CITATION: PPF Investments Inc. v. The Town of Oakville et al., 2010 ONSC 491
COURT FILE NO.: DC-09-2943-ML
DATE: 2010-01-19
ONTARIO
SUPERIOR COURT OF JUSTICE
(Divisional Court)
B E T W E E N:
PPF INVESTMENTS INC.
Adam J. Ezer, for the Applicant
Applicant
- and -
THE TOWN OF OAKVILLE and THE MUNICIPAL PROPERTY ASSESSMENT CORPORATION, REGION NO. 15
Nadia Chandra, for the Respondent, the Town of Oakville,
Shawn R. Douglas, for the Respondent, the Municipal Property Assessment Corporation, Region 15
Respondents
HEARD: November 4, 2009,
at Brampton, Ontario
Price J.
Reasons For Order
Nature of the Motion
[1] The Assessment Review Board (“the Board”), for tax purposes, assessed the value of a property owned by PPF Investments Inc. (“PPF”) in Oakville at the price for which PPF had recently purchased it. PPF says that the assessment is unfair because it overpaid for the property in a bidding war, and that the price is 70% to 205% greater than the assessed values of similar properties in the vicinity.
[2] PPF seeks leave to appeal from the Board’s assessment on the ground that the Board failed to consider the values of comparable properties in the vicinity and, instead, based its decision exclusively on the price that PPF had paid for it. PPF submits that there is reason to doubt the correctness of the Board’s decision and that the point of law is of sufficient importance to merit the attention of the Divisional Court.
[3] The Town of Oakville (“the Town”) and the Municipal Property Assessment Corporation (MPAC) oppose PPF’s application. They say that the Board is required to base its assessments on current values and that it was reasonable for the Board to rely on the price most recently paid for the property as the basis for assessing its current value.
[4] As a preliminary matter, PDF seeks an extension of the thirty day period following the mailing of the Board’s decision, within which the Assessment Act requires a Notice of Application for leave to appeal to be delivered. PPF was self-represented before the Board and it is not disputed that no one advised it that it had a right to appeal or of the time within which it was required to exercise it. PPF says that it did not become aware of the deadline until almost four months after it had passed, when PPF was finally referred to a lawyer familiar with municipal property assessment law. It delivered its Notice of Application shortly after receiving that lawyer’s advice.
[5] The Town and MPAC submit that the Court has no jurisdiction to extend the time limit. They say that it is a statutory limitation period because it is found in a statute, as distinct from the Court’s Rules of Civil Procedure, and is framed in mandatory language. They also submit that, even if the Court has power to extend the time, it should not do so, as there is no evidence that PPF formed an intention to appeal within the thirty day appeal period.
Background Facts
[6] The property in question is located at 221 Lakeshore Road East in Oakville (the property). Its value was assessed for tax purposes at $1,606,000.00 on June 30, 2003, but it was later listed for sale at $1,950,000.00. As a result of a bidding war with two other prospective buyers, PPF paid $2,250,000.00 for it on April 28, 2004.
[7] After PPF purchased the property, the Town appealed to the Board to have the property’s value re-assessed, based on the price PPF had paid for it, to increase its assessed value for the 2006, 2007 and 2008 tax years. PPF opposed the re-assessment and sought to lower the assessed value for years from 2009 onward.
[8] On November 18, 2008, the PPF’s President, Tony Ferraro, a non-lawyer, represented PPF at the hearing before the Board. He tendered in evidence the assessed values of PPF’s property, as well as those of nearby properties having similar square footage on the same street, to show that the price PPF had paid for the property was excessive:
| Property Address | Area (Sq. M.) | Current Assessed Value Total | Paid Per Sq. Metre |
|---|---|---|---|
| 221 Lakeshore Rd. E. | 374 | $ 1,606,000 | $ 4,294 |
| 225 Lakeshore Rd. E. | 330 | $ 1,093,000 | $ 3,312 |
| 263 Lakeshore Rd. E. | 292 | $ 722,000 | $ 2,473 |
| 207 Lakeshore Rd. E. | 373 | $ 1,063,000 | $ 2,850 |
| 217 Lakeshore Rd. E. | 239 | $ 780,000 | $ 3,264 |
| 228 Lakeshore Rd. E. | 230 | $ 737,000 | $ 3,204 |
[9] PPF submits that, based on the above Current Value Assessments, the value the Board ascribed to PPF’s property is 70% to 205% higher than those of similar properties in the vicinity. It argues that, based on the average Current Assessed Value of these properties, which is $3,250 per sq. metre, the Current Assessed Value of the property it bought should be $1,215,500.00.
[10] The Town tendered evidence of two other properties, also in the same vicinity, to show that the prices paid for them was similar to the price PPF had paid for its property:
| Property Address | Date | Area | Price Paid |
|---|---|---|---|
| 395 Church Street | Aug 8/05 | 11,000 (Sq Metres) | $2,000,000 |
| 260 Lakeshore Rd. E. | Dec 17/04 | 7,000 (Sq Metres) | $2,280,000 |
Decision Under Appeal
[11] In its reasons, the Board held that:
a) The Act requires property to be assessed at its current value. The best evidence of that value is the price paid for the property close to the valuation date. The valuation date of 2006, 2007 and 2008 is January 1, 2005.
b) The subject property was sold within the relevant time period and there was no evidence to persuade the Board that Mr. Ferraro had been coerced into purchasing it for the price he paid.
[12] On January 23, 2009, the Board released its decision. Based solely on the purchase price PPF had paid for the property, the Board increased the assessed value of the property from $1,606,000.00 to $2,235,000.00 (the purchase price, less abatements) for 2006, 2007 and 2008.
