CITATION: Lomico 188 Inc. v. Mouritsen, 2014 ONSC 2442

DIVISIONAL COURT FILE NO.: 541/13

DATE: 20140417

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

BETWEEN:

LOMICO 188 INC.

Landlord/Respondent

– and –

DAVID MOURITSEN and IRINA MOURITSEN

Tenants/Appellants

Kenneth Pimentel, for the Landlord

Larry J. Levine, Q.C., for the Defendant

HEARD: April 15, 2014

PERELL, J.

REASONS FOR DECISION

A. INTRODUCTION

A. INTRODUCTION

1On December 4, 2013, the Landlord and Tenant Board made an order terminating the residential tenancy of David and Irina Mouritsen in an apartment rented to them by Lomico 188 Inc.

2The Mouritsens immediately appealed to the Divisional Court, but on March 10, 2014, Justice Sachs, sitting as a single judge of the Divisional Court, quashed their appeal. She ordered that the Sheriff may evict the Mouritsens if they do not vacate their apartment by April 15, 2014.

3By quashing the appeal, Justice Sachs negated the automatic stay of the Board’s Order available pursuant to s. 25(1) of the Statutory Powers Procedure Act¹, and rule 63.01(3) of the Rules of Civil Procedure, which state:

25(1) An appeal from a decision of a tribunal to a court or other appellate body operates as a stay in the matter unless,

(a) another Act or a regulation that applies to the proceeding expressly provides to the contrary; or

(b) the tribunal or the court or other appellate body orders otherwise.

63.01(3) The delivery of a notice of appeal from an interlocutory or final order made under the Tenant Protection Act, 1997 stays, until the final disposition of the appeal, any provision of the order declaring a tenancy agreement terminated or evicting a person.

4Pursuant to s. 21(5) of the Courts of Justice Act², the Mouritsens brought a motion to a panel of the Divisional Court to set aside or vary Justice Sach’s Order. Section 21(5) states:

21(5) A panel of the Divisional Court may, on motion, set aside or vary the decision of a judge who hears and determines a motion.

5The s. 21(5) motion from Justice Sachs’ Order is scheduled for September 2014. The appeal of the Board’s Order was never scheduled.

6The Mouritsens remain in their apartment, but the Sheriff has given notice that the eviction will proceed, and the Mouritsens now bring a motion for an Order enjoining the Sheriff from proceeding with the planned eviction. In effect, they are seeking to restore the automatic stay with a court ordered stay or they seek to stay Justice Sachs’ Order that authorized the eviction to proceed.

7For the reasons that follow, I dismiss the Mouritsens’ motion.

B. FACTUAL AND PROCEDURAL BACKGROUND

B. FACTUAL AND PROCEDURAL BACKGROUND

8Lomico owns unit 806 at a residential condominium at 188 Eglinton Avenue East, Toronto, Ontario. The Mouritsens have rented the unit since October 2007.

9The monthly rent is $2,188.42. Interest on arrears is payable at the rate of 3% per annum.

10In January 2012, Lomico applied to the Landlord and Tenant Board for an order requiring the Mouritsens to pay arrears of rent of $2,663.24.

11On March 2, 2012, the Board dismissed Lomico’s application for failure of proof.

12After December 2012, save for one payment in March 2013, the Mouritsens stopped paying rent.

13In early 2013, the Mouritsens brought an application to the Board claiming a rent abatement of $12,735.72. The Mouritsens claimed that their enjoyment of their premises had been disturbed and that Lomico should pay a fine for having claimed that the Mouritsens owed rent.

14In February 2013, the Mouritsens withdrew their application to the Board and commenced an action in the Superior Court for $350,000 in damages. They claimed that Lomico’s application to recover $2,663.24 caused them serious physical and emotional harm. The Mouritsens sued for negligence, abuse of process, and intentional infliction of mental suffering.

15In August 2013, Lomico commenced an application to the Board to terminate the Mouritsens’ tenancy for their ongoing failure to pay any rent.

16On September 19, 2013, Lomico’s application came on for a hearing and after the Mouritsens made submissions objecting to the hearing proceeding, the hearing was adjourned to allow the Mouritsens to make written submissions.

17The Mouritsens’ argument, which they continue to make, is that their Superior Court action for damages is a claim for equitable set-off that is a defence or answer to Lomico’s claim for rent, termination of the tenancy, and eviction. The Mouritsens concede that the Landlord and Tenant Board does not have the jurisdiction to determine the merits of their claim for equitable set-off, which is a personal injury action for mental suffering, but they submitted that the Board should not proceed with Lomico’s application under the Residential Tenancies Act, 2006³ because there was a potential defence; i.e. a set-off, in equity to Lomico’s claim for rent and to terminate the residential tenancy.

