CITATION: Municipal Property Assessment Corporation v. BCE Place Ltd., 2011 ONSC 6986
COURT FILE NO.: 441/11
DATE: 20111124
SUPERIOR COURT OF JUSTICE – ONTARIO
(DIVISIONAL COURT)
RE: MUNICIPAL PROPERTY ASSESSMENT CORPORATION (Applicant)
AND
BCE PLACE LIMITED, 1225209 ONTARIO LIMITED, NATIONAL TRUST COMPANY, SCOTIA REALTY LIMITED, FIRST PLACE TOWER INC., TORONTO DOMINION CENTRE, 200 BAY HOLDING INC., CITY OF TORONTO and ASSESSMENT REVIEW BOARD (Respondents)
BEFORE: M. Dambrot J.
COUNSEL: Donald Mitchell, for the Applicant
David Fleet, for the Respondents BCE Place Limited, 1225209 Ontario Limited, National Trust Company, Scotia Realty Limited and First Place Tower Inc.
Jeff G. Cowan, for the respondent Toronto Dominion Centre
Phillip Sanford, for the Respondent 200 Bay Holdings Inc.
Terry Dennison, for the Respondent City of Toronto
HEARD: November 22, 2011
E N D O R S E M E N T
[1] The Municipal Property Assessment Corporation (“MPAC”) brings this motion to stay the continuation of a hearing scheduled to commence on November 28, 2011 and to continue for 16 days before the Assessment Review Board (the “Board”), pending an application for judicial review.
BACKGROUND
[2] The respondents, who are the owners of the six largest office complexes in Toronto (“the bank towers”), made complaints in respect of their 2001 and 2002 property assessments under the Assessment Act, R.S.O. 1990, c. A.31 (“the Act”). The hearing of their complaints began on October 11, 2005. The central issue before the Board was the correctness of the current value assessments for the bank towers. Fundamental to a determination of that issue was a legal interpretation of the phrase “fee simple, if unencumbered” in the definition of “current value” in the Act. In the course of the hearing, the complainants led expert valuation evidence consistent with their interpretation of current value. They did not lead evidence of alternative valuations based on MPAC’s interpretation.
[3] After 62 days of hearings, the Board released an interim decision on February 22, 2008, amended on December 5, 2008, adopting the complainants’ interpretation of the Act, with certain caveats. MPAC and the City of Toronto (the “City”) successfully appealed to the Divisional Court, which adopted the interpretation of “current value” advanced by MPAC and the City. The Divisional Court ordered a new hearing before a differently constituted panel of the Board.
[4] On an appeal to the Court of Appeal by the complainants, the court affirmed the Divisional Court’s interpretation of “current value,” but allowed the appeal only to the limited extent that the matter was ordered returned to the original panel of the Board. The Court made this variation because it was of the view that many of the matters determined in the interim decision were unaffected by the legal error. The Court obviously did not consider it advisable to completely discard the 62 hearing days that had been invested in this matter.
[5] On December 20, 2010, MPAC and the City brought a motion to the Board requesting that MPAC’s assessments be confirmed on the ground that the complainants had failed to meet their burden of proof. They resisted the “re-opening” of the evidence, taking the position that to do so would be unnecessary and unfair.
[6] On March 15, 2011, the Board dismissed the motion to confirm the assessments (“the confirmation decision”). The Board stated that it had envisioned, in its interim decision, that if the parties did not reach an agreement on a new assessment based on the definition of “current value” adopted in that decision, the matter would return to the Board and more evidence would have to be heard.
[7] I note that in the interim decision, the Board stated:
The Board is not able to determine the actual assessments for each of the properties, as the methodology set out requires a further review by the parties of leases, particularly renewals, expansions and “blends and extends” of one full floor or more. The Board trusts that the parties will work diligently, with this decision in hand, to determine the actual assessment figures.
The Board will withhold its final Order in this matter until the parties provide the final assessment figures.
[8] The Board also stated:
The Board cannot confirm assessments based on the use of anything other than the correct leases. To do so would be a failure of the board to discharge the responsibility assigned to it under the Assessment Act.
