Court File and Parties

Citation: Drewlo Holdings v. MPAC et al., 2023 ONSCDC 1466 Court File No.: DC-22-00000046-0000 Date: 2023-03-02 Superior Court of Justice – Ontario Divisional Court

Re: Drewlo Holdings Inc., Moving Party And Municipal Property Assessment Corporation and The Corporation of the City of London, Responding Parties

Before: Justice Spencer Nicholson

Counsel: J. Jebreen and S. McAnsh, for the Moving Party K. Lunau, for the Municipality Property Assessment Corporation, Responding Party G. Smith, for the Corporation of the City of London, Responding Party

Heard: November 28, 2022

Reasons on Motion for Leave to Appeal

Nicholson J.:

[1] Drewlo Holdings Inc. (“Drewlo”) brings this motion for leave to appeal a decision of the Ontario Assessment Review Board (the “Board”) dated June 24, 2022, made pursuant to the Assessment Act, R.S.O. 1990, c. A. 31 (the “Act”).

[2] The motion for leave is contested by the Municipal Property Assessment Corporation (“MPAC”) and the City of London.

[3] Succinctly, the issue involves the scope of powers granted to MPAC to make changes to the assessment of land during a tax year. In this case, MPAC relied upon s. 33 of the Act, which reads as follows:

33 (1) The following rules apply if land liable to assessment has been in whole or in part omitted from the tax roll for the current year or for all or part of either or both of the last two preceding years, and no taxes have been levied for the assessment omitted:

1. The assessment corporation shall make any assessment necessary to correct the omission.

2. If the land is located in a municipality, the clerk of the municipality shall alter the tax roll upon receiving notice of the change, and the municipality shall levy and collect the taxes that would have been payable if the assessment had not been omitted.

3. If the land is located in non-municipal territory, the Minister shall alter the tax roll upon receiving notice of the change, and shall collect the taxes that would have been payable if the assessment had not been omitted.

(2) For the purposes of this section,

“omitted” includes the invalidation or setting aside of an assessment by any court or assessment tribunal on any ground except that the land is not liable to taxation.

Background:

[4] Drewlo is the owner of certain property located in the City of London. Drewlo is a property developer and accordingly, constructed three residential apartment towers on the property, each containing 165 units. The construction on the towers was completed in 2018.

[5] On December 6, 2018, Drewlo registered a Condo Plan which converted two of the three towers into 330 residential condominium units (165 each). The third tower remained a multi-residential building at that time.

[6] As the Board noted in its decision, for each upcoming taxation year s. 14 of the Act obligates MPAC to annually prepare an Assessment Roll for each municipality which must contain certain enumerated information. This information is used by the municipal corporation to calculate and levy municipal property taxes on the property owner. Section 36 obligates MPAC to return the Assessment Roll by no later than the second Tuesday of December in the calendar year preceding the taxation year.

[7] Thus, the timing of the registration of Drewlo’s Condo Plan left insufficient time for MPAC to amend the Assessment Roll it had prepared for the 2019 taxation year to reflect the change to the property. On the Assessment Roll for the 2018 taxation year, the property had been reported as being vacant with a current value of $2,602,000. Similarly, on the Assessment Roll for the 2019 taxation year, MPAC reported the property as vacant land with a value of $2,602,000.

[8] In January 2019, MPAC conducted an assessment of the current value of the property and concluded that the total value of the property (land and the three towers) was $68,410,000. This was comprised of $2,602,000 for the land and $65,808,000 for the towers.

[9] Accordingly, on May 8, 2019, MPAC issued an omit (the “May Omit”) pursuant to subsection 33(1) of the Act against the property, retroactive to January 1, 2019, assessing the value of the land and improvements at $68,410,000 on one parcel of land.

[10] The City of London levied taxes based on the May Omit in the amount of $1,407,320.90, which Drewlo paid.

[11] However, on October 8, 2019, MPAC issued 330 residential assessments also pursuant to subsection 33(1), retroactive to January 1, 2019, against the units in the two towers that had been converted to individual condominium units. The total value of the assessment of the units in those two towers was $62,527,000. On the same date, MPAC issued a further 33(1) omit assessment for the third tower, as a multi-residential property. The third tower was assessed to have a total value of $21,377,500. Collectively, the parties refer to these omits as the “October Omits”.

