Wheeler et al. v. Ontario (Minister of Natural Resources) [Indexed as: Wheeler v. Ontario (Minister of Natural Resources)]

75 O.R. (3d) 113

[2005] O.J. No. 1544

Court File No. 1489

Ontario Superior Court of Justice

Divisional Court

Cunningham A.C.J.S.C.J., McKinnon and Kerr JJ.

April 20, 2005

Landlord and tenant -- Residential premises -- Tenant Protection Act, 1997 not applying to summer resort lots within provincial park -- Tenant Protection Act, 1997 not applying to Crown by necessary implication -- Tenant Protection Act, 1997, S.O. 1997, c. 24.

WW, JE and GS leased summer resort lots within Rondeau, a provincial park in Chatham-Kent, Ontario, pursuant to specific lease agreements with the Crown that were renewed in 1987 and 1988 until the 31st day of December 2017. The lease extensions were authorized by Letters Patent signed by the Lieutenant Governor of the Province. The agreements provided that the premises were for recreational purposes and not as year-round permanent residences. Further, the agreement provided that the premises shall not be used for residential purposes as defined by the Landlord and Tenant Act, R.S.O. 1990, c. L.7 and the Residential Rent Regulation Act, R.S.O. 1990, c. R.29. The Ontario Rental Housing Tribunal ruled that the Ontario Tenant Protection Act, 1997 did not apply to the leases. WW, JE and GS appealed.

Held, the appeal should be dismissed.

The Tenant Protection Act, 1997 does not apply to property owned by the provincial Crown and, contrary to the appellants' argument, the Act did not bind the Crown by necessary implication. The Interpretation Act, R.S.O. 1990, c. I.11 provides that "No Act affects the rights of Her Majesty, Her heirs or successors, unless it is expressly stated therein that Her Majesty is bound thereby." Even if the necessary implication doctrine was available, it would not apply here. The words in the Tenant Protection Act, 1997 did not manifest a clear intention to bind the Crown nor would the statute be wholly frustrated or rendered an absurdity if the Crown were not bound. Nor did the "benefit -- burden" principle of waiver apply against the Crown. Moreover, if the Tenant Protection Act, 1997 did bind the Crown, the recreation properties in question could not be characterized as "residential units" within a "residential complex" as contemplated by the Act, nor a "land lease community" which embraces rental units that are "intended for the common use and enjoyment of the tenants of the landlord". These words cannot be construed to include a provincial park. The cottages in question were not "residences" within the meaning of the Act, and to so deem them would be to torture the plain meaning of the defining terms. In the result, the appeal should be dismissed.

APPEAL from a decision of the Ontario Rental Housing Tribunal.

Cases referred to Alberta Government Telephones v. Canadian Radio-television and Telecommunications Commission, 1989 78 (SCC), [1989] 2 S.C.R. 225, [1989] S.C.J. No. 84, 68 Alta. L.R. (2d) 1, 61 D.L.R. (4th) 193, 98 N.R. 161, [1989] 5 W.W.R. 385, 26 C.P.R. (3d) 289; [page114] Friends of the Oldman River Society v. Canada (Minister of Transport), 1992 110 (SCC), [1992] 1 S.C.R. 3, [1992] S.C.J. No. 1, 84 Alta. L.R. (2d) 129, 88 D.L.R. (4th) 1, 132 N.R. 321, [1992] 2 W.W.R. 193, 48 F.T.R. 160n; Moss v. Jackson, [2002] O.J. No. 933 (S.C.J.); Sparling v. Québec (Caisse de dépôt & de placement), 1988 26 (SCC), [1988] 2 S.C.R. 1015, [1988] S.C.J. No. 95, 55 D.L.R. (4th) 63, 89 N.R. 120, 41 B.L.R. 1 Statutes referred to Interpretation Act, R.S.C. 1985, c. I-21 Interpretation Act, R.S.O. 1990, c. I.11, s. 11 Landlord and Tenant Act, R.S.O. 1990, c. L.7 Provincial Parks Act, R.S.O. 1990, c. P.34, s. 12 Residential Rent Regulation Act, R.S.O. 1990, c. R.29 Residential Tenancies Act, 1979, S.O. 1979, c. 78 Tenant Protection Act, 1997, S.O. 1997, c. 24, s. 205(2)

Troy H. Lehman, for applicant (appellant). Josh Hunter, for respondents (respondent).

The endorsement of the court was delivered by

MCKINNON J.: -- This is an appeal from a decision of the Ontario Rental Housing Tribunal, seeking an Order that the Ontario Tenant Protection Act, 1997, S.O. 1997, c. 24 applies to the rental units enjoyed by the three appellants.

[1] The appellants lease summer resort lots within Rondeau, a provincial park in the Municipality of Chatham-Kent, Ontario. There are over 300 provincial parks in Ontario. Only one other provincial park permits cottage lots, which is Algonquin Park. There are only 596 cottage lots located in Rondeau and Algonquin. Suffice to observe, these summer lots are a distinct rarity.

[2] The three appellants are all subject to specific lease agreements which were renewed in 1987 and 1988 until the 31st day of December 2017. Cottages exist on the leased lots. In all, approximately 1 per cent of Rondeau is occupied by 291 cottage lots. Rondeau Provincial Park is a year-round park classified as a natural environment park and is home to many rare plant and animal species. The privilege of holding a lease for these lots is so unique that s. 12 of the Provincial Parks Act, R.S.O. 1990, c. P.34 prohibits the use or occupation of lands in the park except as permitted by the Act or its regulations. The original Crown leases under which the cottage properties were let to the appellants predecessors in title expressly provide that the "demise is subject to the Provincial Parks Act, and the regulations made thereunder". The regulations provide a terminal date of December 31, 2017. [page115]

[3] When the leases expire, the provisions of the lease extensions provide that the appellants will have the option of removing any buildings from the premises. Should they fail to give notice to do so within 30 days of the expiry of the lease, and remove the structures within five months thereafter, the ownership of the structures will revert to the Crown without compensation to the appellants. The cost of removing the structures will become a debt owed to the Crown.

