JUDGMENT

Gilmore, J.

OVERVIEW

[1] This is the Landlord/Appellant’s (“Landlord”) appeal from the order of the Landlord and Tenant Board dated September 23, 2013 being file no. CEL-33354-13. The Board dismissed the Landlord’s application for arrears of rent and found that the proposed increase in rent was invalid because no “prescribed service” had been added pursuant to section 123(1) of the Residential Tenancies Act.

[2] The Landlord appeals to the Divisional Court on two grounds:

The Member hearing the application erred in relying on issue estoppel in relation to a case which did not involve the same parties or the same issues.
The hearing was procedurally unfair as the Member hearing the application:

a) Prejudged certain decisive issues.

b) Did not treat the Landlord’s representative respectfully.

c) Adopted the position taken by the Tenant where she gave certain answers which she later admitted were incorrect.

BACKGROUND FACTS

[3] The Tenant has resided at 27 John Street South, Unit 405, Mississauga since September 2005. The building in which the Tenant resides is owned by the Landlord.

[4] When the Tenant moved in in 2005 she did not sign a lease. Her rent included all utilities. The Tenant has had an air conditioning unit in her apartment since 2005.

[5] In May 2007 the Tenant entered into a written lease with the Landlord. Paragraph 5 of the lease provides as follows:

“During the summer months of June 1^st – September 30^th for those with air conditioning will agree to pay an additional $30 per month to cover the extra cost for the air conditioner.”

[6] Between 2005 and 2012 the Tenant used her air conditioner in the summer months but was not charged any extra rent after 2007 as per the lease.

[7] On June 1, 2013 the Landlord sent a Notice to all tenants that use of air conditioners during the summer months would be subject to the charge set out in the lease and that this charge should be paid with rent at the first of the month. The notice indicated that “further action” would be taken if the additional rent was not paid.

[8] The Landlord’s representative at the hearing, Ms. Hewson, testified that the Tenant had not been charged additional rent for her air conditioning unit prior to 2013 because the Landlord was not aware that the Tenant had an air conditioner in her apartment. The Tenant’s evidence was that the building superintendent installed the unit for her in 2005.

[9] The Landlord claimed against the tenant for the use of the air conditioner in June, July and August 2013 for a total of $90.00 plus the filing fee of $170.00. The application to evict the the Tenant for non-payment of rent was dated August 1, 2013. The matter was heard by the Landlord and Tenant Board on August 21, 2013.

THE HEARING AND THE DECISION

[10] At the hearing on August 21, 2013 the Tenant testified that her air conditioner was installed by the superintendent in 2005. She could provide no particulars regarding the name of the superintendent or whether this had been arranged by the landlord or was done personally by the superintendent.

[11] The Tenant testified that she did not understand why she owed any rent because she had paid her rent in full and had the cheques to prove it. When she was asked when she first understood that the rental arrears related to the air conditioning charge her reply was “today” being the day of the hearing. She denied that she had received anything in writing from the Landlord regarding air conditioning charges in 2013. When the June 1, 2013 notice was put to her she changed her answer and stated that she knew about the air conditioner charge but she did not realize that those were the charges referred to in the Eviction Notice.

[12] The Member hearing the application made certain comments during the hearing which the Landlord submits resulted in an unfair hearing. With respect to Ms. Hewson’s statement that she did not know that the Tenant had an air conditioning unit in her apartment, the Member made the following comments:

“So if you’re giving directions to put a/c’s in people’s units then you are expected to know that.”[^1]

“If she’s had it [the air conditioning unit] all along and the super put it away, your super should have been charging for it.”[^2]

“The superintendent put it in”[^3]

“Please, accept it. You didn’t know. Your superintendent knew.[^4]

[13] The Member also made comments concerning the merits of the Landlord’s case as follows:

Member: “…you’ve made them believe that they don’t have to pay for the [air conditioning charge] despite it being in the lease.”

Tenant’s Rep: “How did we make them believe if we didn’t know it was there?”

Member: “Okay, so let’s move on.”[^5]

“You cannot have a tenant who has lived there all these years, and suddenly years later you decide, oh, now you’re going to pay for this. You can’t do that.[^6]

Member: “she’s had this air conditioning in her unit for many years and you’ve never charged for it . Somebody must have seen that.”

Tenant’s Rep: “Can I just say that everybody is assuming that because [the Tenant’s] saying it’s been there all these years, it has been.”

