Court File and Parties
CITATION: Shapiro v. Swingler, 2021 ONSC 6191
DIVISIONAL COURT FILE NO.: 1233-20
DATE: 20210921
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Dambrot, Lederer and Favreau JJ.
BETWEEN:
Alexander Shapiro
Respondent (Landlord)
– and –
Michelle Swingler and George Obiero Yoga
Appellants (Tenants)
Stuart O’Connell, for the Respondent on the Appeal
Miguna Miguna, for the Appellants
HEARD at Toronto (by viodeconference): May 21, 2021
Reasons for Decision
Favreau J.:
Introduction
[1] Michelle Swingler and George Obiero Yoga, the Tenants, appeal from an order of the Landlord and Tenant Board terminating their tenancy for persistent late payment of rent.
[2] In its decision, the Board found that the Tenants had persistently paid their rent late and that it would be prejudicial to the Landlord for the tenancy to continue.
[3] For the reasons below, the appeal is granted. The hearing before the Board was procedurally unfair. The Tenants were not given an opportunity to provide evidence of the rent payments they made. The matter is remitted back to the Board for a hearing before a different member of the Board.
Background
[4] The rental unit is in Newmarket. The Tenants have occupied the unit since 2004.
[5] On November 8, 2018, the Tenants entered into a four-month renewal agreement with the Landlord, Alexander Shapiro. After four months, the tenancy converted to a month to month lease. The agreement required the Tenants to pay their rent on the 9th day of each month and provided that the rent was $1690 per month.
[6] In December 2019, the Landlord served the Tenants with a Notice of Termination for non-payment of rent dating back to October 9, 2019.
[7] The Landlord then made two applications to the Landlord and Tenant Board to terminate the tenancy. The first application was an L1 Application and sought termination on the basis of non-payment of rent, and the second application was an L2 application and sought termination for persistent late payment of rent.
[8] The hearing before the Board proceeded on January 20, 2020. At the hearing, the Landlord was represented by a paralegal and the Tenants represented themselves.
[9] In a decision dated February 24, 2020, the Board Member hearing the matter dismissed the L1 Application on the basis that the notice was deficient. However, the Member granted the L2 Application, terminating the tenancy as of March 8, 2020. The Member also found that the Tenants owed the Landlord $4,944.04 in rent arrears and ordered the Tenants to pay this amount by March 8, 2020.
[10] In the context of determining the L2 Application, the Member held that the Tenants had persistently failed to pay their rent when it was due. The Member stated that:
The Tenants admit that they pay the rent late, and they admit that the Landlord was understanding of their situation by accepting late payment for some time. They said that their family income is now about $2,300.00 per month, and that they have a lot of expenses. Because of their financial difficulties, they say that they are unable to pay the rent on time.
[11] In considering section 83(1)(b) of the Residential Tenancies Act, 2006, S. O. 2006, c. 17, the Member held that it would be prejudicial to the Landlord to allow the tenancy to continue but that the Tenants should have some time before the tenancy is terminated:
I have considered all of the disclosed circumstances in accordance with subsection 83(2) of the Residential Tenancies Act, 2006 (the ‘Act’), and find that it would not be unfair to postpone the eviction until March 8, 2020, pursuant to subsection 83(1)(b) of the Act. I find that, because of the Landlord’s financial situation, and because he is unable to rely on the Tenants paying the rent in full and on time, it is very prejudicial to the Landlord for the tenancy to continue. However, the Tenants have had their own financial difficulties as well as difficulty in finding an alternative place to live, so it is appropriate to give them a bit longer to move.
[12] The Tenants requested that the Board review its decision. In a decision dated March 9, 2020, the Board upheld the termination of the tenancy. The Board rejected the Tenants’ argument that the Member who made the original decision erred in not issuing a conditional order requiring the Tenants to pay their rent on time. The Board held that this was a proper exercise of discretion and that the Tenants submitted evidence in the context of the review that showed that they would continue to struggle to pay their rent on time. The Board nevertheless found the initial decision contained errors regarding the outstanding rent owed by the Tenants on the basis that the Member who conducted the hearing did not credit the Tenants for amounts paid before the order was issued. The Board remitted the issue of the outstanding rent owed back for a rehearing. The rehearing was originally scheduled for January 22, 2021, but the matter was adjourned pending the hearing of this appeal.
Appeal to the Divisional Court
[13] This appeal was originally scheduled to be heard on January 26, 2021. However, the hearing was adjourned because the Divisional Court had not received the transcript from the hearing before the Board.
