Court File and Parties
CITATION: Anca International Holding Group Inc. v Zhao, 2024 ONSC 3397
DIVISIONAL COURT FILE NO.: 006/24
DATE: 20240613
SUPERIOR COURT OF JUSTICE – ONTARIO
DIVISIONAL COURT
RE:
ANCA INTERNATIONAL HOLDING GROUP INC. and YUQING TANG, Appellants
-and-
HONGNA ZHAO, Respondent
BEFORE: FL Myers J
COUNSEL: Andro A. George and Stefan Juzkiw, for the Appellants Edward Zhou and Leon Li, for the Respondent Anna Solomon, for the Landlord and Tenant Board
HEARD at Toronto (by video conference): June 12, 2024
ENDORSEMENT
[1] The tenants appeal the decision of the Landlord and Tenant Board dated December 8, 2023, granting the landlord’s application to evict the tenants for non-payment of rent.
[2] The rented premises is a 9,200 square foot home on the Bridal Path. Rent exceeds $15,000 per month. At the date of the hearing last October, the tenants had run up arrears of rent of almost $70,000.
[3] Kai Wu and the appellant Yuqing Tang reside at the rented house. They say they are “business partners.” Ms. Tang was the original tenant on the lease. On renewal, she asked the landlord to substitute the corporate appellant for “tax reasons.” Mr. Wu and Ms. Tang deny being tenants of the premises.
[4] At the close of the appellants’ oral submissions, I advised the respondent’s counsel that I did not need to hear from them. Despite the appellants’ efforts to find an extricable error of law, their arguments reduce to questions of fact or mixed fact and law. These questions are not appealable under s. 210 of the Landlord and Tenant Act, 2006, SO 2006, c 17.
[5] The appellants’ arguments on the appeal stem from the tribunal member’s denial of their request for an adjournment of the hearing. They submit that the refusal of the adjournment denied them procedural fairness. They say the denial of the adjournment led the tribunal member to refuse to allow them to present repair invoices to set off against rental arrears as allowed under s.82 of the statute. They say that the denial of the adjournment led the tribunal member to have incorrect or inexact evidence about the tenants’ ability to pay a proposed payment plan. They say the denial of the adjournment led the tribunal member to fail to understand factors necessary to guide the discretionary decision to deny an eviction under s. 83 of the statute.
The Denial of the Adjournment Request
[6] Adjournments are a matter of discretion. The tribunal member was required to consider the interests of justice in making the decision. All relevant circumstances were to be balanced. The tribunal member did so.
[7] The appellants’ principal complaint is that the denial of the adjournment was unreasonable in their view and denied them the right to participate.
[8] I disagree.
[9] The tribunal member discussed the adjournment in his decision:
The Tenants' legal representative made an adjournment request at the outset of the hearing on behalf of the Tenants. The reason for this request was because the Tenants had just flown to China for the individual, Kai Wu, to attend medical care for a head injury and were both unable to participate in the hearing. The Tenants' legal representative provided copies of plane tickets as proof that they will be outside the country on October 11, 2023.
The Tenants' legal representative further submitted a medical note dated October 3, 2023, which shows that a doctor recommended the Tenant, Kai Wu, to "go overseas" for faster medical treatment. I inquired as to why the other Tenant, Yuqing Tang, could not attend and was informed that she was accompanying the other Tenant at a medical appointment in China. I asked what time it was in China at the current moment, and I was informed that it was close to midnight. There was also no proof submitted of a medical appointment that the Tenants were attending.
Even if the Tenants were overseas, there was no reason why the Tenants or at least one Tenant could not participate virtually over the internet using the Zoom application.
After hearing submissions on the adjournment request, the Tenants' legal representative asked for some time to contact his client and gain instructions on having someone else come to speak on their behalf. When the hearing was reconvened, the Tenants' legal representative advised that the Tenants had elected for a close friend to act as agent for them in the hearing. The agent had personal knowledge of the Tenants' financial matters.
There was no objection from the Landlord to have this agent present. The adjournment request was denied for the above reasons. [Emphasis added.]
[10] Mr. Wu denies being a tenant. The tribunal member found that Ms. Tang was a tenant because the lease was in her name initially. Pursuant to Mr. Juzkiw’s submissions, Mr. Wu was held to be an occupant but not a tenant of the premises.
