2010 ONSC 6352, 2010 ONSC 6352

CITATION : Minto Commercial Properties Inc. v.

City of Ottawa , 2010 ONSC 6352 COURT FILE NO.: 09-45431 ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N: ) ) MINTO COMMERCIAL PROPERTIES INC. ) ) ) Richard Poole/David Fleet, Walker Poole Nixon LLP, counsel for the Applicant ) Applicant ) ) - and - ) ) ) CITY OF OTTAWA ) ) ) Benoit Duchesne/Marc Sauvé, Heenan Blaikie LLP, counsel for the Respondent ) Respondent ) ) ) ) HEARD: November 16, 2010 ENDORSEMENT Kealey J. [ 1 ] The Applicant Minto seeks an order declaring that the property tax refund received from the City of Ottawa by cheque dated November 6, 2008 was $116,215.74 less than it should have been pursuant to a settlement of all issues surrounding matters before the Assessment Review Board under s. 37(6) of the Assessment Act of Ontario, and an order for payment of the aforesaid shortfall together with prejudgment interest, GST and costs. [ 2 ] Minto was the owner of an office building located at 3000 Merivale Road in the City of Ottawa and appealed to the Assessment Review Board alleging the assessment for the years 2004 to 2008 inclusive were too high.

Matters before the Board engaged Minto and the City of Ottawa as well as the Municipal Property Assessment Corporation (MPCA). On January 22, 2008, settlement discussions were entered into amongst the parties in an attempt to resolve the appeals in question. These negotiations were driven primarily by Minto and the Municipality whose concerns related to the quantum of tax refunds including the vacancy tax rate that would be generated by any agreed upon assessed value of the subject property.

During the January meeting, estimates of net tax adjustments were made by Minto’s expert based on proposed assessment reductions including one of $47,268,000. It should be noted that Minto was prepared to

accept this assessed value for the property even though it was somewhat higher than that proposed by the MPAC who had suggested a value of $44,500,000, provided the amount of the tax refund to them, was satisfactory. [ 3 ] In order that matters could be settled and instructions obtained in this regard from their client and various stakeholders, Minto’s counsel, on February 21, 2008, requested from Ottawa, its tax calculations setting out the exact amount of refunds including the vacancy tax rebate to be realized.

These were obviously necessary and were received by Minto who, relying on their accuracy, thereafter executed the Minutes of Settlement before the Review Board fixing the assessed value of their property at $47,268,000 for the years 2004, 2005, and 2006 and $62,774,000 for the year 2007. The Minutes were filed with the Assessment Review Board resulting in their decision dated August 8, 2008, fixing the value at the aforesaid amounts. [ 4 ] In my opinion, the correspondence between counsel for the City and Minto, in February and March of 2008 set out in the Respondent’s record at Tab 1, (F), (G), (H), (

I) and (

J) contains a representation from the City that Minto would receive a tax rebate including a vacancy readjustment in the total amount of $3,532,859 if the assessed value of the subject property was settled at the above referred to amounts. Minto relied on this information from the City and signed the Minutes of Settlement fixing the above assessed values for their property. However, the payment made by the City in November of 2008 was $116, 215.74 less than what they had represented. [ 5 ] Minto submits that the law of estoppel by representation is applicable to the facts present here.

Where one party makes a representation to another intending it to be relied upon and the other detrimentally changes their position based on the representation, then the representing party is estopped from denying what it represented. [ 6 ] The only argument the City makes to avoid the alleged estoppel is that Minto did not rely on what the City provided in their March 7, 2008 correspondence but rather relied on its own expert Mr. Arnott who reviewed the City’s calculations and offered advice to his client. [ 7 ] The City’s contention in this respect fails for a number of reasons some of which are as follows: 1.

Minto’s counsel, Mr. Poole, in seeking the City’s calculations, expressly stated that he required these to verify Mr. Arnott’s work. Thus, the advice given to Minto from its counsel and expert was based on the calculations received from the City as to the quantum of the tax refund Minto would receive. Their reliance on what the City provided was also Minto’s reliance. So the attempted circular argument by the City cannot avoid the aforesaid reality. 2. Mr. Poole made known to the City that the “certainty” of the calculations was a significant factor in what he was seeking.

