Razor Management Inc. et al. v. Municipal Property Assessment Corporation
[Indexed as: Razor Management Inc. v. Municipal Property Assessment Corp.]
Ontario Reports
Ontario Superior Court of Justice,
Dietrich J.
May 25, 2018
142 O.R. (3d) 388 | 2018 ONSC 3042
Case Summary
Assessment — Interpretation — "Tenant" — School board and RMI entering into licence agreement which permitted RMI to develop and operate sports facility on school property and provided for shared use of facility by board and RMI — RMI being occupant and person in possession of licensed land and falling within definition of "tenant" in Assessment Act — Licensed land not exempt from real property taxation as it was occupied by tenant who would be taxable if tenant owned land — Assessment Act, R.S.O. 1990, c. 11.
RMI and the Toronto District School Board ("TDSB") entered into a licence agreement in 2011 which permitted RMI to develop and operate a sports facility on school property owned by the TDSB and provided for the shared use of the facility by the TDSB and RMI. The licensed land was classified as tax exempt until November 2015, when MPAC issued a retroactive assessment removing that tax exempt status, effective January 1, 2013. In April 2017, the TDSB passed a resolution exempting the licensed land from tax, from the effective date of the resolution going forward. RMI and the TDSB brought an application for a declaration that [page389] the licensed land was exempt from tax for the period January 1, 2013 to the date when the TDSB resolution took effect.
Held, the application should be dismissed.
Land owned by the TDSB is generally exempt from municipal property taxation pursuant to the Assessment Act. However, the land is not exempt if it is occupied by a tenant who would be taxable if the tenant owned the land. "Tenant" is defined in s. 1(1) of the Act as including "an occupant and the person in possession other than the owner". RMI was an occupant of the licensed land and a person in possession, and was therefore a tenant of the licensed land during the period from 2013 to 2017. Although the licence agreement did not require RMI to pay rent, RMI was responsible for payment of utilities and taxes and was required to make an annual donation to the school. The licence agreement was binding on RMI's successors and assigns, and RMI was required to surrender the licensed land at the end of the term. Those factors militated in favour of a landlord and tenant arrangement. RMI satisfied the essential elements for rateable occupation. Both RMI and the TDSB were actual occupants of the licensed land. Each had exclusive use of the licensed land for its particular purpose. RMI derived value from its ability to issue permits to patrons looking to access a well-maintained and modern sports facility. In addition, it collected rents from subtenants who occupied a portion of the clubhouse and was entitled to all revenues from the sale of food, beverages, merchandise, advertising and sponsorships. The initial term of the licence granted to RMI, being 21 years less two days, was of considerable duration. RMI also had an office and personnel on the licensed land who were there all day, every day. Once RMI was found to be an occupant, it was unnecessary to determine paramount occupancy because if RMI was a tenant of the licensed land, the land became taxable even if the TDSB was also in occupation. The licensed land was not exempt from taxation for the period in question.
Exchange Corp. Canada Inc. v. Mississauga (City), [2014] O.J. No. 694, 2014 ONCA 113, 18 M.P.L.R. (5th) 181, 372 D.L.R. (4th) 136, 79 O.M.B.R. 1, 41 R.P.R. (5th) 31, 237 A.C.W.S. (3d) 516, 315 O.A.C. 193; Gottardo Properties (Dome) Inc. v. Toronto (City), 1998 CanLII 6184 (ON CA), [1998] O.J. No. 3048, 162 D.L.R. (4th) 574, 111 O.A.C. 272, 46 M.P.L.R. (2d) 310, 81 A.C.W.S. (3d) 409 (C.A.), consd
Other cases referred to
British American Oil Co. v. DePass, 1959 CanLII 125 (ON CA), [1960] O.R. 71, [1959] O.J. No. 710, 21 D.L.R. (2d) 110 (C.A.); Chatham (City) v. Raleigh (Township), 1964 CanLII 131 (ON SC), [1965] 1 O.R. 168, [1964] O.J. No. 816, 47 D.L.R. (2d) 205 (H.C.J.); Clear Channel Outdoor Co. Canada v. Municipal Property Assessment Corp. (2013), 117 O.R. (3d) 664, [2013] O.J. No. 5125, 2013 ONSC 7014, 17 M.P.L.R. (5th) 95, 317 O.A.C. 137, 37 R.P.R. (5th) 175, 234 A.C.W.S. (3d) 31 (Div. Ct.); Loyalist College of Applied Arts and Technology v. Municipal Property Assessment Corp., [2014] O.J. No. 5885, 2014 ONSC 7152, 32 M.P.L.R. (5th) 49, 330 O.A.C. 52, 247 A.C.W.S. (3d) 752 (Div. Ct.); Mount Sinai Hospital v. Municipal Property Assessment Corp., [2003] O.J. No. 4295, [2003] O.T.C. 970, 43 M.P.L.R. (3d) 253, 126 A.C.W.S. (3d) 553 (S.C.J.)
