Lacasse v. Grant Lake Forest Resources Ltd. and Facts Ltd., and
Laing v. Grant Lake Forest Resources Ltd., and
Mousseau v. Grant Lake Forest Resources Ltd.
2017 ONSC 6091
DIVISIONAL COURT FILE NOS.: DC-1031-16, 1033-16, 1034-16, 1044-16
DATE: 20171011
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
Kiteley, Conway, Mulligan JJ.
BETWEEN:
FLOYD A. HONSBERGER
Jonathan Ho and Grace Alcaide Janicas, for the Applicant (Respondent in Appeal), Floyd
A. Honsberger
Applicant (Respondent in Appeal)
– and –
GRANT LAKE FOREST RESOURCES LTD.
Paul A. Johnson, for the Respondent (Appellant), Grant Lake Forest Resources
Ltd.
Respondent (Appellant)
– and –
DANNY LACASSE
Applicant (Respondent in Appeal)
– and –
Self-represented
GRANT LAKE FOREST RESOURCES LTD. AND FACTS LTD.
Respondents (Appellants)
– and –
TREVOR LAING
Applicant (Respondent in Appeal)
– and –
GRANT LAKE FOREST RESOURCES LTD.
Respondent (Appellant)
– and –
IVAN MOUSSEAU
Applicant (Respondent in Appeal)
– and –
GRANT LAKE FOREST RESOURCES LTD.
Respondent (Appellant)
LANDLORD AND TENANT BOARD
Respondent
Paul A. Johnson, for the Respondent (Appellant), Grant Lake Forest Resources Ltd.
Self-represented
Paul A. Johnson, for the Respondent (Appellant), Grant Lake Forest Resources Ltd.
Self-represented
Paul A. Johnson, for the Respondent (Appellant), Grant Lake Forest Resources Ltd.
Brian Blumenthal, Counsel for the Landlord and Tenant Board.
HEARD at Sudbury: October 11, 2017
Mulligan, J. (Orally)
[1] This is an Appeal by the Landlord, Grant Lake Forest Resources Ltd. (“Grant Lake”) of a decision of the Landlord and Tenant Board’s Review Order dated April 29, 2016.
[2] Mr. Honsberger is the tenant and represented by counsel. Danny Lacasse, Trevor Laing and Ivan Mousseau are the other tenant Respondents and are self-represented with respect to their own Board decisions. Their leases with Grant Lake are similar in nature to Mr. Honsberger’s other than the specific locations of their lots and the specific rents.
Background
[3] The background facts, not disputed, are clearly set out in the factum of the Respondent at the following paragraphs:
- In the 1970s Algoma Central Railway became the owner of a large tract of land north of Sault Ste. Marie. In the 1970s and 1980s Algoma Central Railway leased many one acre sites within the property for recreational use during the summer. The lessees built cottages on their sites. The Tenant Honsberger leased one of these sites in 1989 and build a cottage there.
I pause to note that the other tenants entered into similar leases.
In 1997 Algoma Central Railway sold part of the land, including 429 cottage sites, to Honsberger’s former landlord, Michipicoten Forest Resources (“MFR”), who was named in the application. In 2005, Algoma Central Railway sold the rest of the land and cottage sites to Algoma Timberlakes Corporation.
Mr. Honsberger’s rent increased periodically under the lease dated June 1, 1989. For the one-year period of June 1, 2008 through to May 31, 2009, the Tenant Honsberger was charged $370.83 in rent plus $15.75 in “provincial land taxes”.
On June 1, 2009, the Tenant Honsberger’s former landlord increased the rent for the cottage site from $370.83 to $1,527.00, an increase of over 411%, but did not serve him with a Notice of Rent increase pursuant to the RTA in respect of the increase.
In 2010, the Court of Appeal determined that the land lease cottage sites owned by Algoma Timberlakes Corporation were governed by the RTA and its rent protection provisions in the case of Matthews v. Algoma Timberlakes Corporation (“Matthews”).
[4] The other tenants similarly rented for 20 years then signed new 1 year leases. The rents were increased significantly unlike the prior 20 year leases. All the tenants sought a rebate from the Board based on the new leases and the increases contained therein. They sought a rebate for the 1 year prior to their Applications pursuant to the provisions of the Residential Tenancies Act, 2006, SO 2006, c.17 and not for the entire period in question.
[5] The landlord has changed over the years. The initial 20 years of leases was with Algoma Central Railway. It sold this block, which contained 492 cottages, to Michipicoten Forest Products and also sold another block to Algoma Timberlakes Corporation. Both these blocks contained cottage lots established by leases. The tenants constructed their own cottages. Michipicoten sold their block to Grant Lake Resources Ltd., the current landlord for these Respondents.
[6] Are these leases subject to the provisions of the Residential Tenancies Act?
