ONTARIO SUPERIOR COURT OF JUSTICE
In the Matter of:
TORONTO COMMUNITY HOUSING CORPORATION Applicant Landlord – and – BRYANT DIDIER Respondent Tenant
Counsel: A. Abells and M. Lee, for the Applicant Acting in Person
Heard: August 28, 2018
APPLICATION UNDER SECTION 74 OF THE COMMERCIAL TENANCIES ACT, RSO 1990, c. L.17
Reasons for Decision
SANFILIPPO J.
Overview
[1] The Applicant Landlord, the Toronto Community Housing Corporation, seeks an order requiring the Respondent Tenant, Bryant Didier, to give up possession of a rental unit owned by the TCHC and related relief. For the reasons that follow, I grant the Landlord possession of the disputed rental unit.
I. Background
[2] Bryant Didier has leased space at 331 Bartlett Avenue, Toronto, since about 1989. Initially, Mr. Didier leased an apartment, Unit #101, together with a windowless room in the centre of the basement that would have at that time been characterized as a storage room. This space, Unit B3, was used by Mr. Didier at that time for storage and for music rehearsals. Mr. Didier believes that he entered into a written lease with the property owner at that time, the City of Toronto, through its agency Cityhome, but no written lease was introduced into evidence in this Application.
[3] The earliest written document pertaining to Mr. Didier’s leasing of an apartment and Unit B3 is a letter from Cityhome to Mr. Didier dated November 8, 1996. In this letter, the landlord confirmed Mr. Didier’s move from Unit #101 to Unit #105 and, more importantly, confirmed the assessment of a rental charge of $100 per month for Unit B3, referred to by the landlord as the “studio space.” By 1996, Mr. Didier had soundproofed Unit B3 and set it up as a recording studio.
[4] In 2000, the TCHC was formed. It is the largest social housing landlord in Canada. From that date, the TCHC has operated the 331 Bartlett building further to a ground lease from the City of Toronto. The TCHC is Mr. Didier’s landlord.
[5] The TCHC does not know of any written lease by which Mr. Didier leases space in the 331 Bartlett property, certainly none since its formation in 2000. The TCHC states that the rental of space by Mr. Didier in the 331 Bartlett building was as a month-to-month tenant.
[6] In 2005, Mr. Didier moved his family out of Unit #105 of the 331 Bartlett property and has since resided in another home leased by the TCHC. He has, however, continued to rent Unit B3, developing it into a music recording studio. Mr. Didier acknowledges that he has no written lease with the TCHC for the rental of Unit B3. He pays $132 each month in rent.
The Steps Taken by the TCHC to Terminate
[7] Since 2015, the TCHC has been seeking to terminate Mr. Didier’s rental of Unit B3 and to re-take possession. The TCHC gave evidence regarding its reasons for deciding to terminate Mr. Didier’s rental of Unit B3. He no longer lives in the 331 Bartlett property. The TCHC states that some of the tenants who reside in the 331 Bartlett property have complained to the TCHC about the sound from the music studio. The TCHC found that the presence of a commercial venture in the basement of a residential building interfered with their objective of providing tenants with quiet enjoyment of their residences. Simply put, the TCHC concluded that Mr. Didier’s recording studio was not compatible with a residential building that had no other commercial tenants.
[8] Mr. Didier submits that the TCHC is acting on inadequate or unreliable information and thereby does not have a proper reason for terminating his tenancy. The TCHC responds that a landlord of a commercial rental space may terminate a monthly tenancy without establishing a reason for its determination provided it complies with the requirements of the Commercial Tenancies Act, R.S.O. 1990, c. L.17. The TCHC contends that it has done so.
[9] The TCHC initiated the process of terminating Mr. Didier’s tenancy on February 6, 2015, when it served Mr. Didier with a Notice to Quit under the Commercial Tenancies Act. The February 2015 Notice to Quit was designed to terminate Mr. Didier’s tenancy of Unit B3 effective March 31, 2015, stating in pertinent part as follows:
You have been occupying [Unit B3] as a tenant from month-to-month.
The Landlord hereby gives notice that your month to month tenancy is hereby terminated and you must vacate [Unit B3] on or before March 31, 2015.