Reasons for PPF’s Delay in Applying for Leave to Appeal
[13] PPF delivered its Notice of Application for Leave to Appeal on June 28, 2009, four months beyond the thirty day period within which the Assessment Act required it to be delivered. PPF’s President, Tony Ferraro, explains the delay in an affidavit filed in support of PPF’s application:
i) The Board issued its decision on January 23, 2009. Mr. Ferraro received it in February or March 2009.
ii) Shortly after receiving the decision, Mr. Ferraro received another notice from the Town, seeking to raise the assessed value of the property to $2,544,000 for January 1, 2008.
iii) In March 2009, Mr. Ferraro consulted a Property Tax Reduction Consultant for help in filing a challenge to the assessed value of the property for the 2009 taxation year.
iv) In mid-April, on receiving the Town’s March 27, 2009, demand for payment, the Consultant advised Mr. Ferraro to contact a lawyer about the Board’s decision. Mr. Ferraro contacted PPF’s corporate lawyers.
v) The corporate lawyers initially helped Mr. Ferraro, in late April and early May, begin an appeal from the latest increase in PPF’s property tax assessment. PPF sent a letter dated April 30, 2009, to the Town and paid into the legal trust account the $42,791.62 in taxes which the Town required.
vi) During discussions between PPF’s corporate lawyers and Mr. Ferraro in mid-May 2009, the lawyers advised Mr. Ferraro that they did not practice in this area of law and referred him to the Lawyer Referral Service of the Law Society of Upper Canada.
vii) In late May 2009, Mr. Ferraro contacted the Law Society and was referred to Mr. Ezer, PPF’s lawyer in the present motion. Mr. Ferraro immediately contacted Mr. Ezer, who set up an appointment for them to meet in early June 2009.
ix) On June 11, 2009, PPF retained Mr. Ezer to give it an opinion regarding a challenge to the Board’s decision. On June 18, 2009, Mr. Ferraro received Mr. Ezer’s opinion, from which he learned for the first time of the thirty day period for seeking leave to appeal to the Divisional Court.
xi) On June 22, 2009, PPF retained Mr. Ezer to bring the present motion. Mr. Ferraro authorized Mr. Ezer two days later to serve and file a draft Notice of Motion.
xiii) On June 26, 2009, the Town and MCAP were served with a motion for leave, returnable in Toronto. The Registrar in Toronto would not accept the motion there and advised PPF to file it in Brampton, instead.
xiv) On June 29, 2009, the Respondents were served with the motion returnable in Brampton.
Issues
[14] This motion raises the following issues:
a) Does the Court have jurisdiction to extend the time for filing a notice of application for leave to appeal and, if so, should an extension of time be granted?
b) Should leave to appeal be granted?
i) Is there reason to doubt the correctness of the Board’s decision?
ii) Does the matter raise issues of law of significance beyond the parties?
Positions of the Parties
a) Should an extension of time to file a notice of application for leave to appeal be granted?
i) PPF
[15] PPF submits that this Court has inherent jurisdiction to control its own process, including the time limit for applying for leave to appeal. It argues that Mr. Ferraro is not a lawyer and did not realize that PPF could appeal from the Board’s decision or that he was required to exercise that right within thirty days after the Board mailed its decision. They also say that Mr. Ferraro’s delay was in good faith and unintentional, explained by the difficulty he had finding qualified counsel to advise him.
[16] PPF submits that an extension of time will not prejudice the Town in relation to its budget planning because PPF does not seek to disturb the assessment of its property tax for 2008 or earlier, but only to ensure that it is taxed based on an equitable value in the future.
ii) Town of Oakville
[17] The Town submits that the deadline for filing a Notice of Application for Leave to appeal expired on February 22, 2009. PPF did not deliver its Notice of Motion until more than four months later, on June 29, 2009. The Town submits that the Court has no power to extend a time limit that is prescribed in a statute such as the Assessment Act, rather than in the Rules of Civil Procedure, and that is expressed, as this one is, in mandatory language. It says that a time limit of this sort is a statutory limitation period which the Court may not extend.
[18] The Town submits that the time limit prescribed by the Assessment Act is designed to ensure that there is finality to the assessment roll, which forms the basis for municipal budgets. It argues that the cases that PPF relies on in support of an extension are distinguishable on the ground that they all involved very brief delays.
[19] The Town submits, in the alternative, that if the Court possesses the power to extend the time period, it should not do so in the present case because there is no evidence that PPF formed an intention to appeal within the thirty day time period.
iii) MPAC
[20] MPAC agrees with the Town that a statutory limitation period for commencing a proceeding, as distinct from a time limit for taking procedural steps once a proceeding is already under way, cannot be extended.
b) Should leave to appeal be granted?
1. Is there reason to doubt the correctness of the Board’s decision?
i) PPF
[21] PPF submits that, based on the Current Value Assessments of properties in the vicinity, the Board’s assessment of PPF’s property is 70% to 205% higher than those of others. The following table sets out the value at which the Board assessed PPF’s property (the first line), compared to the Current Assessed Value of what PPF asserts are similar properties in the vicinity. The table shows the square footage of each property and how much higher the value, per square foot, that the Board assessed the subject property than each of the others:
| Property Address | Area (Sq. Ft.) | Current Assessed Value Total | Per Sq. Ft. | % Higher |
|---|---|---|---|---|
| 221 Lakeshore Rd. E. | 4025 | $2,235,000 | $555.28 | Base Price |
| 225 Lakeshore Rd. E. | 3552 | $1,093,000 | $307.71 | 80% |
| 263 Lakeshore Rd. E. | 3143 | $ 722,000 | $ 229.72 | 142% |
| 207 Lakeshore Rd. E. | 4015 | $ 1,063,000 | $ 264.76 | 110% |
| 217 Lakeshore Rd. E. | 2573 | $ 780,000 | $ 303.15 | 83% |
| 228 Lakeshore Rd. E. | 2476 | $ 737,000 | $ 297.66 | 87% |
| 305 Church Street | 11000 | $ 2,000,000 | $ 181.82 | 205% |
| 260 Lakeshore Rd. E. | 7000 | $ 2,280,000 | $ 325.71 | 70% |
[22] Section 44(2) of the Assessment Act requires the Board to have reference to the assessed value of other properties in the vicinity when assessing the value of any land. PPF submits that it failed to do so in the present case. It says that the Board dismissed its evidence of the assessed values of nearby properties out of hand and did not even mention them in its reasons. In the result, the Board assessed PPF’s property at as much as double the value of similar properties in the vicinity, with no explanation other than that this was the price that PPF had paid for it.