Statutes referred to
Assessment Act, R.S.O. 1990, c. A.31, s. 3(1)9
City of Toronto Act, 2006, S.O. 2006, c. 11, Sch. A [as am.]
Education Act, R.S.O. 1990, c. E.2
Municipal Affairs Act, R.S.O. 1990, c. M.46
Authorities referred to
Widdicombe, David, et al., Ryde on Rating, 13th ed. (London: Butterworths, 1976) [page390]
APPLICATION for a declaration that certain land was exempt from property tax.
Stephen Longo, for applicants.
Donald Mitchell, for respondent Municipal Property Assessment Corporation.
DIETRICH J.: —
Overview
[1] This application relates to a tax assessment of real property in the City of Toronto, municipally known as 1 Hanson Street. The real property is owned by the Toronto District School Board ("TDSB"), where it operates Monarch Park Collegiate Institute as a public school under the Education Act, R.S.O. 1990, c. E.2.
[2] The applicant Razor Management Inc. ("RMI") entered into a licence agreement with the TDSB on December 1, 2011. The licence agreement permits RMI to develop and operate a state-of-the art sports facility on a portion of the real property. RMI erected a sports facility, including an artificial turf sports field, a seasonal dome and a clubhouse on the licensed land. It maintains and operates the sports facility in accordance with the licence agreement.
[3] The licence agreement provides for the shared use of the sports facility on the licensed land by the TDSB and RMI. The TDSB is entitled to use of the facility without charge from 7:00 a.m. to 5:00 p.m. on all school days when the dome is in place and from 7:00 a.m. to 6:00 p.m. on all other school days. School days are days when the TDSB keeps open the majority of its secondary schools in the City of Toronto. The TDSB is entitled to an additional minimum of ten hours of use in each school year (i.e., on weekends and weekday evenings). Five per cent of the overall hours available for use of the sports facility are reserved for free community use.
[4] The licensed land was classified as tax exempt until November 2015, when the defendant Municipal Property Assessment Corporation ("MPAC") exercised its authority pursuant to the Assessment Act, R.S.O. 1990, c. A.31, and issued a retroactive assessment removing the tax-exempt status for the licensed land, effective January 1, 2013.
[5] Subsequently, in April of 2017, the TDSB passed a resolution pursuant to the City of Toronto Act, 2006, S.O. 2006, c. 11, Sch. A exempting from tax the licensed land from the effective date of the resolution going forward. [page391]
[6] RMI and the TDSB seek a declaration that the licensed land is exempt from tax for the period January 1, 2013 to the date in April of 2017 when the TDSB resolution took effect. They also seek an order that the City of Toronto refund the tax paid by RMI during this period.
[7] In the alternative, RMI and the TDSB seek a declaration that the licensed land was exempt from tax in 2013, and a cancellation of the post assessment change notice issued to RMI for that year. This relief is sought on the basis that similarly licensed land where a similar sports facility is operated at another school owned by the TDSB in 2013 maintained an exempt classification during that year.
[8] MPAC submits that RMI is a tenant for the purposes of the Assessment Act, occupying the licensed land, who would be taxable if it owned the land; therefore, the licensed land is taxable.
