COURT FILE NO.: DC-05-001292ML
DATE: 20050707
SUPERIOR COURT OF JUSTICE – ONTARIO
DIVISIONAL COURT
RE: SYLVIETTE BROWN v. ONTARIO MINISTRY OF AGRICULTURE & FOOD, ADMINISTRATOR FARM PROPERTY CLASS TAX RATE PROGRAM
BEFORE: MacKENZIE J.
COUNSEL: Ms. S. Brown, appellant/self-represented
Mr. S. Garrod, for the respondent
HEARD: July 4, 2005
E N D O R S E M E N T
[1] This is an application for leave to appeal from a decision of the Agriculture, Food and Rural Affairs Appeal Tribunal (the “Tribunal”) dated December 21, 2004 (the “Decision”).
[2] By the Decision, the Tribunal refused the request of appellant to designate her real property as “Farm Property Class” in order to become eligible for reduced tax rates on her real property.
[3] The appellant’s right of appeal from the Decision is set out in s.43.1 of the Assessment Act, R.S.O. 1990, Chap. A-31, as amended:
s.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.
It is not in issue that for purposes of this leave application, the Tribunal discharges the function of the Assessment Review Board. Accordingly, in order to bring an appeal from the Decision of the Tribunal, the applicant must obtain the leave of a judge of the Superior Court of Justice in his or her capacity as a judge of the Divisional Court.
[4] To obtain leave, the applicant must show that there is some reason to doubt the correctness of decision of the Tribunal and that there is a point of law which is of sufficient importance to merit review by the Divisional Court.
[5] In applying this test for the standard of review, it must be remembered that the appeal is an appeal from the decision below and not from the reasons that were given for the decision. Alternately put, where the impugned decision is reasonable despite an error in the interpretation of a statute or for other reasons and the jurisdiction of the Tribunal does not depend upon any erroneous construction, then the decision should not be set aside. In these circumstances leave to appeal should not be granted to an applicant: see Ontario Property Assessment Corporation v. Nelson Steel, 2001 38751 (ON SC), [2001] O.J. No. 4977 (S.C.J.); Municipal Property Assessment Corporation v. Carlro Holdings Ltd., [2002] O.J. No. 3108 (S.C.J.).
[6] In her fresh as amended notice of motion for leave to appeal, the applicant sets out nine grounds of appeal from the Decision. The grounds that relate to questions of law are as follows (for ease of reference, they are numbered as they are set out in the fresh amended notice of motion):
The Tribunal failed to inquire into the issue of the activation of the FBR number as currently practiced by the Ontario Ministry of Agriculture and Food (“OMAF”) and Agricorp that is, the formal demands for certification or proof of gross farm income by production of Canada Revenue Agency (“CRA”) tax filings to Agricorp.
The Tribunal failed to determine in accordance with sections 8(1), (2), and 8.1 of the Assessment Act the impact the 2003 regulation changes had on the farm land and buildings for municipal tax assessment not being available for farm land classification that a valid farm business registration number if not issued for the year 2003.
The Tribunal misinterpreted or in the alternative ignored s.1(2) of O. Reg. 723/93 amended to O. Reg. 42/99 of the Farm Registration and Farm Organization Funding Act, 1993, O.M.A.F. had jurisdiction to demand copies of C.R.A. tax filings that legislation does not confer upon O.M.A.F. or Agricorpe.
The Tribunal misinterpreted the Income Tax Act (Canada), that is, a statute that is not the Tribunal’s constituent statute; this is a matter of general or public importance since the Tribunal has no expertise in particular to this area of law.
The Tribunal based its decision by its own admittance on insufficient evidence, meaning of course it should have invited more evidence prior to making its decision in accordance with sections 26 and 27(2) Farm Registration and Farm Organization Funding Act, 1993; this may constitute “good reason to doubt the correctness of the December 21, 2004 decision.
[7] From the language used in grounds number 8 and 9, it is evident the applicant is adverting to the principles set out in Rule 62.02(4)(b) setting out the grounds in which leave may be granted on appeals from a judge’s interlocutory order. Despite the apparent reliance on criteria for interlocutory appeals, the application for leave will be determined in accordance with the rules governing leave applications for appeals from orders of a statutory tribunal.
[8] The salient background facts may be shortly stated.
[9] The applicant carries on a farming business known as Little River Farms in the Town of Georgina, Regional Municipality of York (“the Farm”). She has been the owner of the Farm property since 1997 although she has carried on a farming business at the property prior to acquiring ownership. She reports that since the year 2000, the farm property has been subject to serious flooding from alleged illegal drainage practices by neighbours of the Farm property and by the municipality having jurisdiction therein. She informs there is pending litigation respecting such alleged illegal draining practices and states that these draining practices have been the cause of low crop production years for the years 2001 through 2004, both inclusive.
