Haye v. Siddiqui, 2024 ONSC 6214

CITATION: Haye v. Siddiqui, 2024 ONSC 6214

COURT FILE NO.: DC-24-51

DATE: 2024 11 08

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Ty-Shaun Haye, Tenant/Appellant in Appeal

AND:

Anees Siddiqui, Landlord, Respondent in Appeal

BEFORE: M.T. Doi J.

COUNSEL: Muraad T. Shah, for the Moving Respondent

Ty-Shaun Haye, self-represented Appellant

HEARD: September 27, 2024

Endorsement

Overview

[1] On this motion, the landlord seeks to quash the tenant’s appeal for not raising a question of law, for being an abuse of process, or otherwise being frivolous or vexatious. In the alternative, the landlord seeks a lifting of the stay pending appeal of the eviction order of the Landlord and Tenant Board dated May 28, 2024, or security for costs of the appeal.[^1] By unopposed cross-motion, the tenant seeks to validate service of the notice of appeal on the Board.[^2]

[2] As set out below, the motion is granted in part and the cross-motion is granted.

The Record

[3] At the return of the motion, the appellant objected to the landlord’s affidavits by asserting that they were improperly commissioned. In addition, the appellant objected to a letter included in the landlord’s materials on the basis that it is subject to settlement privilege.

a. The landlord’s affidavits were properly commissioned

[4] I am satisfied that the landlord’s affidavits for the motion were properly commissioned and should be received into evidence.

[5] Respectfully, I am not persuaded by the appellant’s submission that the affidavits filed by the landlord were improperly commissioned because they were not marked with a commissioning stamp, or that the two affidavits sworn by Nazeeneih Hirani for the landlord were improperly commissioned by remote electronic means. Muraad Shah, the landlord’s lawyer, commissioned the affidavits. As a person licensed to practice law in Ontario under the Law Society Act, RSO 1990, c. L.8, he is a commissioner for taking affidavits in Ontario: s. 1 of the Commissioners for Taking Affidavits Act, RSO 1990, c. C.17 and ss. 1(1)(4.) of O.Reg. 386/12. I was able to make out his commissioning signature on the affidavits without difficulty. Effective August 1, 2020, a regulation was passed to permit affidavits to be remotely taken. There is simply no reason why Ms. Hirani’s affidavits sworn August 8 and 23, 2024 could not be remotely commissioned: O.Reg. 431/20; Delgado-Zurita v. Toronto (City), 2023 ONSC 35 at para 41.

[6] The appellant submits that all of the affidavits filed by the landlord should be received with caution because Mr. Shah, the landlord’s lawyer of record, commissioned them. But an affidavit is not inadmissible or unusable in evidence only because it was made before the solicitor of a party: s. 47 of the Evidence Act, RSO 1990, c. E.23. In any event, I am not prepared to disallow the landlord’s affidavits or otherwise afford them less weight simply because Mr. Shah did not print or emboss his name under his commissioning signature.[^3] In my view, it is fair and just to admit the landlord’s affidavits into evidence despite any informality with practices or requirements: s. 46 of the Evidence Act; Rule 2.01. Accordingly, I am satisfied that the landlord’s affidavits should be admitted into evidence.

b. The landlord’s letter dated July 18, 2024 should be excluded

[7] The appellant objected to the landlord’s “with prejudice” letter dated July 18, 2024 being included in evidence as the letter made an offer to settle the appeal and is settlement privileged.[^4] For the reasons that follow, the objection is allowed.

[8] Settlement privilege is an important common law rule of evidence that promotes settlement by making settlement communications inadmissible so parties may engage in candid settlement negotiations knowing the communications cannot be used against them in litigation. This promotes honest and frank discussions that can make it easier for parties to reach a settlement: Sable Offshore Energy Inc. v. Ameron International Corp., 2013 SCC 37 at paras 12-14; Union Carbide Canada Inc. v. Bombardier Inc., 2014 SCC 35 at paras 31-35.

[9] Settlement privilege will attach to a communication or record where (a) there is a litigious dispute, (b) the communication has been made with the express or implied intention that it would not be disclosed in a legal proceeding in the event the negotiations failed; and (c) the purpose of the communication is to attempt to effect a settlement: Re Hollinger, 2011 ONCA 579 at para 16. Settlement privilege is a class privilege that features a prima facie presumption of inadmissibility, with exceptions found, “when the justice of the case requires it”: Sable at paras 12 and 19. To fall within an exception, a party must show on balance that, “a competing public interest outweighs the public interest in encouraging settlement”: Sable at para 19.

