COURT FILE NO.: DC-05004846-00

DATE: 20060605

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

CARNWATH, MATLOW & JENNINGS JJ.

B E T W E E N:

ROBERT PUTNAM, RAY & NAN MILLARD, BELWOOD LAKE COTTAGERS’ ASSOCIATION INC. AND CONESTOGO LAKE COTTAGERS’ ASSOCIATION Applicants (Respondents on Appeal)

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GRAND RIVER CONSERVATION AUTHORITY Respondent (Appellant)

Robert G. Doumani, for the Applicants (Respondents on Appeal)

Heath P.L. Whiteley, for the Respondent (Appellant)

HEARD at Brampton: January 17, 2006

THE COURT:

1Grand River Conservation Authority (“the Landlord”) appeals from an order of the Ontario Rental Housing Tribunal (“the Tribunal”) dated April 1, 2005. The Tribunal ordered that the Tenant Protection Act, 1997, S.O. 1997 c. 24 (“the TPA”) applies to the tenancy between the respondents on appeal (“the Tenants”) and the Landlord.

2There are three issues to be decided on this appeal:

1. Is the appeal with reference to s. 3(a) of the TPA on a question of law alone?

2. Was the Tribunal correct in its interpretation of ss. 3(a) of the TPA? and,

3. Did the terms of a mediated settlement between the parties bar a finding that the TPA applies to the tenancies?

BACKGROUND

3The Landlord owns certain lands totalling approximately 3,800 acres, being the Belwood Lake Conservation Area, and certain lands totalling 5,800 acres, being the Conestogo Lake Conservation Area, which lands the Landlord acquired for the prime purpose of the development and operation of two flood-control and water-supply reservoirs.

4The reservoir at the Belwood Lake Conservation Area covers approximately 1,900 acres and is known as Belwood Lake. Belwood Lake was formed by the construction of the Shand Dam in the 1940’s.

5The reservoir at the Conestogo Lake Conservation Area covers approximately 1,800 acres and is known as Conestogo Lake. Conestogo Lake was formed by the construction of the Conestogo Dam in the 1950’s.

6In response to public demand, the Landlord designated certain areas along the shoreline of Belwood Lake in the 1940’s and along the shoreline of Conestogo Lake in the 1950’s for seasonal or temporary cottage lot use. At present, the Cottage Lot Program consists of 335 cottage lots at Belwood Lake and 398 cottage lots at Conestogo Lake leased to tenants.

7In furtherance of the cottage lot program, the Landlord constructed seasonal roads to the cottage lots, which are not maintained, ploughed or salted by the Landlord during the months from November to April, inclusive.

8Robert Putnam is a tenant of a lot at Belwood Lake. The applicants, Ray and Nan Millard are tenants of a lot at Conestogo Lake.

9Certain of the tenants at Belwood Lake are members of the respondent, Belwood Lake Cottagers’ Association Inc. (“BLCA”). Certain of the tenants at Conestogo Lake are members of the respondent, Conestogo Lake Cottagers’ Association (“CLCA”).

10The standard form of lease between the Landlord and the Tenants under the cottage lot program covering the term from August 1, 1999 to July 31, 2004 (“the Lease”) states, among other things, the following:

3. Term: To have and to hold the Demised Premises for a term of (5) years during the months of May, June, July, August, September and October only in each lease year (the “Term”), which, unless sooner terminated pursuant to the terms hereof, shall commence on the 1st day of August, 1999 and shall expire on July 31, 2004. The Tenant acknowledges that he is specifically prohibited from occupying the Demised Premises during the months of November, December, January, February, March and April.

4. Use: The Tenant shall occupy the Demised Premises on a seasonal and temporary basis during the Term and any renewals thereof for the purpose of personal recreational use only and for no other purpose. The Tenant agrees not to carry on upon the Premises any activity that may be deemed a nuisance.

