CITATION: Espey v. Kilius, 2019 ONSC 1964

DIVISIONAL COURT FILE NO.: 254/18

LANDLORD AND TENANT BOARD NO. TNL-90437-17-RV DATE: 20190327

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

KITELEY, PARAYESKI, and FAVREAU JJ.

BETWEEN:

AUDREY ESPEY AND CECIL ESPEY

Stuart O’Connell, for the Appellants

Appellants

– and –

RON KILIUS

Spencer Toole, for the Respondent

Respondent

HEARD at Toronto: March 27, 2019

FAVREAU J. (Orally)

1The appellants, the Estate of Audrey Espey, by its Estate Trustee Cecil Espey, and Cecil Espey, appeal an order of the Landord and Tenant Board, dated April 10, 2018, dismissing the appellants’ request to review the Board’s order dated April 4, 2017, which terminated the appellants’ tenancy as of November 30, 2017.

2Audrey Espey died on January 22, 2019, after which an order to continue her appeal in the name of the estate was made.

3Until Ms. Espey’s death, the Espeys were both tenants in a house at 9520 Jane Street, in Maple, Ontario. Ms. Espey moved into the house in 1941, and Mr. Espey moved into the house in 1947. Ms. Espey owned the house until 1991, when the house was sold under power of sale to the respondent, Ron Kilius.

4After the sale, the Espeys continued to live in the house as tenants, paying monthly rent of $1,500.

5On March 6, 2017, Mr. Kilius brought an application to the Landord and Tenant Board to terminate the tenancy on the basis that he intended to occupy the house for his own use. In a decision released on April 4, 2017, the Board granted the application, finding that Mr. Kilius’ intention to occupy the house for his own benefit was made in good faith and that he was entitled to terminate the tenancy. The Board ordered that the Espeys were to move out of the house by November 30, 2017, and that they were to pay $49.32 per day as compensation to Mr. Kilius if they did not move out by that date.

6Following the Board’s eviction order, on September 18, 2017, the Espeys and Mr. Kilius entered into an agreement that extended the Espeys’ move out date to April 30, 2018. The agreement included a term that “under no circumstances has the landlord created a new tenancy with the tenants”. The agreement also provided that the Espeys agreed that “they will not under any circumstances seek to delay in any way their vacating the subject premises on the termination date herein agreed to by the parties”.

7On April 3, 2018, the Espeys applied to the Landlord and Tenant Board to review the Board’s April 4, 2017 eviction order. As part of the grounds for review, the Espeys claimed that, as compensation for the agreement to extend the eviction date, Mr. Kilius required them to pay $1,500 per month in rent and an extra $10,000. They claimed that this arrangement created a new rental agreement, and that the April 4, 2017 eviction order was therefore no longer in effect.

8In a decision released on April 10, 2018, the Landlord and Tenant Board denied the Espeys’ review request. In its decision, the Board held that the agreement did not create a new tenancy, and that it was “essentially a forbearance agreement”. In addition, the Board found that the agreement was made in accordance with section 45(b)(iii) of the Residential Tenancies Act, 2006, S.O., c.17, which provides that “[u]nless a landlord and tenant agree otherwise, the landlord does not waive a notice of termination, reinstate a tenancy or create a new tenancy … by accepting arrears of rent or compensation for the use or occupation of a rental unit after … the Board makes an eviction order or an order terminating the tenancy”. The Board also declined to make a determination as to whether the Espeys had paid $10,000 to Mr. Kilius, and, if so, whether such a payment was illegal, holding that such a determination was not material and that it should be made in a different proceeding.

Jurisdiction

9Pursuant to s. 210 of the Residential Tenancies Act, an appeal to this Court from a decision of the Landlord and Tenant Board can only proceed on a question of law.

Standard of review

10As indicated in First Ontario Realty Corporation v. Deng, 2011 ONCA 54, at paras. 16-22, the standard of review for Board decisions when it is interpreting its home statute or exercising discretion is reasonableness.

Issues

11The issues relevant to this appeal are:

(a) Whether the Board erred in its interpretation of section 45(b)(iii) of the Residential Tenancies Act, and in particular in its finding that the September 18, 2017 agreement did not create a new tenancy; and

(b) Whether the Board erred in declining to decide whether the Espeys made a $10,000 payment to Mr. Kilius.

Analysis

12Section 45(b)(iii) of the Residential Tenancies Act provides as follows:

45. Unless a landlord and tenant agree otherwise, the landlord does not waive a notice of termination, reinstate a tenancy or create a new tenancy,

(a) by giving the tenant a notice of rent increase; or

(b) by accepting arrears of rent or compensation for the use or occupation of a rental unit after,

(i) the landlord or the tenant gives a notice of termination of the tenancy,

(ii) the landlord and the tenant enter into an agreement to terminate the tenancy, or

(iii) the Board makes an eviction order or an order terminating the tenancy.

13The Board found that the September 18, 2017 agreement did not create a new tenancy and that it fell within the scope of section 45(b)(iii).

14The appellants argue that this finding was not reasonable because it creates an absurd result. Specifically, they argue that, if section 45(b)(iii) is interpreted to include a situation such as this one, where the parties agree to a significant extension of the date by which the tenant is required to move out and to an amount higher than the per diem rate ordered by the Board for occupation after the eviction date, the provision creates a mechanism that allows landlords to avoid their obligations to tenants under the Residential Tenancies Act while the tenant remains in the unit.

15We do not agree.

16Section 45 specifically starts off with the phrase “[u]nless the landlord and tenant agree otherwise”, which makes clear that there are circumstances in which the parties can agree to enter into a new tenancy following an eviction order. However, the provision makes clear that, absent such an agreement, the landlord’s acceptance of compensation for occupation beyond an eviction date does not create a new tenancy. Therefore, whether there is such an agreement depends on the specific circumstances in each case.

17In this case, in its review order, the Board considered the wording of the agreement, which it found made clear that there was no intention to create a new tenancy agreement. There is no basis for this Court to interfere with that determination because it is not a question of law, but rather a question of mixed fact and law which is beyond this Court’s jurisdiction. In any event, we note that the Board’s finding is fully justified by the wording of the extension agreement.

18We also do not agree that the Board made an error in refusing to decide whether the evidence supported making a finding that the Espeys paid $10,000 to Mr. Kilius.

19The Board indicated that the issue of whether such a payment was made was “not material” because of its finding that the eviction order remained lawful.

20This conclusion flows from the Board’s finding that no new tenancy agreement was created and again does not raise a question of law. In the absence of a new tenancy agreement, the issue of whether the payment was made and whether it was lawful falls outside the jurisdiction of the Landlord and Tenant Board, and, as found by the Board, is more properly to be decided in another forum such as the Smalls Claim Court.

21In conclusion, we see no legal error in the Landlord and Tenant Board’s review order, and the appeal is therefore dismissed.

KITELEY J.

22I have endorsed the Appeal Book and Compendium as follows: “This appeal is dismissed for oral reasons given. Tenants must move out of the rental unit by April 30, 2019. Appellants shall pay costs to the respondent in the amount of $8,000 including fees, disbursements and HST on partial indemnity basis.”

___________________________ FAVREAU J.

I agree