Court File and Parties

CITATION: Padathe v. Lee, 2023 ONSC 4560

DIVISIONAL COURT FILE NO.: 336/23

DATE: 20230808

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: LAILITA K PADATHE and SAKUNTHALA DEVI PADATH KALLIKATTUMADATHIL, Moving Parties

AND: KIE HANG KATH LEE, Respondent

BEFORE: D.L. Corbett J.

COUNSEL: Self-represented Applicants

Edward Wing-Chung Choi, for the Respondent

HEARD: in Writing

ENDORSEMENT

D.L. Corbett J.

[1] The moving parties move urgently for a stay of the decision of O’Brien J. refusing to extend the time to appeal a decision of the Landlord and Tenant Board, and a stay of the eviction order of the Landlord and Tenant Board, pending disposition of the moving parties’ motion to review the decision of O’Brien J. before a panel of three judges of the Divisional Court.

[2] The moving parties have established that they will suffer irreparable harm if the stay is not granted, a point conceded by the respondent landlord. However, the moving parties have not established that there is a serious issue to be decided on the review motion, nor have they established that the balance of convenience weighs in favour of granting the stay. Therefore, for the reasons that follow, this stay motion is dismissed.

[3] The Landlord and Tenant Board found that the landlord was entitled to increase the rent from $1,950.00 per month to $3,998.00 per month – slightly more than double the original rent. On any view of it, a residential rent increase of more than 100% is enormous. It can be no surprise that the tenants cannot afford such a substantial increase. Their plight is all the more evident when the personal circumstances of one of the tenants is taken into account. The tenants have established – both below and on this motion – that they cannot afford the increased rent.

[4] The tenants failed to appeal the decision of the Landlord Tenant Board in time, and so moved for an extension of time in which to bring their appeal. That motion was heard by O’Brien J. By decision released July 19, 2023, Justice O’Brien refused to extend the time to bring the appeal. Thus, in this court, there is no outstanding appeal and no statutory stay of the eviction order of the Landlord and Tenant Board.

[5] The tenants immediately signaled that they wished to challenge the decision of O’Brien J. On July 21, 2023, the court directed as follows in response to the tenants’ request to challenge the order of O’Brien J.:

Justice D.L. Corbett, the acting administrative judge of the Divisional Court, directs me to advise you as follows:

1. The decision of O'Brien J. (2023 ONSC 4241) dismissing the tenant's request for an extension to appeal the final order of the LTB has disposed of the extension request. If the tenant disagrees with the decision, she may bring a motion before a panel of the Divisional Court to review the order of O'Brien J. pursuant to s.21(5) of the Courts of Justice Act. Such a motion must be brought promptly: if the tenant decides to pursue such a motion, she should so advise the court and provide the date by which she will serve all of her motion materials for the review.

2. A motion to review the order of O'Brien J. does not have the effect of reinstating the interim stay previously ordered by O'Brien J. Thus, the eviction granted by the LTB may be enforced while the tenant's review motion is pending. This court could grant interim relief pending the review motion but will not entertain such a request until the tenant has served her motion materials for the review motion.

3. A review motion is not a fresh hearing - it is a review of the decision of O'Brien J. It is clear on the face of the decision of O'Brien J. that Her Honour stated and applied the usual test that applies to a request for an extension. Her Honour exercised her discretion based on her conclusion that the landlord would be prejudiced by further delay in recovering the property and that the proposed appeal does not appear to raise an arguable issue of law. The tenant would likely need to persuade the review panel that these two findings were not available to O'Brien J. on the record before Her Honour in order to succeed on the review motion. This paragraph is included in this direction to assist the self-represented appellant to understand what she would need to show to succeed on a review motion.