18The Mouritsens’ argument is that the Board does not have jurisdiction to decide a landlord’s eviction application against a tenant and must stay the eviction proceeding when there is a pending action in the Superior Court by the tenant against the landlord for damages.

19The Mouritsens’ written submissions were received and reviewed by the Board, and on November 6, 2013, the Board ordered that Lomico’s application proceed to a hearing on December 3, 2013. In its Interim Order, the Board provided the following reasons:

1. The Tenants’ submissions indicates that the Tenants are under the impression that the Landlord and Tenant Board is a court of equity. It is not, it is a court of exclusive jurisdiction, with powers limited to the Residential Tenancies Act, 2006 (the “Act”) and the Statutory Powers Procedure Act, as pointed out in the Landlord’s counsel’s submission page 3 and page 7, which also refers to the applicable law and section 168(2) of the Act.

2. The Tenants have the right to file an action against the Landlord in the Ontario Superior Court of Justice, and may receive the remedy that they are looking for in the Superior Court of Justice. The Tenants’ obligation to pay rent exists independently of any cause of action the Tenants may have against the Landlord. The Board has jurisdiction to decide whether the Tenants paid the rent and in if not, terminate the tenancy in accordance with the Act. It is also noted that an eviction order is not an equitable remedy as claimed in paragraph 1 of the Tenants’ submissions.

3. Is this application a competing action? I do not find so, as it requests rent owing from December 2012 until the present time, while the Tenants’ action is looking for compensation for serious and permanent personal injuries alleged caused by earlier events. Therefore, these two causes of action are independent from each other.

4. Given the above and after careful consideration of all case law presented by both parties, I find that the Tenants’ request for a stay of proceedings shall not be granted.

5. The Tenants’ request for the dismissal of the application because it competes with an action at the Ontario Superior Court of Justice shall not be granted, as there is no competition.

20On November 27, 2013, the Mouritsens asked the Board to review its Order, which request was denied on November 29, 2013.

21On December 3, 2013, the Mouritsens attended the scheduled hearing of the Board and served a Notice of Appeal of the Board’s Orders of November 6, 2013 and of November 29, 2013, and they asked that the hearing not proceed. The Board refused. The Mouritsens left. The hearing proceeded. After hearing Lomico’s evidence, the Board made an Order dated December 4, 2013 terminating the tenancy, evicting the Mouritsens and ordering them to pay rent arrears of $21,523.73 plus per diem rent of $71.95 plus costs of $170.00. For reasons that will become clearer during the discussion below, the Board declined to exercise its discretion under s. 83(2) of the Residential Tenancies Act, 2006 to refuse an eviction order.

22On December 6, 2013, the Mouritsens delivered a new Notice of Appeal in which they appealed the Board’s eviction decision and the Board’s Orders of November 6, 2013 and November 29, 2013 to the Divisional Court.

23In their Notice of Appeal, the Mouritsens request that the Divisional Court determine that their defence of equitable set-off, which is before the Superior Court, must be decided before the Board can adjudicate Lomico’s application for an eviction. In the alternative, the Mouritsens’ request that the Divisional Court determine that because the Board does not have jurisdiction to decide matters within the jurisdiction of the Superior Court, it should dismiss the Landlord’s application, leaving it for the Landlord to making a counterclaim for rent in the Mouritsens’ civil action.⁴

24On December 6, 2013, the Registrar of the Divisional Court issued a Certificate of Stay certifying that pursuant to s. 25(1) of the Statutory Powers Procedure Act, the Order of the Landlord and Tenant Board dated December 4, 2013 had been stayed by an appeal to the Divisional Court.

25Lomico brought a motion to have the Mouritsens’ appeal quashed.

26On March 10, 2014, Justice Sachs granted the motion to quash. She found that the Mouritsens’ appeal was devoid of merit and should be quashed. In a handwritten endorsement, Justice Sachs stated:

…. In spite of the able submissions of counsel on this point, the fact is that the Landlord and Tenant Board is a creature of statute, whose powers are derived from their statute. Tenants’ counsel candidly admitted that the Board’s statute does not grant them the authority to grant a remedy of equitable set-off. The Board unlike the Superior Court is not a court of equity. The decision of the Supreme Court of Canada in Tranchemontagne v. Ontario (Director, Disability Support Program), 2006 SCC 14, [2006] 1 S.C.R. 513 does not assist the Tenants on this point. That decision stands for the proposition that a tribunal can go beyond the provisions of its enabling statute when it is considering a question of law that it is empowered to decide under statute. It does not stand for the proposition that a statutory tribunal can grant an equitable remedy that it is not empowered to grant under its enabling statute.