[9] RMI submits that it is not a tenant for the purposes for the Assessment Act and, accordingly, the licensed land should be exempt from tax as land owned by a school board, being the TDSB.
[10] The City of Toronto, as co-respondent, takes no position on the application.
Issues
[11] The issues in this application are as follows:
(1) Was RMI a tenant of the licensed land during the period from 2013 to 2017, during which MPAC assessed the land as taxable pursuant to the Assessment Act?
(2) If RMI were a tenant during the taxable period, is it entitled to a refund of the tax it paid in 2013 because similarly licensed land at another school owned by the TDSB was exempt from taxation in the same year?
Issue 1: Was RMI a tenant of the licensed land during the period from 2013 to 2017 during which MPAC assessed the land as taxable pursuant to the Assessment Act?
[12] Land owned by the TDSB is generally exempt from municipal property taxation pursuant to the Assessment Act. However, the land is not exempt if it is occupied by a tenant who would be taxable if the tenant owned the land.
[13] The relevant provisions of the Assessment Act are as follows:
1(1) "tenant" includes an occupant and the person in possession other than the owner[.] [page392]
3(1) All real property in Ontario is liable to assessment and taxation, subject to the following exemptions from taxation[.]
- Subject to section 27, land owned by a municipality, including an upper-tier municipality, a public commission or a local board as defined in the Municipal Affairs Act. The land is not exempt if occupied by a tenant who would be taxable if the tenant owned the land, except land owned by a harbour commission and used for parking vehicles for which a fee is charged.
[14] A school board is a local board as defined in the Municipal Affairs Act, R.S.O. 1990, c. M.46 and includes the TDSB.
[15] In determining a landlord and tenant relationship, the principles set out in Exchange Corp. Canada Inc. v. Mississauga (City), [2014] O.J. No. 694, 2014 ONCA 113, 2014 CarswellOnt 1526 ("Exchange Corp.") are instructive. In that case, at para. 22, the court cites British American Oil Co. v. DePass, 1959 CanLII 125 (ON CA), [1960] O.R. 71, [1959] O.J. No. 710 (C.A.) for the principle that whether an agreement creates the relationship of landlord and tenant or merely that of licensor and licensee will depend on the intention of the parties as ascertained by a review of the document.
[16] The Divisional Court in the Exchange Corp. case identified the following elements in distinguishing a tenancy from a licence agreement: (i) the creation or transmission of an estate in the tenant and a transfer of control of the premises to the tenant (at para. 9); (ii) exclusive possession granted to the tenant in relation to the purpose for which occupation is intended; and (iii) restrictions imposed on the tenant to the extent that they undermine the exclusivity of possession (at para. 23).
[17] For the reasons that follow, I find that RMI is a tenant within the extended meaning of the definition of tenant in the statute. Consequently, the licensed land is liable to assessment and taxation.
Is RMI a tenant or a licensee?
[18] The Exchange Corp. case involved a determination of the relationship between the Greater Toronto Airport Authority ("GTAA") and Exchange Corporation Canada Inc. The latter operated a currency exchange and insurance business at airport property owned by the GTAA. The Divisional Court reversed the decision of the lower court and found that Exchange Corporation Canada Inc. was a tenant, and not a licensee. Therefore, the property on which it was operating its business was not exempt from property tax under the Assessment Act. In making that finding, the Divisional Court took particular note of the terms of the lease [page393] that allowed Exchange Corporation Canada Inc. to "to peaceably possess and enjoy the Leased Premises for the Term without interruption by the Landlord" (para. 18); and the landlord's covenant to the tenant that it enjoyed "the benefit of a good and sufficient leasehold interest in the Lands, sufficient to permit the grant by the Landlord to the Tenant of the leasehold interest contemplated by this lease" (para. 18).
[19] The Divisional Court also took note of the following terms of the lease: (i) the tenant is required to pay rent, and taxes attributable to the leased premises, if separately assessed or allocated by the landlord; (ii) the leased premises are specifically described; (iii) the tenant is required to surrender the leased premises at the expiration of the lease; (iv) the lease is binding on permitted successors and assigns; (v) the lease created the relationship of landlord and tenant; and (vi) the lease is a "completely carefree absolutely net lease to the Landlord" except as set out in the lease (para. 26). The court found the lease provisions to be unambiguous in reflecting the intention of the parties.