[10] Mr. Didier did not vacate Unit B3. Instead, he asserted that Unit B3 was a residence, such that the TCHC acted improperly in delivering to him a Notice to Quit under the Commercial Tenancies Act. To validate this position, Mr. Didier applied to the Landlord and Tenant Board for an order that Unit B3 was a residence such that the Residential Tenancies Act, 2006, S.O. 2006, c. 17 applied to his rental of Unit B3, not the Commercial Tenancies Act.
[11] The Landlord and Tenant Board reached its decision on January 19, 2016. The Board determined that it had no jurisdiction over Unit B3 because from the onset of Mr. Didier’s tenancy, Unit B3 was used “predominantly, if not exclusively, for commercial purposes.” The jurisdiction of the Landlord and Tenant Board is restricted to residential premises.
[12] Mr. Didier decided to appeal the decision of the Landlord and Tenant Board, but did not do so in time. Mr. Didier brought a motion to the Divisional Court seeking an extension of time to appeal the Board’s decision. On August 30, 2017, while the motion before the Divisional Court was pending, the TCHC served Mr. Didier with a second Notice to Quit to terminate his tenancy of Unit B3. This August 2017 Notice to Quit demanded that Mr. Didier vacate Unit B3 by September 30, 2017. The TCHC delayed enforcement of the August 2017 Notice to Quit while the Divisional Court had Mr. Didier’s motion under consideration.
[13] On October 19, 2017, the Divisional Court dismissed Mr. Didier’s motion to extend the time for his appeal on the basis that Mr. Didier’s appeal of the Landlord and Tenant Board’s decision had no merit. The Divisional Court held that the Landlord and Tenant Board’s determination that Unit B3 was not used as a residence “was amply supported by the evidence before it.” Appeals from the Board lie to the Divisional Court only on questions of law, and none were raised by Mr. Didier’s appeal.
The Agreement to Vacate
[14] After the Divisional Court dismissed his motion, and in the context of the August 2017 Notice to Quit, Mr. Didier entered into discussions with the TCHC. Mr. Didier sought more time to move his recording and musical equipment out of Unit B3, for the TCHC to relocate him to another unit, and to be relieved of the cost award granted to the TCHC by the Divisional Court against him. I was provided with evidence of negotiations between representatives of the TCHC and Mr. Didier with the objective of seeking terms by which Mr. Didier would vacate and turn over possession of Unit B3 in an orderly manner.
[15] On October 31, 2017, Mr. Didier executed an agreement to vacate Unit B3. The agreement allowed him to continue to rent Unit B3 until January 31, 2018 (instead of being required to move out immediately) on his agreement to pay in the interim the monthly rent of $132. Additionally, the TCHC agreed to waive the cost award rendered in its favour by the Divisional Court.
[16] In the first version of the Agreement to Vacate executed by Mr. Didier, he wrote the words “under duress” adjacent to his signature. The TCHC rejected this agreement, and stated that they would not complete the agreement with Mr. Didier if he was doing so under duress. On October 31, 2017, a representative of the TCHC confirmed in an email to Mr. Didier that Mr. Didier had acknowledged in discussion that he was not entering into the Agreement to Vacate under duress. Mr. Didier subsequently delivered to the TCHC an executed version of the Agreement to Vacate that did not contain the words “under duress”.
[17] In reliance on the Agreement to Vacate, the TCHC did not take any steps to evict Mr. Didier from Unit B3 in the period from October 2017 to January 31, 2018.
Events Leading to this Application
[18] On January 31, 2018, the TCHC attended at Unit B3 to take possession, in accordance with the terms of the Agreement to Vacate. Mr. Didier refused to provide possession of the unit to the TCHC, taking the position that he had been coerced to enter into the Agreement to Vacate under duress such that it was invalid.
[19] On January 31, 2018, the TCHC served Mr. Didier with a Notice of Termination, providing him with five days to remove his possessions from Unit B3 and provide vacant possession of the unit to the TCHC, relying on the August 2017 Notice to Quit under the Commercial Tenancies Act. Mr. Didier did not comply.
[20] On February 12, 2018, the TCHC initiated this Application, brought pursuant to the Commercial Tenancies Act, to obtain a declaration that Mr. Didier’s tenancy of Unit B3 has been terminated and related relief, including an order for the issuance of a writ of possession.
II. Analysis
What is the Nature of Mr. Didier’s Tenancy?
