CITATION: National Car Rental Inc. et al. v. Municipal Property Assessment Corp. et al., 2023 ONSC 2989

COURT FILE NO.: DC-22-00000053-0000

DATE: 2023 05 11

DIVISIONAL COURT OF JUSTICE – ONTARIO

7755 Hurontario Street, Brampton ON L6W 4T6

RE:

NATIONAL CAR RENTAL INC. et al.

AND:

MUNICIPAL PROPERTY ASSESMENT CORP. et al.

BEFORE:

Justice H. McGee

COUNSEL:

Lauren Lackie, for the plaintiff, Email: llackie@npllaw.ca

Donald Mitchell (MPAC), for the defendant, Email: mitchell@cdglaw.net

Brad Teichman (City of Mississauga), Email: bteichman@overlandllp.ca

Colin Holland (with Teichman), Email: colin.holland@mississauga.ca

Valerie Crystal (ARB), Email: Valerie.crystal@ontario.ca

Jeff Cowan (CPTA), Email: jcowan@weirfoulds.com

HEARD:

March 22, 2023, by video conference

ENDORSEMENT on motion to quash

Overview

[1] On June 21, 2022 the Assessment Review Board (“ARB”) denied the Applicants’ motion to amend their Statement of Issues after the timelines set out in the ARB’s Rules to delivery their Statement had expired.

[2] The Applicants brought a motion for leave to appeal the ARB’s June 21, 2022 decision (“the decision”) pursuant to the Assessment Act, R.S.O. 1990, c. A.31. They later abandoned the motion because the Divisional Court does not have jurisdiction to hear statutory appeals from interlocutory rulings by tribunals unless expressly authorized by statute. Sections 40(22) and 43.1 of the Assessment Act do not provide for interlocutory appeals; only appeals from a final order on a question of law, with leave.

[3] The Applicants now seek judicial review of the ARB’s dismissal of their motion on the same basis as was set out in the abandoned motion for leave to appeal.

[4] The Respondents jointly move to quash the Applicants’ request for judicial review of the interlocutory decision on three grounds: 1) because it is manifestly premature, 2) because there is an adequate alternative remedy in the form of a statutory appeal from the final decision of the ARB should it prove unfavourable to the Applicants, and 3) because the Applicants should not be allowed to circumvent the applicable legislative scheme which requires that questions of law be determined on appeal, with leave.

[5] I grant the Respondents’ motion to quash for the reasons set out below.

Background

[6] The Applicants operate car rental companies at locations that include leased premises at the Pearson International Airport. Sections 18 and 3(1)24 of the Assessment Act require leaseholders of federal airport lands to pay municipal tax as if they were property owners. The Municipal Property Assessment Corporation (“MPAC”) is an independent, municipally funded corporation that determines property assessment values for Ontario properties.

[7] This proceeding is about the assessment of the value of the Pearson premises that is to be applied to the determination of the municipal tax payable by the Applicants for the taxation year of 2021.

[8] Section 19(1) of the Assessment Act requires Ontario property to be assessed on current value. Section 19.2(1), paragraph 4, establishes that the current valuation date for the four taxation years from 2017 to 2020 is January 1, 2016. The taxation period of 2017 to 2020 was extended by regulation to 2017 to 2023. As a result, the current valuation date for the assessment year of 2021 remains January 1, 2016.

[9] The value of a property is assessed as to its state and condition on the current valuation date. The phrase “state and condition” is not defined in the Assessment Act. It has been interpreted to mean the physical situation of the property, inclusive of its development potential. As set out in Claireville Holdings Limited v Municipal Property Assessment Corporation, Region 9, 2021 26729 (ON ARB), at para. 21: “The assessor’s task is to determine, annually, at the state and condition date, the highest and best use of the land assessed, then establish the correct value of such annual determination by reference to the valuation of land of similar highest and best use on the legislated valuation day.”

[10] A person or a business may appeal an assessment to the ARB for any of the reasons set out in s. 40 of the Assessment Act, including that the current value of the land is incorrect.