[10] Settlement privilege belongs to both sides and cannot be unilaterally waived: Williams v. Williams, 2020 ABCA 15 at para 22; Howes v. Howes, 2018 ONSC 6297 at para 17. Where an offer to settle is not accepted, no communication respecting the offer shall be made to the court until all questions of liability and the relief granted, other than costs, are determined: Rule 49.06(2).

[11] I am satisfied that the landlord’s letter dated July 18, 2024 is subject to settlement privilege. The letter clearly made an offer to settle the appeal. The fact that it is marked “with prejudice” did not change its character as a communication made in furtherance of settlement: Canadian Flight Academy Ltd. v. The Corporation of the City of Oshawa, 2024 ONSC 2756 at paras 11-12; Eurotex North America Inc. v. Hardwood Apparel Ltd., 2024 ONSC 4494 at paras 5-6. A party cannot unilaterally waive settlement privilege: Williams at para 22; Howes at para 17; Canadian Flight at para 14. I see no compelling reasons to invoke an exception to the privilege in this case.

[12] Accordingly, I find that the landlord’s letter dated July 18, 2024 is subject to settlement privilege and should be excluded from the record. In addition, I find that any other references to the offer to settle in the record, including any made by the appellant, should be disregarded.

Background

[13] On or about August 1, 2017, the appellant and his mother entered into a 1-year residential lease agreement with the landlord. The lease required the tenants to pay $1,200.00 in monthly rent at the beginning of each month. The landlord collected a $1,200.00 rent deposit.

[14] On November 1, 2017, the tenants did not pay rent. The landlord served notice to end the tenancy effective November 26, 2017 and applied to the Landlord and Tenant Board for an eviction and rent arrears. The tenants then paid the landlord $3,400.00. By order dated January 18, 2018, the Board terminated the lease but directed that the tenants could void the order by making a $450.00 payment by January 29, 2018. The tenants made the payment, voided the order, and continued the tenancy. After the term agreement expired, the tenancy continued on a month-to-month basis.

[15] On February 1, 2023, the tenants did not pay rent. The landlord served notice to end the tenancy effective March 31, 2023 and applied to the Board for an eviction and rent arrears. The matter initially came before the Board on August 15, 2023. Due to a scheduling overflow, the Board adjourned the application to March 5, 2024 and heard the matter that day.

[16] By decision released on May 28, 2024, the Board granted the application and ordered the tenants to pay either $20,186.00 by May 31 2024 or $21,436.00 by June 8, 2024 to void the order. Failing payment, the Board directed that the landlord could file its order with the court enforcement office as of June 9, 2024 to enforce the eviction and require the tenants to pay $15,299.97 in rent arrears to the date of hearing with filing costs, less the rent deposit with interest, plus $41.10 per day for the use of the rental premises starting March 6, 2024 until the unit was vacated.

[17] On May 30, 2024, the tenants requested a review of the Board’s order. On June 7, 2024, the Board denied the review and upheld the May 28, 2024 order.

[18] On or about June 25, 2024, the appellant commenced an appeal of the Board’s order dated May 28, 2024 and obtained an automatic stay of its eviction order pending the disposition of the appeal: Rule 63.01(3)(a). He served the Board with the notice of appeal by email on July 19, 2024.

[19] After the Board released its May 28, 2024 order, and before the notice of appeal was served, the landlord commenced garnishment proceedings against the tenants.

