Regional Assessment Commissioner v. Ontario Steel Products, [1976] 2 SCR 721

Supreme Court of Canada

Regional Assessment Commissioner v. Ontario Steel Products, [1976] 2 S.C.R. 721

Date: 1975-06-26

The Regional Assessment Commissioner, Region Number 2

and

The Corporation of the Town of Gananoque (Plaintiffs) Appellants;

and

Ontario Steel Products Company Limited (Defendant) Respondent.

1974: April 30, May 1; 1975: June 26.

Present: Laskin C.J. and Martland, Judson, Spence and Dickson JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO.

Assessment—Review—Inequitable assessment—Onus of proof that assessment is inequitable—Assessment made in 1970—Applicability of s. 90 of The Assessment Act—The Assessment Act, R.S.O. 1970, c. 32, as amended, ss. 27, 90.

In 1970 an assessment was made of the respondent’s industrial plant in the total sum of $376,850, consisting of $2,225 for the land (some 30 acres), $128,560 for the original building (47,000 sq. ft.) erected in 1964 and $246,065 for the building addition (100,000 sq. ft.) erected in 1970. The respondent appealed the assessment to the Ontario Municipal Board on the ground that its land had not been assessed at market value and submitted evidence as to this. The Board sustained the submission and pointed out that the Regional Assessment Commissioner had admitted that market value was not the basis on which the assessment had been made. This decision was upheld in the Court of Appeal on the basis that s. 90 of The Assessment Act, R.S.O. 1970, c. 32, could not apply to an appeal, against an assessment in 1970 for 1971 taxes, launched before July 23, 1971 and then pending.

Held (Laskin C.J. and Spence J. dissenting): The appeal should be dismissed.

Per Martland, Judson and Dickson JJ.: Even if s. 90 were applicable, the assessment of land in Ontario was governed by s. 27 of The Assessment Act, R.S.O. 1970, c. 32. The Board in fixing the assessment of the land did have reference to the assessed value of other industrial subjects “in the vicinity”, the only ones suggested by the appellants as being “similar real property”. Further as s. 27 remained the basis of assessment, the words “the amount of any assessment of real property” in s. 90

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referred to an assessment of market value and as the assessment was found by the Board not to be such an assessment of market value, the Board had to determine what the market value was. Section 90 did not impose on the respondent the onus of showing that the initial assessment, improperly made was inequitable but rather the onus rested on the appellants to establish that the assessment, although not based on market value was not inequitable in relation to similar real property in the vicinity.

Per Laskin C.J. and Spence J., dissenting: Since the assessments made in 1970 were to prevail for the years 1970 to 1974 to permit the change from municipal to provincial assessment responsibility to take effect, s. 90 was applicable. The burden of proof that the assessment was inequitable within the meaning of s. 90 was on the taxpayer who had to satisfy the Board that the assessment was inequitable with respect to the assessment of similar real property in the vicinity.

APPEAL from a judgment of the Court of Appeal for Ontario[1] dismissing an appeal from a decision of the Ontario Municipal Board allowing an appeal against an assessment. Appeal dismissed, Laskin C.J. and Spence J. dissenting.

B. Chernos, and R.S. Syer, for the appellants.

J.D. Brownlie, and M. Fingerhut, for the respondent.

The judgment of Laskin C.J. and Spence J. was delivered by

THE CHIEF JUSTICE (dissenting)—The relief which the appellant Assessment Commissioner and the appellant Municipality seek in this appeal is an order remitting to the Ontario Municipal Board for rehearing the questions of the respondent’s two real property assessments made in 1970, one a supplementary assessment for 1970 taxes and the other the regular assessment made in 1970 for 1971 taxes. The issues in this case arise out of an assessment of the respondent’s industrial plant in the total sum of $376,850, consisting of $2,225 for the land (a parcel of some 30 acres), $128,560 for

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the original 47,000 square foot building, which was erected in 1964, and $246,065 for the 1970 building addition of about 100,000 square feet. The Ontario Municipal Board decreased the assessment to $180,595 and this decision was sustained on appeal in reasons which were limited to one only of the three points that were argued on behalf of the appellants. Counsel for the parties are agreed that the single overall assessment aforesaid, in the first place by the assessor and subsequently by the Board in a lesser sum is what is in issue in this appeal, both in respect of taxation in 1970 and in respect of taxation for 1971.

