Stephen Longo

The Municipal Property Assessment Corporation (MPAC) appealed a Divisional Court decision that affirmed an Assessment Review Board (Board) ruling.

The Board had found that MPAC failed to meet its burden of proving the "highest and best use" (HBU) of properties for assessment purposes, instead accepting the respondents' valuation based on current use.

MPAC argued the Board erred by relying on a presumption of current use and by not independently determining current value based on comparable sales.

The Court of Appeal dismissed MPAC's appeal, holding that the Board did not make a legal error.

The Board correctly found MPAC failed to prove financial feasibility for its proposed HBU and was entitled to accept the respondents' valuation evidence, especially since MPAC's own expert conceded its appropriateness if their HBU was not established.

The court clarified that while no legal presumption of current use exists, the Board's role is to determine current value based on the evidence and submissions presented, with MPAC bearing the onus.

The Court of Appeal for Ontario heard an appeal from a Divisional Court order that had allowed appeals from a Superior Court order.

The Court of Appeal agreed with the Divisional Court's reasoning and conclusions, dismissing the appeal.

The parties also agreed on an all-inclusive costs award of $35,000 payable by the appellant to the respondents, covering all levels of court proceedings, including the motion for leave to appeal.

This motion arose from a contentious landlord-tenant relationship, addressing the proper calculation of realty taxes and occupancy expenses, and costs, following a prior application.

The court found the Landlord improperly used inconsistent methods to calculate the Tenant's realty tax allocation.

While declining to rule on occupancy expenses in this motion, the court remained seized of the issue.

Critically, the Landlord was ordered to pay the Tenant substantial indemnity costs for both the original application and this motion, totaling $709,017.39, due to the Landlord's "reprehensible" conduct, including attempting to evict the tenant for an ulterior motive (a better offer from another party) and engaging in vexatious litigation tactics.

The applicant sought a determination on whether an "air parcel" constitutes assessable "land" under section 1(1) of the Assessment Act, R.S.O. 1990, c.

A.31.

The court concluded that an air parcel, as defined in a strata plan, is not "land" for the purposes of the Act until a physical structure is affixed to the ground.

The decision emphasized that the statutory definition of "land" is paramount, not common law or conveyancing practices, and that legislative amendment would be required to include air parcels for taxation.

The applicant's request for an order was granted, and costs were awarded.

The applicants, a private management company and a school board, sought a declaration that a sports facility operated by the company on school board land was exempt from property tax.

The municipal assessment corporation had assessed the land as taxable, arguing the company was a tenant.

The Superior Court of Justice dismissed the application, finding that the licence agreement between the company and the school board created a landlord-tenant relationship.

The company satisfied the essential elements for rateable occupation, including actual occupation, exclusivity, value, and permanence.

Consequently, the land was not exempt from taxation under the Assessment Act.

A charitable organization applied for a declaration that premises it occupied under leases were exempt from municipal property taxation under s. 10 of its incorporating statute.

The applicant argued that the statutory phrase “buildings, lands, equipment and undertaking of” the association extended to leased premises used for its charitable activities.

The respondents contended that the exemption applied only to property owned by the organization.

The court applied principles of statutory interpretation and held that the phrase “lands of the association” refers to land owned by the association, not leasehold interests.

Because the properties at issue were leased rather than owned, the exemption did not apply.

Following a successful application, the court determined the appropriate quantum of costs payable by the unsuccessful party.

The applicant sought substantial indemnity costs relying on a lease provision and a prior offer to settle, while the respondent argued for a more limited award based on reasonable fees and proportionality.

The court found the lease provision ambiguous regarding the applicable scale of costs and applied ordinary principles governing the court’s discretion under the Courts of Justice Act and Rule 57.01.

Considering proportionality, the comparative bills of costs, and the necessity of expert evidence, the court fixed a mid-point between the parties’ proposed figures.

Interest on reimbursements was ordered at the Courts of Justice Act rate rather than the lease’s designated interest rate.

A commercial tenant sought declarations regarding the proper method for allocating property taxes under a shopping plaza lease and the proper allocation of tax shortfalls arising from statutory tax-capping rules between 2001 and 2008.

The court interpreted the lease to require use of MPAC valuation records (“working papers”) as the primary method of allocating property taxes rather than a proportionate-share-by-square-footage approach.

The court also addressed the landlord’s allocation of tax shortfall created by legislative caps, holding that the landlord’s historical allocation was arbitrary and lacked a principled basis.

Preferring the methodology of the tenant’s expert, the court held that shortfall should be allocated proportionately among eligible tenants, including uncapped shortfall tenants.

The tenant was therefore entitled to recalculation of taxes and potential refunds or credits based on the correct methodology.

Following the dismissal of an application seeking interpretation of a commercial lease concerning the calculation of property taxes, the successful respondent sought partial indemnity costs exceeding $75,000.

The applicant argued the amount was disproportionate to the approximately $160,000 in dispute and the relatively limited complexity of the proceeding.

The court applied the principles governing reasonable expectations of the losing party under the Boucher line of authorities and assessed the reasonableness of the time spent by counsel and the claimed disbursements.

Finding the claimed hours and overall expenditures excessive for an application hearing lasting less than a day, the court reduced the recoverable costs.

The landlord sought a declaration that the tenant’s share of property taxes under a commercial lease should be calculated on a proportionate share basis following the elimination of separate tenant assessments under amendments to the Assessment Act.

The tenant argued that the lease required the parties to determine what a separate assessment would have been using official information from MPAC valuation records.

The court interpreted the lease according to the parties’ intentions at the time of contracting and held that MPAC valuation records constituted sufficient official information to estimate a separate assessment.

Because the lease contemplated this scenario, the tenant’s taxes were properly calculated using the assessed value approach rather than proportionate share.

The landlord’s application for a declaration was dismissed.

The applicants, a public hospital and its foundation, applied for a property tax exemption for the foundation's offices, arguing they shared an identity or patrimony with the hospital.

The court dismissed the application, finding that the foundation was a separate corporate entity with its own governance, objects, and funding, and did not share a sufficient identity or patrimony with the hospital to qualify for the public hospital exemption under the Assessment Act.