Supreme Court of Canada

Kew v. Burlington, [1980] 2 S.C.R. 598

Date: 1980-04-22.

Kew Property Planning and Management Limited (Plaintiff) Appellant;

and

The Corporation of the Town of Burlington (Defendant) Respondent.

1980: February 13; 1980: April 22.

Present: Martland, Dickson, Beetz, Estey and Mclntyre JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO.

Assessment—Retroactive legislation—Municipality without authority to make additional assessment or to collect taxes based on such additional assessment—Action for declaration that assessments void and return of taxes paid—Decision in earlier proceedings that appeal not brought within prescribed time and mode of complaint not appropriate for securing relief from taxes imposed—Present issue not rendered res judicata—The Assessment Act, R.S.O. 1970, c. 32, s. 43(1)(a), (4).

During the years 1970 and 1971 the appellant owned certain lands in the Town of Burlington on which it was building a condominium project. By April 30, 1971, this project had reached the point where the officials of the respondent municipality were able to increase the assessment with respect to this development because it had become “reasonably fit for occupancy”, within the meaning of that term in s. 43(1)(a) of The Assessment Act, R.S.O. 1970, c. 32, as it stood in April 1971. On July 23, 1971, The Assessment Act was amended retroactively to January 1, 1971, so as delete the words “or reasonably fit for occupancy”, following the words “becomes occupied”, in s. 43(1)(d). The premises in question were in 1971 unoccupied. The appellant disclaimed liability for tax and in November 1971 appealed to the Assessment Review Court, which dismissed the appeal. The appellant then appealed to the county court and the Ontario Municipal Board, both of which also dismissed the appeal. Thereafter, the appellant appealed to the Ontario Court of Appeal, which, on May 3, 1974, dismissed the appeal.

On July 30, 1974, the appellant paid the taxes claimed by the municipality. On March 7, 1975, the appellant commenced an action by writ of summons wherein the statement of claim stated that the payment of taxes was made “without prejudice to the plaintiffs right to recover the same and claim a refund or assert the impropriety and unenforceability and nullity of the

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tax notices and tax collected by Burlington”. The Divisional Court found that the error claimed by the appellant did not fall within the scope of s. 76 of the Act, and that all issues raised under The Assessment Act, including matters raised by appeal under s. 43(4) were res judicata. The Court of Appeal dismissed the appeal, preferring to rest its decision on the effect of the limitation periods imposed by The Assessment Act.

Held: The appeal should be allowed.

The taxing municipality had no authority after July 23, 1971, to maintain the addition to the collector’s roll in respect of the appellant’s property theretofore added under the authority of the then existing s. 43(1)(a). Faced with such a withdrawal of authority, the municipality should have deleted the value so added to the collector’s roll which in turn would have resulted in a recalculation of the tax demand by the municipality against the appellant. By the clearest inference from the detailed, step-by-step procedure outlined in the statute, it was incumbent upon the respondent to notify the appellant of such a deletion from the collector’s roll. Notice in this case, however, would have been meaningless because the required recalculation of the tax claim would itself have been notice of the action taken in response to the July 1971 amendment. Formal matters aside, the retention of the moneys by the municipality was a wrongful position, wrongfully maintained throughout the lengthy proceedings. In the simplest terms, the respondent acknowledged that it had no right to make the additional assessment nor to collect any taxes based on such additional assessment, and the respondent could demonstrate no right by which it could now retain the moneys thus obtained from the appellant.

In the first proceedings, the Court of Appeal, in essence, decided only two things: (a) the appeal was not brought within the time prescribed by s. 43(4); and (b) the complaint pursuant to s. 76 “was not the appropriate one for securing relief from the taxes imposed”. The judgment did not decide that the appellant had no legal right to seek recovery of these moneys by an action at law in the appropriate forum. On these facts and on the basis of the jurisdiction invoked by the appellant, this Court did not find the 1974 decision had rendered the cause of action now before the Court res judicata.

Nor is there any “issue estoppel”, assuming “cause of action estoppel” has been set aside. The issue of nullity which is fundamental to the appellant’s action could not have been dealt with in the administrative chain of appeal machinery “for the review of an assessment for

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the purpose of ensuring the administrative integrity of the assessment roll”.

Town of Grandview v. Doering, [1976] 2 S.C.R. 621; distinguished; Trans-Canada Pipe Lines Ltd. v. Township of Macaulay, [1963] 2 O.R. 41; Toronto Transit Commission v. City of Toronto, [1969] 2 O.R. 637, rev’d on other grounds, [1971] S.C.R. 746; Wiswell v. Metropolitan Corp. of Greater Winnipeg, [1965] S.C.R. 512, considered.

APPEAL from a judgment of the Court of Appeal for Ontario dismissing an appeal from the Divisional Court which dismissed the appellant’s action for a declaration that certain assessments were null and void and for the return of taxes so paid, together with interest from date of payment. Appeal allowed.

Boris G. Freesman, Q.C., for the plaintiff, appellant.

Garry J. Smith, Q.C., and Paul M. Perell for the defendant, respondent.

