CITATION: O’Shanter Development Company Ltd. v. Barbara Augustin, 2021 ONSC 1720

DIVISIONAL COURT FILE NO.: DC-19-0000006-0000

DATE: 20210308

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: O’Shanter Development Company Ltd., Appellant

AND:

Barbara Augustin et al., Respondents

BEFORE: Dambrot, Penny and Favreau JJ.

COUNSEL: Joseph J. Hoffer and Kristin A. Ley for the Appellant

Brian A. Blumenthal and Katia Snukal for the Landlord and Tenant Board

HEARD by video conference: March 8, 2021

reasons for judgment

[1] The Landlord appeals from a Decision and Reconsideration of the Landlord and Tenant Board which determined that the cost of installing a fall arrest roof anchor system at the residential complex owned by the Landlord was not a “capital expenditure” which qualified for rent recovery through an over-guideline rent increase.

[2] An appeal lies to this Court from the LTB on a question of law only.

[3] The Landlord submits that it was denied procedural fairness by the LTB in three respects:

(1) failing to grant an adjournment or permit post-hearing submissions to enable the Landlord to produce evidence about the legal requirement for installation of the roof anchor system;

(2) reliance, in the Reconsideration, on a so-called “confidential” settlement note from a prehearing case conference; and

(3) the lack of a recording system or the lack of adequate reasons for denying the Landlord’s request for an adjournment.

[4] There is no standard of review for questions of procedural fairness. The Court decides, for itself, whether procedural fairness has been afforded in the circumstances, applying the factors set out in Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 SCR 817. The denial of procedural fairness, if established, qualifies as an error of law.

Denial of Request To Receive Further Material

[5] The LTB is entitled to control its own process and is entitled to deference on matters requiring the exercise of discretion, such as scheduling and adjournment requests. The Landlord acknowledges this but argues that, in the circumstances of this case, the refusal to “adjourn” to permit the Landlord to file further material or to permit the Landlord to make post-hearing submissions on the question of whether it was “necessary” to install the roof anchor system was a denial of the Landlord’s right to be heard.

[6] We are unable to agree. The Landlord was the applicant for a rent increase above the guideline limit. The Landlord’s justification for this increase was, in this case, capital expenditures, including the expenditures on the roof anchor system. A capital expenditure is “eligible” for inclusion in an application of this kind under s. 126(7) of the Residential Tenancies Act. Section 126(7)(b) of the RTA, makes a capital expenditure eligible for inclusion if the capital expenditure was necessary to comply with s. 20(1) of the RTA. Section 20(1), in turn, provides that:

A landlord is responsible for providing and maintaining a residential complex, including the rental units in it, in a good state of repair and fit for habitation and for complying with health, safety, housing and maintenance standards [emphasis added].

[7] The Landlord relied on this ground for inclusion of the roof anchor system its application for a rent increase.

[8] The Landlord bore the onus of proving that the installation of the roof anchor system was necessary to comply with building standards. The Landlord’s representative came to the hearing with a witness who said the roof anchor system was a necessary requirement, but this was challenged by the tenants. The Landlord’s representative was not in a position to offer any legal basis or more detailed evidence to establish the necessity for this particular improvement.

[9] In our view, absent a consent from the tenants in advance of the hearing, proof of the necessity for the roof anchor system under building standards in this case was clearly an essential constituent element of the Landlord’s case. It was imprudent for the Landlord to attend the hearing without that evidence and legal support. The LTB and the tenants were entitled to expect the Landlord would appear at the hearing with all the evidence and legal support necessary to meet the bare-bones, essential constituent elements of the statutory requirements for an above-guideline rent increase. The remedial discretion in s. 201(1)(d) was not invoked by the Landlord at the time. The LTB is not obliged to direct a party to fill in gaps in its legal or evidentiary record. Gramercy Apartments Limited v. Anthony (ONSC), relied on heavily by the Landlord, is readily distinguishable. Gramercy was a case involving an obvious mistake in that pages of a document in the record were missing. There is no comparable issue here.

[10] The fact that the tenants raised a concern about the legal necessity of the roof anchor system by reference to the Occupational Health and Safety Act is neither here nor there. The Landlord was under a legal obligation to prove the essential elements of its case whether the tenants raised specific objections or not.

[11] In addition, there was evidence in the record showing it was well known to the Landlord that the roofing expense was one of the main sources of tenant objection to the Landlord’s application. As I will discuss in a moment, the reference to the fact of this dispute by the Vice Chair in her Reconsideration was not improper.

[12] In the circumstances, it cannot be said that the Landlord was caught by surprise or some unforeseeable issue raised by the tenants. The matter on which the Landlord needed time to gather more law and evidence was the necessity for this expenditure. This was an essential element of the Landlord’s case, without which it could not succeed and for which it bore the onus of proof. The Landlord was, or ought to have been, well aware of this. The refusal of the LTB to grant an adjournment, even if that is in fact what happened, was, in the circumstances, well within the allowable limits of discretion and did not result in a denial of procedural fairness.

The “Confidential” Note from a Pre-Hearing Case Conference

[13] We do not accept the Landlord’s submission that it was improper for the Vice Chair to refer to the case management note. The note was to the effect that the roofing expenditures were a central issue of dispute by the tenants going into the hearing. Prehearing case management at the LTB, like judicial pretrials, is most often a combination of settlement efforts and hearing management discussions. What issues are going to be in dispute at the pending hearing clearly falls within the latter, not the former category. There was nothing confidential or privileged about the fact that the tenants disagreed with the Landlord’s claim that the roofing expenditures met the test for eligible capital expenditures under the RTA.

[14] In any event, as noted earlier, even if reference to the case conference note was improper, it would not change the outcome because the denial of the alleged request for time to fill in gaps in Landlord’s case was justified on other grounds.

No Recording/No Reasons

[15] In the absence of a recording, evidence about a denial of procedural fairness is generally provided by way of affidavit. There is no such evidence here.

[16] In any event, in light of the Landlord’s concession that there was no adjournment request, the problems with the recording of the proceedings and the failure to give reasons, raised in the Landlord’s factum, are no longer live issues.

[17] For these reasons, the appeal is dismissed.

[18] The tenants did not actively participate in the appeal. The LTB does not seek costs. Accordingly, there is no order as to costs.

Penny J.

I agree _______________________________

Dambrot J.

I agree _______________________________

Favreau J.

Date: March 8, 2021