4. Any further communication about this matter in Divisional Court shall be directed to D.L. Corbett J.

[6] Following receipt of my directions, the tenants wrote to the Sheriff’s office on July 21, 2023, advising that the tenants plan to seek an interim stay pending the review motion. Also on July 21, 2023, the tenants wrote to the Accessibility Co-ordinator at Osgoode Hall, requesting “accommodation of stay order to provide me necessary time to prepare and file my motion to review the order of Justice O'Brien in the absence there is a risk of eviction and homelessness.” The Accessibility Co-ordinator advised the tenants (apparently confirming advice previously given to them on July 7 and July 14) that he did not have jurisdiction to provide the kind of accommodation they were requesting. He concluded his email to the tenants as follows:

Please let me know if you require legal assistance and would benefit from legal support options made known to the court for the public, in order to navigate the instructions in Justice Corbett’s second and third paragraph of His Honour’s endorsement.

This court confirmed this as follows:

Justice Corbett directs me to advise you as follows:

As the tenant has been advised by the Accessibility Co-ordinator, the Accessibility Co-ordinator has no jurisdiction to grant accommodation measures to vary the direction of a judge, and in particular, has no jurisdiction to vary the directions from the court sent by email on July 20, 2023.

[7] On July 24, 2023, the tenants delivered a notice of motion for review of Justice O’Brien’s decision, and for an urgent stay of the eviction order of the Board. In the notice of motion, the tenants argue that they require accommodation for disability in the deadline by which they are required to serve their materials for their motion to review the order of O’Brien J., and this request is supported by medical documentation. They did not provide more than a notice of motion.

[8] On July 25^th, the court directed as follows:

Justice Corbett directs me to advise you as follows:

The court has received the tenant's notice of motion for a stay.

The court has already given directions on this topic. Once the tenant has served her complete motion materials for the motion to review the order of O'Brien J., and complete motion materials for her motion for an interim stay, the court will provide further directions. Until that time, no stay will be granted and the eviction order may be enforced in accordance with its terms.

[9] The tenants then sought to initiate a review of my case management directions, pursuant to s.21(5) of the Courts of Justice Act, and specifically on the requirement that they serve motion materials without being granted an interim stay in the meantime. They sought a further urgent stay of the eviction order pending their review of my case management directions. Matheson J. sent out directions respecting this review motion which included a requirement to serve motion materials for their request for an urgent stay.

[10] On August 1, 2023, the tenants delivered their motion materials seeking an urgent stay of the eviction order of the Landlord and Tenant Board. They argue that they need accommodation for disability to permit them to deliver her motion materials for the review motion – in this regard they seek a deadline of August 23, 2023, to deliver those motion materials.

[11] Matheson J. directed the landlord to provide responding motion materials by August 4, 2023. The landlord complied with this direction. The tenants requested that this motion be decided on an urgent basis and that it be heard in writing, and the matter was then placed back before me on the basis of these materials.

[12] The court ordinarily requires complete motion materials for the review motion to assess a request for a stay, since the motion materials are the best basis upon which to assess the merits of the review motion, a significant aspect of the issue of whether to grant a stay. It assists the moving party to serve these complete materials, since it reduces the delay inherent in the review motion (and thus reduces the prejudice to the responding party), and it provides the most thorough basis for the court to assess the merits of the review motion. In this case, the proposed delivery date for review motion materials is reasonable (August 23^rd), and I accept that the tenants will likely be evicted prior to that date if the stay is not decided earlier (there is no evidence before the court that the Sheriff has given notice of her intention to enforce the eviction order – a notice that is usually provided in the ordinary course: had I been disinclined to proceed on the basis of the materials now before the court, I would have sought clarification respecting the likely timing of eviction from the parties).

[13] In the motion materials now before the court, the tenants address the merits of the review motion at length, and I am satisfied that I have a sufficiently clear picture of the merits of the review motion to be able to decide the stay motion now. The tenants have been communicating with the court on at least a daily basis, demanding immediate decision of the stay motion, on the basis of their view that it is urgent, and I accede to their request for an urgent decision rather than delaying the motion for complete motion materials for the review motion.

Motion for a Stay

[14] The test for a stay is derived from the Supreme Court of Canada decision in RJR Macdonald Inc. v. Canada (A.G.), 1994 117 (SCC), [1994] 1 SCR 311:

(a) is there a serious issue to be tried;

(b) will the moving party suffer irreparable harm if the stay is not granted?

(c) does the balance of convenience favour granting or refusing a stay?