For the above reasons, I find that the Tenants’ appeal is manifestly devoid of merit and the Landlord’s motion to quash is granted. The Tenants have now paid no rent for over a year. In my view, there is no reason or way the Tenants should not be obliged to vacate the unit on or before the 15th April, 2014. If the Tenants have not vacated the unit by that date the Sheriff may proceed with the eviction order. The Landlord is entitled to its costs of this motion, which I fix in the amount of $5,000 and order payable within 90 days.

27As of March 10, 2014, Lomico’s claim for rent arrears is $28,600.93 with a per diem rate of $71.95.

C. DISCUSSION AND ANALYSIS

C. DISCUSSION AND ANALYSIS

28Section 134(2) of the Courts of Justice Act provides that on motion, a court to which a motion for leave to appeal is made or to which an appeal is taken may make any interim order that is considered just to prevent prejudice to a party pending the appeal. The appellate court’s jurisdiction under s. 134(2) is discussed in The Law of Civil Procedure in Ontario (1st ed.) at pp. 803-84 as follows:

Section 134(2) has the same purpose as the provisions in Rule 63, which enable a judge of the appellate court to impose or to remove a stay, but the power is wider than that conferred by Rule 63. Section 134(2) provides a broad-based jurisdiction to make interim orders pending an appeal.⁵ The section addresses those situations for which no specific remedy has been provided by the Courts of Justice Act or the Rules of Civil Procedure and some form of judicial intervention is necessary to prevent prejudice to a party to the appeal. The provision is designed to prevent a situation where the appellant might be successful on the appeal but find that this result has been rendered nugatory.

In Waxman v. Waxman,⁶ Doherty J.A. noted that the jurisdiction under section 134(2) is broad, but it is not unlimited and its focus was on preventing prejudice in the context of the appeal. The prejudice must relate to a party’s ability to participate meaningfully in the appeal or to the court’s ability to hear and decide the appeal on its merits in a timely fashion. Section 134(2) does not supplant specific provisions of the Courts of Justice Act or the Rules governing orders lifting stays, imposing stays, or providing security for costs. Where the order sought under section 134(2) is akin to an order lifting a stay, imposing a stay, or providing security for costs, the principles applicable to those remedies will play a central role in deciding whether any remedy should be granted under section 134(2).⁷

29In the case at bar, the relief requested by the Mouritsens’ is akin to a stay of the Order of the Board, which stay no longer occurs automatically because the Mouritsens’ appeal of the Board’s Orders has been quashed.

30The principles for granting a stay are well known. In deciding whether to grant a stay, courts apply the test set out by the Supreme Court in RJR-MacDonald Inc. v. Canada (Attorney General)⁸, which test is also used for the purposes of guiding the court’s discretion in granting or refusing an interlocutory injunction.

31Under the RJR-MacDonald test, the court considers three factors: (1) whether the party seeking a stay has presented a serious issue to be tried or, in a narrow band of cases, a strong prima facie case; (2) whether the party seeking the stay would suffer irreparable harm if the stay were not granted; and (3) where does the balance of convenience or inconvenience lie in the granting or the refusing to grant the stay.

32As I shall explain below, in my opinion, the Mouritsens do not satisfy the test for a stay because they do not satisfy the first element of the test for a stay.

33With respect to the first element of the RJR-MacDonald test, Justice Sachs has already determined that the Mouritsens’ appeal is devoid of merit, and in my opinion there is no reason to doubt Justice Sachs’ decision. I agree with her reasons. An issue that is devoid of merit does not meet the standard of a serious issue to be tried.

34On this motion for a stay and in support of their argument that there is a serious issue that would justify a stay, the Mouritsens persist in relying on Tranchemontagne v. Ontario (Director, Disability Support Program)⁹, a case that Justice Sachs decided did not assist them. In particular, they rely on paragraphs 14 and 26 of Justice Bastarache’s judgment, where he stated:

14. … It is settled law that statutory tribunals empowered to decide questions of law are presumed to have the power to look beyond their enabling statutes in order to apply the whole law to a matter properly in front of them. …

15. The presumption that a tribunal can go beyond its enabling statute -- unlike the presumption that a tribunal can pronounce on constitutional validity -- exists because it is undesirable for a tribunal to limit itself to some of the law while shutting its eyes to the rest of the law. The law is not so easily compartmentalized that all relevant sources on a given issue can be found in the provisions of a tribunal's enabling statute. Accordingly, to limit the tribunal's ability to consider the whole law is to increase the probability that a tribunal will come to a misinformed conclusion. In turn, misinformed conclusions lead to inefficient appeals or, more unfortunately, the denial of justice.

