COURT FILE NO.: 520/07
DATE: 20080714
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N:
Stanislaus Joseph Sokol and Jacqueline Christiane Sokol
Stanislaus Joseph Sokol for the appellants
Appellants
- and -
Assessment Review Board of Ontario, the Municipal Property Assessment Corporation Region No. 9, and the City of Toronto
Donald G. Mitchell, solicitor for the Municipal Property Assessment Corporation
Respondents
HEARD at Toronto: Mar. 31, 2008
Kiteley J.
[1] This is a motion by the property owners for leave to appeal the Amended Decision (Amended Decision) of the Assessment Review Board (Board) delivered by J. Laflamme and K. Craigie dated September 28, 2007.
Background
[2] The appellants are the registered owners of the property in the City of Toronto. In March 2001, they obtained a building permit. By the fall of 2002, the renovations were complete including adding a bedroom above the existing family room. The total square feet prior to the renovation was 1,938. The renovations added 250 square feet for a total of 2,188.
(a) Original assessment notice for 2004 and 2005
[3] The appellants received their MPAC assessment notice for the taxation years 2004 and 2005 based on June 30, 2003 valuation date. According to that notice, the property value had increased $87000 over the previous assessment.
[4] The appellants accepted that notice. It is their position that they acquiesced based on their assumption that it incorporated the increase in value attributable to the renovations in 2001-2002.
(b) Original assessment notice for 2006
[5] In early 2006, the Appellants received an MPAC assessment notice for the taxation year 2006 based on January 1, 2005 valuation date. The projected assessment was 26% higher than the previous assessment. The appellants filed a request for reconsideration, and, in the event that it might be denied by MPAC, they filed for a hearing before the Board.
[6] In September, 2006, the request for reconsideration was denied.
[7] On October 31, 2006, the appellants’ complaint pursuant to s. 40 of the Assessment Act (R.S.O. 1990, c. A.31 (the Act) was heard. Member C. Marques issued a decision on February 2, 2007 in which she fixed that assessment at $623,000 based on $321.46 per square foot. Her reasons make reference to 1,938 square feet.
[8] No appeal was taken from that decision.
(c) Omitted Assessment Claims for 2004, 2005 and 2006
[9] In September, 2006, pursuant to s. 33(1) of the Act, MPAC issued and served on the appellants the Omitted Assessment claims for the taxation years 2004, 2005 and 2006 in the supplementary amounts of $45,000, $45,000, and $53,000, respectively.
[10] The appellants launched a complaint against the omitted assessments. The complaints were heard by the Assessment Review Board (consisting of Members J. Laflamme and K. Craigie) on April 11, 2007.
[11] The key argument of the appellants before the Board was that the assessment decision by Member C. Marques should be the final decision that extinguished the omitted property assessment notices for 2004, 2005 and 2006.
(d) Original Decision of the Assessment Review Board
[12] The Original Decision is dated August 31, 2007. Under the heading “MPAC’s evidence”, the Board noted that the assessor with MPAC had recommended that the omitted assessments be $25,000 (for taxation years 2004 and 2005) and $29,000 (for taxation year 2006) rather than the amounts in the assessment notices of $45,000, $45,000, and $53,000.
[13] The Board held that the total building area was 2,188 square feet and that the “omitted assessments issued for taxation years 2004, 2005 and 2006 were returned properly”. The Board also held that the decision of Member Marques did not include the addition of 250 square feet.
[14] The Board referred to the decision of C. Marques in which she accepted the assessor’s recommended assessment based on $321.46 per square foot of building. The Board held as follows:
This Board applies this value to the extra 250 square foot addition, resulting in a value of $8,000 (250 square feet x $321.46) for the 2004, 2005 and 2006 taxation years.
[15] The Board observed that it was unfortunate that the appellants’ s. 40 complaint with respect to the 2007 assessment year had not been dealt with at the same time as the s. 33 assessments. Had the s. 40 complaint been before it, the Board would have reduced the 2007 assessment from $731,000 to $631,000 being the total of the section 40 and the section 33 assessments for 2006.
