COURT FILE NO.: 224/09
Date: 2009/11/26
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
CUNNINGHAM A.C.J.S.C.J., SWINTON AND R.J. SMITH JJ.
B E T W E E N:
PARKDALE RESIDENTS ASSOCIATION
Applicant
Brendan Van Niejenhuis for the Applicant
- and -
CITY OF TORONTO
Respondent
Mark Siboni / Christopher J. Henderson, for the Respondent
Heard at Toronto: October 7, 2009
REASONS FOR DECISION
R. Smith J.
Overview
[1] The Parkdale Residents Association (the “PRA”) seeks an order in the nature of mandamus, compelling the City of Toronto (the “City”) to prepare and serve a notice to the tenants of 29 residential complexes in the Parkdale area in accordance with section 131(4) of the Residential Tenants Act, 2006, S.O. 2006, c. 17 (“RTA”). The PRA also seeks a declaration that the City has failed to comply with its statutory duty under section 131 of the RTA and seeks to add Terence Williams as an applicant, nunc pro tunc.
[2] The City failed to give the required notice of a reduction in municipal property tax to the landlords and tenants of these residential complexes within the prescribed time period. Sections 131(3) and (4) of the RTA state that the City shall give notice within the prescribed time period, to the landlord and tenants advising them that the rent is reduced, the percentage reduction, the date the reduction takes effect, and of their right to apply to the Board for a reduction of rent. The notice must be given when there has been a substantial decrease (greater than 2.5%) in the municipal property taxes, which occurred in 2004, 2005 and 2006.
[3] The City submits that the court should not order it to give notices containing the exact information specified in section 131(4) because advising the current tenants that their rent is reduced, and specifying the percentage rent reduction and when it would take effect may be misleading. Section 136 of the RTA contains a one year limitation to apply for a rent reduction where excessive rents have been charged, which may prevent a current tenant from obtaining a rent reduction. In addition, the tenants may have moved during the last three or four years which may also prevent a current tenant from receiving a rent reduction.
[4] The City also submits that the declaration sought should not be granted if the mandamus order is not granted, as the declaration would not be connected to any practical remedy and would only be relevant to some other legal proceeding.
Issue #1 Should the City be ordered to send a notice to each current tenant of the 29 residential complexes in accordance with [section 131(4)](https://www.canlii.org/en/on/laws/stat/so-2006-c-17/latest/so-2006-c-17.html) of the [RTA](https://www.canlii.org/en/on/laws/stat/so-2006-c-17/latest/so-2006-c-17.html) after the prescribed time period has passed?
Background
[5] In the late 1990’s the City implemented the Parkdale Pilot Project (“PPP”) to deal with existing bachelorette and illegal rooming houses in the Parkdale area. The PPP required the landlords to bring the units into compliance with the building code and to meet the fire and safety standards. When this work was completed, the City would pass site specific zoning where required to legalize the existing use.
[6] The upgraded rooming houses were then reclassified from “multi-residential” to the “residential” class resulting in an average municipal tax reduction for the landlords of the units of approximately 66% of the previous property tax, which was a substantial benefit to the landlords who owned the 29 rooming houses in question.
[7] Pursuant to section 131(1) of the RTA, if municipal property tax for a residential complex is reduced by more than the prescribed percentage, the lawful rent for each rental unit is reduced in accordance with the prescribed rules. Pursuant to section 131(2), the rent reduction shall take effect on the date determined by the prescribed rules, whether or not notice has been given under s. 133(3).
[8] Subsection 131(3) requires the municipality to give notice of the rent reduction to landlords and tenants of residential complexes having at least seven units (as prescribed by O.Reg. 516/06, section 41(5)). The content of the notice is set out in section 131(4), which reads:
The notice shall be in writing in a form approved by the Board and shall,
(a) inform the tenants that their rent is reduced;
(b) set out the percentage by which their rent is reduced and the date the reduction takes effect;
(c) inform the tenants that if the rent is not reduced in accordance with the notice they may apply to the Board under section 135 for the return of money illegally collected; and
(d) advise the landlord and the tenants of their right to apply for an order under section 132
[9] The tenants in the 29 buildings that are the subject of this application were entitled to a reduction of rent, commencing at the beginning of the year immediately following the year in which the property tax reduction occurred. The rent reduction is calculated according to a formula which is a percentage of the reduction in property taxes under the RTA and its predecessor, the Tenant Protection Act, S.O. 1997, c. 24. The spreadsheet attached as Schedule “A” hereto sets out the amount of the tax reduction and the amount of rent reduction in percentages, for each of the 29 buildings involved in the PPP.