The judgment of the Court was delivered by

ESTEY J.—This appeal from the Ontario Court of Appeal concerns the position of a ratepayer who has paid 1971 taxes in response to a 1970 assessment made contrary to the applicable provisions of the Ontario Assessment Act but in respect of which appeal proceedings were launched and disposed of by the Ontario Court of Appeal in favour of the municipality in 1974. The strange circumstances of this case arise by reason of the retroactive provisions in an amendment made by the Ontario Legislature to The Assessment Act which came into force on July 23, 1971, but which was expressly stated to be effective from January 1, 1971.

The relevant facts can be shortly stated. During the years 1970 and 1971 the appellant (the plaintiff in these proceedings) owned certain lands in the Town of Burlington on which it was building a condominium project. By April 30, 1971, this project had reached the point where the officials of the respondent municipality were able to increase the assessment with respect to this development

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because it had become “reasonably fit for occupancy” within the meaning of that term as it was found in s. 43(1)(a) of The Assessment Act, R.S.O. 1970, c. 32, as it stood in April 1971. The subsection then read:

43(1). The clerk of the municipality shall, after the 1st day of January and before the 28th day of November in any year, enter in the collector’s roll,

(a) the value or increase in value, as the case requires, as certified by the assessment commissioner, of any building… that after the 1st day of January becomes occupied or reasonably fit for occupancy;

(Italics added.)

It is agreed that the premises in question were in 1971 unoccupied.

The Assessment Amendment Act, 1971 (Ont.), c. 79, repealed clause (a) of subs. (1) of s. 43 and substituted the following:

(a) the value or increase in value, as the case requires, as certified by the assessment commissioner, of any building… that after the 1st day of January becomes occupied.

(Italics added.)

By this amendment therefore, the words “or reasonably fit for occupancy” were deleted.

By subs. (4) of s. 43 of The Assessment Act, the taxpayer is given a right of appeal to the Court of Revision where an increase in assessment has been effected under subs. (1). The time for making this appeal runs from the time such assessment is added to the collector’s roll.

Because the taxpayer/appellant here had no basis for an appeal prior to July 23, 1971 (because the addition to the collector’s roll in respect of the appellant’s property was authorized by subs. (1)(a) until that date), and because subs. (4) was not amended at the same time as subs. (1)(a), no right of appeal would appear to arise under subs. (4) in the circumstances in which the appellant found itself in the summer of 1971.

In order to appreciate the difficulty in which a taxpayer such as the appellant finds himself, it is necessary to consider briefly the general taxation pattern established under The Assessment Act. By reason of s. 3 of the Act, all properties in the

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province are subject to assessment and taxation, subject to certain enumerated exemptions. The assessment is undertaken by the municipal assessment officials in the year preceding that in which the tax in question is levied. In order to provide for a stable base of revenue for municipal operations, the assessment roll is made up annually and the property values thereby established are the basis for the calculation of tax. So as to facilitate tax being levied and raised in the year in which expenditures are made, it was found advisable to establish the assessment or property value base in the year prior to the establishment of the actual amount of tax owing by each property owner. The assessment roll representing the totality of assessed properties in the municipality is then established and, subject to authorized variation in the manner prescribed in the Act, the roll is completed by the end of October in each year. However, in order to bring the roll up to date to reflect building completion during the tax year in question, s. 43 authorizes the municipality to enter on the “collector’s roll” (which is prepared from the assessment roll completed in the previous year), the increase in value of any building which is erected, altered or enlarged after the assessment in question has been completed.

Three general methods of appeal from assessments so made in respect of real property are established under the Act. The first right arises with respect to the assessment roll under s. 52 where an appeal may be taken to the Assessment Review Court and thereafter to the county judge, the Ontario Municipal Board, and the Court of Appeal. This right of appeal relates to errors and omissions arising from being wrongfully included or omitted from the roll or from having been overcharged or undercharged by the assessor in preparing the roll. The second right of appeal arises under s. 66 which provides a right in any person assessed to apply by originating notice to the Supreme or county court

for the determination of any question relating to the assessment, except a question as to persons alleged to be wrongfully placed upon or omitted from the assessment roll or assessed at too high or too low a sum.

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This second procedure has its origins in constitutional problems arising in connection with the first mentioned avenue of appeal. The third mode of appeal is provided for in s. 76 which authorizes an application to the Assessment Review Court for the cancellation, reduction or refund of taxes levied in the year in question where the taxes have been levied in respect of property that has become subject to a different rate of tax or where an overcharge has resulted by reason of clerical error, and certain other categories listed in the section.

A specific right of appeal is given in respect of additions to assessments effected under s. 43(1)(a) supra, by subs. (4) of that section:

(4) Where an entry is made or is to be made in the collector’s roll under this section, the assessment commissioner shall, before the assessment is added to the collector’s roll, deliver as provided for notices of assessment in subsections 2 and 3 of section 40 to the person to be taxed a notice setting out the amount of the assessment and, where applicable, the amount of the assessment of real property liable to taxation under subsection 3, and the time within which an appeal may be made from such assessment, and the same rights in respect of appeal lie as if the assessment had been made in the usual way, but for the purposes of an appeal made from an assessment under this section the assessment roll shall be deemed to have been returned on the day such assessment is added to the collector’s roll.

