Court File and Parties

CITATION: Equity Builders v. Petrella, et al. 2023 ONSC 7516

DIVISIONAL COURT FILE NO.: 17/23DC

DATE: 2023/07/17

SUPERIOR COURT OF JUSTICE – ONTARIO (DIVISIONAL COURT)

RE: Equity Builders Ltd., Landlord (Appellant)

AND:

Valerie Petrella, Dwayne Mottley, Jessica Latrielle, Jonathan Havill, Michelle Pitman, Daciana MacDuff, Jacob Taylor, Danielle Waddilove, Kimberly Comeau, Julie Robinson, Christopher McGill, Matthew Roberts, Lloyd Ginez, Angel Ginez, Shawn O’Grady and Gary Conn, Tenants (Respondents)

BEFORE: Justice A. K. Mitchell

COUNSEL: A. Rosenbluth, D. McCabe, and A. Bolter for the Tenants (moving parties) T. Duggan, for the Landlord (responding party)

HEARD: July 14, 2023 via video-conference

ENDORSEMENT

Overview

[1] The tenants, respondents on appeal (the “Tenants”), bring this motion seeking to quash the landlord’s appeal of an interim order made by the Landlord and Tenant Board (the “Board”) on May 8, 2023 (the Order”). The Order requires, among other things, that the appellant landlord (the “Landlord”) return possession of the subject residential units to the Tenants.

[2] Pursuant to s. 25(1) of the Statutory Powers Procedure Act ( the “SPPA”), the Landlord’s appeal operates as an automatic stay of the Order. As of the date of hearing of this motion, the Tenants remain dispossessed of their homes.

[3] On this motion, the Tenants seek to quash the appeal on the basis the appeal (i) does not raise a question of law; (ii) is devoid of merit; and/or (iii) constitutes an abuse of process or is otherwise frivolous and vexatious.

Background

[4] The Tenants are the 16 residents of 14 separate residential units in an apartment building owned by the Landlord.

[5] On February 20, 2023, a fire broke out in a residential unit unrelated to the units forming the subject matter of the appeal and this motion. All tenants of the building were evacuated pursuant to an order issued by the Chief Building Official for the City of Sarnia (the “City”). The fire did not spread to units other than the one in which it began and was extinguished shortly after it began.

[6] On February 27, 2023, the City issued an amended order restricting access to certain residential units in the building but not the units forming the subject matter of the appeal and this motion. Access by the Tenants to their units was expressly permitted. The February 27, 2023 order stated in part:

… Continue to restrict access to the entire Second Floor, as well as units 108, 306, 308 and 310. Based on the assessment provided by the engineer, access to remainder of building is permitted…

[7] Notwithstanding the City’s amended order, the Landlord refused the Tenants access to their units. The Tenants (together with 7 other tenants whose units are not the subject of the appeal) applied to the Board for an order requiring the Landlord to allow them access to and repossession of their residential units, an abatement of rent for the period during which they were dispossessed of their units and compensation for out-of-pocket expenses during the period of displacement together with an administrative fine against the Landlord for its conduct.

[8] On April 13, 2023 the Board issued a direction notifying the parties that the Tenants’ applications would be heard together on an urgent basis and an expedited virtual hearing to address the issue of the alleged illegal lockout by the Landlord was scheduled for May 5, 2023. Notice of the hearing date was provided to the Landlord on April 26, 2023.

[9] On May 4, 2023 disclosure with respect to all issues raised in the applications, including those related to the allegations that the Tenants had been illegally locked out, was sent to the Landlord. No disclosure was provided by the Landlord.

[10] On the return of the hearing on May 5, 2023, the Landlord requested an adjournment. The request was denied by the Board.

[11] On May 8, 2023, the Board issued the Order requiring the Landlord to restore possession of the units to the Tenants and adjourned the balance of the relief sought by the Tenants to a hearing on July 20, 2023. The Board established a detailed timetable for the exchange of materials by the parties in advance of the hearing date.