[10] The record shows that the Tribunal granted two appeals by the applicant to have the farm property placed in the farmland class for the taxation years 1999 and 2003. In the decision of December 21, 2004, for the 2004 taxation year, the Tribunal declined to place the Farm property in the farmland class, thereby entitling the applicant to the reduced realty tax rate. In regard to this latter decision, it should be noted that the application by the applicant for the designated farm property class tax rate was made in April of 2003 although the Decision was rendered in December of 2004.
[11] Before turning to the merits of the application for leave, it is appropriate to set out the main parameters of the legislative framework for determining whether a given parcel of real estate used for agricultural purposes can be included in the Farm Property Class for purposes of assessment under the Assessment Act.
[12] To obtain this classification, the real property must meet certain criteria specified in the regulations establishing the farm property class, pursuant to the provisions of s.2(5) of the Farm Registration and Farm Organization Funding Act 1993, S.O. 1993, C.21, as amended (the Act).
[13] Regulation O. Reg. 723/93 under the Act provides, in the pertinent parts, as follows:
- (1) A person who carries on a farming business shall file with the Minister a completed farming business registration form in every year in respect of which the annual gross income of the farming business equals or exceeds $7,000.
(2) The annual gross income of a farming business shall be determined in the same manner as the gross income from farming of the farming business is determined under the Income Tax Act (Canada) for the most recent taxation year for which a tax return was filed in relation to the farming business during the eighteen-month period preceding the date on which the annual registration form is required.
A farming business registration form, in addition to the information mentioned in subsection 2 (3) of the Act, must contain the following information:
The approximate annual gross income of the farming business with reference to the income ranges specified in the form.
On request, for the purpose of verifying the farming business's eligibility for the Class 6-farmlands property tax rate under the Assessment Act and for registration under the Act, additional financial, inventory and business information and records sufficient to establish that the eligibility criteria are met, including the gross income from farming of the farming business for the year.
[14] The legislative scheme however entitles a farm business landowner to request an exemption from the gross farm income requirement on the basis of the annual gross income was for “a year that was not a normal production year” for the farming business and the annual gross income of the farming business for the year in question would have been equal to or greater than $7,000.00 if the year in question had been a normal production year. See O. Reg. 282/98, s.8(2)(8) and 8(3)(1).
[15] The record discloses that following the submission by the applicant of her application to the O.M.A.F. program Administrator (the Administrator) in April of 2003, the Administrator requested further information from her on or about the 23rd of May, 2003 to determine if her application qualified for the income exemption due to “unusually low production” on the farm property.
[16] The additional requested information comprised the following items:
(1) Details about the circumstances that resulted in the gross farm income being reduced below $7,000. per annum.
(2) The gross farm income generated by the farm business for the preceding three year period that was reported for income tax purposes to Canada Customs and Revenue Agency.
(3) The crop production plans for at least two years (crops grown including acreage, expected yield and price).
(4) Projected farm income statements for the next two years to verify that the gross farm income of the farm business is expected to return to a level greater than $7,000.00.
[17] On or about June 23, 2003, the applicant responded to this request for information. The information submitted by her did not include any income tax records to verify the farm business income for the preceding three-year period.
[18] In the grounds in the fresh amended notice of motion for leave to appeal and in her submissions at the hearing, the applicant has strenuously objected to any requirement that she produce income tax returns and notices of assessment. The Administrator in response to these objections at the time informed the applicant that they would accept alternate documentation from a third party professional, such as an accountant, for verification of the farm business income issues. The information supplied by or on behalf of the applicant set out income projections and histories of capital cost allowance in relation to the Farm business. This information was deemed insufficient by the Administrator for the purposes of determining gross farm income.
[19] The applicant, in her information return on or about June 23, 2003, also indicated she would not be conducting farming operations in the year 2003 and she would return to farming operations after the flooding on her property caused by the allegedly illegal draining practices had been rectified.
[20] In November of 2003, the Administrator received further information by way of an affidavit from the applicant seeking an amendment to her application in order to show the gross farm income for 2003 exceeded $7,000.00, i.e. that the applicant realized $9,000.00 from the sale of crops in 2003.
[21] The Administration affirmed the decision that he was unable to approve the request for income exemption due to unusually low production, informing her that more specific evidence was needed (a) that the property would be farmed in the future; and (b) as to how and when the requisite level of income would again be generated from the Farm business.
[22] On December 18, 2003, the applicant in a letter to the Administrator raised concerns again relating to the request to produce income tax returns and notice of assessment for purposes verifying her eligibility for the farm property class tax rate.