His February 21, 2008 email to the City’s lawyer makes clear the intent of his correspondence was to “make sure the numbers are correct.” He also advised of past difficulty with the City in similar circumstances. 3. It is obvious the City was fully aware of Mr. Poole’s concern where in the correspondence to their counsel on February 26 the following is stated: “In response to Mr. Poole’s concerns about the City’s tax refund corresponding to Jeff Arnott’s calculations, we have prepared the following spread sheet, which also incorporates the vacancy rebate recovery.

As he is suggesting, if the intent of his email is simply to make sure that the numbers are correct, I believe the below figures are addressing this issue depending on which scenario is to be used”. The figures thereafter enclosed were forwarded to Minto’s legal advisors. 4. When the City’s calculations were delivered, it was never suggested by them that these were “estimates” or “drafts” or would be subject to recalculation in any way.

They were presented as final and certain. [ 8 ] For the same reasons, I find there was an agreement between the parties as to the amount of the tax rebate the City would be paying to Minto once the Minutes of Settlement before the Assessment Review Board were finalized. Close consideration of the whole record, especially the above communications foreclose any other rational conclusion, in my view. [ 9 ] Furthermore, as an alternative, the Applicant submits that the doctrine of estoppels by convention as enunciated by the Supreme Court of Canada in the case of Ryan v.

Moore (2005), D.L.R. (4 th ) 1 (S.C.C.) is also applicable. This brand of estoppel requires the following three factors to be established: 1. The parties’ dealings must have been based on a shared assumption of fact or law. This type of estoppel requires a manifest representation by statement or conduct creating a mutual assumption. 2. A party must have acted in reliance on such shared assumption, its actions resulting in a change of its legal position.

3. It must be unjust or unfair to allow one of the parties to resile or depart from the common assumption. Thus, the parties seeking to establish this type of estoppel must prove that they will suffer a detriment if the other party is allowed to resile from the assumption. [ 10 ] It seems to me all facets of the Ryan requirements are made out on the record in this case. Once the City disclosed its tax rebate figures to Minto as requested, both parties assumed this was the amount to be paid.

Minto acted on this mutual assumption and agreed to the assessed value of their property in the Minutes of Settlement filed with the Review Board. To allow the City to resile from the common assumption would result in a $116, 215. 74 detriment to Minto. [ 11 ] To be blunt, I have some difficulty understanding the Respondent’s submissions in paragraphs 50 to 53 of its factum suggesting that there is no unjust enrichment for the City if it is permitted to retain the shortfall in question.

The operative statute and regulations require a calculation of any rebate of taxes to be made following the decision of the Assessment Review Board. The City argues this later calculation governs, even though different from what was represented to the tax payer to induce the settlement of their assessment appeal. The amount the City would gain through their misrepresentation is an obvious unjust enrichment, I find. [ 12 ] Lastly, the suggestions by counsel for the City of Ottawa that this Court has no jurisdiction to hear the matter, is wholly unconvincing.

The issues before me do not arise from an application under s. 364 of the Municipal Act . As herein discussed, the Applicant’s claim is to enforce the amount of money to be paid by the City of Ottawa to Minto by an agreement implicit in or collateral to a settlement fixing the assessed value of certain Minto property before the Assessment Review Board. [ 13 ] As a result of the aforesaid, I order the City of Ottawa pay to Minto forthwith $116,215.74 plus prejudgment interest thereon from November 6, 2008 at the rate of 1.3% per annum.

The City of Ottawa shall also pay to Minto the costs of this application, including HST and postjudgment interest. In the event that the parties cannot agree on costs, I am prepared to fix same after receiving written submissions in this regard (not to exceed 5 pages) on or before December 10, 2010. ___________________________ Mr. Justice R. Kealey Released : November 24, 2010 CITATION : Minto Commercial Properties Inc. v. City of Ottawa , 2010 ONSC 6352 COURT FILE NO.: 09-45431

ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N: MINTO COMMERCIAL PROPERTIES INC. Applicant - and – CITY OF OTTAWA Respondent Endorsement Kealey J. Released : November 24, 2010