[12] In the Board’s reasons for the Order with respect to the Board’s denial of the Landlord’s adjournment request, Vice Chair of the Board, Robert Patchett, wrote:

5. The Board was satisfied that the Landlord has had sufficient knowledge of these proceedings in a timely manner. As a result, if the Landlord intended to retain counsel they have had sufficient time to do so. The Board’s Interpretation Guideline 1 – Adjourning and Rescheduling Hearings states the parties are expected to make any necessary arrangements to proceed with the hearing on the date set out in the notice of hearing. An adjournment is not usually granted unless there are exceptional circumstances.

6. Section 10 of the [SPPA] states that a party may be represented by a representative at a hearing. However, the right to representation is not absolute and an adjournment is not automatically granted when it is requested on this ground. The onus is on the party wishing to be represented to make all reasonable efforts to find a lawyer or paralegal able to represent them at the hearing once they become aware of the hearing date. The Landlord’s Agent indicated that the Landlord has been in discussions with a representative but was unsure when or if a representative would be retained.

7. Therefore, the Board was satisfied that the Landlord has had sufficient notice of these proceedings and has had sufficient time to retain and instruct counsel, and as such there are no exceptional circumstances to warrant an adjournment for this reason.

8.. The Board also notes that the Divisional Court has indicated that if a party has sufficient knowledge of the case and the issues before the Board, the denial of an adjournment may not amount to being procedurally unfair as set out in Fisher v. Michel, 2022 ONSC 6558 para’s 37–49). Here the sole issue to be determined at this initial hearing is the question of the illegal lockouts, something the Landlord was made aware of in a timely manner, particularly given that for this expedited hearing the Board shortened the time to complete disclosure to afford all the parties more time to complete disclosure on this important issue prior to the hearing.

9. The Landlord had knowledge that the specific issue of the illegal lockouts that would be addressed in an expedited hearing and time to retain and instruct counsel well before the notice of hearing was issued. His failure to attend or to retain counsel, leaves the Board to take this into consideration as an adverse finding against the Landlord and any final determinations.

10, The Landlord did not provide to the Board or to the Tenant’s representative substantive evidence to show that they were travelling and outside the country. However, even if outside the country, given that the hearing is a digital hearing via videoconference, there is no reason to believe that a party could not participate online using the ZOOM platform even if outside the country.

11. Finally, the Board notes that the Ombudsman has released a report on May 4, 2023, a copy of which was not submitted for this hearing or an extract of the reference sections. However, in order to ensure that there would be no delays in this proceedings, the Board has directed a timeline below, including having set a date to reconvene this hearing

[13] On May 16, 2023, the Landlord appealed the Order claiming it was denied procedural fairness when the Board refused its request for an adjournment and was denied an opportunity to cross examine on the affidavit filed by the Tenants in support of their position on the hearing. The Landlord also claimed the Board erred in law by misapprehending the evidence.

[14] As an aside, in the notice of appeal, the Landlord indicates its intention to adduce fresh evidence regarding the unsafe condition of the residential units. However, I was advised that the Landlord no longer intends to pursue a motion to adduce fresh evidence on the appeal. Curiously, the Landlord filed evidence in support of its opposition to this motion. This evidence appears to be the “fresh evidence” referred to in the notice of appeal. Such evidence has no bearing on the issues on this motion and, as such, I have disregarded same other than to note that the affiant is a law clerk with the offices of the lawyer for the Landlord. Kai Yorke-Edwards deposes to information provided by Ash Singh, the principal of the Landlord (including Mr. Singh’s views on the correctness of the Order). Such evidence is hearsay and presumptively inadmissible.

Analysis

[15] All grounds to quash the appeal were argued by counsel on the hearing of the motion. However, I have focused my analysis on whether the appeal constitutes an abuse of process. I find that it does for the reasons set forth below. This finding disposes of both the motion and the appeal.

[16] The purposes of the Residential Tenancies Act, 2006[^1] (the “RTA”) are set out in s. 1 as:

[T]o 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.

