CITATION: Stenka v. Garten, 2023 ONSC 6120

DIVISIONAL COURT FILE NO.: DC-142/23

DATE: 20231030

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: EDWARD STENKA and JOZEF PYRC, Appellants

AND:

IRVING GARTEN and MAYER INVESTMENTS LTD., Respondents

BEFORE: Nishikawa J.

COUNSEL: Edward Stenka, in person

Alan McConnell, for the Respondents

Valerie Crystal, for the Landlord Tenant Board

No one appearing for Jozef Pyrc[^1]

HEARD at Toronto: October 4, 2023

AMENDED ENDORSEMENT[^2]

Overview

[1] The Appellant, Edward Stenka, appeals a decision of the Landlord and Tenant Board (“LTB”) dated February 6, 2023 (the “Review Decision”) reversing a previous LTB decision dated March 2, 2022 (the “Initial Decision”). As a result of the Review Decision, the LTB made an eviction order against the Appellant, who was found to be an unauthorized occupant.

[2] The Appellant argues that the review of the Initial Decision should never have occurred. He submits that the review amounted to an unfair re-hearing of the issues decided in the Initial Decision in breach of the LTB’s duty of procedural fairness. The Appellant further argues that the LTB refused to allow him to cross-examine the Respondent on a particular issue, also in breach of procedural fairness. Finally, the Appellant submits that the LTB failed to appropriately apply both ss. 83 and 202 of the Residential Tenancies Act, 2006, S.O. 2006, c. 17 (the “RTA”).

[3] The Respondents, Irving Garten and Mayer Investments Ltd. (together, the “Landlord”), argue that this appeal ought to be dismissed because the LTB made no error of law or breach of procedural fairness.

[4] For the reasons that follow, the appeal is granted. I find that the manner in which the review hearing was conducted was not in accordance with the LTB’s duty of procedural fairness.

Background Facts

[5] The Appellant has lived in the apartment building owned by the Respondents for the past 30 years. At first, he lived with his wife who was employed as a superintendent in the building. In 2010, Mr. Stenka’s wife moved out of the building when her employment ended. Mr. Stenka moved into a different unit in the building with Jozef Pyrc, who was already a tenant there.

[6] Over the course of nine years, the Appellant resided with Mr. Pyrc as his roommate. Mr. Stenka and Mr. Pyrc had an oral agreement that the Appellant would pay half the rent while he occupied the unit. However, Mr. Pyrc remained the sole tenant during this time, and there was no tenancy agreement or amendment to the tenancy agreement adding Mr. Stenka to the lease with the Landlord. The Appellant alleges that although he was not named on the lease, his presence was known to the Landlord.

[7] In March 2020, the Landlord made an agreement with Mr. Pyrc, pursuant to which the Landlord would pay Mr. Pyrc $18,000 in return for vacant possession of the rental unit. In accordance with the agreement, Mr. Pyrc moved out of the rental unit on July 1, 2020. The Appellant remained in the rental unit. The following day, the Landlord advised Mr. Stenka in writing that he was not permitted to occupy the unit. The Landlord then filed an application to evict Mr. Stenka as an “unauthorized occupant.”

[8] After Mr. Pyrc moved out, the Appellant began paying the full rent and has continued to do so. Arrears of rent were not an issue at either hearing.

The Initial Decision

[9] The Landlord’s application was heard by the LTB on November 16, 2021. The issues before the LTB were whether Mr. Stenka was an “unauthorized occupant” and whether the Landlord was entitled to evict him pursuant to s. 100 of the RTA. On March 2, 2022, Member Nicholson of the LTB found that Mr. Stenka was an “unauthorized occupant,” within the meaning of the RTA, but denied the Landlord’s application to have Mr. Stenka evicted from the rental unit.

[10] Member Nicholson considered the circumstances of both parties and found, pursuant to s. 83 of the RTA, that it would be unfair to evict the Appellant. The Member cited the considerable length of time that Mr. Stenka had lived in the apartment building, the fact that he was on permanent disability benefits, the minimal prejudice to the Landlord, and the fact that it would be difficult for Mr. Stenka to secure other, comparable housing. As a result, the Member dismissed the Landlord’s application.