[11] As Mr. Wu is not a tenant of the premises, there was no reason for him to be present at the hearing. There was no evidence before the tribunal as to why Ms. Tang needed to accompany her business partner to China for his medical treatment. There was no evidence as to why Ms. Tang or a corporate representative could not be available by Zoom for the hearing at near midnight local time in China.
[12] Neither the doctor’s note submitted by the tenants nor the explanation of the travel by Mr. Juzkiw below were supported by evidence under oath.
[13] The landlord commenced the eviction application in May, 2023. The appellants retained Mr. Juzkiw to act for them in July, 2023. The tenants delivered no documents prior to the hearing as required by the Rule 19.1 of the Landlord and Tenant Board Rules of Procedure. I reject Mr. George’s unsworn submission that between July and October, 2023, Mr. Juzkiw had too little time to prepare an affidavit for the clients or to collect their documents for disclosure as required by the tribunal’s rules. While it may be subjectively true for Mr. Juzkiw, I cannot accept that it is a reasonable basis to consider an adjournment or that it is a factor of any weight in assessing the interests of justice on an adjournment.
[14] The denial of an adjournment on a proper exercise of discretion is not a denial of procedural fairness. It does not deny the tenants the opportunity to participate. Rather, it was the tenants who sought to deny the landlord of the opportunity of a timely hearing. The tenants had the opportunity to participate, bring forward their evidence, make submissions of law, or provide compelling evidence to justify their alleged inability to do so. The presence at the hearing of their lawyer and authorized agent was properly a factor to be considered by the tribunal member in the exercise of his discretion.
[15] Absent an error in principle or a failure to take into account relevant considerations, an appellate court will defer to discretionary adjournment decisions made by tribunals. These types of decisions are particularly the province of the tribunal members who live these hearings on a daily basis. In my view, the tribunal member fairly considered the relevant circumstances and then exercised his best judgment in assessing of the interests of justice. There is no error of law and no denial procedural fairness.
The Tribunal Member Found no Basis to Refuse Eviction under s. 83 of the Statute
[16] The tribunal member reserved the decision until December 8, 2023. The tenants did not pay rent in November or December while the decision was under reserve.
[17] In the decision, arrears were calculated to have mounted to almost $125,000 as at year-end 2023.
[18] In April, 2024, the tenants offered to pay their accruing rent plus an amount in excess of $8,000 per month toward their arrears pending the appeal. They were ordered to do so by O’Brien J on April 18, 2024.
[19] Mr. George submits that arrears are down to about $36,0000 today. He offers that his client can pay the rest of the arrears right away if the appeal is allowed. That may be an offer of interest to the landlord. The court hearing an appeal is not a party to privileged negotiations. There is no provision of the statute allowing for consideration of a payment plan in lieu of eviction on appeal like there was before the tribunal. The court’s role is to assess whether the tribunal committed any errors of law or denied the appellants the fair procedure to which they were entitled.
[20] But during the hearing before the board, Mr. Juzkiw made two offers of payment terms to try to engage the board’s discretionary jurisdiction to deny an eviction order under s. 83 of the statute. The transcript records that during the discussion, the tribunal member mused that the amount of the second offer was, “in the realm of potentially making sense.” But the tribunal member then indicated a reluctance to agree to a payment plan because the arrears were so high and in the months in which arrears had mounted the tenants had made no attempt to pay apart from one seemingly random payment. He also wanted to hear the landlord’s reaction to the offer.
[21] Mr. George submits that it was an error of law for the tribunal member to find the plan reasonable but then reject it by deferring to the landlord. That is a most skewed reading of the transcript. Suggesting that an offer is “in the realm of potentially making sense” is hardly a finding that it was reasonable. Moreover, there is absolutely nothing objectionable about the tribunal member wanting to hear the landlord’s submission in response to the tenants’ offer of a payment plan.
[22] After hearing from both sides during the hearing, the tribunal member rightly said:
Either way, I have the authority [sic] a payment plan that I deem to be fair, on the evidence that's before me. And so if I did determine that a payment plan is fair, I will do that. I have to look at both sides. The landlord's right to have rent paid on time and in full as well as the tenant's right to reside in the unit, given that they pay their rent.
