ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N:
1609830 ONTARIO LIMITED
Applicant
- and -
THE MUNICIPAL PROPERTY ASSESSMENT CORPORATION, REGION NO. 9 and THE CITY OF TORONTO
Respondents
Peter Milligan and Adam Stephens, for the Applicant
Karey Lunau, for the Respondent, Municipal Property Assessment Corporation
Susan L. Ungar, for the City of Toronto
HEARD at Toronto: September 17, 2008
1The applicant, 1609830 Ontario Limited (Liberty) seeks leave to appeal from the decision of the Assessment Review Board (the Board), dated December 14, 2007.
JURISDICTION AND TEST FOR LEAVE TO APPEAL
2An appeal lies from the Board to the Divisional Court with leave on a question of law in accordance with s.43.1(1) of the Assessment Act.
The test for leave to appeal as confirmed in 1098748 Ontario Ltd. v. Ontario Property Assessment Corporation Regional, [2000] O.J. No. 2050 (Div. Ct.) is twofold:
(i) there must be a question of law of sufficient importance to merit the attention of the Divisional Court, and
(ii) there must be reason to doubt the correctness of the decision under review.
THE ISSUE
3The applicant asserts that the Board exercised its discretion pursuant to s. 44(1) of the Assessment Act on incorrect principles of law and mistaken facts.
4The result of the Board’s decision is that Liberty will be required to pay property taxes in the approximate amount of $500,000.00 annually with respect to the 5.6 acres it purchased for $21.3 million dollars at 1100 Sheppard Avenue West, Toronto (the “Property”) from the date of acquisition of the Property.
5Prior to the Board order, through inadvertence, the assessment roll for 2006 was returned as if the severance of the Property and the sale to Liberty had not occurred. Property taxes for the year 2006 therefore were payable on the original 10 acre parcel, rather than based upon two parcels. There is a significant difference in the taxes assessed.
BACKGROUND FACTS AND RULINGS BY THE BOARD
6The City of Toronto noticed the error in the assessment roll. The City initiated a complaint to the Board pursuant to s. 40(1) of the Assessment Act to correct the error. The owner of the property prior to the severance, Idomo, was served with the complaint initiated by the City within the time limits contemplated by the section. Liberty was not served within the time limits contemplated by the section but received copies of all documents after the expiry of the time limit.
7Liberty in turn brought a motion to dismiss the City’s complaint as it had not been served in time. The City then brought a cross-motion seeking the alternative relief that the assessment roll be corrected pursuant to s. 44 of the Assessment Act, if the Board did not correct the error pursuant to s. 40.1.
8In the hearing the Board concluded that Liberty should have been served by the City as an interested party with the original complaint initiated pursuant to s. 40(1). No appeal is taken from this rather obvious conclusion. The Board declined the City’s request to correct the assessment roll pursuant to s. 40.1 of the Assessment Act as Liberty had not been served within the limitation period.
9Section 40.1 provides:
Correction of errors
40.1 If it appears that there are palpable errors in the assessment roll,
(a) if no alteration of assessed values or classification of land is involved, the Board may correct the roll; and
(b) if alteration of assessed values or classification of land is involved, the Board may extend the time for making complaints and direct the assessor to be the complainant.
10The City in turn brought a cross-motion The Board granted the alternative relief sought by the City in their cross-motion pursuant to s. 44(1) of the Assessment Act.
11The Board corrected the assessment roll to accurately reflect the legal description and acreage of the remaining property owned by Idomo resulting from the severance. The Board declined to make any order directly against Liberty.
12Section 44(1) of the Assessment Act provides:
Assessment may be open upon appeal
44(1) Upon an appeal on any ground against an assessment, the Assessment Review Board or court, as the case may be may reopen the whole question of the assessment so that omissions from, or errors in the assessment roll may be corrected, and the amount for which the assessment should be made, and the person or person who should be assessed therefore may be placed upon the roll, and if necessary the roll of the municipality, even if returned as finally revised, may be opened so as to make it correct in accordance with the findings made on appeal.
13It is conceded that the wording “an appeal” is used interchangeably in the Assessment Act with the term “complaint”.
14The individual sections of the Assessment Act are inter-dependant, and must be read in context and purpose of entire Act, which is to regulate the orderly and fair collection of public taxes based upon an accurate assessment roll. .