[20] Regarding the licence agreement between the parties, RMI submits that the agreement is referred to as a "licence" agreement, not a lease, the parties are referred to throughout the agreement as the "licensor" and the "licensee", and there is a prohibition against an interpretation of the agreement or any clause in a way that creates a different relationship between the parties. However, in a document pre-dating the licence agreement, dated October 26, 2011, which sets out recommendations for a shared use agreement between the parties, reference is made to a "possible Five Year lease renewal". The nature of the relationship created by the instrument under examination depends on the substance of the instrument and not its form or the form of the expressions used in it: Chatham (City) v. Raleigh (Township), 1964 CanLII 131 (ON SC), [1965] 1 O.R. 168, [1964] O.J. No. 816 (H.C.J.) ("Chatham (City)").
[21] Unlike the agreement in the Exchange Corp. case, the licence agreement contains no habendum clause or quiet enjoyment provision, both of which the Divisional Court in Exchange Corp. found to be important indicators of a lease. Also, the licence agreement does not require RMI to pay rent, only an annual $1.00 licence fee. However, RMI is responsible for payment of utilities and all taxes, including property taxes (if applicable) and is required to make an annual donation to the school; the licensed land is specifically described in Schedule 1 to the licence agreement; the licence agreement is binding on RMI's successors and assigns; and RMI is required to surrender the licensed land at the end of the term, together with all improvements made at RMI's [page394] expense. All of these factors militate in favour of a landlord and tenant arrangement as was found in the Exchange Corp. case.
[22] The licence agreement imposes restrictions on RMI's use of the licensed land. These include, among others, (i) TDSB approval of signs and advertising; (ii) a prescribed allocation of hours when RMI may operate its business of issuing permits to use the sports facility; (iii) access to the sports facility by the TDSB to evaluate the state of repair; and (iv) notice to the TDSB of any potential claims. RMI submits that these are indicia of control over the sports facility by the TDSB, which militate against a finding of a transfer or possession and control of the premises to RMI and reinforce the licensor/ licensee relationship. MPAC submits that these controls are typical of the controls placed by commercial landlords on their tenants. I find that these controls are less onerous than controls imposed on the tenant in the Exchange Corp. case where the landlord could amend the term of the licence on 30 days' notice, impose limits on maximum prices charged by the tenant for goods, impose restrictions on pricing and prohibit the sale and stocking of types of merchandise. In that case, the leased land remained subject to the landlord's exclusive control and the landlord could do such things in the leased space as it determined to be advisable in good business judgment, the tenant was required to obtain written approval for signs and advertising and required to use names, marks and insignia required by the landlord in advertising, the tenant was required, at the request by the landlord, to discontinue any business which in the opinion of the landlord may harm the landlord's business, the tenant was required to use the whole of the leased premises and to conduct its business to the satisfaction of the landlord in accordance with a proposal, the tenant was required to consult with the landlord before giving any press conference and to obtain its consent. Even these more onerous controls were not found to be sufficient to compromise the ability of the Exchange Corporation Canada Inc. to carry out its business as a foreign currency exchange while GTAA ran its business, being the operation of the airport. Accordingly, I find a tenancy as opposed to a licence agreement between the TDSB and RMI.
Is RMI an occupant?
[23] As noted, "tenant" for the purposes of the Assessment Act, includes an "occupant" and the person in possession other than the owner. In Mount Sinai Hospital v. Municipal Property Assessment Corp., [2003] O.J. 4295, [2003] O.T.C. 970, 126 A.C.W.S. (3d) 553 (S.C.J.), at para. 9, Karakatsanis J. set out the essential elements for rateable occupation, namely, (i) actual occupation; [page395] (ii) exclusivity for the particular purposes of the possessor; (iii) value or benefit to the possessor; and (iv) permanence (citing David Widdicombe, et al., Ryde on Rating, 13th ed. (London, Butterworths, 1976), at 26-27).
i. Actual occupation
[24] "Actual" occupation involves "acts of a user, however slight, in respect of land": Clear Channel Outdoor Co. Canada v. Municipal Property Assessment Corp. (2013), 117 O.R. (3d) 664, [2013] O.J. No. 5125, 2013 ONSC 7014 (Div. Ct.) ("Clear Channel"), at para. 26.