[23] There was no error of law apparent in the transcript.
[24] Of greater significance however, I reject Mr. George’s submission that a line plucked from a transcript during iterative discussions with counsel amounts to a finding by the tribunal. The transcript of the hearing is not the decision of the tribunal. In this case, as part of the discussions surrounding the proposed payment plans, the tribunal member went through the tenants’ budget with their lawyer and agent and then made the following findings in the decision:
The problem with the Tenants' request for relief is that the evidence indicates they cannot afford the rental unit unless they reduce their expenses, and if they do that as they propose (by reducing the $1,500 monthly budget for their children's clothes), they still cannot afford the repayment plan they proposed. So, the evidence supports the conclusion that if the Board puts in place the repayment plan they request, the Tenants will not be able to comply with it and the Landlord will be facing additional financial difficulties and legal proceedings and that would be unfair to the Landlord.
In the alternative, the Tenants' agent asked for the eviction to be postponed until the end of November 2023. Given that the date of this order is for December 8, 2023, the eviction date is past the postponement requested by the Tenants. I have provided the Tenants until January 3, 2024 as a delayed eviction date. No further postponement will be granted.
Based on the above, I have considered all of the disclosed circumstances in accordance with subsection 83(2) of the Residential Tenancies Act, 2006 (the 'Act'), and find that it would not be unfair to postpone the eviction until January 3, 2024 pursuant to subsection 83(1)(b) of the Act.
[25] Mr. George submits that the tenants were denied the right to put their actual expenses before the tribunal. The fact that they have paid rent as ordered since April, he submits, proves that they could afford the payment plan that was under discussion last October. Mr. George submits, without any evidence, that the tenants’ agent did not have accurate figures and this resulted in a denial of procedural fairness to the tenants.
[26] The simple answer to this is in the bolded words of para. 4 of the decision which I set out in para. 9 above:
When the hearing was reconvened, the Tenants' legal representative advised that the Tenants had elected for a close friend to act as agent for them in the hearing. The agent had personal knowledge of the Tenants' financial matters.
[27] The tenants cannot be heard to now say that the person whom they elected to speak for them and whom Mr. Juzkiw represented to the tribunal had personal knowledge of their financial affairs in fact did not have that knowledge. Moreover, Mr. George’s unsworn submission that their information was incorrect is not evidence to indicate that there was any mistake made at the hearing. Neither does the tenants’ willingness to start paying down their six-figure arrears in April, 2024 say anything about their willingness or ability to pay their arrears six months earlier at the time of the hearing.
[28] If the tenants had wanted to prove their financial wherewithal to meet their proposed payment plan at the hearing, they would have needed to produce at least some financial documents. The tribunal’s Rules of Procedure required production of documents to be made seven days before the hearing. As noted above, they did not produce anything in the months leading up to the hearing. Even had the tenants been present, they would not have been entitled to surprise the landlord with new documentary evidence.
[29] In rejecting the proposed payment plan and finding no basis to defer eviction beyond January 3, 2024 under s. 83 of the statute, the tribunal member made a discretionary decision applying the law to the facts as found. This is not an error of law. Nor was there any error in principle or failure to appreciate relevant factors. The appellants just disagree.
The Unsworn Invoices
[30] In their Compendium for this hearing, the appellants have purported to deliver a number of invoices that Mr. George says show that the tenants paid repair expenses that they should have been allowed to set off against rental arrears.
[31] The invoices were not disclosed or put into evidence before the tribunal although they predate the tribunal hearing.
[32] The appellants did not bring a motion to admit fresh evidence on the appeal. They delivered no affidavit to attest to the authenticity of the invoices. They provided no explanation of why the invoices could not have been disclosed to the tribunal by the exercise of diligence.
[33] The invoices as presented the court are just a group of documents copied into the appellants’ Compendium. Mr. George told me that the business that issued each invoice is real. He said that the amounts in the invoices were paid by the tenants. He also submitted that if the tenants had been allowed to participate in the hearing they would have been able to present the invoices to the tribunal member. None of this is in evidence.
[34] Mr. George then made submissions that he did not have enough time to bring a motion to admit fresh evidence on this appeal.