[20] On July 24, 2024, the appellant and the landlord attended a case management conference. During the attendance, Trimble J. conferenced the landlord’s motion to quash the appeal and the appellant’s cross-motion to validate service of the notice of appeal on the Board, and set down the motions with a timetable for the exchange of materials. Trimble J. endorsed that the landlord’s garnishment proceedings against the tenants were stayed by the certificate of stay dated July 12, 2024, ordered the landlord to serve the certificate on the court enforcement office, and ordered him to direct enforcement officers to cease garnishment activities pending further order of the court. At the conference, the parties agreed that rent arrears from January 1, 2023 to July 31, 2024 totalled $22,500.00. In turn, Trimble J. ordered the appellant to pay $1, 250.00 as security for rent on August 1, 2024 and on the first day of every month thereafter so long as he or Ms. Lyons remained in possession of the rental unit. In addition, the conference judge ordered the appellant to pay security for rent arrears totalling $22,500.00 in four (4) instalments as follows: a) $10,000.00 by 4:00 pm on October 1, 2024; b) $5,000.00 by 4:00 pm on December 1, 2024; c) $5,000.00 by 4:00 pm on March 1, 2025; and d) $2,500.00 by 4:00 pm on June 1, 2025. The appellant’s payments to secure ongoing rent and rent arrears were payable to the landlord’s solicitor in trust to the credit of the appeal, failing which the landlord could bring a motion to seek a dismissal of the appeal.

[21] On August 7, 2024, a municipal property standards inspector conducted an inspection of the rental unit. The inspector found that the rental unit was an unregistered 2-bedroom additional basement residential unit that breached s. 6 of City of Brampton By-law 157-2022. As a result, the inspector issued a $750.00 administrative penalty notice for the contravention.

[22] On August 27, 2024, a municipal fire inspector attended the rental unit, determined that the building had been altered from its approved use as a single family unit into multiple residential units, found that the structure lacked various fire safety features in contravention of the Fire Code, O.Reg. 213/07, and issued an inspection order on August 29, 2024 for the landlord to discontinue having more than one residential unit at the premises and to return the building to its approved use as a single-family residential unit. On September 13, 2024, the landlord applied for a review of the inspection order by the Office of the Fire Marshall. On September 18, 2024, the Office of the Fire Marshall advised that the inspection order was stayed under ss. 25(6) of the Fire Protection and Prevention Act, 1997, SO 1997, c 4, pending the outcome of the review application.

Analysis

a. The appeal is not manifestly devoid of merit

[23] For the reasons that follow, I decline to grant the landlord’s motion to quash the appeal for being manifestly devoid of merit.

[24] The court may quash an appeal that is manifestly devoid of merit: ss. 134(3) of the Courts of Justice Act, RSO 1990, c. C.43: Schmidt v. Toronto Dominion Bank (1995), 1995 3502 (ON CA), 24 OR (3d) 1 (CA) at para 6. The discretion to quash an appeal is exercised sparingly as it, "is very difficult, in most cases, to reach the conclusion that an appeal is devoid of merit without hearing the entire appeal": Ibid; Zhou v. Rama, 2021 ONSC 4659 (Div Ct) at para 17; Renée v. 10887609 Canada Inc., 2024 ONSC 917 (Div Ct) at para 37. Even where it is difficult to see the merits of a proposed appeal, a party should not be deprived of the right to appeal where there is no real prejudice to the other side: Sabatino v. Posta Ital Bar Inc., 2022 ONCA 208 at para 20.

[25] An appeal from a decision of the Landlord and Tenant Board lies to the Divisional Court but only on a question of law: ss. 210(1) of the Residential Tenancies Act, 2006, SO 2006, c. 17; Renée at para 39. Although the bar to quash an appeal for being devoid of merit is generally high, an appeal from an order of the Board may be quashed where the appeal does not raise a question of law: Zhou at para 18, citing Solomon v. Levy, 2015 ONSC 2556 (Div Ct) at paras 33-34 and Mahdieh v. Chen, 2019 ONSC 4218 (Div Ct) at para 8.

[26] An issue of procedural fairness is a question of law: Shapiro v. Swingler, 2021 ONSC 6191 (Div Ct) at para 25; Peel Standard Condominium Corporation No. 779 v. Rahman, 2021 ONSC 7113 (Div Ct) at para 18; Harper v. Sauve, 2022 ONSC 5754 (Div Ct) at para 11. A failure of the Board to afford procedural fairness is an error of law that falls within this court’s jurisdiction on appeal. In addition, an issue of adjudicative bias will give rise to a procedural fairness issue that may be pursued on appeal from a decision of the Board: Shearer v. Oz, 2024 ONSC 1723 (Div Ct) at para 31, citing Stetler v. Ontario Flue-Cured Tobacco Growers’ Marketing Board, 2005 24217 (ONCA) at para 70.

