Municipal Property Assessment Corporation v. Prata et al., 2014 ONSC 368
CITATION: Municipal Property Assessment Corporation v. Prata et al., 2014 ONSC 368
DIVISIONAL COURT FILE NO.: 29/13
DATE: 20140205
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
KITELEY, RADY AND WHITAKER JJ.
Application Under the Assessment Act, R.S.O. 1990, c. A.31, s. 43.1
and Rule 61.03 of the Rules of Civil Procedure
BETWEEN:
Municipal Property Assessment Corporation Appellant
- and -
Philipe Maria Gonzaga Prata, Dinah Leigh Prata and Town of Oakville Respondents
Karey Lunau, for the Appellant
Philipe Maria Gonzaga Prata, in person
HEARD: January 14, 2014
KITELEY J:
[1] This is an appeal by MPAC from two decisions of the Assessment Review Board: the Hearing Decision dated May 8, 2012 and the Review Decision dated December 17, 2012.
The Assessment Review Board – The Hearing Decision
[2] On December 16, 2011 Member I. Oliveira held a hearing of the appeal by Mr. Prata of the assessment by MPAC of Mr. Prata’s former residence in the amount of $967,000 for the 2010 taxation year. The ARB allowed the appeal and reduced the assessment to $720,000 for the 2010 taxation year.
[3] At the appeal hearing, MPAC and the Town of Oakville were each represented by an advocate and Mr. Prata did not have counsel. The Member reviewed the evidence of a Property Valuation Analyst with MPAC who was described as an experienced witness. She provided five properties which she opined were good indicators of the subject property’s current value which demonstrated a range of values between $967,000 and $1,002,000. The witness provided an alternative approach that involved an analysis of three properties which had been sold and the structures had been demolished. On that approach, she said that the range of values would be between $951,000 and $1,017,000. The Member noted that MPAC took the position that the evidence established that the assessment of $967,000 was correct. The advocate for the Town of Oakville concurred with MPAC and she too suggested comparable properties.
[4] The Member reviewed Mr. Prata’s evidence which included his purchase in April 2009 with a closing date of June 2009; the condition of the property; a Report Summary from a Home Inspection Report; an Energy Efficiency Evaluation Report; and a comparison with another property in the same neighbourhood. Mr. Prata took the position that his purchase price of $720,000 was the correct basis for establishing the assessed value.
[5] In a decision dated May 8, 2012, the Member considered the evidence and the positions taken and concluded that the purchase price of the subject property was the best indicator of value.
The Assessment Review Board - The Request for Review
[6] On behalf of MPAC, Donald G. Mitchell filed a Request for Review dated June 6, 2012. In his written Request, Mr. Mitchell referred to the document that had been filed as exhibit 5 at the hearing and he noted that attached to exhibit 5 were two MLS listings, one with reference to the transaction in June 2009 and the other with reference to a transaction in May 2011. Mr. Mitchell referred to the Home Inspection Report (which had been marked Exhibit 2 at the hearing) as well as a documents referred to as exhibit 6 which described work that had been done on the property. He noted that Mr. Prata had sold the property in May 2011 for approximately $950,000. He referred to the comparables on which MPAC had relied and other evidence.
[7] Mr. Mitchell took the position that the Board had erred in the following material respects:
(a) The Board conducted its own investigation prior to the hearing and considered evidence not produced to the parties resulting [sic] a denial of natural justice and procedural fairness;
(b) The Board improperly excluded the land sales on the basis that the Property was not purchased with the intent to demolish and re-build. The intention of the purchaser is irrelevant and the Member ignored or misapprehended evidence that the Property was in fact marketed and purchased for redevelopment;
(c) The Board erred in relying on the June 2009 sale of the Property. Specifically, the Board failed to adjust the June 2009 sale price for time or for renovations made to the Property after the sale but before the return of the roll in 2009 for taxation in 2010. In addition, the Board failed to apprehend that the Property was sold under a power of attorney.