[10] The Schedule “A” spreadsheet also sets out when the conversion of each property was completed and when the rent reductions were to take effect, namely in the years 2005, 2006 and 2007.
[11] The City admits that it failed to give notice to the landlords and the tenants in accordance with sections 131(3) and (4) of the RTA or its predecessor within the prescribed time period. Section 41(6)(b) of O. Reg.516/06, states that the notices for tenants must be given between October 1st and December 15th of the year before the rental reductions were to occur. The notices under section 131(4) inform the tenants that their rent is reduced, the percentage by which the rent is reduced and the date the reduction takes effect, and also advise them that if their rent was not reduced by their landlord, they could apply to the Board for a return of money illegally collected.
[12] The failure to give the tenants the required notice of their rent reductions came to the City’s attention in late April of 2008 when Warren Sheffer (“Sheffer”), the Treasurer of the PRA, first raised a general concern about the lack of rent decreases for the tenants in units that were part of the PPP for the years 2005, 2006 and 2007.
[13] Sometime in July of 2008, the City provided Sheffer with a similar table to that attached as Schedule “A” listing the addresses of the properties that were part of the PPP, their roll numbers, the number of units, the year the property was reclassified, the percentage property tax decrease, and the corresponding percentage by which the tenants’ rent was reduced in the year in question.
[14] The PRA has continued to insist that the City send out the notices strictly in accordance with section 131(4) of the RTA even though the prescribed time period for giving notice has passed. The City has refused to send the notice in accordance with 131(4) but has sent an informational notice advising each tenant when the landlord’s property taxes were reduced and the percentage reduction of the property tax. The notice also states that the tenants may have a right to apply to the Board to vary their rent, and also provided the Board’s telephone number and suggests consulting a lawyer for advice.
Positions
[15] The applicants seek an order compelling the City to serve a notice to each current occupant of the 29 rooming houses in accordance with the requirements of section 131(4) of the RTA stating that their rent is reduced, specifying the percentage by which the rent is reduced, stating when the reduction is to take effect and informing the tenant of his or her right to apply to the Board for the return of the excessive rent collected.
[16] The City submits that giving the notice as prescribed by section 131(4) of the RTA four to five years late may be misleading and may be inaccurate because a one year limitation may apply which would prevent the tenants from obtaining any retroactive rent reduction. The one year limitation period has now passed for all rent reductions which occurred in 2005, 2006 and 2007 as a result of the property tax reduction.
[17] In addition, the City submits that the tenants of the units in the years that the rent was reduced may have moved, and the new tenants may not be entitled to any rent reduction. As a result, the City claims that it does not have knowledge of the “affected tenants”.
Analysis
[18] The four preconditions that must be met before granting an order in the nature of mandamus were set out in Karavos v. Toronto (City), 1947 326 (ON CA), [1948] 3 D.L.R. 294 (Ont. C.A.) at p. 297 and are as follows:
(1) "a clear, legal right to have the thing sought by it done, and done in the manner and by the person sought to be coerced." … (2) "The duty whose performance it is sought to coerce by mandamus must be actually due and incumbent upon the officer at the time of seeking the relief”, … (3) That duty must be purely ministerial in nature"plainly incumbent upon an officer by operation of law or by virtue of his office, and concerning which he possesses no discretionary powers." … (4) There must be a demand and refusal to perform the act which it is sought to coerce by legal remedy.
[19] In the Karavos decision, supra, at p. 297 the court also stated that mandamus was recognized as being an extraordinary remedy that was not granted if an applicant had any other remedy and was never granted in doubtful cases.
