Ontario Rental Housing Tribunal v. Metropolitan Toronto Housing Authority, 2002 ONCA 41961

DATE: 20020625 DOCKET: C36729

COURT OF APPEAL FOR ONTARIO

ABELLA, CHARRON and CRONK JJ.A.

B E T W E E N :

ONTARIO RENTAL HOUSING TRIBUNAL

Susan J. Freeborn, for the Appellant

Appellant

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METROPOLITAN TORONTO HOUSING AUTHORITY

Lorenzo D. Policelli, for the Respondent Metropolitan Toronto Housing Authority

Respondent

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SARAH GODWIN et al., being various Tenants of 30 Charles Street West, Toronto, as per the attached Schedule “A”

Tracy Heffernan, for the Respondents Sarah Godwin et al.

Respondents

Heard: March 13, 2002

On appeal from the order of Justice John O’Driscoll dated March 24, 2000, sitting as a single judge of the Superior Court of Justice (reasons reported at (2000), 2000 29054 (ON SCDC), 50 O.R. (3d) 207).

CRONK J.A.:

1. [1] The issue in this case concerns the jurisdiction of the Ontario Rental Housing Tribunal (the “Tribunal”) to permit the applicants in a multi-party residential tenancy hearing under s. 32(1) cl. (6) of the Tenant Protection Act, 1997, S.O. 1997, c. 24 (the “Act”) to lead oral evidence from a group of tenants who formed a subset of a larger number of tenants claiming rent abatements from their landlord, in lieu of calling each individual tenant to testify.

I. THE FACTS

2. [2] In the summer of 1999, the Metropolitan Toronto Housing Authority (now known as the Toronto Community Housing Corporation) (the “Authority”) undertook repairs to the balconies and exteriors of apartments in a building in Toronto reserved as student family housing for the University of Toronto. Numerous tenants of the building alleged that the repairs resulted in disruption and inconvenience to them and interfered with the enjoyment of their rental premises. As a result, on July 20, 1999, the respondent Sarah Godwin and more than 300 other tenants (the “Tenants”) applied under the Act for a determination that the Authority, as landlord, had substantially interfered with the reasonable enjoyment of their rental units and for a consequential rent abatement. Initially, the application was signed by Ms. Godwin, through her agent, with an attached list of names and telephone and apartment numbers of the other applicants.

3. [3] On September 16, 1999, counsel for the Tenants informed the Tribunal that the Tenants wished to present oral evidence in support of their claims against the Authority by calling eleven tenants to testify on behalf of all of the Tenants, instead of calling each involved tenant as a witness (the “Tenants’ Proposal”). The Tenants also intended to rely upon documentary evidence, including surveys completed by approximately 160 of the Tenants. The Authority objected to the Tenants’ Proposal, alleging that the Authority would be prejudiced by it. The Authority also sought an order from the Tribunal severing the applications to require a separate hearing concerning each application and asserted that the Tribunal lacked jurisdiction to combine the applications.

4. [4] By interim order dated September 24, 1999, a member of the Tribunal directed that the Tenants’ applications be combined under s. 173 of the Act and that the Tenants’ Proposal could proceed. That interim order also required the Tenants to provide the Authority and the Tribunal, prior to the hearing, with written notice of: a) the names of the eleven witnesses who would be testifying at the hearing, b) a description of the facts and evidence to which the witnesses would testify, and c) a list of signatures of those tenants who wished to be parties to the application. The Authority did not seek a stay or judicial review of that interim order.

5. [5] Thereafter, disclosure was made by the Tenants and the Authority of their respective anticipated evidence. By letter to the Tribunal dated November 16, 1999, the Authority asserted that the eleven tenants proposed to be called as witnesses by the Tenants were not representative of all of the Tenants and argued, accordingly, that viva voce evidence would be required at the hearing from all of the Tenants.