[11] The ARB is an adjudicative tribunal established by the Assessment Review Board Act, R.S.O. 1990, c. A.32. The ARB hears appeals regarding property tax and assessment matters under a variety of statutes. One of the ARB’s functions is to hear appeals under s. 40 of the Assessment Act from property tax assessments performed by MPAC. On appeal, the ARB determines the current value of land according to section 19.2(1) of the Assessment Act. The ARB has the authority to decide all questions of law and fact within its jurisdiction. Decisions are final and binding unless appealed to the Divisional Court under section 43.1 of the Act.

[12] The ARB is provided with broad powers to dispose of appeals. On appeal, the ARB may, pursuant to s. 44(1), “reopen the whole question of the assessment” to ensure that any errors in the assessment roll are corrected. Pursuant to s. 45, the ARB has all the powers and functions of the MPAC in making an assessment, a determination, or a decision on appeal.

[13] An appeal at the ARB proceeds in accordance with the deadlines set out in the Schedule of Events, schedules “A” and “B” to the ARB’s Rules of Practice and Procedure. The ARB assigns a commencement day for each proceeding, and the due dates in the Schedule of Events are timetabled. The Schedule of Events includes deadlines for appellants to serve a Statement of Issues and for respondents to serve a Statement of Response.

[14] Rule 43 sets out the information that parties must include in their Statements of Issues and Response, which includes, if the issue is current value:

i. the current value requested and how it is calculated;

ii. a full statement of every issue that the party intends to raise, including identification of comparable property(ies) to be referred to, if any; and

iii. a list of all facts, legal grounds, and documents that the party relies on in support of its position.

[15] Pursuant to rule 49, parties may not raise an issue at a hearing that has not been set out in the Statement of Issues or Statement of Response, unless there are exceptional circumstances. Pursuant to rule 40, exceptional circumstances are also required in order to extend a due date in the Schedule of Events.

[16] The Applicants complied with the Schedule of Events set out in their appeal of the MPAC assessment of their properties.

[17] Subsequently, they took the position that the COVID-19 pandemic measures constituted exceptional circumstances which warranted an extension of the due dates under the Schedule of Events. Specifically, they argued that evidence of reduced property values during the period of pandemic restrictions must be before the ARB in order that their appeal be fairly conducted.

[18] To this end, the Applicants brought a motion to alter the Schedule of Events to allow them to amend their Statements of Issues to raise new issues and file new evidence regarding the pandemic period.

[19] The ARB dismissed the Applicant’s motion to alter the Schedule of Events in their interim decision dated June 21, 2022 (the “Decision”). In doing so, they exercised their discretion to deny the Applicants’ request for an extension of time to add an issue to their assessment appeal. They held that the proposed new issue – a decrease in income during the COVID-19 pandemic – was not relevant to the question to be determined in the proceeding, which is what the current value of the property was as of the statutory valuation day of January 1, 2016.

[20] In this application for judicial review of the ARB’s Decision, the Applicants allege that the ARB:

i. Erred in law by misinterpreting the applicable legislative framework to deny the Applicants their annual right to appeal the annual assessment of their properties; and

ii. Erred in law by failing to follow precedent pertaining to the annual assessment of a property’s “state and condition” and applying a novel application of the legislation not argued by any party.

[21] MPAC and the City of Mississauga have jointly brought this motion to quash the application for judicial review because it is premature, because there is an adequate alternative remedy in the form of a statutory appeal from the final decision of the ARB, and because the Applicants should not be allowed to circumvent the applicable scheme which provides broad authority to the ARB so that only questions of law, with leave, may be appealed.

Analysis

[22] In its June 21, 2022 decision, the ARB identified the issues to be determined as:

1. Does the legal regime imposed by the Assessment Act require that the current value of a property be reassessed annually?

2. If so, should the Appellants be granted an extension of the due date for serving an amended Statement of Issues, to allow them to raise the issue that the correct current value of the Subject Properties for the 2021 taxation year is different from the correct current value they have claimed for the 2017 to 2020 taxation years?

[23] The ARB found that the Act does not require an annual reassessment, and as a result, changes in the properties’ “state and condition” after January 1, 2016 were not relevant on the appeal before them.

