COURT FILE NO.: 11-106 (Owen Sound)

DATE: 20120110

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

RONALD & KATHERINE PARKER

Applicants

• and -

TIMOTHY YUNDT, SARA BARNHUM, SCOTT BUEHLOW, TAMMY BUEHLOW, JAMES ECSEDI, TAMMY ECSEDI, STEPHEN BARTLETT, DONNA BARTLETT and BEVERELY LEWIS WATTS

Respondents

Mr. John A. Kirby, and Ms K. van Alphen for the Applicants

Mr. Stephen B. McCotter, for the Respondents Yundt, Barnhum and Ecsedi

Mr. R. Choi for the Respondents Bartlett

Mr. Scott Buehlow and Ms Tammy Buehlow, in person

HEARD: November 24, 2011

REASONS FOR JUDGMENT

Kruzick J.

Nature of the Application

1This is an application by Ronald and Katherine Parker (“the Parkers”) where they seek an order declaring that:

(1) The leases entered into with the Respondents are null and void;

(2) the Respondents grant vacant possession of the land; and

(3) a writ of possession be issued.

2The Respondents take the position that this court does not have jurisdiction to deal with the issues by virtue of the jurisdiction of the Residential Tenancies Act, 2006 S.O. 2006, c.17 (“RTA”).

The Issue

3While counsel for the Applicants addressed all the issues on the application, given the time constraints for this one day matter, the single issue before the court which I propose to deal with is whether this court has jurisdiction to declare the lease agreements null and void, thereby terminating the tenancies.

Background and Facts

4The Parkers, purchased a property in April 2010 from Antonio and Irene Tavares (“the Tavareses”) known as Mountain Trout Camp. The property is a recreational site for tents and trailers and also has five cabins. Between 2005 and 2007 the Tavareses sold the five cabins to the Respondents and to a fifth person who is now not a party to the application. Following the purchase of the cabins, the Respondents paid rent to the former owners of the site, the Tavareses.

5When the Parkers purchased the campsite from the Tavareses they were aware that the cabins were separately owned by the Respondents, as purchasers of the cabins. Thus, the Parkers were aware of the rents and a lease arrangement with the Respondents when they made the purchase of the campsite.

6On or about November 15, 2010 the Parkers provided each of the cabin owners with an invoice for the 2011 rental period (January 1 to December 31, 2011) increasing the rent. There was a significant increase in the rent. The annual site fee was increased from $1,500.00 to $7,000.00 annually.

7The Respondents Yundt & Buehlow relies on a lease agreement which was entered into in 2005. The Bartletts entered into their lease agreement in 2006. The Ecsedis rely on an agreement entered into in September 2007. The Barnhums also rely on a lease agreement containing the same terms. All of the Respondents rely on the duration of the lease being “for as long as the cabin is owned by the lessees”.

8Following the receipt of the notice to increase the rent, the Bartletts applied to the Landlord and Tenant Board (“LTB”) to determine whether the cabin they owned was within the jurisdiction of the RTA, on January 31, 2011. The LTB determined that the RTA applied and the matter was adjourned to the next available date. In April 21, 2011 the Parkers commenced their application in this court. Their application to this court was amended in May, 2011. There was no appeal launched from the LTB’s decision and interim order that was made.

Position of the Parties

9The Applicants take the position when they made the purchase of the property a number of trailers remained on the property year-round. Most of the leases for the trailers that had been renewed for the current season were provided to them and were for a year to year term. No leases were given to the Parkers by the Tavareses for the cabin sites. When the Parkers made the purchase of the site they believed the cabin leases were also year to year. The leases upon which the Respondents rely were provided to the Parkers in August 2010, after the closing of their purchase of the site. The Parkers decided to then increase the rents for the cabins. The cabin owners protested the rent increase and applied to the LTB.

10In April 2011, following the ruling of the LTB the Parkers notified the cabin owners that their leases were invalid because they contravened the Planning Act, R.S.O. 1990 c.P. 13 and were also contrary to the Statute of Frauds, R.S.O. 1990, c.S.19. The Parkers also relied on the fact that the terms of the leases were vague, unenforceable and not properly executed.

11The Parkers rely on the Planning Act and specifically that the lease term contravenes s. 50(3)(b) because the leases are for a term of twenty-one years or more and they own the abutting lands.

12The Parkers also take the position that the leases contravene S.1 of the Statute of Frauds, because they were not signed by the parties and they failed to be made part of the deed to their land. They argue the terms of the purported leases are uncertain. Furthermore, the Parkers take the position the leases contravene s. 21.1 of the Comprehensive Zoning By-Law Number 2002-54 of the Municipality of Northern Bruce Peninsula in that the by-law prohibits privately owned cabins on land zoned C4-Travel Trailer Park and Commercial Campground.