(e) Amended Decision of the Assessment Review Board
[16] In a letter dated September 18, 2007, MPAC’s counsel asked the Chair of the Assessment Review Board to make a correction. Relying on rule 108 of the Board’s Rules of Practice and Procedure, MPAC pointed out that, in its original decision, the Board had made two errors. First, in arriving at the $8,000 figure the Board made an error in calculation in that the product of 250 and $321.46 is $80,365, not $8,000. Second, in the obiter comments with respect to the 2007 taxation year, the assessed value was not based on 2,188 square feet (which would yield $703,354 based on $321.46 per square foot).
[17] In that letter, counsel for MPAC noted that MPAC was not seeking the increases in the omitted assessments. Rather:
It respectfully requests that the Board amend its decision and fix the assessments at $25,000 (2004 & 2005 taxation year) and $29,000 (2006) as recommended by MPAC at the hearing.
[18] Finally, counsel for MPAC asserted that the $8000 figure was a “clear mathematical error” falling within rule 108. However, if the Board declined to amend the Decision pursuant to rule 108, MPAC asked that the letter be treated as a request for review under rule 110.
[19] Counsel for MPAC sent a copy of the letter to the property owners. The appellants sent a letter to the Chair of the Board dated September 26, 2007. However, it is agreed that that letter did not come to the attention of the Chair before the Amended Decision was issued. It will be considered below.
[20] In a letter dated September 28, 2007 from a person described as “Editor/Researcher” at the Board, counsel for MPAC received amended written reasons pursuant to rule 108 citing counsel’s letter dated September 18, 2007 and “a mathematical error”. The amendments were underlined in the text as follows:
The Board finds the omitted assessments of $45,000 (2004) taxation year), $45,000 (2005 taxation year) and $53,000 (2006 taxation year) to be incorrect and accepts the assessor’s recommendation that the values be reduced to $25,000 (2004 taxation year), $25,000 (2005 taxation year) and $29,000 (2006 taxation year).
. . . If the Board applies this value to the extra 250 square foot addition, the resulting value would be $80,000 (250 square feet x $321.46). However, during the hearing MPAC made a recommendation that the value of the supplementaries be reduced to $25,000 (2004 taxation year), $25,000 (2005 taxation year) and $29,000 (2006 taxation year). The Board accepts these recommendations.
[21] The underlined portions did not appear in the Original Decision.
[22] The Amended Decision also purported to correct the error in the obiter by reducing
the 2007 assessment from $731,000 to $703,000, being the total of the section 40 and the section 33 assessments for 2006.
(e) letters from the appellants and the respondents and the Board
[23] As indicated above, in a letter dated September 26, 2007, in response to MPAC’s letter dated September 18th, the appellants made submissions. They pointed out that:
the omit assessments at $25,000 for 2004 and 2005 taxation years and $29000 for 2006 taxation year were the amounts suggested by Mr. Turner on behalf of MPAC at the conclusion of the Board’s hearing of April 11, 2007. (Incidentally, the original arbitral panel declined to accept Mr. Turner’s submission in this regard based on the evidence presented at the hearing.)
[24] The appellants took the position that it was not a “minor error in calculation” within rule 108. They suggested that the Board should remit the matter to the Laflamme/Craigie Board pursuant to rule 117 or order a rehearing pursuant to rule 111. Among other points made, the appellants asserted that:
It would be unfair to arbitrarily substitute another amount in place of the omit assessment of this Arbitral Panel that heard all the evidence and assessed the credibility of those appearing before them. To substitute a different amount to that as rendered by this panel, in my respectfully [sic] opinion, would place the integrity of the entire ARB arbitral process in disrepute.
[25] The appellants’ preference was that the matter be remitted to the Panel of Laflamme and Craigie.
[26] It is conceded that the Chair did not receive nor consider this letter prior to the issuance of the Amended Decision.
[27] When the appellants received a copy of the Amended Decision, they sent a letter dated October 2, 2007 to the Chair of the Board querying whether their letter dated September 26, 2007 had been considered by the Chair. In this second letter, the appellants pointed out an error in the Amended Decision, namely that the value for 2007 should have been $652,000 not $703,000.
