ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-08-00368286
DATE: 20120416

BETWEEN:

Community Head Injury Resource Service of Toronto Applicant – and – Municipal Property Assessment Corporation and the Corporation of the City of Toronto Respondents

David N. Bleiwas, for the Applicant

Karey Lunau, for the Respondent, Municipal Property Assessment Corporation
Ulli S. Watkiss, for Respondent, The Corporation of the City of Toronto

HEARD: March 20, 2012

J.S. O’NEILL

REASONS ON APPLICATION

[ 1 ] This is an Application for a declaration for the following relief described by the Applicant at paragraph 62 of its Factum. I reproduce paragraph 62 below:

CHIRS respectfully requests:

(a) A declaration, in accordance with clauses 3 (1) 11 and 3 (1) 12 (iii) of the Act that, for the 2008 taxation year and following, the Applicant is exempt from taxation in relation to the Property;

(b) An Order requiring the Respondents to amend the Assessment Roll to reflect the exempt status of the Property and requiring the Respondents, or either of them, to refund or credit to the Applicant the amount of any overpayment of taxes and/or any interest paid on the amount of the overpayment; and

(c) Its costs of this Application on a substantial indemnity basis.

[ 2 ] At paragraphs 1, 2, 3 and 4 of its Factum, the Municipal Property Assessment Corporation (MPAC) set out its overview of the Application as follows:

1. Community Head Injury Resource Services of Toronto (“CHIRS”), is a heath care agency. It provides rehabilitation services and housing for people who have suffered a brain injury. CHIRS owns, uses and occupies a building at 62 Finch Avenue West in Toronto (“Property”). The top floor of the Property is used for housing CHIRS’s clients. The remainder of the Property is used for rehabilitation and other services.

Photos, Exhibit 6 to Cross-Examination, MPAC’s Record, tab 11, p. 162.

2. CHIRS seeks an exemption from municipal taxation on two grounds: (1) CHIRS’s property is a house of refuge or (2) CHIRS is organized for the relief of the poor .

Assessment Act, R.S.O. 1990, c.A.31, s.3(1) - 11 , 12 , as amended:

s. 3(1) All real property in Ontario is liable to assessment and taxation subject to the following exemptions from taxation: ...

11. Land owned, used and occupied by a non-profit philanthropic corporation for the purpose of a house of refuge ...

12. Land owned, used and occupied by, ...

iii. any charitable, non-profit philanthropic corporation organized for the relief of the poor ...

3. CHIRS is a non-profit philanthropic corporation. It is supported by public funds.

4. The housing on the top floor of the Property is a house of refuge and should be exempt from municipal taxation. The rest of the Property is not a ‘house’ and, therefore, is not a ‘house’ of refuge.

[ 3 ] When the matter came on for hearing before me on March 20, 2012, it was agreed that the exemption would be sought on the basis that the CHIRS’s property is a house of refuge.

[ 4 ] I set out below the following important facts as summarized at paragraphs 8, 10 and 11 of the Respondent (MPAC) Factum:

8. As set out in its objects, mission, vision and values statements, CHIRS’s purpose is to provide rehabilitation programs and to operate residential accommodation for people who suffered a brain injury.

9. CHIRS is funded by the Ministry of Health and Long Term Care (MOH). The purpose of MOH’s funding is to ‘improve the health of Ontarians through better access to high quality health services’.

Financial Statements, Exhibit G to Chandler Affidavit No.1, Record , tab 2G, p. 36.

Service Accountability Agreement, Exhibit 1-29 to Cross-Examination, (‘Background’), MPAC’s Record , tab 7, p.110.

11. MOH reimburses CHIRS for 100% of CHIRS’s property taxes.

Answers to Undertakings, No.10 (P41, Q167-8), MPAC’s Record, tab 13, p.269.

[ 5 ] The issue therefore on the Application before me is whether the Property is a “house of refuge” or similar to a house of refuge.

LEGAL ANALYSIS

[ 6 ] The Applicant submits that CHIRS is a house of refuge, entitled to a tax exemption, based on the following points concisely set out in paragraphs 34 to 38 inclusive of its Factum:

34. CHIRS submits that its use of the Property qualifies it as a house of refuge or similar purpose. While the evidence is clear that only the 4 th floor of the Property is used exclusively for residential clients, CHIRS submits that there is no requirement that only the portions used exclusively as residential premises are entitled to an exemption under clause 3 (1) 11 of the Act.

35. The Free Online Dictionary defines “refuge” as:

36. Protection or shelter, as from danger or hardship.

37. A place providing protection or shelter.

38. A source of help, relief, comfort in time of trouble.

The Free Online Dictionary, http://www.thefreedictionary.com/refuge

36. Similar definitions can also be found in the Merriam-Webster OnLine dictionary and at YourDictionary.com.

Merriam-Webster OnLine, http://www.merriam_webster.com/dictionary/refuge

Your Dictionary.com, http://www.yourdictionary.com/refuge

37. Refuge is provided to the residential clients 24 hours a day, and those same clients also use other parts of the Property when participating in ADS programs. The Property also provides refuge to non-residential clients who attend day, evening and weekend programs. Their brain injuries make all of CHIRS’ clients extremely vulnerable and in need of comfort and protections from the danger and hardships which results from brain injury.

38. The entire Property is used by CHIRS to provide protection from hardship, aid, relief and comfort to those suffering from brain injuries by providing them with a safe environment in which they gain valuable life skills and learn to cope with their injuries and function in society.