[27] The appellant has raised two (2) grounds of appeal on procedural fairness grounds. The first is that the Board denied procedural fairness to the tenants by not allowing or offering them an opportunity to examine or cross-examine during the hearing. Neither side called any witnesses at the hearing before the Board. However, the appellant submits that Ms. Hirani, the landlord’s agent, made statements and gave information to the Board to which the tenants should have been allowed to respond with evidence or cross-examination. The second ground is that the Board showed bias against the tenants at the hearing. In part, the bias argument is based on how the Board engaged with the tenants during the hearing, and how the Board received and considered the evidence and submissions of the parties.

[28] There may be valid arguments that the hearing was procedurally fair, and I acknowledge that the Board is entitled to control its own process. The appellant did not explain what further evidence he would have called or what evidence he would have cross-examined on at the hearing. As a result, the strength of this ground of appeal is less than clear. Regardless, I am not prepared to find on a preliminary basis that the appellant’s claim that the Board’s hearing was procedurally unfair is manifestly devoid of merit to justify quashing the appeal at this time. The parties presented contested facts and submissions to the Board that further evidence or cross-examinations arguably may have clarified. In addition, the transcript of the Board hearing arguably shows some conflict at the hearing that may support the appellant’s bias claim. In the circumstances, I accept that the appeal raises procedural fairness issues and questions of law that are best decided when the appeal is heard on its merits with the benefit of a complete record and fulsome submissions.

b. The appeal is an abuse of process

[29] Although I am persuaded that the appeal has arguable merit, I find that the appeal gives rise to an abuse of process as the appellant has persistently failed to pay rent without reasonable explanation. As set out below, I have real concerns that the appeal was brought to game the system.

[30] It is an abuse of process for a party to commence an appeal from an order of the Board for the sole purpose of obtaining an automatic stay of an eviction order, otherwise referred to as “gaming the system”: Regan v. Latimer, 2016 ONSC 4132 (Div Ct) at para25; Wilkinson v. Seritsky, 2020 ONSC 5048 (Div Ct) at para 34; Zhou at para 30. The stay pending appeal from an eviction order of the Board is an important protection for tenants as it allows them to bring their appeals to court while preserving their tenancies: Rule 63.01(3)(a). The stay is meant to preserve the court’s ability to do justice to both sides at the conclusion of an appeal. Importantly, it does not exist to give tenants a lengthy period of living rent-free pending appeal: Jayaraj v. Metcap Living Management Inc., 2021 ONSC 503 at para 23. A key indicator that a tenant is trying to game the system arises when the tenant persistently does not pay rent over a lengthy period without reasonable explanation or an intention to remedy the situation: Wilkinson at para 34; Oladunjoye v. Jonker, 2021 ONSC 1199 (Div Ct) at para 27; Mubarak v. Toronto Community Housing Corporation, 2022 ONSC 382 (Div Ct) at para 25; Martel v. Purdy, 2023 ONSC 1806 (Div Ct) at para 13. In a landlord and tenant case, the court may quash an appeal as an abuse of process where the appeal is being used as a stratagem to delay eviction: Singh v Balogun, 2018 ONSC 7506 (Div Ct) at para 27; Wilkinson at para 33; Martel at para 11.

[31] In this case, the tenants persistently have not paid rent. When the appeal was conferenced on July 24, 2024, rent had been unpaid since January 1, 2023 with rent arrears to July 31, 2024 totalling $22,500.00, as the appellant conceded. To address the arrears, Trimble J. made a clear order for the tenants to pay $1,250.00 to the landlord’s lawyer in trust to the credit of the appeal as security for rent on August 1, 2024 and thereafter on the first of every month for so long as the appellant and/or Ms. Lyons remain in possession of the rental unit. The conference judge also ordered the appellant to pay $22,500.00 to secure rent arrears in four instalments, and cautioned the appellant about the consequences of not complying with the orders to secure rent and arrears.

[32] The appellant did not comply with the orders to pay security for ongoing rent and arrears. When the landlord inquired on August 1, 2024 about the rent payment due that day, the appellant advised that he would make the payment the following day. However, on August 2, 2024, he wrongly asserted that the order gave him 7 calendar days to make the payment.[^5] His position was clearly incorrect. In fact, the order expressly provides that, “[t]here shall be no extension for the payment of the monthly rent.” [emphasis added] The landlord wrote to disagree with the appellant’s implausible and strained interpretation of the terms of the conference judge’s payment order.

