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HomeMy WebLinkAboutCD-25-92 ADDENDUM UNFINISHED BUSINESS THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON VM(X(XlXD((X9(A10JDX#=XlXlX X0WM011X REPORT Meeting: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE File # Date: SEPTEMBER 7, 1993 R es. # Ci Addendum To By-Law# Report#: CD-25-92 File#: Subject: REQUEST FOR PAYMENT - LINE FENCE DISPUTE MRS.K. COKE Recommendations: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1. THAT the Addendum to Report CD-25-92 be received; 2 . THAT Report CD-25-92 be received; 3 . THAT, because of the negative financial impact on all taxpayers of the municipality, a by-law not be passed under Section 12(6 ) of the Line Fences Act to provide for the municipality to pay "up front" to the owner, awards granted under said Act; and 4 . THAT Kathleen Coke and Richard Murphy be advised of Council's decision. BACKGROUND AND COMMENT: On November 2, 1992, Members of the General Purpose and Administration Committee considered Report CD-25-92 (Attachment #1) and passed the following resolution: "THAT Report CD-25-92 be referred back to Staff to receive a legal opinion relating to the priority ranking of payments of liens which have been added to the tax roll; and THAT the delegation of Richard Murphy be acknowledged and he and Kathleen Coke be advised of Council 's decision. " Continued . . . . . /2 Addendum to Report CD-25-92 - 2 - September 7, 1993 Since that time, several conversations have ensued and documentation has been received pertaining to this matter, including a letter dated November 18, 1992 from the Ministry of Municipal Affairs (Attachment #2) and correspondence dated May 13, 1993 from the Municipality's Solicitor (Attachment #3) . We have been advised by Mrs. Kathleen Coke that, by going through the Small Claims Court, she has been successful in obtaining the total amount of $1, 146 .06 awarded to her under the Line Fences Act, from her neighbour through the garnishment of his wages. Mrs . Coke explained that the whole process took approximately 5 months and that she was also able to recover her court costs which were minimal. In view of the legal opinion received from the Municipality's Solicitor and the fact that the process of the Small Claims Court has resolved the issue in a timely and efficient manner, Staff's original position is reiterated: THAT the Addendum to Report CD-25-92 be received; THAT Report CD-25-92 be received; THAT, because of the negative financial impact on all taxpayers of the municipality, a by-law not be passed under Section 12(6) of the Line Fences Act to provide for the municipality to pay "up front" to the owner, awards granted under said Act; and THAT Kathleen Coke and Richard Murphy be advised of Council's decision. Respectfully submitted Recommended for Approval to Committee tti Ba rie, A.M.C.T. Lawrence E. k t f, M.C.I .P. Cler Chief Administ a .ve Officer PLB/MPK/ms Attachments Interested Parties: Mrs. K. Coke Mr. R. Murphy 14 Darlington Blvd. 210 Andrew Street Courtice, Ontario Newcastle, Ontario LlE 2J7 L1B 1J9 ATTACHMENT #1 THE CORPORATION OF THE TOWN OF NEWCASTLE REPORT Meeting: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE File# mo• F L-1 Date: NOVEMBER 21 1992 Res. 7 9a By-Law# Report#: CD-25-92 File#: Subject: REQUEST FOR PAYMENT - LINE FENCE DISPUTE MRS. K. COKE Recommendations: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1. THAT Report CD-25-92 be received; 2. THAT the request of. Mrs. K. Coke for payment by the treasurer of the town of $1,146.06 to settle a line fences dispute be denied; 3. THAT, because of the impact on all taxpayers of the municipality, a by-law not be passed under Section 12(6) of the Line Fences Act to provide for the treasurer of the municipality to pay to the owner awards granted under. said Act; and 4. THAT Kathleen Coke and Richard Murphy be advised of Council's decision. BACKGROUND AND COMMENT: At the Council Meeting held on September .14, 1992, Mrs . Kathleen Coke appeared before Council with- respect to a fence dispute between herself and her adjoining neighbour. Mrs. Coke advised that she wanted to construct a fence to separate the two properties and requested her neighbour's assistance. The neighbour replied that he was not interested in having a fence built and, therefore, he would not contribute to its cost. Mrs. Coke then contacted the Town to commence proceedings under the Line Fences Act. In June 1991, the "Clerk's Notice to Parties (Dispute) " was mailed to the property owners, advising that three fence viewers would be viewing and arbitrating on the fence line between the properties. 