The time prescribed for such appeal is inappropriate in our circumstances because no cause of appeal arose when the addition was made to the collector’s roll earlier in 1971. Such time limit had of course expired in any case prior to the amendment to the subsection in July 1971.

On the facts now before the Court, it is not an easy question to determine which right of appeal was open to the appellant and what, if any, limitations apply to the exercise of that right. Before July 23, 1971, the appellant had no cause for complaint by way of appeal or otherwise because the value added to the collector’s roll was, at the time of such addition, authorized by the Act. After July 23, 1971, no action by way of addition to the roll was taken by the municipality to increase or reduce the assessment and hence the mechanism under subs. (4) of s. 43 was not triggered by any

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action on the part of the assessment officials. If matters are left in that simple state, however, we have a situation where the Legislature has very deliberately, in July of 1971, granted tax relief to taxpayers in a class which includes the appellant but has left the class without remedy or method by which it can realize the benefit so granted by the statute. To determine if this is the proper result in law, it is necessary to examine firstly the proceedings which have actually occurred in this matter to date, and secondly, the proper interpretation to be placed upon certain provisions in The Assessment Act as amended.

The first round of proceedings culminating in the Court of Appeal decision reported in (1974), 4 O.R. (2d) 365, are summarized in the judgment of Kelly J.A., speaking on behalf of the Court, at pp. 368-9:

The record before us does not disclose what action the owner then did take, [upon learning that there had been no reduction in the 1971 taxes accorded to the appellant by reason of the 1971 amendment], but there was apparently some action by it in November, 1971, as a result of which the Regional Registrar of the Assessment Review Court under date of April 12, 1971, dispatched to it a notice of a sitting of the Assessment Review Court to be held on April 28, 1972: “…in respect of an application under Section 76 of The Assessment Act for an adjustment of the 1971 realty tax”.

A further notice under date of May 10, 1972, was received by the owner advising of the decision of the Assessment Review Court as follows: “Application not approved.”

Again at this stage what was done by the owner is only a matter of conjecture, but a notice of hearing dated October 6, 1972, advised the owner that the county court judge had appointed October 24, 1972, for the purpose of hearing the following appeal against the decision of the Assessment Review Court:

“Appeal:

Section 76—1971 Taxation No Reason Given.”

A notice dated December 6, 1972, from the Regional Registrar advised the owner of the dismissal of its application by the county court judge.

Thereupon the owner gave notice of appeal from the decision of the county court judge setting out no grounds

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of appeal. The style of cause, under which the notice of appeal was given, was the following:

ONTARIO MUNICIPAL BOARD

IN THE MATTER OF Appeals from the Decision of His Honour Judge Sprague dismissing the Appeals from the Assessment Review Court in respect of the Town of Burlington Appeals, Nos. 340-2, 340-6, 340-8 to 340-11 inclusive, 340-13 to 340-16 inclusive, 340-18, 340-20 to 340-23 inclusive, 340-25 to 340-90 inclusive, 340-92 to 340-94 inclusive, 340-96, 340-99 to 340-101 inclusive, 340-103 to 340‑115 inclusive.

BETWEEN:

KEW PROPERTY PLANNING AND MANAGEMENT

Appellant

—and—

TOWN OF BURLINGTON

Respondent

Despite the fact that all the documents available to this Court, up to and including the notice of appeal to the Ontario Municipal Board, refer to an appeal under s. 76 (repealed 1972, c. 125, s. 18), wherein the cancellation, reduction or refund of taxes levied may be made on an application to the Assessment Review Court, the appointment issued by the Ontario Municipal Board, under the hand of its secretary, contained a style of cause in the following words:

ONTARIO MUNICIPAL BOARD

IN THE MATTER OF Section 63 of The Assessment Act, (R.S.O. 1970, c. 32)…

The reference to s. 63 of The Assessment Act in the Board’s style of cause no doubt results from the fact that subs. (2) of that section provides for the right of appeal to the Ontario Municipal Board from a decision of the county judge sitting in appeal from the Assessment Court under subs. (4) of s. 43 which is the section under which the disputed action was taken.

On July 30, 1974, the appellant paid to the respondent the taxes claimed by the respondent on the basis of the collector’s roll which included the additional assessment under s. 43(1)(a) prior to the amendment in July 1971. The taxes paid as a result of the additional assessment amounted to $88,624.82. On March 7, 1975, the appellant commenced this action by writ of summons wherein

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the statement of claim states that the payment of taxes was made

without prejudice to the Plaintiff’s right to recover the same and claim a refund or assert the impropriety and unenforceability and nullity of the tax notices and tax collected by Burlington.