[17] As was noted in White v. Upper Thames River Conservation Authority[^2], the RTA is remedial legislation designed to address the imbalance of power between landlords and tenants. The Ontario Court of Appeal in White at para. 20 stated:

…The circumstances in which a landlord may take possession of a rental unit from a tenant are strictly limited to lawful termination, abandonment, death, assignment, eviction, or a Board order – in other words, the end of the tenancy in accordance with the [RTA].

[18] By virtue of the provisions of the RTA, the Tenants enjoy a presumptive right to occupy the residential units. In their applications, the Tenants asserted that the Landlord had violated their rights under ss. 22, 23 and 24 of the RTA. These provisions provide:

22 A landlord shall not at any time during a tenant’s occupancy of a rental unit and before the day on which an order evicting the tenant is executed substantially interfere with the reasonable enjoyment of the rental unit or the residential complex in which it is located for all usual purposes by a tenant or members of his or her household.

23 A landlord shall not harass, obstruct, coerce, threaten or interfere with a tenant.

24 A landlord shall not alter the locking system on a door giving entry to a rental unit or residential complex or cause a locking system to be altered during the tenant’s occupancy of the rental unit without giving the tenant replacement keys.

[19] The issue at the expedited hearing was a narrow one. The Board determined whether the Landlord’s locking out of the Tenants was lawful. The only evidence before the Board on the expedited hearing was the affidavit of Adam McDonald, the Chief Building Inspector for the City, filed on behalf of the Tenants. Agent for the Landlord in attendance at the hearing attempted to adduce hearsay evidence provided to them by the Landlord’s contractor and insurer with respect to the unsafe presence of asbestos in the residential units. The Board rejected this evidence and held:

As explained below, the Tenants have proven on a balance of probabilities the allegations of an illegal lockout contained in the applications. Therefore, the Landlord must restore possession of the rental units to these tenants. The remaining allegations will be determined at the reconvened hearing.

[20] By reason of s. 25 of the SPPA an appeal to the Divisional Court from a decision of the Board operates as a stay unless the court orders otherwise. The SPPA is silent as to whether the decision of the Board must be final. Recognizing the importance of orders of the Board dispossessing a tenant of their residence, rule 63.01(3) of the Rules of Civil Procedure specifically addresses eviction orders made under the RTA. This rule provides that the delivery of a notice of appeal from an interlocutory or final order made under the RTA stays, until the disposition of the appeal, any provision of the order declaring a tenancy agreement terminated or evicting a person. In this case, the automatic stay provided for under the SPPA has the effect of undermining the intent and purpose of rule 63.03 and has the effect of sustaining the Landlord’s unlawful eviction of the Tenants.

[21] I concur with the findings and adopt the comments of this court in Delic v. Entietti-Zoppo[^3] with respect to whether an interlocutory order of the Board may be appealed. At paragraphs 9 - 12 the court writes:

[9] The stay pending appeal from the order of a statutory decision-maker provided by s. 25 of the Statutory Powers Procedure Act did not apply because the notice of appeal of April 23, 2021 was a nullity. The Residential Tenancies Act, 2006 does not give a right of appeal from an interlocutory order.

[10] The Act provides:

210 (1) 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.

[11] Jurisprudence in this court with respect to similar provisions for statutory appeals from other tribunals has consistently held that in the absence of an explicit right of appeal from an interlocutory decision, only a final order of a tribunal can be appealed. [citations omitted] Tribunals and boards are designed to provide expeditious access to justice. That intention is evidenced in section 2 of the Statutory Powers Procedure Act and, with respect to the Landlord and Tenant Board in particular, in section 183 of the Residential Tenancies Act, 2006, which provides:

183 The Board shall 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.

[12] It cannot be the legislature’s intention at the same time to put tribunal proceedings on hold every time an interlocutory decision is made. Section 210 does not confer a right of appeal from an interlocutory order.

