COURT FILE NO.: DC-05-077927-00
DATE: 20060406
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Wismer Markham Developments Inc.
Mr. R. Macklin, for the Landlord (Respondent in Appeal/Moving Party)
Landlord (Respondent in Appeal/Moving Party)
- and -
R. Cameron MacDonald
Mr. D. Strashin, for the Tenant (Appellant/Responding Party)
Tenant (Appellant/Responding Party)
HEARD: February 16, 2006
REASONS FOR DECISION
Fuerst J.
Introduction
[1] Cameron MacDonald (“the Tenant”) rents a house from Wismer Markham Developments Inc. (“the Landlord”). He has been a tenant at the property for several years.
[2] In November 2005 after protracted proceedings before the Ontario Rental Housing Tribunal (“the Tribunal”), Mr. MacDonald consented to an order terminating his tenancy and evicting him. Within a matter of weeks, however, he launched an appeal of the order to the Divisional Court.
[3] The issues on this motion by the Landlord are whether the appeal should be quashed and the automatic stay of the eviction order lifted, or in the alternative whether the Tenant should be ordered to pay interim rent until the disposition of the appeal, and to post security for costs.
The History
[4] Mr. MacDonald became the tenant of a house at 9506 Highway 48 in Markham, on April 1, 1998. The tenancy is month-to month. He agreed to pay rent of $1200 per month on the first day of each month.
[5] The Landlord is a land developer involved in construction projects in Markham.
[6] The house is on land being developed into subdivisions in accordance with an Official Plan.
[7] The Official Plan designates the site on which the house is located for commercial use. The Landlord wishes to use the house as a construction site office, rather than a residence.
[8] On December 13, 2004, the Landlord gave Mr. MacDonald written notice that his tenancy would end on April 30, 2005. The specified ground was that the property was being converted to a use other than residential, in that the Landlord needed it for a construction site office. The notice stated, “No permits or other authorizations are necessary in this case to convert the rental unit or complex to a non-residential use or to demolish it”.
[9] The Landlord sought and obtained an order from the Tribunal terminating the tenancy as of April 30, 2005. The order was granted on January 28, 2005.
[10] On March 3, 2005, Mr. MacDonald requested a review hearing. He obtained a stay of the Tribunal’s order.
[11] The review hearing was scheduled for March 24, 2005. On that date Mr. MacDonald, who was represented by a paralegal, and the Landlord reached a mediated settlement. The settlement provided for an abatement of rent, grading of the property by the Landlord, and extension of the termination date of the tenancy to August 31, 2005.
[12] The Landlord performed all of its obligations. Mr. MacDonald, however, refused to vacate the property on the specified date.
[13] The Landlord applied to the Tribunal for an order terminating the tenancy because of Mr. MacDonald’s failure to comply with the terms of the mediated settlement. On September 14, 2005, the Tribunal granted the application. It ordered Mr. MacDonald to leave by September 25, 2005.
[14] In response, Mr. MacDonald commenced a multiplicity of proceedings before the Tribunal. He moved to set aside the eviction order, sought to re-open the Landlord’s original application, brought a “T2” application seeking $6500 for alleged interference with tenant’s rights, and made a “T6” application seeking $5100 for alleged deficiencies in maintenance.
[15] On September 19, 2005, the Tribunal issued an interim stay of the eviction order, pending resolution of the new proceedings brought by Mr. MacDonald.
[16] When the issues came on for hearing by the Tribunal on November 8, 2005, Mr. MacDonald was represented by a paralegal. The parties again opted for mediation. Mr. MacDonald was present, and participated personally in the process.
[17] The parties reached agreement that the previous eviction order be set aside, the tenancy be terminated with Mr. MacDonald required to vacate by December 5, 2005, rent be abated until termination, and interest be paid on any rent owing after the end of November. Mr. MacDonald was present with his representative when the parties jointly asked the adjudicator to make an order in accordance with the mediated settlement, on consent. Mr. MacDonald personally confirmed that the consent order resolved everything between the parties. He even discussed delivering the keys to the Landlord’s representative.
[18] The Tribunal issued a consent order in the same terms as proposed by the parties, on November 15, 2005.
[19] Mr. MacDonald did not pay the rent required by the consent order, nor did he vacate the property. On November 21, 2005, he apparently wrote to the Town of Markham and requested information about the status of development approvals for the property. He also applied to the Tribunal for a review of the consent order. He argued that the Tribunal had failed to satisfy itself that the Landlord had obtained all necessary permits to carry out the conversion of the property, as the Tribunal is required to do by statute before it orders a tenancy terminated.
[20] The Tribunal denied Mr. MacDonald’s request on November 29, 2005, on the ground that the basis for the termination was the consent of the parties, which may override the statute by its own terms.[^1]
[21] On December 1, 2005, Mr. MacDonald launched an appeal of the consent order, to the Divisional Court. Under rule 63.01(3) of the Rules of Civil Procedure, the eviction order is automatically stayed until the disposition of the appeal.