[21] The parties agree that there is no written lease pertaining to Mr. Didier’s rental of Unit B3. The TCHC states that Mr. Didier has a month-to-month tenancy. Mr. Didier submits that he has a tenancy that is perpetual, capable of being terminated only in the case of breach or default on his part. I see no merit in this submission.
[22] In cases where there is no written lease and where the parties dispute the type of tenancy that was agreed upon, the onus is on each party to establish, on a balance of probabilities, their respective positions concerning the term of the tenancy. In this regard, the Court must look at the surrounding circumstances, including the actions of the parties, to determine what the parties intended their contractual relationship to be: Manitouwadge General Hospital v. Kudlak, 2000 CarswellOnt 3243 (Ont. S.C.J.), at para. 28. All matters considered, in assessment of all evidence regarding Mr. Didier’s rental history, I have determined that Mr. Didier’s rental of Unit B3 is a monthly tenancy. I do not find in the current record any agreement on implied terms between the parties pertaining to the rental of Unit B3.
[23] Even if Mr. Didier had a written lease at the time of his initial leasing of premises in 331 Bartlett in or about 1989, the term of any such written lease would have long expired. Any such written lease would have been before the year 2000, when the TCHC became Mr. Didier’s landlord. The expiry of any such written lease would cause this tenancy to convert into an overholding month-to-month tenancy.
Which Statute is Applicable?
[24] The Landlord and Tenant Board determined that Mr. Didier’s rental of Unit B3 was exempted from the Residential Tenancies Act because it came within section 5(j), which exempts “premises occupied for business or agricultural purposes with living accommodation attached if the occupancy for both purposes is under a single lease and the same person occupies the premises and the living accommodation.” The Landlord and Tenant Board has the exclusive jurisdiction to determine and terminate a residential tenancy: section 168(2) of the Residential Tenancies Act; Toronto-Dominion Bank v. Hosein, 2016 ONCA 628, 133 O.R. (3d) 225; Warraich v. Choudhry, 2018 ONSC 1275.
[25] The Divisional Court held that the Landlord and Tenant Board’s determination “was amply supported by the evidence before it, that the premises were not covered by the [Residential Tenancies] Act because they were not residential”.
[26] Mr. Didier argued at length that his use of Unit B3 was not commercial in nature because it was a “live-work” space, principally because he periodically there stayed overnight. The TCHC contended that it is improper for Mr. Didier to raise in this Application an issue already determined by the Landlord and Tenant Board. The case that Mr. Didier relied upon to do so, Matthews v. Algoma Timberlakes Corp., 2010 ONCA 468, 102 O.R. (3d) 590, leave to appeal to S.C.C. refused, 33882 (September 28, 2010) does not support his position.
[27] There is simply no evidence that Mr. Didier, or anyone ever resided in Unit B3. Mr. Didier has a home where he lives with his family. Unit B3 is his workplace. Further, periodic overnight stays in Unit B3 do not derogate from the application of the section 5(j) exemption in the Residential Tenancies Act that contemplates some living accommodation along with the business activity.
[28] Section 2 of the Commercial Tenancies Act restricts its application to tenancies that are not residential in nature: “This Act does not apply to tenancies and tenancy agreements to which the Residential Tenancies Act applies.” The Landlord and Tenant Board found that the Residential Tenancies Act does not apply to Mr. Didier’s tenancy. I find that Mr. Didier’s rental of Unit B3 is governed by the Commercial Tenancies Act.
[29] Other courts have reached similar determinations on greater evidence of mixed use of commercial space with residential functions. In Lei v. Crawford, 2011 ONSC 349, [2011] O.J. No. 175 (Ont. S.C.J.), Perell J. upheld the application of the Commercial Tenancies Act to the lease of a property that consisted of a retail store on the main level with residential apartments on the second floor and in the basement. In Hahn v. Kramer (1979), 23 O.R. (2d) 689 (Div. Ct.) and Fiset v. DiGeso (1998), 20 R.P.R. (3d) 86 (Gen. Div.), the courts held that the lease of a retail store with associated living accommodation was not a residential tenancy under the Residential Tenancies Act. My conclusion is supported by the finding in Sigrist v. McLean, 2011 ONSC 7114, 283 O.A.C. 100, at paras. 112-115, that the Commercial Tenancies Act applies to a mixed use property where the “predominant purpose” of the property was for business.
