CITATION: Barnaby v. Salamander Opportunities et al, 2018 ONSC 5749

DIVISIONAL COURT FILE NO.: DC-17-1071 DATE: 20180927

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

C. Horkins, Bale, Labrosse JJ.

BETWEEN:

Dorothy Barnaby and David Barnaby

Applicant/Respondents

Salamander Opportunities

and

Amanda Ridding

Respondents/Appellants

O. Syed, for the Applicant/Respondents

D. Strashin, for the Respondents/Appellants

HEARD at Oshawa: September 27, 2018

c. hORKINS J.

introduction

[1] The Appellants (“the landlord”) appeal the decision of the Landlord Tenant Board (the Board) dated December 4, 2017. The Board found that the landlord contravened s. 24 of the Residential Tenancies Act (the “Act”) by failing to provide the tenant, Dorothy Barnaby, (the “tenant”) with replacement keys to her rental unit.

[2] The Board ordered the landlord to pay the tenant $15,655.70 by December 15, 2017, with interest owing on the balance outstanding after December 15, 2017. This amount reflected the tenant’s storage expenses and increased rental costs that resulted from the landlord’s conduct in inducing the tenant to vacate the rental unit. The landlord asks that the Board’s Order be set aside.

background

[3] The following background is relevant to this appeal.

[4] From 1976 until July 2016, the tenant lived at 178 Owen Street in Barrie (the “Rental Unit”). In May 2009, her son, David Barnaby, moved into the Rental Unit with her. The landlord purchased the Rental Unit in 2014 and continued to rent the premises to the tenant.

[5] In July 2016, there was a fire at the residential complex where the Rental Unit was located. The Rental Unit had smoke damage and was uninhabitable. The landlord asked the tenant to vacate the Rental Unit and remove her belongings so that it could be repaired.

[6] Initially it was expected that the repairs could be done and the tenant could return to live in the rental unit in 30 days. However the repair process was protracted because asbestos was discovered during the repairs.

[7] The tenant’s insurance covered the cost of rent in another home until June 2017, when the Rental Unit was repaired and available for occupancy.

[8] In June 2017, the landlord did not provide the tenant with replacement keys to the Rental Unit. The landlord rented the unit to another tenant as of July 2017.

[9] On June 2, 2017, the tenant applied for an order determining that the landlord had illegally locked her out of the Rental Unit because the landlord had failed to provide her with replacement keys, pursuant to s. 29(1) of the Act. The tenant sought an order restoring possession of the Rental Unit or increased rent for one year.

[10] The landlord argued that the tenant was not entitled to occupancy of the Rental Unit due to the following: the tenant had abandoned the Rental Unit, the tenant had fundamentally breached the rental agreement, and/or the rental agreement was frustrated. In making these arguments, the landlord submitted that the tenant cancelled the water bill and failed to negotiate a renewal of the tenancy agreement. The Board did not accept the landlord’s arguments.

[11] Specifically, under the doctrine of frustration, the Board stated that the following must be met:

First, an unexpected event that was not contemplated in the contract or foreseeable must occur. Second, the unexpected event cannot be self-induced or the fault of one of the parties… Third, the event must drastically change the nature of the contract so that it is impossible (not just difficult or expensive) to perform the obligations under the contract. The impossibility of performance must be of a long term nature and not temporary or transient.

[12] The Board found that resuming occupation of the Rental Unit was reasonably possible and that the landlord did not give notice of termination to the tenant but rather continued discussions with the tenant about continuing the tenancy.

[13] The landlord argued that the Board was biased due to the Board’s conduct in unbinding the landlord’s affidavit of documents and reconvening the hearing. The Board rejected this submission.

[14] The Board found that the tenant had been illegally locked out of the Rental Unit. In determining the remedy, the Board found that it was not appropriate to order recovery of possession of the Rental Unit because it had been rented and was occupied by another tenant. The Board awarded the tenant $11,105.70 in increased rent paid from June 1, 2017 to May 1, 2018, pursuant to s. 31(2)(a) of the Act. The Board also awarded storage expenses in the amount of $4,500 for the period from June 8, 2017 to October 10, 2017, pursuant to s. 31(2)(b) of the Act. Lastly, the Board awarded $50 for the cost of filing the application.

jurisdiction and standard of review

[15] Appeals from a decision of the Landlord and Tenant Board can be made to the Divisional Court under s. 210(1) of the Act. However, the Act limits any appeal from the Landlord and Tenant Board to questions of law.

[16] The standard of review on an appeal from a decision of the Board is reasonableness. Where allegations of procedural fairness are raised there is no standard of review. The process is either procedurally fair or it is not.