Decisions of the Ontario Municipal Board are appealable to the Ontario Court of Appeal on questions of law or of construction only, as is evident from s. 63(8) of The Assessment Act, R.S.O. 1970, c. 32, and this Court’s concern can therefore be only with errors of law or of construction allegedly committed by the Board and by the Court of Appeal. Despite some ambiguity in the effect of the concluding words of s. 63(8), it is common ground that only errors of law or errors of construction of statutes, by-laws or written agreements with the concerned municipality, made by the Ontario Municipal Board in its decisions or orders, are so appealable; and the general words of s. 64 respecting the reopening of an assessment are to be read in that light. The appellants contended before the Court of Appeal, and renewed those contentions here, that (1) there was a misconstruction or misapplication of the market value formula of s. 27(2) of The Assessment Act by the Ontario Municipal Board; (2) it erred in law in its application of a factor of 17.6 per cent to arrive at the reduced assessment of $180,595; and (3) the Court of Appeal erred in law in failing to hold that s. 90 of The Assessment Act, as enacted by 1971 (Ont.) c. 79, s. 13, applied to the proceedings before the Board in respect of both 1970 assessments or, at least, in respect of the 1970 assessment for 1971 taxes. The reasons of the Board, which were dated

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May 4, 1972, do not disclose that any consideration was given to s. 90.

The assessment of the original plant and of the land was fixed by reliance on a provincial cost manual (used since 1954) through which replacement cost was calculated on the cubic foot volume of the building; and, at 9 cents per cubic foot, the total assessment for land and building was $130,785. This assessment was made after the original plant was built in 1964 and was carried forward for succeeding years without change. The same cost manual was used for the assessment of the 1970 addition to the building, which was fixed at $246,065 on the basis of 10 cents per cubic foot. The overall assessment was thus $376,850.

It is clear that the respondent’s property was not assessed on the basis of market value, as directed by s. 27(1) of The Assessment Act, nor was other property in the appellant Town so assessed. Counsel for the appellants did not attempt to support the assessments of the assessor on the basis on which they were made; and although he perforce supported a market value approach, he did not, having regard to the applicable principle of equitable relationship of assessments, reject the principle of applying a factoring formula of a ratio of assessments to sale prices, which is what the Board did as will be explained below. His objection on this score was that the ratio was established on an improper basis because it did not take into account industrial property values.

An appeal in an assessment matter to the Ontario Municipal Board is in the nature of a hearing de novo and, in the present case, the respondent, which appealed from the confirmation of its assessment, produced evidence of an appraiser upon which the Board relied in fixing the market value of the property at $850,000 plus additions in the amount of $176,111 for a total of $1,026,111. The factor of 17.6 per cent. based on calculations by another expert witness for the respondent, was applied to this total to give in the result the sum of $180,595 as the assessment.

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It was strongly contended by the respondent that the fixing of the market value by the Board and its determination of the 17.6 per cent factor were findings of fact which were not reviewable by the Court of Appeal or by this Court. In arriving at his estimate of $850,000 as the market value of the respondent’s property (to which the Board added certain items of value totalling $176,111 which the appellants do not challenge), the respondent’s appraiser was aware of the fact that the total cost of the assessed property (land and building) was $1,453,547, of which $384,211 was a forgivable loan from the Ontario Development Corporation, a loan related to the fact that the Town, with a population of 5,000 (which had remained almost static from 1961 to 1971) was at best in a slow growth area. This loan had not in fact been forgiven at the time of the hearing before the Board, and counsel for the respective parties differed on its relation to “market value”, as defined in s. 27(2), namely, “the amount that the land might be expected to realize if sold in the open market by a willing seller to a willing buyer”.

The Board made its decision on market value without the help of any evidence on that issue by the municipality. It adduced none but, instead, sought to support its assessment by reliance on an exhibit, Exhibit 8, designed to show that the assessment of the respondent’s property was equitable in comparison with the assessment of other industrial properties in the area. Exhibit 8 shows the ratio of assessment to square foot area and to cubic foot area of each of those properties. Clearly enough, if the Board’s assessment is to stand those ratios would result in a much lower square foot assessed value and cubic foot assessed value for the respondent’s property than for the other industrial properties listed in the Exhibit.

