Belsito v. Zemtsov, 2019 ONSC 5839
CITATION: Belsito v. Zemtsov, 2019 ONSC 5839
DIVISIONAL COURT FILE NO.: 434/18
LANDLORD AND TENANT BOARD FILE NO.: TNT-05052-18
DATE: 20191008
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
Swinton, S.T. Bale, and Favreau JJ.
BETWEEN:
BARBARA BELSITO Applicant (Appellant)
– and –
SAM ZEMTSOV Respondent (Respondent in Appeal)
COUNSEL:
R. Christopher M. Belsito, acting for the Applicant (Appellant)
David J. Rose, for the Respondent (Respondent in Appeal)
Eli Fellman, for the Landlord and Tenant Board
HEARD at Toronto: October 8, 2019
ORAL REASONS FOR JUDGMENT
SWINTON J. (Orally)
[1] The appellant landlord, Barbara Belsito, appeals an order of the Landlord and Tenant Board (the “Board”) dated June 29, 2018 ordering the appellant to pay the respondent tenant, Sam Zemtsov, $12,000.00 for illegal rent collected in the 12-month period preceding the tenant’s T1 application for illegal collection/retention of money.
[2] The tenant was a former resident of 304 Johnston Avenue, Toronto, who had lived in the rental unit for 13 years. His monthly rent was $1,000.00.
[3] In October 2016, the tenant was told that the property would be sold. He signed a new lease with the appellant, the purchaser, for double the rent - that is, $2,000.00 per month, although he was not given a Notice of Rent Increase (“NORI”).
[4] In May 2018, the appellant applied for an order to terminate the tenancy at the end of August 2018 and evict the tenant because the landlord intended to demolish the rental unit. The appellant also applied for an order to terminate the tenancy based on an agreement to terminate before August 31, 2018. In response, the tenant brought the T1 application.
[5] After a hearing, the Board issued its order dismissing the landlord’s second application and granting the tenant’s application in part.
[6] The Board stated at paras. 18 and 19 of its reasons:
A new tenancy requires more than just an increase in rent. The Landlord did not demonstrate that the other terms of the lease had changed. Section 202 of the Act directs the Board, when determining issues before it, to ascertain the real substance of transactions and activities…The parties signed a “new” tenancy agreement in which the only change was a doubling of the rent charged to the Tenant. The fact that a new written tenancy agreement was signed does not, by itself, create a new tenancy.
On the facts before me, I find that the only purpose for having the Tenant sign a new lease was to allow the Landlord to increase the rent. Given my finding that the sole purpose for having the Tenant sign a new lease was to increase the rent, the necessary conclusion is that the increase in rent without the service of a NORI was void ab initio. The Tenant felt pressured into signing a “new” lease, and did. However, this did not create a new tenancy; only the continuation of an existing tenancy. Therefore, the rent was, and continues to be $1,000.00 per month. Any money collected in excess of this amount was illegally collected.
[7] The Board limited the tenant’s recovery to $12,000.00 because of the limitation in s. 135(4) of the Residential Tenancies Act, 2006, S.O. 2006, c. 17 (the “Act”).
[8] An appeal lies to this Court only on a question of law (s. 210(1) of the Act).
[9] The appellant argues that the Board erred in law by failing to consider the second affidavit of Stephen Braun, the appellant’s real estate agent; by making a finding about the terms of the old lease without an evidentiary basis; and by finding that the tenant signed the lease under pressure.
[10] The appellant is essentially taking issue with the Board’s findings of fact. The Board heard evidence from the tenant, who was cross-examined. The appellant provided only affidavit evidence, and there was no opportunity for the tenant to cross-examine Mr. Braun, as the Board pointed out in para. 17 of the reasons.
[11] The appellant argues that the Board failed to consider material evidence in the second Braun affidavit, given the statements in para. 17 of the reasons that the affidavit was silent on discussions about the new lease and does not mention whether the landlord was aware of the tenant’s prior rent or the tenant’s attitude regarding the new lease.
[12] We do not see this as a material error amounting to an error of law. The Board was entitled to accept the evidence of the tenant concerning the events surrounding the lease, which was tested on cross-examination.
[13] In any event, as found by the Board, the signing of a new written tenancy agreement does not, by itself, create a new tenancy. The Board made the finding that the only purpose for having the tenant sign a new lease was to allow the landlord to increase the rent. Given that finding of fact, which is not subject to appeal, the Board applied correct legal principles and reasonably concluded that the increase in rent without the service of a NORI was void ab initio.
[14] Accordingly, the appeal is dismissed. An order is to go for the payment out of court to the respondent tenant of the $12,050.00 and any interest that was paid into court by order of Then J. dated August 1, 2018.
[15] The respondent seeks $21,800.00 in costs on a substantial indemnity basis. There is no reason to award costs on a substantial indemnity basis, as there was no element of compromise in the offer to settle.
[16] The amount claimed is excessive and the hours unexplained. The amount in issue was $12,050.00, and the issues were not complex. Having regard to the principles of proportionality and reasonableness, we fix costs at $7,500 plus HST plus disbursements of $889.94 payable to the respondent. The Board does not seek costs, and none are awarded.
Swinton J.
I agree _______________________________
S.T. Bale J.
I agree _______________________________
Favreau J.
Date of Oral Reasons for Judgment: October 8, 2019
Date of Release: October 9, 2019
CITATION: Belsito v. Zemtsov, 2019 ONSC 5839
DIVISIONAL COURT FILE NO.: 434/18 LANDLORD AND TENANT BOARD
FILE NO.: TNT-05052-18
DATE: 20191008
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Swinton, S.T. Bale, and Favreau JJ.
BETWEEN:
BARBARA BELSITO
Applicant (Appellant)
– and –
SAM ZEMTSOV
Respondent (Respondent in Appeal)
ORAL REASONS FOR JUDGMENT
Swinton J.
Date of Oral Reasons for Judgment: October 8, 2019
Date of Release: October 9, 2019