CITATION: O’Shanter Development Company Ltd. v. Adai et al, 2023 ONSC 6478
COURT FILE NO.: DC-22-0074-00
DATE: 2023 11 16
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N:
O’SHANTER DEVELOPMENT COMPANY LTD.
Joseph Hoffer and Kevin Kok, for the Appellant
Appellant
- and -
KAREN MAGNE ADAI, MALIKA RENEE ADAI, and others identified in the attached Schedule “C”
Betty Godzwon and Priscilla Mullings, Respondents
Respondents
Valerie Crystal, for the Landlord and Tenant Board
HEARD: September 25, 2023, by Video Conference
WILKINSON J.
RULING ON APPEAL
[1] The Appellant, O'Shanter Development Company Limited (“the Landlord"), appeals a decision of the Landlord and Tenant Board (“the Board”) dismissing its L5 Application for a Rent Increase Above the Guideline.
[2] I am hearing this appeal from a decision of the Landlord and Tenant Board in my capacity as a single judge of the Divisional Court. For the reasons that follow, I find that the September 16, 2022 decision of the Board does not contain an error of law. The Landlord’s appeal is dismissed.
Background
[3] The Landlord owns a 133-unit residential rental building located at 2150 Bromsgrove Road, in Mississauga, Ontario (the “Residential Complex”). The Respondents in the Appeal are the named tenants of the rental units in the Residential Complex for which the Landlord filed the L5 Application (the "Tenants").
[4] The Landlord filed a L5 Application on June 3, 2019, seeking a rent increase beyond the guideline to offset $388,202.00 paid by the Landlord to purchase new appliances for rental units, complete drain repairs, and complete elevator modernization work in the Residential Complex. The Board did not respond to this Application for over two and a half years.
[5] On January 28, 2022, the Board sent a letter to the Landlord outlining deficiencies in the L5 Application, by email to the Landlord’s paralegal, John Andrade.
[6] On May 13, 2022, the Board sent another email to Mr. Andrade, with several attachments. These attachments included a notice of hearing in writing with no hearing date specified, another deficiency letter requiring the Landlord to address certain issues in the L5 Application by May 27, 2022, and an interim order directing the Landlord to serve the Tenants with the notice of hearing, and the amended L5 Application by June 2, 2022. The Landlord states that it never received this email correspondence from the Board.
[7] On August 10, 2022, the Landlord’s in-house paralegal, Lindsay Goldberg, received an inquiry from the Board as to the status of the Certificates of Service on the Tenants for the notice of hearing the amended L5 Application. Ms. Goldberg requested that the Board copy her on all correspondence related to this matter. That same day, the Board forwarded the May 13, 2022 correspondence to Ms. Goldberg, who in turn provided a copy to Mr. Andrade.
[8] Upon reviewing the May 13, 2022 correspondence, Mr. Andrade advised the Board by email on August 23, 2022 that both he and the Landlord had not previously seen the May 13, 2022 correspondence, and that the Landlord was therefore previously unaware of the procedural deadlines. Accordingly, the Landlord had not complied with the deficiencies in the L5 Application that were to be addressed by May 27, 2022, nor had it served the Tenants with the notice of hearing and amended L5 Application by June 2, 2022. Mr. Andrade requested that a new hearing date be scheduled.
[9] On August 24, 2022, the Board denied Mr. Andrade's request. In its Order, the Board referenced other matters before the Board involving the same Landlord, for which Mr. Andrade had requested the rescheduling of hearings as a result of documents being misfiled.
[10] The Board indicated that the Notice of Hearing in the present matter had been sent to two email addresses used by Mr. Andrade on May 13, 2022, and had not bounced back. The Board concluded that the Notice of Hearing and Application had not been served on the Tenants by the Landlord as required due to disorganization and lack of diligence on the part of the Landlord, and that the Landlord was the author of its own misfortune.
[11] On August 29, 2022, the Landlord requested an extension of time to serve the Tenants with the documents as required by the May 22, 2022 correspondence. On August 31, 2022, the Board denied the Landlord’s request. The Board found that the Landlord’s Request to Extend Time was in essence the same request that had already been denied by the Board, and that the Landlord had not demonstrated a significant change in circumstances to justify altering the first denial.
[12] On September 16, 2022, the Board issued a Final Order, dismissing the Landlord's L5 Application due to the Landlord's failure to comply with the deadlines and requirements set out in the May 13, 2022 email correspondence. In reaching this conclusion, the Board found that the Landlord had not established that the Board had failed to deliver the Notice of Hearing package to the Landlord's representative. Further, the Board found that the Landlord’s request to extend the time to serve the Notice of Hearing on the Tenants failed to outline any significant changes in circumstances following the denied request to reschedule.
[13] The Landlord now appeals the September 16, 2022 ruling from the Board dismissing its L5 Application for a rent increase.