The Motion by the Landlord
[22] The Landlord moves for an order quashing the Tenant’s appeal and lifting the automatic stay of eviction pending appeal, or in the alternative, an order requiring that rent be paid pending the disposition of the appeal, and that Mr. MacDonald post security for costs.
[23] As of the date the motion was argued, Mr. MacDonald had paid no rent whatsoever since May 2005. Nonetheless he continued to occupy the property.
The Positions of the Parties
[24] On behalf of the Landlord, Mr. Macklin submits that the appeal should be quashed because it has no merit, and the stay of the eviction order lifted. He argues that Mr. MacDonald is manipulating the process. He is appealing an order made with his own consent, in proceedings in which he was represented by a paralegal, and participated personally. He showed no respect for previous orders, including another made with his agreement. He has refused to vacate the property, or to pay rent. He has been able to live rent-free since May 2005, by abusing the system. His appeal is simply another stratagem to delay. There is no basis in law for an appeal of a consent order. Mr. MacDonald has not provided any evidence that his consent was uninformed. The proceedings that resulted in the order did not involve procedural unfairness or a lack of natural justice.
[25] Mr. Macklin submits that in the alternative, Mr. MacDonald should be required to pay all rent owing since December 1, 2005, and all future rent as it comes due until disposition of the appeal. He also asks for an order requiring Mr. MacDonald to post security for costs. He argues that in the event of default, the Landlord should be permitted to move ex parte to quash the Tenant’s appeal.
[26] On behalf of Mr. MacDonald, Mr. Strashin submits that quashing an appeal is an extraordinary remedy. It usurps the role of a full panel of the Divisional Court, and deprives the appellant of relief. In this case, there are real issues for consideration on the appeal. There is at least an issue whether the Landlord’s Notice of Termination is valid. By statute, the Tribunal shall not order a tenancy terminated where the Landlord requires possession of the rental unit for conversion to a use other than residential, unless the Landlord has obtained all necessary permits. On that point, there is a discrepancy between the Landlord’s assertion in the written notice that no permits are necessary, and a letter obtained by Mr. MacDonald from the Town of Markham. Any consent given by Mr. MacDonald was based on non-information or a lack of accurate information from the Landlord. Mr. Strashin submits that the appeal should not be quashed nor the stay of the eviction order lifted.
[27] He does agree that Mr. MacDonald should pay rent from December 2005 until the disposition of the appeal. He has no objection to the Landlord having a remedy in the event of default.
Issue #1: Should the Appeal Be Quashed and the Stay Lifted?
[28] A court to which an appeal is taken may quash the appeal under s. 134(3) of the Courts of Justice Act, R.S.O. 1990, c. C.43 “in a proper case”. This applies where the appeal is manifestly devoid of merit: Lesyork Holdings Ltd. v. Munden Acres Ltd. (1976), 1976 793 (ON CA), 13 O.R. (2d) 430 (Ont. C.A.).
[29] In Schmidt v. Toronto-Dominion Bank (1995), 1995 3502 (ON CA), 24 O.R. (3d) 1 the Ontario Court of Appeal held that this power should seldom be exercised. It is very difficult in most cases to reach the conclusion that an appeal is devoid of merit without hearing the entire appeal. The court pointed out that a motion to quash is not the proper forum for a de facto hearing of a full appeal.
[30] In Fok v. Clarke, an unreported decision of the Divisional Court on January 22, 2003, Blair J. cautioned that a motion to quash is not a screening procedure like a requirement for leave to appeal. He pointed out the danger that in quashing an appeal for lack of merit, a single judge of the Divisional Court can usurp the role of the full panel.
[31] Mr. Macklin on behalf of the Landlord concedes that quashing an appeal is a drastic remedy.
[32] I am suspicious that Mr. MacDonald’s appeal is nothing more than an artifice to prolong his rent-free stay at the property, to the Landlord’s detriment. The record of his dealings with the Landlord suggests that he used the Tribunal process to extend his tenancy and avoid eviction, while paying no rent for the better part of a year. I have considerable doubt that he launched this appeal for any purpose other than further delay.
[33] Abuse of the court process by a litigant, including the filing of an appeal as a stratagem to delay eviction, should not be condoned: Haley v. Morra, [2001] O.J. No. 134 (S.C.J.); Minto Yorkville Inc. v. Trattoria Fieramosca Inc., [1997] O.J. No. 5247 (Gen. Div.).
[34] I have considered Mr. MacDonald’s grounds of appeal. They include a contention that the Tribunal erred in failing to determine that his consent was voluntarily given, not under duress, and with proper representation, and so denied him procedural fairness and natural justice; and that it failed to canvass deficiencies in the Landlord’s application.