[20] The City was required to give notice to the landlords and the tenants of a rent reduction pursuant to sections 131(3) and (4) of the RTA. The regulation specifies that the notice must be given between October 1st and December 15th of the year in which the property taxes were reduced. The time for giving notice of rent reductions which occurred in 2005, 2006 and 2007 has now passed.
[21] The scheme and objective of the RTA and its predecessor the Tenant Protection Act, as set out in section 131 of the RTA, is to require the City to give timely notice to the landlords and tenants that the rents the tenants are required to pay are reduced, where the municpal property tax for a residential complex has been reduced by more than the prescribed amount of 2.5%. The timing of the notice is an important part of the scheme of the RTA because the rent reduction occurs commencing on the first month following the year in which the tax reduction occurred.
[22] Under section 131(3) of the RTA, the City is required to give notice to the tenants within the prescribed time period. The prescribed period is set out in section 41 of O. Reg. 516/06 as between October 1st and December 15th in the year in which the property tax reduction takes effect. The regulation also uses mandatory language and states that the notices “must be given” within the prescribed period because section 41(4) of the regulation also states that the rent reduction takes effect on December 31st of the year in which the property tax reduction takes effect. The practical effect of the provisions of the regulation are that the rent is reduced commencing in January of the year following the year in which the tax reductions occurred.
[23] Ordering the City to give the notice beyond the prescribed time period may be misleading to the tenants because the one year limitation period in section 136 of the RTA may prevent the tenants from obtaining a rent reduction. Section 136 of the RTA states that any rent charged shall be deemed to be lawful unless an application is made within one year from when the amount was first charged. The landlords and tenants were not informed by the City that the rent was reduced or of the percentage reduction as set out in Schedule “A” for 2005, 2006 and 2007. In these circumstances, it is likely that the rents were not reduced and may now be deemed to be lawful as a result of section 136 of the RTA.
[24] Section 135(4) of the RTA also contains a time limitation for bringing in the application for the return of excessive rents. It states that “[n]o order shall be made under this section …” ordering a landlord to pay the tenant any money collected in contravention of the RTA “… with respect to an application filed more than one year after the person collected or retained money in contravention of this Act …”.
[25] The one year limitation period, as set out in both section 136 and section 135(4), has already passed for rent reductions which occurred in 2005, 2006 and 2007 and as a result, it is not clear that the current tenants will be able to obtain a rent reduction at the present time. As a result, giving the notice strictly in accordance with section 131(4) could be misleading to the tenants.
[26] I find that both the first and second preconditions to grant an order in the nature of mandamus as set out in Karavos, supra, have not been met for the following reasons:
(a) It is not certain that the tenants have a clear legal right to have the notices given outside of the prescribed time period in the form specified in section 131(4), when to do so would potentially provide misleading and inaccurate information to the tenants;
(b) It is also not certain that the duty of the City to give notice is due and incumbent because the prescribed time period has passed. The regulation specifies that the notice “must be given” between October 1st and December 15th in the year the tax decrease occurs and that is no longer possible due to the passing of time;
(c) An order in the nature of mandamus is an extraordinary remedy and the court should not exercise its discretion to make such an order when the effect may be to give inaccurate and misleading information to the tenants;
(d) While the City has failed to give the notice within the prescribed time limits, it has shown good faith by providing the PRA with information about the amount of the tax reduction and corresponding rent reduction for each residential complex as shown in Schedule “A”. In addition, the City has given each current occupant the informational notice setting out the percentage of the property tax reduction and stating when it occurred for their residential complex;
(e) The PRA has already received the information contained in Schedule “A” and as a result, it has knowledge of the percentage by which the property taxes were reduced for each residential complex, the percentage reduction in rent, and when each unit’s rent was reduced. This is similar information to that which would have been provided if the notice under section 131(4) had been given, and it could be made available to tenants; and
(f) The tenants are not without other potential remedies, including making a claim for damages for any excess rent paid and a possible application to the Landlord and Tenant Board for relief.
Disposition on mandamus
[27] The application for an order in the nature of mandamus is dismissed for the above reasons, as it is not clear, and is in fact doubtful, whether the City is required to give notices after the prescribed time period has passed, where such notices may be misleading to the tenants.