In these proceedings the plaintiff claims a declaration that the assessments were null and void, together with a claim for the return of the taxes so paid, together with interest from the date of payment. The Divisional Court found that the error claimed by the appellant did not fall within the scope of s. 76 of the Act, and that all issues raised under The Assessment Act, including matters raised by appeal under s. 43(4), are res judicata. The Court of Appeal dismissed the appeal (the decision is as yet unreported), preferring to rest its decision on the effect of the limitation periods imposed by The Assessment Act. MacKinnon J.A., as he then was, speaking on behalf of the Court, stated:

While we have some reservations as to the matter being properly termed “res judicata”, we are all of the view that the addition to the collector’s roll in the instant case was an assessment within the meaning of The Assessment Act, R.S.O. 1970, c. 32, and amendments, which brought into play the limitation periods set out in that Act. Those limitation periods, setting out the times within which one may attack such assessments, have long passed. Although one’s sense of justice may be affronted by the respondent municipality’s insistence on the payment of the tax moneys for which the appellant now seeks restitution, the defence of the limitation periods was and is available to the municipality and has to be given effect.

I turn then to the interpretation of the statutory provisions bearing on this issue and predicate this review upon the basic consideration that we are here primarily concerned with the interpretation of s. 8 of “An Act to amend The Assessment Act, 1968-69” which bears the statutory title of The Assessment Amendment Act, 1971, 1971 (Ont.), c. 79. By subs. (1) of s. 8, the Legislature removed the words “or reasonably fit for occupancy” from the pre-existing s. 43(1)(a), as noted above, for the obvious purpose of bringing relief from taxation to the owners of buildings which stand unoccupied although they are occupiable. It is difficult to

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believe that the Legislature would pass such beneficial legislation with a view to according to the taxpayers of the province freedom from taxation on any value increase by reason of the completion of a building until such building becomes occupied, and at the same time, do so in a manner which completely negates and defeats any such purpose. This is the result which is brought about if s. 8 is read as though it had always been a part of the taxation machinery established in the comprehensive and rather complex Assessment Act.

This conclusion becomes apparent from an examination of the appeal provisions of The Assessment Act itself. I have already adverted to subs. (4) of s. 43 which, after authorizing the clerk of the municipality to add value or increase in value during the taxation year, grants a right of appeal from the clerk’s actions providing such appeal is taken within the same time limits as are applicable to general appeals from assessment under s. 52. This latter section affords a general right of appeal to

any person complaining of an error or omission in regard to himself, as having been wrongfully inserted in or omitted from the roll or as having been undercharged or overcharged by the assessor in the roll…

This right of appeal must be taken within 14 days after the date upon which the assessment roll is required to be returned and under s. 43(4), the time is deemed to run from the day on which the added value is added to the collector’s roll by the clerk of the municipality.

This initial appeal is taken to the Assessment Review Court. From the decision of the Assessment Review Court, appeal may be taken under s. 55 to the county judge of the county in which the property is situated. From the decision of the county judge an appeal lies by virtue of s. 63 to the Ontario Municipal Board. By subs. (2) of that section, an appeal to the Board is granted with respect to any decision of the county judge under s. 43 as well. By s. 63(8), an appeal is granted in these terms from the Board to the Ontario Court of Appeal:

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(8) An appeal lies from the decision of the Ontario Municipal Board under this section to the Court of Appeal upon all questions of law or the construction of a statute, a municipal by-law, any agreement in writing to which the municipality concerned is a party, or any order of the Board.

It is also relevant to note the provisions of s. 64(1) relating to these successive appeals.

64 (1) Upon an appeal on any ground against an assessment, the Assessment Review Court, county judge or Ontario Municipal Board hearing an appeal under section 63, or the Court of Appeal, as the case may be, may reopen the whole question of the assessment so that omissions from, or errors in the assessment roll may be corrected, and the amount for which the assessment should be made, and the person or persons who should be assessed therefor may be placed upon the roll, and if necessary the roll of the municipality, even if returned as finally revised, may be opened so as to make it correct in accordance with the findings made on appeal.

Section 65 provides in these terms for the general scope of the appeal procedure:

65. (1) Upon a complaint or appeal with respect to an assessment, the Assessment Review Court, county judge or Ontario Municipal Board may review the assessment and, for the purpose of such review, has all the powers and functions of the assessor in making an assessment, determination of decision under this Act, and any such assessment, determination or decision made on review by the Assessment Review Court, county judge or Ontario Municipal Board shall, except as provided in subsection 2, be deemed to be an assessment, determination or decision of the assessor and has the same force and effect.

((2) Not here applicable.)

(3) For greater certainty, it is hereby declared that the provisions of sections 52, 55 and 63 respecting appeals are intended to establish machinery for the review of an assessment for the purpose of ensuring the administrative integrity of the assessment roll, and, except as provided in subsection 2, such provisions shall not be deemed to affect the right of any person to apply to a superior, county or district court for a judicial determination of any question relating to an assessment.

It is important to note the reference in subs. (3) to “machinery for the review of an assessment for the

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purpose of ensuring… administrative integrity…”. It is these sections together with s. 76, to which reference has already been made, which were invoked in the proceedings terminated by the judgment of Kelly J.A. noted above. The significance of this procedural description I will return to shortly.

