CITATION: Chrysler Canada Inc. v. Municipal Property Assessment Corp., 2012 ONSC 2129
DIVISIONAL COURT FILE NO.: DC-10-392-ML
DATE: 20120813
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
A.C.J.S.C. CUNNINGHAM, CRANE AND WILTON-SIEGEL, JJ.
BETWEEN:
CHRYSLER CANADA INC., C.E.H. METRO WEST LTD., C.E.H. METRO EAST LTD., SCARBOROUGH AUTOMOTIVE CENTRE LTD., DOWNSVIEW REAL ESTATE (1993) LTD., DAMIS HOLDINGS LTD., MICROBJO PROPERTIES INC., SABEL HOLDINGS., ZAGJO HOLDINGS LTD., and 454691 ONTARIO INC.
Appellants
– and –
MUNICIPAL PROPERTY ASSESSMENT CORP. (“MPAC”), and THE CORPORATION OF THE CITY OF TORONTO
Respondents
Jack A. Walker and Kenneth R. West, for the Appellants
Karey Lunau, for the Respondent, Municipal Property Assessment Corporation
HEARD at Toronto: April 3, 2012
DECISION
CRANE J.
[1] The Appellants (collectively “Chrysler”) appeal a decision of the Assessment Review Board (the “Board”) released July 6th, 2010 and seek an order setting aside the decision and remitting the matter to the originally constituted panel of the Board for a redetermination on the basis of the facts as admitted, in accordance with this Court’s determination and direction.
[2] Chrysler appealed the assessments on four car dealerships in the City of Toronto to the Board.
[3] On assessment appeals, the Board is required to fix an assessment on a property at the lower of its current value or its equitable assessment pursuant to the provisions of Section 44(3) of the Assessment Act, R.S.O. 1990, c. A 31 (“the Act”) as amended.
Standard of Appeal
[4] The appeal is taken pursuant to Section 43.1 of the Act which provides that an appeal lies to this Court, with leave, on a question of law. The parties are in agreement that the standard of review is one of correctness: see BCE Place Limited v. Municipal Property Assessment Corporation, 2010 ONCA 672 (CA) at para. 17 and 18.
[5] Leave was granted by Swinton J. by order dated January 27, 2011 on the following question:
“Did the Board err in law in its determination that for the purposes of s. 44(3)(b) of the Act, “vicinity” may not exceed the boundaries of the municipality in which the properties under appeal are located.”
Position of the Parties
[6] Board member P. Andrews in the subject Decision has set out the position of the parties succinctly before it (and as now put by counsel before this Court):
It is the position of the appellant that subsection 44.(3)(b) places no limitation in terms of municipal boundaries when referencing similar land in the vicinity. Accordingly the appellants provide 13 suggested similar properties to the subject properties, four located in the City of Toronto and nine located in surrounding municipalities. The median Assessment to sale Ratio (ASR) of these 13 sale properties is 0.682; an ASR that, the appellants argue, is inequitable in as far as it is indicative that while the subject properties are assessed at their current values other similar lands in the vicinity are assessed at below their current values and accordingly, the ASR supports a reduction in the assessments of the subject properties as returned.
It is the position of the Municipal Property Assessment Corporation (MPAC) that for the purpose of the test under subsection 44.(3)(b) it is not appropriate to cross municipal boundaries. Thus, MPAC argue that in testing the equity of the assessment as returned of the subject properties, only the evidence of the four suggested similar properties located in the City of Toronto should be referenced. These four properties have a median ASR of 0.96, a level that MPAC suggests supports confirmation of the assessments as returned.
The Board must determine whether for the purpose of subsection 44.(3)(b) of the Act vicinity for the subject properties should be limited by the boundaries of the municipality within which the assessed properties lie.
The parties are in agreement that if the Board finds that for the purposes of subsection 44.(3)(b) of the Act no restriction, in terms of municipal boundaries, should be placed on the location of referenced similar lands in the vicinity then the Board should reduce the assessments as returned of the subject properties by a factor of 0.682.
Further the parties are in agreement that if the Board finds that for the purposes of subsection 44.(3)(b) of the Act the location of referenced similar lands in the vicinity should be restricted to the municipality within which the subject properties are located then the Board should confirm the assessments as returned.
