Court File and Parties
CITATION: Cater v. Khakh, 2020 ONSC 6884 DIVISIONAL COURT FILE NO.: DC-19-53-00 DATE: 2020-11-12
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT R.D. GORDON, LEDERER, FAVREAU JJ.
BETWEEN:
Courtney Cater and Jennifer Parker Appellants
– and –
Amandeep Kaur Khakh and Avtar Singh Khakh Respondent
Landlord and Tenant Board
Counsel: Alexandra Grishanova, for the Appellants Satish Mandalagiri, for the Respondents Valerie Crystal, for the Landlord and Tenant Board
HEARD at Brampton: October 29, 2020 (by videoconference)
DECISION ON APPEAL
THE COURT
Overview
1By order of the Landlord and Tenant Board (“LTB”) dated May 14, 2019, the appellants were ordered evicted from premises owned by the respondents. On June 10, 2019 the appellants’ request to review the order of the LTB was denied. A further request by the appellants that the LTB conduct a Board Initiated Review was also declined. The appellants appeal from these three orders.
Background Facts
2The respondents own a house in Brampton. The appellants began occupying the upper level of the house as tenants in October of 2017. The written tenancy agreement between the parties is dated October 10, 2017. It provides for monthly rent of $1600 and states that the tenants will be responsible for 60% of the costs of utilities for the house defined in the agreement to include electricity, gas and water.
3At the LTB hearing the appellants led evidence that in December of 2018 they were having difficulty with the heating system for the house. They complained to the respondents and asked that the difficulty be rectified. When the difficulty continued, the appellants indicated to the respondents that if the issue was not fixed they would have no choice but to complain to the municipality. When the heating issue continued the appellants did just that. A representative of the municipality attended to inspect the property and determined the lower apartment unit was unlawful and would require significant repair.
4On January 22, 2019 the respondents served the appellants with two eviction notices: the first, a N12 Eviction Notice on the basis that they required the rental unit for occupation by a family member; the second, a voidable N5 Eviction Notice pursuant to s. 64 of the Residential Tenancies Act, 2006 S.O. 2006, c.17 (“RTA”) on the basis that the tenants had not been paying their share of utilities and were thereby interfering with the respondents’ lawful rights, privileges or interests (the “N5-1”).
5On April 3, 2019 the respondents served the appellants with a non-voidable N5 Eviction Notice pursuant to s. 68 of the RTA again on the basis that the tenants had not been paying their share of utilities and were thereby interfering with the respondents’ lawful rights, privileges or interests (the “N5-2”).
6On April 5, 2019 the respondents filed a L2 Eviction Application based upon the Eviction Notices that had been provided. The application came before the LTB on May 7, 2019. The appellants represented themselves at the hearing. The respondents were represented by a paralegal. The appellants contested the application claiming there was an oral agreement made when the tenancy agreement was signed that utilities were included in the monthly rent of $1600 and the respondents’ actions were retaliation for the complaint made to the municipality.
7On May 14, 2019 the LTB released its decision. It held that the written tenancy agreement accurately reflected the agreement between the parties and that the appellants’ failure to pay their share of utilities from January 2018 onwards was a substantial interference with the lawful rights, interests and privileges of the respondents. In determining that the eviction of the appellants was warranted the LTB said:
I have considered all of the disclosed circumstances in accordance with subsection 83(2) of the Act, and find that it would not be unfair to postpone the eviction but only until June 30, 2019, pursuant to subsection 83(1)(b) of the Act.
The Tenants submitted that they are current with the rent and there is no dispute that the Landlords are holding a last month’s rent deposit. This extension of the termination date to June 30, 2019 will allow the Tenants’ children to finish the school year and provide a reasonable time for the Tenants to find alternate accommodation.
8On June 6, 2019 the appellants applied to the LTB to have the May 14 decision reviewed on the grounds that, among other things, there was a failure to consider the appellants’ contention that the eviction notices were retaliatory and a failure to provide the appellants with any options or remedies to preserve their tenancy.
9On June 10, 2019 the appellants’ request for review was denied. The review order found that the LTB provided detailed reasons establishing a reasonable basis for its conclusions.
10On June 12, 2019 the appellants asked that the LTB conduct a Board Initiated Review, arguing that the respondents’ N5-2 was improper as it did not list any new activity, conduct or situation that constituted grounds for notice of termination under s. 68(1)(b). That request was denied in an endorsement dated June 15, 2019 on the basis that a party has no authority to request a Board Initiated Review and there was no basis for allowing one in this instance, particularly when the issued raised was not raised at the initial hearing or at the first review.
Jurisdiction
12Section 210(1) of the RTA provides that any person affected by an order of the Board may appeal the order to the Divisional Court, but only on a question of law.
13Accordingly, insofar as this appeal raises a question of law it is properly before this court.
Standard of Review
14The RTA provides that parties may appeal from an administrative decision of the LTB to the court and has therefore subjected the LTB to appellate oversight with appellate standards of review. As the RTA limits appeals to questions of law, the appellate standard of review is correctness. [See Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, [2019] S.C.J. No. 65].