[12] MPAC issued an Amended Property Assessment Notice three weeks later, on October 29, 2019 pursuant to s. 32 (1.1) of the Act. That section permits MPAC to correct any error in any assessment. The Amended Property Assessment Notice reduced the assessment of the parcel it had assessed in the May Omit to $0. The parties referred to this as the “October Correction”.

[13] I note that the October 8, 2019 date and the October 29, 2019 date were provided to the Board as part of an Agreed Statement of Facts. Those dates match the dates found on the Property Assessment Change Notice and Amended Property Assessment Notice respectively.

[14] However, the Board was also provided with an affidavit of the Property Valuation Specialist for MPAC. He was responsible for assessing the property in issue. He set out in his affidavit the following timeline:

• January 2019—the newly constructed buildings were valued in January of 2019 for their addition to the roll.
• May 8, 2019—the value from January of 2019 was added to the “Parent Roll” by way of omitted assessment with notice.
• September 23, 2019—a series of new roll numbers were created and approved for use. This resulted in 330 “Child Rolls” representing the units in the two buildings that had been converted to condominiums and the “Remainder Roll” representing the third apartment building.
• September 24, 2019—The assessment on the Parent Roll, including the May Omit value, was deleted by way of Post-Roll Amended Notice, with notice on October 22, 2019 (sic--the Notice is dated October 28, 2019).
• September 24, 2019—values were added to the 330 Child Rolls and Remainder Roll by way of omitted assessments, with notice on October 8, 2019.

[15] The Board adopted the order of steps taken as set out in the affidavit of the Property Valuation Specialist in its Decision. However, the Board arguably misdescribed that the notices were issued on September 24, 2019. I note that the affidavit includes screenshots of MPAC’s system showing the precise time that each step was taken. Thus, the Board did have evidence before it that MPAC took the above steps prior to the dates contained on the notices and knew the order in which the steps were taken.

[16] Drewlo provided the Board with an affidavit of its Municipal Tax Consultant. That affidavit sets out that the Consultant advised MPAC on several occasions prior to the issuance of the May Omit that the apartments would be converted into rental condos. These communications began as early as October 2, 2018.

[17] The effect of MPAC’s reissuance of assessments was that the total assessed value of the property changed from $68,410,000 to $83,904,500, triggering additional tax liability on Drewlo. Drewlo filed 331 separate appeals to the Board, which were combined into one proceeding. The Board convened a hearing on April 7, 2021, and issued its Reasons on June 24, 2022.

The Board’s Decision:

[18] The Board’s Decision is cited as Drewlo Holdings Inc. v. Municipal Property Assessment Corporation, Region 23, 2002 56286 (ON ARB).

[19] I note that Drewlo did not dispute the assessed values before the Board, simply the manner in which MPAC acted.

[20] The Board described the issue before it as follows:

[11] Having explained this background information, the Board can now describe the issue raised in this appeal. The Appellant submits that MPAC, having made the May 2019 s. 33 omitted assessment of the current value of the “land” for the 2019 taxation year (which includes the three towers), was not permitted to make the second s. 33 omitted assessment in September 2019. In overview, the Appellant’s rationale for its submission is as follows. The Appellant states that s. 33 only allows MPAC to amend the Assessment Roll if there is an omission on the Assessment Roll. There was an omission on the Assessment Roll for the 2019 taxation year, so MPAC had the authority to issue the May 2019 omitted assessment. Having done so, and even though this s. 33 assessment failed to address the conversion of a portion of the Subject Properties to condominiums, there was no omission on the Assessment Roll because the “land”, as this term is used in the Act, had been assessed. Consequently, the Appellant maintains that MPAC did not have the authority to issue the s. 33 omitted assessment in September 2019.

[21] The Board restated the issue a few paragraphs later, at para. 16 of its Decision as “whether MPAC had the authority to issue the September 19, 2019 (sic) omitted assessments under s. 33 of the Act, which requires that “land liable to assessment has been in whole or in part omitted from the tax roll”. The Board stated that it was required to determine whether the registration of the condominium plan created new “land” that had not previously been assessed.