The Decision of the Board
[7] In its reasons, the Board, made findings of current values of the subject properties of the Appellants as of the valuation day of January 1, 2008. The Board then stated that:
The Act was amended for taxation years beginning with 2009 to require the Board to lower an assessment below current value if required to make the assessment equitable with the assessments of similar properties in the vicinity.
[8] The Board then quotes Subsection 44.(3)(b) of the Act… “The Board shall…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 land.”
[9] The Board responds to the Appellants’ argument at page nine of the Reasons for Decision as follows:
While the Board agrees with Mr. Tolley that there is no explicit constraint on vicinity in the wording of Subsection 44.(3)(b) of the Act, the Board is persuaded that to extend vicinity under Subsection 44.(3)(b) beyond municipal boundaries would lead to an answer that is illogical, inequitable and contrary to the general intent of the Act, and to the purpose of the specific section in question.
[10] The Board rests its conclusions upon its answer to two questions.
[11] The first question that the Board puts to itself is how far may a search for comparables extend? In answering this question the Board characterizes the evidence as a search for an absolute and in effect, concludes that one may search as far as is necessary (within presumably the Province of Ontario).
[12] The second question the Board puts to itself; “is it is equitable to use similar properties from a different tax regime to demonstrate inequity?” The Board in answering this question characterizes Subsection 44(3)(b) of the Act, as the search for similar properties to that of the Appellants’ properties that are assessed at below their current value. The response by the Board is the acceptance of 4 properties within the City of Toronto and 9 properties in the Region of York, a total of 13 similar properties to determine current value. The appellants seek the application of s. 44(3)(b) to all 13 properties. The respondent, MPAC, persuaded the Board that the law limits vicinity to the comparables within the municipality of Toronto. The Board reasons as stated at page 10 as follows:
The second challenge goes to the crux of Ms. Lunau’s argument. The purpose of the Assessment Act is the equitable distribution of the tax burden within a Municipality. The tax burden is distributed equitably if all tax payers are assessed at their current values. The subject properties are located in the City of Toronto. The subject properties are correctly assessed at their current values. The subject properties are correctly assessed when referenced to the values at which similar properties in the City of Toronto are assessed. Accordingly the subject properties are paying their fair share of the tax burden in the City of Toronto; as also are the similar properties.
[13] The Board concluded that to interpret Section 44(3)(b) of the Act to give effect to the principle of equity, it is necessary to understand the meaning of similar properties in the vicinity to be limited to vicinity within the municipal boundaries of the Appellant. In effect, writing in the words following “vicinity”, ‘not to exceed the boundaries of the municipality’.
Legislative Background
[14] In order to see where we are, it is instructive to begin with the background to the present legislative regime.
[15] It may reasonably be said that the legislative course of municipal taxation has been checkered and patched both before, and following, the assumption of the assessment function by the Province of Ontario in 1970 and the amendments of 2008.
[16] The present regime, for our purposes on this analysis, may be considered commencing with the enactment of the Fair Municipal Finance Act, S.O. 1997 c. 29 followed by amendments to the Assessment Act in 2008 including the legislative enactment of common law principles of equity in taxation, through the additions to s. 44 and the Appeal process to the Board in s. 40. These former provisions as then enacted and continuing to date are:
“44. (1) Assessment may be open upon appeal – 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.
(2) Reference to similar lands in vicinity – 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.
(3) Same, 2009 and subsequent years – 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, Sch. A, s. 13.”
“Vicinity” The Legislative Intention
[17] Subsection 2 of s. 44 above states “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.”
[18] This wording has been used for at least the last 100 years, (see for e.g. The Assessment Amendment Act, 1892, s. 15)[^1]. It has been the duty of the Board and its predecessors to find the actual value of an appellant’s land by having reference to the value at which similar land in the vicinity is assessed. The Assessment Act, R.S.O. [1914] s. 40(1) and s. 69(16) stated, “the Court may, in determining the value at which any lands shall be assessed have reference to the value at which similar land in the vicinity is assessed,” per Anglin, J., Dreifus v. Royds (1920) 1920 489 (SCC), 61 S.C.R. 326. The Supreme Court stated the duty on the Board was to find the actual value of the lands in question. No municipal boundary limit is placed on the requirement.