[35] One of the grounds of appeal relates to a letter dated December 5, 2005, to Mr. MacDonald from a representative of the Town of Markham, in response to his inquiry. It states that a change of use permit would be required for interior alterations or renovations to the house in order for it to be converted for office uses.[^2] Mr. MacDonald contends that this is contrary to the Landlord’s assertion in the Notice of Termination delivered to him.
[36] I have not heard full argument of any of the grounds of appeal. After reviewing the materials filed and the submissions made on the motion, I am unable to come to a definite conclusion that no aspect of the appeal has any merit. There is at least an argument about whether the Tenant’s consent to the order in the particular circumstances of this case absolved the Tribunal of the need to comply with the statute and satisfy itself that all necessary permits were in place.
[37] The Landlord’s request to quash the appeal and lift the stay of the eviction order go hand in hand. If the appeal is not quashed, it makes little sense to lift the stay.
[38] I decline to quash the appeal or to lift the automatic stay of the eviction order.
Issue #2: Should Mr. MacDonald be Ordered to Pay Interim Rent?
[39] Section 134(2) of the Courts of Justice Act provides that a court to which an appeal is taken may make any interim order that is considered just to prevent prejudice to a party pending the appeal.
[40] It is undisputed that Mr. MacDonald has lived in the house without paying any rent since May 2005. It appears that he has been quite content to enjoy a parasitic existence at the Landlord’s expense. In particular, he has paid no rent since December 5, 2005, the most recent date by which he failed to vacate the property. He failed to provide his counsel with a cheque for rent owing to the Landlord as of the motion date, as might be expected of a tenant acting in good faith.
[41] There is abundant authority that where a tenant continues to occupy the rented premises pending the hearing of an appeal in a landlord and tenant case, it is appropriate to require the continued payment of rent: see, for example, 797 Don Mills Ltd. v. NN Life Insurance Co. of Canada, [1996] O.J. No. 723 (C.A.); Numbert Investments Ltd. v. Jordan, [2000] O.J. No. 3878 (S.C.J.).
[42] In oral argument, Mr. Strashin on behalf of Mr. MacDonald conceded that his client should be paying rent. There is no justification for Mr. MacDonald to live rent-free while continuing to tenant the house.
[43] This is an appropriate case in which to require the payment of rent pending the disposition of the appeal, for any period for which Mr. MacDonald remains in possession of the property. This includes rent from December 1, 2005, up to and including April 1, 2006. It also includes future rent from May 1, 2006, until the disposition of the appeal.
[44] It also is appropriate to provide the Landlord with a remedy in the event of default by the Tenant.
Issue #3: Should Mr. MacDonald be Ordered to Pay Security for Costs?
[45] Rule 61.06(1) of the Rules of Civil Procedure provides that security for costs may be ordered where there is good reason to believe that the appeal is frivolous and vexatious and that the appellant has insufficient assets in Ontario to pay the costs of the appeal.
[46] I am not satisfied that the appeal is plainly devoid of merit, and accordingly frivolous and vexatious.
[47] I decline to order that Mr. MacDonald post security for costs.
Conclusion
[48] The request that the appeal be quashed and the stay of the eviction order be lifted, as well as the alternative request that Mr. MacDonald post security for costs is denied.
[49] The request that the Tenant pay interim rent is granted. I order that Mr. MacDonald pay rent to the Landlord of $1200 per month, calculated from December 1, 2005, until the disposition of the appeal. The rent is payable as follows:
The total rent due and payable on December 1, 2005, January 1, 2006, February 1, 2006, March 1, 2006, and April 1, 2006, that remains unpaid shall be paid to and received by the Landlord on or before April 21, 2006. It shall be paid by certified cheque, money order, or a cheque drawn on a lawyer’s trust account; and
From May 1, 2006, until the disposition of the appeal monthly rent shall be paid to and received by the Landlord on the first day of each month. It shall be paid by certified cheque, money order, or a cheque drawn on a lawyer’s trust account.
[50] I further order that this appeal be perfected by June 1, 2006, and that it be listed to be heard during the fall sittings of the Divisional Court in Newmarket.
[51] In the event that the Tenant fails to abide by any aspect of this order, the Landlord may move ex parte without further notice to him, before a judge of the court to have the appeal quashed and the stay of the eviction order lifted.
[52] If the parties are unable to agree on costs, they may make written submissions to me. The Landlord shall serve and file its submissions no later than April 19, 2006, and the Tenant no later than April 28, 2006.
Justice M. Fuerst
Released: April 6, 2006
[^1]: Tenant Protection Act, 1997, S.O. 1997, c. 24, s. 181(2)
[^2]: Mr. Strashin, counsel for Mr. MacDonald, included the letter in the materials filed on this motion. Mr. Macklin, counsel for the Landlord, objected to the letter as evidence improperly filed, because it was not presented as an exhibit to an affidavit. Mr. Strashin explained that he was unable to obtain an affidavit in time for the motion, because of the hospitalization of Mr. MacDonald. In these circumstances, I accept that the letter exists and take its contents at face value, even though there is no accompanying affidavit.