CITATION: North Avenue Road Corporation v. Travares, 2015 ONSC 6986

DIVISIONAL COURT FILE NO.: 309/14

DATE: 20151120

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: NORTH AVENUE ROAD CORPORATION, Applicant (Landlord)/Appellant

AND:

TOM TRAVARES (A.K.A TAVARES), Respondent (Tenant)/Respondent

BEFORE: Molloy, E. Kruzick and Lococo JJ.

COUNSEL: Martin Zarnett, for the Applicant (Landlord)/Appellant

Scott McGrath, for the Respondent (Tenant)/Respondent

HEARD at Toronto: September 28, 2015

ENDORSEMENT

KRUZICK j.

Nature of the Appeal

[1] The appellant (“landlord”) is the landlord of a residential building in Toronto. The landlord brought an application to the Landlord and Tenant Board (“Board”) to terminate the tenancy of the respondent, Dr. Travares (“tenant”).

[2] On May 29, 2014, the application was dismissed by the Board. The landlord requested reconsideration by the Board. Pursuant to a June 27, 2014 order, the original decision was upheld by a reviewing Board member who found no error and denied the request for review.

[3] On appeal to this court, the landlord is seeking an order terminating the tenancy or, in the alternative, an order remitting this matter back to Board for re-hearing.

[4] For reasons set out below, I am of the view that the matter should be remitted for re-hearing by a differently constituted Board.

The Question

[5] The question before this is court is: was it reasonable for the Board to deny the landlord the right to evict the tenant given the evidence and the circumstances of this case?

Background

[6] The tenant has lived in the building of the landlord for over 22 years. A lifetime smoker, the tenant selected this property because smoking was not prohibited in the building. Until this issue arose, there were no complaints about his smoking or cigarette odour.

[7] The tenancy agreement does not prohibit smoking in the unit.

[8] On August 9, 2013, a neighbouring tenant (“the neighbour”), on the same floor, complained about the cigarette smoke and odour. The neighbour resided in her unit for 10 years. Her complaint was that, for 2 to 3 years, the actions of the tenant substantially interfered with her reasonable enjoyment to live in her unit. She met with the tenant to attempt to resolve the issue, to no avail.

[9] The neighbour complained that the smoke emanating from the tenant’s unit affected her ability to live in her apartment.

[10] Both the landlord and tenant made efforts to remedy the smoke odour. The landlord hired various technicians to address the problem. He blocked the air vents between two units and sealed the baseboards. He also installed larger fans on the roof, sealed the thresholds under the doors of the two units and checked the plumbing and closet areas. The tenant cooperated with the landlord and allowed hired workers access to his unit so that the problem could be remedied.

[11] The tenant has made efforts to minimize the smoke odour by purchasing an air purifier, placing a fan in his window and often smoking on his balcony.

[12] Despite all these efforts, the problem was not remedied and the neighbour terminated her tenancy.

[13] Two weeks after the neighbour moved out, the landlord served the tenant with a notice to terminate his tenancy. The notice set out as grounds for termination substantial interference with the reasonable enjoyment of the residential complex. The notice provided that if the problem was corrected within seven day, the notice would be void. The problem was not been corrected.

[14] The neighbouring apartment remains vacant.

[15] The landlord states he is unable to rent or sell the neighbour’s unit as a result of the cigarette smoke. Conversely, the landlord has not made efforts to rent the vacant unit given the odour.

[16] The building is in the process of being converted from a rental building to individually owned condominiums.

Standard of Review

[17] The landlord brings this appeal pursuant to s. 210 of the RTA, which grants the right to appeal, but only on a question of law.

[18] The parties agree that the standard of review is reasonableness. As set out in Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 SCR 190, in determining whether the decision in issue is reasonable, the court is concerned largely with the justification, transparency and intelligibility of the Board’s reasons, as well as whether the decision fall within a range of possible, acceptable outcomes, given the facts and the law.

Position of the Parties

[19] The tenant relies on Caputo v. Newberg (2009), 2009 32908 (ON SCDC), 251 O.A.C. 281, [2009] O.J. No. 2659 and takes the position that the decision was reasonable and should be afforded deference.

[20] The landlord raises three arguments to establish that the Board's decision was unreasonable given an error on the question of law:

(a) The Board incorrectly found that the dispute between the parties was moot

(b) The Board's decision puts the landlord at legal risk because of section 20 of the Residential Tenancies Act, 2006, S.O. 2006, c. 17 (“RTA”).

(c) The Board's reasons do not provide the landlord with an understanding as to why the eviction was refused.

[21] The tenant argues that the Board applied the correct tests and asks the appeal be dismissed.

Analysis

Statutory Framework

[22] Originally, the landlord sought to terminate the tenancy pursuant to s. 64(1) of the RTA which provides that the landlord may deliver a notice of termination if the conduct of the tenant “substantially interferes with the reasonable enjoyment of the residential complex for all usual purposes by the landlord or another tenant or substantially interferes with another lawful right, privilege or interest of the landlord or another tenant.”

[23] When the tenant failed to vacate, the landlord applied to the Board for an order of eviction, pursuant to s. 69 of the RTA.

[24] Even where a landlord has established a right to terminate a tenancy, the Board retains a discretion, under s. 83(1)(a) of the RTA to refuse to grant the application unless it is satisfied that it would be unfair to refuse. In other words, the Board has the broad power to dismiss the landlord's application so long as it would not be unfair to do so. Subsection 83(2) requires the Board to review the circumstances before it grants an application under s. 83(1). Section 83 reads:

(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).

