CITATION: Abara v. Hall and Lee, 2022 ONSC 7093
DIVISIONAL COURT FILE NO.: 016/22
DATE: 20221216
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Matheson, Sutherland and Akbarali JJ.
BETWEEN:
EMMANUEL ABARA
Appellant/Landlord
– and –
CHRISTIEN FRANCES HALL and JIEUN GRACE LEE
Respondents/Tenants
Uko Abara, Counsel for Appellant
Nelson Wan, Counsel for Respondents
Valerie Crystal, for the Landlord and Tenant Board
HEARD in Toronto: October 31, 2022 (by videoconference)
REASONS FOR DECISION
Sutherland J.
Overview
[1] The landlord appeals a decision of the Landlord and Tenant Board (“LTB”) dated October 27, 2021, and the related LTB review order dated December 21, 2021. The landlord obtained an order terminating the tenancy as of September 15, 2021 and did not receive an order for compensation. The landlord appeals, among other things, the determination by Member Joy that the tenancy terminated on September 15, 2021, and the LTB’s finding that it had no jurisdiction under the application brought by the landlord to grant compensation.
[2] On review, Member Nicola Mulima denied the request for review on the basis that there was no serious error in the order nor did a serious error occur in the proceeding.
[3] The landlord contends that there was error in law in deciding that the LTB did not have jurisdiction to award compensation and in its determination of the date of termination of the tenancy. The landlord further argues that there was a breach of procedural fairness.
[4] For the reasons that follow, I find no error in law. But I do find a breach of procedural fairness. The appeal is allowed.
Brief History
[5] The tenants entered into a joint residential lease with the landlord dated September 1, 2019. The tenants returned a signed copy of the lease agreement after they began occupying the rental unit.
[6] On April 15, 2021, the tenant, Ms. Lee sent an email to the landlord indicating that she was getting married in August and wished to provide 60 days notice as per the lease. She stated that: “Specifically, I am planning to move out by July 31, 2021, and hope to transfer my portion of the lease to a new tenant to start her lease on August 1, 2021.”
[7] The landlord responded that since it was a joint tenancy and Ms. Lee had decided to leave, the tenancy agreement would terminate in its entirety and that she and Ms. Hall must sign an N9 and return it to him.
[8] In a further email approximately a month later, the landlord indicated that since there had been no assignment of the joint lease, a fresh lease would have to be negotiated and signed. The landlord further indicated that given their initial email, the joint tenancy terminated on July 31, 2021. He indicated that he was agreeable to that termination date and as such an N9 was not required.
[9] The landlord and tenants exchanged a series of email between May 23, 2021 and July 22, 2021. The tenants indicated that another tenant, Victoria, wished to take over Ms. Lee’s portion of the lease. The landlord indicated that he had not consented to any assignment and that the lease would terminate on July 31, 2021. The tenants confirm that there had been no consent to an assignment. The landlord warned the tenants that they would be considered unauthorized occupants if they remained, and the overholding provisions of the lease would apply.
[10] No new lease was signed. No assignment was given.
[11] The unit was vacated on September 15, 2021, and the keys returned to the landlord on September 24, 2021. By then, the landlord had incurred costs to replace the locks.
[12] The landlord commenced an application to Terminate a Tenancy and Evict a Tenant -Tenant Gave a Notice or Agreed to End the Tenancy, an L3, dated July 23, 2021, on July 30, 2021. In that application, the landlord sought an order that the lease terminated on July 31, 2021, per an agreement with the tenants. In the body of the application, the landlord sought compensation in the amount of $9,428.12 for overholding and other costs.
[13] A form L3 application is usually adjudicated in writing, which is consistent with the grounds that the tenants want to terminate the tenancy. However, in this matter, the LTB determined that it shall take place by a hearing and that the hearing shall not be more than 15 minutes. The LTB endorsed on August 16, 2021 that: “There are two Tenants listed on application. One Tenant wants to leave and one wants to stay. The Landlord wants both out of the rental unit. However, both Tenants did not sign an N9 form.”
[14] At the hearing Member Joy determined that since the tenants had vacated, the application was moot. He determined that he did not have jurisdiction to deal with overholding and compensation since the L3 only concerns termination of the lease. The tenants had vacated and as such the lease was terminated. He determined that the lease terminated on September 15, 2021.