Issue #2 Should the Court grant a declaration stating that the City has failed to comply with its statutory duty to provide notices to landlords and tenants in accordance with [section 131](https://www.canlii.org/en/on/laws/stat/so-2006-c-17/latest/so-2006-c-17.html) of the [RTA](https://www.canlii.org/en/on/laws/stat/so-2006-c-17/latest/so-2006-c-17.html)?
[28] The following cases have held that declaratory relief should not be granted where the granting of a remedy will be futile and have no practical effect (Wii’litswx v. British Columbia (Minister of Forests), [2008] B.C.J. No. 2296 (S.C.) at 14‑22; Re Town of Halton Hills et al. and Ontario Municipal Board et al., [1979] O.J. No. 4400 (H. Ct. J. (Div. Ct.)) at 7; Society of the Friends of Strathcona Park v. British Columbia (Minister of Environment, Lands and Parks), [1999] B.C.J. No. 2251 (S.C.) at 55; Charette v. Canada (Commissioner of Competition), [2003] F.C.J. No. 1697 (C.A.) at 63, 66‑67; Re Brown and Waterloo Regional Board of Commissioners of Police, [1985] O.J. No. 2493 (H. Ct.J. (Div. Ct.)) at 47).
[29] The applicant submitted that a declaration should be granted because the City acknowledges that it failed to give the notices under section 131 of the RTA and the section states that the City “shall” notify the landlord and tenants within the prescribed time period and by the prescribed method. However, the applicants acknowledge that the declaration would have no practical effect in this proceeding but would be useful to them in some other possible proceedings. The fact that a declaration would be useful in another proceeding is not a valid reason for granting the declaration sought.
[30] The City does not dispute the fact that it failed to give the notice within the prescribed time period to the affected landlords and tenants advising them that the rent was reduced and by what percentage. However the City submits that the declaration sought is not connected to any other relief in this application, especially since the application for mandamus has been denied, and as a result will have no practical effect and should not be granted. I agree.
Disposition on application for a declaration
[31] The application for a declaration that the City has failed to comply with its statutory duty under section 131 of the RTA is dismissed.
Issue #3 Should Terence Williams be added as a party?
[29] The applicant has brought a motion to add Terence Williams (“Williams”) as a party pursuant to Rule 5.03 of the Rules of Civil Procedure.
[30] The applicant PRA is an unincorporated association and is not a separate legal entity and may not have standing to bring this application as a party and as a result the applicant wishes to add Mr. Williams.
[31] Rule 5.03(4) states that the court may order that any person whose presence as a party will enable the court to effectively adjudicate on the issues, be added as a party. Rule 5.04(2) states that the court may add a party on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment. In this case, there is no prejudice to the City if Mr. Williams is added as a party and no need for an adjournment.
[32] The City opposes the addition of Mr. Williams on the grounds that, while he was a tenant in one of the affected residential complexes at the relevant date, he has moved to another affected residential complex and, as a result he may not be entitled to a rent reduction. While Mr. Williams has not been a tenant of the same unit since the property tax reduction occurred, it is not clear that his claim would not be successful because he moved.
[33] I am satisfied that Mr. Williams is a necessary person to adjudicate on the issues, he is sufficiently closely connected to be added as a party as he was and still is a tenant in two of the affected properties in the PPP during the relevant time period, and there is no prejudice to the City.
Disposition
[34] The motion to add Terence Williams as an applicant in this proceeding is granted nunc pro tunc.
Costs
[35] If the parties are unable to agree on costs, each party may make brief submissions within 15 days.
R. Smith J.
D. Cunningham A.C.J.S.C.J.
K. Swinton J.
Released: November , 2009
COURT FILE NO: 224/09
DATE HEARD: 2009/10/07
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N:
PARKDALE RESIDENTS ASSOCIATION
Applicant
- and –
CITY OF TORONTO
Respondent
REASONS FOR DECISION
Cunningham, A.C.J.S.C.J., Swinton and R.J. Smith JJ.