[25] In this appeal, the landlord relies on the broader obligation it has pursuant to s. 20 of the RTA, which reads:

20. (1) A landlord is responsible for providing and maintaining a residential complex, including the rental units in it, in a good state of repair and fit for habitation and for complying with health, safety, housing and maintenance standards.

(2) Subsection (1) applies even if the tenant was aware of a state of non-repair or contravention of a standard before entering into the tenancy agreement.

Findings of the Board

[26] The Board found that the impact of the quantity of cigarettes the tenant consumes substantially interfered with another tenant’s reasonable enjoyment of her rental unit. The Board also found, in paragraph 14 of the reasons (dated May 29, 2014), “that a lawful, privilege or interest of the Landlord was substantially interfered with” because of the tenant’s smoking.

[27] Notwithstanding these findings, the Board determined it would not exercise its power to evict pursuant to subsection 83(1) of the RTA for four reasons:

(1) the Respondent has lived and smoked in his unit for 22 years;

(2) the Respondent’s tenancy agreement does not prohibit smoking in his unit;

(3) there is only one unit on the same floor as the Respondent’s unit, and it is currently vacant; and

(4) the evidence did not establish that the Respondent’s smoking is preventing or will prevent the Appellant from re-renting or selling the neighbouring unit.

[28] In making these finding of fact, I find that the Board erred by failing to consider the greater responsibility of the landlord pursuant to s. 20 of the RTA which extend beyond this specific complaint. As set out in s. 20, the landlord has the responsibility of “maintaining a residential complex, including the rental units in it, in a good state of repair and fit for habitation and for complying with health, safety, housing and maintenance standard.”

[29] I turn then to the issues raised in this appeal.

(1) Mootness

[30] In paragraph 13 of the Hearing reasons (dated May 29, 2014), the Board states:

In considering whether to grant relief under section 83 the Board must consider the impact of permitting the Tenant to remain in the unit and how the conduct that gave rise to the application could be modified or restricted to minimize the impact on other tenants. Although I am satisfied that the Tenant’s smoking substantially interfered with his neighbour’s reasonable enjoyment while she was still living there, the issue is now moot ….

[31] The landlord argues the issue is not moot because the problem and his responsibility to future tenants continue. On the issue of mootness, judicial review may be refused where there is no longer a live controversy between the parties. The leading case continues to be Borowski v. Canada (Attorney General), 1989 123 (SCC), [1989] 1 S.C.R. 342.

[32] It was also argued that the landlord has not tried to rent and, in fact, will not be re-renting but wants to sell the neighbour’s unit because the complex is being converted to condominiums. I make no finding on the landlord’s specific intention, nor do I need to. Rather, I accept the Board’s finding that the landlord has not attempted to rent the vacant neighbour unit.

[33] While I agree with this finding, I am of the view that in the exercise of its discretion, the Board failed to consider the responsibility of the landlord pursuant to the s. 20 of the RTA and the landlord’s responsibility, even to a new tenant (or purchaser). In the end, the problem of the cigarette smoke and odour remains for the landlord to deal with.

[34] Borowski sets out a two-step analysis. First, is there still a live controversy between the parties? While the complaining tenant is gone, the Board found the problem continues to exist, so that there is a live issue. Secondly, even if there is no such issue, which I do not find, discretion may be exercised to hear the matter if the basic rationales for the mootness doctrine are met.

[35] Even if this was a mootness doctrine case, pursuant to Borowski, in exercising discretion to hear this case, a court is required to bear in mind three basic rationales: the absence of an adversarial relationship, the need to promote judicial economy and the need for the court to demonstrate an awareness of its proper law-making function. In this case, and as the Board found, the problem is not remedied and continues to be a contentious issue between the parties. With this finding, in the exercise of its discretion, the fundamental error of the Board, in my view, lies in the application of the law, and specifically, in the application of s. 20 of the RTA. In addition, the Supreme Court also set out the consideration whether it is in the public interest to deal with the merits in order to settle the law. This is a housing issue. Smoking in residential units where the units such as the one before this court are so close and have life implications for the other, is of public interest.

(2) Section 20 of RTA

[36] The Board’s decision requires the landlord to rent, or sell, a unit that is not in a good state of repair or, more importantly, “fit for habitation”. With the responsibility that is imposed on the landlord by s. 20, that finding puts the appellant in “legal jeopardy”. I accept that the landlord may be able to rent this unit, but as set out by this court in Morguard Residential v. Peters, 2010 ONSC 2550, the landlord has a lawful interest in protecting itself against future claims by future tenants based on a failure to comply with s. 20 of the RTA.

[37] Furthermore, as set out in Hassan v. Niagara Housing Authority, [2000] O.J. No. 5650, the landlord has a positive obligation to provide the (future) tenant with quiet enjoyment and take reasonable actions against a tenant that denies a neighbouring tenant enjoyment of the premises. I am of the view, knowledge of the existing smoking problem simply sets the landlord at legal risk of having an application brought for failing to comply with section 20 of the RTA.

[38] Putting the landlord at risk where the where the landlord knows that the unit does not comply with the obligation of section 20 is, I find, an error in law.

(3) Sufficiency of Reasons

[39] It is argued also argued that the reasons of the Board are insufficient so that it is difficult to understand given the Board’s findings of fact. Here I agree with the tenant, that the Board clearly explained why, in exercising its discretion, it granted the tenant relief from eviction.

Dispostion

[40] I therefore remit the matter back to be heard before a differently constituted Board.

[41] Counsel were able to reach an agreement on costs. Accordingly and given the success of the landlord, costs will be to the landlord, payable by the tenant and fixed in the total amount of $3,200 (being $ 2,000 (inclusive of HST) plus $1,200 for disbursements).

Kruzick J.

Molloy J.

Lococo J.

Date: November 20, 2015