[22] The Board rejected Drewlo’s arguments and dismissed its appeal. In doing so, the Board concluded that the relevant question was whether the registration of the condominium plan created new “lands” to be added to the Assessment Roll. If no new lands were created, then there was no omission on the Assessment Roll after the May Omit was issued and MPAC would not have the authority to issue the subsequent omits.

[23] Ultimately, the Board concluded that the Condo Plans had created new lands and therefore, MPAC’s position was correct. Thus, the $83,904,500 assessment was considered to be correct.

Test for Leave to Appeal:

[24] The Act sets out the appeal route in s. 43.1(1). An appeal lies from the Board to the Divisional Court, with leave, on a question of law.

[25] The parties agree on the applicable test for leave to appeal in this context, as set out in Via Rail Canada Inc. v. MPAC, 2015 ONSC 7459. In order to grant leave to appeal, the court must be satisfied that:

(a) There is some reason to doubt the legal correctness of the Board’s Decision; and

(b) The appeal involves an important question of law meriting the attention of the Divisional Court.

[26] As noted in Via Rail, at para. 17, to meet the first branch of the test, the party seeking leave to appeal need not show that the Board’s Decision was wrong or even probably wrong. This part of the test is satisfied if the correctness of the Decision is “open to very serious debate”.

[27] If there are conflicting decisions on an issue, this may give reason to doubt the correctness of a decision. If the Board has applied legal tests or factors that are novel or not in accordance with established case law, the threshold of “open to very serious debate” may be met (see: Via Rail, at para. 18).

[28] In Yater v. TD Insurance Meloche Monnex, 2021 ONSC 2507 (Div.Ct.), Kristjanson J. stated at para. 28:

[28] On a statutory appeal limited to questions of law alone, the court considers whether the decision-maker correctly identified and interpreted the governing law or legal standard relevant to the facts found by the decision-maker. There are limited circumstances in which findings of fact, or the administrative decision-maker’s assessment of evidence, may give rise to an error of law alone for the purposes of appeal. If the adjudicator ignored items of evidence that the law required him or her to consider in making the decision, then the adjudicator erred in law: Canada (Director of Investigation and Research) v. Southam Inc., 1997 385 (SCC), [1997] 1 S.C.R. 748, at para. 41. Challenges to the sufficiency or weight of evidence supporting a finding of fact do not give rise to a question of law. An error in law or legal principle made during the fact-finding exercise, however, can give rise to an extricable question of law. A “misapprehension” of the evidence does not constitute an error of law unless the failure is based on a wrong legal principle: R. v. J.M.H., 2011 SCC 45, [2011] 3 S.C.R. 197, at paras. 25 and 29. It is an error or law to make a finding of fact on a material point where the factual finding is based solely on (a) no evidence, (b) irrelevant evidence, or (c) an irrational inference (Johannson v. Saskatchewan Government Insurance, 2019 SKCA 52 at paras. 24-25).

[29] An important question of law meriting the attention of the Divisional Court must transcend the interests of the parties before the court. For an issue to be considered sufficiently important, it must engage matters of general interest to the public and litigants before the Board and go beyond the narrow immediate concerns of the parties (see: The Kensington Foundation v. MPAC, 2013 ONSC 1799).

[30] The moving party must meet both branches of the test for leave to appeal to be granted.

Legislative Scheme of the Act:

[31] As described in Toronto (City) v. MPAC, 2013 ONSC 6137 (known as “Shane B”), at para. 22, municipal property is assessed for tax purposes only once per year, for the most part, and that assessment is intended to be final, subject only to appeal. However, the Act does provide several mechanisms to allow changes to an assessment during a taxation year, usually to reflect changes such as improvements to the property, or a change in its classification. One such mechanism is section 33 of the Act which affords MPAC an opportunity to correct the Assessment Roll during the tax year.

[32] Both parties agree that the Act has two primary objectives: correctness and finality. These are often opposed. As described in Shane B, at para. 30, “[t]he principles of equity and finality are often in conflict and each must be weighed in the balance in arriving at the proper interpretation of the legislation”. Correctness ensures that the property tax burden is distributed equitably among all property owners. Finality prevents taxpayers and the municipality from having to continuously revisit tax assessments and permits them to order their affairs accordingly.