[33] On August 8, 2024, the appellant advised the landlord that a municipal enforcement officer had inspected the rental unit and found that it was unregistered and non-compliant with building code requirements. As noted earlier, the officer issued a $750.00 administrative penalty notice for the contravention. The appellant also advised the landlord of an impending fire inspection of the rental unit. On August 29, 2024, a fire inspector served an inspection order to require the landlord to return the building to its approved use as a single-family residential unit. On September 13, 2024, the landlord applied for a review of the inspection order that stayed the order pending review.

[34] I accept that by-law and fire officials inspected the rental unit after the appellant reported concerns with the unit to them.

[35] Given that the rental unit was illegal, the appellant asserts that he should be relieved of any obligation to pay rent to the landlord, including the payments the conference judge ordered to secure ongoing rent and outstanding arrears. He cited no authority to support his position. None of his alleged concerns with the rental unit were raised before the Board. Both tenants occupied the rental unit for over seven (7) years without raising any such concerns.

[36] The appellant has paid no rent since January 2023 and expressed no intention of doing so in the future. Rent arrears now total about $25,000.00 despite the July 24, 2024 order for the appellant to make payments to the landlord’s lawyer in trust to secure ongoing rent and arrears. The conference judge fashioned the payment order to do justice by avoiding prejudice to either party. I find that it would be an abuse of the court’s process for the appellant to be allowed to continue to occupy the rental unit without paying to secure rent pending the appeal.

[37] On the particular facts of this case, I am persuaded that the appellant may arguably have a basis to seek a rent abatement due to the illegal nature of the rental premises, although the actual nature or extent of this claim is unclear on the record as filed. Nevertheless, it remains an abuse of process for a tenant to appeal a Board decision in an effort to occupy a rental unit without paying rent. Stays pending appeal do not give tenants the right to live rent-free pending appeal. Tenants should expect that a stay of eviction pending appeal may be lifted if their rent is not kept current pending appeal: Jayaraj v. Metcap Living Management Inc., 2021 ONSC 503 (Div Ct) at para 23; Mao v. Liao, 2024 ONSC 2175 (Div Ct) at para 21.

[38] Taking everything into account, I find that it would be just and reasonable to lift the stay of the Board’s eviction order pending appeal on the conditions as set out below. The appellant has not paid rent since January 1, 2023 and owes about $25,000.00 in arrears. Although Trimble J. ordered the appellant to make payments to secure ongoing rent and arrears, the appellant chose to not comply with the payment order and instead reported the rental unit to by-law and fire officials in a strategic effort to gain a litigation advantage by retroactively creating grounds to challenge his obligation to pay rent and arrears. In my view, it would be an abuse of the court’s process for the appellant to continue to occupy the rental unit without paying to secure rent and arrears. That said, I am prepared to give him a limited opportunity to rectify his non-compliance with the payment order to secure ongoing rent and arrears before lifting the stay of the eviction. Should the appellant rectify his non-compliance with Trimble J.’s payment order dated July 24, 2024 within 30 days as set out below, the stay of the eviction order pending appeal shall remain in place for so long as the appellant is compliant with the remaining terms of the payment order.

c. No Security for Costs

[39] In the unique circumstances of this case, I find that the interests of justice favour making no order for security for costs at this time.

[40] In Faraone v 285 Spadina SPV Inc., 2023 ONSC 3357 (Div Ct) at para 13 et seq, Leiper J. helpfully set out the principles to consider on a motion under Rule 61.06 and/or Rule 56.01 for security for costs, that I shall adopt in this case. An order for security for costs is a discretionary measure that is granted when justness of the case demands it after examining all the circumstances of the case: Yaiguaje v. Chevron Corp., 2017 ONCA 827 at paras 23-25.

[41] There is no evidence to show that the appellant has insufficient assets in Ontario to pay costs of the appeal, that is not devoid of merit or otherwise frivolous or vexatious as noted above. However, I find in all of the circumstances that it is just and fair to give effect to Trimble J.’s payment order dated July 24, 2024 to secure rent and arrears in lieu of ordering security for costs at this time. In my view, the appellant’s ongoing occupation of the rental unit without securing rent or arrears gives rise to the sort of exceptional circumstances to justify security for judgment on appeal: Wiseau Studio, LLC v. Harper, 2021 ONCA 31 at para 24; Faraone at para 21.

