COURT FILE NO.: 349/07

DATE: 20080806

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

CHAPNIK, FERRIER, AND SWINTON JJ.

B E T W E E N:

CITY OF TORONTO

Appellant

• and -

ANNETTE WOLF, 2027330 ONTARIO INC. and the MUNICIPAL PROPERTY ASSESSMENT CORPORATION

Respondents

Diana Dimmer and Christopher Henderson, for the Appellant

Karey Lunau, for the Respondent, Municipal Property Assessment Corporation

Richard Minster, for the Respondent, 2027330 Ontario Inc.

HEARD at Toronto: July 10, 2008

CHAPNIK J.

OVERVIEW

1The City of Toronto (the City) appeals the decision of the Ontario Assessment Review Board (the Board) dated June 15, 2007, and revised July 24, 2007. The Board quashed two of the City’s complaints respecting municipal property assessments for the 2005 taxation year for properties at 761 and 771 King Street West in the City of Toronto (the Properties).

2The Board dismissed the complaints on the grounds they were null and void, as the City failed to comply with the notice provisions in s. 40(3) of the Assessment Act, R.S.O. 1990, c. A.31, as amended (the Act).

THE FACTS

3Annette Wolf is the assessed owner of the Properties on the assessment roll for the 2005 taxation year. The mailing address on the assessment roll for these Properties is 775 King Street West, Toronto.

4On February 25, 2005, Wolf sold the Properties to the respondent 2027330 Ontario Inc. (Ontario Inc.) for a combined total price of $5,965,000. The City was of the view that the sale price was $3,575,000 higher than the assessed current value of the Properties, and that they, therefore, were under-assessed by MPAC on the assessment roll for the 2005 taxation year.

5Section 40 of the Act permits a municipality to complain to the Board that the current value of a person’s land is incorrect on the assessment roll. The complaint is to be delivered or mailed to the Board and to the person being assessed by March 31^st. The relevant provisions of the Act read, in part, as follows:

4.(1) Any person, including a municipality…. may complain in writing to the Assessment Review Board that,

(a) the current value of the person’s land or another person’s land is incorrect.

(2.1) The last day for complaining with respect to a taxation year is March 31 following the return of the assessment roll for the taxation year.

(3) Where the complaint concerns the assessment of another person,

(a) the complaint shall state a name and address where notices can be given to the person; and

(b) the complainant shall deliver or mail a copy of the complaint to the person within the time limited by subsection (2).

6In March 2005, the City filed complaints with the Board, claming that the assessed current value of the Properties was incorrect.

7On March 31, 2005, the City mailed copies of the notice of complaint to Wolf at the address for service stated on the assessment roll, being 775 King Street West. Copies of the notices of complaint were also mailed to Ontario Inc. at that address. It is not disputed that the complaints were filed within the time limits prescribed in s. 40(2.1) of the Act.

8Wolf and Ontario Inc. submitted, however, that they did not receive the letters of complaint prior to receiving the notice of hearing in October 2005.

9Wolf had provided MPAC with the mailing address of 775 King Street West on the land transfer tax affidavit attached to the deed upon her purchase of the Properties, and no notices had been received by the City requesting a change in the address. The respondent argued before the Board, however, that nothing in s. 40(3) of the Act authorizes the use of the mailing address on the assessment roll for these purposes. Further, the City had actual knowledge that Wolf was no longer at the 775 King Street address because the sale document it relied on to launch the appeal showed an address for service on Clifton Avenue. Therefore, the City could not rely on the former address in sending the notices of complaint.

10The Board agreed with this latter argument though it viewed the case as “borderline.” It held that the City had not complied with the notice provisions in the Act and the City’s complaints were, therefore, null and void, and it had no jurisdiction to determine the complaints. In its reasons the Board stated (Reasons, p. 9):

The Board agrees that the City cannot blithely rely on the address on the roll, when they have actual knowledge that the address on the roll may be wrong, in the sense that a mailing is not likely to reach the intended recipient. In such circumstances, the Board finds it is incumbent on the City to make further enquiries and searches to determine the correct address.

11The Board also stated (at p. 11):

It is the Board’s interpretation that it is implicit in subsection 40(3) that the “address where notices can be given” is the best address known to the City, where receipt is most likely.

12Though the appellant and MPAC urged the Board to find the notice of complaint voidable rather than void, and to consider whether the complaint should be allowed to proceed, the Board failed to address the question of whether a defect in notice could be cured.

13Leave to appeal the Board’s decision was granted by Jennings J. on January 25, 2008.

THE ARGUMENTS

14The City contends that it complied with the s. 40(3) notice requirements of the Act and that this section should be interpreted in a manner that is consistent with the object and purpose of the Act as a whole, namely, to ensure equity and fairness in the assessment system. This would favour an interpretation allowing the complaints to be filed and determined by the Board on their merits. In the alternative, any defect in service was a “curable irregularity” – an aspect that the Board failed to properly consider.