Released: November 26, 2009
Schedule “A”
Updated List of Rooming Houses that Experienced Property Tax Reductions in Ward 14 as a Result of a Property Class Conversion
Property Address
Roll Number
Conversion Year
Year Rent Reduction was to take Effect
Rent Reduction Notices Sent[^1]
Year Tax Reduction Posted to Account[^2]
% Tax Reduction
% Rent Reduction
26 Maynard Avenue
1904-02-1-230-02000
2004
2005
45.2
9
40 Beaty Avenue
1904-02-1-210-05300
2004
2005
26.2
5.2
57 Cowan Avenue
1904-02-1-110-02800
2004
2005
50
10
11 Elm Grove Avenue
1904-02-1-330-00700
2004
2005
54.9
11
30 Landsdowne Avenue
1904-02-3-100-04800
2004
2005
44.7
8.9
62 Brock Avenue
1904-02-3-060-03300
2004
2005
46.1
9.2
11A Elm Grove Avenue
1904-02-1-330-00800
2004
2005
55.1
11
20 Maynard Avenue
1904-02-1-230-02300
2004
2005
53.1
10.6
63 Spencer Avenue
1904-02-1-100-01000
2004
2005
55.8
11.2
65 Spencer Avenue
1904-02-1-100-01200
2004
2005
6.2
1.2
22 Springhurst Avenue
1904-02-1-070-03100
2004
2005
41.2
8.2
149 Cowan Avenue
1904-02-1-300-00300
2004
2005
62.6
12.5
10 Maynard Avenue
1904-02-1-230-02800
2004
2005
52.1
10.4
116 Spencer Avenue
1904-02-1-110-07800
2004
2005
37.9
7.6
191 Dunn Avenue
1904-02-1-290-00500
2004
2005
May 2005
41.1
8.2
193 Dunn Avenue
1904-02-1-290-00600
2004
2005
May 2005
38.8
7.8
2 Laxton Avenue
1904-02-1-260-01600/1
2004
2005
Apr 2005
30
6
28 Maynard Avenue
1904-02-1-230-01900
2004
2005
May 2005
39
7.8
5 Thorburn Avenue
1904-02-1-070-01800
2004
2005
Nov 2005
43.8
8.8
15 Thorburn Avenue
1904-02-1-070-01300
2004
2005
May 2005
41.6
8.3
70 Wilson Park Road
1904-02-1-200-03100
2004
2005
May 2005
40.9
8.2
198 Dunn Avenue
1904-02-1-280-03800
2005
2006
62.9
12.6
94 Cowan Avenue
1904-02-1-120-05200
2005
2006
Jun 2006
22.8
4.6
189 Dunn Avenue
1904-02-1-290-00400
2005
2006
Dec 2005
20.6
4.1
62 Triller Avenue
1904-02-3-240-02600
2005
2006
Jan 2006
46.4
9.3
157 Dunn Avenue
1904-02-1-120-03500
2006
2007
45.1
9
1554 King Street W.
1904-02-1-200-06200
2006
2007
69.3
13.9
155 Springhurst Avenue
1904-02-1-160-01800
2006
2007
64.3
12.9
102 Spencer Avenue
1904-02-1-110-08300
2006
2007
Aug 2007
50.9
10.2
119 Dowling Avenue
1904-02-1-160-01200
2007
2008
P
42.9
6.4
1512 King Street W.
1904-02-1-210-06900
2007
2008
P
63
9.5
8 Temple Avenue
1904-02-1-090-02800
2007
2008
P
56.8
8.5
15 Temple Avenue
1904-02-1-080-01300
2008
2009
P
62.8
9.4
[^1] Following the City’s communications with Sheffer in July 2008, rent reduction notices were sent out in respect of four (4) properties that experienced property tax conversions in 2007 and 2008 because the rent reductions in these cases were to take effect in 2008 and 2009. As notices were sent out in these cases, these properties are not included in the set of “Properties” discussed in the body of the Affidavit of Casey Brendon, sworn on August 28, 2009.
[^2] The class conversion for these properties arose as a result of assessment appeals initiated under the Assessment Act regime. These appeals were resolved beyond the date that MPAC made its property tax class determinations and communicated that information to the City of Toronto. In addition, in all but one case, these appeals were resolved beyond the “effective date” on which the rent reductions were to take effect.