6. [6] When the hearing commenced on November 19, 1999, the Authority renewed its objection to the Tenants’ Proposal on the basis that it, in effect, contemplated a representative application before the Tribunal and that the Tribunal lacked jurisdiction to permit such an application. That objection led to a further interim order by a member of the Tribunal, dated December 31, 1999 (the “Challenged Order”), by which the Tribunal ruled that it would not disallow the Tenants’ Proposal.

7. [7] The Authority applied for leave under s. 6(2) of the Judicial Review Procedure Act, R.S.O. 1990, c. J.1 to seek judicial review of the Challenged Order before a single judge of the Superior Court of Justice on an urgent basis. By order dated March 24, 2000, Justice O’Driscoll granted leave, quashed the Challenged Order on jurisdictional grounds and prohibited the Tribunal from continuing the rent abatement hearing as a “representative proceeding”. The Tribunal, with leave of this court, appeals that decision. On October 12, 2000, the Tenants settled their claims against the Authority through mediation. As a result, the hearing did not proceed. Nevertheless, they support the Tribunal on this appeal. For the reasons that follow, I would allow the appeal.

II. THE ISSUE

8. [8] The issue for determination on this appeal is whether the Tribunal had jurisdiction to make the Challenged Order. In order to decide this issue, it is necessary to review the statutory framework which governs the Tribunal’s jurisdiction in connection with applications of the type commenced by the Tenants. In addition, in view of the reasons of the applications judge, it is necessary to consider wehther s. 13 of the Act gives rise to a right to cross-examine each of the Tenants, thereby effectively precluding the Tribunal from making the Challenged Order.

III. ANALYSIS

(1) The Statutory Framework

(a) The Tribunal’s Authority Under the Act

9. [9] The Tenants’ application was brought under s. 32(1) cl. (6) of the Act. By the combined operation of that section and s. 35(1)(b), a tenant may apply to the Tribunal for an order determining that a landlord has substantially interfered with the tenant’s reasonable enjoyment of rental premises and, if the Tribunal makes such a determination, the Tribunal may order an abatement of rent, among other relief.

10. [10] As relevant here, the key provisions of the Act read as follows:

Tribunal’s jurisdiction

157. (2) The Tribunal has exclusive jurisdiction to determine all applications under this Act and with respect to all matters in which jurisdiction is conferred on it by this Act.

Power to determine law and fact

162. The Tribunal has authority to hear and determine all questions of law and fact with respect to all matters within its jurisdiction under this Act.

Committee shall adopt rules

164. (2) [The Rules and Guidelines Committee established under s. 164(1) of the Act] shall adopt rules of practice and procedure governing the practice and procedure before the Tribunal under the authority of this section and section 25.1 of the Statutory Powers Procedure Act.

Expeditious procedures

171. The Tribunal shall adopt the most expeditious method of determining the questions arising in a proceeding that affords to all persons directly affected by the proceeding an adequate opportunity to know the issues and to be heard on the matter.

Form of application

172. (1) An application shall be filed with the Tribunal in the form approved by the Tribunal, shall be accompanied by the prescribed information and shall be signed by the applicant.

Application filed by agent

(2) An applicant may give an agent written authorization to sign an application and, if the applicant does so, the Tribunal may require the agent to file a copy of the authorization.

Combining applications

173. (1) A tenant may combine several applications into one application.

(2) Two or more tenants of a residential complex may together file an application that may be filed by a tenant if each tenant applying in the application signs it.

Add or remove parties

174. (2) The Tribunal may add or remove parties as the Tribunal considers appropriate.

Applications joined

185. (1) Despite the Statutory Powers Procedure Act, the Tribunal may direct that two or more applications be joined or heard together if the Tribunal believes it would be fair to determine the issues raised by them together.

(b)TheTribunal’s Authority Under theStatutoryPowers Procedure Act

11. [11] By operation of s. 184(1) of the Act, the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22, as amended (the “SPPA”) applies to tenant applications under s. 32(1) cl. (6).