35From these passages from Tranchemontagne, the Mouritsens argue that the Board had the jurisdiction to apply the whole of the common law and equity to Lomico’s application and that the Board ought to have exercised its equitable jurisdiction to dismiss or stay Lomico’s application pending the determination of the proceedings in the Superior Court. They argued that the Board does not have jurisdiction to decide a landlord’s eviction application against a tenant and must stay the eviction proceeding when there is a pending action in the Superior Court by the tenant against the landlord for damages.

36A major problem and a fatal flaw in the Mouritsens’ argument is that it ignores that Justice Bastarache stated that a statutory tribunal’s power to look beyond its enabling statute was: “to apply the whole law to a matter properly in front of them.”

37As the Mouritsens’ concede, the matter of their equitable set-off was not properly before the Landlord and Tenant Board, which clearly does not have the jurisdiction of a Superior Court to decide a claim for intentional infliction of mental suffering. There is no doubt that the Landlord and Tenant Board is a creature of statute and is not a court of equity.

38There is also no doubt that the Board may be empowered, expressly or by the Tranchemontagne principle, to apply the whole law, including equities’ principles. Interesting, in the case at bar, an example of the Board having some equitable jurisdiction can be found in the eviction decision made against the Mouritsens, where the Board referred to but rejected exercising its jurisdiction under s. 83(2) of the Residential Tenancies Act, 2006.

39Section 83(2), which is set out below, is an example where the Board can consider equitable considerations.

Power of Board, eviction

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.

40In its reasons the Board referred to s. 83 of the Act. Thus, upon closer analysis, it turns out that the Mouritsens’ complaint that the Board erred in not following the Tranchemontagne principle is both factually and legally incorrect. Once again, Justice Sachs was, therefore, correct in concluding that an appeal from the Board’s decision was devoid of merit.

41The Board did not have the jurisdiction to grant equitable relief, and although it had a limited jurisdiction under s. 83 of the Residential Tenancies Act to deny the Landlord an eviction remedy, it did not have the jurisdiction to dismiss the application or stay its own proceedings pending the outcome of a Superior Court action for negligence, abuse of process, and intentional infliction of emotional harm.

42The Mouritsens were incorrect in submitting that if there is a pending action in the Superior Court by the tenant against the landlord for damages, then the Board does not have jurisdiction to decide a landlord’s eviction application against a tenant and must stay the eviction proceeding.

43If anything is mandatory, it is that the Board proceed to exercise its jurisdiction to hear the landlord’s application, and then the Board may exercise its discretion under s. 83 of the Residential Tenancies Act. If the Mouritsens’ approach was applied, there would be the absurdity that the Board which has an exclusive jurisdiction to decide claims for rent up to $25,000, would have to wait for the Superior Court to adjudicate a personal injury claim between the landlord and the tenant.

44With the Mouritsens failing to satisfy the first element of the test of a stay, it is not necessary for me to address the other elements of the test for a stay.

D. CONCLUSION

D. CONCLUSION

45For the above reasons, the Mouritsens’ motion is dismissed with costs on a partial indemnity basis fixed at $5,000 payable to Lomico within 90 days.

46Order accordingly.

Perell, J.

Footnotes

1. 1R.S.O. 1990, c. S.22.
2. 2R.S.O. 1990, c. C.43.
3. 3S.O. 2006, c.16.
4. 4It may be noted that a counterclaim may not be possible given the exclusive jurisdiction of the Board for claims up to $25,000.
5. 5Waxman v. Waxman, [2003] O.J. No. 73 (C.A.); Peel (Regional Municipality) v. Great Atlantic & Pacific Co. of Canada (1990), 74 O.R. (2d) 161 at 163 (C.A.); F.(S.) v. Ontario (Director of Income Maintenance, Ministry of Community and Social Services), [2000] O.J. No. 2750 at p. 384 (C.A.).
6. 6[2003] O.J. No. 73 (C.A.).
7. 7Waxman v. Waxman, [2003] O.J. No. 73 (C.A.); Peel (Regional Municipality) v. Great Atlantic & Pacific Co.,(1990), 74 O.R. (2d) 161 (C.A.); Horsefield v. Ontario (Registrar of Motor Vehicles), [1997] O.J. No. 3388 (C.A.); CPC International Inc. v. Seaforth Creamery Inc., [1996] O.J. No. 3537 (C.A.).
8. 8[1994] 1 S.C.R. 311.
9. 92006 SCC 14, [2006] 1 S.C.R. 513.