[9] In its interim decision, the Board did not say what would happen if the parties could not agree on the final assessment figures, but it is not unreasonable to think that the Board would have permitted additional evidence to be led. Certainly there is no reason to doubt the Board’s assertion that that was their intention. Otherwise, MPAC and the City would have had an overwhelming incentive not to reach an agreement with the complainants, and simply attempt to secure a victory by relying on the burden of proof.
[10] After the Board released its confirmation decision, MPAC and the City brought a motion requesting the Board to recuse itself because it improperly intervened in the hearing process resulting in a loss of impartiality and an unfair hearing. On May 26, 2011, the Board dismissed the recusal motion (“the recusal decision”). It stated that the remedy for an alleged error by the Board is an appeal. It further stated that neither MPAC nor the City alleged bias on the part of the Board, and that there was no demonstration of bias or of an apprehension of bias.
[11] In a subsequent procedural order released on August 26, 2011 (“the procedural order”), the Board required the parties to exchange pleadings and export reports, and reserved dates for the hearing. Pleadings and reports have been exchanged in compliance with the procedural order. The Board also refused MPAC’s request to “clarify” which of its factual findings in its interim decision were affected by legal error as a result of the decision of the Court of Appeal.
[12] On September 22, 2011, MPAC commenced an application for judicial review of the confirmation order and the procedural order. MPAC then brought a motion to the Board asking it to adjourn the continuation of the hearing pending the hearing of its judicial review application. On November 4, 2011, the Board dismissed the motion to adjourn (“the adjournment decision”).
[13] In its Notice of Application for Judicial Review, MPAC raises the following grounds for its application:
Unfairness – the Board improperly intervened in the hearing process by allowing the complainants to re-open their case, resulting in a denial of natural justice and procedural unfairness.
Reversal of Onus – the Board reversed the burden of proof by ruling that it could not confirm the assessments based on anything other than the “correct leases.”
Inadequate Reasons – the Board failed to give adequate reasons for dismissing the confirmation motion.
[14] In its factum, MPAC identified the following additional grounds for review:
Additional Unfairness – the Board acted unfairly by failing to identify which of its factual findings in its interim decision were affected by legal error as a result of the decision of the Court of Appeal.
Misinterpretation of the decisions of the Court of Appeal and the Divisional Court – the Board misinterpreted and misapplied the decisions in at least three respects: the Board erroneously found that its instruction to the parties to attempt to arrive at new assessment figures survived the appeals; the Board misunderstood the decisions regarding valuation of tenants’ interests; and the Board erroneously found that the Court of Appeal fixed the capitalization rate at 8%.
ANALYSIS
[15] Section 4 of the Judicial Review Procedure Act, R.S.O. 1990, c. J.1 provides me with the authority to stay the continuation of a hearing that is the subject of judicial review pending the hearing of that review. On a motion for a stay, the moving party must satisfy the Court that:
The application for judicial review raises a serious question;
The applicant has shown that it would suffer irreparable harm if the stay is refused; and
The balance of convenience favours the applicant.
[16] These requirements are not separate hurdles, but rather are interrelated considerations. In the end, the overriding consideration is whether or not the interests of justice call for a stay. (See RJR-MacDonald Inc. v. Canada, 1994 117 (SCC), [1994] 1 S.C.R. 311 and Longley v. Canada, 2007 ONCA 149, [2007] O.J. No. 929.)
[17] I will examine each of the three considerations in turn.
Serious Question
[18] On this issue, I must determine the seriousness not only of the grounds raised by MPAC, but also of MPAC’s argument that its judicial review application is not premature. This is of fundamental significance because the Divisional Court will decline to consider an application for judicial review brought in the course of an administrative process absent exceptional circumstances. The Court of Appeal put it this way in Toth Equity Limited v. Ottawa, 2011 ONCA 372, [2011] O.J. No. 2128, at para. 35:
The Canadian courts have enforced this general principle vigorously. In the recent decision of C.B. Powell Ltd. v. Canada (Border Services Agency), 2010 FCA 61, at paras. 31-32, Stratas J.A. of the Federal Court of Appeal, usefully describes the principle and its rationale.