12. [12] The Tribunal derives authority under the SPPA in diverse ways to determine its own procedures and to govern its own processes. Under the SPPA, in its discretion, the Tribunal may:

(1) make rules of general or particular application governing the practice and procedure before it (s. 25.1);

(2) determine its own procedures and practices and, for that purpose, may “make orders with respect to the procedures and practices that apply in any particular proceeding” (s. 25.0.1(a)) and “establish rules under s. 25.1” (s. 25.0.1(b));

(3) make such orders or give such directions in proceedings before it as it considers proper to prevent abuse of its processes (s. 23(1));

(4) admit as evidence at a hearing any oral testimony and any document or other thing relevant to the subject-matter of the proceeding, unless such evidence is inadmissible by reason of any privilege, the Act or any other statute, and may act on such evidence and exclude anything unduly repetitious (ss. 15(1) and (2)); and

(5) make interim decisions and orders and impose conditions on such decisions or orders (ss. 16.1(1) and (2)).

(c) The Tribunal’s Rules of Practice

13. [13] In accordance with its powers under s. 164 of the Act and s. 25.1 of the SPPA, the Tribunal has developed Rules of Practice. Rule 2.2 provides that a member of the Tribunal “may decide the procedure to be followed for an application and may make specific procedural directions or orders at any time and may impose such conditions as are appropriate and fair”. Section 2 of the SPPA requires that rules made under s. 25.1 receive a liberal interpretation to “secure the just, most expeditious and cost-effective determination of every proceeding on its merits”. (See, to similar effect, Rule 1.1 of the Tribunal’s Rules of Practice).

(d) Approach to Interpretation of the Tribunal’s Jurisdiction

14. [14] The Act replaced the Landlord and Tenant Act, R.S.O. 1990, c. L.7 (the “LTA”). It is agreed among the parties that the purpose of the Act is to consolidate and revise the law with respect to residential tenancies. As stated by the Minister of Municipal Affairs and Housing on introduction of the Act in the legislature for third reading, one of the clear goals of the Act is “to streamline administration and cut red tape to create a faster, fairer, less costly system of rent control” (J. Fleming, Residential Tenancies in Ontario (Toronto and Vancouver: Butterworths, 1998) at p. 12, quoting from Hansard, Orders of the Day (18 November 1997) at 1600). To that end, the Act is tenant-centred. It is designed to protect tenants while easing rent control restrictions on landlords. (See J. Fleming, Residential Tenancies in Ontario, at pp. 8-10).

15. [15] The Act confers exclusive jurisdiction on the Tribunal to determine all applications under the Act and with respect to all matters in which jurisdiction is conferred on the Tribunal by the Act (s. 157(2)). It also vests power in the Tribunal to hear and determine questions of law and fact concerning matters within the Tribunal’s jurisdiction under the Act (s. 162).

16. [16] In my view, the purpose of the Act is to encourage speedy, fair and efficient access to justice in residential tenancy matters. The Act provides direction to the Tribunal, in ss. 164 and 171, to achieve that legislative purpose. The intention of the legislature is stated in clear, unambiguous and mandatory terms in s. 171 of the Act. It is useful to again repeat the direction to the Tribunal provided by that section:

171. The Tribunal shall adopt the most expeditious method of determining the questions arising in a proceeding that affords to all persons directly affected by the proceeding an adequate opportunity to know the issues and to be heard on the matter.

17. [17] The Act also seeks to provide the Tribunal with the legal means necessary to accomplish the purpose of the legislation. Those means include wide discretionary powers over matters of procedure and process, including in connection with the joinder or removal of parties (s. 174(2)), the combining of applications (s.173), and the methods of determining questions arising in a proceeding (s. 171).

18. [18] In addition, because the SPPA applies to certain types of hearings held by the Tribunal, including a hearing of the type initiated here, the Tribunal’s power over its own procedures and processes is confirmed by s. 25.0.1 of the SPPA and the rule-making authority conferred on the Tribunal under s. 164 of the Act and s. 25.1 of the SPPA. The Tribunal’s discretion to formulate suitable procedures and directions for the hearing of applications, including tenant applications, is also enunciated in Rule 2.2 of the Tribunal’s own Rules of Practice.