Jurisdiction of the Divisional Court
[14] The 210(1) of the Residential Tenancies Act, 2006, provides that an appeal from an order of the Board lies to the Divisional Court but only on a question of law.
Standard of review
[15] Given that there is a statutory right of appeal from the Board to the Divisional Court, the Court is to apply an appellate standard of review. Errors of law are to be reviewed on a standard of correctness.
Analysis
[16] The Tenants raise several issues on the appeal related to both the substance of the decision and procedural fairness. Many of the issues related to the substance of the decision are not questions of law and therefore do not fall within this Court’s jurisdiction. However, the issue of procedural fairness is a question of law that does fall within this Court’s jurisdiction.
[17] In my view, the appeal should be allowed on the basis that the hearing was procedurally unfair. The Member made a finding that the Tenants were persistently late in paying their rent without any documentary evidence from the Landlord and without giving the Tenants an opportunity to produce their own banking documents. The Tenants should have been given an opportunity to produce their evidence and the failure to give them such an opportunity was a breach of procedural fairness.
[18] I first consider the Tenants’ motion to adduce fresh evidence and then turn to the issue of procedural fairness
A. Motion to admit fresh evidence
[19] In the context of the appeal, the Tenants brought a motion to admit fresh evidence.
[20] The fresh evidence consists of an affidavit sworn by one of the Tenants, Michelle Swingler. In her affidavit, Ms. Swingler provides the following evidence:
a. She describes her employment status and Mr. Yoga’s receipt of disability benefits;
b. She describes what happened at the hearing before the Board on January 20, 2021; and
c. She includes bank records that show rental payments between 2016 and 2020.
[21] Section 134(b) of the Courts of Justice Act, R.S.O 1990, c. C.43, gives the Court the jurisdiction to admit fresh evidence on an appeal.
[22] The test for the receipt of fresh evidence as set out in R. v. Palmer is as follows:
a. The evidence should generally not be admitted if, by due diligence it could have been adduced at trial.
b. The evidence must be relevant in the sense that it bears upon a decisive or potentially decisive issue in the trial;
c. The evidence must be credible in the sense that it is reasonably capable of belief; and
d. It must be such that if believed it could reasonably, when taken with the other evidence adduced at trial, be expected to have affected the result.
[23] I agree with the Landlord that the evidence of the Tenants’ employment and financial circumstances does not meet the test for admission of fresh evidence. This is evidence that the Tenants could and did in fact provide at the hearing. More significantly, it could not be expected to affect the results. While the personal circumstances of a tenant may have some bearing on the Board’s exercise of discretion regarding the timing of an eviction, it is of minimal significance in the determination of whether a tenant has persistently failed to pay rent on time.
[24] In contrast, in my view, the evidence regarding the rent payments made in 2018 and 2019 meet the test for the admission of fresh evidence:
a. As reviewed below in the section dealing with procedural fairness, the Tenants tried to have the evidence admitted, but the Board refused to allow the Tenants to produce the evidence because it was on Ms. Swingler’s phone rather than in paper form;
b. The issue of when and whether the Tenants paid their rent is relevant because it is at the heart of the Board’s determination that the tenancy should be terminated;
c. The evidence consists of bank records and is therefore credible and reliable; and
d. Given that the bank statements address the payment of rent during the relevant period, it could have affected the result.
B. Procedural fairness
[25] The issue of procedural fairness is a question of law. Therefore, a failure to afford a party procedural fairness is an error of law that falls within this Court’s jurisdiction on an appeal from the Board.
[26] The Tenants argue that the Board Member conducted the hearing in a manner that did not give them an opportunity to present their case. In particular, they argue that the Member prevented them from showing evidence of the dates on which they had paid rent. They argue that, in contrast, the Landlord succeeded without presenting any evidence on this issue.
[27] The Landlord argues that the Board was entitled to control its own process by denying the Tenants’ request to provide evidence that was on their phone.
[28] The Board’s counsel emphasizes that the Board hears a high volume of cases and Board members are entitled to control their own process to ensure that hearings proceed efficiently.
[29] There is no question that the Board is entitled to control its own process and that this Court should respect that process and be mindful of the high volume of cases the Board considers. However, from my review of the transcript and the documents before the Board in this case, I am not satisfied that the Tenants were afforded procedural fairness.