Member: “Okay. You’re contradicting yourself now so that’s okay. Thank you so much.”[^7]

[14] In reaching her decision, the Member relied heavily on a previously decided case of the Board involving the same Landlord but a different tenant namely WMR Hewson John Street Apartments v. Hilda Bindi[^8]. In that case, the tenant signed a new lease in October 2010. The lease entitled the Landlord to charge an additional amount for air conditioning between June and September “or as long as the unit is installed.” The tenant did not remove the air conditioning unit at the end of September and the Landlord charged the additional amount for the period of October 2011 to April 2012.

[15] The Board found that the charge for the October to April period was illegal because it was not an “addition” under section 123 of the Residential Tenancies Act. The Board found that the provision for air conditioning was void under section 4 of the RTA because it was inconsistent with the RTC.

[16] That decision was reviewed by Member Wallace on July 30, 2012. In that review Member Wallace states that the extra $30.00 charge for June to September was not an issue. She declined however, to allow charges for the air conditioner for periods in which the air conditioner was not in use as the Landlord was not providing additional electricity for those periods.

THE STANDARD OF REVIEW

[17] Issues of procedural fairness at the Landlord and Tenant Board are not subject to a standard of review. An appeal may be granted where procedural fairness affected the outcome of the hearing.

[18] Appeals to the Landlord and Tenant Board are otherwise subject to a standard of reasonableness and decisions will be upheld if the outcome is defensible as deference is to be given to the special expertise of the decision maker.

[19] The Appellant submits, and I agree, that where the LTB goes beyond their expertise (such as deciding issues related to issue estoppel or res judicata) the standard of review is one of correctness. Where the question is one of general law that is of importance to the legal system as a whole and outside the adjudicator’s specialized area of expertise, a standard of correctness will apply.[^9]

SECTION 123(1) OF THE RTA

[20] Section 123(1) of the RTA provides that a landlord may increase rent to provide a service where the landlord and tenant consent and where the service is prescribed by the regulations. Regulation 516/06 states that “extra electricity for an air conditioner” is a prescribed service under the RTA.

[21] In the Review Order of Bindi by Member Wallace dated July 30, 2012, the Member specifically references section 123(1) and regulation 516/06.[^10] She confirmed that extra electricity for an air conditioner is a prescribed service under the regulation. There is no question that the Landlord was entitled to charge additional rent for this prescribed service.

[22] I do not agree with the position of the Respondent that the provision in the 2007 lease was invalid because the Landlord was not providing a new service. While it is true that the Tenant did not pay for additional electricity for her air conditioner between September 2005 and the signing of the new lease in May 2007, she agreed to pay for the charges in the May 2007 lease. The Review Order of July 30, 2012 confirms this is a valid charge under the regulation. I do not accept that there is any inconsistency between the RTA and charge for air conditioning on these facts.

ISSUE ESTOPPEL

[23] Issue estoppel is intended to prevent the re-litigation of issues already decided by courts or tribunals. Three facts must be establish for issue estoppel to apply:

the same question was decided in the previous decision;
the previous decision was final; and
the parties to the previous decision were the same.

[24] While the Landlord was the same in the Bindi decision, the tenant was different as was the question to be determined by the Board. In Bindi, the Board dealt with charges for electricity outside of the prescribed summer months. Member Wallace decided, quite rightly, that an additional electricity charge could not be imposed when air conditioning was not actually being used. Member Wallace confirmed, however, that the charge for June to September inclusive when electricity for air conditioning was being used was not an issue and was allowable under the regulation.

[25] I agree with the submissions of the Appellant that the decision and Review Order in Bindi did not involve the same parties (a different tenant) or the same issue (electricity charges for periods when air conditioning was not being used).

[26] Therefore, the Member’s reliance on Bindi in the form of issue estoppel is unsupportable. The standard of review is correctness and the Member erred in relying on Bindi for the proposition that the amounts charged for additional electricity are not justified by section 123(1) of the RTA. In fact, the Review Order is clear that the additional amounts charged come within the ambit of the RTA and its regulation so long as the tenant has some form of added benefit. The tenant does not have any added benefit for the charge where the air conditioning is not required (i.e. between October to May). However, for the summer period (June to September) the tenant has the benefit of an air conditioned apartment.

[27] Given that the grounding of the Member’s decision was related to adherence to the principles in Bindi the Member’s decision cannot stand.

FAIR HEARING ISSUES

[28] The Appellant submits that the Member failed to address both credibility issues and that her treatment of the Landlord’s representative was unfair.