[ 7 ] Counsel for the Applicant submitted in oral argument that the CHIRS building had five floors inclusive of the basement and that these floors were utilized as follows:

• Basement and 1 st Floor – program space for adult programs and some office space

• 2 nd floor – community outreach staff office

• 3 rd floor – some administrative staff and psychology department where staff see clients

• 4 th floor – residential accommodation for 5 persons

[ 8 ] Counsel thus argued that taken as a whole, the CHIRS building was a house of refuge, meeting in some respects the dictionary definition of the term, and entitling CHIRS, on a fair and liberal interpretation, to the exemption claimed or sought. Counsel also argued that if CHIRS were not a house of refuge per say, the exemption sought ought to be granted on the basis that the land owned, used and occupied by CHIRS was for the purpose of a house of refuge or a similar purpose.

[ 9 ] Counsel relied in particular on the decision Ottawa Aalus Corp. v. Municipal Property Assessment Corp ., 2004 CarswellOnt 326 (C.A.) . At paras 25 and 26 of this decision, MacPherson J.A. stated as follows:

25. The general purpose of the Assessment Act is obvious. It is expressed in s. 3(1) of the Act: “All real property in Ontario is liable to assessment and taxation”. In Canadian Mental Health Association v. Ontario Property Assessment Corporation , [2002] O.J. No. 2199 at para. 42 (S.C.) , Kozak J. described the purpose of s. 3(1) as follows: “to impose upon all real property in Ontario a general obligation to pay a property tax so that the government can meet its expenditures.”

26. However, this purpose is not an absolute one. Section 3(1) expressly provides that the general purpose is “subject to the following exemptions from taxation”. Twenty‑nine exemptions follow, including exemptions for churches, public education institutions, public hospitals, houses of refuge, charitable institutions, small theatres and large non‑profit theatres. Many of the organizations listed in the exemption paragraphs perform activities which are of great benefit to either discrete groups of disadvantaged persons or to society as a whole. Exemption from property tax allows these organizations to spend more of their limited resources on those activities. The clear implication of these exemptions is that while there is a substantial public interest in the generation of revenue through the taxation of real property, in the context of the real property covered by these exemptions, that public interest is outweighed by the public interest in giving relief from property taxation to certain organizations.

[ 10 ] For the reasons which follow, I would dismiss the application and adopt the position and the interpretation put forward by the Respondent. Firstly, I accept and find that a place of refuge, within the intent of the legislation in question, means a place for a house of refuge, a refuge where people live. - see Tilsonburg and District Association for Community Living et al. v. Municipal Property Assessment Corporation et al . (14 November 2008), (Ont.S.C.J.) [unreported] at para 11, p.2; aff’d (2010), 95 R.P.R. (4 th ) 303 (Ont.Div.Ct) .

[ 11 ] At paragraph 11 of this decision, Morissette J. stated at paragraph 11 as follows:

The case law having considered the exemption under subsection 11 contemplates a “residence” and not offices in support of those residences, or workshops. It is well established that a house is a building for human habitation. A house of refuge is a refuge where people live. For these reasons, I find that these two non-residential properties are not a “house of refuge” and therefore not exempt of taxes under section 3(1)11.

[ 12 ] In the Divisional Court, (2010) 95 R.P.R. (4 th ) 303 (Ont.D.C.) the purpose of the Appellant Association for Community Living was accepted as follows:

The purpose of the appellants is “to work with people with intellectual disabilities, ensuring that they are included in their community and enjoy active and productive lives”. The appellants provided residential accommodation and a number of other programs and services for children and adults living with intellectual disabilities. The goal of all of these services is to integrate the appellants’ clientele into the community and to enrich the lives of those who are impoverished by these disabilities. Access to the appellants’ services is not restricted to income level.

[ 13 ] It is to be kept in mind that in accordance with the Applicants’ letters patent, CHIRS’s objects consist of both rehabilitation and the providing and operating of residential accommodation. Case law dictates that an exemption application be analyzed and considered in the context of the primary purpose test, see Sim Canada v. Corporation of the City of Scarborough et al., (7 May 1998), (Ont.Gen.Div.) [unreported]; aff’d (28 March 1999) Div. Ct.) [unreported].

[ 14 ] CHIRS has approximately 209 clientele, five of whom live on the top floor. I do not accept that accordingly, its primary purpose is a place of refuge considering its Letters Patent and the services provided to the other 204 clients.

[ 15 ] As to the argument that CHIRS is a similar institution carrying out a similar purpose and that the legislation ought to be liberally construed in favour of the tax payer, guidance is provided in legal authorities referred to by counsel for the Respondent. In the decision Re Heart & Stroke Foundation and Regional Assessment Commissioner , Region No. 9 (27 December 1985), (Ont.H.C.J.) [unreported] O’Leary J. stated:

“Rather to be exempt from taxation the Applicant must establish that it is substantially similar in its immediate and specific purposes...”

[ 16 ] Applying the substantially similar test as required, I am not persuaded that CHIRS, whom I have found is not a house of refuge, and which has a considerable rehabilitation component it its operations, has a similar purpose for the purposes of meeting the 3(1)11 exemption.

[ 17 ] Accordingly, for these reasons, the within application is dismissed. A declaration and order shall issue that CHIRS’ exemption for taxation in 2008 and subsequent years be granted in respect of the 4 th floor of the property and that any refund be paid in accordance with the law.

[ 18 ] The Respondent is entitled to the costs of the application, on a partial indemnity scale. If they cannot be agreed to, counsel may contact the Trial Coordinator at Parry Sound in order to arrange a phone conference to address the costs issue. The resolution of the costs issue will either occur by filing written submissions, or through oral submissions, if necessary. The Trial Coordinator may be reached at 1-705-746-8644.

[ 19 ] Order and declaration accordingly.

Justice J.S. O’Neill

Released: April 16, 2012

ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: Community Head Injury Resource Service of Toronto Applicant – and – Municipal Property Assessment Corporation and the Corporation of the City of Toronto Respondents REASONS on application J.S. O’NEILL

Released: April 16, 2012