13It is the position of the Respondents that they have and have had a long- term tenancy agreement and that, given the terms and nature of the agreement, this court does not have the jurisdiction to entertain or grant the relief sought by the Parkers.

14The Respondents take the position that the legislature conferred exclusive jurisdiction to the LTB to determine all matters in which jurisdiction is conferred by the RTA including the relief sought here, being termination of tenancy and eviction.

15The Respondents also rely on the decision of the LTB made on January 31, 2011 where the Board member determined the Board had jurisdiction to deal with the tenancy agreements.

Analysis

16The Courts of Justice Act, R.S.O. 1990, c.C.43, s. 11(2) provides this court “all the power and authority historically exercised by the courts of common law and equity in England and Ontario.” It is uncontroverted that the jurisdiction of this court is broad.

17It has, however, long been settled by this court and the Court of Appeal that this court’s jurisdiction may be limited by legislative provisions. While in Michie Estate v. Toronto (City), 1967 202 (ON SC), [1968] 1 O.R. 266, Stark J. of the High Court determined the court had jurisdiction to deal with a land title issue, in para. 11 he stated the then Supreme Court of Ontario had broad universal jurisdiction “unless the Legislature directs from this universal jurisdiction by legislation in unequivocal terms”.

18The Michie Estate case, supra, was supported by our Court of Appeal in 80 Wellesley St. East v. Fundy Bay Builders Ltd., 1972 535 (ON CA), [1972] 2 O.R. 280 where Brooke J.A. said as follows at p. 282:

As a superior Court of general jurisdiction, the Supreme Court of Ontario has all of the powers that are necessary to do justice between the parties. Except where provided specifically to the contrary, the Court's jurisdiction is unlimited and unrestricted in substantive law in civil matters.

19Similarly, in Fraser v. Beach (2005), 2005 14309 (ON CA), 75 O.R. (3d) 383 Juriansz, J.A. in para. 8 sets out that it has long been settled that the jurisdiction of a Superior Court may be limited by statute. Reference is made to the leading case on this principle, Board v. Board, 1919 546 (UK JCPC), [1919] A.C. 956 (P.C.).

20If this court does not assume jurisdiction it would be a travesty of justice if the Applicants here found themselves without a jurisdiction. As was said in a very early decision Mostyn v. Fabrigas, (1774) 1 Cowp. 161 at p. 172:

In every plea to the jurisdiction, you must state another jurisdiction.

21The Respondents argue that the other jurisdiction here is the tribunal under the RTA. In Fraser v. Beach, supra, the Court of Appeal considered the predecessor legislation to the RTA, The Tenant Protection Act 1997, S.O. 1997, c. 24 (“TPA”). It held that this court’s jurisdiction was limited by the legislative provisions of the predecessor act.

22While in that case the subject property was a rooming house, it is argued that, similarly, the RTA governs the cabins and the campsite on which they are located. The Applicant’s counsel does not agree. In Fraser v. Beach, supra, at para. 14, Juriansz J.A. set out five provisions of the TPA as being of central importance to the issue of jurisdiction. When the legislature enacted the RTA the section of the TPA cited by the Court of Appeal was preserved in the new legislation almost word for word. The five provisions of the RTA that I now consider are the following:

(1) Section 37(1): “A tenancy may be terminated only in accordance with the Act”.

(2) Sections 39(a) and 39(b): “A landlord shall not recover possession of a rental unit subject to a tenancy unless (a) the tenant has vacated or abandoned the unit, or (b) an order of the Board evicting the tenant has authorized the possession.

(3) Section 168(2): “The Board has exclusive jurisdiction to determine all applications under this Act and with respect to all matters in which jurisdiction is conferred on it by this Act.

(4) Section 3(1) of the RTA: “This act apples with respect to rental units in residential complexes, despite any other Act and despite any agreement or waiver to the contrary”; and

(5) Section 3(4) of the RTA: “If a provision of this Act conflicts with a provision of another act, other than the Human Rights Code, the provision of this act applies”.

23Parliament has enacted legislation which gives the tribunal under the RTA broad power. If I follow the reasoning of the Court of Appeal in Fraser v. Beach, supra, this court does not have the jurisdiction to terminate the lease or, if no valid lease exists, as it is argued by the Applicants, to make an order evicting residential tenants.