Jurisdiction
[14] The Divisional Court has jurisdiction pursuant to s.210 of the Residential Tenancies Act, 2006, S.O. 2006, c. 17 (“RTA”), to hear appeals on questions of law. As of January 25, 2023, as per the memorandum from Associate Chief Justice McWatt, issued pursuant to section 21(2)(c) of the Courts of Justice Act, all appeals from the Landlord and Tenant Board are to be decided by a single judge of the Divisional Court. I therefore have appropriate jurisdiction to hear this matter.
[15] Under subs. 210 (4) and (5) of the RTA, I may affirm, rescind, or replace the Order of the Board; remit the matter to the Board with the Divisional Court’s opinion; or make any other order, including with respect to costs, that I consider proper.
Standard of Review
[16] [This matter is proceeding by way of appeal on a question of law, which requires me to apply a correctness standard, pursuant to the Supreme Court decision in Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, at para. 8.
[17] Issues of procedural fairness arising from tribunal decisions where there is a statutory appeal mechanism are subject to the appellate standard of review of correctness (Law Society of Saskatchewan v. Abrametz, 2022 SCC, 29). I also note the Ontario Divisional Court decision in Zarei v. Afsharian, 2023 ONSC 5317 (Div. Ct.), at para. 2, which indicates that issues of procedural fairness, where there are matters of legal standards, are also decided on a standard of correctness.
Issue Raised by the Appellant Landlord:
[18] Did the Board err in law in dismissing the Landlord’s request for a rescheduling of the written hearing, and in dismissing the Landlord’s request for an extension of time to serve the notice of hearing and L5 Application on the Tenants?
[19] Was there a breach of procedural fairness in the hearing process?
Relevant Statutes
[20] Section 126 of the RTA allows a landlord to apply to the Board for an order permitting the rent charged in a residential complex to be increased by more than the guideline. One of the circumstances allowing this type of application is when eligible capital expenditures have been made by the landlord, as is being claimed by the Landlord in this matter.
[21] Section 190(1) of the RTA allows the Board to extend or shorten time requirements related to making an Application for a rent increase beyond the guidelines under section 126 of the Act, in accordance with the Landlord and Tenant Board Rules of Procedure.
[22] The Rules of Procedure govern all matters before the Board. Rule 21.1 requires that requests for rescheduling can only be made with the consent of all the parties, and not less than five days before the scheduled hearing date.
[23] Rule 21.2 of the Rules of Procedure states that notwithstanding the requirements of Rule 21.1, a request to reschedule a hearing may be granted if the Board is satisfied that it was not reasonably possible for the party making the rescheduling request to comply with Rule 21.1.
[24] Rule 16 of the Rules of Procedure addresses requests to extend or shorten time related to the hearing. Rule 16.4 indicates that the following factors may be considered in deciding whether to grant a request to extend time:
(a) The length of the delay, and the reason for it;
(b) Any prejudice a party may experience;
(c) Whether any potential prejudice may be remedied;
(d) Whether the request is made in good faith; and
(e) Any other relevant factors.
[25] Rule 16.6 of the Rules of Procedure states that if a request to extend time has already been denied, the party making the request may not make a second request to extend time unless there has been a significant change in circumstances.
[26] Rule 201(1)(a) of the RTA sets out the powers of the Board to “conduct any inquiry it considers necessary” before, during or after a hearing. Rule 201(2) further states:
In making its determination, the Board may consider any relevant information obtained by the Board in addition to the evidence given at the hearing, provided that it first informs the parties of the additional information and gives them an opportunity to explain or refute it.
The Position of the Landlord
[27] The Landlord argues that the Board made three errors that constitute errors of law, namely:
(i) The Board failed to apply the correct legal test in considering and denying the Landlord's Request to Reschedule the hearing in writing for the L5 Application;
(ii) The Board failed to apply the correct legal test in considering and denying the Landlord's Request to Extend Time to serve documents on the Tenants prior to the unscheduled written hearing date of the L5; and,
(iii) The Board erred at law in dismissing the Landlord's L5 Application.
[28] The Landlord relies upon section 201(2) of the RTA in arguing that when the Board made its first decision on August 24, 2022, it considered evidence involving two matters concerning the same landlord that were not heard at a hearing. The Landlord submits that the Board ought to have informed the Landlord about the findings and permitted the Landlord to provide a response. The Landlord argues that it was denied procedural fairness by not being given an opportunity to respond to this additional information being considered by the Board.
[29] The Landlord also relies upon the Ontario Divisional court decision in Barker v. Park Willow Developments, at para. 15, which indicates that the failure of the Tribunal to call the parties back and give them an opportunity to provide relevant evidence regarding new information being considered by the Board was a denial of natural justice.
[30] The Landlord submits that the Board erred in law by not considering all the factors listed under Rule 16.4 when it refused to extend the time for the Landlord to serve the Tenants with the documents regarding the L5 Application.
[31] The Landlord further submits that any delay in scheduling the hearing in writing does not cause any prejudice to the Tenants, as it is the Landlord who is seeking the increase in rent. Conversely, the Landlord submits that it will be prejudiced if it is not permitted to apply for the guideline rent increase.
