Court File and Parties
COURT FILE NO.: 07-DV-1305
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Cunningham A.C.J., Browne J. and Ferrier J.
B E T W E E N:
MUNICIPAL PROPERTY ASSESSMENT CORPORATION
Appellant
- and -
CISCO SYSTEMS COMPANY and CITY OF OTTAWA
Respondents
Counsel: Carl B. Davis for the Appellant William Burrows, Q.C. for the Respondent Cisco Systems Company No one appearing for the City of Ottawa
HEARD: October 19, 2007
Reasons for Decision
BROWNE J.
[1] The Municipal Property Assessment Corporation (“MPAC”) appeals to this court from an order of the Assessment Review Board on a question of law set forth in a consent order granting leave to appeal. The questions of law in the consent order are as follows:
(i) Did the Board err in law in its interpretation of the meaning of the words “parcel” in the Assessment Act and in O. Reg. 282/98?
(ii) Did the Board err in law in holding that two separate improved lots, on a registered plan of subdivision can be combined as ‘a single parcel’ with a single roll number for purposes of s. 14 of O. Reg. 282/98?
[2] In its decision the Board set out the issue before the Board, namely, the correct property class for two properties owned by Cisco Systems Company (“Cisco”). Cisco’s position before the Board was that the two properties involved were correctly classified as “large industrial property class”. MPAC’s position is that the two buildings in question were on separate blocks on a plan of subdivision and that the correct property class was that as assessed “industrial property class”. A lower rate of tax is applicable to an assessment class of large industrial property.
[3] Cisco owns and is the single occupant of a three-building complex. Each building is on an individual block joined by climate-controlled walkways. 2000 and 3000 Innovation Drive are each two-storey buildings containing approximately 95,000 square feet individually or approximately 190,000 square feet in total. The third property is 4000 Innovation Drive which has a three-storey building containing in excess of 140,000 square feet.
[4] The Board’s decision was to order that the two respective assessment roll numbers for the properties municipally known as 2000 and 3000 Innovation Drive, Ottawa, be merged or combined into one single assessment roll number and that the property class for the single assessment number is the “large industrial property class”.
[5] 4000 Innovation Drive is a block on a separate plan of subdivision. It is presently classified is “large industrial property class” and is not the subject of these proceedings.
[6] The Board’s decision set out portions of the Assessment Act and of regulations pursuant to the Act including the following:
(1) Assessment roll content - The assessment corporation shall prepare an assessment roll for each municipality and the roll shall contain the following particulars:
The classification of the parcel of land.
(2) Preparation - The following provisions shall be observed in the preparation of the assessment roll:
- Each subdivision shall be assessed separately, and every parcel of land (whether a whole subdivision or a portion thereof, or the whole or a portion of a building thereon) in the separate occupation of any person shall be separately assessed: [Emphasis added]
The large property class is defined in section 14 of Ontario Regulation 282/98 (O. Reg. 282/98). Subsections 14(1) and (2) provide:
- (1) The large industrial property class applies within a municipality, the council of which is required to pass a by-law establishing tax ratios under section 308 of the Municipal Act, 2001, only if the council of the municipality has passed a by-law opting to have the large industrial property class apply within the municipality.
(2) The large industrial property class consists of the following land that would otherwise be in the industrial property class:
- A parcel or a portion of a parcel of land that is occupied by the same single occupant, if the total exterior measured area of the building or buildings or the parts of the building or buildings that are occupied by that occupant is greater than 125, 000 square feet. [Emphasis added]
[7] Section 6 of the regulation sets out what consists of “industrial property” including that land in the “large industrial property class” is not included in the “industrial property class”.
[8] The City of Ottawa passed the optional by-law contemplated by Regulation 14.1.
[9] MPAC is required by the Act to prepare an assessment roll for each municipality. Words from the Act find their way into the regulations. For example, Section 14(2)2 uses the word “parcel” and the phrase “separate occupation”. Regulation 14 uses similar wording, in particular, there is used “a parcel or a portion of a parcel of land” plus the concept of the property being occupied by the same single occupant.
[10] It is agreed that 2000 Innovation Drive and 3000 Innovation Drive are occupied by the same single occupant namely, Cisco, and that individually the building on each block is less than 125,000 square feet but that collectively the two blocks have square footage exceeding 125,000 square feet.
[11] Apparently, Ottawa is the only municipality in Ontario to have a tax rate for “large industrial property class” which is less than the rate for “industrial property class”. Tax rates are set by the municipality. The low tax rate applicable in this case for the large industrial class may well have triggered these proceedings, but the tax rate is neutral when considering an assessable classification.
[12] The Board recognizes that the concept of occupation is an integral and important factor as to what constitutes a “parcel”. From Section 14 of the Act, elements referable to the word “parcel” include a whole subdivision or a portion thereof or the whole or portion of a building in “separate occupation”. From the regulation “parcel or a portion of a parcel of land” is used, with occupation to be by a single occupant and with square footage to exceed 125,000 square feet. The elements of single occupation and square footage are essential elements to determine the classification of a parcel or a portion of a parcel.
[13] The decision recognizes that from a conveyancing perspective either of the blocks can be separately conveyed.
[14] The Board determined as set out above that a parcel within the meaning of the regulation is “a parcel of land for assessment purposes”. The result was to order that the two roll numbers for municipal numbers 2000 and 3000 be combined into one. From that decision, made under consideration of the Act, considerations of the regulation then became applicable. There was single occupation with the element of square footage of at least 125,000 square feet being satisfied.
[15] The Board recognized that if there was a sale, that two roll numbers would again be assigned.
[16] The Board made it part of its deliberations and conclusion that a parcel was not confined to one lot on a plan of subdivision.
[17] We have before us a decision of the Board in Regional Assessment Commissioner, Region 3 v. Torino Investments Co. Ltd. This case involved contiguous lots under one ownership. This was a valuation case. The ratepayer’s argument is expressed at p. 116 as follows:
The ratepayer argued that because Lots 5, 7 and 8 are abutting lots and are all used in the same business, they should be assessed as one parcel under one roll number.
The board is not of this opinion as these are separate lots on a registered plan of subdivision and even though they are all used in the same business at this time, they can, at any time, be sold separately at the whim of the owners or the vagaries of the market-place.
[18] The position advanced in the quoted portion from this valuation decision is not persuasive on the questions of law before this court.
[19] As set out above, the decision of the Review Board was that the two assessment roll numbers for the properties 2000 and 3000 Innovation Drive were to be merged or combined into one and that the property class for the new parcel is “large industrial property class”.
[20] I conclude the decision was correct. In the result, the two questions of law are answered as follows: the Board did not err in law. The appeal is dismissed.
[21] Material on costs has been received. Costs are payable to Cisco fixed in the amount of $9,900.00 inclusive of G.S.T.
Browne J.
I agree Cunningham A.C.J.
I agree Ferrier J.
Released: January 29, 2008