What is obvious, of course, is that Exhibit 8 has neither base in nor even reference to market value. I read the Board’s reasons in this case as finding

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Exhibit 8 unhelpful in the bare and rough way in which it purported to justify the municipality’s assessment, and I agree with that view. What remains to consider then, on this aspect of the appeal, is whether the Board was guilty of any error of law in its finding of market value and in its ascertainment of the factor of 17.6 per cent.

The respondent’s appraiser considered that it was proper to arrive at market value by disregarding the forgivable loan as an element thereof, the reasoning being that a prospective purchaser of the plant would have that same advantage in determining whether to buy or to build his own plant. Counsel for the appellants contested this as being an improper concentration on only one end of the seller-buyer equation which underlies market value. What he urged was that in a limited market, as in this case, the owner of property must itself be considered as a prospective purchaser (indeed, it was put to the Court that in an economic sense the respondent had been a purchaser of the plant which it had constructed), and on the basis of the principle of exchange, involved in the market value formula, the very construction so recently completed at the cost involved was cogent evidence that the Board had fixed the market value at less than the price that the respondent would be willing to sell.

In my opinion, the appellants’ submission aforesaid raises only a question of fact, and, moreover, has in it a subjective element quite contrary to the proposition of the Privy Council in Montreal v. Sun Life Assurance Co. of Canada[2], at p. 90, upon which counsel for the appellants relied. There were no comparable sales in the area upon which either the respondent’s appraiser or the Board could base themselves, and in reaching for market value on a notional basis (as explained in the reasons of Rand J. in this Court in the Sun Life Assurance[3] case, at p. 246), it was open to the appraiser to refer to sales of industrial plants in adjacent areas and it was open to the Board to look at this data and to take it into account as factual material to assist it

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in its notional exercise.

Four sales of industrial properties, two in Orangeville in 1967 and 1969, one in Burlington in 1971 (after the assessment was made) and one in Trenton in 1966, each superior markets to the appellant Town, were brought into view by the evidence of the respondent’s appraiser who testified that sales of industrial properties of the size of that of the respondent were very few. The four properties, taken as comparables, were, according to the appraiser somewhat similar to the respondent’s new plant in age, size and desirable location. They had been sold at prices ranging from $5.06 to $6.17 per square foot. The appraiser’s determination of the market value of the respondent’s plant gave a result of $5.78 per square foot. The Board in weighing the appraiser’s evidence decided that the Trenton sale alone offered the most relevant comparable and, making allowances for the differences in the land area involved and in the floor area, and the differences in dates the Board chose to accept the $850,000 valuation to which it added the additional sum of $176,111. In coming to this conclusion, the Board made a factual determination unblemished by any error of law, and I can see no basis upon which it is reviewable.

The 17.6 per cent factor was the median ratio of assessments to sale prices in 1970 in the respondent Town of seventy-two properties which, on the basis of a Registry Office search, had been sold in that year. Excluded from this exercise were some thirty sales which were not regarded as market transactions. Of those included, only three were of non-residential properties, being sales of commercial properties such as motels. On these facts, counsel for the appellants alleged that there was a reviewable error of law when a factor was being applied to arrive at an assessment of industrial property without there being any consideration of industrial properties in establishing the factor. This, in his view, indicated a want of equity in the fixing of the assessment, and equity was a statutorily relevant consideration.

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It was not urged before us that a factor based on a ratio of assessments to sales, applied to market value, was an improper measure for arriving at an assessment. Had there been evidence of sales of industrial properties which had been excluded from calculation and which, if included, would have given a different factor, the situation would be different. There were no such sales, nor was any evidence presented to indicate that other industrial property in the area was assessed on the basis of a higher factor than that applied here. Exhibit 8, produced by the municipality, is of no assistance here. Since the principle of applying a factor was not in issue, and the evidence being what it was, I am of the opinion that the Board was entitled to make a non-reviewable determination of the assessment by proceeding on such evidence as it had. It was within its exclusive authority to weigh the cogency of the material before it upon which the factor was established and to apply it accordingly. I do not think, absent any evidence from the municipality, that the Board was required to insist that the respondent’s appraiser include in its factoring calculations an estimate of notional sales of industrial property in the Town. It is to be noted too that the Board applied the factor to its own determination of market value, namely, $1,026,111 and not to that proposed by the respondent’s witness, and the Board’s determination, less the forgivable loan, was not far short of the respondent’s outlay for its plant.