15The respondent Ontario Inc., the new owner of the Properties, argues that the City did not comply with the notice requirements under s. 40(3) of the Act, the Board’s decision was correct in law and within its jurisdiction, and was, in any event, a reasonable exercise of discretion which should be accorded deference.

16The respondent the Municipal Property Assessment Corporation (MPAC) supports the appellant’s arguments and takes the position that the Board’s decision should be set aside and the matter remitted to the Board for a hearing on the merits.

ANALYSIS

17This appeal raises a question of law or specifically, an issue of statutory interpretation, that does not engage the Board’s expertise. The Board is not protected by a privative clause and there is a right to appeal, with leave, on a question of law, pursuant to s. 43.1(1) of the Act. The standard of review in these circumstances is correctness. Dunsmuir v. New Brunswick (2008), 372 N.R. 1, 2008 SCC 9 at paras. 55, 60; 1098748 Ontario Ltd. v. Ontario Property Assessment Corp. (2000), 2001 40233 (ON SCDC), 198 D.L.R. (4th) 139, 143 O.A.C. 121 at paras. 10-12 (Div. Ct.).

18Subsection 40(3) is broadly-worded. It does not specify a particular address to which the complaint must be sent, nor does it require personal service or actual receipt of the complaint by the assessed person. Indeed, the subsection appears to contemplate more than one address to which the complaint may be sent, when it uses the words “a name and address.”

19At the same time, a literal interpretation of the section is not appropriate, as this would allow the complainant to choose any address even if it had no relationship to the intended recipient. Clearly, a reasonable interpretation must be given to the subsection that gives effect to the language and purpose of s. 40(3).

20We appreciate that there are competing purposes inherent in the scheme of the Act. To achieve the equitable distribution of the tax burden, there must be mechanisms to correct errors in the assessment roll. At the same time, in fairness to the taxpayer, there must be some finality in the system in order to achieve a stable and reliable tax base. That balance is achieved by the relatively simple, informal right to complain, coupled with a specific and firm limitation period in the governing legislation.

21A complainant must act reasonably and in good faith in selecting an address for service under subsection 40(3). If the complainant has done that, he or she will have met the notice requirements. Provided the complaint is in compliance with s. 40(2) and 40(2.1) of the Act as well, the Board has jurisdiction to deal with the complaint, even if the notice of complaint was not actually received by the assessed person.

22In this case, the City acted reasonably and in good faith in sending the notices of complaint to Wolf, the assessed person, at the address listed for service on the assessment roll. This address had been provided by her, was utilized for many years after her purchase of the Properties, and was never revoked by her. It was also the address to which tax bills were sent, including bills for the 2005 taxation year for which Wolf continued to bear partial responsibility. Indeed, the taxes were paid even after Wolf sold the property to the new owner. As the Board stated at p. 8 of its Reasons:

Tax bills, assessment notices, and the City’s Statement of Issues and Notice of Intent to Seek a Higher Assessment were all sent to 775 King West and acted on by the recipients following the sale.

23While the City was aware that the Properties had been sold, the City complied with the Act by mailing copies of the complaint to Wolf at the address on the assessment roll. In passing, it is noted that an address contained in the land transfer tax affidavit of the deed on the sale does not necessarily connote the actual residence of the property owner (see Townhouses of Hogg’s Hollow Inc. v. Municipal Property Assessment Corporation, Region No. 9, [2006] O.A.R.B. No. 93).

24The Board’s decision imposes a higher standard on a complainant than checking and relying on the name and address set out in the assessment roll. At page 12 of its decision, the Board stated:

The serious nature of the complaint as an originating process requires a higher standard on the part of the complainant sender than simply relying on the roll address no matter what the circumstances.

25In our view, the Board erred in imposing a “higher standard” on a complainant under section 40(3) of the Act, as the wording of the legislation does not support this conclusion.

26Moreover, subsection 31(4) of the Act supports the sending of the notices of complaint to the address provided on the assessment roll, as it provides that where a person has furnished the assessment corporation with a written notice requesting a notice of assessment be made to a particular address, that notice of address stands until revoked in writing. Similarly, s. 343(6) and (8) of the Municipal Act, 2001, S.O. 2001, c. 25 provides that a tax notice shall be sent to an address specified in writing unless the direction has been revoked by the taxpayer in writing.

27In our view, the Board erred when it imported a requirement on a complainant to make further inquiries where the complainant in good faith reasonably believes that the complaint and notices under s. 40(3) will reach the assessed person. It, therefore, erred in concluding that the City’s notices of complaint were invalid such that the Board had no jurisdiction to hear or determine the complaints.

28Clearly, once the original process has been initiated, steps can be taken to ensure that any future notices of hearing come to the attention of interested parties. We find no prejudice to the respondent in allowing the matter to proceed to a hearing on the merits.

CONCLUSION

29The City’s appeal is allowed, the decision of the Board is set aside, and the complaints are remitted to the Board for a hearing on the merits.

30Costs to the appellant in the agreed upon sum of $10,000 inclusive of GST, disbursements and the leave application. No costs were requested by and none are awarded to MPAC.