Grounds of Appeal

[17] The landlord’s grounds of appeal can be grouped into three:

(1) Did the Board err in finding the doctrine of frustration did not apply?

(2) Did the Board err in calculating the respondent’s remedy?

(3) Did the Board deny the landlord procedural fairness?

[18] The first two grounds of appeal do not raise a question of law but rather questions of mixed fact and law. Describing an alleged error as an error of law does not make it so.

[19] It is agreed that the Board correctly identified the test that must be met to prove frustration.

[20] Dealing with the issue of frustration, the landlord submits that after the fire, the nature of the rental agreement changed drastically and became impossible to perform. It is the application of the third prong of the test that is challenged.

[21] The landlord also argues that in analyzing the doctrine of frustration, the Board analyzed whether resumption of occupancy was possible but did not address whether other aspects of the contract were possible to perform. The landlord submits that the nature of the contract changed and made it impossible for the landlord to file Form N5 and Form L2 to evict the tenant. This form stipulates that the tenant must be in possession of the rental unit when the application is filed. The landlord also submits that the tenant cancelled the water bill as of February 2017 but the landlord was unable to file an application under the rental agreement to end the tenancy due to the tenant’s lack of possession of the Rental Unit.

[22] The Board correctly described the elements of the doctrine of frustration. The landlord’s ground of appeal focuses on the application of the facts to the law. As such this is a matter of mixed fact and law, specifically the Board’s application of the third prong of the test. The landlord has no right of appeal.

[23] Dealing with the second ground of appeal the same problem arises. The landlord argues that the Board’s calculation of the tenant’s remedy was inaccurate because the Board failed to account for the tenant’s duty to mitigate damages on the rental unit and storage costs. This is at best a question of mixed fact and law if not solely a question of fact.

[24] The alleged procedural fairness deals with the Board’s treatment of documents that the landlord submitted and the landlord’s allegation that the Board member was biased and failed to recuse herself. The Board dealt with these allegations in the decision.

[25] At the first hearing date, the landlord provided a package of documents to the Board. The hearing did not proceed that day and was adjourned. The Board returned the package of documents to the landlord and explained that the landlord could submit documents at the hearing if they related to the issues to be heard.

[26] After the first hearing date, the landlord resubmitted the package of documents and a copy of a law journal. On the return of the hearing, the Board gave the documents back to the landlord and the landlord refused to accept them. The landlord insisted that the package of documents form part of the record. The Board explained to the landlord the process through which evidence is introduced at a hearing. The Board also told the landlord that the documents would not be reviewed and considered by the Board until they were introduced at the hearing and accepted by the Board as evidence.

[27] The landlord submits that its’ right to be heard and right to an impartial decision maker was denied when the Board returned the documents to them.

[28] The landlord also alleges that the Board was biased because the Board reconvened to hear evidence about the tenant’s increase in rent and moving costs (that were incurred because the tenant could not move back into the rented unit).

[29] The landlord also submits that its right to an impartial decision maker was denied when the Board delayed making the final judgment in order to review the tenant’s cost submissions.

[30] As the Board noted, the Statutory Powers Procedure Act authorizes a tribunal to admit evidence at a hearing or order that it be excluded. Section 25.0.1 of this Act gives the Board the power to determine its own procedures and make orders for that purpose. The Board is entitled to control its process and this is exactly what it did.

[31] The landlord submits that that the Board should not have made a determination on the landlord’s allegation of bias against the Board. The landlord submits that this determination should have been made from an unbiased observer.

[32] In paras 7-14 of the decision, the Board acknowledged the allegation of bias and described the landlord’s position. The Board set out the applicable law and correctly concluded that a reasonable and well informed person would not conclude that there is a reasonable apprehension of bias. This was an exercise of the Board’s discretion and it was fairly applied.

[33] In summary, the landlord has not raised any grounds of appeal on a question of law and there is no basis for the argument that procedural fairness was not provided.

[34] The appeal is dismissed.

[35] Appeal is dismissed for oral reasons provided. There have been three court attendances for this appeal. The tenant is entitled to costs. We have fixed the costs at $9,000.00 all inclusive and order the landlord to pay the tenant these costs.

___________________________ C. Horkins J.

I agree: ___________________________

Bale J.

I agree: ___________________________

Labrosse J.

Released: September 27, 2018

CITATION: Barnaby v. Salamander Opportunities et al, 2018 ONSC 5749

DIVISIONAL COURT FILE NO.: DC-17-1071 DATE: 20180927

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

C. Horkins, Bale, Labrosse

BETWEEN:

Dorothy Barnaby and David Barnaby

Applicant/Respondents

Salamander Opportunities

and

Amanda Ridding

Respondents/Appellants

REASONS FOR JUDGMENT

C. Horkins J.

Released: September 27, 2018