By s. 66 of The Assessment Act a person assessed is given the right to apply by originating notice to the Supreme Court of Ontario or to the county court of the county in which the land is located “for the determination of any question relating to the assessment, except a question as to persons alleged to be wrongfully placed upon or omitted from the assessment roll or assessed at too high or too low a sum.” From any decision under this section, an appeal lies to the Court of Appeal. It is clear from the record now before us that the Court of Appeal in 1974 were not sitting on an appeal under s. 66.

Section 67 provides:

67. No action or other proceeding, except an action or other proceeding brought by or on behalf of a municipality for the collection of arrears of taxes, shall be brought in court with respect to an assessment or taxes based thereon,

(a) except within sixty days after the day upon which the assessment roll is required by law to be returned, or within sixty days after the return of the roll, in case the roll is not returned within the time fixed for that purpose;

((b), (c), (d)—not here applicable)

provided, where an appeal is made to the Court of Appeal, no action or other proceeding shall be brought in any other court with respect to the assessment.

Sections 68 and 70 require notice. The former provides:

68. Where any part of an assessment is declared invalid or in error by the Supreme Court or a county court, the whole assessment is not thereby invalidated and the court may direct that the assessment roll be altered in accordance with its judgment and the clerk of the municipality concerned shall so alter the roll and shall write his name or initials against every alteration.

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The latter section makes provision for the impact on business tax where the assessment of any real property is altered on an appeal or in an action.

The reach of the limitation periods prescribed in The Assessment Act has been the subject of examination in the Court of Appeal of Ontario on previous occasions. That Court decided in Trans-Canada Pipe Lines Ltd. v. Township of Macaulay[^1] that jurisdictional defects (in that case relating to the failure to give notice of the hearing before the Court of Revision) were not subject to the limitation bar imposed by what is now s. 67. The Court of Appeal, speaking through Laskin J.A. as he then was, in Toronto Transit Commission v. City of Toronto[^2], at p. 648, after noting the decision in the Trans-Canada Pipe Lines case, supra, added:

…and there may be other situations which may justify its [i.e., the limitation period’s] exclusion.

The Court there was concerned with the wrongful denial of a statutory exemption granted under the then s. 4, now s. 3, and not with a lack of taxing authority by reason of the amendment to s. 43 as in the present case. In fact, the Court of Appeal in the Toronto Transit Commission case, supra, expressly found it unnecessary on the facts of that case to deal with the application of s. 43. The decision of the Court of Appeal was reversed on other grounds by this Court[^3]. It is difficult to ascertain the standard by which the Court of Appeal in the first‑mentioned case exempted the right of action from the operation of the statutory limitation period, and in the second-mentioned case applied the limitation provisions to the action in question. In the latter case, the Court presumably did so as the claim arose within “the machinery for the review of assessment” under the statute. This is quite a different situation from that now arising in this proceeding wherein the appellant calls into question the failure of the taxing authority to conform to the 1971 statute which all

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parties agree is applicable to the appellant’s lands during the 1971 taxation year.

A parallel may be drawn between the position of the Court sitting in disposition of the issues raised by the writ of summons herein and that of a court dealing with proceedings summarily commenced wherein the relief sought was the quashing of a by-law. Under The Municipal Act of Ontario, R.S.O. 1970, c. 284, ss. 282-286, procedures are established for the summary quashing of a by-law by the Supreme Court of Ontario. A like procedure appeared in the Manitoba municipal legislation and was the subject of examination by this Court in Wiswell v. The Metropolitan Corporation of Greater Winnipeg[^4], at p. 524, where Hall J. had this to say on the issue of whether or not the Court was confined to the statutory procedure, including its limitation periods, when dealing with a motion to quash a by-law:

Even if the by-law was voidable only as argued by the respondent, I do not think that s. 206 of The Metropolitan Winnipeg Act, 1960 (Man.), c. 40, would bar the action for a declaratory judgment declaring the by-law invalid. The section in question appears to provide a summary procedure to quash by-laws of the Metropolitan Council but it does not apply to an action such as this. There is nothing in the section depriving the appellants of their right to bring an action to have the by-law declared invalid: Wanderers Investment Co. v. The City of Winnipeg, [1917] 2 W.W.R. 197, at p. 205.

Section 66 of The Assessment Act of Ontario, as mentioned above, likewise establishes a summary process for invoking a review by the courts of issues arising as a result of an assessment made under the statute. Applying the same reasoning I would conclude that the statute does not here preclude an action to contest the failure of the taxing authority to limit its taxation of the appellant’s property to the authority granted by the Legislature under the 1971 statute.