[24] The ARB did not decide on a final basis whether the properties in question suffered a “state and condition” change over the assessment period or whether the pandemic-imposed restrictions resulted in exceptional circumstances. It limited its analysis, at para. 14 of the Decision, to a finding that a “state and condition” change, “however this term is defined, must be determined as of the date specified in the Act for the return of the Assessment Roll and not on an annual basis.” Because the assessment date remained January 1, 2016, they denied the Appellants' request for an extension.

[25] In determining that January 1, 2016 is the date specified by the Act for the valuation of the subject properties for the 2021 taxation year, the ARB concluded, at para. 229, that “Section 36 [of the Assessment Act] does not allow for an annual reassessment of current value, nor is it necessary to impose an interpretative gloss on the wording of the legislation by adopting and applying a ‘state and condition’ paradigm.”

1. The Application for Judicial Review is Premature

[26] The Applicants fear that the June 21, 2022 decision closes the door on pandemic relief for taxpayers across Ontario. They argue that the issue is of such importance that the court must review the ARB’s decision at the earliest possible opportunity, which they propose is this hearing for judicial review.

[27] This is a misapprehension of the role of judicial review. Judicial review and the use of prerogative writs are extraordinary and discretionary remedies. Although this court has discretion to hear an application for judicial review from any administrative decision, judicial review of an interlocutory decision may only be heard in exceptional circumstances.

[28] In the normal course, an interlocutory tribunal decision is challenged after the tribunal has rendered its final decision in the matter. In the case of the ARB’s decisions under the Assessment Act, this is done by way of statutory appeal on a question of law, with leave of this court.

[29] It is well-established that, in most cases, reviewing courts will decline to engage in a judicial review until the administrative proceeding has been completed. The rationale for this principle was summarized in Canada (Border Services Agency) v. C.B. Powell Limited, 2010 FCA 61, at paras. 31-32, quoted with approval by the Court of Appeal for Ontario in Volochay v. College of Massage Therapists of Ontario, 2012 ONCA 541, at para. 69:

Absent exceptional circumstances, courts should not interfere with ongoing administrative processes until after they are completed, or until the available, effective remedies are exhausted.

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.

[30] The prematurity principle has been consistently applied by this court on judicial review from interlocutory tribunal decisions and was recently summarized in Gill v. College of Physicians and Surgeons, 2021 ONSC 7549 at para. 31 (Div. Ct.):

This court has repeatedly held that absent exceptional circumstances, applications for judicial review of decisions of administrative bodies should not be brought until the end of the tribunal’s proceedings and after the party seeking review has exhausted all available effective remedies within the administrative scheme. The rationale for this principle is to avoid a piecemeal approach to judicial review, to allow administrative matters to run their full course before the tribunal, and to have all legal issues arising from the proceeding considered together at their conclusion.

[31] Absent exceptional circumstances, a tribunal proceeding will be allowed to run its course. All issues arising from the entire proceeding together are to be addressed on appeal or in a judicial review of the tribunal’s final order. As the Federal Court of Appeal noted in C.B. Powell Limited, at para. 33:

Courts across Canada have enforced the general principle of non-interference with ongoing administrative processes vigorously. This is shown by the narrowness of the “exceptional circumstances” exception.… Suffice to say, the authorities show that very few circumstances qualify as “exceptional” and the threshold for exceptionality is high.… Concerns about procedural fairness or bias, the presence of an important legal or constitutional issue, or the fact that all parties have consented to early recourse to the courts are not exceptional circumstances allowing parties to bypass an administrative process, as long as that process allows the issues to be raised and an effective remedy to be granted.

[32] As stated in Kadri v. Windsor Regional Hospital, 2019 ONSC 5427 at para. 59 (Div. Ct.), even assertions of bias, procedural unfairness, breach of natural justice and lack of jurisdiction do not give rise to an automatic right to judicial review. The fact that an important legal issue – or even a jurisdictional or constitutional issue – is raised does not create an exceptional circumstance.