691 3 RECYCLED® PAC PECER, Report CD-25-92 - 2 - November 2, 1992 In July, 1991, a "Fence Viewer's Award (Dispute) " was sent to both parties ordering a fence to be constructed and maintained. It also stated which portion was the responsibility of each party and a starting and completion date (July 31 and August 31, 1991, respectively) . As of November, 1991, construction of her neighbour's portion of the fence had not been commenced and Mrs. Coke had the fence constructed at her cost. A "Clerk's Notice to Parties (Certification) " stating that the three fence viewers would re-attend the lands on December 20, 1991 to verify the value of work done was completed. Following this inspection a "Fence Viewer's Certificate of Default" was completed which stated that her neighbour had failed to obey the award made July 15, 1991. This documentation quoted the value of work done and paid for by the Cokes at $1,146 .06 plus the fence viewers' expense of $77 .40. In accordance with Section 12(6) of the Act, Mrs. Coke is now requesting that the treasurer of the municipality pay the outstanding amount of $1,146 .06 to her and then place this amount on her neighbour's tax account. Section 12(5) of the Line Fences Act states that, upon receiving a 'certificate of default and an application in writing by the owner entitled to receive the amount certified, the total amount shall be placed on the collector's roll and may be collected in the same manner as taxes, together with interest. Once collected, the outstanding amount is then paid over to the owner. This has happened in Mrs. Coke's case. Section 12 (6) of the Act states that a local municipality may by by-law, provide that where a certificate and an award are deposited with the clerk, the treasurer may, upon written application, pay "up front" to the owner, the amount certified. This amount is then placed on the collector's roll and collected in the same manner as taxes, together with interest. Mrs . Coke is now requesting payment by this method. The Town of Newcastle presently has three outstanding fence disputes totalling an amount of $1,993. 14. In each case, the amount of the award has been placed on the collector's roll, in accordance with Section 12 (5) of the Act. The tax collector has advised that interest in the amount of 1.25 percent per month is charged to these accounts . The Municipal Law Enforcement Officer has advised that there are several other instances such as Mrs . Coke's whereby the owner is awaiting the outcome of the Coke dispute to determine whether they too will request "up front" payment of the award by the town. As more residents are requesting fence viewings, an estimate of funds required to cover the costs is $3,500. � �; + - 6 � 4 Report CD-25-92 - 3 - November 2, 1992 Should Council pass a by-law to provide for the payment of the award by the municipality, this amount will need to be added to the town's budget each and every year. In so doing, all taxpayers of the town will be subjected to helping to offset these costs through their tax dollars. The Line Fences Act states, in Section 12 (9) that rather than applying the award to the collector's roll or applying for the award under a by-law passed under Section 12(6) , the owner may file a copy of the certificate and the award with the clerk of the small claims court and the amount may be levied against the goods and chattels and land of the adjoining owner. Because the passage of a by-law under Section 12(6) of the Line Fences Act will require additional funds to be allocated in the town's annual budget each year, thereby further burdening all taxpayers of the municipality, and the option an owner has of filing a claim with small claims court, it is respectfully recommended that Mrs. Coke's request for payment of $1,146 .06 by the treasurer of the municipality, be denied and that a by-law not be passed under Section 12(6) of the Line Fences Act. Respec ul submitted Recommended for Approval to C ittee --_� atti arrr b, A.M.C.T. Lawrence-:,; Kotse f;. M.C.I.P. To Clerk Chief Administra 1vt Officer PLB/ms Individuals to be Notified of Council's Decision: Mrs. K. Coke Mr:. R. Murphy 14 Darlington Blvd. 210 Andrew Street Courtice, Ontario Newcastle, Ontario L1E- 2J7 . L1B 1J9 1105 ­695 ATTACHMENT #2 COUNTY STUDY OFFICE 2nd Floor Ministry of Ministere des Cc 74 Simcoe Street South 4Q� W I"" TeOlephone:On(416),571-1515 Municipal Affaires Affairs municipales Fax Line: (416) 571-5233 ���,��- Ontario November 18, 1992 Ms