Motion to Introduce Fresh Evidence
15At the outset of this appeal, the appellants sought leave to introduce fresh evidence relevant to factors they say the LTB was legally required to, but did not, consider when making the eviction order. The purpose of the fresh evidence, they say, is to provide context for the court’s appreciation of the significance of the LTB’s failure to consider the factors in question.
16The four-part test for admission of new evidence on the hearing of an appeal is set out in R. v. Palmer, [1979 8 (SCC)]: (1) The evidence should not be admitted if, by due diligence, it could have been adduced at trial; (2) The evidence must be relevant in the sense that it bears upon a decisive or potentially decisive issue in the trial; (3) The evidence must be credible in the sense that it is reasonably capable of belief; and (4) The evidence must be such that, if believed, it could reasonably, when taken with the other evidence adduced at trial, be expected to have affected the result.
17The appellants seek, firstly, to introduce evidence establishing that the L2 application to evict brought by the respondents following service on the appellants of the N5-1 and N12 had been withdrawn by the respondents. For reasons that are set out below under the heading “Validity of the N5-2”, I am of the view this evidence, had it been adduced at the hearing could not reasonably have been expected to have affected the result and it is therefore not now admissible.
18Secondly, the appellants seek to introduce a fresh copy of the tenancy agreement which does not contain the handwritten text contained in the copy that was filed at the LTB hearing. They say their copy of the agreement did not contain this text, that they never agreed to these changes, and their initials to this text are forged. The copy filed at the hearing was provided to them the day of the hearing. It was incumbent upon them to inspect the document and object to it when it was tendered. Their failure to do so was a failure of due diligence. In any event, I am also of the view that a fresh copy of the agreement, free of the handwritten text, could not reasonably be expected to have affected the result. It follows that this evidence is not admissible on appeal.
19Thirdly, the appellants seek to introduce evidence from the City of Brampton corroborating evidence they gave at the hearing that they made a complaint to the City in December of 2018 and the action taken by the City as a result of that complaint. The appellants had made a request for this information under the Freedom of Information and Protection of Privacy Act in advance of the LTB hearing, but by letter of April 15, 2019 their request was denied. That letter set out appeal rights available to the appellants but no appeal was filed. A subsequent request for information provided by appellants’ counsel met with success without the necessity of an appeal. In these circumstances, I am of the view that with due diligence this documentation could have been available to adduce at the hearing. It follows that it is not now admissible on appeal.
Analysis
20The appellants framed the issues on appeal as follows: (1) Did the LTB err in law by hearing an eviction application based on an invalid eviction notice? (2) Did the LTB err in law by ordering eviction without reviewing the circumstances? (3) Did the LTB err in law by permitting an eviction application for non-payment of utilities under s. 64 of the RTA?
The Validity of the N5-2
21Section 64 of the RTA provides that a landlord may give a tenant notice of termination of the tenancy if the conduct of the tenant substantially interferes with, among other things, a lawful right, privilege or interest of the landlord. A notice given under this section must provide a termination date no earlier than the 20th day after the notice is given, set out the grounds for the termination, and require the tenant to correct the impugned conduct within 7 days. If the tenant corrects the impugned conduct the notice of termination is void.
22Section 68 provides, inter alia, that a landlord may give a tenant notice of termination of the tenancy if: (a) a notice of termination was given to the tenant under section 64; and (b) more than seven days but less than six months after the notice mentioned in clause (a) was given to the tenant, an activity takes place, conduct occurs, or a situation arises that constitute grounds for a notice of termination under s. 64. A notice given under this section must set out the date it is to be effective and that date shall not be earlier than the 14th day after the notice is given. Under this section the tenant is not given a seven-day period to correct the impugned conduct.
23Prior to January 1, 2018, s. 68 provided that a notice given under that section could be given only if the earlier notice under s. 64 had been voided. The corollary to that was if the earlier s. 64 notice was not voided the second notice under s. 68 could not be given. The result was that if a s. 64 notice was not voided and was not pursued by way of application, and the same conduct arose again, a landlord was obliged to start the process over with a new s. 64 notice. Indeed, this was the finding of the LTB in TEL-79203-17 (Re) [2017 48861] as cited by the appellants. However, the change to s. 68 on January 1, 2018 deleting the requirement that the s. 64 notice be voided before notice under s. 68 can be given renders that case inapplicable. Currently, the only precondition to a s. 68 notice is that a previous notice has been given under s. 64 and that further activity constituting grounds for termination under sections 60, 61, 62 or 64 occurs more than seven days but less than 6 months after the s. 64 notice was given.
24In this case the s. 64 notice was given on January 22, 2019. The section 68 notice was given on April 3, 2019. It alleged further activity constituting grounds for termination under s. 64. It was given more than seven days but less than six months after the s. 64 notice was given. The requisites for a valid s. 68 notice were met.
Did the LTB Fail to Review the Circumstances?
