COURT FILE NO.: 833/01

DATE: 20030430

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

LANE, SOMERS AND GREER JJ.

B E T W E E N:

JOHN L. TABER, DEBBIE YAN, BILL AND KAREN GRICE, V. DE BREYNE AND L. JANOVSKY

Tenants (Respondents)

• and -

DOUBLESWEET INVESTMENTS

Landlord (Appellant)

Michael J. Reid, for the Tenants (Respondents)

Raymond H. Raphael, for the Landlord (Appellant)

HEARD: April 30, 2003

LANE J.: (Orally)

1This is an appeal from the order of the Ontario Rental Housing Tribunal, dated November 26, 2001, allowing the respondent/tenants certain abatements of rent.

2The tenants applied to the tribunal for an order reducing their rent because the facility of lockers had been discontinued by the landlord. The landlord argued that the lockers had been provided free of charge to the tenants and were not included with every unit. In fact, they had lockers for only about half of the units. The tenants argue that they had contracted specifically for the lockers, it was an important selling point and it was part of their rental agreement.

3The tribunal found the tenant's evidence more credible and further found that the landlord had little or no personal knowledge of how the lockers had actually been assigned. As a result, the tribunal concluded that the lockers were a service or facility that had been provided and subsequently discontinued.

4Ontario Regulation 194/98, s.30(2) reads as follows:

"If a service or facility is discontinued, the rent shall be reduced by an amount that is equal to what would be a reasonable charge for the service or facility based on the cost of the service or facility to the landlord or, if the cost cannot be determined or is there is no cost, on the value of the service or facility."

5The tribunal, exercising the jurisdiction given to it by the Regulation, directed the landlord to pay rent abatement in two parts. For the time prior to the hearing it directed a payment of $630.00 to those tenants with one locker and of $900.00 to one particular tenant who had two lockers. Ongoing monthly rent for those with one locker would be reduced by $70.00 and for the tenant with two lockers by $100.00.

6On the appeal the landlord sought leave to introduce fresh evidence to establish, among other points, that as of January 1, 2002, lockers have been made available to the tenants and therefore the landlord submitted the order for an abatement for rent should be set aside. This and other new evidence was admitted before us on consent. Accordingly, the decision of the tribunal must be reconsidered in the light of that new evidence.

7Turning for a moment to the basis of this appeal, s.196 of the Tenant Protection Act provides for an appeal by a party before the tribunal to this Court but only on a question of law. Our jurisdiction is set out by ss.4 and 5 of s.196:

4. "If an appeal is brought under this section the Divisional Court shall hear and determine the appeal and may:

(a) affirm, rescind, amend or replace the decision or order, or

(b) remit the matter to the tribunal with the opinion of the Divisional Court."

5. "The Divisional Court may also make any other order in relation to the matter that it considers proper and may make any order with respect to costs that it considers proper."

8Two issues of law have been put before us. The first is that the tribunal adopted the cost of commercial locker space as the test for determining the amount of the abatement. Ontario Regulation 194/98, s.30, already quoted, provides as the fall-back position, in the absence of evidence from the landlord as to the cost to it, an assessment of the abatement "on the value of the service or facility".

9The tribunal did not appear to recognize the difference between the statutory direction to establish the value of the facility versus the cost to the tenant to replace it. Conceptually the two are not the same. However, we are unable to give effect to this legal argument because the new evidence, like the former evidence, offers no alternative basis for this valuation. Accordingly, as we have no basis to reach a considered decision, the amount cannot be altered by us in a principled fashion. We do not give effect therefore to this ground of appeal.

10The second point of law arises from the impact of s.30(5) of the Regulation which reads as follows:

"If the discontinuance or reduction is temporary and its duration is reasonable, taking into account the effect on the tenant, there shall be no reduction of rent."

11The tribunal cannot be faulted for not considering this subsection in its original decision because there was no evidence before it to trigger its application. However, we do have evidence that the discontinuance was in fact temporary. It was not intended to be temporary but it was in fact temporary. The landlord replaced the facility with effect from January 1st, 2002. It was submitted that this could not be taken into account by us because it was not the landlord's intention originally. However, we have the evidence, not before the tribunal, that the discontinuance was in fact temporary. Had that evidence been before the tribunal it would have been obliged to consider and apply Regulation 194, s.30, ss.5. Applying the Regulation on the basis of the evidence now before us we conclude that the discontinuance of the facility was temporary and, considering the effect on the tenants, the abatement should have been co-extensive with the period ending January 1, 2002. This result is in line with the reasoning of the Divisional Court in a case involving different circumstances but a similar problem to be resolved. That case is Offredi v. 751768 Ontario Ltd. 1994 11006 (ON SCDC), [1994] O.J. No. 1204. At paragraph 10 the Divisional Court wrote:

"Looking at the matter from the purpose of the legislation, the deficiencies in the premises that gave rise to the complaints all took place in the past, and it was in respect of occupation of the premises in that past that the tenants had paid rent. It would seem to be reasonable that the reduction in rent, for that is all that the word "abatement" of rent means, should be applicable in respect of the period of time in which the deficiencies existed."

12In our view, that reasoning applies to the present case. What order should now be made? The abatement must be terminated, but in our view since the whole issue was generated by the landlord's failure in the first place to adduce evidence and by his subsequent changing of his position and replacing the facility, the fair solution is to terminate the abatement effective with the rent payable on May 1, 2003 and it is so ordered.

13The appeal book has been endorsed as follows: "This appeal is allowed for reasons delivered orally. As the matter arises entirely from decisions of the landlord and his change of position, we regard this as one of those unusual matters in which the unsuccessful respondents should nevertheless have costs which we fix at $2,500 inclusive."

LANE J.

SOMERS J.

GREER J.

Date of Reasons for Judgment: April 30, 2003

Date of Released: May 15, 2003

COURT FILE NO.: 833/01

DATE: 20030430

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT