CITATION: Yundt v. Parker, 2014 ONSC 1805

DIVISIONAL COURT FILE NO.: DC-13-19-00 DATE: 2014-03-20

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

HEENEY, PARFETT and VARPIO, J.J.

BETWEEN:

Sarah Barnum & Timothy Yundt Appellants

– and –

Katherine Parker & Ronald Parker Respondents

R.G. Doumanie and Stephen McCotter, for the Appellants

Joe Hoffer and Kristin A. Ley, for the Respondents

HEARD: March 18, 2014

1This matter is an appeal from an Order of the Landlord and Tenant Board (the “Board”) terminating the tenancy and evicting the Appellants (the “Tenants”). The basis of the Board’s decision was a finding that the Tenants were committing a serious illegal act because their cottage was located in an area zoned for tourist cottage rental only.

Background

2The material facts that underlie this appeal are not disputed. The Respondents (the “Landlords”) own a trailer park and campground. They purchased this property in 2010. In 2005, the previous owners sold one of the cabins on the property to the Tenants and leased the land that the cabin was on for $1,500/year.

3The property, which consists of approximately 36 acres, is subject to two different zoning by-laws. The bulk of the property is zoned ‘RU’ – restricted rural – and the remainder is zoned ‘C4 lms’ – travel trailer park and commercial campground with limited municipal services.

4The only permanent residence on the property is that of the Landlords. All the remaining residences, including the Tenants’ residence, are seasonal. There is no dispute that if the Tenants’ cabin is within the C4 zone it contravenes the zoning by-law. On the other hand, if it is within the RU zone, it is a permitted use.

5The history of the litigation between these parties has some relevance to the issues on this appeal. After the Landlords purchased the property, they sought to raise the Tenants’ rent by 400%. The Tenants opposed the increase and the matter went to the Board. The Board ruled that the cabin was subject to the Residential Tenancies Act, 2006¹ (“the Act”) and therefore, the proposed rent increase was denied.

6Subsequent to that decision, the Landlords sought to have the tenancy terminated by way of an application to the Ontario Superior Court of Justice. The court held that it did not have the jurisdiction to terminate the lease or evict residential tenants. The Act applied to the cabin owned by the Tenants and therefore the Landlord and Tenant Board had jurisdiction to deal with the issue.

7As a result of that decision, the Landlords applied to the Board to terminate the lease and evict the Tenants. The Board agreed with the Landlords that the cabin was within an area that was zoned only for campground and trailer park use. The Board found that this fact created a serious, illegal use and issued an eviction notice.

8The Tenants appeal to this court from that decision.

Issues

9There are two issues to be decided: first, did the Board err in law in finding that the Tenants’ cabin was in breach of the applicable zoning by-law, and secondly, did the Board err in law by failing to dismiss the application pursuant to s. 83(3) of the Act?

Analysis

1. The Zoning Issue

10The standard of review on this issue is reasonableness. In Dunsmuir v. New Brunswick², the Supreme Court of Canada set out the factors necessary to a determination of whether the standard of review was correctness or reasonableness. They noted,

Where the question is one of fact, discretion or policy, defence will usually apply automatically. We believe that the same standard must apply to the review of questions where the legal and factual issues are intertwined with and cannot be readily separated.

Guidance with regard to the questions that will be reviewed on a reasonableness standard can be found in the existing case law. Deference will usually result where a tribunal is interpreting its own statute or statutes closely connected to its function, with which it will have particular familiarity. Deference may also be warranted where an administrative tribunal has developed particular expertise in the application of a general common law or civil law rule in relation to a specific statutory context.

A consideration of the following factors will lead to the conclusion that the decision maker should be given deference and a reasonableness test applied:

• A privative clause: this is a statutory direction from Parliament or a legislature indicating the need for deference;

• A discrete and special administrative regime in which the decision maker has special expertise (labour relations for instance);

• The nature of the question of law. A question of law that is of “central importance to the legal system … and outside the … specialized area of expertise’ of the administrative decision maker will always attract a correctness standard. On the other hand, a question of law that does not rise to this level may be compatible with a reasonableness standard where the two above factors so indicate.³ [citations omitted]

11In our view, the zoning issue in this case involves a question of fact alone. The Board was not called upon to interpret the zoning by-law, but only to find as a fact whether the subject property fell within the C4 zone or not. Even if the question is one of mixed fact and law, the standard of review would remain one of reasonableness. Finally, although the interpretation of by-laws is not within the area of expertise of the Board, the interpretation of the by-law is not a question of law that is “of central importance to the legal system” and consequently, the standard of review would still be reasonableness.

12In this case, the central finding made by the Board was that the Tenants’ cabin was located within the C4 zone. Only two witnesses were questioned on that issue and in coming to its conclusion, the Board made the following observations:

…the Tenants asserted that the Landlords failed to provide confirming evidence via [Mr. Jacob Van Dorp, a land use planner (“J.V.D.”)] that the Cabin is actually inside the C4 Zone. Unfortunately, for an unknown reason, a brief portion of J.V.D.’s testimony is not captured by the audio recording of the hearing and my notes taken at the hearing are silent on this issue. Nevertheless, my recollection of the hearing is that J.V.D., who had at some point attended at the Camp, did not recall with certainty whether the Cabin is located in the C4 Zone. As well, in their written post-hearing submissions, the Landlords do not claim that J.V.D. so testified.

However, the audio recording reveals that in direct examination [Ronald Parker (“R.P.”)] testified that in his view the Cabin was “illegal”. He did not elaborate on this opinion, which was given in response to a leading question by [his counsel]. However, given that the fundamental issue at the hearing was the alleged illegal use [of] the Cabin in relation to the By-Law, it is reasonable to infer that R.P.’s statement was made in this context. As such, bald though it is, this assertion constitutes a sufficient evidentiary basis for the establishment of a prima facie case of illegality. Neither in their argument nor evidence did the Tenants attempt to rebut this assertion.⁴

13Mr. Parker is not an expert in land use planning. He could not offer opinion evidence concerning whether the cabin was ‘illegal’. Mr. Van Dorp was an expert. However, as a consequence of Mr. Van Dorp’s evidence that he was not sure where the cabin was located, there was a complete lack of evidence on this critical issue.

14The onus was on the Landlords to prove that the cabin was located in the C4 zone. In the final sentence quoted above, the Board effectively attempted to reverse that onus. The Board erred in so doing.

15In our view, given that the onus was on the Landlords to demonstrate that the cabin was located within the C4 zone and there was a complete lack of evidence on that issue, the Board could not make the finding of fact that it did. Consequently, on this issue the decision of the Board must be overturned.

2. The s. 83(3) Issue:

16The Tenants argued before the Board that it should deny the Landlords’ application for an eviction order, because it was brought as a result of the fact that the Tenants had enforced their legal rights under the Act. The Board dealt with that issue in this way:

The Tenants also recounted that the application is the fourth legal proceeding involving attempts by the Landlords to have the Tenants removed from the premises. Given the litigious history between the parties, in the Tenants’ view the current application has been brought in retaliation to the Tenants’ attempts to secure or enforce their legal rights and as such, the Board should grant relief from eviction pursuant to section 83[(3)(c)] of the Act.

As well, the Tenants assert that the entire series of Board and Court proceedings between the parties was initiated because an attempt to capitalize on the raising of rent was unsuccessful and that a decision in favour of the application would allow landlords across Ontario to rely on the fact that they are not making as much money as possible out of their rental unit as a ground for eviction.

I accept that there has been a history of intense disagreement and litigation between the parties and that the Landlords’ clear historic intent has been either to increase the rent charged to the Tenants or to terminate the tenancy. I also understand that the Landlords have not to date been successful in their multiple actions against the Tenants. However, on balance, these facts alone do not reasonably establish an inference that this application was filed for an improper purpose or in bad faith, especially considering that the substantive issue in this application is justiciable and not frivolous. That it may follow from the Landlords’ historically unsuccessful efforts to end the relationship does not, on its own, demonstrate bad faith on the part of the Landlords.⁵

17The relevant section is s. 83 of the Act. It reads as follows:

83. (1) Upon an application for an order evicting a tenant, the Board may, despite any other provision of this Act or the tenancy agreement,

(a) refuse to grant the application unless satisfied, having regard to all the circumstances, that it would be unfair to refuse; or

(b) order that the enforcement of the eviction order be postponed for a period of time.

Mandatory review

(2) If a hearing is held, the Board shall not grant the application unless it has reviewed the circumstances and considered whether or not it should exercise its powers under subsection (1).

Circumstances where refusal required

(3) Without restricting the generality of subsection (1), the Board shall refuse to grant the application where satisfied that,

(a) the landlord is in serious breach of the landlord’s responsibilities under this Act or of any material covenant in the tenancy agreement;

(b) the reason for the application being brought is that the tenant has complained to a governmental authority of the landlord’s violation of a law dealing with health, safety, housing or maintenance standards;

(c) the reason for the application being brought is that the tenant has attempted to secure or enforce his or her legal rights;

(d) the reason for the application being brought is that the tenant is a member of a tenants’ association or is attempting to organize such an association; or

(e) the reason for the application being brought is that the rental unit is occupied by children and the occupation by the children does not constitute overcrowding.

