Carsons' Camp Ltd. v. Municipal Property Assessment Corp. et al., 2008 ONCA 17

• Judge: Simmons, MacFarland and Rouleau, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: January 14, 2008
• Jurisdiction: Ontario
• Citations: 2008 ONCA 17;(2008), 232 O.A.C. 297 (CA)

Carsons Camp Ltd. v. Municipal Prop. (2008), 232 O.A.C. 297 (CA)

MLB headnote and full text

Temp. Cite: [2008] O.A.C. TBEd. JA.044

Carsons' Camp Limited (applicant/respondent/appellant by cross-appeal) v. Municipal Property Assessment Corporation and the Corporation of the Town of South Bruce Peninsula (respondents/appellants/respondents by cross-appeal)

(C46147; C46186; 2008 ONCA 17)

Indexed As: Carsons' Camp Ltd. v. Municipal Property Assessment Corp. et al.

Ontario Court of Appeal

Simmons, MacFarland and Rouleau, JJ.A.

January 14, 2008.

Summary:

Carsons' Camp Ltd. owned and operated a 53 acre campground in the Town of South Bruce Peninsula. In addition to 205 campsites for transient campers, the campground contained 495 campsites that were rented out to individual third party trailer owners on a seasonal basis from May 1 to October 15 of each year. The Municipal Property Assessment Corporation (MPAC) determined that 229 of the third party owned trailers had sufficient permanency to be considered part of Carsons' land for the purpose of assessment under the Assessment Act. MPAC was assessed an additional $5,250,000 on account of the value of the 229 trailers. Carsons' applied for an order declaring, inter alia, that (1) seasonally used trailers owned by third parties could not be assessed and taxed as land under the Act; (2) taxation of seasonally-used trailers owned by third parties amounted to an indirect tax and was beyond the province's legislative competence; and (3) taxation of seasonally used trailers owned by third parties was not authorized by statute and contravened s. 53 of the Constitution Act, 1867.

The Ontario Superior Court, in a decision reported at [2006] O.T.C. 1110, allowed Carsons' application in part. The court held that seasonally used trailers owned by third parties and not intended to be permanent fixtures on the land did not form part of the "current value" of land as that term was defined in the Act. Therefore, the 229 trailers could not be assessed and should not have been included in Carsons' property tax assessment. The court rejected Carsons' constitutional challenges. MPAC and the Town appealed. Carsons' cross-appealed. The Attorney General of Ontario and 17 municipalities intervened in support of MPAC and the Town's position on the appeals.

The Ontario Court of Appeal allowed the appeal and dismissed the cross-appeal.

Constitutional Law - Topic 6824

Provincial jurisdiction (s. 92) - Direct taxation within the province - What constitutes a direct tax - Carsons' Camp Ltd. owned and operated a 53 acre campground - In addition to 205 campsites for transient campers, the campground contained 495 campsites that were rented out to individual third party trailer owners on a seasonal basis from May 1 to October 15 of each year - The Municipal Property Assessment Corporation (MPAC) determined that 229 of the third party owned trailers had sufficient permanency to be considered part of Carsons' land for the purpose of assessment under the Assessment Act - MPAC was assessed an additional $5,250,000 on account of the value of the 229 trailers - Carsons' argued, inter alia, that the tax on the 229 trailers was indirect and beyond the legislative competence of the province - It pointed out that the portion of its realty taxes attributable to the value of the trailers was not levied against their owners, but demanded from one person (Carsons') with the intent and expectation that someone else (the trailers' owners) would pay - The character of the tax was therefore indirect - The application judge disagreed - The Ontario Court of Appeal also rejected the argument - The tax had the hallmarks of a true land tax - It was imposed on land and assessed as a percentage of the land's value - It was collected from the owner of the freehold, who was also the very person whom the legislature intended and desired should pay it - The fact that the tax might be recouped from a third party did not change the nature of the tax and make it indirect - Landlords almost always recouped realty taxes from tenants in some manner - The fact that the definition of land in the Act included items not owned by the owner of the freehold also did not change the character of the tax - When determining the incidence of a tax, it was important to remember the context within which the tax operated as well as its purpose - Here, the 229 trailers had features closely associated with the land and were structures placed thereon with a degree of permanency - The purpose of the assessment was the taxation of land and the tax was therefore a direct tax within the competence of the province - See paragraphs 33 to 36.

Constitutional Law - Topic 6829

Provincial jurisdiction (s. 92) - Direct taxation within the province - Real property taxes - [See Constitutional Law - Topic 6824 ].

Constitutional Law - Topic 6829

Provincial jurisdiction (s. 92) - Direct taxation within the province - Real property taxes - Carsons' Camp Ltd. owned and operated a 53 acre campground - In addition to 205 campsites for transient campers, the campground contained 495 campsites that were rented out to individual third party trailer owners on a seasonal basis from May 1 to October 15 of each year - The Municipal Property Assessment Corporation (MPAC) determined that 229 of the third party owned trailers had sufficient permanency to be considered part of Carsons' land for the purpose of assessment under the Assessment Act - MPAC was assessed an additional $5,250,000 on account of the value of the 229 trailers - Carsons' argued, inter alia, that before the province could levy a tax on the trailers, s. 53 of the Constitution Act required that the province pass a bill in the legislature authorizing such tax - Since the Taxpayer Protection Act, S.O. 1999, c. 7, was adopted a referendum was required before such a new tax was imposed - The Ontario Court of Appeal rejected the argument - The Act authorized the levy of realty taxes against the owner of the freehold for the assessed value of land as broadly defined in the statute - Once a trailer came within the definition of land, it was included in the assessed value without regard to the ownership of the trailer - Both before and after the 1997 amendments, the Act provided the statutory basis for the tax on land, defined to include the 229 trailers - The tax on these trailers was authorized by statute and this statutory authorization pre-dated the Taxpayer Protection Act - See paragraphs 37 to 39.