[15] On review, Member Mulima determined that under a L3 application, the issue is the termination of the tenancy and given the fact that the tenants provided vacant possession on September 15, 2021, the application was moot. Vacant possession had been provided. The landlord was not entitled to any further relief. The Member concluded that there was no error in the decision of Member Joy as it related to the termination date and compensation to the landlord under an L3 application. Member Mulima also found that the claim for compensation could not be given due to the fact the claim was a penalty and not compensable under the legislation. The landlord suffered “no prejudice.”
[16] Member Mulima denied the request for review and confirmed the order of Member Joy.
Legislative Scheme and Changes
[17] An L3 is used when a landlord wishes to terminate the lease either by agreement to end the tenancy or where a tenant gave notice to terminate. The form does not indicate a space for the determination of compensation. Section 77(4) of the Residential Tenancies Act, 2006[^1] (RTA) states that the Board may make an Order on receipt of an L3 to terminate the tenancy and evict the tenant. The section does not provide the Board with authority to order compensation.
[18] Section 86 of the RTA indicates that: “A landlord is entitled to compensation for the use and occupation of a rental unit by a tenant who does not vacate after his or her tenancy is terminated by order, notice or agreement.”
[19] In the situation where the landlord is not seeking eviction for non-payment of rent, the landlord may apply under section 87 for payment of rent arrears or section 86 compensation. If the tenant is still in possession of the unit, this is done by filing an L9 for arrears in rent and an L2 application for section 86 compensation.
[20] However, given a change to the legislation, if the tenant is no longer in possession of the rental unit on or after September 1, 2021, then the landlord may file an L10 application to collect arrears or compensation under section 86. An L10 application must be brought within one year of the date the tenant vacated the unit. The legislation is silent on the procedure after the first year has expired.
[21] At the time the application was commenced in this matter, section 87(3) entitled the landlord to apply to the LTB for an order for the payment of compensation “for the use and occupation of a rental unit after a notice of termination or an agreement to terminate the tenancy has taken effect.” After September 1, 2021, the wording in section 87(3) changed and section 87 (3.1) was added. Section 87(7) was enacted being the transition section for proceedings not affected by the changes in the legislation. Section 87(7) states that the amendments do “not affect any court proceeding for an order for the payment of arrears of rent or compensation for the use and occupation of the rental unit, or for the payment of both, that is commenced before the day that subsection comes into force and has not been finally determined before that day.”
[22] Prior to September 1, 2021, the means for a landlord to obtain compensation or arrears in rent after the tenant was no longer in possession of the unit was the Superior Court of Justice. After September 1, 2021, an L10 is the pertinent application for request for compensation in this case.
Issues
[23] The issues in this appeal deal with these questions:
a. Did the LTB err in determining that the LTB did not have jurisdiction to grant compensation based on the application brought?
b. Was the duty of procedural fairness breached by the LTB because of the process used at the hearing?
c. Was the duty of procedural fairness breached due to an apprehension of bias?
Did the LTB err in determining that the LTB did not have jurisdiction to grant compensation based on the application brought?
Standard of Review
[24] The parties have a right of appeal on questions of law only,[^2] which includes a breach of procedural fairness. There is no right of appeal from findings of fact, or findings of mixed fact and law that do not give rise to an extricable question of law.[^3] The standard of review on questions of law is correctness.
Analysis
[25] Based on the application filed by the landlord, I am not persuaded that the LTB erred in law in concluding that it did not have jurisdiction to grant compensation in the circumstances of this case.
[26] The application requested termination of the tenancy. The issue framed before the Member to determine was whether both tenants had terminated the lease. It is undisputed that the tenants did vacate the premises by the time of the hearing. The issue framed for the Member was determined by the vacating of the premises. On the application brought, an L3, the landlord requested compensation, which did not provide the LTB with the necessary jurisdiction to grant relief dealing with compensation. An L3 application was limited to the termination of a tenancy and did not include compensation. For the landlord to seek compensation when both tenants have remained in the unit, an L9 and/or L2 application would have been appropriate.
[27] The landlord has directed the Court to the decision of the LTB, Farkhondeh v. Kiani[^4] I do not find this decision assists the appellant. Based on the analysis above, that decision was wrongly decided. I am of the view that the existence of a N11 Agreement does not provide the LTB with jurisdiction to award compensation in a L3 application. The RTA did not provide such jurisdiction to the LTB to grant such an award.