[15] As noted above, I am satisfied that the moving party has established irreparable harm, and the landlord has conceded this point. Thus, this decision focuses on the first and third branch of the test for a stay.

Is There A Serious Issue ?

[16] This motion seeks a stay in the context of a motion to review the decision of a Divisional Court motion judge before a panel of three judges of the Divisional Court. Therefore, on this motion, the question is whether there is a “serious issue” to be argued on the review motion. The test, in this context, is not a high bar: the moving party must show that there is an arguable basis upon which a review panel may reverse the decision of O’Brien J. and grant an extension of the time in which the tenants may appeal the decision of the LTB terminating the tenancy if the tenants do not pay their rent on the basis of the “lawful rent” as found by the Board.

[17] On a motion under Courts of Justice Act, s. 21(5) to review the order of a Divisional Court motion judge, the panel will intervene to vary or set aside the order only if the motion judge made an error of law or a palpable and overriding error of fact [Marsden v. Ontario (Chief Coroner), 2012 ONSC 6118 (Div. Ct.); Ontario Federation of Anglers and Hunters v. Ontario (Natural Resources and Forestry), 2017 ONSC 518, para. 7 (Div. Ct.)]. Where the motion judge exercised discretion, the panel will not interfere unless the moving party demonstrates that the decision is so clearly wrong that it amounts to an injustice, or the motion judge gave no or insufficient weight to relevant considerations (Franchetti v. Huggins, 2022 ONCA 111, para. 5.).

[18] In this instance, the motion judge correctly set out the test for granting an extension of time to appeal on the basis of binding authority (Enbridge Gas Distribution v. Froese, 2013 ONCA 131, 114 O.R. (3d) 636, at para. 15.) (Decision, para. 8). In particular, the motion judge correctly found that “[t]he overarching question is whether the justice of the case requires that an extension be given” and correctly stated that this overarching question is assessed by review of four factors:

(1) Whether the moving party formed a bona fide intention to appeal within the appeal period;

(2) The length of, and explanation for, the delay in filing;

(3) Any prejudice to the responding party caused, perpetuated or exacerbated by the delay; and

(4) The merits of the proposed appeal.

[19] The motion judge found that the tenants had satisfied the first two branches of the test for an extension. The motion judge found that delay would prejudice the respondent landlord (accumulation of substantial rent arrears). This finding is correct as a matter of law, and firmly grounded in the record below as a matter of fact, but I return to it briefly below to explain to the tenants why there is no reviewable issue arising from this finding.

[20] The motion judge then found that the tenants have not raised any reviewable error of law by the Landlord and Tenant Board in its analysis of the merits of the case. I devote most of the balance of these reasons to this issue: I see no reviewable error in the motion judge’s conclusions on this point and thus no serious issue to be heard on the review motion.

Prejudice to the Landlord

[21] The court assesses prejudice to the landlord on the basis of the possibility that the tenant’s review motion and proposed appeal will not succeed. This is not based on the assumption that the landlord is right and the tenant is wrong. Rather, it is assessing the prejudice that may result of granting – or refusing – a stay. If the tenants are right about the issues for the proposed appeal, and a stay is not granted, clearly the tenants will be prejudiced: they will be put out of their home, required to find new accommodation, and may find themselves without secure shelter for some period. One of the tenants is 80 years old and disabled and so may suffer all the more from these consequences.

[22] The prejudice to the landlord is purely financial. But it is prejudice, nonetheless. On the tenants’ evidence, they are paying roughly half the lawful rent resulting in a monthly shortfall of about $2,000 per month. The tenants state, candidly, that they are unable to pay the shortfall. The landlord will suffer prejudice of about $2,000 per month as a result of delay, and this will accrue until the matter is finally decided. Of course, this will not be “prejudice” if the tenant wins the appeal; but, likewise, an order refusing a stay will cause the tenants no prejudice if it turns out that the landlord prevails at the end of the day.

[23] “Prejudice” in this context is potential loss that cannot be cured at the end of the case. The motion judge found that the landlord will suffer prejudice of accumulated rent arrears, with little prospect of recovering those arrears from the tenant, if the landlord prevails. This finding is firmly rooted in the record, and the conclusion that this constitutes “prejudice” for the landlord is sound in law.