[19] In 2001 the Ontario Legislature enacted the Municipal Act, 2001, S.O. 2001 C. 25. The following definitions appear;
Definitions
(20) In this section,
“comparable properties” means properties identified by the assessment corporation to be similar lands in the vicinity of the eligible property;
“vicinity” has the same meaning as under subsection 44(2) of the Assessment Act, except that the vicinity shall not exceed the boundaries of the single-tier or upper-tier municipality, as the case may be, in which the eligible property is located. 2001, C. 25, s. 331(20), [etc.]
[20] In 2006, the Legislature enacted the City of Toronto Act, 2006, S.O. 2006 c. 11, s. 294(19). This section adopts the definition of “comparable properties” and “eligible property” from the Municipal Act, 2001. The definition of “vicinity” follows:
“vicinity” has the same meaning as under subsection 44(2) of the Assessment Act, except that the vicinity shall not exceed the boundaries of the City.
Analysis
[21] The Appellants submit that they as tax-payers are entitled in law to the strictness of interpretation applied to the State taxing authority.[^2] They argue that it is readily apparent that should the decision of the Board as to its interpretation of “vicinity” be upheld, the words of limitation to municipal boundaries in the Municipal Act, 2001, and the City of Toronto Act, 2006, would be redundant, and contrary to the accepted rules and jurisprudence of statutory interpretation.
[22] The Respondent submits that the Legislature intends an intra-boundary application. In my view, this reasoning, however laudable, is not mandated by the governing legislation as it is clear that the intention of the Legislature in the statutes of 2001 and 2006 expressly adopted the meaning of “vicinity” in s. 44(2) of the Assessment Act and then expressly limited its definition in the latter statutes to only properties within the municipal boundary.
[23] The MPAC does not dispute that the Legislature intends an extra-municipal boundary application to vicinity in subsection 44(2) for the determination of market values (when required to find values), but then submits the property valuation is not intended to be used by the Appellants’ municipality for its taxation of the Appellant because equity of the property for taxation may only be fair or unfair relative to other properties within a municipality.
[24] Consequently, although the Board’s decision does serve the policy objective of equitable taxation within the City of Toronto, the policy, however desirable, loosens the legislative constraints that hold its agent, the MPAC, to the delivery of current value assessments of all property in Ontario as may be tested by property owners under subsection 43(3) of the Assessment Act. In my view the use by the Legislature of the identical words in subsection 44(3) to that of subsection 44(2) is beyond controversy that the meaning is intended to be identical.
Comment
[25] The conclusion of the Board that equity is achieved under the present facts of the appeal is troublesome. It may well be accepted that the Appellant car dealerships are paying their fair share of taxes as compared to other tax-payers within the City of Toronto. However, the Board further concludes that similar car dealership properties in the York Region are also paying their fair share of municipal taxes within that municipality given that the York Region mill rate is being applied to similar valuations of York car dealerships, even though considerably below current value. Those car dealerships may well be paying an equitable share of taxes as between themselves, but as to the rest of the rate-payers in that municipality they are under-taxed. At the hearing MPAC counsel acknowledged that the present circumstances arose due to erroneous assessments of those car dealerships. This observation, however, is not determinative.
[26] It is overtly reasonable that similar properties bear a similar level of municipal taxes and that inequities in assessment be reduced to the lesser. This result is within s. 44(3)(b) of the Assessment Act. However, in my view, s. 44(3)(b) is broader. It speaks of inequity of assessment with the scope of the assessment mandate extra-municipal. That mandate being all similar properties are to bear similar current values – subject to adjustment every 4 years. So that on those rare occasions when sufficient similar properties cannot be found, to the satisfaction of the Board, within the appellants’ municipality, the comparison is, as here, extra-municipal.
Principles of Statutory Interpretation
[27] Sullivan on the Construction of Statutes, Fifth Edition[^3], opens chapter one as follows:
Introduction. More than thirty years ago, in the first edition of the Construction of Statutes, Elmer Driedger described an approach to the interpretation of statutes which he called the modern principle:
Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context, in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.
The modern principle has been cited and relied on in innumerable decisions of Canadian courts, and in Re Rizzo & Rizzo Shoes Ltd. it was declared to be the preferred approach of the Supreme Court of Canada. It has even been applied to interpretation of Quebec’s Civil Code.