[33] In order to rely upon subsection 33(1) of the Act there are two prerequisites that must be met. The first is that “land liable to assessment has been in whole or in part omitted from the tax roll”. As noted by the Board, this part of the test requires a determination of what is meant by “land”. It also requires an examination of the term “omitted”. The second prerequisite is that “no taxes have been levied for the assessment omitted”.

[34] In Shane B, at paragraph 44, the Court described that s. 33(1) does not create a general power to review errors in valuation but is directed solely at correcting a situation where some or all of a property was erroneously omitted from the Assessment Roll. Absent such an omission, no change in the valuation of the property will be permitted. Further, at paragraph 46 in Shane B, Molloy J. described that s. 33 is intended to address specific situations that arise outside of the usual assessment process and to correct specific errors. It is not intended to be an alternate method to appeal the value set out in an assessment.

Is there Some Reason to Doubt the Correctness of the Board’s Decision:

Arguments Raised by Drewlo:

[35] Drewlo argues that the Board made five significant errors, quoted from its factum as follows:

1. The Board incorrectly interpreted “land” in subsection 33(1) of the Act to mean the legal description of the land. The correct interpretation of “land” is the physical land and any improvements on that land.

2. Although subsection 33(1) of the Act requires that no taxes be levied on the land, the Board failed to even consider that requirement. Ignoring and failing to apply such an important piece of evidence amounts to an error of law.

3. In the alternative to (a) and (b), in making the finding that it did, the Board erred in law by failing to limit the October Omits to correcting the omission from the assessment roll, instead permitting the current value to also be changed.

4. In the alternative to (a) and (b), the Board failed to consider MPAC’s intentionality in issuing an incorrect May Omit for multi-residential towers despite its knowledge that the Property was converted to condominiums. This was a strongly contested issue which the Board failed to address in its Reasons.

5. The Board incorrectly applied a timeline of events that contradicts the parties’ Agreed Statement of Facts. This is a rare instance of an error of fact amounting to an error of law.

Arguments by MPAC and the City:

[36] MPAC and the City argue that the Board’s Decision was correctly decided.

[37] MPAC focuses on 1609830 Ontario Limited v. Municipal Property Assessment Corporation, Region No. 9, 2008 47726 (ON SCDC) (“Idomo”). In Idomo, the Board intentionally created an omission by changing the subject property’s legal description to remove a severed portion of the land. The Board noted that this would then permit MPAC to issue a notice of omitted assessment against the severed parcel.

[38] On a motion for leave to appeal the Board’s decision in Idomo, (1609830 Ontario Limited v. MPAC, Region No. 9, 2008 47726 (ON SCDC)) Wilson J. refused leave to appeal. She deferred to the Board’s expertise.

[39] Idomo, in my view, is somewhat distinguishable. In Idomo, the Board initiated the correction which led to the omission by changing the legal description of the property. Here, MPAC is attempting to rely upon its own actions to trigger s. 33(1) of the Act.

[40] Furthermore, the Board and Wilson J. stressed the importance of ensuring that all property is subject to tax based on accurate facts. The cases decided since that time have also sought to balance correctness with finality.

[41] Idomo also arguably requires that the correction occur prior to the omit being issued.

Issue 1: Board’s Interpretation of “Land”:

[42] Drewlo argues that s. 33(1) can only be used to correct erroneous omissions of physical land and improvements from the Assessment Roll.

[43] “Land” is defined in s. 1 of the Act. Drewlo argues that the classes of “land” enumerated in s. 1(1)(a)-(e) all relate to physical aspects of land.

[44] Drewlo relies upon Magee v. Municipal Property Assessment Corporation and the City of Belleville, 2010 ONSC 6498 (Divisional Court). In Magee, the subject property had originally been four rural residential properties. Between 2003 and 2005, a golf course was constructed on portions of the four properties. The course opened in 2005 and buildings and improvements continued to be added to the golf course in the ensuing years. The properties were assessed in 2005, 2006 and 2007 without taking into account the improvements to the land made as a result of the construction of the golf course. MPAC relied upon s. 33(1) of the Act to issue new assessments in 2007.