[8] Upon learning of the Request for Review, Mr. Prata contacted the ARB and asked for an opportunity to respond but MPAC did not make the request.
[9] The Review Decision of the ARB was released on December 17, 2012. After referencing the request for review, and rules 146-152 of the Board’s Rules of Practice and Procedure, Lynda Tanaka, Chair, concluded as follows:
I find that you do not raise an arguable case on behalf of MPAC that Member Oliveira made a material error of law or fact.
While Member Oliveira did print Toronto Real Estate Board (TREB) listing for the subject property the information contained in the TREB listings was already contained in Exhibit 5. The evidence was introduced at the hearing and the parties had the right to respond. Furthermore Member Oliveira placed the TREB listings in the exhibit file rather than keeping them to himself.
As for the other two allegations that Member Oliveira improperly excluded MPAC’s comparables and erred in relying on the June 2009 sale of the subject property, the Decision shows that Member Oliveira carefully scrutinized the evidence tendered and accepted or rejected it with clear reasons.
Motion for Leave to Appeal
[10] In support of the motion for leave to appeal, MPAC filed the affidavit of Mr. Mitchell dated January 8, 2013 and Joseph Fantetti dated January 22, 2013.
[11] In his affidavit, Mr. Mitchell said that he had been retained by MPAC to request that the Assessment Review Board review its decision. He had not attended at the original hearing so he inspected the Board’s file prior to completing the application for the review. According to his affidavit sworn January 8, 2013, he discovered two documents stapled to what was marked as Board Hearing Exhibit 5 which he described as follows:
(i) A “Status Report”[^1] for the sale of the Property that closed on June 30, 2009 printed from the Toronto Real Estate Board’s website on December 12, 2011. The Status Report was headed:
Prepared by IVAN OLIVEIRA, Salesperson
HERITAGE BRAMPTION [sic] INC., BROKERAGE
126 Main St. N., Brampton, ON L6V 1N8
12/14/2011 10:07:56 AM
(ii) A “Status Report” for the sale of the Property that closed on May 26, 2011 printed from the Toronto Real Estate Board’s website on December 12, 2011. The Status Report was headed:
Prepared by IVAN OLIVEIRA, Salesperson
HERITAGE BRAMPTION [sic] INC., BROKERAGE
126 Main St. N., Brampton, ON L6V 1N8
12/14/2011 10:08:38 AM
[12] Mr. Mitchell deposed that Board Hearing Exhibit 5 is described on the exhibit list as “Subject’s MLS Listing”. Mr. Mitchell had spoken with Joseph Fantetti who was the advocate for MPAC at the hearing. Mr. Mitchell said he was advised that Exhibit 5 was an MLS listing for the June 30, 2009 sale of the property. Mr. Mitchell said he had asked Mr. Fantetti if the Member had provided the parties with copies of the reports at the hearing and Mr. Fantetti had advised him that the Member had not done so. Mr. Mitchell also provided an excerpt from the Ontario Public Appointments Secretariat website in which Member Oliveira is described as a realtor and an educator.
[13] In his affidavit, Mr. Fantetti reviewed the two documents that were attached to Hearing Exhibit 5 as well as his file copy of the document that had been marked as Exhibit 5 and confirmed that Exhibit 5 consisted of a one page MLS listing for a sale on June 30, 2009. The content of Exhibit 5 is the same as the two documents referred to by Mr. Mitchell but the formatting is somewhat different. Mr. Fantetti said that the two reports were not provided to the parties at the hearing and Member Oliveira did not tell the parties that he had done any research about the property or that he had prior knowledge of any facts about the property.
[14] On September 18, 2013 Aston J.[^2] granted leave to appeal on these two issues:
Whether the presiding member’s undisclosed investigation into the facts of the Prata appeal renders his decision invalid?
Did the Board err in finding that the member’s undisclosed investigation did not violate the rules of natural justice?
[15] The Notice of Appeal was filed on September 20^th^ and included those two grounds of appeal.