[11] The Landlord appealed the Initial Decision to this court and sought review of the decision through the LTB’s internal review process. Mr. Stenka also sought a review of the finding in the Initial Decision that he was an unauthorized occupant, and not a tenant. The review requests were heard by a different member of the LTB. The parties agreed to stay the Landlord’s appeal to this court pending the outcome of the review process before the LTB. The Landlord eventually abandoned that appeal.

The Review Decision

[12] The review hearing was conducted by Member Cho (the “Member”) over two days on July 19, 2022, and November 23, 2022. The review process will be further detailed in these reasons. On review, the Member found that the Appellant failed to demonstrate that the previous adjudicator made a serious error in finding that he was an unauthorized occupant and not a tenant, as defined under the RTA. Mr. Stenka’s request for review was denied.

[13] The Member granted the Landlord’s review request and ordered that the Appellant vacate the unit on or before April 30, 2023. The Member found that the Initial Decision did not, for the purposes of the s. 83 analysis, “explain in sufficient detail” the Landlord’s evidence and submissions regarding their circumstances. Member Cho stated that denying the Landlord’s application to evict would be unduly prejudicial to the Landlord, as it would effectively create a tenancy agreement between the Landlord and the unauthorized occupant, despite the Landlord’s consistent refusal to do so. The Member pointed to s. 103(2) of the RTA to emphasize that Mr. Stenka’s continued payment and the Landlord’s continued acceptance of rent payments did not create a tenancy agreement.

Issues

[14] The appeal raises the following issues:

(a) Did the Member breach the duty of procedural fairness by reviewing the Initial Decision?

(b) Was the refusal to allow cross-examination on a particular issue a breach the duty of procedural fairness?

(c) Did the Member fail to properly apply s. 83 of the RTA?

(d) Did the Member fail to properly apply s. 202 of the RTA?

Analysis

Standard of Review

[15] Appeals from decisions of the LTB to this court are limited to questions of law: RTA, s. 210(1). The standard of review on questions of law is correctness. While issues of procedural fairness are reviewed on a correctness standard, this does not detract from the need to respect the LTB’s specialized function, expertise and familiarity with the RTA: Reisher v. Westdale Properties, 2023 ONSC 1817, [2023] O.J. No. 1273 (Div. Ct.), at para. 10.

Did the Member Breach the Duty of Procedural Fairness by Reviewing the Initial Decision?

[16] The Appellant submits that the Member breached the duty of procedural fairness and exceeded his jurisdiction by reviewing the Initial Decision without identifying a “serious error” in the decision, contrary to the LTB’s Rules of Procedure (the “LTB Rules”). The Appellant’s position is that the Initial Decision was based on a reasonable exercise of discretion by the first Member, and there was no basis on which to review it. The Appellant submits that the Member conducted the review hearing in a confusing and irregular manner by proceeding with a de novo hearing before first determining whether the threshold of a serious error had been met, resulting in procedural unfairness.

[17] In my view, the manner in which the hearing was conducted was not in accordance with the LTB Rules, resulting in unfairness to the Appellant.

[18] 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, 1999 699 (SCC), 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”.

[19] This court has found that procedural fairness before the LTB is at the higher end of the spectrum of procedural fairness because of the high stakes for all parties, among other things: Shapiro v. Swingler, 2021 ONSC 6191, [2021] O.J. No. 4832 (Div. Ct.), at para. 39. While the Respondent submits that an unauthorized occupant does not have the same entitlement to procedural fairness as a tenant, s. 183 of the RTA states that “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). Moreover, the very issue of whether the Appellant was an unauthorized occupant or tenant was one of the issues to be determined in the proceeding.

[20] The LTB’s authority to review a decision is found in s. 21.2 of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22 (“SPPA”) and Rule 26 of the LTB Rules. Rule 26.9 states that the LTB “will conduct a preliminary review of the request and may exercise its discretion to” among other things, “dismiss the request or direct a review hearing on some or all of the issues raised.” Rule 26.15 states that if the request to review is granted, the reviewing member will identify the issues to be re-heard. Under Rule 26.16, the re-hearing begins immediately after the request to review is granted. The parties are required to be prepared to proceed with the re-hearing.