[30] The application of the Commercial Tenancies Act in this Application is entirely consistent with the nature of Mr. Didier’s stated use of Unit B3. He deposed that his income derives from the recording studio work conducted from Unit B3 and that he stores his inventory and operates his recording equipment in Unit B3. On Mr. Didier’s own evidence, the predominant purpose and use of Unit B3 is commercial in nature.
Application of the Commercial Tenancies Act
[31] Section 28 of the Commercial Tenancies Act provides as follows:
A week’s notice to quit and a month’s notice to quit, respectively, ending with the week or the month, is sufficient notice to determine, respectively, a weekly or monthly tenancy.
[32] Mr. Didier has received 3.5 years’ notice of termination under the February 2015 Notice to Quit and 1 year’s notice of termination under the August 2017 Notice to Quit, well in excess of the one-month notice requirement under section 28 of the Commercial Tenancies Act. These Notices to Quit were served personally, in accordance with section 36(1) of the Commercial Tenancies Act, and were sufficiently clear to allow Mr. Didier to understand the termination that was intended by the notices: Goodyear Canada Inc. v. Burnhamthorpe Square Inc. (1998), 41 O.R. (3d) 321, at paras. 88-89 (Ont. S.C.J.). Mr. Didier’s conduct after service of the Notices to Quit shows that he understood the meaning and intention of the notices.
[33] Under the Commercial Tenancies Act, there is no requirement that the Landlord state a reason for termination in a monthly tenancy. Absent any term in a lease requiring the existence of any condition as justification for the termination of a commercial month-to-month rental by either party, 30 days’ notice is sufficient to terminate a lease under s.28 of the Commercial Tenancies Act: Downtown Pallets Ltd. v. Ontario Food Terminal Board, 2013 ONSC 502, 30 R.P.R. (5th) 153, at paras. 17‑18.
[34] Section 74(1) of the Commercial Tenancies Act provides:
Where a tenant after the tenant’s lease or right of occupation, whether created by writing or by parol, has expired or been determined, either by the landlord or by the tenant, by a notice to quit or notice pursuant to a proviso in a lease or agreement in that behalf, or has been determined by any other act whereby a tenancy or right of occupancy may be determined or put an end to, wrongfully refuses or neglects to go out of possession of the land demised to the tenant, or which the tenant has been permitted to occupy, the tenant’s landlord may apply upon affidavit to a judge of the Superior Court of Justice to make the inquiry hereinafter provided for and the application shall be made, heard and determined in the county or district in which the land lies.
[35] Mr. Didier has failed to vacate his occupation of Unit B3 after the TCHC served a valid Notice under section 28 of the Commercial Tenancies Act. The TCHC has thereby established an entitlement to the relief sought in this Application.
The Effect of the Agreement to Vacate
[36] In light of my determination that the Commercial Tenancies Act applies to Mr. Didier’s rental of Unit B3, a finding of the validity of the Agreement to Vacate is not necessary to determine this Application. Nonetheless, for completeness of analysis, I will address the issue of the validity and effect of the Agreement to Vacate.
[37] The evidence establishes that Mr. Didier initiated the negotiation of the Agreement to Vacate with TCHC representatives after the Divisional Court denied his motion to extend time for his appeal of the Board decision. Mr. Didier asked the TCHC for more time to move out, for it to seek alternate premises for him, and for relief from the Divisional Court’s cost award.
[38] Mr. Didier had an opportunity to discuss the terms of the Agreement to Vacate with legal counsel or advisors. Mr. Didier had a representative who assisted him before the Landlord and Tenant Board. In exchange for his agreement to vacate Unit B3, Mr. Didier received consideration from the TCHC: three months’ time to find alternative space and to move, and relief from the cost award.
[39] To establish duress, it is not sufficient to state that the TCHC took advantage of a superior bargaining position. I agree with the statement by Perell J. in Lei v. Crawford, at para. 7, that: “for duress, there must be coercion of the will of the contracting party and the pressure must be exercised in an unfair, excessive or coercive manner.” These elements are not established in this Application.
[40] On the evidence before me, I find that Mr. Didier understood the meaning and effect of the Agreement to Vacate and entered into it purposefully, without duress, in order to extend his occupation of Unit B3. In failing to vacate Unit B3 by January 31, 2018, Mr. Didier breached the agreement. Had I not already determined that the TCHC is entitled to the relief sought by operation of the Commercial Tenancies Act, I would have determined that the TCHC is entitled to the relief sought on the basis of the Agreement to Vacate.