[28] Counsel for MPAC responded to the Chair in a letter dated October 4, 2007. He agreed that there was an error in the last sentence of the Amended Decision but asserted that:
Given the Board’s determination that the correct current value should be determined by reference to building area multiplied by $321.46 it would be incorrect to determine the current value assessment for the 2007 taxation year by adding the “section 40” and “section 33” assessments.
[29] In a letter dated October 18, 2007, the Chair enumerated all of the correspondence referred to above and apologized to the parties “for this matter falling off the rails and for decisions that were meant to correct errors and instead created more errors”. He suggested several ways to approach the situation. He could direct that the s. 33 complaints for the 2004, 2005 and 2006 taxation years together with the section 40 complaints for 2006 taxation year be scheduled into a hearing with the outstanding section 40 complaint for the 2007 taxation year. Alternatively, he suggested a non-binding mediation meeting.
[30] In paragraph 29 of the appellants’ factum (to which no objection was taken by the respondent), it is reported that on October 23, 2007, counsel for MPAC indicated to the appellant that his client “would not be interested in participating in a rehearing”.
[31] No further steps were taken by the Board.
Issues in the Appeal
[32] The appellants seek leave to appeal the Amended Decision on the basis that the Board had ruled that:
it had jurisdiction to consider the MPAC omitted assessment notice of 2006 for the taxation years 2004, 2005 and 2006, although these omitted assessments related to renovations conducted and completed in 2001-2002, under a validly issued building permit, and would normally have been captured by the MPAC’s valuation assessment of June 2003 of the subject premises.
[33] The appellants argue that the Board failed to address arguments they had raised including that the MPAC omitted assessment claims were statute barred; that they were barred by the doctrine of equitable estoppel; that the lands had already been assessed at the current market value in the decision rendered on February 2, 2007 and that the omitted assessment claim for 2006 was barred by the doctrine of res judicata.
[34] The respondent argues that the appellants challenge factual elements of the Amended Decision that are not appealable.
Leave to Appeal
[35] The following sections of the Act are relevant:
s. 33(1) If any land liable to assessment has been in whole or in part omitted from the tax roll for the current year or for any part or all of either or both of the next two preceding years, and no taxes have been levied for the assessment omitted, the assessor shall make any assessment necessary to rectify the omission . . .
s. 43.1(1) An appeal lies from the Assessment Review Board to the Divisional Court, with leave of the Divisional Court, on a question of law.
Analysis
[36] The fundamental question before the Board was whether the omit assessment claims issued in the fall of 2006 were valid. The appellants have attempted to put that question into a legal context by asserting issue estoppel and other legal issues. But in essence, that is a factual determination.
[37] In her decision, Member Marques referred to 1,938 square feet. Before the Board consisting of Laflamme and Craigie, the appellants made a variety of submissions to attempt to persuade the latter Board that Member Marques had considered the original 1,938 square feet and the additional 250 square feet and that her decision reflected the value of 2,188 square feet. As indicated above at paragraph 13, in their decision, Members Laflamme and Craigie concluded that based on the evidence and the submissions before them, the omit assessments were properly returned for the additional 250 square feet.
[38] That was a determination of fact that was squarely within the jurisdiction of the Board.
[39] As the review of the events that occurred beginning with counsel’s letter dated September 18th and ending with the Chair’s letter dated October 18th demonstrates, there were some procedural anomalies such as: an Amended Decision was issued in disregard of the letter from the appellants; errors were made in the Original Decision and in the Amended Decision; and, in effect, there was a lack of response to the request by the appellants that the matter be dealt with under rule 111 or 117. Notwithstanding the various responses by the Chair or the Board, the issue that is central to the appeal was a question of fact, not a question of law.
[40] Leave to appeal cannot be granted on that basis.
Costs
[41] Unless the parties are able to resolve costs of the motion for leave to appeal, they will make submissions on this timetable: the respondent MPAC by July 21, 2008; the appellants by July 31, 2008.
Kiteley J.
Released: July 2008
COURT FILE NO.: 520/07
DATE: 20080714
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Sokol and Sokol
Appellants
- and –
Assessment Review Board of Ontario, the Municipal Property Assessment Corporation Region No. 9 and the City of Toronto
Respondents
REASONS FOR JUDGMENT
Kiteley J.
Released: July 2008