I come finally to the submissions on the application of s. 90 of The Assessment Act, as enacted in 1971. This enactment of s. 90 and other sections to which I will refer became effective on July 23, 1971. Some of the provisions of the amending Act of 1971 were declared to have retroactive force as of January 1, 1971 and two were given a postponed operation with effect only as of January 1, 1974. Stated generally, s. 90 and allied provisions of the 1971 amendment to The Assessment Act were transitional provisions referable to the province assuming responsibility for assessments in the various municipalities, and they were designed to

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fix assessments on the basis of the 1970 roll to remain in force for the years 1971 to 1974, that is to cover taxation from 1971 to 1975. I am in no doubt that s. 90 even on the interpretation thereof advanced by the appellant Town can have no application to the supplementary assessment in 1970 for 1970 taxes, and this position was not seriously contested by counsel for the Town. It is its effect upon the general 1970 assessment for 1971 taxes that is involved on this phase of the appeal.

I quote the following relevant provisions of the 1971 amending Act, as found in s. 13 thereof:

85. Subject to the alterations, amendments and corrections authorized by this Act, for the purposes of any general or special Act, the assessment roll of every municipality prepared for the year 1970 for taxation in 1971 shall be the assessment roll of the municipality in the years 1971 to and including 1974 and the assessments of all real property as set forth on the 1970 assessment roll shall be the assessments of the real property and the assessment commissioner of a municipality shall not cause to be prepared a new assessment roll for the municipality until the year 1974 for taxation in 1975.

90. The Assessment Review Court, county judge, Ontario Municipal Board or any court, in determining the value at which any real property shall be assessed in any complaint, appeal, proceeding or action, shall have reference to the value at which similar real property in the vicinity is assessed, and the amount of any assessment of real property shall not be altered unless the Assessment Review Court, judge, Board or court is satisfied that the assessment is inequitable with respect to the assessment of similar real property in the vicinity, and in that event the assessment of the real property shall not be altered to any greater extent than is necessary to make the assessment equitable with the assessment of such similar real property.

92. No assessment taken in any municipality under subsection 1 or 2 of section 46 in the year 1971 shall be used for purposes of taxation and no appeal, complaint, action or proceeding shall lie, be brought, maintained or continued with respect to any such assessment.

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95. Section 90 ceases to be in force on the 1st day of October, 1974, but shall continue in force for the purpose of any pending complaint, appeal, proceeding or action which will affect taxes for the years 1971 to and including 1974.

It is evident from the foregoing provisions that for the period during which they were to operate any 1971 assessments that may have been made were to be inoperative, and that assessments made in 1970 by an assessor were not to be altered by any of the review tribunals under s. 90 except in accordance with its prescriptions, namely, that the alteration shall not be to any greater extent than would be necessary to make the challenged assessment equitable with the assessment of similar real property in the vicinity.

The contention of the appellants was that s. 90, as enacted in 1971, was applicable to the review proceedings which came before the Ontario Municipal Board on January 18, 1972 in respect of 1971 taxes based on the 1970 assessment. On this basis it was their submission that the Board should have considered other industrial assessments in order to discharge its duty under s. 90. Two points arise therefore from the appellants’ contentions: first, whether s. 90, which became effective on July 23, 1971, after the assessment roll for 1970 was returned, could be invoked by the appellants in respect of 1971 taxes; and second (a point which arises only if an affirmative answer is given on the first point), whether any ground is shown to remit the case to the Board to consider other industrial assessments in the vicinity.

It was the respondent’s position (and one in which it was sustained by the Ontario Court of Appeal) that s. 90 could not be given a retrospective effect to apply in 1971 or later to an assessment made in 1970 for 1971 taxes; and, in any event, since proceedings by way of appeal to the Board were launched by the respondent in December, 1970, it could not be affected retrospectively in respect of such proceedings by a subsequent enactment even though that enactment was in force when the hearing before the Board came on.