[30] In order to understand the breach of procedural fairness in this case, it is helpful to conduct a fairly careful review of the transcript.
[31] The Board Member first dealt with the issue of the L1 application. In that context, the Landlord’s representative relied on notations in a box on the N8 application setting out the Landlord’s position on the payments made by the Tenants since August 2018. Amongst other matters, the notations suggested that the Tenants had not paid rent in October 2019. The Member asked the Tenants if they agreed with the notations on the form and Ms. Swingler advised that she did not agree and that the Tenants had paid all outstanding rent, including for October 2019. The Member then asked Ms. Swingler if she had any proof of the payments. Ms. Swingler then advised the Member that she had the banking records on her phone, at which point the Member swore her in as a witness. Ms. Swingler then testified that the Tenants always paid their rent but admitted they were late “a couple of times” by “a couple days”. Again, Ms. Swingler stated that she had evidence of the payments on her phone. The Member then asked her why she did not have the information with her in paper form:
BOARD MEMBER: Why don’t you have it here?
A. I – this is the first time I’ve ever been through this.
BOARD MEMBER: Okay, everybody says that, but it’s just common sense that if you want to prove you’ve made payments when the landlord says you haven’t…
A. Right.
BOARD MEMBER: … that you bring evidence of having paid it, isn’t it?
A. Yeah.
BOARD MEMBER: Isn’t that common sense?
A. Yeah, I have it on my phone and this is why I wanted to speak to you.
BOARD MEMBER: Okay, well, I’m not going to look at your phone.
[32] The Member proceeded to have a lengthy exchange with the Tenants about what was included in the rent and the specific amount of rent to be paid each month. In that context, the Member again said that she would not let the Tenants rely on the banking information on Ms. Swingler’s phone.
[33] The Member then had a series of exchanges with the Landlord’s representative on the issue of the L1 application. The Member ultimately stated that she would dismiss the L1 application because the Landlord had failed to produce a “ledger”. During the hearing, the Member refused to consider the list of dates and payments prepared by the Landlord in the N8 Form on the basis that the Tenants contested that information. Ultimately, despite the Landlord’s request for an opportunity to provide a ledger, the Member advised that she would dismiss the L1 application and moved on to the L2 application.
[34] In the context of the L2 application, the Landlord gave evidence about his own financial hardship. He testified that he had lost his job and that he was having trouble making mortgage payments. The Landlord testified that the Tenants had persistently paid their rent at the end of the month rather than at the beginning of the month, and that there were two months for which they had paid no rent. The Landlord did not provide any documentary evidence in support of these statements. The Landlord also testified that he is now trying to sell the house. Ms. Swingler then cross-examined the Landlord about their discussions regarding the Tenants’ health issues and the possibility the Tenants would agree to move out.
[35] After Ms. Swingler completed her cross-examination of the Landlord, the Board Member asked Ms. Swingler a few questions about the payment of rent. Ms. Swingler did agree that there were occasions when the Tenants paid their rent at the end of the month in 2018 and that they were a couple of days late on no more than two payments in 2019. However, Ms. Swingler continued to take the position that the information set out by the Landlord in the N8 Form was inaccurate.
[36] Ultimately, as reviewed above, the Board dismissed the L1 application and granted the L2 application. In granting the L2 application, the Board purported to rely on the Tenants’ admissions that they had paid their rent late.
[37] Reading the transcript as a whole, it is obvious that there was significant confusion over what payments the Tenants had made when. The Landlord had no evidence to prove their case other than his vague and unspecified reference to late payments. As the Member herself recognized, she could not rely on the Landlord’s information in the N8 Form because it was not evidence and the Tenant did not agree that the information was accurate. In fact, on several occasions, the Landlord’s representative agreed that the information was not entirely accurate. The Tenants asked for an opportunity to provide bank records, which was denied. Ultimately, the Board purported to rely on the Tenants’ admissions of some late payments without any regard to the dates when those late payments occurred and without any proper evidence on this issue.
[38] In Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, at para. 77, the Supreme Court of Canada noted that procedural fairness is “‘eminently variable’, inherently flexible and context specific”. The Court reaffirmed that the issue of whether a proceeding was procedurally fair is to be decided in accordance with the five factors in Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817, at paras. 22-23, namely “(1) the nature of the decision being made and the process followed in making it; (2) the nature of the statutory scheme; (3) the importance of the decision to the individual or individuals affected; (4) the legitimate expectations of the person challenging the decision; and (5) the choices of procedure made by the administrative decision maker itself”.