Jamie Coutu Tax Department OF NEWCASM, Town of Newcastle 40 Temperance Street RNANU Bowmanville, Ontario L1C 3A6 Dear Jamie: You asked several questions recently on the collection of a defaulting owner's share of fence costs under a Line Fences Act award. I hope the following will provide you with the answers: Section 12 of the Line Fences Act requires the fence viewers to issue a certificate of default to the municipal clerk. When the conforming owner makes application to the clerk, the clerk is required to place the certified amount on the tax collector's roll as a charge against the defaulting owner. The amount may then be collected in the same manner as taxes; in other words the municipality may employ all legal means, with one important exception, to collect the amount as though it, were outstanding taxes. The important exception is a tax sale under the Municipal Tax Sales Act. While the outstanding amount is to be collected like taxes, it is not in fact deemed to be taxes, and therefore cannot be registered under the Municipal Tax Sales Act. With regard to the accrual of interest, the Line Fences Act is silent on the matter. However, when the amount is put on the collector's roll it accrues interest in the same manner as taxes. It is suggested that the interest be charged from the first day of the month following the entry on the collector's roll. If you have any questions on the foregoing, please give me a call. Yours truly, Harry onnolly Municipal Advisor ' (' ATTACHMENT #3 Shibley Righton Barristers & Solicitors � , �► 1 L 6 i� RICHARD E.SHIBLEY,Q.C. RUPERT F.RIGHTON,Q.C. HAROLD H.ELLIOTT,Q.0 NICHOLAS T.MACOs DENNIS C.HEFFERON DONALD K.ROBINSON,Q.C. RICHARD E.ANKH,Q.C. RECEPTION:(416)363.9381 BARRY S.WORTZMAN,Q.C. LESLIE S.MASON TIMOTHY W.SARGEANT,Q.C. VOICEMAIL(416)363-3425 DEZ WINDISCHMANN JOHN P.BELL MICHAEL FITZPATRICK,Q.C. GEORGE CORN PETER H.SMITH V.ROSS MORRISON EXTENSION 238 LINDA S.BOHNEN ALAN L.BROMSTEIN JOHN C.SPEARN MICHAEL C.BIRLEY PETER C.WILLIAMS PAUL E.McINNIS FAX (416)363-6438 PETER G.NEILSON CLIFFORD 1.COLE JONATHAN H.FLANDERS CHARLES SIMCO THOMAS A.STEFANIK BARBARA R.C.DOHERTY WILLIAM L NORTHCOTE JAMES ROSSITER HELDER M.TRAVASSOS PETER V.RAYTEK J.JAY RUDOLPH CYNTHIA J.GUNN MARTIN J.HENDERSON NICHOLAS T.MACOS WARREN S.RAPOPORT BOX 32.401 BAY STREET RICHARD E.COLES MARTIN PETERS ALEXANDER P.TORGOV TORONTO,CANADA CHARLES M.GASTLE PHILIP P.HEALEY SHEILA M.MacKINNON CHARLES G.T.WIEBE J.PAUL R.HOWARD WADE D.JAMIESON M5H 2ZI LEONARD D.RODNESS SANDRA E.DAWE LINDA J.GODEL JANIS E.INGRAM CHRISTINE M.SILVERSIDES SALVATORE G.P.FRISINA THOMAS McRAE JAMES W.BUSSIN KAREN 1.McMASTER CRAIG A.LEWIS JULIE A,MACIURA JENNIFER L PERRY SUITE 1800 MICHAEL GORDON(1969-1991) THE SIMPSON TOWER COUNSEL MARTIN L.O'BRIEN,Q.C. BARRY D.LIPSON,Q.C. May 13, 1993 File No. 9201377 Mrs. Marie Marano Treasurer Town of Newcastle 40 Temperance Street Bowmanville, Ontario L1C 3A6 Dear Mrs. Marano: Re: Request for payment - Line Fence Dispute Your File P01.1490.FE At its meeting on November 9, 1992, Council passed the,following resolution:. "THAT Report CD-25-92 be referred back to staff to receive a legal opinion relating to the priority ranking of payments of liens which have been added to tax roll; and THAT the delegation of Richard Murphy be acknowledged and he and Kathleen Coke be advised of Council's decision." We have been provided the information contained in Report Nos. CD-25-92 together with a subsequent letter dated November 18, 1992, from Harry Connelly, Municipal Advisor in the Ministry of Municipal Affairs, a memorandum dated December 16, 1992, from Jamie Coutu to Patti Barrie, Clerk, and a copy of the Rent Roll for the Marion Evelyn Turner Estate property (Roll #010-070-14100-000). We will address the questions asked in Council's meeting of November 9, 1992, as well as those contained in Ms. Coutu's memorandum and further questions raised in discussion with you. i Cr IJ Shibley Righton 2 PRIORITY OF LIEN FOR LINE FENCES AWARD Section 12 (5) of the Line Fences Act c.L.17 provides that "the Clerk, upon application in- writing by the owner entitled to receive amounts certified in an award pursuant to the Act and have the total amount certified placed upon the Collector's Roll and the amount may be collected in the same manner as taxes, together with interest thereon accruing from the, date the application was made at the same rate as interest added by the municipality under Section 419 of the Municipal Act to taxes due and unpaid and is until so collected or otherwise paid a charge upon the land liable for