5. General

c. Application of Law: This lease shall be governed in accordance with the Commercial Tenancies Act, R.S.O. 1990, Chapter L.7, but shall not create a residential tenancy as therein defined and shall not be subject to the Tenant Protection Act, S.O. 1997, Chapter 24, nor shall the Residential Rent Regulation Act, 1986 S.O., Chapter 63 apply to the relationship herein created.

11In 1999, the members of the two cottage Associations had become concerned about their relations with the Landlord. Robert Putnam, on behalf of himself and over three hundred and thirty-five BLCA members, applied to the Tribunal for an order that the TPA applied to their leases. A similar application was brought by David and Susan Oates, for themselves and three hundred and ninety-eight CLCA members.

Both matters were mediated by Joel Chacha, a mediator appointed pursuant to r. 11 of the ORHT Rules of Practice. A settlement was confirmed on February 9, 2000. The settlement called for an amendment to the original Lease, plus a licencing agreement available to the Tenants to permit winter occupation of their units on certain conditions.

12The lease amending agreement provides, in part, as follows:

RENEWAL: Provided that the Tenant has fully performed all obligations under the Lease and obeyed and carried out all of the terms and covenants hereunder, the Tenant shall have the option to renew the term of this Lease for a further term of five (5) years from the 1st day of August, 2004 to the 31st day of July, 2009 during the months of May, June, July, August, September and October only in each lease year, based on the same terms and conditions as contained herein, except for Rent and Service Fees which shall be determined by…

13The license agreement provides, in part, as follows:

The Licensee shall be permitted to occupy the premises for not more than 10 days per month, during the months of December, January, February and March and not more than 15 days in the months of November and April (collectively, the “Winter Months”)…

14To ensure compliance with the occupancy restrictions imposed by the Lease and the License Agreement, the Landlord monitors the cottage lot lands during the winter months.

15The zoning for the Belwood cottage lot lands is “Resort Residential” and permits one cottage on each cottage lot. In the zoning by-law, cottage is defined as “a dwelling constructed for use as a secondary place of residence for seasonal vacations and recreational purposes and not as a principal residence of the owner or occupant thereof”.

16The zoning for the Conestogo cottage lot lands is “P3” and permits seasonal dwelling units for recreational uses. In the zoning by-law, a “seasonal dwelling” is defined as “a building or structure intended for seasonal occupancy and not year round use and shall include a cottage, but not a mobile home, and shall require the approval of the GRCA”.

17In February of 2000, 306 of the cottage lot tenants at Belwood Lake (approximately 91%) and 378 of the cottage lot tenants at Conestogo Lake (approximately 93%) entered into the Mediated Settlement, through legal counsel, with the Landlord in connection with the 1999 Applications.

18Pursuant to the amended Leases, the rent for the renewal term (August 1, 2004 – July 31, 2009) would be determined by two accredited Appraisal Institute of Canada members (“AAIC”). Each side was to choose one. Dissatisfied with the appraisal process, the Tenants of both the BLCA and CLCA commenced new applications to the Tribunal in form A-1, again seeking an order declaring the Leases subject to the TPA.

19The Tribunal made the following findings in its order issued April 1, 2005:

(a) There was no evidence that was controversial. There appeared to be little in dispute concerning the evidence presented by all parties;

(b) These homes would be characterized today as ‘year-round’ cottages, many with basements, and most with furnaces for winter heating (or electric heating combined with extensive fireplaces);

(c) Although the leases began with strict seasonal requirements, and indicated to the parties signing that the lease was for land upon which was to be built “temporary residences”, they have evolved over the years;

(d) If, however, one decided to sign for, and pay for, all available access each of the winter months, one could have access to one’s property 264 days in the year. This constraint allows the Conservation Authority, certainly, to underline its compliance with the local municipal by-laws that created zoning for the area as ‘seasonal and recreational use’;

(e) The likelihood of there being any day in any given year without some resident of the cottage community being present is low;

(f) Just as the facts of these Applications do not appear to be controversial, so do the submissions of counsel appear to be similar;

(g) Each of the properties is a permanent structure, used as a ‘residential premise’. There is no requirement in the definition of a land lease home that it be a ‘permanent residence’;