The Position of the Landlord and Tenant Board
[32] The Board indicates that it takes no position as to the correctness of its decision, or with respect to the outcome of the appeal. It attends, however, to speak to the specialized function of the Board, emphasizing the Board’s right to control its own processes, and the need for expediency given the high volume of matters considered by the Board as set out in section 183 of the RTA. The Board relies upon Wei v. Lu, 2022 ONSC 3887, at para 9:
the LTB is entitled to control its own process and its procedural choices are entitled to deference. The LTB has exclusive jurisdiction to hear and determine all applications under the Residential Tenancies Act. Tribunals with authority to control their own process are owed considerable deference on procedural decisions. This is because administrative tribunals, including the LTB, have experience and expertise balancing the need to ensure fair participation by all parties with the need to ensure that the issues are dealt with in a timely and efficient way.
[32] The Board emphasizes that when considering a Request to Extend Time, it is not mandatory that the Board consider all the factors set out in Rule 16.4. The language of Rule 16.4 states that the factors “may” be considered in deciding requests to shorten or extend any time requirement.
[33] The Board states that it made a finding of fact that the Landlord’s representative had received its May 13, 2022 correspondence, and that I do not have jurisdiction to interfere with that finding of fact.
[34] The Board further states that even when the Board’s procedural decisions are challenged on the basis of procedural fairness, I may not interfere with the findings of fact that form the basis of the Board’s choice of procedure (Law Society of Saskatchewan v. Abrametz, 2022 SCC 29).
[35] The Board also submits that the Board has the power to take judicial notice of past proceedings between the same parties, and relies upon Lerose v. Princess Apartments, 2022 ONSC 7 (Div. Ct.), at paras. 23-24.
Analysis
Did the Board err in law in refusing to reschedule the hearing and in refusing to extend the time for service of documents?
[36] The facts before me involving the allegation that a party did not receive notice of a hearing are similar to those considered by the Ontario Divisional Court in Zarei v. Afsharian, 2023 ONSC 5317, in which Corbett J. states at paragraph 3:
- The primary issue raised by the appellants is a question of procedural fairness – they say that they did not receive notice and thus did not have an opportunity to participate in the hearing. A question of procedural fairness is reviewed in this court on a standard of correctness. However, in this case the issue of procedural fairness raised by the appellants turns solely on a finding of fact by the Board: the Board found that the appellants received notice of the hearing. Given that finding, which is not subject to appeal in this court, no issue of procedural fairness arises, and for this reason the appeal must be dismissed.
[37] As in Zarei, the case before me involves an appeal of a finding of fact made by the Board that the Landlord had received notice of the hearing in writing. I do not have jurisdiction to interfere with this finding.
Was there a breach of natural justice in the hearing process?
[38] There was no breach of natural justice in the hearing process. The Board has the authority to control its own process. It made a determination that the Landlord’s representative had received the Notice of Hearing package. The Board then made a determination that it was not going to exercise its discretion to permit the Landlord to schedule a new hearing, or to permit the Landlord to extend the time for service of documents on the Tenants. In making this determination, it relied in part upon the Landlord’s past behaviour in other cases.
[39] This is not a situation where there was an actual hearing, and the adjudicator made a choice to consider new information that was not presented at the hearing, as was the case in Barker v. Park Willow. This matter did not get as far as a hearing. The Board exercised its discretion to deny the Landlord’s procedural requests. The Board could have denied the Landlord’s requests solely on the basis of the Landlord’s failure to take action after having received the May 13, 2022
correspondence. The Board’s reference to two other cases without providing the Landlord with an opportunity to respond to the allegations of misfiling and processing errors in the present case does not alter the Board’s finding that the Landlord had properly received the Notice of Hearing.
[40] It should also be noted that the factors under Rule 16.4 to be considered when deciding requests to extend or shorten time requirements are not mandatory factors. While the decision from the Board does not address many of these factors, it is not required to do so.
Did the Board err in law in dismissing the Landlord’s L5 Application?
[41] I have found that the Board did not commit any errors of law in its consideration of the Landlord’s L5 Application by denying the Landlord’s requests for a new hearing and for an extension of time to serve the required documents on the Tenants. I have also found that there was no breach of procedural fairness in the process utilized by the Board to consider the Landlord’s Application. The Board therefore did not commit an error of law in dismissing the L5 Application of the Landlord.
[42] Neither the Board nor the Landlord seeks costs with respect to this appeal. Accordingly, none will be granted.
Wilkinson J.
Released: November 16, 2023
CITATION: O’Shanter Development Company Ltd. v. Adai et al, 2023 ONSC 6478
COURT FILE NO.: DC-22-0074-00
DATE: 2023 11 16
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N:
O’SHANTER DEVELOPMENT COMPANY LTD.
Appellant
- and -
KAREN MAGNE ADAI, MALIKA RENEE ADAI, and others identified in the attached Schedule “C”
Respondents
RULING OF APPEAL
Wilkinson J.
Released: November 16, 2023