Houle et al. v. Watson, 2014 CanLII 66860 (ON SCDC)

DIVISIONAL COURT FILE NO.: DC-13-00559

DATE: 20141113

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

MATLOW, LEDERMAN and HAMBLY, JJ.

BETWEEN:

GREG HOULE and WENDY HOULE

Appellants

– and –

IAN WATSON

Respondent

Greg Houle, Self-Represented

John A. Annen, for the Respondent

HEARD: September 18, 2014, at Oshawa

HAMBLY J.

Introduction

1This is an appeal by the tenants from an order of the Ontario Rental Housing Tribunal issued by Caroline King, the Member, on May 29, 2013 terminating their tenancy under the Residential Tenancies Act, 2006. We heard the appeal on September 18, 2014. On September 19, 2014 we issued an order dismissing the appeal and stated that written reasons would follow. We further permitted the landlord to take enforcement proceedings to obtain vacant possession after October 6, 2014. As well, we ordered that the tenants pay costs to the landlord, fixed at $2,500. What follows are are our reasons.

The Facts

2In September 2012, Greg Houle and Wendy Houle (“the tenants”) entered into an oral tenancy with Ian Watson (“the landlord”) to rent a house at 535 Riverside Drive in Peterborough, Ontario. The rent was to be $1200 per month. At the landlord's request the tenants provided the landlord with post-dated cheques. The tenants paid the rent for October and November 2012. They then stopped payment on the cheque for December's rent. They did provide the landlord with a money order for $700 towards the rent for December but stopped payment on the remainder of the cheques. The tenants continue to reside in the rented premises. They have not paid rent since December, 2012.

3Mr. Houle is disabled. He was in receipt of an extended health benefit from the Ontario Disability Support Program (“ODSP”). His only other source of income was a disability pension from the Canada Pension Plan. Mr. Houle sent a letter to the landlord dated November 30, 2012 in which he enclosed a letter dated November 12, 2012 from a caseworker for ODSP. The caseworker, in her letter, stated that ODSP required rent receipts if they were to continue his extended health benefit beyond December, 2012. Mr. Houle, in his letter, requested that the landlord provide rent receipts. The landlord has never provided receipts for the rent payments that the tenants did make in October, November and December, 2012. Mr. Houle alleges that ODSP has terminated his extended health benefit by reason of the landlord not providing rent receipts. He provided no evidence of this. He also did not explain why he did not approach the landlord again for receipts or why he did not provide ODSP with the cancelled cheques for October and November and a copy of the money order for $700 to ODSP as proof that he had made these payments for rent.

4The landlord served on the tenants a notice of termination of tenancy effective February 27, 2013. The landlord then commenced an application before the Landlord and Tenant Board (“the Board”) on March 5, 2013 for orders terminating the tenancy on the grounds of nonpayment of rent, for eviction of the tenants and for payment of the arrears of rent. The amount of rent in arrears at the time of the commencement of the application was the balance of the rent for December in the amount of $500 and the rent for January, February and March, 2013 of $3600 for a total of $4100. The Board then sent a notice to the parties dated March 11, 2013 that the application was to be heard on April 11, 2013. The tenants filed applications before the Board dated March 13 and 26 in which they sought an abatement of the rent and reimbursement for expenditures made by them as a result of alleged verbal abuse of them by Jim Hoy, acting on behalf of the landlord, for the insistence of Mr. Hoy that they provide access to the rented premises to prospective purchasers, the failure to provide rent receipts, the failure to give notice for prospective purchasers of the rented premises to inspect it and for failure to maintain essential appliances.

5The Board set June 13, 2013 for a hearing of the tenants’ applications. The tenants sent a letter dated March 14, 2013 to the Board in which they sought an adjournment of the hearing of the landlord’s application on April 13, 3013 on the grounds that Mr. Houle was scheduled to have a medical procedure on that date. On April 5, 2013 the Board advised the tenant by phone that the hearing of the landlord’s application would proceed on April 11, 2013.