(h) …they are so used and can be so used on any day of the year which the owner chooses’;

(i) Most applicants have a primary residence elsewhere and ‘go to the cottage’ for various reasons. These reasons are not necessarily ‘seasonal’, however, as the cottages are winterized and available for use at any season of the year. In fact, the seasonal use is during all four seasons, and the facilities such as the snowmobilers clubhouse on Conestogo Lake underlines that the owners want to use, and do use, their properties during all seasons of the year; and,

(j) …but those residences are not part of a ‘cottage or cabin establishment’ that is analogous to a hotel, a motel, an inn, a ‘bed and breakfast’ or a campground or trailer park.

ANALYSIS

20At the conclusion of the hearing on January 17, 2006, we told counsel that our answer to Question 1 was “Yes” and our answer to Question 2 was “Yes”, with reasons to follow. We reserved our decision on Question 3.

The Standard of Review

21Both parties submit and we agree that the standard of review on an appeal from a decision of the Tribunal is correctness.

1. Is the Appeal with reference to s. 3(a) of the TPA on a question of law alone?

22An appeal lies to the Divisional Court from a decision of the Tribunal, pursuant to s. 196(1) of the TPA, on a question of law alone.

23The respondent submits the appeal involves a question of mixed law and fact, and not a question of law alone. We reject this submission. The Tribunal noted on two occasions that “the facts of these applications do not appear to be controversial”. While there was no agreed statement of facts as such, neither was it necessary for the Tribunal to make findings of fact after hearing competing submissions on what those facts were. We conclude the appeal is on a question of law alone.

2. Was the Tribunal correct in its interpretation of ss. 3(a) of the TPA?

24The Landlord submitted to the Tribunal that the lots rented to the Tenants fall within the exceptions of s. 3(a) of the TPA, which reads as follows:

3.(a) This Act does not apply with respect to,

(a) living accommodation intended to be provided to the travelling or vacationing public or occupied for a seasonal or temporary period in a hotel, motel or motor hotel, resort, lodge, tourist camp, cottage or cabin establishment, inn, campground, trailer park, tourist home, bed and breakfast vacation establishment or vacation home.

25The Tribunal’s analysis, which rejected the submission of the Landlord, is reported as follows:

The listing of places where this seasonal or temporary accommodation is to take place clearly is a listing of places, owned by private persons or businesses, which appeal to the general public as vacation spots or places to stay when one is away from home. They represent accommodation for travellers, for vacationers, for anyone who needs temporary accommodation provided by someone other than themselves.

The Tribunal accepts that the phrase ‘in a … cottage or cabin establishment’ in Section 3(a) should be interpreted to mean that the grouping of cottages or cabins (the establishment) available as seasonal or temporary accommodation is analogous to the rooms in a hotel or a motel, or the rooms in a ‘bed and breakfast’ or in an inn, or the sites at a campground or in a trailer park, available as living accommodation to be occupied for a seasonal or temporary period. To interpret otherwise would be to ‘hive off’ this particular phrase from the listing in Section 3(a) and give it a completely different interpretation from the other words and phrases in the listing.

The Tribunal’s interpretation of section 3(a) of the Act is an interpretation based upon the listing of the areas of ‘living accommodation … occupied for a seasonal or temporary period’. That list contains only areas of accommodation that are owned or managed by a person or business offering the accommodation service.

To interpret ‘cottage or cabin establishment’ as something different from the other portions of the list is not an acceptable interpretation, nor logical. The plain reading of the list demands that this phrase be given an interpretation which makes it a part of the list, as opposed to one which makes it diametrically different from the other words and phrases in the listing.

Therefore, one is left with an exemption for living accommodation occupied as a temporary or seasonal residence only if that residence is part of the named and listed types of accommodation.

In this case, the Applicants clearly are temporary residents, occupying their living accommodation from time-to-time, but those residences are not part of a ‘cottage or cabin establishment’ that is analogous to a hotel, a motel, an inn, a ‘bed and breakfast’, or a campground or trailer park.

26We agree with the Tribunal’s analysis of s. 3(a) and find it to be correct in law.