24I must also satisfy myself that the Respondents here are tenants under the RTA and that the legislation applies to the cabins now owned by the Respondents as tenants.

25The RTA is a remedial piece of legislation. Section 202 states that:

“ …the Board shall ascertain the real substance of all transactions and activities relating to a residential complex or a rental unit and the good faith of the participants…”.

26In making its findings the Board may disregard the outward form of a transaction and may have regard to the pattern of activity.

27Under the definition section of the RTA, I find that the cabins are residential units pursuant to s.2(1) of the Act. A residential unit is defined as:

“…any living accommodation used or intended for use as residential premises, and “residential unit” includes,

(a) a site for a mobile home or on which there is a land lease home used or intended for use as a residential premises, …”.

28Section 3(1) of the RTA states that the Act applies to rental units in residential complexes.

29In this case, the land was leased in this campsite community. Section 2(1) of the Act defines a “land lease community” as follows:

“…the land on which one or more occupied land lease homes are situate and includes the rental units and the land, structures, services and facilities of which the landlord retains possession and that are intended for the common use and enjoyment of the tenants of the landlord”.

30I find that by definition the campsite owned by the Applicants is such a “land lease community”.

31Similarly, when I look at the definition of “land lease home” under the RTA, I cannot but find it applies to the cabins owned by the Respondents. In s.2(1) “land lease home” is defined as:

“…a dwelling, other than a mobile home, that is a permanent structure where the owner of the dwelling leases the land … as the site for the dwelling”.

32Section 5 of the RTA provides for living accommodations that are exempt. The cabins do not come under any of the exemptions set out. I therefore find that the RTA applies to the cabins of the Respondents as set out in s.3(1). I also do not find, that given the facts, as I find them here, Part X of the Act would apply. I find no conflict which would direct me to the part which governs mobile home parks and land lease communities.

33When the Respondents made their application to the LTB, the Board came to the same conclusion that the leases in issue were under the RTA. Rather than appeal that decision the Applicants commenced these proceedings.

34The Applicants argue that the issues now go beyond the framework of the RTA and that the remedy they seek should be dealt with by this court given the issues further raised under the Planning Act, Statute of Frauds and the very issue of whether or not there is a lease between the parties.

35It is not denied that the lease documents were not carefully crafted. However, the former owners of the site as landlords, and the Respondents as tenants, acted pursuant to the terms as they understood them to be. Thus, the existence of a tenancy agreement was presumed and acted upon by the former owners and the Respondents.

36It is not denied by the Parkers that when they entered into the purchase agreement with the Tavareses they did not obtain the leases they had with the owners of the cabins. From the affidavit evidence of the Applicant, Katherine Parker, the Applicants knew the four cabins in issue were privately owned by the Respondents and that they rented the land on which they were located.

37In support of their position the Applicants rely on the Court of Appeal decision in Kaiman v. Graham, 2009 ONCA 77, [2009] O.J. No. 324. In that case the central issue was whether the Superior Court had jurisdiction to entertain the action brought by the appellants for damages and other relief or whether the RTA applied. In that case the Court of Appeal held this court had jurisdiction given the claim for damages of $250,000.00 on account of improvements to the cottage property on the basis of quantum meruit and unjust enrichment. The appellants in that case did not seek to terminate the tenancy as is the case here. Their statement of claim was for equitable relief and for a Certificate of Pending Litigation. As a result, the Court of Appeal determined that, given the broad nature of the relief sought, the Superior Court clearly had jurisdiction.

38The Applicants also referred me to this court’s decision in O’Brien v. 718458 Ontario Inc., [1999] O.J. No. 324. There again the claim was for damages for fraudulently collecting rents and for punitive damage. In Kaiman v. Graham, supra, which referred to Thompson J.’s reasoning in O’Brien v. 718458 Ontario Inc., the claim was such that it was within the jurisdiction of this court.

39In the case before me, the Applicants take the position that the issue here is whether there is a valid tenancy agreement. In her affidavit sworn May 31, 2011 Katherine Parker acknowledges that lease/tenancy agreements existed with the Respondents. In the fall of 2010 the Parkers decided to increase the lease rate on the cabin sites. That is when the Respondent owners brought their application before the LTB pursuant to the RTA.

40The Tribunal ruled it had jurisdiction to deal with the issue. Rather than remaining in that forum or appealing that decision, the Applicants began this application. The Applicants now challenge whether there is in fact a tenancy agreement. In fact, before launching these proceedings, they assumed there were lease agreements which allowed them to increase rents. I also find they knew the former owners collected rents from the cabin owners who were permanently located on the camp site.