[7] That question was answered in Matthews v. Algoma Timberlakes Corporation, (2010) 2010 ONCA 468, 102 O.R. (3rd) 590 by the Court of Appeal regarding the adjacent Algoma Timberlakes block of lands that contain similar cottage leases. The headnote of that case captures the essence of the Court’s Decision:
All residential properties, including those used by tenants for recreational as well as residential purposes, are subject to the Act. The cottages in question were “living accommodation” used or intended for use as “rented residential premises”. Occupants of residential units are entitled to the protection of the Act, whatever they do inside or outside of their premises during their waking hours and regardless of whether they live in the accommodation 52 weeks a year or some lesser amount of time, or whether the unit in question is their primary or secondary residence. The “seasonal or temporary” exclusion in s. 5 (a) of the Act did not apply to the cottages in question. The evidence established that the leases were intended to be continually renewed over a long period of time. All of the leases provided for payment of rent on an annual basis.
Contracting Out
[8] In 1086891 Ontario Limited v. Barber, 2007 18734 (Div.Ct.), that decision makes it clear that parties cannot contract out of the Landlord and Tenant Act. Parties cannot bargain away or waive their statutory rights.
[9] The Board first dealt with Mr. Honsberger’s Application in a decision that was rendered on January 21, 2016 by member Del Vecchio. She reviewed the history of recent leases and found that the lawful rent was $1,557 and ordered a repayment of overpayment regarding the past 1 year.
[10] By interim Order dated March 21, 2016, an interim stay was issued by Vice-Chair S. Charron staying the decision on the basis that important case law had not been considered.
[11] On April 29, 2016 Vice-Chair Charron issued a Review Order. She considered the Matthews decision. As she stated in her decision: “If notice is not given, any increase is void based on the Court of Appeal decision in Price v. Turnbull Groves.” She reasoned that the increases in rent starting in 2008 and following were illegal, no 90 day notice of rent increase having been given. She found the lawful rent to be $370.83 and ordered repayment for 1 year prior to the application, being the excess rent collected by the landlord of $2078.30 plus $45 for costs.
[12] The other three Respondents received similar results in their Applications with only the amount of overpayment varying slightly.
The Standard of Review
[13] The parties agree that the standard of review is reasonableness, supporting the Landlord and Tenant Board’s Factum on this issue. Counsel for the Board made no submissions as to the merits but provided some helpful comments with respect to section 38 (1) of the Act. Both parties agree that the Board made an error in determining that the leases became month to month pursuant to section 38 (1). The responding party submits that nothing turns on it. Counsel for the Board suggests that section 38 (1) leads to one of three outcomes: (1) an Agreement to terminate the lease, (2) a new Lease Agreement by renewal or (3) a month to month tenancy. A renewal involving the same parties and the same land requires the landlord to give 90 days’ notice of an increase pursuant to the clear provisions of the Act and those cannot be bypassed, it was submitted.
[14] We agree that section 116 (1) is a stand-alone section and that section provides:
116 (1) A landlord shall not increase the rent charged to a tenant for a rental unit without first giving the tenant at least 90 days written notice of the landlord’s intention to do so.
116 (4) An increase in rent is void if the landlord has not given the notice required by this section, and the landlord must give a new notice before the landlord can take the increase.
[15] In Nanne v. 3011650 Ontario Limited, the Court of Appeal upheld the Divisional Court decision and did not alter the law as established in Matthews and considered section 38 (1) in the context of a Planning Act issue.
[16] In Nanne the Divisional Court below did not disturb the Board’s finding about the 1 year limit as the Board was interpreting its home statute.
[17] In this Court, the landlord submits that it has been prejudiced by the delayed Application of the tenant some 6 years after the new leases. We disagree. The landlord has had the benefit of increased rent revenues from void increases over the years. Had the landlord complied with the Act after Matthews, the increase would have been dramatically lower. The tenants under the Act are only seeking a 1 year rebate in accordance with the provisions of the Act and seek no remedy with respect to prior years.
[18] In our view, the decision of the Tribunal was reasonable. The Board made reference to the Residential Tenancies Act and the binding decision of the Court of Appeal in Matthews. Her finding that the rent increase was void warrants deference. She ordered a return of excess funds, not for the entire period of the leases, but for the past 1 year prior to the Application being filed in accordance with the Act section 135 (1).
[19] Therefore the Appeal with respect to each Respondent is dismissed.
[20] With respect to costs, we find it fair and reasonable that the successful party, the Respondent Mr. Honsberger, receive costs in the amount of $7,000 payable by the Applicant all-inclusive as asked.
___________________________ Mulligan, J.
I agree
Kiteley, J.
I agree
Conway, J.
Date of Reasons for Judgment: October 11, 2017
Date of Release: October 13, 2017
Lacasse v. Grant Lake Forest Resources Ltd. and Facts Ltd., and
Laing v. Grant Lake Forest Resources Ltd., and
Mousseau v. Grant Lake Forest Resources Ltd.
2017 ONSC 6091
DIVISIONAL COURT FILE NOS.: DC-1031-16, 1033-16, 1034-16, 1044-16
DATE: 20171011
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Kiteley, Conway, Mulligan JJ.
BETWEEN:
Honsberger v. Grant Lake Forest Resources Ltd., and
Lacasse v. Grant Lake Forest Resources Ltd. and Facts Ltd., and
Laing v. Grant Lake Forest Resources Ltd., and
Mousseau v. Grant Lake Forest Resources Ltd., and
Landlord and Tenant Board
ORAL REASONS FOR JUDGMENT
Mulligan, J.
Date of Reasons for Judgment: October 11, 2017
Date of Release: October 13, 2017