ii) Town of Oakville
[23] The Town submits that the Board, when reviewing an assessment, is governed by section 44(1) and 19(1) of the Assessment Act. Section 19(1) requires that assessments be based on current value. The Act defines “current value” as the amount of money that would be realized if the property were sold at arm’s length. The best evidence of the current value of PPF’s property, in the present case, was the price PPF had paid for it.
[24] The Town submits that the Board is required to apply section 44(2) only when it cannot assess the value of a property fairly, based on its sale price. It argues that section 44(2) is secondary to section 19(1).
[25] The Town further submits that PPF failed to prove the assessed values of similar properties in the vicinity, that there was no evidence before the Board that the properties whose assessed values PPF relied on were, in fact, similar to PPF’s property.
iii) MPAC
[26] MPAC agrees with the Town’s submission. It submits that the evidentiary record in the present case would not enable the Divisional Court to make a definitive pronouncement as to how the Board should apply section 44(2) of the Assessment Act when assessing the value of a property. The Board had un-contradicted evidence concerning the price PPF paid for its property. It did not have evidence of the price paid for similar properties in the vicinity so as to enable it to make a finding as to whether PPF had over-paid.
[27] While PPF tendered evidence of the assessed values of other properties in the vicinity, it failed to prove the sale prices of those properties or that the properties were similar to PPF’s property. MPAC argues that, although the Town tendered evidence of the prices paid for two other properties in the vicinity, there was no evidence as to the assessed values of those properties or as to whether they were similar to PPF’s property.
[28] MPAC submits that, in the absence of such evidence, the Board made no error in using the price most recently paid for the subject property as the most reliable basis for assessing its current value.
2. Does the matter raise issues of law of significance beyond the parties?
i) PPF
[29] PPF submits that this Court has held in recent decisions that the interpretation of section 44(2) of the Assessment Act is an important matter that merits the Divisional Court’s attention. This appeal deals only with that issue. The Divisional Court agreed to hear an appeal on the same issue recently but could not decide it because of a deficiency in the evidentiary record. PPF submits that the evidentiary record in the present case is adequate because there was ample evidence before the Board as to the current assessed value of similar properties in the vicinity, and the Board simply failed to consider it.
ii) Town of Oakville
[30] The Town submits that the Board adjudicates complex disputes over property classification and value. In doing so, it interprets and applies the Assessment Act, in relation to which its members possess a high degree of expertise. The Town submits that this Court should give substantial deference to the Board’s decisions.
iii) MPAC
[31] MPAC submits that in order to make a definitive pronouncement as to what adjustments the Board should make to the price paid for a property in arriving at a Current Assessed Value, the Divisional Court needs evidence that the properties to which the subject property is being compared are really similar to it. It also needs evidence as to both the prices paid for the properties, and their current assessed values, so that it can calculate the ratio between prices paid and assessed values and arrive at a formula for adjusting the sale price that can be applied uniformly to all properties in the vicinity.
Analysis and Evidence
a) Should an extension of time be granted to permit the applicant to file a Notice of Application for leave to appeal?
i) Does the Court Have Jurisdiction to Extend the Time?
[32] Rule 61.03 of the Rules of Civil Procedure provides that, in general, a party has 15 days after an order or decision is made to apply for leave to appeal to the Divisional Court, if leave is required:
Notice of Motion for Leave
61.03 (1) Where an appeal to the Divisional Court requires the leave of that court, the notice of motion for leave shall,
(b) be served within 15 days after the making of the order or decision from which leave to appeal is sought, unless a statute provides otherwise. (Emphasis added)
[33] The Assessment Act creates a statutory exception to the time period contained in the Rules of Civil Procedure. It provides that a party affected by a decision of the Assessment Review Board shall deliver its notice of motion for leave to appeal within thirty days after the decision was mailed. The Act provides:
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.
Time for appeal
(2) An application for leave to appeal under this section shall be made within 30 days of the mailing of the decision of the Assessment Review Board.
[34] The Town and MPAC would have this time limit interpreted as a statutory limitation period based on three considerations, namely, that:
a) It is contained in the Assessment Act, rather than in the Rules of Civil Procedure.
b) It is framed in mandatory language.
c) It applies to the commencement of a proceeding rather than to steps to be taken in a proceeding that is already underway.
[35] The fact that the thirty day time limit is contained in the Assessment Act, and the fact that it applies to the commencement of an appeal, do not preclude it being considered a procedural time limit that the Court may extend. In Derivative Services Inc. v. Investment Dealers Assn. of Canada[^1], the Divisional Court interpreted a similar provision for a thirty day time period for appealing from a ruling of the Ontario Securities Commission, found in the Commodity Futures Act. The Court held that it had power to extend the time. It stated:
- It would seem to us that s. 21.1(1) creates the appeal right and that s. 21.1(2) then imports the provisions to s. 4(2). At the worst for the appellants, the provisions would be ambiguous, and in such case, the appellants should have the advantage of the more favourable interpretation provided that this does not conflict with the object of the legislation.[^2]
Exercise of Discretion to Extend the Time
[36] The Court of Appeal in Kefeli v. Centennial College of Applied Arts and Technology[^3] set out the factors that a court should consider when deciding whether to exercise its discretion to extend the time for bringing an appeal. They are:
whether the appellant formed an intention to appeal within the relevant period;
the length of the delay and the explanation for it;
any prejudice to the respondent;
the merits of the appeal; and
whether the “justice of the case” requires it.