[23] By return letter in January of 2003, the Administrator reiterated his willingness to accept alternate documentation to the income tax returns that would be sufficient to show the gross farm income along the lines required for purposes of the Income Tax Act (Canada).
[24] The applicant has then appealed to the Tribunal on the grounds set out above. As noted, a decision of the Tribunal was rendered on December 21, 2004.
[25] The Tribunal stated the issue on the applicant’s appeal to the Tribunal (characterized as a “complaint”) was to decide whether the land in question is land within the farm lands property class and specifically, whether the subject property satisfied the criteria set out in Regulation 282/98 for the 2004 taxation year.
[26] The Tribunal heard the submissions of the applicant’s husband on her behalf and accepted and reviewed various documents, including a letter from the applicant’s accountant. The Tribunal recorded that this letter showed that the applicant had recorded gross farm income of over $7,000.00 but the author of the letter indicated that he had not been able to verify this amount.
[27] The Tribunal reviewed the evidence before it, considered the submissions and made factual findings to support its conclusion that the applicant failed to meet the criteria in order to be eligible for the farm property class and accordingly a reduced tax rate on the farm property.
[28] The Tribunal expressly stated that it lacked the jurisdiction to change the criteria for the farm property class, indicating in its decision:
Not all properties which are assessed as farmland will meet these criteria. An owner of agricultural land must apply for the farm property class and demonstrate that all the criteria have been met in order to have the property placed in the farm property class. These criteria include a requirement that a minimum gross farm income of $7,000. be generated and that the landowner, or a tenant farming the land, have a valid farm business registration number.
The Tribunal recognizes that a landowner may choose to leave lands fallow and that land that is fallow may still be placed in the farm property class. However, leaving land fallow does not trigger an exemption from the minimum gross farm income requirement. The Tribunal was not convinced that the minimum gross farm income requirement was not met because of an unusual production year.
[29] I return to the fresh as amended notice of motion for leave to appeal and the grounds of appeal referred to at the beginning of these reasons.
[30] I turn to grounds number 2 and 7. These grounds appear to focus on a lack of authority to require an applicant for the farm tax rate to supply copies of income tax filings and notices of assessment. The record indicates that the Administrator and the Tribunal recognized there was no specific authority in the regulatory regime for it to demand such materials. However, in light of the provision in the regulatory regime requiring gross farm income for purposes of the exemption process to be determined in accordance with gross farm income for purposes of the Income Tax Act of Canada, the Administrator and the Tribunal were prepared to receive suitable alternate documents that would address the regulatory standard. In the result, these grounds of appeal are academic and raise no question of law.
[31] I turn to ground number 6. This ground appears to focus on an alleged failure of the Tribunal in applying the stipulated sections of the Assessment Act and amendments to the regulations thereby depriving the applicant of a valid farm business registration number for the year 2003. The record indicates there was evidence before the Tribunal that the applicant’s farm business registration number was invalidated for the year 2003 on the basis of the applicant having failed to satisfy the inform information requirement. This is a finding of fact and there is nothing in the record to indicate that a question of law is raised by this ground.
[32] I turn to ground number 8, i.e. the Tribunal misinterpreted the Income Tax Act of Canada. There is no basis on the record for this ground raising any question of law.
[33] I now turn to ground number 9, i.e. that the Tribunal’s decision is based on insufficient evidence. This contention is contrary to the record; the Tribunal took into account the evidence presented at the hearing before the Tribunal. I am not persuaded that in the words of ground number 9, the Tribunal “should have invited more evidence prior to making its decision”. This ground of appeal does not raise any question of law.
[34] I am of the view that the other grounds of appeal do not raise any questions of law that meet the test for granting leave to the applicant to appeal the decision of the Tribunal to the Divisional Court. Accordingly, I dismiss the motion for leave with costs to the respondent, if demanded.
[35] If the respondent seeks costs, it shall make a submission in writing, not to exceed 5 pages in length (exclusive of supporting materials) within 30 days from the date of issuance of these reasons. The applicant shall have 21 days from the date of her receipt of these submissions to respond in the same format as the respondent’s submissions.
MacKENZIE J.
DATE: July 7, 2005
COURT FILE NO.: DC-05-001292ML
DATE: 20050707
SUPERIOR COURT OF JUSTICE – ONTARIO
DIVISIONAL COURT
RE: SYLVIETTE BROWN v. ONTARIO MINISTRY OF AGRICULTURE & FOOD, ADMINISTRATOR FARM PROPERTY CLASS TAX RATE PROGRAM
BEFORE: MacKENZIE J.
COUNSEL: Ms. S. Brown, appellant/self-represented
Mr. S. Garrod, for the respondent
ENDORSEMENT
MacKENZIE J.
DATE: July 7, 2005