Outcome

[42] Based on all of the foregoing, and pending further order of the court, the appellant shall have thirty (30) days to pay $15,000.00 to the landlord’s lawyer in trust to the credit of the action (i.e., consisting of $5,000.00 to secure the monthly $1,250.00 rent that is owed for the months of August, September, October and November 2024, plus $10,000.00 to secure the rent arrears that are due on October 1, 2024 pursuant to Trimble J.’s payment order dated July 24, 2024). Should the appellant make this $15,000.00 payment in trust within this 30-day period, the stay pending appeal of the eviction order shall remain so long as the appellant is compliant with his obligations under the remaining terms of the payment order. However should the appellant not pay this prescribed amount in trust within the 30-day period, or not comply with the remaining terms of the payment order thereafter, the stay pending appeal of the Board’s eviction order shall be lifted and the court enforcement office shall enforce the Board’s eviction order as soon as practicable. To be clear, the appellant may continue the appeal even if the eviction is carried out. The balance of the landlord’s motion is dismissed.

[43] The unopposed order sought on the appellant’s cross-motion to validate service of the notice of appeal on the Board is hereby granted.

[44] Should the parties not resolve the issue of costs for the motions, the landlord may deliver written costs submissions of up to 2 pages (excluding any costs outline or offer(s) to settle) within 15 days, and the appellant may deliver responding costs submissions on the same terms within a further 15 days. Reply submissions shall not be delivered without leave.

Date: November 8, 2024 M.T. Doi J.

CITATION: Haye v. Siddiqui, 2024 ONSC 6214

COURT FILE NO.: DC-24-51

DATE: 2024 11 08

ONTARIO

SUPERIOR COURT OF JUSTICE

RE: Ty-Shaun Haye, Appellant

AND:

Anees Siddiqui, Respondent

BEFORE: M.T. Doi J.

COUNSEL: Muraad T. Shah, for the Respondent

Ty-Shaun Haye, self-represented Appellant

ENDORSEMENT

M.T. Doi J.

DATE: November 8, 2024

[^1]: The appellant, Mr. Haye, is one of two (2) tenants in the subject residential lease agreement for this appeal. The other tenant is his mother, Marie Lyons, who is not an appellant or otherwise participating in the appeal. [^2]: The Landlord and Tenant Board indicated that it was unopposed to the appellant’s cross-motion to validate service of the notice of appeal on the Board. At the return of the motions, the appellant sought further relief based on additional grounds set out in his cross-motion that were not conferenced nor timetabled by Trimble J. at the July 24, 2024 case management conference when the motions were set for a one-hour hearing. The appellant, who is self-represented, needed substantially more time to argue his response to the landlord’s motion that ran significantly longer than the one-hour period scheduled for the hearing. In the circumstances, I declined to hear the appellant’s further issues that he added to the expanded cross-motion that were not raised at the July 24, 2024 case conference. [^3]: The Ministry of the Attorney General of Ontario “Guide for newly appointed commissioners for taking affidavits in Ontario”, updated August 13, 2024, states that an imprint of the commissioner’s stamp should be placed below their signature or elsewhere on the commissioned document: https://www.ontario.ca/page/guide-newly-appointed-commissioners-taking-affidavits-ontario. [^4]: The July 18, 2024 letter from landlord’s counsel to the appellant is attached as Exhibit “K” to the Affidavit of Samandeep Singh sworn August 9, 2024. [^5]: Para 11(e) to Trimble J.’s endorsement dated July 24, 2024 provides that if the appellant misses any payments to secure rent arrears (i.e., due on October 1, 2024, December 1, 2024, March 1, 2025 or June 1, 2025, respectively), then the landlord shall by 4pm the next calendar day give the appellant written notice of the missed payment whereupon the appellant will have by 4pm on the 7th calendar day after the original missed payment date to make the missed payment. This 7-day grace period did not apply in the event that the appellant missed any of the monthly $1,250.00 security for rent payments due on the first day of each month while either tenant remained in possession of the subject rental unit.