[37] In Bratti v. Wabco Standard Trane Inc. (c.o.b. Trane Canada)[^4], the Court noted that, of the factors mentioned above, the principal one is whether the “justice of the case” requires it. As Laskin J.A. stated:
While appellate courts have considered a number of different factors in determining whether to grant leave to extend the time for appealing, the governing principle is simply whether the “justice of the case” requires that an extension be given. [citation omitted]
1. Whether PPF formed an intention to appeal within the relevant period
[38] The first step, when considering whether PPF formed an intention to appeal within the relevant period, is to identify what that period is. According to the Assessment Act, the time for applying for leave to appeal begins to run when the Board’s decision is mailed. In my view, there is no evidence in the present case as to precisely when that was. The Board’s decision is exhibit “H” to the affidavit of Christopher Kerr in PPF’s Motion Record. It indicates only that the decision was released January 23, 2009. PPF submits that there is no evidence as to the date of mailing. Mr. Ferraro, in paragraph 3 of his affidavit, states that he received the decision in February or March 2009.
[39] The Town acknowledges that there is no evidence before me as to the date when the decision was mailed. MPAC’s counsel notes that Rule 141 of the ARB Rules of Practice and Procedure, authorized under section 23 of the Statutory Powers Procedures Act, provides that “The Board Registrar will issue a written decision, effective on the date released, unless specified.” However, there is no evidence that the decision was mailed the same date it was released.
[40] Counsel for MPAC submits, based on more than twenty years of practice before the Board, that the Board’s practice is to release and mail its decisions on the same date. While I have no reason to doubt counsel’s statement, it is an insufficient basis, in my view, upon which I should find when the decision in the present case was mailed, with the effect of beginning the period within which PPF was required to apply for leave to appeal.
[41] The Court was given a one page document at the hearing, under the Board’s letterhead, entitled “Decision,” and marked “Municipality’s Copy.” This document, which is undated and unsigned, refers to the release of the Board’s decision in PPF’s case on January 23, 2009. It further states, “A copy of this Decision has been mailed to the following parties or their representatives: the Complainant(s), the Assessed Person(s), the Municipal Clerk and the Municipal Property Assessment Corporation.” This document does not form part of the evidence in the appeal, however, and is not certified, sworn, or authenticated.
[42] At best, evidence as to when the Board’s decision was released raises a rebuttable presumption as to when it was mailed. Hamlyn J. of the Tax Court of Canada, in Adler v. The Queen,[^5] considered when the limitation period began to run under section 244(14) of the Income Tax Act. That section provided that the limitation period for appealing a tax assessment ran from the date the Notice of Assessment was mailed. The section created a presumption that the date of the Notice was also the date it had been mailed. The applicant testified that he had not received the Notice. Hamlyn J. held that this evidence was sufficient to rebut the presumption. On this basis, he held that the limitation period had not expired. A similar result was reached by Judge Brulé of the same court in Antoniou v. M.N.R.[^6]
[43] Charbonneau, J., of the Northwest Territories Supreme Court, reached a similar result in relation to a Notice of a Rental Officer’s decision under the Territories’ Residential Tenancy Act in Hegeman v. Carter et al.[^7] In concluding that the presumption of Notice arising from mailing was rebuttable, and not conclusive, he stated:
[27] I find it difficult to accept that the Legislature could have intended the rules of natural justice to be followed by a Rental Officer during a hearing, while at the same time potentially eliminating, through a conclusive presumption of notice, one of the most fundamental rules of natural justice, namely, the right for all parties to be heard.
[44] Mr. Ferraro has admitted that he received the Board’s decision sometime in February or March 2009. His evidence, which I accept, is that in March, he consulted a Property Tax Reduction Consultant to help PPF file a challenge to the assessed value of the property for the 2009 tax year. I infer from this that Mr. Ferraro formed a bona fide intention to appeal within thirty days of when the Board’s decision was mailed to him.
2) Length of the Delay and the Explanation for it
[45] Whether or not PPF formed an intention to appeal, in the sense of having made a decision to appeal, within the thirty day period, I must consider all of the circumstances in relation to this factor, as well as the length of PPF’s delay and the explanation for it. These factors, in the present case, include the fact that PPF was a self-represented litigant, the fact that Mr. Ferraro was unaware of PPF’s right of appeal or of the period within which it had to be exercised, the efforts Mr. Ferraro made to secure advice as to PPF’s rights, and the delay he experienced in receiving such advice.
[46] PPF argues that the Board had a duty to notify it of its right to appeal and of the time within which it was required to exercise that right. It relies, in this regard, on the decision of the Supreme Court of Canada in Smith v. Co-operators General Insurance Co.[^8] In that case, the Court held that the period within which a motorist could make a claim against his insurer for accident benefits under his automobile insurance policy had not begun to run because the insurer, in giving the insured notice of its termination of his benefits, had failed to notify him of his right to refer the dispute to mediation as required by the Insurance Act. In that case, however, the Court found that the Legislature clearly intended to place an obligation on the insurer to inform the claimant of the dispute resolution process. Section 71 of the Statutory Accident Benefits Schedule stated that the insurer “shall inform the person in writing” of the dispute resolution process.”
[47] The Assessment Act does not impose a similar obligation on the Respondents or the Board to notify a property owner of its right to appeal from the Board’s decision. They therefore cannot be faulted for failing to do so. On the other hand, the fact that they did not notify PPF of its rights, combined with the fact that PPF was self-represented and encountered difficulty in securing the appropriate advice, are all factors that this Court can properly consider in deciding whether to exercise its discretion as to whether to extend the period within which a notice of motion for leave was required to be given.