[29] The Landlord’s position at the hearing was that she had no knowledge that the Tenant had an air conditioner in her apartment. The Tenant’s evidence was that the superintendent installed an air conditioner for her in 2005. As indicated in the excerpts from the transcript above, the Member implied that the Landlord should have known that there was an air conditioner in the Tenant’s apartment. The Member did not address the credibility issue raised by Ms. Hewson’s evidence that the Landlord did not know that the Tenant had an air conditioner.

[30] Further, the Member did not address the credibility issue raised by the Tenant when she stated she denied any knowledge of the additional rental charges until the June 1, 2013 Notice was put to her.

[31] The Appellant submits that the Member was unnecessarily aggressive, argumentative and made comments indicative of her having pre-judged the case. The Appellant submits that the Member improperly took on the role of advancing the Tenant’s position. The Respondent concedes that the Member exhibited “attitude” when dealing with both parties.

[32] This court is not unaware of the responsibilities attached to a lengthy list of hearings for a Board member and the necessity of ensuring that witnesses be reminded of their obligation to be focused and succinct.

[33] I agree with the Respondent, however, that neither party escaped the Member’s “attitude” during the hearing. For example, after being shown the signed 2007 lease which reflected the air conditioning charges the Member said to the Tenant’s counsel:

Member: “She’s given a document she’s asked to sign. It’s within her rights to read the documents and say, no, I’m not going to sign for this. It’s since 2007. This is 2013. How many years later----that she can sit there and dispute that? It’s in the lease.

Tenant’s counsel: “Right but the reason I’m bringing this up is it was never brought to her attention. That’s the issue.”

Member: “Where is the requirement that it should have been brought to her attention? She signed it.”[^11]

[34] And later in the hearing when the Tenant was confronted by the Member about her previous statement that she did not know about the additional charges:

Member: “But didn’t you claim not too long ago that you were not aware until you came to the hearing? Isn’t that what you claimed?”

Tenant: “The N5--- ”

Member: “Hello, excuse me. Didn’t you say you were not aware about an air conditioner until this morning? That’s what you told me.”[^12]

[35] Both parties were subjected to interruptions in their testimony and confrontations by the Member about their evidence. I agree with the Appellant that on occasion the interruptions by the Member drifted towards comments on the merits of the case.

[36] However, the case was decided by the Member on wrong principles as set out above and the conduct of the Member, while not entirely acceptable, need not be scrutinized in terms of fairness principles given my findings. Half of the Member’s decision is devoted to aligning her decision with that of the decision in Bindi. The Member does not make credibility findings with respect to either party. Therefore, even if the hearing was conducted unfairly, that did not affect the outcome of the decision.

FINAL ORDER

[37] The appeal is allowed and the decision of the Member dated September 23, 2013 is set aside. The matter is remitted back to the Landlord and Tenant Board for re-hearing before a different Member.

[38] The Appellant sought costs of the appeal of $2500. As this matter was a form of test case in that the result will affect other tenants in the building and given that the Respondent is a person of modest means on a fixed income, the court declined to order costs.

Gilmore J.

___________________________ Hambly J

D. Brown J.

Released: October 24, 2014

DIVISIONAL COURT FILE NO.: DC-13-127-00

DATE: 20141024

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

Hambly, Brown and Gilmore, JJ.

B E T W E E N:

WMR Hewson John Street Apartments

Appellant

and –

Betty Godzwon

Respondent

REASONS FOR JUDGMENT

Gilmore J.

Released: October 24, 2014

[^1]: Transcript of the Landlord and Tenant Board Hearing, August 21, 2013, p. 17, line 19-24 [^2]: Ibid, page 16, lines 20-22. [^3]: Ibid, page 20, line 31. [^4]: Ibid, page 40, line 17. [^5]: Ibid, page 19, lines 18-23. [^6]: Transcript Supra at page 38, lines 22-27. [^7]: Ibid at page 40, lines 1-12. [^8]: LTB file no. CEL-22662-12 [^9]: First Ontario Realty Corporation Ltd. v. Deng, 2011 ONCA 54 (C.A.) at para 17. [^10]: LTB Review Order, file no. CEL-22662-12-RV, para 4. [^11]: Transcript Supra, page 13, lines 8-21. [^12]: Ibid at page 29, lines 8-17.

WMR Hewson John Street Apartments v. Betty Godzwon, 2014 ONSCDC 6212

Case Summary

JUDGMENT

OVERVIEW

BACKGROUND FACTS

THE HEARING AND THE DECISION

THE STANDARD OF REVIEW

SECTION 123(1) OF THE RTA

ISSUE ESTOPPEL

FAIR HEARING ISSUES

FINAL ORDER

Judges

Counsel

Parties

Areas of Law

Fact Patterns

Financial Outcomes

Issues