41The Applicants’ counsel referred me to several decisions including Parsons v. Twin Elm Estates Ltd., [2001] O.J. No. 1907, Burton v. Leadway Apartments Ltd., [2002] O.J. No. 3252, In Reference see Residential Tenancies Act (Ontario) (1980), 1980 58 (ON CA), 26 O.R. (2d) 609 (C.A.) and 581355 Ontario Ltd. v. Tenants of 80 St. Clair Avenue East (1991), 49 O.A.C. 74 (Div. Ct.). I agree that the RTA does not give substantive powers to the LTB under the Act but rather exclusive jurisdiction to determine all matters and questions arising under the Act, such as whether the leases should be terminated. I find that is the central issue here.

42The duration of the lease in all of the purported agreements of the Respondents is for a period which cannot be fixed with certainty as to its duration. While this term was negotiated and acceptable to the former owners, the Parkers cannot accept this term of uncertainty.

43As was noted by Swinton J. in Bank of Tokyo-Mitsubishi (Canada) v. Toronto District School Board, [1999] O.J. No. 1196, the common law prohibits the granting of a tenancy in land for a period which cannot be fixed with certainty from the outset of that term, except in the case of a life estate.

44The court dealt with the issues before it in that case and declared the lease in issue null and void. The court was also asked to deal with rectification and estoppels. More importantly, on the issue of jurisdiction, Swinton J. found that the respondents in that case attorned to the jurisdiction of this court. In the case before me the Respondents have clearly argued jurisdiction and commenced a proceeding before the Tribunal.

45The Applicants argue that the leases with the Respondents contravene the municipal by-laws and the Planning Act. It is not denied that the Applicants own the land which abuts the leased site. The leases in issue appear to be for a term that is for “as long as the cabin is owned by the lessee”. The Applicants argue that the term is therefore for a period of twenty-one years or more which is prohibited by the Act.

46I accept that in Londry v. Dean, [1994] O.J. No. 705 Chilcott J. found a contravention of subsection 50(3) of the Planning Act. The principle issue was whether or not a base for life constituted a contravention. He ruled the lease was void ab initio. In Beer v. Beer, [1997] O.J. No. 2876, LaForme J. (as he then was) agreed with the finding in Londry v. Dean, supra.

47Both of these decisions were decided prior to the enactment of the RTA. Given that the RTA provides that no tenancy may be terminated except in accordance to the RTA, I would defer the issue of the Planning Act contravention to the LTB. The only reason the Applicants now rely on this legislation is to terminate the leases they acquired.

48The Court of Appeal in Fraser v. Beach, supra, and the Divisional Court in Canada Trustco Mortgage Co. v. Park (2003), 2003 49385 (ON SCDC), 63 O.R. (3d) 789 support the paramountcy of the RTA when the issue is termination of lease.

49The Applicants also argue that the leases in issue contravene the Statute of Frauds because they do not appear to be executed by parties making or creating them. The Applicants’ counsel cited section I (1) and (2). As was set out in 3670490 Canada Inc. v. Charles Boushey Limited, [2000] O.J. No. 4861 a formal written lease agreement is not required under the Statute of Frauds, however, the essential elements which included rent had to be agreed upon. Polowin J. in para. 31 sets out the essential elements that are required to support a valid lease agreement. The purported leases were acted upon and understood until the new owners purchased the site. Even they were prepared to rely on them had the demanded increase in rent been accepted. It would therefore appear that the essential elements of an agreement for the leases have been met.

50While I come to that conclusion I would agree with the submission made by counsel for the Applicants that the purported leases are on their face vague and lacking some essential elements. Nevertheless, the lease may still be a valid lease. Once again the sole reason for now relying on this statute is to terminate the leases.

Conclusion

51The Applicants come before the court seeking the termination of the leases that came with the campsite property they purchased. Given the nature of the relief sought by the Applicants I conclude that the LTB has the jurisdiction to grant the relief they seek.

52Prior to the purchase of this property by the Applicants there was a pattern of activity and an ongoing landlord-tenant relationship which the Respondents enjoyed with the former owners. The Respondents come before the court with clean hands. The Applicants acquired the leases now in issue without having full knowledge of their terms or implications.

53In the end, I find that given the nature of the relief sought by the Applicants, which to my mind is very narrow, the residential tenancies in issue should be decided under the RTA and should be continued before the LTB.

54As a result, the application is dismissed.

55Counsel and the unrepresented parties did not have an opportunity to argue costs. If unable to agree on the issue of costs, arrangements can be made with the office of the Trial Coordinator in Owen Sound.

Kruzick J.