[48] The Nova Scotia Court of Appeal, in Irving Oil Ltd. v. Sydney Engineering Inc.[^9], considered what effect the Court, in the exercise of its discretion as to whether to extend the time for appealing, should give to counsel’s failure to give correct advice to his client, particularly in relation to whether the appellant had formed a bona fide intention to appeal within the appeal period:
It would be inappropriate to, in all cases, require rigid adherence to the requirement that the intent to appeal be formed within the applicable appeal period, if the "intent" to appeal is synonymous with a "decision" to appeal. Here, the appeal period is very short. The appellant, although in contact with counsel, was initially not aware of the appeal period, and was then misinformed. It is reasonable for an appellant to seek legal advice on the prospects of an appeal, and to take some time to consider its options, if of the understanding that such time exists. On the other hand, an appellant who is aware of the proper time limits should not be permitted to rely upon its indecision to extend the prescribed appeal period. I agree with the respondent that an appellant has some obligation to inform itself of the applicable periods. The effect of the failure of the appellant to do so, however, and the reasonableness of its explanation, must be considered in each case. Simply put, this appellant, on counsel's advice, thought the appeal period was 30 days. This is confirmed by the appellant's filing of the Notice within the 30 day period. A review of the case law particular to when the appeal period has been missed due to a solicitor's mistake, is found in Blundon v. Storm (1970), 1970 928 (NS CA), 1 N.S.R. (2d) 621 (N.S.S.C.A.D.). (Emphasis added)
3) Prejudice to the Respondent
[49] MPAC submits that, if the Court holds that the thirty day time period is a statutory limitation period, then it has no jurisdiction to extend the period and the absence of prejudice should not be a consideration.
[50] The Respondents have not alleged that PPF’s delay in applying for leave to appeal has caused them to suffer any specific prejudice. The only prejudice they assert is the need of municipalities generally for finality of decisions as to property assessments so that they can have a reliable basis upon which to plan their budgets. While this is a valid consideration in relation to assessments that will affect taxes that have already been imposed or ones required to finance current budgets, PPF submits that it seeks only to adjust the assessment of its property value for purposes of future taxes.
[51] Up until 2008, the Assessment Act based the time limit for appealing property assessments on what taxes would be affected. It provided, in this regard:
- Despite section 47, a proceeding may be brought in court pursuant to section 46 or 47 at any time but the court may only alter an assessment to affect taxes fixed, levied and payable with respect to the assessment in the year in which the proceeding is commenced and any subsequent year. R.S.O. 1980, c. 31, s. 66
[52] The current legislation describes the time limit more broadly, without reference to the potential impact of the appeal.
Time for appeal
43.1 (2) An application for leave to appeal under this section shall be made within 30 days of the mailing of the decision of the Assessment Review Board. 1999, c. 9, s. 15
[53] PPF seeks to affect the assessment of its property’s value only from 2009 forward, not for the earlier years, 2006 to 2008. In these circumstances, especially, I find that PPF’s delay in delivering its Notice of Application for leave to appeal, did not cause any actual prejudice to the Respondents.
4) Merits of the appeal and Whether “Justice of the Case” Requires Extension of Time
[54] I will consider these two factors together with the issue of whether leave to appeal should be granted.
b) Should leave to appeal be granted?
[55] There is a two-part test for granting leave to appeal. The first test is whether there is some reason to doubt the correctness of the Board’s decision. The second is whether the decision involves a point of law of sufficient importance to merit the attention of the Divisional Court.[^10]
1. Is there reason to doubt the correctness of the Board’s decision?
[56] The Assessment Act requires the Board to undertake a two step process in assessing the value of a property for purposes of property tax. The first step is to determine the actual current value of the land. The second step is to consider adjusting the value downward, if it is appropriate to do so, in order to make the assessed value of the property for purposes of property tax equitable, having regard to the assessed values (as distinct from the actual current values) of similar lands in the vicinity. As Lang J. stated in Clarkson v. Ontario Assessment Review Board[^11], “Under the Act, the Board must determine the market value under s. 19 and then determine whether the assessment is equitable as compared to other properties in the vicinity.”
[57] This two step process is derived from s. 44 of the Assessment Act. It provides as follows:
Assessment may be open upon appeal
- (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 persons who should be assessed therefore may be placed upon the roll, and if necessary the assessment roll, even if returned as finally revised, may be opened so as to make it correct in accordance with the findings made on appeal. R.S.O. 1990, c. A.31, s. 44 (1); 1997, c. 5, s. 29 (1); 2006, c. 33, Sched. A, s. 34.
Reference to similar lands in vicinity
(2) For taxation years before 2009, in determining the value at which any land shall be assessed, reference shall be had to the value at which similar lands in the vicinity are assessed. 2008, c. 7, Sched. A, s. 13.
Same, 2009 and subsequent years
(3) For 2009 and subsequent taxation years, in determining the value at which any land shall be assessed, the Board shall,
(a) determine the current value of the land; and
(b) have reference to the value at which similar lands in the vicinity are assessed and adjust the assessment of the land to make it equitable with that of similar lands in the vicinity if such an adjustment would result in a reduction of the assessment of the land. 2008, c. 7, Sched. A, s. 13. [Emphasis added]
[58] A separate type of value is relevant, then, at each of the two stages of the Board’s determination. In the first, it is market value. In the second, it is assessed value, being the value that has been attributed to the property for purposes of property tax. The fact that it is market value that is relevant at the first stage of the Board’s determination follows from the fact that section 44(3)(a), above, directs the Board to determine “the current value of the land” and the Act defines that term as market value.