Rizzo & Rizzo Shoes Ltd., 1998 837 (SCC), [1998] 1 S.C.R. 27 at 41 (S.C.C.)
[28] Professor Sullivan at page 24 discusses the ordinary meaning rule, “In interpreting any text, the ordinary meaning as understood by the reader is assumed to correspond with the meaning intended by the writer.” Professor Sullivan continues at page 24 and summarizes as follows:
“…the ordinary meaning rule is closely related to Driedger’s modern principle. “It emphasizes that interpretation properly begins with ordinary meaning – with reading words in their grammatical and ordinary sense – but it does not stop there. Interpreters are obliged to consider the total context of the words to be interpreted in every case, no matter how plain those words may seem upon initial reading.”
[29] Professor Sullivan deposes under her heading The Presumption Against Tautology at page 210 as follows:
“Governing principle. It is presumed that the legislature avoids superfluous or meaningless words, that it does not pointlessly repeat itself or speak in vain. Every word in a statute is presumed to make sense and to have a specific role to play in advancing the legislative purpose.”
Professor Sullivan concludes at page 210 of her text, as follows:
“As these passages indicate, every word and provision found in a statute is supposed to have a meaning and function. For this reason courts should avoid, as much as possible, adopting interpretations that would render any portion of a statute meaningless or pointless or redundant.”
[30] Professor Sullivan’s third contribution to this analysis is found at page 244 of her text:
An implied exclusion argument lies whenever there is reason to believe that if the legislature had meant to include a particular thing within its legislation, it would have referred to that thing expressly. Because of this expectation, the legislature’s failure to mention the thing becomes grounds for inferring that it was deliberately excluded. Although there is no express exclusion, exclusion is implied. As Laskin J.A. succinctly put it, “legislative exclusion can be implied when an express reference is expected but absent”. The force of the implication depends on the strength and legitimacy of the expectation of express reference. The better the reason for anticipating express reference to a thing, the more telling the silence of the legislature.
Conclusion
[31] In my view had the Legislature of Ontario intended a municipal boundary in s. 44(3) of the Assessment Act it would not have used the historic words, or alternatively, would have stated an exception, as was done in the statutes of 2001 and 2006, supra.
The Decision
[32] I would allow the appeal with the order of the Board to be set aside and the subject appeals remitted to the Board before the originally constituted panel for redetermination on the basis of this Court’s determination and direction.
Costs
[33] Counsel agree that costs here and on the motion for leave are to be fixed in the inclusive sum of 5,000.00 payable in the cause. An order will issue.
Released: Crane J.
Cunningham J.
Wilton-Siegel J.
CITATION: Chrysler Canada Inc. v. Municipal Property Assessment Corp., 2012 ONSC 2129
DIVISIONAL COURT FILE NO.: DC-10-392-ML
DATE: 20120813
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
A.C.J.S.C. CUNNINGHAM, CRANE AND WILTON-SIEGEL JJ.
BETWEEN:
CHRYSLER CANADA INC., C.E.H. METRO WEST LTD., C.E.H. METRO EAST LTD., SCARBOROUGH AUTOMOTIVE CENTRE LTD., DOWNSVIEW REAL ESTATE (1993) LTD., DAMIS HOLDINGS LTD., MICROBJO PROPERTIES INC., SABEL HOLDINGS., ZAGJO HOLDINGS LTD., and 454691 ONTARIO INC.
Appellants
– and –
MUNICIPAL PROPERTY ASSESSMENT CORP. (“MPAC”), and THE CORPORATION OF THE CITY OF TORONTO
Respondents
REASONS FOR JUDGMENT
Crane J. / Divisional Court
Released: August 13, 2012
[^1]: 15. Sub-section 15, of the section 64 of the said Act is amended by inserting immediately after the word “accordingly”, where it occurs in the fourth line thereof, the words following:-And the court may, in determining the value at which any land shall be assessed, have reference to the value at which similar land in the vicinity is assessed.
[^2]: Placer Dome Canada Ltd. v. Ontario (Minister of Finance) 2006 SCC 20 at para. 21; Taxpayers are entitled to rely on the clear meaning of taxation provisions in structuring their affairs. Where the words of a statute are precise and unequivocal, those words will play a dominant role in the interpretive process.
[^3]: All that follows is to my understanding well established law.