payment thereof when collected shall forthwith be paid over the owner entitled thereto." (Emphasis added) Although interest is to be added to the award at the same rate as added to tax arrears under subsection 419(1), in our opinion the interest may not be compounded; nor may any other penalty be imposed. You will note that although subsection 12(5)b of the Line Fences Act specifically states that the certified amount placed on the Collector's Roll may be collected in the same manner as taxes, it does not deem such amount to be municipal taxes. From a legal standpoint, this is very significant. In contrast to subsection 12(5) of the Line Fences Act, subsection 30(1) of the Public Utilities Act R.S.O. 1990 c. P.52 provides that "the amount payable to a municipal corporation or to a public utility or Hydro-Electric Commission of a municipality by the owner or occupant of any lands for the public utilities supplied to him for use thereon is a lien and charge upon the estate or interest in such land of the person by whom the amount is due ... and in the case of an amount payable by the owner of the lands the amount is a lien -and charge upon the lands in the same manner and to the same extent as municipal taxes upon the lands." (Emphasis added) In the case of the supply of a public utility, the amount payable by the owner of land not only is prescribed to be a lien and charge upon the lands but also is prescribed to be a lien and charge upon them "in the'same manner and to the same extent as municipal taxes upon the land". This language is quite different from that of subsection 12(5) of the Line Fences Act referred to above. In interpreting subsection 30(1) of the Public Utilities Act, in Re Victoria & Grey Trustco et al and City of North BaX, 1984 (44) O.R. (2d), 795, J. Holland J. of the of the Ontario Supreme Court decided that the lien or charge of the public utility for a utility service supplied to the owner-mortgagor of the lands did not affect the interest of the mortgagee in the lands whose mortgage had been made and registered against title before the service in question was supplied by the public utility. Accordingly, on default occurring in the payment of the mortgage debt, he held that the mortgagee could sell under power of sale to a purchaser who would have no liability whatsoever to pay for the utility service that had been provided to the previous owner-mortgagor of the lands. In J. Holland J.'s opinion, the creation of a lien or charge on the lands for the payment of the supply of public utilities 1 X08 Shibley Righton 3 upon the lands by subsection 30(1) of the Public Utilities Act, did not have the effect in law of converting the unpaid utility fee into municipal taxes. In a subsequent case which also involved the priority of a mortgagee selling under power of sale over a public utility which had supplied a service to the previous owner-mortgagee of the lands upon the lands, Potts J. also of the Ontario Supreme Court in Re Canada Mortgage & Housing Corp. and the City of Kitchener, (1985) 50 O.R. (2d), 49 noted that since the service had been supplied to the owner, subsection 30(1) of the Public Utilities Act triggered a lien and charge for the unpaid service upon the lands "in the same manner and to the same extent as municipal taxes." Where there is a default in the payment of municipal taxes, the lien and charge of the municipality have priority over all other persons interested in the lands except the Crown. A lien or charge for unpaid municipal taxes has priority over a mortgagee whose mortgage is otherwise prior in time of making and time of registration to the default in payment of the municipal taxes. A purchaser from a mortgagee who has exercised a power of sale following default in the payment of the mortgage debt, is in no better position than the mortgagee. The purchaser is subject to the prior lien or charge of the municipality for unpaid municipal taxes. In Potts J.'s opinion, subsection 30(1) of the Public Utilities Act in effect provides for the public utility to have priority for the unpaid service where it has been supplied to the owner upon the lands in question to the same extent as a municipality has priority for unpaid taxes. Although Potts J.'s view is diametrically opposed to that of J. Holland J. referred to above and on the facts of the North Bay and the CMHC cases may be its preferable view, in our opinion if the interpretation of subsection 12(5) of the Line Fences Act was put to a Court for a decision, it likely would conclude as J. Holland J. did in construing