[25] On the evidence before the court, each of RMI and the TDSB meets the test of occupant. This is not disputed. Among other things, each enjoys hours of exclusive use of the sports facility in accordance with the prescribed shared use terms set out in the licence agreement.
[26] RMI submits that the licence agreement prescribes the usage allocation between the parties with the result that the TDSB's allotted time amounts to 57.5 per cent of the total usage time available, leaving 42.5 per cent of the time to be divided between RMI (41.3 per cent) and community use (1.2 per cent). This breakdown is based on (i) the TDSB's hours of usage running from 7:00 a.m. to 5:00 p.m. (being ten hours/day) in the winter months, when the dome is installed, and 7:00 a.m. to 6:00 p.m. (being nine hours/day) in the spring, fall and summer months; and (ii) RMI's hours of usage running from 5:00 p.m. to 12:00 a.m. in the winter and summer months and 5:00 p.m. to 11:00 p.m. in the spring and fall months. RMI also submits that the licence agreement permits RMI to use the licensed land until midnight in each season, but, in fact, because the City of Toronto only allows permits to be issued and lights to be kept on until 11:00 p.m. in the spring, summer and fall months, its calculation reflects usage by RMI in those months as running from 5:00 p.m. to 11:00 p.m. only. While the breakdown provided by RMI is accurate in terms of hours per day of usage by the TDSB, it is inaccurate in the number of days that the TDSB has access to the sports facility. The TDSB only enjoys such access on school days plus an additional minimum of ten hours granted by RMI (i.e., on weekends and weekdays).
[27] MPAC submits that RMI's usage is higher than RMI allows and submits that in the 2014--2015 school year its actual usage of the sports facility amounted to 68 per cent of the total time allocated in accordance with the licence agreement. Its example is based on 17 hours of available use daily (7:00 a.m. to midnight). It shows that the TDSB used the sports facility on [page396] school days only (being 188 in 2014--2015) and for only six hours/day during September, October, May and June; and for seven hours/day from November through March, when the dome was installed. It also used the facility during the ten additional hours that RMI was obliged to provide to the TDSB. MPAC submits that when the TDSB was not using the licensed land, RMI was. This would leave the TDSB in occupation of the sports facility for less than 32 per cent of the time in the 2014--2015 year, factoring in the time allotted for community use. MPAC submits that the usage by the TDSB would not vary widely from year to year given that its use is limited to school days and its obligation to provide access for use by the community is fixed.
[28] The principal difference between the two calculations is that RMI allots time to the TDSB for each month in the year, as opposed to only those months in which there are school days. The shared use terms in the licence agreement provide that the TDSB has use of the sports facility on school days only and not year-round. Allocating the hours of 7:00 a.m. to midnight, daily, as is provided for in the licence agreement, the TDSB is entitled to usage of the sports facility for approximately 188 days per year for ten or 11 hours per day depending on the season. RMI is entitled to usage of the remaining six or seven hours on each school day as well as 17 hours on each day that is not a school day, subject to the minimum of ten additional hours that it is required to allocate to the TDSB. Accordingly, on an annual basis, RMI is entitled to a higher percentage of the allocated time. Based on the evidence before the court, in the 2014--2015 year, in fact, RMI used the licensed land 68 per cent of the time as compared to the TDSB, which used it 32 per cent of the time.
[29] RMI's use of the licensed land extends to opening the sports facility each morning at 7:00 a.m. and locking it each night. It is also responsible for the licensed land during the night, including ensuring appropriate security measures are in place. In RMI's calculation of its usage, it did not include any time for usage between midnight and 7:00 a.m., when it is responsible for the licensed land.