[28] Consequently, I find that the finding at the LTB that under an L3 it lacked jurisdiction to deal with the issues of compensation was not an error in law.
Was the duty of procedural fairness breached by the LTB?
[29] The LTB is obliged to provide a process that is both fair and efficient. Failure to provide a hearing that is fair is a reviewable error, and the standard of review is correctness.[^5]
[30] In determining whether the standards of procedural fairness had been met, Baker v. Canada (Minister of Citizenship & Immigration)[^6] enunciated a non-exhaustive list of five factors:
(1) the nature of the decision being made and the process followed in making it;
(2) the nature of the statutory scheme and the terms of the statute pursuant to which the body operates;
(3) the importance of the decision to the individual or the individuals affected;
(4) the legitimate expectations of the person challenging the decision; and
(5) the choices of procedure made by the agency itself.
[31] As set out above, the statutory scheme is relevant. Section 183 of the RTA requires the LTB to utilize “the most expeditious method of determining the questions arising in a proceeding that affords to all persons directly affected by the proceeding an adequate opportunity to know the issues and be heard on the matter.” The LTB is a high-volume tribunal with limited time allocation for hearings.
[32] In this case, even though these applications are normally done in writing, the LTB directed an oral hearing lasting 15 minutes since the positions of the tenants differed.
[33] The transcript of the hearing shows the Member did not provide the appellant with the opportunity to put forth his full argument specifically dealing with the date of termination, which would have an impact on the request for compensation even though that needed to be addressed in a different process. The hearing lasted no more than 3-5 minutes. The appellant was interrupted numerous times. Without permitting any submissions from the appellant on termination date, the Member determined that the termination date was September 15, 2021. Although no compensation was available in that specific application, the date may have an impact on the entitlement to compensation through other processes.
[34] On review, Member Mulima recognized there was a concern with regard to the issue of the termination date and the appellant’s request for compensation. At paragraph 8, Member Mulima stated:
The Landlord argues that the termination date should have been determined to be July 31, 2021, therefore granting him an “overholding penalty” for rent after that date to the date the Tenants vacated the rental unit. As set out below, the Residential Tenancies Act, 2006 (‘Act’) does not permit such a penalty and as a result, there is no prejudice to the Landlord, and no material impact on the outcome of the case, in the Member determining the tenancy terminated on the date the Tenants granted vacant possession of the rental unit to the Landlord.
[35] The difficulty I have with this conclusion by Member Mulima is that it does not recognize that there could be other consequences to the date of termination. The transcript is clear that the appellant was not given any opportunity to make any submissions on the date of termination. Though there was written material put forth at the hearing, the Member determined that there was no jurisdiction for the compensation claim and ended the hearing on that issue, yet still made a finding about the date of termination.
[36] The compensation claims of the appellant encompassed various claims including overholding from July 2021 and costs for the tenant not returning the key. The characterization by Member Mulima that the claim was for an “overholding penalty” highlights that there was no opportunity for submissions on the substance of the appellant’s claim and no hearing on the date of termination. The conclusion that the appellant did not suffer “prejudice” is not borne out by the record.
[37] The appellant, in my view, was entitled to a fair opportunity to make submissions about the date of termination and was not provided that opportunity. I do recognize that the LTB is a high-volume tribunal. But for the LTB to conclude on a significant finding—the termination date of the lease—without providing the appellant with the opportunity to address that issue, was, in the circumstances of this case, a breach of procedural fairness.
[38] I therefore conclude that the LTB finding that the termination date of the lease is September 15, 2021 should be set aside and allow the appeal on that issue.
Was there an apprehension of bias?
[39] The other alleged breach of procedural fairness is the landlord’s argument on apprehension of bias.
[40] The landlord argues that both Members acted in bad faith and that there was a reasonable apprehension of bias. The landlord presents that Member Joy’s behaviour was disparate and antagonistic. He states that Member Mulima’s mischaracterization of the pleadings, the overholding compensation sought, and the hearing recording, and her wrong treatment of legal errors as obiter were errors that resulted in an apprehension of bias. The landlord argues that the acts of both Members “are indicative of serious carelessness or recklessness and amount to a fundamental breakdown of the orderly exercise of authority resulting in bad faith.”[^7]
[41] I do not agree.