[21] In addition, the LTB’s Interpretation Guideline 8 (the “Guideline”), regarding the review of an order, states that the LTB will only exercise its discretion to grant a review when it is satisfied that the order “contains a serious error, a serious error occurred in the proceeding, or the requestor was not reasonably able to participate in the proceeding.” The Guideline further states that when the request for review is not dismissed, the LTB will issue a notice of hearing to all parties. The LTB will determine the scope of the review hearing and depending on the issues, the manner in which it will be conducted.

[22] The LTB Rules and the Guideline thus envisage a two-step process that involves: (i) a determination as to whether to grant review because the order may contain a serious error or because of the inability of a party to participate in the proceeding; and (ii) the review hearing itself.

[23] As noted above, in the Review Decision, the Member found that the Landlord had met the “serious error” threshold for review of the Initial Decision, but that the Appellant had not. The Member thus granted the Landlord’s review request and dismissed the Appellant’s. The Member found that it was unfair to deny the Landlord’s application and substituted the Initial Decision with an eviction order.

[24] However, the process that the Member adopted at the review hearing was far less clear. At the outset of the review hearing, the Member stated that he would begin by hearing the “moving party or the applicant – that is the party that has brought the motion or the application – first.” It is unclear how this applied to the review process, where both parties had made requests for review. The Member then stated that he was “assigned to attend to the tenant’s April 7, 2022 review request.” However, based on the LTB’s interim order dated May 27, 2022 (the “Interim Order”), both the Landlord and the Appellant’s requests for review were to be heard together.

[25] Based on my review of the hearing transcript, at no point did the Member adopt or explain the two-step review process identified in the LTB Rules. To the contrary, the Member stated that he was conducting a de novo hearing. The Member began to hear evidence before any submissions or determination on the threshold question of whether the Initial Decision “may contain a serious error”. Some of the confusion may have arisen because of the Interim Order, which granted both review requests on a “preliminary basis” but also stated that:

The Board shall schedule a hearing to consider the Landlords’ requests for review and the Tenant’s request for review together. The parties are directed to attend the hearing and be prepared to proceed on the merits of the original application should the review request(s) be granted.

[26] The Interim Order thus required the Member to determine if the review requests should proceed, which necessitated that the Member engage in an analysis of the threshold question of whether there was a serious error in the Initial Decision.

[27] In my view, in the circumstances of this case, the failure to address the threshold question before proceeding with a de novo hearing was problematic from a procedural fairness perspective. The conduct of a de novo hearing on all the issues before a finding of a serious error raises the risk of a perception that the Member reasoned backward. That is, that the Member came to his own conclusion on the evidence adduced before him, and then found a serious error to justify reviewing the Initial Decision. The question of whether the Initial Decision contained a serious error ought to have been determined based on the record before the previous adjudicator.

[28] In this case, the serious error that the Member found was that the Initial Decision did not adequately consider the Landlord’s circumstances, including a contract to renovate the unit. This finding, however, was not based on the evidence before the first adjudicator but was based on evidence that the Member heard during the de novo hearing before him. The only prejudice to the Landlord identified in the Initial Decision was the Landlord’s inability to have vacant possession of the unit, thus allowing them to enter into an agreement with a new tenant. This may in fact have been the only evidence before the first adjudicator. The Initial Decision contains no mention of any contracts for renovation of the unit. If the Landlord had not adduced evidence of contracts for renovation at the first hearing, then there was no failure on the part of the first Member in taking them into consideration when considering the Landlord’s circumstances. In my view, without a finding of a serious error, it was not appropriate to conduct a de novo hearing in the circumstances, where the serious error alleged was in the exercise of the previous adjudicator’s discretion.

[29] Similarly, while the Review Decision states that there was no serious error in the finding in the Initial Decision that Mr. Stenka was an unauthorized occupant, the findings and reasoning in the Review Decision reflect that the Member in fact reheard the issue based on the evidence before him. In respect of that finding, however, he came to the same conclusion as the first Member.

[30] I pause to note that on review, the Member was faced with an especially difficult task because there was no transcript of the first hearing. It would have been challenging, if not impossible, to determine what evidence was before the first Member. However, this makes it more difficult to understand on what basis the Member found a serious error in the Initial Decision. The Member found that the Initial Decision “does not address the circumstances behind the Tenant’s act of vacating the rental unit, or of the Landlords’ contract to renovate the rental unit” without making any reference to the evidence that was before the first Member.

