CITATION: Egan v. Kincardine Golf & Country Club, 2023 ONSC 4498

DIVISIONAL COURT FILE NO.: DC-22-56

(Brampton)

DATE: 20230804

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

D.L. Corbett, Fitzpatrick, and Hebner JJ.

BETWEEN:

John Egan

John B. Brennan, for the Respondent

Applicant / Respondent in Appeal

– and –

Kincardine Golf & Country Club

Joe Hoffer, for the Appellant

Respondent / Appellant in Appeal

Katia Snukal, for the Landlord and Tenant Board

HEARD at Brampton (by ZOOM):

June 13, 2023

REASONS FOR DECISION

P.L. Hebner J.

[1] The appellant, Kincardine Golf & Country Club, appeals from a final order of the Landlord and Tenant Board issued on July 11, 2022 finding that the Residential Tenancies Act (the “Act”) applies to a lot owned by the appellant and leased to the respondent. I conclude that the Board did not err in law in its decision, and so for the reasons that follow I would dismiss the appeal.

Background Facts

[2] Kincardine is the owner of property in Kincardine, Ontario situated along the shore of Lake Huron. The property contains a golf course, a clubhouse, and eight waterfront lots leased by Kincardine to individual tenants. The respondent, Mr. Egan, is the lessee of one of the lots. The lot is zoned residential with access from a private road leading to the parking lot of the golf course. The golf course does not maintain the road in winter.

[3] The lease for the lot began on October 31, 1921 and had a duration of 99 years, ending on October 31, 2020. The lease required an annual payment of “the regular annual fees for membership” in the golf club plus “the sum of two dollars”. The lease changed hands several times and was eventually assigned to the respondent and Barbara-Ann Egan in 1988 for the price of $120,500.00.

[4] The property contains a structure described as a cottage erected by the respondent or one of his predecessors. Kincardine does not have a key to the cottage. The respondent and his family have typically used the cottage from April/May to October but there are no restrictions on use during the other times of the year. Access would be more difficult but could be accomplished on foot or by other means.

[5] All of the other 7 lots had cottages with similar leases on them and none of those leases contains a restriction of access for specific times of the year. No bylaws or building code provisions have prevented the winterizing of the cottages. At least one of the other cottages has been winterized and the current and former owners of that cottage lived in it some winters.

[6] When the lease expired on October 31, 2020 the parties had discussions on what should happen but could not agree. Kincardine agreed to allow the leasehold interest to continue until November 30, 2020 after which it posted “No Trespass” signs on the property. On March 16, 2021 Kincardine placed padlocks on the cottage.

The Decision Below

[7] The respondent filed an application with the Board seeking to determine whether the Act applied to his tenancy. The parties agreed that the cottage falls under the definition of “rental unit” in the Act. The issue before the Board was whether the property was exempt under s. 5(a) of the Act. Kincardine took the position that the property was exempt and the respondent took the position that it was not.

[8] Section 5(a) of the Act reads:

This Act does not apply with respect to,

(a) living accommodation intended to be provided to the travelling or vacationing public or occupied for a seasonal or temporary period in a hotel, motel or motor hotel, resort, lodge, tourist camp, cottage or cabin establishment, inn, campground, trailer park, tourist home, bed and breakfast vacation establishment or vacation home….

[9] The Board found, in paragraphs 21-23 of its Decision, that the occupation of the cottage was not “seasonal or temporary” given the 99-year lease and accordingly the exemption did not apply.

The Issue

[10] The appellant asserts that the Board did not apply the correct legal test in its determination that the lot was not exempt under s. 5(a). The issue, then, is whether it did so.

Jurisdiction and Standard of Review

[11] The jurisdiction of this court is set out in s. 210(1) of the Act:

Any person affected by an order of the Board may appeal the order to the Divisional Court within 30 days after being given the order, but only on a question of law.

[12] The appropriate standard of review on a question of law is correctness (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, paras. 33-52, 55).

Legal Principles

[13] The issue involves the proper interpretation and application of s. 5(a) of the Act to the facts. I start with a review of the rules of statutory interpretation.

[14] In Rizzo & Rizzo Shoes Ltd. (Re), 1998 837 (SCC), [1998] 1 S.C.R. 27, at para. 21, the Supreme Court set out the modern principle of statutory interpretation thusly:

Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.

[15] In R. v. Del Mastro, 2017 ONCA 711, 416 D.L.R. (4th) 726, at para. 61 the Court of Appeal reviewed that principle and stated:

[S]tatutory interpretation is a multi-dimensional exercise and requires a court to consider whether a particular interpretation complies with the legislative text, promotes the intention of the legislature, and produces a result that is reasonable and just, in compliance with accepted legal norms: Ruth Sullivan, Sullivan on the Construction of Statutes, 6th ed. (Markham: LexisNexis, 2014), at pp. 7-10.