We are here, of course, dealing with a statute passed in 1971 in which the Legislature has granted a specific, clear right to the appellant with

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respect to the taxation of its property. Section 67 may on one interpretation appear to stand in the way of the appellant in bringing an action to set aside an assessment and a taxation made under The Assessment Act but squarely in the face of the amendment made in July 1971. The municipality does not contest this fact but contents itself with saying that the money is simply unrecoverable in the face of the limitation periods in The Assessment Act itself. Section 67, in my view, does not contemplate or encompass the barring of such an action as here brought by the appellant. In its opening terms, s. 67 deals with an action brought in respect of an assessment or taxes based thereon. Section 43(1)(a) deals with the entry

in the collector’s roll, [of]

(a) the value… of any building… that… after the 1st day of January becomes occupied…

In the words of s. 65(3), the appeal sections therein enumerated “are intended to establish machinery for the review of an assessment for the purpose of ensuring the administrative integrity of the assessment roll…” with which we are here not concerned. The Court is here concerned with the determination of the impact of s. 43(1)(a) as amended on the tax recoverable through the collector’s roll in respect of the appellant’s property. I do not find the terminology in s. 67 so broad as to cut off and to defeat the right clearly granted by the Legislature, and indeed acknowledged by the municipality. In fact, given full rein, s. 67 would eliminate any chance for a taxpayer to recover the improperly collected moneys because the time therein specified for the taking of action by the property owner had expired before the Legislature enacted the amendment which granted the assessment relief.

The taxing municipality had no authority after July 23, 1971, to maintain the addition to the collector’s roll in respect of the appellant’s property theretofore added under the authority of the then existing subs. (1)(a). Faced with such a withdrawal of authority, the municipality should, in my view, have deleted the value so added to the collector’s roll which in turn would have resulted in a recalculation of the tax demand by the municipality against the appellant/ratepayer. By the

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clearest inference from the detailed, step-by-step procedure outlined in the statute, it was incumbent upon the respondent to notify the appellant of such a deletion from the collector’s roll. Notice in this case, however, would have been meaningless because the required recalculation of the tax claim would itself have been notice of the action taken in response to the July 1971 amendment. Formal matters aside, the retention of the money by the municipality is a wrongful position, wrongfully maintained throughout the lengthy proceedings. In the simplest terms, the respondent acknowledges that it had no right to make the additional assessment nor to collect any taxes based on such additional assessment, and the respondent can demonstrate no right by which it can now retain the moneys thus obtained from the appellant.

I turn to the question of res judicata. This requires a determination of the issues before Kelly J.A. in 1974 and the various arguments, grounds, pleas and submissions which might have been properly placed before the Court of Appeal on that occasion. On this point, it is essential to bear in mind the procedure followed by the parties in reaching the Court of Appeal in 1974 and the issues actually determined by that Court. Those proceedings originated by an appeal to the Assessment Review Court and were interpreted by all parties as being an appeal with reference to s. 76 of the Act mentioned above, which section is invoked in the action leading to this appeal. Eventually the proceedings were broadened by the introduction of s. 63, and the Court of Appeal broadened the matter further by reviewing the impact of s. 43(4) under which the appeal in law was indeed launched in the first instance before the Assessment Review Court. In dealing with the role of the Assessment Review Court (inferred to in earlier legislation as the Court of Revision), the Court of Appeal in the Trans-Canada Pipe Lines case, supra, speaking through McLennan J.A., had this to say:

The learned trial Judge was of the opinion that the action of the Court of Revision could have been easily corrected on appeal to the County Court Judge under s. 75 [now s. 55]. In this I think he erred. The question of the jurisdiction of the Court of Revision is a question of law. On an appeal under s. 75 the County Court Judge

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has no jurisdiction to deal with a question of law but is limited to the question of whether or not the values are too high or too low or whether persons are in fact wrongfully omitted from or placed upon the roll. Quance v. Thomas A. Ivey & Sons, Ltd., [1950] 3 D.L.R. 656, [1950] O.R. 397; Town of Brampton v. Hutchinson, [1950] O.R. 491; Toronto v. Olympia Edward Recreation Club Ltd., [1955] 3 D.L.R. 641, [1955] S.C.R. 454. Therefore the County Court Judge could under no circumstances grant the remedy which the plaintiff seeks in this action and the plaintiff would have no remedy in this case under the appellate procedure under the Assessment Act.

While the learned trial Judge has found that in this case there was no fraud in the moral sense, if the construction which the appellant supports is placed on s. 88 it could be used as an instrument for a fraud in that as long as the fraud could be concealed until after the limitation period in s. 88, a person assessed would be deprived of any remedy. I cannot think that the intention of the Legislature in enacting s. 88 was to prevent persons from attacking proceedings either fraudulent in nature or without legal effect because of the failure by the authorities to obey commands of the Legislature.

Counsel for the respondent pointed out that the provisions of the Act relating to appeals from assessments and s. 88 were designed to achieve finality in assessment and taxation and to avoid the confusion necessarily resulting from changes in the assessment and the amount of tax after a lapse of time. No doubt this is so. It was so stated in the judgment of MacKay, J.A., in Agudath Israel of Toronto v. Town of Orillia, 32 D.L.R. (2d) 81 at p. 85, [1962] O.R. 305 at p. 309, but finality of assessment is purchased at too high a price if it countenances complete disregard of imperative statutory duties designed to ensure fairness. (p. 53)

(Italics added.)