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Indeed, the respondent’s position was that once review or appeal proceedings were initiated before s. 90 became effective, the entire run of review or appeal would be free of s. 90 as later enacted. It was also contended by the respondent that the fact that s. 85, as enacted in 1971, made 1970 the base year for assessment during the temporary period, a position reinforced by s. 92, lent emphasis to the submission that s. 90 should not be applied to an assessment made in 1970 for 1971 taxes. There is the opposing view, however, that s. 90 works in favour of the taxpayer as well as against him; and there is also the provision in s. 95 that refers to the continued force of s. 90 (after October 1, 1974) in respect of any pending complaint, appeal, proceeding or action which will affect taxes for the years 1971 to and including 1974. Taxes for 1971 would involve, of course, an assessment in 1970, and this lends credence to the view that appeals pending in respect of 1971 taxes when s. 90 became effective were within its scope.

I think it important to stress that s. 90 does not diminish the protection afforded to the taxpayer through his rights of appeal prior to its enactment. If it were the case that prior to the enactment of s. 90 a taxpayer could complain only if he was assessed in excess of market value, there would be small consolation in s. 90 giving the taxpayer a right to complain of inequity of assessment as compared with the assessment of similar real property in the vicinity. The fact is, however, as underlined by the judgment of the Ontario Court of Appeal in Re Empire Realty Co. Ltd. and Assessment Commissioner for Metropolitan Toronto[4], that a taxpayer was entitled to be assessed on an equitable basis with other taxpayers owning land in the vicinity; and the fact that an assessment was at actual or market value would not preclude a successful appeal where it could be shown that similar lands in the vicinity were assessed at substantially less than actual or market value. Review power to this end was vested in the range of appellate tribunals (other than the court of revi-

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sion, now known as the assessment review court) by s. 86 (2) of The Assessment Act. R.S.O. 1960, c. 23. As Kelly J.A. put it, speaking for the Court in the Empire Realty case, at pp. 397‑8:

Any frailties in the method by which the assessed value is arrived at are not of themselves grounds for rejecting it if the assessor has in his own way achieved equity. The only remaining test for determining if the assessment should stand must be the comparison of it with other assessments.

The Assessment Act, s. 86(2), gives to each of the tribunals exercising appellate jurisdiction under the Act (save the Court of Revision), power to consider the value at which similar lands in the vicinity are assessed. The testing of the fairness to the ratepayer of the assessment of his property by looking at what has been done with comparable properties is too well established to need any defence; even an assessment made at the actual value of lands and buildings in compliance with the provisions of s. 35(1) would be an unequitable assessment if all similar lands in the vicinity were assessed at some percentage of actual value substantially less than one hundred; where, as here, there has been no attempt to assess at actual value, the relationship of any particular assessment to the assessed value of similar lands becomes the only standard by which fairness to the ratepayer may be established.

Section 86(2) aforesaid was carried into the new Assessment Act, 1968-69 (Ont.), c. 6 as s. 64(2) but enlarged to give the Assessment Review Board as well power to consider the equity of an assessment. The enlarged provision is now R.S.O. 1970, c. 32, s. 64(2).

The Ontario Court of Appeal, speaking through Estey J.A., held that s. 90 could not apply to an appeal against an assessment in 1970 for 1971 taxes, launched before July 23, 1971 and then pending, as was the case here. This conclusion was based on two considerations. First, it was his view that “s. 95 appears to contemplate an appeal