subsection 30(1) of the Public Utilities Act that the former subsection does not convert an award under the Line Fences Act when placed on the Collector's Roll into municipal taxes. We note that subsection 12(5) of the Line Fences Act does not constitute the amount certified and placed on the Collector's Roll to be a lien and charge upon the lands in the same manner and to the same extent as municipal taxes upon them. Subsection 399 (10) of the Municipal Act R.S.O. 1990 c. M.45 states that "where a by-law is passed pursuant to Section 399 (1) permitting payment of taxes by installment, then the Treasurer or Collector of taxes shall credit any payments received on account of taxes first against the installment first due and secondly against the installment next due and so on until the whole of the remainder of the payment has been credited against such taxes". As is noted below under Section 166 of the Municipal Act, taxes are due on January 1 of each year, although the by-law making the levy ordinarily will be passed on a later date. Nevertheless, the taxpayer is not liable for the payment of the taxes as a debt until the by- law making the levy is ultimately passed by the municipal council. Section 412 of the Municipal Act states that "the Treasurer of every municipality shall collect the arrears of taxes outstanding...and may receive part payment of taxes returned to the Treasurer as in arrears upon any land for any year and shall credit such payment first � ) U �� i Shibley Righton 4 on account of the interest and percentage charges, if any, added to such taxes and shall credit the remainder of such payment against that part of the taxes that has been in arrears for the greatest period of time". Payment is defined in Black's Law Dictionary as "the performance of a duty, promise or obligation, or discharge of a debt or liability, by the delivery of money or other value by a debtor to a creditor, where the money or other valuable thing is tendered and accepted as extinguishing debt or obligation in whole or in part". We understand that the owner entitled to receive the amount awarded under the Line Fences Act had applied to have the amount certified payable by her neighbour added to the Collector's Roll and this was done. However, at no time to date have payments made by the neighbour exceeded the amount required to pay the municipal taxes due in the year in which payment was made. In our opinion, the fact that the amount of the award is not paid by the end of a taxation year does not have the effect of elevating the priority of the award over the amount levied for municipal taxes in the next or any'subsequent year. The municipal taxes become due at the commencement of each calendar year despite the fact that the by-law levying them is not passed until a subsequent date (see section 166 of the Municipal Act). If in any year a surplus of money over and above that required to be paid on account of municipal taxes has been collected by the Collector, subsection 12(5) of the Line Fences Act requires it to be paid to the owner entitled to either in satisfaction or partial satisfaction of the award made under the Act. As will be seen, this point is important in determining whether money that has been collected should be applied in respect of the award under the Lines Fences Act. We understand that at no time has the neighbour purported to earmark any part of any payment to satisfy the obligation to pay the amount certified as payable under the Line Fences Act and placed on the Collector's Roll. Therefore in this letter it is not necessary to address the question whether a purported earmarking by a payer of a payment to discharge a liability under the Line Fences Act would bind the Collector and the Treasurer in circumstances where the money collected is less than the aggregate amount required to pay the municipal taxes and the amount certified as payroll under the Line Fences Act. With respect to the issue of priority of application of money that has been collected, in our opinion, Sections 399 and 412 of the Municipal Act are mandatory in their requirement that the payments received by the Collector be applied in the following order of priority: i) penalties and interest on taxes; ii) earliest arrears of taxes; iii) first installment of taxes due; iv) next installment of taxes due (up to and including the final installment); I i � �; i0 S hibley Righton 5 v) interest on amount of Line Fences award from application to have amount of award placed on Collector's Roll; and vi) principal of amount of Line Fences