[45] Sachs J. addressed the taxpayer’s submission that the focus of s. 33 is to capture “land” that was omitted from the description in the assessment or tax roll. She described that the taxpayer’s interpretation was not supported by the wording of the section which referred to “land” that is liable to assessment that has been in whole or in part omitted from the tax roll. It does not refer to “land” whose description has been omitted from the description of the property in the assessment or tax roll (at para. 9).

[46] Thus, Drewlo argues that Magee stands for the proposition that “land” in s.33 refers to the physical land and any improvements on that land, as opposed to the Board’s interpretation that “land” means the legal description of land.

[47] The City correctly points out that the definition of “land” does not specifically refer to only physical land in the Act. Further, the City is also correct that Drewlo sought to frame the question before this court and the Board as whether “physical land and improvements were omitted from the assessment roll”, presupposing that physical land was required.

[48] The correct interpretation of “land” in s. 33(1) of the Act is an issue of law. For the purpose of this motion, I need not decide whether the Board’s interpretation is wrong or even probably wrong. It is sufficient if the correctness of the decision is open to very serious debate. It is difficult to reconcile the Board’s interpretation of “land” in light of Magee and the Board did not squarely address Magee. For that reason, I find that there is reason to doubt the correctness of the Board’s interpretation of “land” as used in s. 33(1) of the Act.

[49] Furthermore, Drewlo submits that both it and MPAC during the hearing before the Board argued the case on the basis that there was no land omitted until MPAC created omissions by issuing the October PRAN. However, the Board instead focused on whether new “lands” were created, and referenced the Condominium Act, which neither party had raised. The Board did not invite the parties to make further submissions on this issue. I agree with Drewlo that by doing so, there is good reason to question the procedural fairness of the hearing to both parties.

Issue 2: Board’s Failure to Consider “and no taxes levied”:

[50] Drewlo argues that the two prerequisite tests in s. 33(1) are conjunctive in that both prongs must be met in order to apply s. 33(1) and issue an omit. In this case, the Board dealt with the first part of the test but did not consider in this case that the City of London levied taxes which Drewlo paid, based on the May Omit.

[51] MPAC argues that if it has the ability to create the omission, as set out in Idomo, then it can effectively erase the taxes that have been levied, meeting the second part of the test.

[52] In my view, there is a serious issue for debate and, thus, there is some reason to doubt the correctness of the Board’s Decision on the basis that it did not properly apply both aspects of the s. 33(1) test.

Issue 3: The Board Permitted the Assessment Value to be Changed:

[53] Drewlo argues that Shane B makes it clear that while s. 33 of the Act provides a mechanism to correct a situation where some or all of a property was erroneously omitted, it does not authorize a review of the valuation of the property.

[54] MPAC argues that this issue was not raised before the Board and that Drewlo expressly accepted the assessed value of the land.

[55] Furthermore, MPAC argues that Shane B is distinguishable on this point because it dealt with s. 33(3) and not s. 33(1). All that could be done under the Act was to “fix” the tax exemption that had been erroneously applied to the property. S. 33(1) authorizes MPAC to make any assessment necessary to correct the omission.

[56] In my view, the language of Shane B, particularly at paragraph 47, which I refer to later in these reasons, suggests that neither s. 33(1) nor (3) empowers MPAC to review the valuation of the property. Thus, I accept that there is a very serious debate with respect to this issue.

Issue 4: The Board Failed to Consider “Intentionality”:

[57] In Magee, Sachs J. also adopted the following statement as the purpose of section 33, at para. 15, quoting from A. Mantella & Sons Ltd. v. Municipal Property Assessment Corp., Region No. 09, a 2006 decision of the Board:

…The purpose of section 33 is to allow assessments that have been omitted from the assessment roll in error, to be caught and added to the assessment roll, subject to the preconditions for doing so set out in section 33 being satisfied.

[58] Belobaba J., in East of Bay (2003) Development Corp. v. MPAC, 2010 ONSC 3337, held that where MPAC had intentionally placed an incorrect assessment on the roll, land had not been “omitted”. He stated as follows at paras. 5 and 6:

[5] This is not the usual case where MPAC has inadvertently omitted part of a land parcel or unknowingly failed to include a recent building expansion in the course of preparing the annual property assessment. The case law is clear that s. 33(1) is readily available in situations where the assessing authority was unaware of the omissions of land at the time of the delivery of the assessment roll. MPAC is entitled to “rectify the omission” by issuing an Omitted Property Assessment Notice when the omission is discovered.