[42] The appellant directs the Court to Turner v. Northview Apartment Reit.[^8] In Turner, the Court found that the existence of a reasonable apprehension of bias was present based on the Member’s prior involvement in eviction proceedings against the Tenant. In coming to that conclusion, Wilton-Siegel J. quoted the test for bias adopted in Baker that:
…the apprehension of bias must be a reasonable one, held by reasonable and right-minded persons, applying themselves to the question and obtaining thereon the required information…[T]hat test is “what would an informed person, viewing the matter realistically and practically – and having thought the matter through – conclude. Would he think that it is more likely than not that [the decision-maker], whether consciously or unconsciously, would not decide fairly.”[^9]
[43] Wilton-Spiegel J. then quoted the Review Boards application of the test:
This is an objective test, measured in terms of the impression held by the reasonable observer. The categories in which reasonable apprehension of bias can occur are not closed and vary according to the general principles of procedural fairness. The limits of bias can be examined in the context of antagonism during the hearing, prior association, involvement in the preliminary stage, statutory authorization and attitudinal bias. Generally, an active role in the hearing process or a closed mind is not equivalent to bias. An adjudicator should not however, cast ‘gratuitous aspersions’ on the character or physical attributes of the participant, his counsel or representative. Based upon the text of the order and the hearing recording, I find that none of these factors were apparent in the present case.
In terms of attitude, the trier of fact must not appear predisposed to a particular conclusion and should direct her mind to the claim before her. The hearing recording from June 5, 2018 indicates that the Member offered both sides a full opportunity to present evidence and submissions on the issues of the L2 Application. At no point did she demean, insult or disparage the Tenant or his Legal Representative. Although she expressed some skepticism towards his claims of self-defence, the recording and the order itself confirmed that she allowed the Tenant’s Legal Representative to present this argument in full and thoroughly considered it in the order.[^10]
[44] From my review of the transcripts and the Decision of the Review Board, I do not find reviewing objectively that the conduct of either Member gave rise to a reasonable apprehension of bias. I do not agree that the transcripts show antagonism during the hearing or an attitudinal bias. At no point was there insulting, demeaning, or disparaging statements made at the hearing. Though the Member conducting the hearing could have been more explanatory in their decision making and provided the parties with a better explanation on why there is a lack of jurisdiction, this failure, I do not find, reaches the realm of bias. Moreover, I find no elements of bias in the decision Member Mulima. The complaints the appellant raises are better understood as alleged errors of fact or of mixed fact and law (and as such, not open to challenge on this appeal), not indicators of bias.
[45] Objectively speaking, I do not conclude that an informed person, viewing the matter realistically and objectively would conclude that either Member was biased.
[46] Hence, I do not accept that there was a reasonable apprehension of bias.
Disposition
[47] The appeal of the landlord is allowed on the determination that the termination date was September 15, 2021. The order dated October 27, 2021, is amended to remove the phrase "as of September 15, 2021". In the circumstances of this case (where the premises were already vacant at the time of the LTB hearing), I see no need to send the matter back to have a new hearing to determine the effective date of the termination. Should the appellant choose to pursue a remedy through another process, the termination date can be addressed in that context. The appeal as to jurisdiction of the LTB is dismissed.
[48] I determine that given that success is divided, there will be an order of no costs.
Sutherland J.
I agree _______________________________
Matheson J.
I agree _______________________________
Akbarali J.
Date: December 16, 2022
CITATION: Abara v. Hall and Lee, 2022 ONSC 7093
DIVISIONAL COURT FILE NO.: 2DC-22-016-AP
DATE: 20221216
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BETWEEN:
EMMANUEL ABARA
Appellant/Landlord
– and –
CHRISTIEN FRANCES HALL and JIEUN GRACE LEE
Respondents/Tenants
REASONS FOR DECISION
Sutherland J.
Released: December 16, 2022
[^1]: S.O. 2006, c.17. [^2]: Section 210(1)-(3) of the RTA [^3]: Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235. [^4]: 2021 Can LII 140315 (ON LTB). [^5]: Law Society of Saskatchewan v. Abrametz, 2022 SCC 29. [^6]: 1999 699 (SCC), [1999] 2 S.C.R. 817 at paras. 23-27. [^7]: Factum of the Appellant, at para. 135. [^8]: 2019 ONSC 2204 (Div.Ct) [^9]: 2019 ONSC 2204 (Div.Ct) at para. 14 [^10]: 2019 ONSC 2204 (Div.Ct) at para. 16-17