Definitions
- (1) In this Act,
“current value” means, in relation to land, the amount of money the fee simple, if unencumbered, would realize if sold at arm’s length by a willing seller to a willing buyer (“valeur actuelle”). (Emphasis added)
[59] In the present case, the Board based its determination of the “current value” of the property, in the first stage of its assessment process, on the price PPF had recently paid for it. This was considered to be a reliable basis for determining its market value. The Board stated in its “Deliberations and Conclusions”:
The best evidence of value is the sale of the subject property close to the valuation date. The valuation date for 2006, 2007 and 2008 taxation years is January 1, 2005. Where there is no sale of the subject property that the Board can rely upon, the Board must look at the sales evidence of comparable properties to determine current value. Sales within 12 months on either side of the valuation date are usually considered as being within the relevant time period. The subject property sold in April of 2004 and the Board considers this sale to be within the relevant time period.
[60] The Board considered Mr. Ferraro’s argument that the market value of the property, for the purpose of determining its “current value” in the first stage of the assessment process, should be based on the income that it could earn, on the basis that PPF had paid more for the property than it was worth. The Board rejected this argument. It stated:
Mr. Ferraro presented several reasons why the sale price should not be considered as the basis for the valuation. He is of the opinion that this may have been the “worse investment he has ever made” that he “overpaid” for the property, it was late at night and there were multiple offers to consider. The Board does not accept Mr. Ferraro’s income approach to value because there is not enough information such as bona fide income and expense statements for the Board to consider. The fact remains that there is a sale of the subject property within the relevant time period and there is no evidence to persuade the Board that Mr. Ferraro was coerced to purchase the subject property.
[61] The Board heard argument about a reduction in the sale price by an abatement. The board was not convinced that there was an abatement but accepted the Town’s recommendation to adjust the sale price. It stated:
Based on evidence presented at this hearing, the Board is not convinced that, at the closing of the transaction, there was an abatement in the purchase price as claimed by Mr. Ferraro. The Board, however, accepts the Municipality’s recommendation to adjust the sale price from $2,350,000 to $2,235,000.
[62] It is clear from the Board’s reference to “the sale price” that it was still in the first part of the assessment process, which required it to determine the “current value” of the property, based on its market value.
[63] The Board was next required to undertake the second stage of the process, which was to adjust its assessed value downward, if appropriate, to make it equitable, having regard to the assessed values of similar properties in the vicinity. The requirement for this second stage of the assessment process has given rise to questions as to when and how it must be undertaken and what rights the taxpayer derives from each stage of the assessment process.
[64] The Divisional Court has adopted the view that each stage of the assessment process gives rise to a different right in the taxpayer:
The right not to be taxed on a property at an assessed value that exceeds the actual market value of the property; and
The right not to be taxed at a value that is inequitable, having regard to the assessed values of similar properties in the vicinity.
[65] This view was first articulated by the British Columbia Court of Appeal in relation to the counterpart of Ontario’s Assessment Act in that Province. The B.C.C.A. in Bramalea Ltd. v. B.C. Assessor for Area 9 (Vancouver) stated:
It is my view that the principles mentioned give the taxpayer two distinct rights: (1) a right to an assessment which is not in excess of that which can be regarded as equitable; and (ii) a right not to be assessed in excess of actual value. It follows that it is not proper for that board to sustain an assessment in excess of actual value simply because it bears a fair and just relation to assessments on other similar properties.[^12]
[66] Meehan J., speaking for the majority of the Ontario Divisional Court, in Viva v. Ontario Property Assessment Corp., Region No. 10[^13] , cited the above passage with approval, concluding: “On the assumption that there is good evidence of market value as shown by a recent arm’s length sale, the concept of equity and fairness amongst the taxpayers would ordinarily be satisfied.”
[67] Meehan J. later concluded: “It would appear that in cases involving a recent arm’s length sale, there should be no difficulty in determining that price as the current value and, unless requested to do so by the parties, a review of similar properties under s. 44(2) would not ordinarily be employed to change that value.”
[68] The Divisional Court made it clear in its decision a year later, in Krugerand Corp. v. Ontario Property Assessment Corp., Region No. 09[^14], that the consideration of the assessed values of similar properties in the vicinity is a mandatory requirement of the Act. The Court stated:
- We did hear argument from both sides regarding the purpose of the Assessment Act through its three historic regimes - pre-1969; 1970-1997; and post-1997. In view of the foregoing deficiency of the record, we deem it necessary to limit our conclusion in this regard also. However, it must be noted that for the first time, the statutory reference to assessed values of similar properties in the vicinity in s. 44(2) is in mandatory language. Therefore, while no doubt the aim of the new assessment regime is to adopt ‘current value’ as the base of assessment and to focus on the correctness of ‘current value’, it is the duty of the Court or the Board on an appeal also to have reference to the value at which similar lands in the vicinity are assessed. [Emphasis added)
[69] The Board in the present case did not do this. It ended its analysis with its finding that the current value of the property was $2,235,000. The only words that follow in its judgment are: “Therefore, for the above cited reasons, the Board in accordance with subsection 40(19) of the Act increases the assessment from $1,606,000 to $2,235,000 for the 2006, 2007 and 2008 taxation years.” This truncated analysis is clearly not what the Assessment Act requires nor what the Divisional Court in Krugerand directed for assessments undertaken in accordance with the Act. There is therefore good reason to doubt the correctness of the decision appealed from.
3. Does the matter raise issues of law of significance beyond the parties?
[70] The Court in Krugerand already decided that the issue of whether the second step in an assessment, mandated by section 44, (requiring the Board to consider whether the current value of a property was an equitable basis for assessing its value, having regard to the assessed values of similar properties in the vicinity) was an issue of significance that merited the attention of the Divisional Court. However, it found that because there was no evidence before the Board in that case regarding the assessed values of similar properties in the vicinity, it could not properly address the issue. The Court stated, in this regard:
…It is conceded that at the hearing, the appellant led evidence solely directed at the correctness of the assessor’s ‘current value’, supplying no evidence whatsoever of assessed values of similar properties in the vicinity. The assessor’s evidence was adduced in-chief, also directed at the issue of ‘current value’ only. Then, during cross-examination, the agent asked a few questions of the assessor to elicit assessment; sale-price ratios of properties the assessor had referred to in his report. Equity with other assessments in the vicinity was argued only on this narrow evidentiary base.