[22] I am satisfied that the Order is an interlocutory order, in name and in effect. It did not finally dispose of the issues between the parties. This finding is borne out by the extensive scheduling directive issued by the Board with respect to the full-day hearing scheduled for July 20, 2023. The Board envisioned the parties calling witnesses including expert witnesses; exchanging will-say statements and providing full disclosure. The Order addressed the narrow issue of the legality of the Landlord locking-out the Tenants from their residential units. Nothing more, nothing less. The Board did not determine whether it was safe to return to their residential units. Rather, the Board determined only whether the Tenants were lawfully entitled to return to their residential units.

[23] Moreover, the Order does not purport to restrict or limit the Landlord’s rights under s. 50 RTA to proceed with a lawful termination of the tenancies to effect repairs or renovations that meet the test of being “so extensive that they require a building permit and vacant possession of the rental unit”. Lawful termination of a tenancy under s. 50 requires a minimum of 120 days’ notice to the tenant with such notice containing a right of first refusal to occupy the premises after the repairs or renovations are completed. I note that, in this case, neither of these tenant safeguards were respected by the Landlord before locking out the Tenants.

[24] My finding is further supported by the effect of the Order. The Order restores the Tenants’ possession of their rental units only until such time as the Landlord lawfully terminates their tenancy for purposes of remediating and repairing the units. The Order simply returns the status quo and the parties’ respective positions and rights immediately before the fire when the City’s authority (as opposed to the Landlord’s rights) was triggered. It is contrary to the spirit and intent of the legislative scheme governing residential tenancies provided for under the RTA, to grant the Landlord an appeal and therefore an automatic stay of the Order. To do so would deny the Tenants their presumptive right to occupy their units in circumstances where the Landlord has failed and/or refused to comply with the provisions of the RTA and has resorted to “self-help”. I find that the automatic stay under s. 25 of the SPPA was never intended to be used by a landlord to subvert the presumptive right of a tenant to occupy their rented home.

[25] By virtue of the Order being interlocutory in effect, I find the Landlord had no right to appeal from the Order. Notwithstanding the Landlord’s claim it was denied the opportunity to make full answer and response to the Tenants’ applications, Mr. Singh has yet to place his direct evidence before the court despite the passage of more than two months since the Order was made. I find the Landlord’s conduct is subversive of the processes enacted under the RTA for the protection of tenants, and brings the administration of justice into disrepute. I further find the Landlord’s appeal of the Order is an abuse of process and was intended to delay proceedings before the Board and delay the Tenants’ return to their residential units.

Disposition

[26] Motion granted and the appeal is quashed.

[27] The terms of the Order, and specifically paragraphs 11-15 of the Order, remain in full force and effect to the extent not rendered inoperative by the passage of time. All dates provided for in the Order calculated in reference to the date of the Order shall be calculated, instead, with reference to the date of this order.

[28] The parties shall return to the Board to reschedule the hearing of the applications. The July 20, 2023 date is hereby vacated.

[29] Quashing the appeal does not affect or impair the Landlord’s rights to follow the procedure provided for in s. 50 of the RTA to repossess the residential units for purposes of remediation and repair.

Costs

[30] The parties agreed that the successful party should receive their costs of the motion. Accordingly, the Tenants are entitled to their costs. The parties filed Costs Outlines. The Tenants seek their substantial indemnity costs in the amount of $6,201.73 (inclusive of disbursements and HST). By comparison, if successful the Landlord claimed partial indemnity costs in the all-inclusive amount of $6,378.62.

[31] The Landlord opposes an award of costs on an enhanced basis. Tenants’ counsel referred me to the decision in Solomon v. Levy[^4] as authority to award costs on a substantial indemnity basis.

[32] I find that, in the circumstances of this case having regard to the findings made and, in particular, my finding that the appeal was tactical and intended to delay these proceedings, the Tenants are entitled to their substantial indemnity costs of the motion in the amount claimed.

“Justice A.K. Mitchell”

Justice A.K. Mitchell

Released: July 17, 2023

[^1]: S.O. 2006 c. 17. [^2]: 2022 ONCA 146. [^3]: 2022 ONSC 1627 (Div. Ct.). [^4]: 2015 ONSC 2556.