[16] Since the granting of leave, Mr. Prata served and filed an affidavit in which he referred to the allegation that the presiding ARB Member at the hearing on December 16, 2011 did not provide two TREB property listings that he had obtained. According to Mr. Prata, at the start of the hearing the Member asked if they had all received copies of the evidence which was to be submitted. MPAC’s representative disputed having received prior notice of evidence that Mr. Prata wished to submit. At the request of the Member, Mr. Prata and the representatives from MPAC and the Town of Oakville had a private conversation about the contested evidence. On returning, the member asked if they had come to agreement. Mr. Prata said that he went through a list of each item of evidence he intended to submit. Included in his list was an MLS property sale on June 30, 2009. Mr. Prata said that the Member informed all parties that he had two MLS listings in his possession.
[17] Mr. Prata said that he confirmed with the Member that one of his MLS listings was essentially the same as the printout Mr. Prata intended to submit in evidence. The Member asked about his second MLS listing and Mr. Prata said that, on inspection, the Member was informed by MPAC’s witness that it was for a subsequent sale of the property. MPAC’s witness showed pictures of the new house at the property and the Member asked if that was relevant. Mr. Prata said that all parties agreed that his second MLS listing and the pictures were not relevant to the hearing and the Member asked Mr. Prata to continue.
[18] Mr. Prata said that the disclosure concluded without objection from MPAC’s representative or from the representative from the town of Oakville and the evidence was then heard.
[19] Mr. Prata said that the Member did not provide copies of the MLS listing that he had obtained and Mr. Prata did not ask for them as it was obvious that the first report would be submitted into evidence by him and the second was not relevant. Mr. Prata did submit his MLS listing for the June 30, 2009 sale as exhibit #5 and MPAC’s advocate cross-examined him on it.
[20] Mr. Prata also said that in June 2012, MPAC filed a request for review of the decision and provided an affidavit from MPAC’s advocate claiming that the Member had not provided the MLS listings. Mr. Prata said that he had contacted the ARB and had asked if he could submit a response to MPAC’s request for review but he did not receive a response.
Position of the Appellant MPAC and of Mr. Prata
[21] MPAC appeals the decision of the ARB dated May 8, 2012 and the Request for Review Decision dated December 17, 2012. Counsel takes the position that the Member improperly conducted his own investigation; did not advise the parties that he had done so and did not provide the parties with the copies of the two MLS listings that were attached to Hearing Exhibit 5. In addition, counsel asserts that it cannot be known what other investigation the Member conducted. Counsel argues that the Member failed to act in a judicial capacity and breached the fundamental rule of natural justice or procedural fairness that the parties are entitled to decide the evidence that will be led and entitled to have confidence that the decision was made on that evidence alone. Counsel noted that there is no reference in the decision of the Member to his independent investigation.
[22] Counsel also argued that while it is possible for parties to waive a breach of natural justice or procedural fairness, that can only occur when the Tribunal Member discloses the fact of the investigation and the product of the investigation and gives the parties an opportunity to respond and object and that that did not occur here so there can be no waiver.
[23] As for the Request for Review, counsel argued that the ARB applied the wrong test in refusing to hear MPAC’s motion. She took the position that the decision of the ARB was that there was no breach of procedural fairness because most of the information on the listings obtained by the Member was also in the hearing exhibits. Counsel asserted that the correct test was whether the Member’s actions might have prejudiced the parties or might reasonably have raised the possibility of prejudice. Counsel also noted that the finding of the ARB that the Member’s breach was “cured” because similar facts were put into evidence by the parties and because he left some evidence of his investigation in the file is contrary to the ARB’s own rule 149(b) and is legally incorrect.
[24] In her factum, counsel for MPAC asked that the Hearing and Review Decisions be set aside and that the matter be remitted to the ARB for a new hearing before a different member.