[4] Significantly, the lease extensions are authorized by Letters Patent signed by the Lieutenant Governor of the Province, evidencing the unique nature of these leases. Paragraph 8 of the lease extensions provides that:

The lessee shall use the premises for recreational purposes and not as a year-round permanent residence. Without limiting the generality of the foregoing the premises shall not be used for residential purposes as defined by the Landlord and Tenant Act (Ontario) and the Residential Rent Regulation Act (Ontario) including any re-enactment, amendment, revision or consolidation of the said Acts.

[5] As well, the appellants predecessors in title expressly agreed to the terms and conditions of the lease extension "not only on behalf of the undersigned, but each of my heirs, executors, administrators, successors and authorized assigns". The appellants covenanted that they would "pay the rent and perform the lessee's covenants, conditions and agreements reserved by the lease". The appellants acknowledged in evidence before the Tribunal appealed from that they knew and understood that their leases "clearly restrict the use of the premises for residential purposes and not as year-round permanent residences", and acknowledged the requirement to remove their cottages at the expiration of the lease term.

[6] The rental charged by the Ministry is modest, being approximately $1,500 per annum.

[7] The appellants assert that the Ontario Tenant Protection Act, 1997 applies to the leased premises, thus affording them rights which they expressly acknowledged they did not enjoy in the lease extensions. The appellants argue that the Tenant Protection Act, 1997 binds the Crown by necessary implication.

[8] We do not agree. The Ontario Interpretation Act, R.S.O. 1990, c. I.11, s. 11 provides that "No Act affects the rights of Her Majesty, Her heirs or successors, unless it is expressly stated therein that Her Majesty is bound thereby." With one exception, the Tenant Protection Act, 1997, does not expressly state that it binds the provincial Crown. That exception is subsection 205(2) which provides that the Crown can be held vicariously liable for the actions of members of the Tribunal or its employees. [page116]

[9] This section stands in stark [contrast] to the predecessor Acts which expressly bound the Crown, namely the Residential Tenancies Act, 1997, S.O. 1979, c. 78 and the Residential Rent Regulation Act, R.S.O. 1990, c. R.29 passed in 1979 and 1989 respectively. The 1992 revision removed these sections, enacting only subsection 205(2), already described. We conclude that the new legislation provides that the Tenant Protection Act 1997 is inapplicable to property owned by the provincial Crown.

[10] The Ontario Interpretation Act casts a briefer compass on Crown liability [than] the federal Interpretation Act, R.S.C. 1985, c. I-21, which is phrased to include enactments "mentioned or referred to in the enactment". The doctrine of "necessary implication" as outlined in Friends of the Oldman River Society v. Canada (Minister of Transport), 1992 110 (SCC), [1992] 1 S.C.R. 3, [1992] S.C.J. No. 1, per Dickson C.J.C., at p. 50 S.C.R. is inapplicable to the case at bar. Even if the case were controlling, we would find that the words in the Tenant Protection Act, 1997 do not exhibit a clear intention to bind the Crown "which is manifest from the very terms of the statute", nor would the statute be "wholly frustrated" or rendered an "absurdity" if the Crown were not bound: see Alberta Government Telephones v. Canadian Radio-television and Telecommunications Commission, 1989 78 (SCC), [1989] 2 S.C.R. 225, [1989] S.C.J. No. 84, per Dickson C.J.C., at p. 281 S.C.R.

[11] Nor, in our view, does the "benefit - burden" principle of waiver apply against the Crown: see Sparling v. Québec (Caisse de dépôt & de placement), 1988 26 (SCC), [1988] 2 S.C.R. 1015, [1988] S.C.J. No. 95, per La Forest J., at p. 1021 S.C.R. The Crown is not seeking any benefit from the Tenancy Protection Act in the case at bar, and this distinction is vital before Sparling would bear the issue.

[12] The appellants submitted that the decision of this court in Moss v. Jackson, [2002] O.J. No. 933 (S.C.J.) was virtually indistinguishable from the case at bar. In our opinion, the Moss case is inapplicable because the structures in that case were permanent structures, intended as such, and not located in a provincial park, nor subject to the lease agreements that bind the appellants which restrict their use to summer recreation.

[13] In the event we are wrong in our analysis that the Tenant Protection Act, 1997 does not bind the Crown, we would nonetheless conclude that in the event the Act did apply to the Crown, the recreation properties in question cannot be characterized as "residential units" within a "residential complex" as contemplated by the Act, nor a "land lease community" which embraces rental units that are "intended for the common use and enjoyment of the tenants of the landlord". These words cannot be construed to include a provincial park. [page117]

[14] The cottages in question are not "residences" within the meaning of the Act, and to so deem them would be to torture the plain meaning of the defining terms. The cottages are intended to be, in the express terms of the lease extensions "not as year round permanent residences". To the extent they might be used as such, which the evidence before the tribunal contradicts, the appellants would be in breach of the lease extension agreements. They should not be permitted to gain an advantage through a breach of their agreements.

[15] In the result, the appeal is dismissed. Costs are fixed in favour of the respondent in the amount of $5,000 inclusive of GST.

Appeal dismissed.