19. [19] The statutory framework that governs the Tribunal’s jurisdiction in connection with applications, including applications for rent abatements, argues for an expansive view of the Tribunal’s jurisdiction over the presentation of evidence before the Tribunal. In my view, a liberal interpretive approach should govern interpretation of a remedial statute such as the Act, in a manner consistent with its tenant protection focus. In addition, both s. 2 of the SPPA and Rule 1.1 of the Tribunal’s Rules of Practice contemplate that the rules of the Tribunal, including Rule 2.2, are to receive a liberal construction.

20. (2) The Jurisdiction of the Tribunal in Relation to the Challenged Order

21. [20] Section 19 of the LTA provided:

Where more than one person has a common interest in respect of an application under this Part [Part IV] one or more of those persons may be authorized by a judge of the Ontario Court (General Division) to make or defend an application on behalf of or for the benefit of all.

22. [21] Section 119 of the LTA was contained in Part IV of that statute, which set out procedural provisions relating to residential tenants. Under s. 119, representative applications under the LTA by residential tenants were permitted, with leave of a judge of the Ontario Court (General Division). The current Act contains no provision directly analogous to s. 119 of the LTA. Conversely, and of significance in my view, the LTA contained no provisions analogous to s. 171 or s. 173 of the current Act.

23. [22] The applications judge noted the omission from the Act of a provision similar to s. 119 of the LTA and the unreported decision of Molloy J. in Thompson v. Metropolitan Toronto Housing Authority dated November 26, 1996 (Ont. Gen. Div.), in which claims for rent abatements by 125 tenants proceeded as a representative action under s. 119 of the LTA. He concluded:

The power given to the Tribunal under s. 171 of the [Act] cannot be interpreted as bestowing jurisdiction upon the Tribunal to allow any type of proceedings so long as the method is the “most expeditious”. Such an interpretation would render unnecessary the power of joinder under s. 173(2) of the [Act]. It would also negate the right of the responding parties under s. 13 to cross-examine each applicant regarding alleged losses.

In General Motors of Canada Limited v. Naken et al., 1983 19 (SCC), [1983] 1 S.C.R. 72, 93, Estey J. (for the Court) pointed out that “joinder of actions” and “representative actions” were not synonymous. He said that a representative action/class proceeding was “one stage beyond that contemplated” by a joinder of actions.

In summary, it is my conclusion that the Tribunal was without jurisdiction to make the [Challenged Order]. In the alternative, if the Tribunal was vested with the jurisdiction to consider the question, the Tribunal’s impugned decision is patently unreasonable.

24. [23] In reaching those conclusions, the applications judge formed the view that the effect of the Challenged Order was to authorize a representative action of the type envisaged by s. 119 of the LTA. In deciding that leave should be granted to the Authority to seek judicial review on an urgent basis, the applications judge stated:

In my view, whether the Tribunal had jurisdiction to allow a representative action is a bedrock issue that should be decided before the Tribunal embarked on a four (4) day hearing. If the Tribunal lacked such jurisdiction, then the hearing would be fatally flawed and be a waste of time and money for all the parties…. [Emphasis added]

25. [24] That characterization of the jurisdictional question at issue formed the basis for the applications judge’s subsequent reasoning. This appears from his references, after framing the jurisdictional question, to s. 119 of the LTA, former Rule 75 of the Rules of Civil Procedure (which similarly authorized representative actions), and the Class Proceedings Act, 1992, S.O. 1992, c. 6 (which established in Ontario the right to initiate class proceedings).

26. [25] With respect, I do not agree that the Challenged Order authorized a representative action or application of the type envisaged by the statutory and regulatory authorities cited by the applications judge. I also do not agree with the Authority’s submission before this court that the absence in the Act of a provision akin to s. 119 of the LTA establishes that the legislature intended to preclude approaches to the presentation of evidence in hearings before the Tribunal of the type envisaged by the Tenants’ Proposal.