The Merits of the Appeal

(a) The Substantive Issue on Appeal

[24] At paras. 8 - 16 of its decision, the Landlord and Tenant Board found that the lawful monthly rent is $3,998.00, due the first day of each month, and that substantial arrears had accumulated. In particular, the Board found as follows:

The parties disputed the lawful monthly rent. The rent as set out in the application was $1,950.00. As of January 1, 2023, the lawful rent was increased to $3,998.00, an increase well above the rent increase guidelines.

The Landlord submitted that the unit is exempted from rent increase guidelines pursuant to section 6.1(2) of the Residential Tenancies Act (the ‘Act’)….

Section 6.1(2) of the Act states that section 120, relating to guideline increases, do not apply on and after the commencement date with respect to a rental unit if the rental unit is in a building and no part of the building was occupied for residential purposes on or before November 15, 2018.

I am satisfied that the rental unit is located in a building first occupied for residential purposes on October 26, 2021…. As such I am satisfied that the rent increase guidelines do not apply to the rental unit.

I am also satisfied that the rent increase was valid as it was properly served on the Tenants in accordance with section 116 and 119 of the Act….

[25] In their materials before the motion judge, and in their materials on this stay motion, the tenants have not identified an error of law respecting the Board’s analysis leading to its conclusion that the “lawful monthly rent” is $3,998.00 as of January 1, 2023. The tenants argue that there are exemptions to s.6.1 of the Residential Tenancies Act that apply to social housing. This argument does not avail the tenants: receipt of social benefits by a tenant does not transform a privately owned residential unit to “social housing”. None of the exceptions to the exemption apply to the rental unit in this case.

[26] The main thrust of the tenants’ arguments – on this point – is:

a. Such a substantial rent increase is manifestly unfair to the tenants; and

b. One of the tenants is elderly and disabled and will be severely prejudiced by being rendered “homeless” as a result of eviction.

In support of these arguments the tenants have referenced the duty to accommodate in the Human Rights Code, RSO 1990, c. H.19, ss. 7 and 15 of the Canadian Charter of Rights and Freedoms, and the above-referenced exceptions to the exemption in s.6.1 of the Residential Tenancies Act.

[27] The landlord is not a public entity. She is a private person. She is not bound by the Canadian Charter of Rights and Freedoms. The landlord is bound by the Human Rights Code, but she has no obligation thereunder to charge the tenants reduced rent because they cannot afford the full lawful rent. The landlord is not an owner of social housing. The landlord is entitled to charge lawful rent for her premises, and if the tenants cannot pay the lawful rent, then they will have to leave. The harshness of this result – and it is indeed harsh in the circumstances of this case – is inherent in the decision made by the Legislature to exempt new buildings from rent control. It is not open to the Landlord and Tenant Board – or to this court – to second guess the Legislature’s decision.

[28] I see no argument available to the tenants that the motion judge erred in law or made a palpable and overriding error in her assessment of the merits of the proposed appeal. There is no error of law in the decision of the Landlord and Tenant Board and thus the proposed appeal lacks merit.

(b) The Procedural Issues in the Proposed Appeal

[29] The motion judge concluded that there was “little merit” to the procedural grounds of appeal advanced by the tenants. Placed in the context of this case, I see no arguable basis for a review panel to interfere with this finding. The Board’s finding that the lawful rent is $3,998.00 is premised on a factual finding about the date of first residential occupancy of the premises. The Board’s finding that notice of the rent increase was given validly in accordance with the lease is based on the terms of the lease (as to how notice may be given) and the landlord’s evidence of having mailed the notice to the tenants. The alleged procedural unfairness would not have impacted on these findings: there is no basis to conclude that further or better information would have become available in respect to these two key findings. Nothing adduced before the motion judge or before this court casts the substantive issues in a different light, and thus, even if there was procedural unfairness below, it did not have a material affect on the outcome before the Board.

(c) Conclusion: No Serious Issue to be Reviewed

[30] The tenants’ arguments respecting the merits of the Board’s decision did not disclose a basis for this court to find an error of law in the Board’s decision. I see no arguable error of law or palpable and overriding error of fact in the decision of the motion judge to this effect.

