Ontario Superior Court of Justice – Divisional Court

Swire v. Walleye Trailer Park Ltd.

Date: 2001-07-31

Trudy K. McCormick, for the appellant;

Lawrence G. Phillips, for the respondent.

(229/00)

The Appeal

[1] Maloney, J.: These are two appeals from decisions of Deputy Judge Watt of the Small Claims Court in Fort Frances. They were argued together, as they involve virtually identical facts and identical questions of law.

[2] The facts in the appeals are as follows.

[3] In 1993, the appellant, Fern Cunningham, purchased a trailer from the former tenant, Mr. Westover. This mobile home was located in the respondent's mobile home park. The sale of the unit included an assignment of the lease for the mobile home site. Mr. Westover did not seek the respondent's consent with respect to either the sale or the assignment of lease. However, the respondent did not ask Ms. Cunningham to obtain consent for the purchase of the unit, nor did the respondent provide written reasons indicating whether consent would be granted. After she had purchased the unit, Ms. Cunningham attempted to tender rent cheques for the first six months. However, her cheques were returned to her by the respondent uncashed.

[4] In 1994, the appellant, Brenda Scott Swire, purchased a mobile home from the former tenant, Paul Wepruk. This unit was also located in the respondent's mobile home park. Under the terms of the sale, Ms. Swire obtained an assignment of lease from Mr. Wepruk for the trailer site. Though not explicitly stated in Ms. Swire's materials, since the respondent did not consent to Ms. Cunningham's assignment, it is implied that he also failed to consent to this assignment.

[5] In 1997, the respondent made two applications to the Ontario Court (General Division) in respect of the mobile homes purchased by Ms. Cunningham and Ms. Swire. The purpose of these applications was to determine whether the appellants or the former owners of the appellants' mobile homes were required to pay property taxes assessed on their leased mobile home units and also to determine whether the respondent was unreasonably or arbitrarily withholding consent to the assignments. Both of these applications were disposed of in favour of the appellants, as set out in the reasons in Walleye Trailer Park Limited v. Westover and Cunningham. See Walleye Trailer Park Limited v. Westover and Cunningham ("Cunningham") (April 14, 1997), Thunder Bay 956-95 (Ont. Gen. Div.); Walleye Trailer Park Limited v. Wepruk and Scott (May 20, 1997), Thunder Bay 957-95 (Ont. Gen. Div.).

[6] In Cunningham, Platana, J. (as he then was), found that there was no written tenancy agreement requiring the consent of the landlord for an assignment, and that the Landlord and Tenant Act, R.S.O. 1990, c. L-7, thus applied to the determination of whether the former tenant had a right to assign. He then found that the landlord had unreasonably refused consent to the assignment of the lease. Further, Platana, J., dismissed the landlord's application with respect to property taxes on the basis that the landlord had not given proper notice of intention. At the end of his decision, Platana, J., wrote that:

"I am of the view that provided a proper notice of intention to increase rent attributable solely to municipal taxes is provided, that does not offend the provisions of the Rent Control Act, and does indeed entitle the landlord to collect such taxes from the tenant (sic). The key, however, is that there must be a proper notice of intention."

[7] Following this decision, in August 1997, the respondent served each of the appellants with two notices. The first notice (Notice # 1) purported to be a notice of rent increase under s. 129 of the Landlord and Tenant Act. It provided that as of December 1, 1997, the appellant would be responsible for property taxes on her unit, and failure to pay such taxes would constitute arrears of rent. Notice # 1 further specified that:

"As of this year 1997 the Landlord intends to change the terms of the rental agreement between the Landlord and the Tenant and require you the Tenant to pay the Landlord the municipal and school taxes assessed against your mobile home."

[8] The second notice (Notice # 2) provided, inter alia, that:

"If you do not make arrangements with the landlord to pay these arrears of taxes within 30 days, a list of those people who are refusing to pay their fair share of the taxes, which shall include your name, shall be distributed to the tenants who are paying their fair share of the taxes."

[9] Neither Ms. Cunningham nor Ms. Swire made any of the payments to the respondent as specified under these notices. In June 1998, the respondent sent the appellants yet a further notice, which provided that if payment was not arranged by July 15, 1998, the respondent would commence legal proceedings against the appellants.

[10] In December 1998, the respondent issued claims in the Small Claims Court in Fort Frances against each of the appellants. Judgment was granted in favour of the respondent for payment of the 1997 and 1998 taxes.

Issues

[11] There are, in my view, two issues in the case at bar:

1. Whether Deputy Judge Watt had jurisdiction over the subject matter in the dispute; and

2. Whether the respondent's notice was sufficient to vary the terms of the rental agreement to require the appellant to pay the taxes in addition to the rent.

Analysis

[12] Although counsel for the appellants raised the issue of Judge Watt's jurisdiction, neither side presented any legal argument on point.

[13] In considering whether the Smalls Claims Court had jurisdiction over the matter before it, Judge Watt noted that:

"Section (1) of the Tenant Protection Act, states 'Rental Unit includes …a site for a mobile home', however does not deal with the mobile home itself, or the taxes levied against it, which is the subject of this action."