[35] As Mr. George was intent on giving evidence, despite my efforts to have him limit his factual submissions to the evidence in the record, I offered Mr. George the opportunity to be sworn-in as a witness. He declined. He explained that he was making submissions that his clients wanted made. Although I cannot become privy to privileged conversations, I expressed confidence that Mr. George had told his clients that he was bound by the law and the ethical principles of the legal profession to make factual submission to the court based solely only on admissible evidence in the record and not to become an unsworn witness at the hearing.
[36] The last case conference before O’Brien J. in this appeal was held on April 18, 2024. I reject Mr. George’s unsworn evidence that there was insufficient time between then and the hearing of the appeal on June 12, 2024 for him to convene another case conference to schedule a motion to admit fresh evidence. Case conferences are available within a few days in the Divisional Court.
[37] A motion for fresh evidence could have been made returnable at the hearing of the appeal. Mr. George says that the eight weeks between April 18 and the hearing was too little time for him to obtain an affidavit of his clients and that he was too busy in any event. Instead, he proffers inadmissible, unsworn documents with no motion to admit fresh evidence.
[38] While it is always possible for a court to abridge or abrogate procedural rules in appropriate cases, there is no basis to receive these documents at this appeal hearing without a motion to admit fresh evidence. Instead, if the landlord will not recognize the invoices now that they have been produced, the tenants remain able to bring an application before the tribunal to ask for reimbursement of repair expenses.
[39] The tribunal member made the same point in the decision. During the hearing, Mr. Juzkiw submitted that the tenants wanted an opportunity to show they had incurred costs that could be set off against rent under s. 82 of the statute. But Rule 19.4 of the tribunal’s Rules of Procedure specifically requires disclosure of particulars of s. 82 defences and documents in advance of the hearing. The tribunal member held:
- At the hearing, the Tenants' legal representative sought to raise several issues under section 82 of the Residential Tenancies Act, 2006 (the 'Act'). The Tenants legal representative acknowledged that they did not provide the Landlord or the Board with a written description of each issue they intended to raise under section 82 as required under section 82 of the Act and Rule 19.4 of the Board's Rules of Procedure. The Tenants' legal representative, not their agent, provided no evidence that they were unable to comply with the disclosure requirements and as a result, the Tenants were not permitted to raise any issues under section 82 of the Act. The Tenants may still have an opportunity to bring their own application against the Landlord to address the issues they sought to raise at this hearing under section 82.
[40] Once again, I see no error of law in the tribunal member’s decision. He simply applied the Rules of Procedure of the tribunal in face of unexplained non-compliance by the tenants. The refusal of an adjournment did not deny the tenants the ability to rely on their repair expenses. Their failure to follow the Rules of Procedure meant that they could not do so in this hearing. Subject to the passage of time, they continue to have whatever rights to reimbursement for repair expenses they may be able to prove.
Monetary Jurisdiction
[41] In their factum, the tenants submitted that the tribunal was not entitled to require them to pay their full arrears to avoid the eviction order. While it is indeed the case that the tribunal cannot grant judgment on arrears in excess of $35,000, case law in this court confirms that this monetary limit does not apply to the amount of arrears needed to be paid to void an eviction order. It would be a gross abuse if tenants could stall payment and then reinstate their leases by paying a fraction of their arrears. While the landlord will only have judgment for $35,000 enforceable going forward, the lease will be terminated. That is the trade-off provided by the statute. Rosen v. Reed, 2023 ONSC 6482 and Galaxy Real Estate Core Ontario LP v. Kirpichova, 2023 ONSC 593
Outcome
[42] I refrain from characterizing the appeal as an abuse of process given that the tenants did indeed pay significant arrears to maintain the stay of proceedings as ordered by O’Brien J. However, the appeal was entirely devoid of merit. All the complaints (except perhaps for the last one on monetary jurisdiction) related to findings of fact and discretionary application of the law to the facts as found. The issue of monetary jurisdiction is one of law. But it is a question that has been decided definitively by this court and quite properly was not even mentioned by Mr. George at the hearing of the appeal.
[43] The appeal is dismissed. The appellants are jointly and severally liable for the landlord’s costs of the appeal on a partial indemnity basis that I fix at $14,000 all-inclusive.
FL Myers J.
Date: June 13, 2024