The Conclusion of the Motion Judge

[31] Weighing the four factors to be assessed in deciding whether the justice of the case requires that an extension be given is an exercise of discretion, attracting deference on a review motion. The motion judge correctly noted that an absence of merit to the intended appeal could be a sufficient basis, on its own, to refuse to grant an extension. In this case, the motion judge found that the intended appeal lacked merit and that there would be prejudice to the landlord if the extension were granted. Implicit in the analysis was the observation that the tenants would not secure the disputed rent pending appeal, a term that is usually required by this court as the price for continuing a stay pending appeal. I see no basis on which an appeal panel would interfere with the motion judge’s exercise of discretion in these circumstances.

The Balance of Convenience

[32] The prejudice to the landlord is financial; the prejudice to the tenants is more substantial: loss of their home. I note that the agreed rent had been $1,950 per month, and that the tenants say that they are able to pay a “normal” rent increase of 2.5% on this amount – which would place their monthly rent at about $2,000.00 per month. The court is aware that rents are currently very high in Toronto. That said, if the tenants can pay $2,000.00 per month, they should be able to locate alternative housing within a reasonable period. I appreciate that they will still be dislocated, and that this will be a hardship for them.

[33] If the merits of the case are considered when weighing the balance of convenience, that balance tips in favour of the landlord. If a stay is granted and the landlord wins the appeal, the landlord will have substantial accumulated arrears which the landlord could not reasonably expect to recover. If a stay is not granted and the tenants win the appeal, they will have been dislocated from their home and forced to find fresh, perhaps less desirable accommodation. I consider that the review panel will not interfere with the decision of the motion judge – that is, that there is no serious issue to be heard at the review motion – and thus the tenants will be required to relocate in any event.

Summary and Disposition

[34] The tenants have satisfied me that they will suffer irreparable harm if a stay is not granted pending the review motion. However, I conclude that there is no serious issue to be argued respecting the review motion, and that the balance of convenience weighs against granting a stay pending the review motion.

[35] Notwithstanding this decision, the tenants are still entitled to proceed with their motion to review the decision of O’Brien J. – and after eviction that review could still impact on the quantum of arrears they owe the landlord. They have said that they will deliver their materials for this review motion by August 23, 2023. I will give them additional time, given this decision: if the tenants decide to proceed with the review motion, they shall serve their complete motion materials by September 22, 2023. If they do not do so, the landlord may request the court to dismiss the review motion as abandoned, without costs, by email to the court copied to the tenants. If that happens, then the tenants will have an opportunity to respond to such a request before the court decides what to do.

Prior Case Directions

[36] I directed the tenants to serve complete motion materials for the review motion and the motion for a stay before the stay motion would be heard. The tenants took the position that they could not serve the motion materials for the review motion fast enough for it to be practical for the stay motion to be adjudicated before they would be evicted. On this basis Matheson J. directed the landlord to deliver responding motion materials to the stay motion on an expedited basis, and I concluded that I should decide the stay motion without having the benefit of complete materials for the motion to review the decision of O’Brien J. The landlord delivered their responding materials on Friday August 4, 2023, and I am delivering this decision on the first business day thereafter (August 7^th having been a statutory holiday).

[37] This process is a departure from usual practice in this court: it is best to assess the merits of a review motion from the motion materials for the review motion, and it is not usually more burdensome for the moving party to provide them: the review motion is based on the materials that were before the original Divisional Court motions judge and should be readily available. In this instance, I am satisfied that I have a full understanding of the bases for the review motion from the motion materials delivered by the tenants for the stay motion and that the court should decide the stay motion without having the benefit of the tenants’ complete motion materials for the review motion, as the tenants have urged the court to do.

Order

[38] The motion for a stay of the eviction order of the Landlord and Tenant Board pending hearing of the motion to review the decision of O’Brien J. is dismissed.

[39] If the landlord seeks costs of the stay motion, then the landlord shall provide brief written cost submissions by August 22, 2023, and the tenants may provide brief responding costs submissions by August 29, 2023.

Released: August 8, 2023