6On April 11, 2013 the landlord appeared for the hearing. The tenants did not appear. Notwithstanding the advice that the Board provided the tenants on April 5, 2013 that the hearing would proceed on April 11, 2013 the Member granted an adjournment of the hearing on terms set out in an interim order dated April 16, 2013. In the order the Member noted under the heading"Procedural Matter", that on April 11, 2013 (stated, in the order, erroneously, to be April 16, 2013) that the landlord stated that he was "suffering severe financial duress" as a result of the nonpayment of rent by the tenants. The tenants requested that their applications be heard together with the landlord’s application. The Member found that to delay the hearing of the landlord's application to June 13, 2013 would be prejudicial to the landlord. Her order further contained the following terms:

1. The hearing is adjourned to a date to be set by the Board.

2. The next hearing date is peremptory on the tenants.

3. At the next hearing the tenants shall provide medical documentation to confirm that the tenant Greg Houle was unable to attend the hearing on April 11, 2013.

4. The tenants shall make the following payments into the Board in trust:

i. $1200 towards April 2013 rent on or before April 26, 2013;

ii. $1200 on or before May 3, 2013; and

iii. Ongoing rent as it becomes due until the application is resolved or until otherwise ordered.

5. If the tenants fail to make the rent payments ordered then the Member conducting the hearing may refuse to accept the tenants’ evidence.

6. If the tenants wish to raise any issues pursuant to s. 82 of the Act at the hearing of the landlord’s application on or before April 26, 2013 they shall provide to the landlord the following;

i. A written description of all the s. 82 issues that they intend to raise.

ii. A copy of all documents, photographs and other evidence that they intend to submit to the Board regarding their claim under s. 82 of the Act;

7. If the tenants fail to comply with the disclosure ordered in para. 6 the member conducting the hearing may refuse to accept the evidence or consider the issues not disclosed.

7The Board then set May 28, 2013 for the hearing of the landlord’s application. The landlord and Greg Houle attended. The tenants had not complied with any part of the interim order and, in particular, they had not made the payments ordered. Because of this, the Member declined to permit the tenants to raise any of the issues in their applications seeking relief against the landlord. She did give both parties an opportunity to explain why it would be either fair or unfair to grant the landlord’s application for orders terminating the tenancy and evicting the tenants. Mr. Houle said that he would be able to pay the rent for June. The arrears of rent were $6500 for the 5½ months from December to May. Mr. Watson, the landlord, said that he was 70 years old and a pensioner. As a result of the tenants’ failure to pay rent, it was necessary for him to borrow money to pay his expenses. At the end of the hearing, the Member indicated that she would grant the landlord’s application. She gave reasons and made a formal order dated May 29, 2013.

8In her reasons under the heading “Determinations” the Member stated the following:

4. I have considered all of the disclosed circumstances in accordance with subsection 83(2) of the Residential Tenancies Act, 2006 (The ‘Act’), including, but not limited to, the short period of the tenancy, the Tenants’ ongoing non-payment of rent, their non-compliance with the Board’s interim order, there [sic] pattern of stopping payments of rent, and the Landlord’s financial circumstances, and find that it would be unfair to grant relief from eviction pursuant to subsection 83(1) of the Act.

She also made the following order:

1Unless the Tenant voids the order as set out below, the tenancy between the Landlord and the Tenants is terminated. The Tenants must now move out of the rental unit on or before June 9, 2013.

2The Tenants shall pay to the Landlord $6,444.05, which represents the amount of rent owing and compensation up to May 29, 2013.

3The Tenants shall also pay to the Landlord $39.45 per day for compensation for the use of the unit starting May 30, 2013 to the date they move out of the unit.

4The Tenants shall also pay to the Landlord $170.00 for the cost of filing the application.

5If the Tenants do not pay the Landlord the full amount owing on or before June 9, 2013, the Tenants will start to owe interest. This will be simple interest calculated from June 10, 2013 at 3.00% annually on the balance outstanding.

6The Landlord may immediately file this order with the Court Enforcement Office (Sheriff) so that the eviction may be enforced on or after June 10, 2013.

7The Court Enforcement Office (Sheriff) is directed to give vacant possession of the unit to the Landlord, on or after June 10, 2013.

8If the Tenants wish to void this order and continue the tenancy, they must pay to the Landlord or to the Board in trust:

i. $6,670.00 if the payment is made on or before May 31, 2013, or

ii. $7,870.00 if the payment is made on or before June 9, 2013.

If the Tenants do not make full payment in accordance with this paragraph and by the appropriate deadline, then the Landlord may file this order with the Court Enforcement Office (Sheriff) so that the eviction may be enforced.

9The Tenants may make a motion to the Board under subsection 74(11) of the Act to set aside this order if they pay the amount required under that subsection on or after June 10, 2013 but before the Sheriff gives vacant possession to the Landlord. The Tenants are only entitled to make this motion once during the period of the tenancy agreement with the Landlord.