The appeal before this court is therefore the first time at which the issue of equity was raised squarely as a live issue. The result is that this court has a less than complete evidentiary record on the issue upon which the appellant now wants to focus….no canvassing and selection of similar properties in the vicinity of 80 Bloor showing their assessed-value to current-value ratios was before the Board.
We are not satisfied that the evidentiary record is such that we can properly deal with the appeal on the basis urged by the appellant that the present assessment is inequitable as compared to the assessment of similar properties in the vicinity. [Emphasis added]
[71] The critical issue for the purpose of the present motion, then, is whether the evidentiary record of the proceeding before the Board is such that the Divisional Court can properly deal with the appeal on the same basis that the appellant in Krugerand had sought to have it dealt with, namely, that the assessment in the present case is inequitable as compared to the assessment of similar properties in the vicinity. This is important, as issues of law are not to be answered in the abstract, but against the factual background of the particular dispute.
[72] The Town and MPAC submit that the evidentiary record is not adequate. They argue that the record is deficient in two respects. First, it argues that there was no evidence that the properties in the vicinity, whose assessed values the appellant seeks to rely upon, were “similar” to PPF’s property. Second, it argues that there was no evidence of the market values of the allegedly similar properties. In the absence of this evidence, it submits, there is no basis upon which the Divisional Court could determine the assessed-value to current-value ratios of the properties, which the Court would require in order to articulate how the Board is to take the assessed values of similar properties into account when adjusting the assessed value of the subject property downward, if appropriate, as mandated by section 44(3)(b) of the Act.
[73] The Town and MPAC correctly point out that section 44(3)(b) of the Act does not require the Board to adjust the current value in assessing the value of a property for purposes of tax unless it finds that it is appropriate to do so. MPAC relies, in this regard, on the decision of the Divisional Court in Municipal Property Assessment Corporation v. John Moss, Danovoc Holdings Inc. et al[^15]. In that case, the Assessor had presented to the Board an assessment analysis of seven improved properties that had sold in the vicinity in the three years preceding the assessment of the subject property. His analysis showed their sale price, acreage, assessment values at the time of the sale, assessed value of improvements at the time of sale, and the assessed values of the land at the time of sale (calculated as the total assessed value less the assessed value of improvements). The Assessor had then done an analysis to determine how close the assessed value of each property at the time of its sale was to the actual sale value obtained, and had concluded that, on average, the two figures were virtually identical.
[74] The Board in the John Moss, Donovoc Holdings case had instructed itself that it must have reference to the relevant sections of the Act, including section 44(2), and reproduced the sections. It commented that the recent amendments to the Act had resulted in there being no mention of “equity” in the assessment process, aside from the requirement in s. 44(2) that reference shall be had to the value at which similar lands in the vicinity are assessed. The Board had then assessed the value of the subject property based on its recent sale price. The Divisional Court, in those circumstances, held that the appeal, which argued that the Board had disregarded the mandatory provisions in s. 44(2) of the Act, did not involve a question of law but one of fact. The Court stated:
[15] The ARB specifically referred to s. 44(2) before arriving at its decision. It did not state that equity was irrelevant in the assessment process. Instead it stated that the word “equity” is not found in the Act; what is found is a mandatory requirement for reference to the assessment values of comparable properties in the vicinity - something which the ARB did before making its findings of assessment values for the subject properties. There is nothing in the ARB decision which leads me to conclude that it rejected the principles concerning equity in assessment set out in Re Empire Realty Co. Ltd. and Assessment Commissioner for Metropolitan Toronto, 1968 183 (ON CA), [1968] 2 O.R. 388 (C.A.)
[75] John Moss, Danovoc Holdings can be distinguished from the present case on two grounds. The first is that the Board in that case explicitly acknowledged the requirements of s. 44(2) in arriving at its assessed value for the property. The second is that the Board had evidence that the assessed values and market values of similar properties in the vicinity were virtually identical, so no adjustment was necessary to achieve an equitable result. In the present case, the Board did not acknowledge its obligation to consider the assessed values of similar properties in the vicinity, even though PPF had asked it to do so. In addition, the Board did not have evidence that the assessed values and market values of similar properties were identical.
[76] The Town and MPAC submit that the onus was on PPF to submit evidence that the properties whose assessed values it relied on were, in fact, similar. It was also obliged, they argue, to submit evidence as to the ratio of their assessed values to their market prices. In the absence of this evidence, they submit, the Board had no basis for concluding that the market value of the subject property was not also an equitable assessed value for property tax purposes. The Divisional Court will therefore have no evidentiary record for concluding that it was not equitable or for articulating a formula that the Board can apply when taking the assessed values of similar properties into account in future assessments.
[77] PPF submits that the evidence it submitted to the Board was sufficient to enable the Board to conclude that an assessment of the subject property’s value, based purely on the price PPF had paid for it, was inequitable. First, it argues that if the Town or MPAC disputed the similarity of the properties, it was incumbent on them to raise that issue before the Board, not to wait and argue for the first time in the present leave application that the evidence before the Board was insufficient to establish that they were similar.
[78] I agree with PPF’s submission in this regard. The Town and MPAC acknowledged at the hearing that “the same vicinity” is generally interpreted to mean in the same town. The properties whose values are relied on by PPF were not only in the same town but on the same street and in or near the same block as the subject property. They were also of similar square footage. The Court also had, with respect to one of the properties, namely, 260 Lakeshore Road East in Oakville, its sale price and current market assessment, which appear to have been identical, at $2,280,000.00, together with a detailed description of the property which discloses that it was, like PPF’s property, of an industrial nature. Yet, the assessed value of PPF’s property was 70% above that of this property.