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against 1971 tax assessment being launched after July, 1971 and remaining outstanding in October, 1974.” Estey J.A. added here that in drafting s. 95 the Legislature appeared to have deliberately refrained from making s. 90 retrospective to apply to appeals pending on July 23, 1971. Apart from what may have been an inadvertent reference to “1971 tax assessment” rather than to 1971 taxes (which is what s. 95 specifies) I am unable to appreciate how s. 95 can lead to such a conclusion. We are dealing here with temporary legislation, expressly related to a 1970 assessment base and covering the tax years 1971 to 1974 inclusive, based on the one assessment made in 1970. It is in that context that s. 95 speaks of any “pending complaint, appeal, proceeding or action”, which may variously relate to taxes for any of the specified years and to proceedings thereon on foot before the range of tribunals mentioned in s. 90. The present case is an illustration of how taxes for 1971 may still be in issue in an appeal almost three years later; and a fortiori as to taxes for 1972 or 1973 or 1974. To accept Estey J.A.’s position on s. 95 would be to read out its reference to 1971 taxes which would be based on an assessment completed long before July 23, 1971. Of course, it is arguable that force may be given to the reference to 1971 taxes by construing it to apply to an assessment after July 23, 1971 for 1971 taxes, which would be for new construction only. This, however, is to strain the sense of both s. 90 and s. 95.

The second consideration which moved the Court of Appeal to its conclusion aforesaid (and which appears to have influenced its view of s. 95) was that s. 90 introduced a different assessment base than that which prevailed before July 23, 1971 (“s. 90”, said Estey J.A., “deals with substantive rules for the assessment of property”), and it would therefore require express legislative provision to make s. 90 applicable to assessments for 1971 taxes which were completed before July 23,

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1971 on the normal assessment base prescribed by s. 27 of The Assessment Act.

This, in my view, is an erroneous appreciation of s. 90. That provision does not alter or oust the application of s. 27 which, so far as relevant, provides that land shall be assessed at its market value. Section 90 is not concerned with assessment, but with a review thereof by various review tribunals according to a standard and subject to a limitation as prescribed by that section. There is nothing in The Assessment Amendment Act of 1971 that touches s. 27, and there is hence no reason why the Legislature should have prefaced s. 90 (as Estey J.A. suggested would be necessary) by the words “notwithstanding s. 27” in order to make s. 90 immediately effective for review or appeals then pending.

In my opinion, it was effective for the present case in the appeal before the Ontario Municipal Board simply because that appeal was before the Board after s. 90 came into force. Submissions on retroactivity and on the distinction between procedural and substantive changes, as made by the respective parties, are not helpful in the present case when we are dealing with legislation with a limited time span (of course, it could be extended by the Legislature) designed to deal with a special situation which the province expected would be corrected by the end of the period for which the legislation was to be effective. In my opinion, what ss. 85 and 90 fastened on were assessments made in 1970, and these having been made and the various rolls returned before July 23, 1971, the review and appeal procedures operate in respect of taxes for 1971 to 1975. Both ss. 85 and 90 speak of the making of and review of assessments. Since (apart from new construction) the assessments made in 1970 were to prevail for the years 1970 to 1974 to permit the change from municipal to provincial assessment responsibility to take effect, I do not think that s. 90 as a review and appeal. provision of a limited character can be said to be inapplicable if review has been invoked either by the taxpayer or by the municipality and brought

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before the Ontario Municipal Board at any time after s. 90 has become effective.

The remaining question is whether this case should be remitted to the Board to consider other industrial assessments in the vicinity. I have already noted that there is nothing in the Board’s reasons to show that it took s. 90 into consideration. If it had done so, it would have had to go beyond the mere consideration of market value and to consider also whether (it being established that the assessment in appeal to it, namely $376,850, was not in excess of market value) this assessment was inequitable within the meaning of s. 90. On this issue, the burden was on the taxpayer in view of the prescription of s. 90 that “the amount of any assessment…shall not be altered unless the… Board…is satisfied that the assessment is inequitable with respect to the assessment of similar real property in the vicinity...”.

I do not think that it can be said, on the record now before us, that the assessment of $376,850 was inequitable and, moreover, that by reducing the assessment to $180,595 the Board altered the original assessment only to the extent necessary to make it equitable with the assessment of similar real property in the vicinity. In my opinion, therefore, the case should be remitted to the Board to enable the respondent to adduce evidence to discharge the onus put upon it by s. 90.

In the result, I would allow the appeal and remit the case accordingly. The appellant is entitled to its costs in this Court and in the Court of Appeal.

The judgment of Martland, Judson and Dickson JJ. was delivered by

MARTLAND J.—I have had the advantage of reading the reasons of the Chief Justice and I agree that, apart from the possible application of s. 90 of The Assessment Act, R.S.O. 1970, c. 32, the other grounds advanced by the appellants do not warrant this appeal being allowed.