[31] The process adopted by the Member also undermines the principle of finality. As stated in the Guideline, “In making a decision to review, the LTB considers the public interest in preserving the finality of its decisions together with the opportunity correct a serious error without the need to appeal or seek judicial review.” Decisions of the LTB ought not to be disturbed unless there is a specific finding of a serious error. The guideline specifically states that “[o]rders granting relief from eviction (RTA s. 83) or awarding specific remedies involve an exercise of the original hearing Member’s discretion and are entitled to deference. The LTB will not exercise its discretion to review these types of decisions where the result is within the range of reasonable, acceptable outcomes.”

[32] The Member’s approach to the issues on the review hearing was also confusing in other respects. He determined that the “quickest way” to deal with the matter was to deal with the Appellant’s review request first and then proceed to the issue of whether the first Member erred in his application of s. 83 of the RTA. At one point, the Member stated that the outcome of the first issue could negate the need to deal with the second:

This is a hearing as far I’m concerned de novo. Effectively we are getting right into – the review request may very well resolve the A2 application.

What we have done over the last two hearing days is essentially just hear the application de novo, albeit from a reverse perspective with Mr. Stenka giving his evidence first – purpose of the hearing was to allow the parties to introduce evidence and lead submissions to determine whether in fact Mr. Stenka is an occupant or a tenant. Everything will turn on those determinations.

[33] However, because relief from eviction under s. 83 did not necessarily require a finding that Mr. Stenka was a tenant, that issue would have to have been addressed, irrespective of whether Mr. Stenka was found to be a tenant. This confusion resurfaced later in the hearing when the Member refused to allow cross-examination on the issue of a contract to renovate the rental unit, finding that the question was not relevant to the issue of whether or not the Appellant was a tenant.

[34] While not directly relevant to the appeal before this court, the confusing nature of the hearing is further reflected in the Member’s statement that he made an error when he instructed that the LTB hold a board-initiated review which related to an interim order, as opposed to the Initial Decision. He then asked if the parties would consent to a finding that he erred “in April of 2022”, to which they consented. It is unclear from the transcript whether the parties were consenting to a finding that the Member erred in ordering a board-initiated review of an interim decision or a finding that the Member erred in ordering a board-initiated review. The ambiguity was worsened when the Member later stated, “So on consent the board initiated review is granted.” If the parties consented to a board-initiated review, then the issue of whether the Initial Decision raised a serious error was not before him and ought not to have been addressed in the Review Decision.

[35] I recognize that the LTB has broad discretion to manage its process to ensure the most expeditious and fair determination of the issues in a proceeding. Section 2 of the SPPA states that the Act and any tribunal rules are to be “liberally construed to secure the just, most expeditious and cost-effective determination of every proceeding on its merits.” Rule 1.4 of the LTB Rules provides that the LTB will decide how a matter will proceed and may make procedural directions or orders at any time and may impose any conditions that are appropriate and fair. Under Rule 1.6, the LTB may waive or vary any provision in the Rules, and may direct the order in which issues, including issues the parties consider to be preliminary, will be considered and determined.

[36] In this case, however, the transcript does not reflect that the Member made a specific procedural direction or otherwise exercised his discretion to direct the order in which the issues would be determined. In this case, proceeding as provided under the LTB Rules would have been fairer and more expeditious, not to mention less confusing for the parties. In my view, based on the Baker factors, including the nature of the decision and its importance to the parties, as well as the statutory scheme, and the parties’ legitimate expectations based on the procedure adopted by the LTB, procedural fairness necessitated a determination of the threshold issue of a serious error. If the Member was going to adopt a different process, which might have been necessary because of the lack of a transcript of the previous hearing, procedural fairness required an explanation of that process so that the parties could fully and properly participate. Given that the process adopted by the Member was confusing and unclear to me on my review of the transcript, I find it likely that it was confusing to the parties as well, hindering their ability to properly participate.

Was the Refusal to Allow Cross-Examination a Breach of Procedural Fairness?

[37] The Appellant submits that the Member breached the duty of procedural fairness by denying him the opportunity to cross-examine the Landlord on the existence of any contracts to renovate the unit and then relying on the Landlord’s testimony on the issue to set aside the Initial Decision.