27. [26] Section 119 of the LTA authorized the bringing of a representative action. As noted by the applications judge, the term “representative action” is defined by Black’s Law Dictionary, 7th ed. (St. Paul, Minn.: West Group, 1999) as a “class action” or a “derivative action”. The same dictionary defines the term “class action” as “a lawsuit in which a single person or a small group of people represent the interests of a larger group”. Thus, “representing the interests of a larger group” is a defining element of a representative proceeding. That element was embodied in: a) s. 119 of the LTA, which referred to one or more persons making or defending an application “on behalf of or for the benefit of all”, and b) in former Rule 75 of the Rules of Civil Procedure, which referred to one or more persons suing or being sued, or defending “on behalf of, or for the benefit of all”. It is also integral to the concept of class proceedings under the Class Proceedings Act, 1992 pursuant to which one or more persons may seek to pursue an action on behalf of many unnamed persons having a common interest.

28. [27] In this case, no tenant was authorized to act for, or represent the interests of, all of the Tenants. No tenant claimed to represent all of the Tenants. None of the proposed eleven witnesses was identified as a representative applicant on behalf of all of the Tenants. No order was sought from the Tribunal to appoint one or more tenants to represent the interests of all of the Tenants. To the extent that the claims of any of the Tenants extended beyond a common rent abatement, and involved compensatory relief personal to them, the normal demonstration of proof of the individual claimed losses would be required.

29. [28] Moreover, the Challenged Order did not purport to grant authorization for a representative application on behalf of, or to appoint a representative tenant for, unnamed persons. To the contrary, the Tribunal required that all tenants who wished to participate in the hearing, sign the application for rent abatement. By that procedure, the applicants’ identities were disclosed to the Authority. The location of their rental units and the nature of the repairs carried out at each unit were facts within the knowledge of the Authority. Once disclosure of the names of all of the applicants was made, the Tribunal had clear jurisdiction under s. 173 of the Act to entertain one application which combined several tenant applications. The Tribunal member who made the Challenged Order stated:

According to Ms. Summers Interim Order issued on September 24, 1999 this hearing will proceed as a combined multi-tenant application under Subsection 173(2) of the [Act]. Her interim order required that all applicants ensure that they have provided their signatures to this application. Therefore, the Landlord’s submission that the form of this proceeding constitutes a representative action that is not authorized by the [Act], is erroneous.

30. [29] The Tenants’ Proposal, at its core, concerned the suggested method by which the Tenants intended to lead viva voce evidence on common issues. To the extent that the circumstances or losses of individual tenants varied, and were uncommon, the Challenged Order protected against prejudice to the Authority. The Challenged Order states:

The Landlord is not prejudiced by this approach [the Tenants’ Proposal] because overall the abatement will reflect the average experience. Also, to ensure this result, it is open to the Landlord to call evidence to refute that the evidence submitted by the Tenants is in fact representative and to call other Tenants as witnesses.

A list of all witnesses and a description of the facts/evidence to which they will testify shall be provided to the other party and the Tribunal at least two weeks prior to the hearing date.

31. [30] The Challenged Order approved an expeditious procedural method for the introduction of oral evidence at a multi-party hearing so as to facilitate determination by the Tribunal of the questions arising in the Tenants’ combined application. It did so in a manner which provided for procedural and adjudicative fairness to the Authority by ensuring that disclosure was made to the Authority of the case it would be required to meet and by preserving the Authority’s right to call further evidence to contest the Tenants’ evidence. The Challenged Order was thus a direct response to the requirements of the mandatory direction set out in s. 171 of the Act.

32. [31] Without approval by the Tribunal of the Tenants’ Proposal, the Tenants would have been obliged to lead viva voce evidence at the hearing from numerous, perhaps hundreds, of the Tenants. Alternatively, multiple hearings to adjudicate each tenant’s claim would have been necessary. Under either scenario, lengthy and repetitious evidence would have been required, at great cost, on many common issues. Such an impractical result, in my view, would offend s. 171 and the remedial purpose, goals and tenant protection focus of the Act as a whole. The Act seeks to avoid a multiplicity of similar proceedings. Section 15 of the SPPA empowers the Tribunal to exclude unduly repetitious evidence.

