Court File and Parties

Citation: Birch Equities Limited v. Jacobs, 2025 ONSC 1827 Divisional Court File No.: 179/19 Date: 2025-04-11 Superior Court of Justice – Ontario Divisional Court

Re: Birch Equities Limited, Appellant/Landlord And: Glenna Jacobs, Respondent/Tenant

Before: Matheson J.

Counsel: Timothy M. Duggan, for the Appellant Marc Kemerer, for the Respondent

Heard at Toronto: April 10, 2024, by video-conference

Endorsement

[1] The appellant/landlord appeals from the decision of the Landlord and Tenant Board (LTB) dated February 26, 2019 (the Decision) granting the respondent/tenant’s application for a rent abatement.

[2] The main issue before the LTB arose because the landlord removed a roof deck that had been provided to the tenant as part of her tenancy. As found in the Decision, and not challenged on this appeal, the roof deck played a very important role in the tenant’s life and was the reason she rented the unit in the first place.

[3] The landlord submits that the LTB Member erred in law in finding that a 30% rent reduction was required under s. 130 of the Residential Tenancies Act, 2006, S.O. 2006, c 17. Subsection 130(1) permits a tenant to apply for a rent reduction “due to a reduction or discontinuance in services or facilities provided in respect of the rental unit”.

[4] By way of brief background, there is no dispute that the roof deck was removed, or that the landlord then offered the tenant exclusive use of a portion of the courtyard instead. Because of the courtyard offer, the landlord submitted to the LTB that the tenant’s facilities had been changed but not reduced or discontinued. The Member disagreed. Having considered the evidence, the Member found that the removal of the roof deck with the discontinuance of a facility. He found the proposed replacement courtyard area did not constitute the same type of facility as the roof deck. The Member reasoned that the roof deck afforded the tenant a view and was private, where the portion of the courtyard area was open to the rest of the courtyard that was shared with other tenants.

[5] The Member then determined the appropriate rent reduction under s. 39 of O.Reg. 516/06, which required a determination of whether the removal of the roof deck was reasonable. The Member agreed with the landlord that it was reasonable to take steps to maintain and repair the roof. However, the Member found that the deck removal was unreasonable. The Member considered the evidence put forward by the landlord, but also noted the uncontradicted evidence of the tenant that the deck had been built in sections that could be lifted to carry out repairs. The Member found that there was no evidence that the landlord considered whether the roof could have been repaired while maintaining the deck and the landlord did not consider options to replace the deck with a comparable deck that would not impede repairs. The evidence of the tenant’s structural engineer made recommendations about how to approach putting in a new roof deck.

[6] Where the discontinuance of a facility was unreasonable, as found here, s. 39(3) requires that the value of the facility to the tenant be taken into account to determine the amount of the rent reduction. The Member found that the roof deck was an important facility that the tenant bargained for in the tenancy. Under s. 39, the Member found that the value of the deck was 20% of the rent but given the important role that the deck played in the tenant’s life, he found that the requested 30% reduction was appropriate.

[7] This appeal is limited to errors of law. The standard of review is correctness. The appellant/landlord submits that the Member erred in law as follows:

(i) by applying an incorrect test under s. 130 and finding that the courtyard space was not an adequate replacement for the roof deck;

(ii) in the alternative, by finding that the removal of the roof deck was the discontinuance of a facility rather than the reduction of a facility and therefore applying the incorrect test to determine the amount of the rent abatement; and,

(iii) by finding that the discontinuance of the roof deck was not reasonable.

[8] The appellant has not shown an error of law.

[9] On the first issue, the appellant submits, as it did before the Member, that the exchange here (the offer of a portion of a courtyard for the roof deck) was a change but was not a reduction or discontinuance. The appellant relies on two decisions of the Court of Appeal: First Ontario Realty Corporation Ltd. v. Deng, 2011 ONCA 54 and Onyskiw v. CJM Property Management Ltd., 2016 ONCA 477.

[10] First Realty was before the Member and is discussed in the reasons for the Decision without error. In that case, the Court held that the recreational facilities had been changed, rather than reduced. Based on what was described as ample evidence, the Court held that the change was not a reduction under s. 130 of the Act.

[11] It does not appear that Onyskiw was before the Member. Onyskiw underscores that a service or facility can be changed and where something is provided in exchange, the adequacy of the proposed new service or facility must be adjudged to determine whether or not the change was a reduction or discontinuance. At para. 80, the Court held that the adequacy of what is provided in exchange must be adjudged by having regard to the legislation and regulations under the Act, the Board’s Guidelines and the particular factual circumstances, including the reasonable expectations of the parties viewed objectively.

[12] Here, the Decision is in keeping with the above cases. The Member proceeded on the basis that a facility could be changed without a resulting abatement under s. 130. He considered the adequacy of the proposed portion of the courtyard in exchange. He considered the statutory regime and applicable regulation. He considered the factual circumstances and the reasonable expectations of the parties viewed objectively. The Member concluded that the facility had been “discontinued, not changed or reduced.” He made no legal error in doing so.

[13] The appellant submits that reading the above cases together, they show that there need not be an exchange of “like for like” (although that phrase is not in those cases) for there to be a change that is not a reduction or discontinuance. The appellant then relies on a phrase from the reasons for the Decision where the Member says that he does not find the courtyard area is the same type of facility as the roof deck. This submission overlooks the rest of the reasons for the Decision, which show that the Onyskiw principles were followed in adjudging the adequacy of what was offered in exchange.

[14] The Member did not err in law in finding that the removal of the roof deck, on the evidence, was a discontinuance under s. 130 despite the offer of a small portion of the courtyard in exchange. The appellant is, instead, challenging the Member’s weighing of the evidence, which is beyond the scope of this appeal.

[15] The same issue arises with respect to the alternative argument – that there was a reduction rather than a discontinuance – and with respect to reasonableness. The appellant seeks to reargue the evidence to a different conclusion.

[16] The Member did not err in law. This appeal is dismissed with costs to the respondent in the agreed upon amount of $10,000.

Matheson J.

Date: April 11, 2025