The Residential Tenancies Act

9The following sections of the Residential Tenancies Act, 2006 have relevance to this appeal:

82. (1) At a hearing of an application by a landlord under section 69 for an order terminating a tenancy and evicting a tenant based on a notice of termination under section 59, the Board shall permit the tenant to raise any issue that could be the subject of an application made by the tenant under this Act.

(2) If a tenant raises an issue under subsection (1), the Board may make any order in respect of the issue that it could have made had the tenant made an application under this Act.

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.

(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).

195. (1) Where the Board considers it appropriate to do so, the Board may, subject to the regulations,

(a) require a respondent to pay a specified sum into the Board within a specified time; or

(b) permit a tenant who is making an application for an order under paragraph 1 of subsection 29 (1) to pay all or part of the rent for the tenant's rental unit into the Board.

210. (1) Any person affected by an order of the Board may appeal the order to the Divisional Court within 30 days after being given the order, but only on a question of law.

(2) A person appealing an order under this section shall give to the Board any documents relating to the appeal.

(3) The Board is entitled to be heard by counsel or otherwise upon the argument on any issue in an appeal.

(4) If an appeal is brought under this section, the Divisional Court shall hear and determine the appeal and may,

(a) affirm, rescind, amend or replace the decision or order; or

(b) remit the matter to the Board with the opinion of the Divisional Court.

(5) The Divisional Court may also make any other order in relation to the matter that it considers proper and may make any order with respect to costs that it considers proper.

Analysis

10The tenants submit that the order of the Member should be set aside and that the landlord’s application should be returned to the Board for a new hearing by reason of the Member having denied them procedural fairness. They assert that the Member, by denying them procedural fairness, breached the rules of natural justice. They submit that there was no basis for the Member to make the interim order dated April 16, 2013 and that at the hearing on May 28, 2013 the Member ought to have heard their applications against the landlord for relief.

11In London v. Ayerswood, [2002] O.J. No. 4859 the Court of Appeal stated the following:

10When considering an allegation of a denial of natural justice, a court need not engage in an assessment of the appropriate standard of review. Rather, the court is required to evaluate whether the rules of procedural fairness or the duty of fairness have been adhered to. The court does this by assessing the specific circumstances giving rise to the allegation and by determining what procedures and safeguards were required in those circumstances in order to comply with the duty to act fairly. See Moreau-Bérubé, supra, at paras. 74-75.

12In Kalin v. Ontario College of Teachers (2005), 75 O.R. (3d) 523 the Divisional Court stated the following:

10Every tribunal is entitled to control its own procedure and will be accorded deference on matters requiring an exercise of discretion, such as matters of scheduling or adjournment requests. However, where there has been a breach of natural justice or procedural unfairness, it is not necessary to engage in an analysis of the appropriate standard of review. Decisions which do not comply with the rules of procedural fairness and natural justice cannot stand: Baker v. Canada (Ministry of Citizenship and Immigration)(1997), 174 D.L.R. (4th) 193 (S.C.C.); Gismondi v. Ontario (Human Rights Commission), [2003] O.J. No. 419 (Div.Ct.).

13The Member had the authority to make the interim order dated April 16, 2013 pursuant to s. 195(1) of the Act. She had the authority to control the procedure of the hearing on May 28, 2013 in denying the tenants an opportunity to advance their application against the landlord at the hearing of the application of the landlord. The tenants made no payment of any of the rent to the landlord which the Member ordered on April 16, 2013. They have made no payment of rent for the premises that they continue to occupy to the present for a period of 21 months from January 1, 2013. Their arrears now stand at $25,200 plus $500 for December 2012. The Member considered the financial consequences to the landlord of the failure of the tenants to pay rent. She considered the absence of any justifiable reason for the tenants paying no rent. The Member considered “all the circumstances” as she was required to do by s. 83 of the Act before making an order evicting the tenants. The tenants thereby had the opportunity to raise as “circumstances” the very matters set out in their own applications that were pending before the Board. The Member did not deny the tenants procedural fairness. To the contrary, her adjournment of the landlord’s application on April 11, 2013, her conduct of the hearing on May 28, 2013 and her reasons dated May 29, 2013 were in compliance with requirements of the Act. They are a model of procedural fairness to both the tenants and the landlord.

Result

The appeal of the tenants is dismissed.

Hambly, J.

Matlow, J.

Lederman, J.