[6] Here the omissions were not inadvertent but intentional. MPAC knew that the building in question was completed and fully occupied. But MPAC was having difficulty coping with the deluge of new condominium registrations. Lacking the manpower to do all of the current value assessments on an annual basis, MPAC decided as a matter of internal policy to do the condominium assessments in two steps several years apart: it first sent out a property assessment notice for each condo (or apartment) unit pegged at $30,000 ostensibly valuing only the “vacant land” portion. Then, because s. 33(1) allows re-assessments for omitted land going back two years before the current year (and land is defined to include buildings) MPAC was able to delay the assessment for the building itself for at least two years. When it had the time and resources to complete the assessment, MPAC sent out the Omitted Property Assessment Notices for the increased amounts.

[59] On appeal, the Divisional Court declined to address the issue of whether deliberate omissions are captured under s. 33(1) (see: East of Bay v. MPAC, 2011 ONSC 242). However, it upheld Belobaba J.’s decision.

[60] There has been debate as to whether “intentionality” is a proper consideration since East of Bay. In Bona Building & Management Company Limited v. Municipal Property Assessment Corporation, 2015 ONSC 7824, Sheard J. distinguished East of Bay factually and stated, at para. 31, “I do not accept that East of Bay does or intends to impose an obligation upon MPAC to explain how or why a property was omitted from the tax rolls”.

[61] There is a line of Board cases in which intentionality was considered, although in relation to s. 40.1 of the Act (see: Sarnia (City) v. Municipal Property Assessment Corp., 2011 CarswellOnt 12984, [2011] O.A.R.B.D. No. 392, 71 O.M.B.R. 313, Municipal Property Assessment Corporation Region 09 v. Chew, 2015 78969 (ON ARB) and WBH Woodstock Ltd. v. Woodstock (City), [2005] O.A.R.B.D. No. 414 (ARB File No. 39980)). The City and MPAC properly point out that Sarnia (City) v. MPAC was decided between Belobaba J.’s decision and the appellate Divisional Court decision.

[62] In the present case, the Board distinguished East of Bay, at para. 28. In East of Bay, MPAC’s first s. 33 omitted assessment added the new condominium units to the Assessment Roll together with a reported current value for each unit. Here the condominium units were not added. The Board also noted that the Divisional Court declined to address intentionality and thus, Belobaba J.’s ruling on this point was obiter dicta and not binding upon the Board.

[63] In Shane B, Molloy J. certainly suggests that s.33(1) is directed solely at correcting situations arising from erroneously omitted land (at p. 44). She then referred to East of Bay before concluding, at para. 47:

[47] In the case now before this court, the question is not whether there has been any “omitted” property, as the issue arises under s. 33(3) rather than 33(1). However, the same overall approach should govern. Section 33 is meant to address specific situations that arise outside the usual assessment process and to correct specific errors: the omission of land under s. 33(1) and incorrect taxable status under s. 33(3). It ought not to be used as a substitute for the already existing right that arises in every taxation year to appeal the current value set out in an assessment. Further, it ought not to be used to augment or circumvent that appeal power. (emphasis added)

[64] In the within case, Drewlo led evidence that was uncontroverted that MPAC had been advised that the units in the apartment buildings would be converted to condominium units. These communications continued up until the May Omits were issued.

[65] I conclude that there are a line of conflicting cases on the importance of intentionality. The Board determined that it was not bound by East of Bay and did not, therefore, engage in the analysis as to whether MPAC could not rely upon s. 33(1) because no land was “omitted”. Although this may not be wrong, I am of the view that there is some reason to doubt the correctness of its decision not to do so as it open to serious debate.

Issue 5: The Board’s Preference for MPAC’s Affidavit Evidence over the Agreed Statement of Facts:

[66] Drewlo argues that there was a material difference in the Agreed Statement of Facts and the order of events set out in the affidavit of the Property Valuation Specialist submitted by MPAC. The Board adopted the chronology as set out in the affidavit without reference to the Agreed Statement of Facts and without any explanation for doing so.