The Effect of the TCHC Conduct after January 31, 2018
[41] In the period after January 31, 2018, Mr. Didier continued to remit to the TCHC the monthly rent of $132. The TCHC contends that it did not ask for these rent payments and that they were sent electronically directly into the TCHC’s account, such that there was no step taken by the TCHC in receiving the funds.
[42] The continued payment of monthly rent by Mr. Didier gives rise to the issue of whether there was a new tenancy created after January 31, 2018 by reason of Mr. Didier’s payment, and the TCHC’s receipt, of monthly rental payments.
[43] This issue was addressed by the Ontario Court of Appeal in AIM Health Group Inc. v. 40 Finchgate Ltd. Partnership, 2012 ONCA 795, 113 O.R. (3d) 187, specifically at paras. 102-104, and in Re Can. Petrofina Ltd. & Trudell, [1960] O.R. 82 (C.A). The acceptance by the landlord of rent payment after the delivery of a Notice of Termination or Notice to Quit will only create a new tenancy where the evidence establishes that there was a mutual intention to do so.
[44] The TCHC’s conduct from 2015 onward has been consistent with its objective to terminate the rental of Unit B3. There is no evidence of any intention by the TCHC to renew the tenancy or create a new one. I have thereby determined that the receipt of monthly rental payments in the period after January 31, 2018 does not create a continued rental relationship. Even if it did, on the reasons set out herein, the TCHC would be in a position to terminate any such relationship on one month’s notice.
V. Disposition
[45] On the basis of these reasons, I order as follows:
a) The Tenant’s tenancy in Unit B3 was determined on September 30, 2017 in accordance with the Notice to Quit dated August 30, 2017, and the Landlord is entitled to vacant possession of Unit B3;
b) The Tenant wrongfully holds Unit B3 against the rights of the Landlord, pursuant to the Commercial Tenancies Act;
c) A writ of possession for Unit B3 shall be granted in favour of the Landlord. Although the Landlord asked that the writ of possession have immediate effect, it shall not be effective until October 31, 2018. The Landlord shall not enter and take possession of Unit B3 until October 31, 2018 to allow the Tenant sixty (60) days to move his possessions. The Tenant shall transfer possession of Unit B3 to the Landlord no later than October 31, 2018;
d) The Tenant shall pay to the Landlord the monthly amount of $132 for each month of overholding tenancy in Unit B3. All amounts paid by the Tenant to the Landlord since January 31, 2018 shall be credited by the Landlord against the Tenant’s over-holding rent obligation from January 2018 to the time that the Landlord obtains possession of the rental unit.
[46] The Applicant Landlord shall prepare a form of Order and submit it to the Tenant for approval. In the event of disagreement in the settlement of the Order, the parties shall arrange to appear before me at a Chamber’s appointment to settle the form and content of the Order.
VI. Costs
[47] I heard submissions on costs at the conclusion of the hearing of the Application. The TCHC delivered a Bill of Costs in support of its submission that it ought to be awarded $12,404.36 in costs if successful on the Application. Mr. Didier submitted that these costs were excessive, and that the TCHC ought not to receive any costs as the Application was argued by staff counsel. Of course, parties represented by staff counsel are entitled to seek costs when successful as, indeed, can a self-represented party: Mustang Investigations Inc. v. Ironside, 2010 ONSC 3444, 103 O.R. (3d) 633 (Div. Ct.).
[48] The general rule is that, absent special circumstances, “costs follow the event”: Bell Canada v. Olympia & York Developments Ltd., 1994 ONCA 239, 17 O.R. (3d) 135. The TCHC was successful in this Application and is thereby entitled to an award of costs. In terms of the amount of such costs, I have considered the factors set out in Rule 57.01 and the principles established by the applicable case law. The overarching objective of quantification of costs is to determine an amount that is fair and reasonable, understanding that the mathematical quantification of what the successful litigant has spent in legal fees is material but not determinative: Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A.). Section 131 of the Courts of Justice Act, R.S.O. 1990, c. C. 43 provides me with the discretion necessary to ensure fairness in the awarding of costs.
[49] In the circumstances of this Application, all factors considered, I exercise my discretion to award costs of this Application to Applicant Landlord payable by the Respondent Tenant in the amount of two thousand dollars ($2,000), all-inclusive of fees, disbursements and taxes.
Sanfilippo J.