The Court of Appeal decision in Kew in 1974 was given within the framework of an appeal launched before an administrative tribunal under The Assessment Act. I do not interpret s. 63(8) as extending the reach of these procedures so as to include the right of the Court of Appeal sitting thereunder to entertain an argument of nullity. It may be that in some circumstances a court might fall back on its inherent jurisdiction to entertain arguments on questions of law where the court is sitting in first instance as the heir of the ancient

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royal courts of justice of general jurisdiction. The Court of Appeal is, of course, a purely statutory body and draws its authority from the parent statute and such other grants of power as may be found in other legislation. Those powers fall to be interpreted in the context of the legislation in question and such is the case with s. 63(8). That the Court of Appeal in 1974 were concerned with the machinery for the review of an assessment and questions of law pertaining thereto (I borrow the words employed by the Legislature itself in s. 65(3)), is evident from the detailed review of the assessment and legal consequences given to the matter by Kelly J.A. At p. 374 the learned Justice on appeal stated:

The tax bill rendered on the basis of the increase in value entered in purported compliance with s. 43(1) was for an amount greater than it should have been had the clerk acted in accordance with the amended Act and had his action reflected the law which the Legislature stated to be in existence on January 1st.

He continued, again at p. 374:

As I do not believe that the Legislature intended to deprive any owner of the right to appeal against any addition of increased value that became unauthorized by virtue of the amendment, I would consider that this owner, had he launched an appeal within 14 days of the day upon which the amendment came into force, would have, so far as was humanly possible, launched his appeal within the prescribed time after the notice came to him that the addition of the increased value to the collector’s roll had become an objective error and one which, while previously made in good faith, by the action of the Legislature became an entry the making of which was unauthorized. However, as it appears that no formal action was taken by the owner nor were any proceedings launched until November, 1971, it has failed to bring itself within the time for appealing which the interpretation of the statute most favourable to it would have made mandatory.

Kelly J.A. goes on to point out that the jurisdiction of the Ontario Municipal Board, from which the appeal was brought to the Court of Appeal, did not include the determination of questions of law. For that purpose, s. 93 of The Ontario Municipal Board Act, R.S.O. 1970, c. 323, provides, in the words of Kelly J.A., at p. 375:

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…the sole machinery by which, when a question of law is raised before the Board, a judicial interpretation may be secured or that question of law settled.

It is none the less obvious that in many cases the Board in proceeding to deal with matters which are squarely within its jurisdiction must proceed on the assumption that a particular statute involved bears a certain meaning; where the construction is supported by judicial authority, or where the meaning is so obvious that it does not require judicial interpretation, there is no ground to challenge the Board’s decision because it inherently applies the accepted construction. But in this case, assuming that it was required to proceed on some interpretation of s. 43(1) before a decision could be given on the question the parties laid before it, the Board would have had to decide as between the conflicting constructions advanced by the parties before it. The parties having joined issue on the very matter of the interpretation of the section, the Board’s adoption of one or the other of the interpretations was a judicial act which was properly a matter for the Courts. Where, as here, a party challenges the construction that the Board assumes a section to have, a question of law is raised for the decision of which s. 93 of the Ontario Municipal Board Act should be invoked, i.e., the Board should state a case.

The Court of Appeal, of course, was not there dealing with a stated case, but rather with an appeal originating under s. 43(4). In essence, the Court decided only two things:

(a) the appeal was not brought within the time prescribed by s. 43(4);

and,

(b) the complaint pursuant to s. 76 “was not the appropriate one for securing relief from the taxes imposed”.

The judgment does not decide that the appellant had no legal right to seek recovery of these moneys by an action at law in the appropriate forum. On these facts and on the basis of the jurisdiction invoked by the appellant, I do not find the 1974 decision has rendered the issue now before the Court res judicata.

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Quite a different consideration was before this Court in Town of Grandview v. Doering[^5] where the Court was concerned in a second action with a drainage problem identical to that with which the first action was commenced, except that the second action concerned damage to the lands of the plaintiff incurred in later years and by reason of a different type of flooding. The dissenting opinion viewed the second action as raising a new claim based on a different cause or source of damage. The majority concluded that the matter had been litigated or could have been litigated in the first action since the condition then existed. In that case, the same tribunal entertained each claim and was a Court of general jurisdiction. In this appeal the initial proceedings were raised under the statutory assessment review procedures and the first hearing took place before an administrative tribunal. After successive appeals, the last of which was to an administrative board, the matter reached the provincial Court of Appeal under the aforementioned statutory procedures. The second proceeding, the one now before us, is erected on the broad base of an action commenced by writ of summons and brought in a Court of general jurisdiction wherein the appellant claims a declaration and the return of moneys together with interest. Ritchie J., writing for the majority in Grandview, supra, rested his conclusion with respect to res judicata on several authorities, including Phosphate Sewage Co. v. Molleson[^6] and Fidelitas Shipping Co., Ltd. v. V/O Exportchleb[^7], wherein Lord Denning at p. 8 stated:

The law, as I understand it, is this: if one party brings an action against another for a particular cause and judgment is given on it, there is a strict rule of law that he cannot bring another action against the same party for the same cause.