25Prior to ordering an eviction, the LTB must consider and apply the relief from eviction provisions contained in s. 83 of the RTA:
s. 83(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).
26Once the LTB has considered the circumstances of both parties, it may exercise its discretion to refuse or delay an eviction:
s. 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 order of eviction be postponed for a period of time.
27In addition to this discretion to refuse an eviction, the LTB is obliged to refuse an eviction if it is satisfied, among other things, that the reason for the application being brought is that the tenant has complained to a governmental authority of the landlord’s violation of a law dealing with health, safety, housing or maintenance standards, or the reason for the application being brought is that the tenant has attempted to secure or enforce his or her legal rights. [see s. 83(3) (b) and (c)].
28Section 204(1) of the RTA allows the LTB to include in an order whatever conditions it considers fair in the circumstances. This provision allows the LTB, in refusing to evict a tenant, to attach conditions that one or both of the landlord and tenant must follow.
29In my view, the LTB made two errors of law in its s. 83 analysis.
30The first is that it did not, in its decision, deal in any way with the appellants’ contention under s. 83(3) that the application for eviction was brought in retaliation for their having complained to the City about the lack of heat in their rental unit. This issue was clearly raised by the appellants and cannot fall under a general consideration of circumstances under s. 83(2).
31The second is that although it considered all of the circumstances in determining the eviction should be postponed, it failed to consider all of the circumstances in determining whether the eviction order should issue at all or with conditions.
32The powers under section 83 are generally regarded as relief from eviction powers. It provides an avenue to tenants for relief from eviction in two ways: In subsection (a) by allowing the LTB to refuse the eviction order on conditions that may be imposed under s. 204(1), provided it is not unfair to the landlord to do so; or in subsection (b) by ordering the postponement of the eviction.
33The complaint by the respondents was that the appellants were refusing to pay their share of the utility costs. The appellants were refusing based on their understanding that the costs of utilities were included in the rent. Once the LTB concluded that utilities were to be paid in addition to rent, it was incumbent upon it to consider whether to refuse eviction on conditions such as payment of the utilities by the respondents on an ongoing basis along with the payment of arrears, whether the appellants would be able to make such payments if ordered, and whether such an order would be unfair to the respondents. Its failure to do so amounts to an error in law.
34The court recognizes that the LTB deals with a high volume of cases and that it is not required to address every issue raised or argument made by the parties. However, in this case, the reasons are perfunctory and there is no indication that the LTB considered the matters it was required to consider in sections 83(1) and 83(3) of the RTA.
The Treatment of Utilities Costs by the LTB
35The appellants raised the manner in which the LTB treats utilities costs for the first time on this appeal. It is a controversial issue. The LTB has long operated under a policy that when utilities are charged to a tenant separate from the rent, those utility charges are not considered to be rent. The result is that default in payment of utilities does not amount to default in the payment of rent and the route to eviction of a tenant for not paying utilities is considerably different than for the eviction of a tenant who defaults in payment of rent. The appellants argue that the route for eviction of tenants for non-payment of utilities affords them fewer protections than if the respondents were required to seek eviction for non-payment of rent.
36The arguments made by the appellants based on statutory interpretation are persuasive. However, there are competing arguments and interests as well. In particular, a landlord may only increase rent once every 12 months after serving a written notice of rent increase. If utilities are considered rent and the costs of utilities fluctuate due to usage, rent could change every month resulting in regular contravention of the provision allowing only one increase per year. Similarly, if utility rates change during the course of a tenancy it is unclear, at present, how those changes could be implemented without rent changing in potential contravention of the Act.
37Given that: (1)This issue is being raised for the first time on appeal; (2) Determination of the issue could have far-reaching effects on residential landlords both large and small; (3) It is unfair to require the respondents in this case to answer for all of the policy considerations that may be had by landlords at large and the LTB itself, it is not appropriate or necessary to determine this issue in the context of this appeal.
Conclusion
37The appeal is granted in part. The matter is remitted to the LTB for a new hearing on: (1) Whether the reason the eviction was sought by the respondents is that the tenant complained to a governmental authority of the respondents’ violation of a law dealing with health, safety, housing or maintenance standards; (2) Whether the reason the eviction was sought is that the appellants attempted to secure or enforce their legal rights; and (3) Whether, having regard to all of the circumstances, it should refuse to grant the application with or without conditions and whether to do so would be unfair to the respondents. There shall be no costs of this appeal.
R.D. Gordon, J.
I agree _______________________________
Lederer, J.
I agree _______________________________
Favreau, J.
Released: November 12, 2020
CITATION: Cater v. Khakh, 2020 ONSC 6884 DIVISIONAL COURT FILE NO.: DC-19-53-00 DATE: 2020-11-12
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT GORDON R.D., LEDERER, FAVREAU JJ.
BETWEEN:
Courtney Cater and Jennifer Parker Appellants
– and –
Amandeep Khakh and Avtar Singh Khakh Respondents
Landlord and Tenant Board
DECISION ON APPEAL
The Court
Released: November 12, 2020