[33] Nor or is it an exceptional circumstance that the tribunal hearing will need to be conducted again if the court ultimately overturns the tribunal’s final decision. That possibility always exists in a premature judicial review and is generally outweighed by the benefits of allowing the tribunal proceeding to run its course: see Pafco Insurance Company v. Sahadeo, 2022 ONSC 328 (Div. Ct.).

[34] The Applicants do not allege bias, procedural unfairness, a breach of natural justice or a lack of jurisdiction within their request for judicial review. Instead, they argue with some force, that because they cannot include evidence of extraordinary changes in the state and condition of the properties resulting from the pandemic, that the final decision of the ARB will be wrong.

[35] This is not a basis for judicial review of an interlocutory decision. The ARB has only determined the threshold issue of whether the Assessment Act requires that the current value of a property as set out in paragraph 19.2(1) be reassessed annually, within the context of a motion to extend the Schedule of Events. This is not a determination of the merits.

[36] The Applicants also propose that the June 21, 2022 decision determines on a final basis that pandemic-related government restrictions on taxpayers’ properties at Pearson International Airport does not change the legislative scheme set out in the Assessment Act. They argue that this makes the June 21, 2022 Decision an exceptional circumstance.

[37] I disagree. First, the decision is not a final order. A final order is one that “disposes finally of a claim. An order is not final just because it is one of substance. Where the effect of an order is to continue the inquiry, it is not final”: Delic v. Enrietti-Zoppo, 2022 ONSC 1627, at para. 7 (Div. Ct.).

[38] Second, the Applicants confuse the global exceptional circumstances of the pandemic with the exceptional circumstances necessary for a court to judicially review an interlocutory order. The two are very different, as is the exceptional circumstances test in section 40 and 49 of the Assessment Act. Exceptional circumstances permitting judicial review of an interlocutory decision is a narrow legal test that carries a high threshold.

[39] The issue before the ARB on June 21, 2022 was not whether pandemic restrictions constituted global exceptional circumstances, but whether section 19.2(1) of the Assessment Act should be read as requiring evidence of events subsequent to January 1, 2016 as necessary to the ARB’s determination of the Applicant’s appeal of the MPAC valuation assessment for the 2021 taxation year.

[40] The ARB has not yet adjudicated that issue. Instead, the interim decision before this Court is a denial of a request for an extension of time to add an issue to the appeal already before it. That is not a final determination of the Applicants’ claims. A tribunal’s decision not to allow an issue to be added to a dispute is interlocutory, even if the reason for the decision involves an analysis of the substantive law.

[41] In Grewal v. Peel Mutual Insurance Company, 2022 ONSC 4082 (Div. Ct.), the Licence Appeal Tribunal refused a request to add punitive damages to the issues in dispute based on its determination that it has no jurisdiction to award punitive damages. The applicant filed a statutory appeal to this Court, arguing that the Tribunal’s jurisdictional analysis was in error. A panel of the Divisional Court dismissed the appeal as interlocutory, noting at para. 9 that the appellant would have a remedy at the conclusion of the tribunal proceeding:

This appeal is therefore premature. The parties should complete the proceeding before the Tribunal respecting the appellant’s application, which has been on hold since the decision was made over a year ago. If she decides to appeal the Tribunal’s final decision on the merits, the issue of the availability of punitive damages can be raised as an issue before the panel hearing the appeal.

[42] Neither does the fact that other ARB proceedings have been put on hold pending this application make this application for judicial review exceptional. As stated by the Federal Court of Appeal in C.B. Powell Limited, “the presence of an important legal or constitutional issue” is not an exceptional circumstance that allows the administrative process to be bypassed.

[43] I find that the request for judicial review is premature.

2. There is an Adequate Alternative Remedy in the form of a Statutory Appeal from the Final Decision of the ARB

[44] The Applicants do not substantially oppose the availability of an alternative remedy in the form of an appeal of the ARB’s final order; only that it might take too long, and that the issues to be determined are of such importance that they ought to be decided by way of judicial review.