[25] In her submissions before this court, Ms. Lunau pointed out that the hearing before Member Oliveira was a re-hearing of an appeal concerning the same property. In the first appeal Member J. Laws determined that the correct current value assessment was $996,000 which was an increase from the returned value of $967,000. Member Laws had reduced the assessment to $923,000 under section 44(3)(b) based on an analysis of CVA per square foot of comparable properties. Both MPAC and Mr. Prata sought a review of that decision. The Board cancelled the decision and ordered a new hearing. As Ms. Lunau noted, if this court allowed the appeal, it would result in a third hearing involving the same property for the year 2010 when Mr. Prata no longer owns the property. She said that if this Court allowed the appeal, she would not ask for a rehearing but she would agree that the decision of Member Oliveira would stand. She noted that the issue of independent and undisclosed investigations by Members of the ARB was very important to her client but she appreciated why the results of the appeal (if allowed) ought not to be visited on Mr. Prata under these unique circumstances.
[26] Although Mr. Prata was no longer at risk, the Court invited him to make submissions in addition to his affidavit and his factum. Mr. Prata took the position that the Member had disclosed his investigation and none of the participants saw any difficulty in what he reported. He agreed with the evidence of Mr. Fantetti that the Member had not provided copies of the 2009 listing the Member had acquired because Mr. Prata provided the same information in Hearing Exhibit 5 and the Member had not provided copies of the 2011 MLS listing because all agreed it was irrelevant. He noted that he had wanted to participate in the Hearing Review process but the ARB had not responded to his offer to do so. He pointed out that MPAC’s application for the review incorporated three reasons and the Chair of the ARB had dealt with all of them.
Analysis
[27] The ARB exercises a statutory power of decision and is required to act in a quasi-judicial capacity.[^3]
[28] This court’s jurisdiction flows from s. 43.1(1) of the Assessment Act which provided for an appeal on a question of law. The two questions which are the subject of this appeal are found at paragraph 14 above. No standard of review analysis is necessary for issues of procedural fairness. The reviewing court is required to assess the procedures and safeguards required in the circumstances and determine whether the tribunal complied with those requirements[^4]. If the Court finds that there was a breach of the rules of natural justice, then, subject to the unique position taken by counsel for MPAC, the remedy is a new hearing before a differently constituted Tribunal.
[29] Counsel for MPAC observed that Mr. Prata had filed his affidavit sworn December 5, 2013 and that that was irregular. She agreed that she had not challenged the filing. But it did mean that she had not responded. At the outset of her submissions, counsel took the position that the evidence of Mr. Fantetti and of Mr. Prata was in conflict but she ultimately conceded that there was no material conflict. They agree that the Member did not provide the parties with copies of the MLS listings that the Member had obtained. Since the evidence of Mr. Prata is not challenged or contradicted in this appeal, we accept it and rely on it to conclude:
(a) The Member conducted his own investigation prior to the hearing.
(b) The investigation consisted of searching MLS listings and retrieving two listings: one dated June 30, 2009 and the other dated May 26, 2011.
(c) The Member revealed to all the parties that he had conducted his own investigation and had obtained those two listings. He did not provide copies of either to the parties.
(d) The Member did provide the parties with an opportunity to respond. The parties agreed that the second listing was irrelevant and therefore a copy did not have to be provided to the parties. The parties agreed that the first listing was relevant and had already been obtained by Mr. Prata and was put into evidence by Mr. Prata as Hearing Exhibit 5.
(e) While there is no evidence as to whether the Member conducted any other investigation, there is nothing in the record to suggest that he did anything else.
[30] Of the two questions before us, we are satisfied that the Member did disclose his investigation into the facts.
[31] We turn to whether the Member’s decision is invalid. It is a fundamental principle that a Tribunal Member is not to conduct his or her own investigation. In unique circumstances such as this when the Member did so, the party against whom the decision was rendered is justified in raising a concern that the Member failed to act judicially. Furthermore, even where the Member did disclose as indicated above, the failure of the Member to record the fact and the result of his investigation in his decision reinforces that concern.