[38] I agree. In the Review Decision, at para. 25, the Member states that the Landlord “explained that [they] had entered contracts with third parties to renovate the vacant rental unit. The Unauthorized Occupant’s occupancy of the rental unit prevented the Landlords from beginning the work.” The only evidence adduced at the review hearing about any contracts to renovate the unit was the Landlord’s singular statement that, “My men were going to start renovating.” No details were provided as to the dates of the work, timelines, extent or cost of the work. The only documentary evidence of a contract was a reference in a letter dated July 2, 2020 from the Landlord to Mr. Stenka stating, “We are under a binding contract for required renovation of [this] unit. This work will commence immediately.” No contract was entered into evidence as an exhibit.

[39] The Appellant’s paralegal was precluded from asking any questions on cross-examination about the existence of any contracts for renovation. The Member ruled, before hearing submissions, that the question was “not probative” stating, “Whether there was a binding contract for renovations work does not address whether or not Mr. Stenka is a tenant[.]” He then refused to allow any submissions on the relevance of the question. The Member also refused to allow Mr. Stenka to be questioned in chief about whether he was ever shown a contract.

[40] As noted above, the Landlord did not testify to the existence of a contract to renovate the unit, only that his men were going to start renovating. Without further documentary evidence or testimony, however, the Landlord’s assertion was bald. The Appellant had a right to cross-examine the Landlord as to the existence and substance of any contracts because evidence of the Landlord’s circumstances was relevant to the issue of whether relief from eviction should be ordered under s. 83. This is especially true given that the failure to consider “the Landlords’ contract to renovate the unit” was the very basis on which the Member found that the Initial Decision contained a serious error. It is also worth noting that the Landlord’s closing submissions at the review hearing focused on the argument that the Appellant was not a tenant and would not be prejudiced in having to move and made no mention of the existence of contracts for renovation or other circumstances of the Landlord.

[41] As noted above, the Member had considerable discretion to conduct the review hearing in the manner he deemed appropriate. I recognize that LTB adjudicators must have the ability to limit cross-examination to relevant issues and to otherwise conduct hearings in a fair and expeditious manner. However, in the circumstances of this case, the refusal to allow cross-examination on the existence of contracts for renovation was contrary to s. 10.1 of the SPPA, which gives a party to a proceeding the right to cross-examine a witness where it is “reasonably required for a full and fair disclosure of all matters relevant to the issues in the proceeding.” The Member’s ruling echoes the confusion described earlier in these reasons regarding whether the Appellant was a tenant, and if that would negate the need to address the s. 83 issues.

[42] I note that while the LTB Rules and case law recognize the need for discretion and flexibility for the Board to conduct hearings in an expeditious manner, efficiency is not to be divorced from the requirement to conduct hearings fairly. As this court held in Manikam v. Toronto Community Housing Corporation, 2019 ONSC 2083, [2019] O.J. No. 1620 (Div. Ct.), at para. 41:

[41] Section 183 of the Act requires the Board to adopt 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” (emphasis added). Thus, the Act requires the Board to balance the need for expedition with the need for procedural fairness.

[43] In this case, the Member’s refusal to allow cross-examination on an issue that he then found to be significant in both finding a serious error in the Initial Decision, and in assessing the parties’ circumstances under s. 83, represents a breach of the duty of procedural fairness.

[44] Based on my findings on the procedural fairness issues, it is not necessary to consider the substantive issues raised by the Appellant regarding the Member’s interpretation and application of ss. 83 and 202 of the RTA.

Conclusion

[45] Accordingly, the appeal is granted. The matter is remitted back to the LTB for a hearing of the review requests before a different member of the LTB. In the meantime, the Appellant is required to continue to pay monthly rent to the Landlord. As there was no appeal of the Initial Decision, that decision remains in effect.

[46] The Appellant, who is self-represented, had the assistance of counsel on a limited-scope retainer in preparing his factum on the appeal. The Appellant advised in his factum, however, that in the event that he was successful, he would not seek costs of the appeal. As a result, no costs are ordered.

­­­­­­­­­­­________________________

Nishikawa J.

Date: October 30, 2023

Date of release of Amended Endorsement: December 1, 2023

[^1]: While Jozef Pyrc was named as an appellant in the proceeding, he did not participate in the appeal or in the matter before the LTB.

[^2]: The Endorsement was amended to reflect that Valerie Crystal appeared at the hearing as counsel for the Landlord Tenant Board.