3. Did the terms of a mediated settlement between the parties bar a finding that the TPA applies to the tenancies?

27Earlier in these reasons, we noted that s. 27 (c) of the lease agreement made August 1, 1999, provided, in part:

This lease shall not be subject to the Tenant Protection Act, S.O. 1997, Chapter 24…

28Section 2(1) of the TPA provides, as follows:

2. (1) This Act applies with respect to rental units and residential complexes, despite any other Act and despite any agreement or waiver to the contrary. [emphasis added]

29Except as permitted by s. 181 of the TPA, discussed below, a landlord and tenant cannot contract out of the TPA. The courts have prohibited contracting out even if it is for the benefit of the tenant. (Crown Trust Co. v. Rosenberg, [1986] O.J. No. 2683 (H.C.J.) at para. 18; Pallagrosi v. Hrynyk, [1994] O.J. No. 2683 (Gen. Div.) at paras. 15-17)

30In our view, that portion of s. 27(3) of the lease set out above was of no effect when the lease was signed.

31However, section 181 of the TPA provides, in part, as follows:

(1) The Tribunal may attempt to mediate a settlement of any matter that is the subject of an application if the parties consent to the mediation;

(2) Despite ss. 2(1) … a settlement mediated under this section may contain provisions that contravene any provision under this Act. [emphasis added]

32As noted above, in 2000, the Landlord and a majority of the Tenants mediated a settlement of matters that were the subject of applications brought before the Tribunal by Tenants of the two Associations. The applications sought a declaration that the TPA applied to the leases. As a result of the mediated settlement, the parties entered into lease-amending agreements and license agreements. The lease-amending agreement dealt with the specific issues settled in the mediation and then provided in s. 6 “in all other respects, the terms and conditions of the lease are hereby affirmed and shall remain unamended”.

33The appellant submits that s. 6 of the amending agreement confirms s. 27(c) of the lease, and therefore excludes the application of the TPA for the term of the lease-amending agreement which runs until 2009.

34We are unable to tell whether this issue was argued before the Tribunal. What is clear is that nowhere in its reasons does the Tribunal refer to such an argument.

35The final paragraph of the Tribunal’s decision reads:

Indeed, the ‘Mediated Agreement’ into which the Parties entered was negotiated under the auspices of the Act. That agreement, as so mediated, remains a contractual agreement between the Parties.

36This finding would suggest the argument based on s. 181(2) was not brought to the attention of the Tribunal or was overlooked by the Tribunal when it prepared its reasons.

DISPOSITION

37Under the circumstances, we all agree the third question should be remitted to the Tribunal pursuant to s. 196(4) of the TPA.

38It is our opinion we should have the benefit of the Tribunal’s views on the Landlord’s submission with respect to the effect of s. 181(2).

39It is our further opinion that whether the Tribunal wishes to receive further submissions or hear further evidence is a matter for the Tribunal to decide.

40Once having received the views of the Tribunal, we shall decide if the TPA applies to the leases. If we decide it does not, we have no jurisdiction to answer questions 1 and 2. However, our answers will remain available for appellate review should a higher court ultimately conclude the TPA does apply.

41Pursuant to s. 190(2), the Tribunal may order a party to an application to pay the costs of another party. It chose not to do so in its decision issued April 1, 2005.

42We remain seized of this matter. Costs of the hearing before us are reserved pending final disposition before us after we have received the benefit of the Tribunal’s views.

CARNWATH J.

MATLOW J.

JENNINGS J.

Released: 20060605

COURT FILE NO.: DC-05004846-00

DATE: 20060605

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

CARNWATH, MATLOW & JENNINGS JJ.

B E T W E E N:

ROBERT PUTNAM, RAY & NAN MILLARD, BELWOOD LAKE COTTAGERS’ ASSOCIATION INC. AND CONESTOGO LAKE COTTAGERS’ ASSOCIATION Applicants (Respondents on Appeal)

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GRAND RIVER CONSERVATION AUTHORITY Respondent (Appellant)