15The initiation of the s. 40(1) complaint (or appeal) engaged s. 44 of the Assessment Act. The effect of the Board exercising its powers pursuant to s. 44 correcting the legal description and acreage owned by Idomo after the severance in turn triggered s. 33 of the Assessment Act. Section 33 imposes the obligation of the Municipal Property Assessment Corporation to rectify the omission of the Property purchased by Liberty from the tax roll.
16Sections 33(1) and (2) of the Assessment Act provide as follows:
Assessment omitted from tax roll
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 and the clerk of the municipality upon notification thereof shall enter the assessment on the tax roll and the taxes that would have been payable if the assessment had not been omitted shall be levied and collected.
Definition
(2) for the purposes of this section,
“omitted” includes the invalidation or setting aside of an assessment by any court or assessment tribunal on any ground except that the land is not liable to taxation. [emphasis added]
17The rectification of the omission by utilizing s. 33 of the Assessment Act, rather than by using s. 40(1), provided the applicants with a 90-day period to complain about the assessment made (see sections 35(1) and 35(2.1)).
CONCLUSIONS
18The applicants assert that the motion for leave to appeal raises important legal issues with respect to the limitation period contained in s. 40(2) of the Assessment Act. It also asserts that the Board erred in law by misinterpreting the relevant statutory framework and further that the Board made factual errors.
19I disagree.
20The Board correctly exercised its discretion pursuant to s. 44(1) of the Assessment Act to rectify the error on the assessment roll so that the correct legal description and acreage was reflected in the remaining property owned by Idomo. Section 33 of the Assessment Act is then engaged obliging the assessor to rectify the omission and to include the Property purchased by Liberty on the assessment roll.
21The limitation period contemplated in s. 33 for rectification based upon omission is two years preceding the omission of the land from the assessment roll. This limitation period is not exceeded in the facts of this case. Liberty, in turn, has a 90-day period from the date of notice of the rectification to complain.
22The Board carefully considered the facts, weighed the competing interests and correctly exercised its discretion to rectify the omission. The Board correctly considered the structure and purpose of the Assessment Act and the nature of the complaint procedure. At page 15 of the Board’s decision, it states:
The Board finds that the complaint process is not meant to deal with entire properties that have been wrongfully left off the assessment roll, as is the case here. This is a straight factual error or omission that is properly dealt with under section 33 of the Act. This section, together with the other sections discussed earlier, operate in furtherance of the central scheme of the Act that all properties shall be assessed, and they shall be assessed correctly. This is the overriding aim of these parts of the Act. The Board takes the view that correcting such errors and omissions takes precedence, and any benefit or prejudice resulting from such an error is not shielded by the operation of the deadline for complaints found in section 40 of the Act.
23The limitation period stipulated in s. 40(2) of the Assessment Act for complaints does not apply to property erroneously left off the assessment roll.
24It is clear that the thrust of the Assessment Act is to ensure that all property is subject to tax based upon accurate facts. I note that there are multiple provisions in the Assessment Act to allow for correction of errors of various sorts to ensure that the assessment roll is accurate in fairness to both property owners and to the public.
25I conclude that the Board made no legal error in interpreting the governing legislation. I defer to the Board’s expertise with respect to the remedy it chose to rectify the error. I agree with the decision made. As well, there is no question of law in my view of sufficient importance that would justify the attention of the Divisional Court.
26The request for leave to appeal is therefore dismissed.
COSTS
27The parties agreed that the unsuccessful party shall pay costs fixed in the amount of $5,000.00 to the successful party. The applicant shall therefore pay costs to the respondents, each in the amount of $2,500.00, inclusive.
JANET WILSON J.
Date of Reasons for Judgment: September 17, 2008
Date of Release: September 19, 2008
COURT FILE NO.: 17/08
DATE: 20080917
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N:
1609830 ONTARIO LIMITED
Applicant
- and -
THE MUNICIPAL PROPERTY ASSESSMENT CORPORATION, REGION NO. 9 and THE CITY OF TORONTO
Respondents
REASONS FOR JUDGMENT
JANET WILSON J.
Date of Reasons for Judgment: September 17, 2008
Date of Release: September 19, 2008