[14] Since Judge Watt held that the Tenant Protection Act, S.O. 1997, c. 24 (the "TPA"), did not apply to the case at bar, he held that the Small Claims Court had jurisdiction to hear the matter. For the following reasons, I disagree.

[15] While it is true that s. 1 of the TPA sets out a definition for a mobile home, this is not the only section of the Act dealing with such tenancies. Rather, it is clear from s. 1(2) of the TPA that mobile homes are considered to be rental units and are thus subject to the Act in much the same way as traditional tenancies. Section 1(2) states:

"(2) A rented site for a mobile home or a land lease home is a rental unit for the purposes of this Act even if the mobile home or the land lease home on the site is owned by the tenant of the site."

[16] Although it is true that this section does not explicitly discuss the question of taxes, in my view, the wording of the section implies that all issues arising from a mobile home tenancy are to be considered as rental units and thereby dealt with under the rubric of the Act. Moreover, as is discussed below, there are provisions within the Regulations to the TPA which explicitly address the question of property taxes in the mobile home context. Both of these factors lead me to the conclusion that this issue is properly considered under the jurisdiction of the TPA or its predecessor, the Landlord and Tenant Act.

[17] As a result, the question as to which is the proper forum remains. As noted above, this action was commenced in December 1998; however, much of the subject matter of the dispute occurred prior to 1997. This is relevant to this question of the proper forum, since the Tenant Protection Act was not granted royal assent until November 1997, and most of its provisions came into force much later, on June 17, 1998.

[18] Under the pre-1998 Act, i.e., the Landlord and Tenant Act, most disputes were brought to the Ontario Court (General Division). One of the legislature's main purposes in creating the Tenant Protection Act was to remove jurisdiction of landlord-tenant matters from the courts and to transfer such jurisdiction to a specialized tribunal, the Ontario Rental Housing Tribunal (the "ORHT"). Section 157(2) of the TPA states that:

"(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."

[19] As the successor to the courts with respect to landlord and tenant matters, the ORHT would thus have jurisdiction over the matters in the case at bar. On this point, I also note that s. 14 of the Interpretation Act, R.S.O. 1990, c. Ill, which deals with the effect of the revocation or repeal of acts, states, inter alia:

"(2) If other provisions are substituted for those so repealed or revoked,

(b) all proceedings taken under the Act, regulation or thing so repealed or revoked, shall be taken up and continued under and in conformity with the provisions so substituted, so far as consistently may be;"

[20] Thus, while the proper procedure under the Landlord and Tenant Act would have been to make an application to the Ontario Court (General Division), the ORHT has now assumed the court's jurisdiction in this regard. This jurisdiction extends to landlord and tenant matters that would have been considered under the previous legislation. As a result, it is my opinion that judge Watt erred in asserting jurisdiction in the case at bar. I thus set aside the judgment and order that the matter be referred to the ORHT.

[21] Although I have disposed of the appeal on jurisdictional grounds, I would still like to make the following observations concerning the governing law.

[22] The main question involved in this appeal was whether an owner of a mobile home park can require individual tenants to pay their proportionate share of the property taxes for the park. It is true that s. 1 of the TPA specifically states that rent does not include:

"an amount paid by a tenant to a landlord to reimburse the landlord for property taxes paid by the landlord with respect to a mobile home or land lease home owned by a tenant."

[23] As a result, it is clear in my mind that the charge requested by the landlord in this case cannot be considered as rent. However, this does not provide a definitive answer to the question of whether the landlord could impose such a charge on the tenant.

[24] Section 140 of the TPA defines a number of illegal additional charges which cannot be charged by either the landlord or tenant. Such illegal charges include key deposits or fees for consideration for prospective rental units. Section 144 of the TPA provides that a tenant or former tenant of a rental unit may apply to the ORHT for an order that moneys paid to the landlord by the tenant were paid, inter alia, in contravention of the TPA, including s. 140.

[25] A number of exemptions to the charges defined in s. 140 of the TPA are listed in s. 29 of O. Reg. 194/98. This section states, inter alia, that:

"The following payments are exempt from the operation of section 140 of the Act:

9. Payment of an amount to reimburse the landlord for property taxes paid by the landlord with respect to a mobile home or a land lease home owned by the tenant."

[26] In my view, s. 29 of Ontario Regulation 194/98 provides a complete answer to the question in the case at bar. While reimbursement for property taxes in respect of mobile homes is not considered rent under the TPA, it is also not considered an illegal charge. As a result, it is my opinion that the governing law allows landlords to charge tenants of mobile home parks for this expense. I would add, however, that I would agree with Platana, R.S.J., that there should be reasonable notice to the tenant for such a charge, especially where such charge is not specifically covered in the lease.

Disposition

[27] For the reasons given, it is my opinion that the judgment of Judge Watt should be set aside and the matter referred to the Ontario Rental Housing Tribunal. It is so ordered.

Appeal allowed.