Real Property Tax - Topic 3505.2

Valuation - General principles - Meaning of "current value" - Section 19(1) of the Assessment Act provided that "[t]he assessment of land shall be based on its current value" - "Current value" was defined in s. 1 as "... in relation to land, the amount of money the fee simple, if unencumbered, would realize if sold at arm's length by a willing seller to a willing buyer;" - The term "current value" first appeared in the Act in 1997 - Before that, the statute provided that land was to be assessed at its "market value", which was defined as "the amount that the land might be expected to realize if sold in the open market by a willing seller to a willing buyer" - At issue was whether this change in wording to include the term "fee simple" in the definition of "current value" had the effect of limiting tax assessment to interests owned by the owner of the underlying land - The Ontario Court of Appeal held that the changes from "market value" to "current value" and the reference to "fee simple" were not intended to change what was to be included in the assessed value - The definition of "current value" in s. 1 had to be read harmoniously in the context of the whole of the Act, the object of which was to assess all property in Ontario coming within the expanded definition of "land", "real property" and "real estate" - Similarly, the term "fee simple" could not be isolated from the rest of the definition of "current value" - That definition clearly stated that it was to be applied "in relation to land" - From this contextual perspective, it was apparent that the expression "fee simple" was not intended to limit assessment to the "fee simple" interest of the freehold owner at common law or as that interest would appear in the registry or land titles offices - Rather, it had to be interpreted "in relation to" the statutorily broadened definition of "land" - Section 19(1) contemplated assessment of all that fell within the expanded definition of land despite the use of the words "fee simple" - See paragraphs 22 to 31.

Real Property Tax - Topic 3912

Valuation - Particular business properties - Campgrounds (incl. seasonal use of trailers) - [See Real Property Tax - Topic 3505.2 ].

Statutes - Topic 2603

Interpretation - Interpretation of words and phrases - Modern rule (incl. interpretation by context) - Intention from whole of section or statute - [See Real Property Tax - Topic 3505.2 ].

Statutes - Topic 522

Interpretation - General principles - Taxing statutes - [See Constitutional Law - Topic 6824 ].

Words and Phrases

Current value - The Ontario Court of Appeal discussed the meaning of this phrase as defined in s. 1, and used in s. 19(1), of the Assessment Act, R.S.O. 1990, c. A-31 - See paragraphs 22 to 31.

Words and Phrases

Fee simple - The Ontario Court of Appeal discussed the effect of the inclusion of these words in the definition of "current value" in s. 1 of the Assessment Act, R.S.O. 1990, c. A-31 - See paragraphs 22 to 31.

Cases Noticed:

Northern Broadcasting Co. v. Mountjoy (Improvement District), [1950] S.C.R. 502, refd to. [para. 13].

McMaster University v. Hamilton (City) (1973), 1 O.R.(2d) 378 (C.A.), affd. (1975), 16 N.R. 589 (S.C.C.), refd to. [para. 14].

Myers v. Regional Assessment Commissioner, Region No. 32 et al. (1991), 51 O.A.C. 157; 3 O.R.(3d) 488 (Div. Ct.), refd to. [para. 15].

Bell ExpressVu Limited Partnership v. Rex et al., [2002] 2 S.C.R. 559; 287 N.R. 248; 166 B.C.A.C. 1; 271 W.A.C. 1; 2002 SCC 42, refd to. [para. 28].

Ontario Home Builders' Association et al. v. Board of Education of York Region et al., [1996] 2 S.C.R. 929; 201 N.R. 81; 93 O.A.C. 241, refd to. [para. 33].

Statutes Noticed:

Assessment Act, R.S.O. 1990, c. A-31, sect. 1, sect. 19(1) [para. 16].

Counsel:

Christian G. Schulze, for the appellant/respondent by cross-appeal, Municipal Property Assessment Corporation;

Donald R. Greenfield, for the appellant/respondent by cross-appeal, the Corporation of the Town of South Bruce Peninsula;

John L. O'Kane, for the intervenors for County of Bruce, County of Prince Edward, County of Huron, County of Lambton, County of Brant, County of Simcoe, County of Grey, United Counties of Prescott-Russell, City of Sarnia, City of Quinte West, City of Elliot Lake, Municipality of East Hawkesbury, Township of Ear Falls, Township of Tay, Town of Goderich and Town of Espanola and Town of Lincoln;

Peter T. Fallis, for the respondent, appellant by cross-appeal, Carsons' Camp Limited;

Shannon M. Chace-Hall, for the intervenor, the Attorney General of Ontario.

This appeal was heard on October 15 and 16, 2007, by Simmons, MacFarland and Rouleau, JJ.A., of the Ontario Court of Appeal. Rouleau, J.A., delivered the following decision for the court on January 14, 2008.