18As noted earlier, it is undisputed that after purchasing the camp in April of 2010, the Landlords attempted to raise the Tenants’ rent from $1,500 per year to $7,500. The Tenants fought the increase on the basis that the property was subject to the Act and that the proposed increase grossly exceeded the rate allowed by law. The Board agreed and denied the increase.

19The Landlords then brought an application to the Superior Court of Justice seeking to terminate the tenancy and evict the Tenants. This too was unsuccessful.

20The Landlords then brought the present proceeding, which also sought to terminate the tenancy and evict the Tenants for the commission of an illegal act.

21As can be seen from the reasons set out above, the Board dismissed the Tenants’ claim for relief from eviction based on s. 83(3)(c), for the following reasons:

• The Landlords’ application was not brought in bad faith;
• The application was not brought for an improper purpose;
• The substantive issue is justiciable and not frivolous.

22It is readily apparent that none of these factors form any part of the test for relief under s. 83(3)(c). The sole question to be asked is whether the reason for the application being brought is that the tenant has attempted to secure or enforce his or her legal rights. From the factual findings of the Board, there is no question that that is the case.

23The Board found as a fact that the Landlords’ clear historic intent has been to either increase the rent charged to the Tenants or terminate the tenancy. Raising the rent was Plan A. Terminating the tenancy was Plan B. When Plan A was attempted, the Tenants fought back, and enforced their legal rights before the Board in successfully resisting a rental increase beyond the allowable limit. Therefore, the Landlords moved to Plan B and sought to terminate the tenancy, first unsuccessfully before the Superior Court and then before the Board. It is a simple proposition of cause and effect. The present proceedings would not have been brought had the Tenants not successfully resisted the rental increase.

24The Board clearly applied the wrong test in considering whether the application was brought in bad faith. Such a consideration sets the bar far too high, and imports an element of moral turpitude into an issue that is merely one of cause and effect. Similarly, it is inappropriate to enquire whether the application was brought for an improper purpose. Seen objectively, one might conclude that it was quite proper for the Landlords to seek to terminate the tenancy, when the amount of rent being paid was a pittance as compared to what a comparable property would rent for on the open market. However, that is not relevant to s. 83(3).

25It is similarly irrelevant whether or not the application is justiciable and not frivolous. According to the test prescribed in this section, even an application that has objective merit must be refused if it was brought because the tenant has enforced or attempted to enforce his legal rights.

26Both counsel agree that the standard of review on this issue is one of reasonableness.

27In Dunsmuir, Bastarache and LeBel JJ. described this standard in the following terms:

Reasonableness is a deferential standard animated by the principle that underlies the development of the two previous standards of reasonableness: certain questions that come before administrative tribunals do not lend themselves to one specific, particular result. Instead, they may give rise to a number of possible, reasonable conclusions. Tribunals have a margin of appreciation within the range of acceptable and rational solutions. A court conducting a review for reasonableness inquires into the qualities that make a decision reasonable, referring both to the process of articulating the reasons and to outcomes. In judicial review, reasonableness is concerned mostly with the existence of justification, transparency and intelligibility within the decision-making process. But it is also concerned with whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law.⁶

28In our view, a legal analysis that considers a test that is contrary to the one prescribed by law cannot be said to be justifiable or intelligible. Furthermore, the outcome does not fall within the range of possible, acceptable outcomes which are defensible in respect of the facts and law. Given the Board’s clear findings as to the Landlords’ historic intent, there can be only one logical conclusion on the facts: that Plan B was implemented because the Tenants foiled Plan A by standing up for their rights. Furthermore, there can be only one possible legal outcome from this factual finding: the application must be dismissed. Section 83(3) is in mandatory terms. The Board “shall” dismiss the application where the test has been met.

29Since there is only one available outcome from the facts as found by the Board, this is not a case where it is necessary to remit the matter to the Board for a rehearing. This court is in a position to replace the ruling that was made by the Board with the ruling that ought to have been made, as contemplated by s. 209(4)(a) of the Act.

30The appeal is allowed, and the application is dismissed.

31Costs are awarded to the Tenants in the agreed-upon amount of $15,000 all inclusive.

T. Heeney R.S.J.

J. Parfett J.

M. Varpio J.

Footnotes

1. 1S.O. 2006, Chapter 17
2. 22008 SCC 9, [2008] 1 S.C.R. 190.
3. 3Dunsmuir at paras. 53-55.
4. 4Order and Reasons for Order of the Board dated January 14, 2013, tab 12 Respondents’ Compendium at paras. 13-14.
5. 5Order and Reasons for Order of the Board dated January 14, 2013, tab 12 Respondents’ Compendium at paras. 44-46.
6. 6Dunsmuir, supra. Note 2 at para. 47.