[16] In Blue Star Trailer Rentals Inc. v. 407 ETR Concession Company Limited, 2008 ONCA 561, 91 O.R. (3d) 321, at paras. 23-25, the Court of Appeal provided the following further guidance:

This approach to statutory interpretation – sometimes referred to as the textual, contextual or purposive approach – requires an examination of three factors: the language of the provision, the context in which the language is used and the purpose of the legislation or statutory scheme in which the language is found.

When applying this approach, it makes sense to start by examining the ordinary meaning or meanings of the words being interpreted. The ordinary meaning is “the natural meaning which appears when the provision is simply read through….”

After considering the ordinary meaning of the language involved, the court should consider the context in which the language is found as well as the purpose of the legislation or the statutory scheme. If this analytical approach yields a plausible interpretation then the court need go no further and should adopt that interpretation. It is only when there remains genuine ambiguity between reasonable interpretations that the court should resort to other principles of statutory interpretation. [Citations omitted]

[17] The purpose of the Act is set out in s. 1:

The purposes of this Act are to provide protection for residential tenants from unlawful rent increases and unlawful evictions, to establish a framework for the regulation of residential rents, to balance the rights and responsibilities of residential landlords and tenants and to provide for the adjudication of disputes and for other processes to informally resolve disputes.

[18] The Act is remedial legislation. As such, it must be read broadly to ensure the protection of residential tenants within the Act’s stated purposes (White v. Upper Thames River Conservation Authority (2020), 2020 ONSC 7822, 154 OR (3rd) 133 (Div. Ct.) para 32).

[19] In Matthews v. Algoma (2010), 2010 ONCA 468, 102 OR (3rd) 590, the applicants leased land from the respondent’s predecessor and erected cottages, used year-round as second homes. After the respondent acquired the land, it sent eviction notices to some of the lessees and gave notices of significant rent increases to other lessees. It purported to replace the leases with licenses which gave it an unfettered discretion to renew or terminate the license annually. The applicants brought an application seeking a determination that the Residential Tenancies Act applied to their land lease community. The Landlord and Tenant Board dismissed the application. The Divisional Court dismissed the applicants’ appeal, finding that because the premises were used for recreational purposes, they were not “residential”. The Court of Appeal allowed the appeal,

[20] The focus of the Court of Appeal’s decision was the question of whether the cottages were “rental units” within the meaning of s. 2(1) and s. 3 (1) of the Act. In the case at hand, that point was conceded. However, at para 28 the court said:

[28] In my view, occupants of residential units are entitled to the protection of the Act, whatever they do inside or outside of their premises during their waking hours. The Act applies whether the occupants spend their days at work or at leisure, whether they live in their accommodation 52 weeks a year or some lesser amount of time, and whether the unit in question is their primary or secondary residence.

[21] On s. 5(a) the Court of Appeal said, at paras. 33-34:

[33] Timberlakes points to the exclusion, contained in s. 5(a), of premises "provided to the travelling or vacationing public or occupied for a seasonal or temporary period in a hotel, motel or motor hotel, resort, lodge, tourist camp, cottage or cabin establishment, inn, campground, trailer park, tourist home, bed and breakfast vacation establishment or vacation home". In particular, Timberlakes argues both that the lessees occupy the premises for a "temporary period" and that the premises are a "resort", "campground" or "vacation home". I do not accept either argument.

[34] First, in my view, the undisputed evidence is that the premises were occupied for more than a temporary period and for more than a seasonal period. The premises were occupied over many seasons, months and years. The evidence establishes that the leases were intended to be continually renewed over a long period of time. Moreover, all the leases provided for payment of rent on an annual basis. There was no seasonal or temporary rental rate. Accordingly, in my view, the s. 5(a) exclusion regarding "seasonal or temporary" occupation does not apply.

[35] Second, even if it could be found that occupation was for a seasonal or a temporary period, the category of premises at issue in this case is quite different from the living accommodations specifically excluded by s. 5(a) of the Act. Regarding the applicability of what was s. 3(a) of the then Tenant Protection Act, 1997, the Divisional Court in Putnam v. Grand River Conservation Authority, 2006 18526 (ON SCDC), [2006] O.J. No. 2217, 210 O.A.C. 191 (Div. Ct.), at para. 25, cited with approval the reasoning of the Ontario Rental Housing Tribunal regarding rented "cottage" lots:

The listing of places where this seasonal or temporary accommodation is to take place clearly is a listing of places, owned by private persons or businesses, which appeal to the general public as vacation spots or places to stay when one is away from home. They represent accommodation for travellers, for vacationers, for anyone who needs temporary accommodation provided by someone other than themselves.