[79] PPF submits that the evidence as to the assessed values of the properties whose values it relies on was sufficient to establish that it was inequitable to accept the price it had paid for the subject property as the sole basis for its assessed value for property tax purposes. The value the Board ascribed to its property, as noted above, ranged from 70% to 205% above the assessed values of the other properties, on a per square foot basis.
[80] It is true that the lack of the sale prices for all of the properties whose values PPF relies on would have prevented the Board, and will prevent the Divisional Court, from arriving at a sale price-to-assessed-value ratio that they otherwise could have used to articulate a formula that could be applied uniformly to all properties when applying section 44(2) to property tax assessments. It is also true, as the Supreme Court of Canada observed in Hy and Zel’s Inc. v. Ontario (Attorney General[^16]), in the context of constitutional issues raised for the first time on appeal, that it is important that legal issues be decided in a proper factual context. I am mindful, however, that s. 44(3) of the Assessment Act does not direct the Board to consider the sale price of similar properties, but their assessed values. If a taxpayer, as in the present case, asks the Board to consider the assessed values of similar properties in the vicinity, and presents evidence of such values, it is incumbent on the Board to deal with that evidence, if only to state why it is declining to adjust the assessed value of the subject property based on the evidence before it.
[81] I am not satisfied that the Divisional Court, in Krugerand, in observing that the evidentiary record in that case did not include sale price-to-assessed value ratios, should be interpreted as having meant that it would not be prepared to address the issue of equitable treatment under s. 44(3) without evidence of such ratios. To say that a sufficient evidentiary record is required to put an issue of law in a proper factual context does not mean that a case must be a perfect one or one that will enable the Court to articulate conclusively an approach to meet every fact situation that may arise. This Court must be selective in granting leave to appeal but it should not, in my view, be so selective as to prevent justice being done in individual cases, especially where the evidentiary record is sufficient to enable to the Court the context it needs to make incremental developments to its body of previous decisions in order to bring the legal rules those decisions embody “into step with a changing society.”[^17]
Order
Based on the foregoing, it is ordered that the Applicant shall have leave to appeal to the Divisional Court from the Board’s decision.
If the parties are unable to agree on costs, the Applicant shall deliver written submissions, not to exceed four pages, together with a Costs Outline, by January 31, 2010. The Respondents shall file a written reply, each not to exceed four pages, with their Costs Outlines, by February 10, 2010, and the Applicant may reply, not to exceed two pages, by February 15, 2010.
Price J.
Released: January 19, 2010
CITATION: PPF Investments Inc. v. The Town of Oakville et al., 2010 ONSC 491
COURT FILE NO.: DC-09-2943-ML
DATE: 2010-01-19
ONTARIO
SUPERIOR COURT OF JUSTICE
(Divisional Court)
B E T W E E N:
PPF INVESTMENTS INC.
Applicant
- and –
THE TOWN OF OAKVILLE and THE MUNICIPAL PROPERTY ASSESSMENT CORPORATION, REGION NO. 15
Respondents
REASONS FOR ORDER
Price, J.
Released: January 19, 2010
[^1]: Derivative Services Inc. v. Investment Dealers Assn. of Canada, [2002] O.J.No. 1595 (ON S.C.J., Div. Ct.)
[^2]: Derivative Services Inc., supra, para. 11
[^3]: Kefeli v. Centennial College of Applied Arts and Technology (2002), 23 C.P.C. (5th) 35 at para. 14 (C.A.)
[^4]: Bratti v. Wabco Standard Trane Inc. (c.o.b. Trane Canada), 1994 1261, (1994), 25 C.B.R. (3d) 1 at 3 (Ont. C.A.):
[^5]: Adler v. The Queen, 1998 759
[^6]: Antoniou v. M.N.R. case, 88 DTC 1415 (T.C.C.) at 1418
[^7]: Hegeman v. Carter et al, 2008 NWTSC 48
[^8]: Smith v. Co-operators General Insurance Co. [2002] 2002 SCC 30, 2 S.C.R. 129
[^9]: Irving Oil Ltd. v. Sydney Engineering Inc.
[^10]: Mullabrack Inc. v. Ontario Property Assessment Corp., Region No. 16, [2001] O.J. No. 1047 (Div. Ct.). See Also: 1098748 Ontario Ltd. v. Ontario Property Assessment Corp., Region No. 11 et al. [2000] O.J. No. 2050; Ontario (Regional Assessment commissioner, Region No. 9) v. 35792 Ontario Ltd. [1999] O.J. No. 3025; Clarkson v. Ontario Assessment Review Board [2000] O.J. No. 4890, para. 4.
[^11]: Clarkson v. Ontario Assessment Review Board, [2000] O.J. No. 4890, para. 5.
[^12]: Bramalea Ltd. v. B.C. Assessor for Area 9 (Vancouver), (1991), 1990 284 (BC CA), 76 D.L.R. (4th) 53 (B.C.C.A.) at p. 61
[^13]: Viva v. Ontario Property Assessment Corp., Region No. 10 , [2001] O.J. No. 273, at para. 12
[^14]: Krugerand Corp. v. Ontario Property Assessment Corp., Region No. 09, [2002] O.J. No. 4727, para. 7
[^15]: Municipal Property Assessment Corporation v. John Moss, Danovoc Holdings Inc. et al, endorsement of the Divisional Court released August 8, 2002
[^16]: Hy and Zel’s Inc. v. Ontario (Attorney General), 1993 30 (S.C.C.), [1993] 3 S.C.R. 675 at 694. See also A.A. v. B.B., 2007 ONCA 2, at para. 10
[^17]: R. v. Salituro, 1991 17 (S.C.C.), [1991] 3 S.C.R. 654, at p. 666. See also Hill v. Church of Scientology of Toronto, 1995 59 (S.C.C.), [1995] 2 S.C.R. 1130, at paras. 91-92.