[30] According to the evidence, RMI operates its business on the licensed land where it has an office and personnel who manage and operate the sports facility. It issues permits and charges fees to users for sports like soccer, track and field, football and Frisbee. It also operates day camps. The evidence of Matthew Raizenne, president and CEO of RMI, is that RMI has personnel at the licensed land "all day, every day" whether or not the sports facility is being used by the TDSB or RMI. [page397]
[31] The evidence also shows that RMI uses the licensed land during school hours when the TDSB is not using it.
ii. Exclusive use
[32] In cases of simultaneous occupation, the occupant must have exclusive use to carry out the purpose for which it acquired the interest in land: Gottardo Properties (Dome) Inc. v. Toronto (City), 1998 CanLII 6184 (ON CA), [1998] O.J. No. 3048, 111 O.A.C. 272 (C.A.) ("Gottardo"). The licence agreement specifically permits the students of the TDSB to have exclusive use of the sports facility for sports activities during prescribed times. RMI is permitted exclusive use of the licensed land to carry on its business of issuing permits for use by third parties during set hours when the sports facility is not being used by the TDSB in accordance with the licence agreement. There are some limitations on each party's use. Accordingly, I find that each of the TDSB and RMI has exclusive use of the licensed land for its particular purpose.
iii. Value or benefit to the possessor
[33] The TDSB derives value from the new and modern sports facility, which was built and is maintained at no cost to it. The evidence before the court is that sports and fitness are an important part of the TDSB curriculum and students of the TDSB use the sports facility for various sports and related activities.
[34] RMI derives value from its ability to issue permits to patrons looking to access a well maintained and modern sports facility. In addition to the profits earned from issuing the permits, RMI collects rents from subtenants who occupy a portion of the clubhouse and it is entitled to all revenues from the sale of food, beverages, merchandise, advertising and sponsorships. I find that both the TDSB and RMI meet the value or benefit to the possessor test.
iv. Permanence
[35] In Gottardo, Laskin J.A. held, at para. 29, that mere transient use is not assessable. There must be some degree of permanence in the usage. I find that both parties meet the permanence test. The TDSB owns the licensed land on which the sports facility is situated. On that land it operates Monarch Park Public School and no evidence was led to suggest that it will not be operating this secondary school on these premises for the foreseeable future.
[36] The initial term of the licence granted to RMI, being 21 years less two days, is of considerable duration. RMI also has [page398] an office and personnel on the licensed land, who, according to the sworn evidence of Mr. Raizenne, are there all day, every day.
Paramount occupancy
[37] RMI submits that where there are two "occupants", the "paramount occupancy" test must be applied to determine which entity is liable for realty taxes: Loyalist College of Applied Arts and Technology v. Municipal Property Assessment Corp., [2014] O.J. No. 5885, 2014 ONSC 7152, 330 O.A.C. 52 (Div. Ct.), at para. 23.
[38] MPAC submits that once RMI is found to be an occupant, it is not necessary to determine paramount occupancy because if RMI is a tenant of the licensed land, it becomes taxable even if the TDSB is also in occupation. The exemption provided in the Assessment Act does not extend to land occupied by a tenant.
[39] The definition of "tenant" in the Assessment Act includes an occupant "and the person in possession other than the owner". RMI argues that for the land to become taxable, RMI must also be found to be "the person in possession other than the owner". This issue was addressed in Chatham (City), where Hughes J. found the person operating his business on the subject land to be the occupant in law and therefore brought into the extended definition of tenant within the meaning of the statute, and stated, at para. 6: "I can see no distinction between the aeoccupant' and the aeperson in possession'".
[40] I agree with MPAC's submission. An analysis to determine paramount occupancy is not required in this case. The tests for paramount occupancy apply in cases in which there are two competing occupants and only one occupant of the land can be assessed for business assessment at one time. In this case, the assessed person is the TDSB regardless of whether the exemption applies. The TDSB remains liable as the assessed owner even if RMI occupies a portion of the land which is taxable. It is only as a consequence of the licence agreement that RMI becomes responsible for the payment of property taxes relating to the licensed land.
[41] If paramount occupancy were relevant in this case, I would find RMI to be the paramount occupier of the licensed land for the reasons that follow.