[39] In this case, in my view, procedural fairness is at the higher end of the spectrum. Although the Board holds relatively informal hearings, in accordance with section 184 of the Residential Tenancies Act, 2006, it is nevertheless required to hold hearings that are subject to the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22. In addition, section 183 of the Residential Tenancies Act, 2006, emphasizes that, while hearings are to be expeditious, “all persons directly affected by the proceeding [are to be given] an adequate opportunity to know the issues and be heard on the matter” [emphasis added]. Where a landlord seeks to evict a tenant, the stakes are high for all parties. The decision maker is entitled to choose its procedure, including requiring that parties bring their evidence to the hearing. However, any such choices of procedure should not be applied rigidly. Ultimately, the issue is what is procedurally fair in the particular circumstances of the case.
[40] In cases such as this one, where Tenants face potential eviction and have evidence that may be responsive to the issues at the heart of the dispute at their fingertips, procedural fairness would at least require that the Board consider whether to grant a brief recess to allow the Tenants to obtain paper copies of their bank record. The Board expects the parties to bring paper copies of their evidence at the hearing. The Tenant did not comply with this requirement but did ask for an opportunity to show their banking records to demonstrate that the information in the N8 Form was inaccurate. While the Board is entitled to control its own process, it would have taken very little effort in this case to give the Tenants a short break for the purpose of obtaining paper copies of their bank records to prove the dates on which they paid rent.
[41] The procedural unfairness in this case arises in part from the uneven treatment the parties were given. The Landlord provided no documentary evidence of the late payment of rent. The Landlord testified that there was persistent late payment of rent but provided no contemporaneous records showing when rent was paid. In contrast, the Tenant tried to provide evidence and was denied an opportunity to do so. In its decision, the Board purported to rely on the Tenants’ admissions that they had persistently paid the rent late. They did not admit or agree to the information set out in N8 Form. Without a complete and proper understanding of the magnitude of the problem, it was not appropriate for the Board to make a finding that the Tenants were persistently late and that they should not be given a chance to remedy the problem. In fact, if the Board had the benefit of the Tenant’s evidence, it would have seen that the most recent rent payments were made on time or, at most, two or three days late. This evidence should have been available to the Board before concluding that there was a persistent late payment of rent and that evicting the Tenants was the appropriate remedy in this case.
[42] While I understand that the Board deals with a high volume of matters, the stakes for the parties are nevertheless high. It would be one thing if the Landlord had provided the Tenants its own evidence in advance of the hearing, but he did not. Ultimately, the Tenants were placed in the difficult position of having to respond to allegations of late payment of rent without the ability to demonstrate to the Member when they had made each payment and how much each payment was for. From my review of the Tenants’ banking records, it does appear that in 2019 almost all rent payments were made on the 9th of the month with some payments being made on the 11th. The Board made its decision in February 2020 without the benefit of this evidence.
[43] Accordingly, I am satisfied that the hearing was procedurally unfair and that the matter should be remitted back to the Board for a fresh hearing. Given this determination, there is no need to address the other grounds of appeal raised in this matter.
Conclusion
[44] For the reasons above, the appeal is granted. The matter is remitted back to the Board for a fresh hearing.
[45] The Tenants should be mindful that any nonpayment or late payment of rent between now and the hearing date may be relevant to any determination made by the Board. Accordingly, they would be well advised to ensure that they continue to pay their rent in full and on time.
[46] The Tenants seek costs of $42,655.37 on a partial indemnity basis. In support of this amount, the Tenants rely on an offer to settle. Given the issues on the appeal, this amount is excessive and far higher than costs typically awarded by this Court. It is worth contrasting the amount sought by the Tenants with the amount sought by the Landlord, which is $7,645.00. The Tenants are awarded costs in the amount of $7,500, which, in my view, is fair and reasonable in the circumstances of this case.
Favreau J.
I agree _______________________________
Dambrot J.
I agree _______________________________
Lederer J.
Released: September 21, 2021
CITATION: Shapiro v. Swingler, 2021 ONSC 6191
DIVISIONAL COURT FILE NO.: 1233-20
DATE: 20210921
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Dambrot, Lederer and Favreau JJ.
BETWEEN:
Alexander Shapiro
Respondent (Landlord)
– and –
Michelle Swingler and George Obiero Yoga
Appellants (Tenants)
REASONS FOR JUDGMENT
FAVREAU J.
Released: September 21, 2021