[31] Administrative law judgments and textbooks describe this rule in many ways: the doctrine of exhaustion, the doctrine of adequate alternative remedies, the doctrine against fragmentation or bifurcation of administrative proceedings, the rule against interlocutory judicial reviews and the objection against premature judicial reviews. All of these express the same concept: absent exceptional circumstances, parties cannot proceed to the court system until the administrative process has run its course. This means that, absent exceptional circumstances, those who are dissatisfied with some matter arising in the ongoing administrative process must pursue all effective remedies that are available within that process; only when the administrative process has finished or when the administrative process affords no effective remedy can they proceed to court. Put another way, absent exceptional circumstances, courts should not interfere with ongoing administrative processes until after they are completed, or until the available, effective remedies are exhausted.
[32] This prevents fragmentation of the administrative process and piecemeal court proceedings, eliminates the large costs and delays associated with premature forays to court and avoids the waste associated with hearing an interlocutory judicial review when the applicant for judicial review may succeed at the end of the administrative process anyway ... Further, only at the end of the administrative process will a reviewing court have all of the administrative decision-maker's findings; these findings may be suffused with expertise, legitimate policy judgments and valuable regulatory experience. ... Finally, this approach is consistent with and supports the concept of judicial respect for administrative decision-makers who, like judges, have decision-making responsibilities to discharge. [citations omitted]
[19] It seems to me that before I enter a stay, I must be satisfied not only that there is a serious issue raised by this application for judicial review, but also that there is a serious argument that the circumstances here are exceptional, justifying fragmentation of the Board’s proceedings.
[20] With respect to the grounds for the application, I am of the view that issue 1 above – that the Board improperly intervened in the hearing process by allowing the complainants to re-open their case, resulting in a denial of natural justice and procedural unfairness – is the core issue raised by MPAC. I am further of the view that this issue is not an arguable one. It is arguable that the Board erred in reopening the evidence, but this cannot be dressed up as improper intervention into the hearing process and a denial of natural justice and procedural unfairness. There are many cases that consider the propriety of permitting a party to re-open its case. In none of them, to my knowledge, is a wrongful re-opening characterized as anything more than an error of law.
[21] I am of the view that issues 2 and 3 do raise serious questions and that issue 5, in part, may raise a serious question, but that issue 4 does not. Respecting issue 4, whatever value there may be in having a board predetermine questions of law in a particular case, a party has no right to insist on it, and a board does not act unfairly by refusing to do it.
[22] This brings me to the question of prematurity. In this case, I have reached the conclusion that there is no serious argument raised by MPAC that the circumstances here are exceptional and justify interlocutory judicial review. Dressing up issues 1 and 4 in the language of natural justice and procedural unfairness does not change the reality that they are simply commonplace allegations of error that can be reviewed on appeal at the end of the administrative proceedings.
[23] In my view, this determination, that MPAC has raised no serious issue of prematurity in this case, is fatal to its motion for a stay. It eliminates the significance of my finding that some of the substantive issues raised by MPAC are serious issues, and dooms any argument that the interests of justice call for a stay. Nonetheless I will briefly consider the other two branches of the test.
Irreparable Harm
[24] The only harm that MPAC may suffer if the stay is refused is the possibility of costs thrown away to participate in an unnecessary 16-day hearing. I do not mean to be dismissive of such a possibility, but this is not what is meant by irreparable harm.
Balance of Convenience
[25] While the possibility of costs being thrown away weighs in favour of a stay, the certain disruption to the professional lives of the members of the Board, counsel for the complainants and the witnesses standing by if a stay were granted on the eve of the continued hearing – and I note that the blame for the lateness of this application lies entirely at the feet of MPAC – weighs more heavily against a stay.
The Interests of Justice
[26] Given all of the considerations I have outlined, I conclude that the interests of justice do not call for a stay.
DISPOSITION
[27] The motion is dismissed. The parties may address the issue of costs in writing if necessary.
M. Dambrot J.
DATE: November 24, 2011