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Dover-Chester Associates v. Randolph Township

419 N.J. Super. 184, 16 A.3d 467 (App. Div. 2011)

TAXATION; APPEALS — The rules that a property owner challenging taxes must pay the challenged taxes either through the first quarter of the first tax year or for the entire year under review may be relaxed in the interests of justice, but where tax certificates have been issued or sold already, a court is not obligated to relax the rules.

Two owners of property in a municipality appealed to the Tax Court from judgments entered by the County Board of Taxation that had upheld assessments on the their properties. Neither taxpayer was current in its tax obligation at the time its appeal was filed. In each case, relying upon an inapplicable statute, the municipality moved to dismiss the appeal for non-payment of taxes. The Tax Court dismissed the appeal. Thereafter, each taxpayer moved for reconsideration, arguing that the County Board’s dismissal had been based on the wrong statute and that the Tax Court should relax the payment requirement pursuant to an “interests of justice” exception. The Tax Court denied the motion and the taxpayers appealed further.

The Appellate Division was asked whether relaxation is required in the interests of justice under the applicable tax statute if the tax payment requirement is satisfied before the return date of a motion to dismiss the complaint. It concluded that it was not, and held that the applicable statute governing a taxpayer’s challenge of a tax assessment requires a taxpayer, who first appeals an assessment to a county board and who had received a decision, still had to have paid the taxes that were due for the year under review at the time its complaint is filed with the Tax Court.

The Court first found that the municipality’s delay of over two years in filing motions to dismiss for nonpayment of the taxes in one case, and of 15 months in another case, did not make its motions to dismiss untimely. The relevant statute requiring that taxes be paid as a prerequisite to filing an appeal did not contain a time limit restricting a motion to dismiss, and there was no prejudice to the taxpayers because of the delay. It next found the interests of justice exception to the statute did not apply to deny the municipality’s motion to dismiss the appeals, where prior to the return dates of the municipality’s motions to dismiss, three tax certificates had been issued as a result of tax sales on those same properties – one to a third party, and two to the municipality. The Court said that the purpose of the tax payment requirement had not been met as there was an interruption of tax revenue for over a year as to the tax certificate sold to the third party, and the tax certificates acquired by the municipality generated no revenue.

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