The Tribunal accepts that the phrase "in a . . . cottage or cabin establishment" in Section 3(a) should be interpreted to mean that the grouping of cottages or cabins (the establishment) available as seasonal or temporary accommodation is analogous to the rooms in a hotel or a motel, or the rooms in a "bed and breakfast" or in an inn, or the sites at a campground or in a trailer park, available as living accommodation to be occupied for a seasonal or temporary period. To interpret otherwise would be to "hive off" this particular phrase from the listing in Section 3(a) and give it a completely different interpretation from the other words and phrases in the listing. Similarly, the accommodation in this case was not akin to the hotel, resort, campground or vacation home temporary lodgings that the legislature intended to exclude from the application of the Act.

[22] In the case at hand, the Board reviewed all of these authorities and more. Its conclusion is set out in paragraphs 21, 22 and 23 of its decision:

In my view, the facts presented in this case do not support a finding that the exclusion contained in section 5(a) regarding “seasonal or temporary” occupation applies. First, the parties agreed, through the original lease which was assigned to the Tenant that the occupation would last for 99 years, as such, it is, respectfully, unreasonable to deem such a term “temporary” as contemplated by the Act.

In accordance with a purposive interpretation of the legislation as enunciated in Matthews v. Algoma Timberlakes Corp., the type of occupation at issue here is not one which the Legislature intended should be excluded by section 5(a) of the Act. As the Court of Appeal stated in Matthews v. Algoma Timberlakes Corp., it is immaterial “whether the occupants spend their days at work or at leisure, whether they live in their accommodation 52 weeks a year or some lesser amount of time, and whether the unit in question is their primary or secondary residence.” To find otherwise would, as the Court observed, exempt a variety of Ontario tenants who would otherwise be protected by the legislation, such as individuals who reside in warmer locations during the winter or rent premises in areas that offer skiing or golf.

[23] I am in complete agreement with the board’s conclusions.

[24] The appellant asserts that the governing factor to consider in determining whether the rental was “seasonal” is one of intent. The appellant asserts that at the time the lease was entered into the use of the property was intended to be seasonal only. The appellant points to the cost of the lease being membership in the golf club, which was only operational during the warmer months of the year. The appellant asserts that the actual use of the property was seasonal. The appellant asserts that, therefor, the lease is exempt by reason of the inclusion of the word “seasonal” in s. 5(a).

[25] It seems to me that there is a difference between a seasonal rental and an annual rental of premises that is used seasonally. The former involves a premises rented for the season, such as the summer season or the winter season. The latter involves a premises rented annually that is used by the renter only certain months of the year. The former is the type of residence described by a differently constituted panel in this court in Putnam as “accommodation for travellers, for vacationers, for anyone who needs temporary accommodation provided by someone other than themselves”. The latter cannot fit in that description. In my view the former is exempt by s. 5(a) and the latter is not.

[26] This interpretation, in my view, is consistent with a reading of s. 5(a) as a whole, where the accommodations listed are those used by persons needing temporary accommodations for travelling or vacationing purposes. Moreover, this interpretation is consistent with the reasoning of the court of appeal in Matthews where that court opined that a renter is entitled to the protection of the act “whether they live in their accommodation 52 weeks a year or some lesser amount of time, and whether the unit in question is their primary or secondary residence”.

[27] The lease in the case at hand fits into the latter category – namely an annual rental of premises used seasonally. Accordingly, the lease is not exempt and the respondent is entitled to the protection afforded by the Residential Tenancies Act.

Disposition

[28] I would dismiss the appeal, with costs of $5,000, inclusive, payable by the appellant to the respondent within thirty days.

“Hebner J.”

I agree:

“D.L. Corbett J.”

I agree:

“Fitzpatrick J.”

Date of Release: August 4, 2023

CITATION: Egan v. Kincardine Golf & Country Club, 2023 ONSC 4498

DIVISIONAL COURT FILE NO.: DC-22-56

Brampton

DATE: 20230804

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

D.L. Corbett, Fitzpatrick, and Hebner JJ.

BETWEEN:

John Egan

Applicant (Respondent in Appeal)

v.

Kincardine Golf & Country Club

Respondent (Appellant in Appeal)

REASONS FOR DECISION

P.L. Hebner J.

Date of Release: August 4, 2023