[67] In this case, Drewlo argues that a taxpayer is not privy to the inner workings at MPAC, nor the logs on its system, so that the only dates that matter are the dates as set out in the Notices sent to taxpayers. These are the dates that trigger deadlines for exercising appeal rights under the Act.

[68] In the Agreed Statement of Facts, the October Omits were issued before the October Corrections. In the Specialist’s affidavit, which the Board adopted in its Decision, the Correction was done first, then the October Omits. This was an important distinction given MPAC’s argument that it was entitled pursuant to Idomo to correct the legal description of the property resulting from a condominium registration and then issue a s. 33 omitted assessment to add the new lands and their current values to the assessment roll.

[69] Drewlo submits that the Board’s failure to address the facts as set out in the Agreed Statement of Facts and instead rely upon the contradictory affidavit evidence amounts to an error of law, pursuant to Yater, supra. I agree. The dates on the notices are important and it is open to serious debate that the Board’s preference for affidavit evidence setting out the inner workings of MPAC over the notices at the very least required some explanation.

Conclusion as to First Part of the Test for Leave to Appeal:

[70] In respect of the five alleged errors that Drewlo submits the Board made in its Decision, I am satisfied that there is some reason to doubt the correctness of the Board’s Decision with respect to those alleged errors.

[71] I reiterate that I do not conclude that the Board was in error. That determination is left for a full panel of the Court during the appeal, if the second part of the leave test is met.

Is There an Important Question of Law Meriting the Attention of the Divisional Court:

[72] Drewlo returns to the competing principles underlying the Act—correctness of the assessments versus finality of tax assessments to be fair to taxpayers, as set out in para. 30 of Shane B.

[73] In Drewlo’s submission, it is important beyond the interests of the parties involved in this case that the Divisional Court elucidate further on how to achieve the proper balance between these competing principles. I agree.

[74] Furthermore, the mechanism provided in s. 33(1) of using omits to correct Assessment Rolls during the tax year is important to all taxpayers, MPAC and the municipalities. It may well be that MPAC acted properly in this case. However, the manner in which MPAC assesses and adjusts property taxes to arrive at the correct assessment must adhere to the provisions of the Act.

[75] In this particular case, MPAC used the s. 33(1) omit procedure twice within the same taxation year. It was not facing any specific deadline to issue the May Omit. It chose to do so. It is the propriety of the second omit that is under consideration and whether MPAC was empowered by s. 33(1) to do so. Thus, the definition of “land” for the purpose of omits, the proper interpretation of the conjunctive nature of the s. 33(1) test and the role intentionality plays call for appellate review. Appellate guidance on these issues, in my view, transcends the specific interests of these parties.

[76] In granting leave to appeal, I accept the main thrust of MPAC’s argument—that the ultimate assessment arrived at with respect to this property was correct, as Drewlo conceded during the hearing. However, the issue is with how MPAC got to the correct assessment, and whether the procedure complied with the Assessment Act. It may be that the Idomo decision will carry the day. However, it is my view that it is for a panel of the Divisional Court to make that determination.

Disposition:

[77] For the foregoing reasons, I grant leave to appeal with respect to the five alleged errors in the Board’s decision:

1. The Board incorrectly interpreted “land” in subsection 33(1) of the Act to mean the legal description of the land.

2. Although subsection 33(1) of the Act requires that no taxes be levied on the land, the Board failed to even consider that requirement.

3. In the alternative to (a) and (b), in making the finding that it did, the Board erred in law by failing to limit the October Omits to correcting the omission from the assessment roll, instead permitting the current value to also be changed.

4. In the alternative to (a) and (b), the Board failed to consider MPAC’s intentionality in issuing an incorrect May Omit for multi-residential towers despite its knowledge that the Property was converted to condominiums.

5. The Board incorrectly applied a timeline of events that contradicts the parties’ Agreed Statement of Facts.

[78] However, should the panel hearing the appeal determine that it can resolve the appeal without addressing each of these issues, it shall be entitled to do so.

[79] In accordance with the agreement of the parties, costs of the motion for leave are awarded to Drewlo, fixed in the sum of $5,000, all-inclusive.

“Justice S. Nicholson”

Justice Spencer Nicholson

Date: March 2, 2023