[42] In Gottardo, Laskin J.A. set out three elements to consider in determining which of two competing occupants had the greater interest in using the land, namely, (i) an occupant's physical presence on the land; (ii) any controls imposed by one occupant on the other's use of the land and the purpose and effect of those [page399] controls; and (iii) the relative significance of the activities carried out to the primary business of each of the occupants.
[43] The sports facility is located on land owned, used and operated as a public school by the TDSB, which gives the TDSB a physical presence. Students of the public school use the sports facility on school days and at other times as permitted in the licence agreement. RMI has an even greater physical presence on the licensed land in that it operates the sports facility on a daily basis, its business office is there and its staff are on-site on a daily basis. It also has responsibility for opening and closing the sports facility daily, providing security at night and maintaining and repairing the sports facility regularly. RMI conducts its business of issuing permits on the licensed land and operates its holiday camps there as well. It collects rent from a subtenant that uses a portion of the clubhouse and has exclusive use and occupation of the sports facility for a greater percentage of the time that it is available for use as compared to the TDSB.
[44] The evidence before the court shows that the TDSB retains a measure of control over a number of aspects of the licensed land and RMI's use of it. These include (i) the prohibition of the use of spectator stands by RMI at all times during the TDSB's allotted hours; (ii) use of the sports facility is subject to the TDSB permit policy; (iii) the TDSB retains ultimate control over all advertising, naming and sponsorship relating to the sports facility; (iv) the TDSB dictates the use of vending machines on the premises; and (v) the TDSB is granted authority to make reasonable rules with regard to the use of the sports facility to which RMI is bound. However, these rules may not unreasonably interfere with RMI's business conducted on the licensed land. The TDSB is also subject to controls imposed by RMI. For example, it is not permitted to issue permits for use of the sports facility.
[45] While some measure of control is to be expected in any joint-occupier relationship, the degree of control, the purpose of the restrictions and the effect of the restrictions are relevant: Gottardo, at para. 55. In Gottardo, it was held that restrictions that go well beyond those ordinarily found in a licence will establish the paramount occupier. In Clear Channel, the airport's retention of considerable control over the common areas and advertising (including changing display locations or covering them for operational purposes and its right to relocate advertising were found not to materially affect Channel Outdoor Communication Canada's ability to advertise and attract customers, which was essential to its business. As such, occupancy was found to be paramount to that of the GTAA. I do not find the controls [page400] imposed on RMI by the TDSB to be particularly onerous or uncommon between a commercial landlord and its tenant.
[46] With regard to the relative significance of the activities carried out to the primary business of each of RMI and the TDSB, RMI's use is centred around the issuance of permits for the use of the sports facility and providing community use and activities, which is RMI's only business. The evidence before the court is that during the period from 2013 to 2015, RMI's sole revenue source was from the operation of the sports facility on the licensed land. By contrast, the sports facility is incidental to the TDSB's primary objective of promoting student achievement and ensuring the effective stewardship of its resources.
Issue 2: If RMI were a tenant during the taxable period, is it entitled to a refund of the tax it paid in 2013 because similarly licensed land at another school owned by the TDSB was exempt from taxation in the same year?
[47] RMI submits that the licensed land should be exempt from tax for the 2013 tax year on the basis that MPAC's failure to make an omitted assessment for a similarly situated property results in inequitable tax treatment as between the two schools. This submission is made on the basis that MPAC created an inequity by issuing tax assessments inconsistently, resulting in tax treatment that was discriminatory and not fair or equal.
[48] Having found that RMI is an occupant of the licensed land and the person in possession, and therefore a tenant within the extended definition of the Assessment Act, the licensed land is taxable pursuant to para. 3(1)9 of the Assessment Act. I know of no authority that would allow the court to ignore a statutory assessment of tax on the basis of fairness. The power to adjust assessments to make them equitable lies within the exclusive jurisdiction of the Assessment Review Board.
Disposition and Costs
[49] The application is dismissed. The parties have agreed between themselves that the appropriate cost award for the successful party is $10,000. Consistent with that agreement, the applicant RMI shall pay MPAC costs of $10,000.
Application dismissed.
End of Document