Such is not the situation here. This action is founded on the purported consequences in law of the actions of the taxing authority in respect of a

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year in which the Legislature reduced its authority to tax the appellant. Neither do I believe we are here concerned with issue estoppel (assuming cause of action estoppel has been successfully set aside above) as the issue which is fundamental to the appellant’s action could not have been dealt with in the administrative chain comprised in the appeal machinery established under the statute “for the review of an assessment for the purpose of ensuring the administrative integrity of the assessment roll”. Vide Angle v. Minister of National Revenue[^8], at p. 254.

This matter came to this Court in a proceeding originating apparently by way of notice of motion brought by the respondent in Weekly Court wherein application was made to dismiss the action on several grounds including the issues of res judicata and the expiry of the statutory limitation period. This application was dismissed and leave was thereafter granted for an appeal to the Divisional Court. Before the matter was heard in Divisional Court, the parties agreed to a case being stated for the opinion of that Court. The Divisional Court allowed the appeal from the dismissal of the application in Weekly Court and dismissed the action with costs. The Divisional Court thereupon answered the six questions posed in the stated case. The Court of Appeal dismissed the appeal without dealing specifically with either the issue raised by the application to Weekly Court or the questions set out in the stated case.

I would, for the reasons set out above, allow the appeal, set aside the order of the Court of Appeal and of the Divisional Court, and restore the order of Donohue J. sitting in Weekly Court on September 25, 1975; and answer the questions put in the stated case as follows:

1. Was the defendant entitled to add the Assessment Roll to the Collectors Roll, issue tax notices and impose taxes in the circumstances herein for the year 1971?—No.

2. Are the proceedings and decisions therein referred to in para. 10 of this stated case an attack by the plaintiff

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upon the collectors roll in this action?—If this question is whether the matter is res judicata, the answer is no.

3. Is the claim of the plaintiff herein barred by the limitation provisions contained in the Assessment Act?—No.

4. Is the plaintiff entitled to recover from the defendant the sum of $88,624.82 referred to in para. 2 above?—Yes.

5. If the answer to question 4 is yes, is the plaintiff entitled to interest and, if so, at what rate?—The issue of interest was not the subject of argument in this Court. In its statement of claim, the plaintiff asked for interest at the rate of 1 per cent per month from the date of payment of the claimed taxes, July 30, 1974, until repayment to the plaintiff‑appellant, “the rate of interest being the same as that charged by the defendant to the plaintiff on arrears of taxes”. The question of interest is complicated further by the fact that The Judicature Act was amended in 1977 by 1977 (Ont.), c. 51, s. 3(2) of which provides as follows:

6. (2) This section applies to the payment of money under judgments delivered after this section comes into force but no interest shall be awarded under this section for a period before this section comes into force.

The amending statute came into force on November 25, 1977.

The record filed by the parties in this Court does not disclose the precise nature of the proceedings in Weekly Court, nor is it apparent whether the parties have invoked Rules 124 and 125 as well as Rule 497b of the Rules of Practice of the Supreme Court of Ontario. Thus it is not clear that upon disposition of the stated case, the parties have in effect agreed that judgment shall go on the basis of the answers given. However, in its factum filed in this Court, the appellant asked that the judgment of the Court of Appeal “be set aside and that judgment be entered for the plaintiff as prayed in the statement of claim with interest at such rate as this honourable Court may determine”. The response by the respondent to this proposal was simply that the appeal be dismissed. Under these circumstances, and bearing in mind the lengthy proceedings endured by the parties in this action and in the prior appeal proceeding, I think the proper course is to refer the interest issue to a Supreme Court judge sitting in Weekly Court for a determination on any evidence which the parties may wish to adduce in the manner authorized by the Rules of Court, of that part of question 5 which asks what rate of interest is applicable, it being my opinion that the

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appellant is entitled to interest from and after July 30, 1974, being the date of payment under protest of the unauthorized demand for taxes.

6. As between the plaintiff and defendant, who shall pay the costs of these proceedings?—The respondent shall pay the costs of these proceedings in this Court and in all the Courts below to the appellant.

For these purposes, the application in Weekly Court shall, as the parties apparently intended, be treated as a motion for judgment and judgment shall be entered against the respondent in the amount of $88,624.82 with interest from July 30, 1974, until date of payment at such rate or rates of interest as may be found applicable by a judge of the Supreme Court of Ontario sitting in Weekly Court. One can be excused, looking back over this long trail of appeals, actions and hearings, for hoping that this matter can now be disposed of without further protracted proceedings.

Judgment accordingly.

Solicitor for the plaintiff, appellant: Boris G. Freesman, Toronto.

Solicitors for the defendant, respondent: Weir & Foulds, Toronto.

[^1]: [1963] 2 O.R. 41. [^2]: [1969] 2 O.R. 637. [^3]: [1971] S.C.R. 746. [^4]: [1965] S.C.R. 512. [^5]: [1976] 2 S.C.R. 621. [^6]: (1879), 4 App. Cas. 801. [^7]: [1965] 2 A11 E.R. 4. [^8]: [1975] 2 S.C.R. 248.