award placed on Collector's Roll. CAN A MUNICIPALITY REGISTER A LIEN IN RESPECT OF THE CHARGE UPON LAND REFERRED TO IN SECTION CHARGE 12 (5) AND 18 (2) OF THE LINE FENCES ACT?: Contrary to the advice provided by the Ministry of Town Affairs, the Municipality can register notice of the award on title. Pursuant to Section 15 of the Line Fences Act, the award and the certificate made in respect of the award may be registered in the proper Land Registry Office and, when registered, are charges upon the land affected by them. Registration may be effected by registration of a duplicate of the award or certificate or a copy thereof verified by an Affidavit together with an Affidavit of the execution of the award or the certificate. It would be necessary to conduct a search of title to verify the legal description of the charged lands in order to prepare the document for registration. The Ministry is correct in advising you that as a matter of law the amount of the award pursuant to the Line Fences Act cannot be included in the "cancellation price" of a tax arrears certificate registered pursuant to the Municipal Tax Sales Act. Only arrears of real property taxes levied under the Municipal Act, the Education Act and the Ontario Unconditional Grants Act and any amounts owed under the Local Improvement Act the Draina e Act, the Tile Drainage Act, and the Shoreline Property Assistance Act with respect to any real property may be included in any such tax arrears certificate. CAN THE TOWN PUT FENCE VIEWING FEES THAT OUTSTANDING FROM 1991 ON THE TAX COLLECTOR'S ROLL?: There appears to be no limitation in Section 12 (5) of the Line Fences Act as to when a land owner may apply to the Clerk of the local municipality to have the amount certified in the award placed upon the Collector's Roll. CAN THE TOWN CHARGE THE OUTSTANDING FENCE VIEWING FEES VIA THE TAX COLLECTOR'S ROLL TO NEW OWNERS OF THE PROPERTY HAS BEEN SOLD SINCE THE FENCE VIEWING TOOK PLACE?: If the Clerk has received i) a Certificate prepared by the fence viewers in accordance with the Line Fences Act certifying default of the adjoining owner in the amount payable by the adjoining owner and ii) an application in writing by the owner entitled to receive the amount certified, then such amount must be placed on the Collector's Roll. The charge created by such action is upon the land and not restricted to a charge upon the interest of i Shibley Righton 6 the defaulting owner. Accordingly, a new owner may be subject to such award notwithstanding that the new owner had not received notice of the award. It does not appear to be common practice for solicitors acting on behalf of purchasers of real property to make inquiries respecting notification to the Clerk that an owner desires fence viewers to view and arbitrate or whether an award has been made or may be pending pursuant to the Line Fences Act. It may therefore be prudent to register the award and the certificate made in respect of the award pursuant to Section 15 of the Line Fences Act in order to provide notice to potential purchasers. Alternatively, a notation could be put on any tax certificate requested pursuant to Section 398 of the Municipal Act that an application has been made to the Clerk or that an award has been made by the fence viewers. Solicitors acting on a purchase transaction are required to obtain a tax certificate in accordance with the Law Society Practice Guidelines. WHEN THE FENCE VIEWING FEES ARE PLACED ON THE TAX COLLECTOR'S ROLL, WHEN DOES THE INTEREST START ACCUMULATING?: In accordance with Section 12 (5) of the Line Fences Act, interest accrues from the date the application was made by the owner entitled to the award to have the amount certified placed on the Collector's Roll. COLLECTION OF AWARDS THROUGH THE SMALL CLAIMS COURT: Section 12 (9) of the Line Fences Act states that "instead of having the amount certified placed upon the Collector's Roll or instead of applying for that amount or a portion thereof under a by-law passed under subsection 6, the owner entitled to receive the amount may file a copy of the Certificate and of the award with the Clerk of the Small Claims Court and such award may be enforced in the same manner as a judgment in Small Claims Court". It appears that the owner entitled to the award must make an election and cannot pursue both an application to the Clerk pursuant to subsections 12 (5) and (6) and filing the award with the Clerk of the Small Claims Court. Yours very truly, 1 � .3` SHI EY RIGHTON (A DH dh Dennis Hefferon cc: Mrs. P. Barrie ' b Mr. L. Kotseff