33. [32] Accordingly, I conclude that ss. 171 and 173 of the Act are intended to permit the Tribunal to entertain multi-party applications in the form of one combined application, with such corresponding evidentiary approaches as facilitate expeditious dispute resolution while ensuring adjudicative and procedural fairness. The wide discretion of the Tribunal under the Act and the SPPA to set its own procedures and to control and establish its own processes in connection with such an application affords the Tribunal considerable latitude in determining the method by which it will determine contested issues before it. The Tenants’ Proposal was one such method. A liberal construction of the Act, of the Tribunal’s powers under both the Act and the SPPA, and of the Tribunal’s own Rules of Practice compels the conclusion that the Tribunal had jurisdiction to approve the Tenants’ Proposal.

(3) Interpretation of Section 13 of the Act

34. [33] As I earlier noted, the applications judge concluded that interpreting s. 171 of the Act in a manner which permitted authorization of the Tenants’ Proposal would (at para. 40): “[A]lso negate the right of the responding parties under s. 13 to cross-examine each applicant regarding alleged losses”.

35. [34] Section 13 of the Act imposes an obligation on a person claiming a monetary amount from a landlord or a tenant, as a result of a breach of a tenancy agreement, to “take reasonable steps to minimize [the claimant’s] losses”. The Authority argues on this appeal that where a person has such a duty, the party claimed against must have the right to cross-examine the claimant regarding the alleged losses and any efforts made to mitigate those losses. Accordingly, the Authority asserts, if s. 13 is to have meaning, it should be interpreted as conferring such a right of cross-examination. In contrast, the Tribunal argues that the applications judge erred in law in concluding that s. 13 affords a right of cross-examination. I agree with the Tribunal’s submission.

36. [35] The applications judge referred to s. 13 of the Act in support of his conclusion that s. 171 of the Act did not authorize the Challenged Order. The applications judge’s interpretation of s. 171 of the Act lies at the core of his decision to quash the Challenged Order. His observation concerning s. 13, therefore, is obiter. It is not open to the parties to appeal the reasons of the applications judge, as distinct from his decision. Nonetheless, as the applications judge’s statement regarding s. 13 has been challenged on this appeal and fully argued, and as it concerns a basic procedural right in hearings before the Tribunal, I conclude that it is appropriate to comment on its substance.

37. [36] Section 13 of the Act is concerned with a landlord’s or a tenant’s duty to mitigate claimed losses. In my view, it does not confer, and is unrelated to, any right of cross-examination. While s. 10.1(b) of the SPPA provides that a party to a proceeding may conduct cross-examination of witnesses at a hearing, it does not confer a right to compel the testimony of an opposing party. It contemplates that where an opposing party elects to become a witness by choosing to testify, that choice gives rise to cross-examination rights in parties adverse in interest.

38. [37] An applicant in a rent abatement hearing before the Tribunal bears the burden of demonstrating entitlement to the abatement and compliance with s. 13 of the Act where that section applies. That burden may be satisfied in a variety of ways which do not invariably require the testimony of the applicant. It may be that the failure by an applicant to testify will result in the dismissal of a claim for rent abatement. A dismissal in those circumstances, however, flows from an insufficiency of proof by the applicant of his or her claim. It does not flow automatically, or necessarily, from an election not to testify. The Authority’s interpretation of s. 13 presupposes that a claimant under s. 13 can be compelled to testify in order to permit cross-examination on the duty to mitigate losses established under s. 13. That argument, in my view, is misconceived. Stated simply, testimonial compulsion forms no part of s. 13 of the Act, whether for cross-examination or other purposes. It follows that s. 13 cannot be understood or interpreted as conferring a right of cross-examination.

IV. DISPOSITION

39. [38] For these reasons, I would allow the appeal. As no party sought costs of this appeal, this is not a proper case for an award of costs.

“E.A. Cronk J.A.”

“I agree: R.S. Abella J.A.”

“I agree: Louise Charron J.A.”

Released: June 25, 2002