[32] On the basis of our findings in paragraph 29 above, we are satisfied that the parties were aware of the investigation, had the opportunity to object, did not object, and in fact, proceeded with the hearing. On that basis, the parties waived the fact that the Member had conducted his own investigation. While we agree with counsel for the Appellant that the independent investigation was improper, we are satisfied that the Appellant waived the possible apprehension of bias.[^5] The decision is not invalid. The Court would not grant the appeal on that ground.
[33] That leaves the second ground of appeal as it relates to the Request for Review. As indicated above, the Request for Review addressed three issues, only one of which is relevant to this appeal. In the Request for Review, MPAC noted that the two listings obtained by the Member were not referred to in the reasons nor were they disclosed to the parties and that that resulted in a denial of natural justice and procedural fairness. MPAC submitted that the investigation by the Member and the failure to disclose resulted in an unfair hearing and raised a reasonable apprehension that the Board may have prejudged the matter or failed to act in an impartial manner.[^6]
[34] As indicated in paragraph 9 above, the basis for refusing the Request for Review on the ground of procedural fairness consists of three sentences in which the Chair concedes that the Member printed listings but suggests that the improper investigation was cured by the fact that the information in the listing was already contained in Exhibit 5 and the parties had the right to respond. In addition, the Member had not hidden the results of his investigation because he had left them in the exhibit file.
[35] The Review Decision failed to address the fundamental issue that the Member had conducted his own investigation. It failed to reflect that s. 40(19) of the Assessment Act makes it clear that the Board is required to determine the matter “after hearing the evidence and the submissions of the parties” i.e. on the basis of the evidence submitted by the parties. It failed to reflect the fact that the information in only one of the listings was contained in Exhibit 5. By inferring that the breach of procedural fairness could be “cured” the decision failed to reflect the authorities that indicate that there can be no cure once there is a breach.[^7]
[36] We do not agree with the reasoning on this point in the Review Decision. However, having found that the inappropriate investigation was disclosed by the member and the deficiency was waived, there was no breach of the rules of natural justice or of s. 40(19) or of the Board’s Rules of Practice and Procedure.
[37] The Appellant has not persuaded us that the ARB made an error of law in either of the Hearing Decision or the Review Decision. We dismiss the appeal without costs.
KITELEY J.
RADY J.
WHITAKER J.
Date of Release:
CITATION: Municipal Property Assessment Corporation v. Prata et al., 2014 ONSC 368
DIVISIONAL COURT FILE NO.: 29/13
DATE: 20140205
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
KITELEY, RADY AND WHITAKER JJ.
BETWEEN:
Municipal Property Assessment Corporation Appellant
- and -
Philipe Maria Gonzaga Prata, Dinah Leigh Prata and Town of Oakville Respondents
REASONS FOR JUDGMENT
KITELEY J.
RADY J.
WHITAKER J.
Date of Release:
[^1]: These documents are referred to as Status Reports. The documents are headed “Stratus Reports”. In content and appearance they are what are referred to as MLS summaries.
[^2]: Municipal Property Assessment Corporation v. Prata, 2013 ONSC 5883
[^3]: Assessment Review Board Act, R.S.O. 1990 c.A.32, as amended, s.7; Statutory Powers Procedure Act, R.S.O. 1990, c.S.22, ss. 1(1)[“statutory power of decision”]; Marathon Realty Co. v. Ontario (Regional Assessment Commissioner, Region Number 7) [1979] O.J. No. 1090 (Ont. Div. Ct.) at para. 33
[^4]: London (City) v. Ayerswood Development Corp. (2002), 2002 3225 (ON CA), 167 O.A.C. 120 (Ont. C.A.) at para. 10
[^5]: Canadian College of Business and Computers Inc. v. Ontario (Private Career Colleges), 2010 ONCA 856
[^6]: Newfoundland Telephone Co. v. Newfoundland (Board of Commissioners of Public Utilities), 1992 84 (SCC), [1992] 1 S.C.R. 623 at page 636
[^7]: Newfoundland at page 645