[45] In Yatar v. TD Insurance Meloche Monnex, 2022 ONCA 446, at paras. 37, 42 and 47, the Court of Appeal confirmed that the Divisional Court should rarely hear applications for judicial review where an adequate alternative remedy exists. As stated at para. 42, there must be “something unusual about the case to warrant resort to the discretionary remedy of judicial review, given the legislative scheme. That legislative scheme includes the right to reconsideration of the Tribunal’s preliminary decision and the statutory right of appeal from decisions of the Tribunal on questions of law.”

[46] The focus of judicial review is whether the administrative process proceeded in a manner that permitted the issues to be raised and an effective remedy to be granted. On this ground, I find no basis for judicial review because the matter can now proceed to a full hearing before the ARB. Should the ARB find there to be a legal basis for events subsequent to January 1, 2016 to be factored into an analysis of the January 1, 2016 valuation date, further steps can be taken.

[47] If this court grants leave to appeal from the ARB’s final decision, any questions of law will then be decided on the correctness standard, in accordance with Canada v. Vavilov, 2019 SCC 65 on the basis of a complete record. By contrast, if this premature application for judicial review were to proceed, the ARB’s decision would be reviewed on the standard of reasonableness, on an incomplete record.

[48] Matters should proceed efficiently to their conclusion, so that the court can hear all legal issues arising out of a proceeding together on the correctness standard. For example, in Toronto Transit Commission v. Amalgamated Transit Union Loc. 113, 2020 ONSC 2642, at paras. 17-18 (Div. Ct.), the Court held that even when hundreds of grievances were put on hold pending 11 test cases, premature judicial review was not justified:

In my view, all of the policy reasons against judicial review of interlocutory decisions apply with full force in the context of this case, as a test case. Running 11 test cases in lieu of litigating hundreds of underlying grievances makes obvious sense. The net effect is to delay adjudication of hundreds of underlying grievances, but potentially to reduce, significantly, the overall costs of conflict resolution. For this to work practically, of course, it is important that the test cases proceed with reasonable dispatch. “Reasonable dispatch” would be compromised by judicial review and subsequent potential appeals of interlocutory rulings.

I find that the Applicants will have an effective remedy by way of an appeal, with leave, from the ARB’s final decision.

3. The Applicant Should Not be Able to Circumvent the Legislative Scheme

[49] The discretion to entertain judicial review must incorporate respect for the legislature’s choice to not permit an appeal of an interlocutory order, and to require leave to appeal from a final decision of the ARB, only on a question of law, with leave.

[50] Judicial review in these circumstances would be inconsistent with, and in my view, risks offending legislative intent, as set out in Vavilov and in Strickland v. Canada (Attorney General), 2015 SCC 37, at para. 44 (citing D. J. Mullan, “The Discretionary Nature of Judicial Review”, in R. J. Sharpe and K. Roach, eds., Taking Remedies Seriously: 2009 (2010), 420, at p. 447):

While discretionary reasons for denial of relief are many, what most have in common is a concern for balancing the rights of affected individuals against the imperatives of the process under review. In particular, the courts focus on the question of whether the application for relief is appropriately respectful of the statutory framework within which that application is taken, and the normal processes provided by that framework and the common law for challenging administrative action. Where the application is unnecessarily disruptive of normal processes . . . the courts will generally deny relief. [Emphasis added by the Court.]

[51] In Vavilov, at para. 52, the Supreme Court of Canada advised that where a statute prescribes a circumscribed right of appeal, judicial review is available only for decisions to which the appeal mechanism does not apply. Here, there is an appeal mechanism within a legislative scheme that permits meaningful review.

Conclusion

[52] I find that this application for judicial review is premature, that there is an adequate alternative remedy in the form of a statutory appeal from the final decision of the ARB, with leave, and that this Court should not intervene until the ARB’s proceedings are complete. I do not find there to be exceptional circumstances as is necessary to an application for judicial review of an interlocutory order. The motion to quash is granted.

[53] Because the application for judicial review has been quashed, I need not address the Canadian Property Tax Association’s motion for leave to intervene in the judicial review proceedings.

Costs

[54] The parties agreed in advance that the unsuccessful parties to this motion would pay $10,000 in costs. Order to issue that the Applicants shall pay $10,000 in costs to the Respondents.

McGee J.

Released: May 17, 2023