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Section 90 provides as follows:

90. The Assessment Review Court, county judge, Ontario Municipal Board or any court, in determining the value at which any real property shall be assessed in any complaint, appeal, proceeding or action, shall have reference to the value at which similar real property in the vicinity is assessed, and the amount of any assessment of real property shall not be altered unless the Assessment Review Court, judge, Board or court is satisfied that the assessment is inequitable with respect to the assessment of similar real property in the vicinity, and in that event the assessment of the real property shall not be altered to any greater extent than is necessary to make the assessment equitable with the assessment of such similar real property.

The Court of Appeal held that this section, which only came into effect on July 23, 1971, was not applicable in respect of an assessment made in 1970, from which an appeal had been taken in 1970, which had been heard by the Assessment Review Court in 1970, and in respect of which an appeal had been launched to the Ontario Municipal Board on December 21, 1970. The reasons of the Chief Justice express the view that the Ontario Municipal Board, in the present case, was required to give consideration to the provisions of s. 90, since it had become effective before the case was heard by the Board.

Without reaching a final conclusion on that issue, it is my opinion that this case should not be remitted to the Board, even if s. 90 were applicable. The assessment of land in Ontario is still governed by s. 27 of The Assessment Act, the relevant portions of which provide as follows:

27. (1) Subject to this section, land shall be assessed at its market value.

(2) Subject to subsection 3, the market value of land assessed is the amount that the land might be expected to realize if sold in the open market by a willing seller to a willing buyer.

The respondent appealed its assessment to the Board on the ground that its land had not been assessed at market value and submitted evidence as to its market value. This submission was sustained by the Board, which pointed out that the

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Regional Assessment Commissioners had admitted that market value was not the basis on which the assessment had been made.

Section 90 provides that the Board, in determining the value at which real property is assessed, shall have reference to the value at which similar real property in the vicinity is assessed. The Board, in its reasons, stated that:

There is no other industrial facility in Gananoque of the size or age of the subject property. Such a facility would thus be very difficult to sell.

The appellants sought to justify the assessment of the respondent’s land by the Regional Assessment Commissioner by means of a comparison between the assessment per square foot and per cubic foot of space of other industrial facilities in Gananoque and the like method of assessment in respect of the respondent’s land. This evidence was considered by the Board, as well as the opinion expressed by the Regional Assessment Commissioner, that, on the basis of this comparison, the assessment of the respondent’s land was fair and equitable.

In my opinion, assuming s. 90 was applicable, the Board, in fixing the assessment of the respondent’s land, did have reference to the assessed value of other industrial facilities in Gananoque, which were the only ones suggested by the appellants as being “similar real property”.

I turn now to the second portion of s. 90, which provides that the amount of any assessment of real property shall not be altered unless the Board is satisfied that the assessment is inequitable with respect to the assessment of similar real property in the vicinity. In view of the fact that s. 27 remains the basis of assessment under the Act, the words “the amount of any assessment of real property” must refer to an assessment of market value. The assessment made in this case, as found by the Board, was not such an assessment. The Board had to determine what was the market value of the land.

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In these circumstances, s. 90 did not impose upon the respondent the onus of showing that the initial assessment, improperly made, was inequitable with respect to the assessment of similar real property in the vicinity. On the contrary, if the appellants sought to rely upon s. 90, the onus rested on them to establish that the assessment, although not an assessment of market value, was not inequitable in relation to the assessment of similar real property in the vicinity. The evidence presented on behalf of the appellants did not meet that onus. That evidence did not relate to the market value of other industrial properties in Gananoque. It related to the assessment of other properties on a square foot and cubic foot basis. It was considered by the Board in determining the value at which the respondent’s property was to be assessed, and the Board determined the proper assessment.

In my opinion the case should not be remitted to the Board. I would dismiss the appeal with costs.

Appeal dismissed with costs LASKIN C.J. and SPENCE J. dissenting.

Solicitors for the appellants: Feigman & Chernos, Toronto.

Solicitors for the respondent: Blake, Cassels & Graydon, Toronto.