COURT FILE NO.: Div. Ct. 559/18 DATE: 2018/12/14
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
SURINDER SINGH Landlord – and – BUKOLA BALOGUN and OLUWATOBA BALOGUN Tenant
COUNSEL: Sim Chahal, for the Landlord Bukola Balogun, self-represented Leora Jackson, amicus
HEARD: December 13, 2018
PERELL, J.
REASONS FOR DECISION
A. Introduction
[1] Surinder Singh leased residential premises to Bukola and Oluwatoba Balogun.
[2] Pursuant to the Residential Tenancies Act, 2006 [1], the Landlord and Tenant Board ordered the Baloguns’ tenancy terminated. The Baloguns appealed the Board’s Order to the Divisional Court.
[3] Mr. Singh brings a motion to have the appeal quashed.
B. Facts
[4] In July 2014, Mr. Singh purchased a property municipally known as 20 Milady Road, Toronto. At the time of the purchase, the Baloguns were occupying a portion of the premises pursuant to a lease. Under the lease, the rent was $1,450 plus 70% of the utilities.
[5] The Ontario Disability Support Program (“ODSP”) paid $1,450 monthly for the base rent and the Baloguns paid for the utilities, the cost of which was, on average, $300 per month.
[6] On July 18, 2014, Mr. Singh and the Baloguns signed a new lease in which the rent was $1,750 and no additional or separate charge was made for the utilities.
[7] ODSP continued to pay $1,450 monthly and the Baloguns were to pay monthly the $300 balance of the base rent.
[8] Under the old lease, pursuant to s. 138 of the Residential Tenancies Act, which is set out below, the landlord was permitted to charge the Baloguns a portion of the cost of the utility. In contrast, under the new lease, s. 138 of the Act was not engaged, and the landlord was supplying the utility and making no separate charge.
[9] While the new lease was different than the old one, the out-of-pocket expense for the Baloguns was, practically speaking, the same as before.
[10] In December 2016, the Baloguns told Mr. Singh that they would no longer pay the $300, and in 2017, they brought an application before the Landlord and Tenant Board for a determination that their rent was not $1,750 but was $1,450 and that Mr. Singh had unlawfully increased the rent by $300.
[11] The Board, however, found the rent was $1,750, as agreed by the parties. The Board concluded that the rent being charged the Baloguns was lawful under s. 123 (1) of the Residential Tenancies Act.
[12] The Baloguns sought a review of the Board’s order, but the review request was dismissed on March 29, 2018.
[13] Notwithstanding the Board’s Order and the Board’s Review Order, the Baloguns continued to not pay the $300 monthly portion of rent. As a result, Mr. Singh applied to the Board to collect the arrears and to terminate their lease.
[14] On August 7, 2018, the Board made a Termination Order. The Board found that the Baloguns owed rent arrears and that if they failed to pay the arrears, their tenancy would be terminated.
[15] On September 4th, 2018, the Baloguns appealed the Termination Order to the Divisional Court.
[16] Pursuant to s. 25 (1) of the Statutory Powers Procedure Act [2], the filing of the appeal results in an automatic stay of the Termination Order.
[17] The grounds of appeal in the Notice of Appeal were poorly drafted, but restated, the grounds of appeal are that the Board erred in law: (a) by apportioning utilities as rent; (b) by treating utilities as rent; (c) by including the utilities in the rent; (d) by not finding that the rent was the amount paid by ODSP; and (d) by making an unjust and procedurally unfair order.
[18] In their factum for the appeal, the Baloguns state the issues as follows:
a. Issue # 1 - Did the Landlord and Tenant Board err in law when it concluded that increase in rent was for the utilities as a prescribed service thereby it becomes the lawful rent?
b. Issue #2 - Did the Landlord and Tenant Board err in law when it concluded that utilities have to be added to the rent thereby increase rent from $1450/month to $1750/month because the tenant agreed/or it to be added?
c. Issue #3 - Did the Landlord and Tenant Board err in law when it found that an agreement was entered into between the Landlord and the Tenant to add $300 to rent whereby Landlord pays utilities $350.00 without any concrete prove of agreement?
d. Issue #4 - Did the Landlord and Tenant Board err in law when the application of termination is based on the Tenant's failure to pay utility charge causing termination of tenancy?
[19] The Baloguns remain in the premises. Because of the Board’s termination Order, ODSP has stopped paying $1,450 monthly, and the Baloguns have made no payments.
C. Discussion
1. Legislative Background
[20] For the purposes of this motion to quash, the relevant provisions of the Residential Tenancies Act, 2006 are set out below.
- (1) In this Act,
“rent” includes the amount of any consideration paid or given or required to be paid or given by or on behalf of a tenant to a landlord or the landlord’s agent for the right to occupy a rental unit and for any services and facilities and any privilege, accommodation or thing that the landlord provides for the tenant in respect of the occupancy of the rental unit, whether or not a separate charge is made for services and facilities or for the privilege, accommodation or thing, but “rent” does not include,
(a) an amount paid by a tenant to a landlord to reimburse the landlord for property taxes paid by the landlord with respect to a mobile home or a land lease home owned by a tenant, or
(b) an amount that a landlord charges a tenant of a rental unit in a care home for care services or meals;
“services and facilities” includes,
(k) heating facilities and services,
(l) air-conditioning facilities,
(m) utilities and related services, and
(n) security services and facilities;
“utilities” means heat, electricity and water;
Additional services, etc.
123 (1) A landlord may increase the rent charged to a tenant for a rental unit as prescribed at any time if the landlord and the tenant agree that the landlord will add any of the following with respect to the tenant’s occupancy of the rental unit:
A parking space.
A prescribed service, facility, privilege, accommodation or thing.
Apportionment of utility costs
138 (1) A landlord of a building containing not more than six rental units who supplies a utility to each of the rental units in the building may, with the written consent of the tenant, charge the tenant a portion of the cost of the utility in accordance with the prescribed rules if,
(a) the landlord provides adequate notice to the tenant in accordance with the prescribed rules; and
(b) the rent for the rental unit is reduced in accordance with the prescribed rules.
Not a service
(2) If a landlord charges a tenant a portion of the cost of a utility in accordance with subsection (1), the utility shall not be considered a service that falls within the definition of “rent” in subsection 2 (1).
Termination of tenancy prohibited
(3) If a landlord charges a tenant a portion of the cost of a utility in accordance with subsection (1), the landlord shall not serve a notice of termination under section 59 or make an application to the Board for an order under section 69 or 87 if the notice or application is based on the tenant’s failure to pay the utility charge.
Appeal rights
210 (1) Any person affected by an order of the Board may appeal the order to the Divisional Court within 30 days after being given the order, but only on a question of law.
Powers of Court
(4) If an appeal is brought under this section, the Divisional Court shall hear and determine the appeal and may,
(a) affirm, rescind, amend or replace the decision or order; or
(b) remit the matter to the Board with the opinion of the Divisional Court.
Same
(5) The Divisional Court may also make any other order in relation to the matter that it considers proper and may make any order with respect to costs that it considers proper.
2. Jurisdiction
[21] Under s. 210 of the Residential Tenancies Act, 2006, an appeal lies to the Divisional Court only on a question of law.
[22] A question of law is a question about what law applies to the case and what the correct legal test is for the case. [3] In contrast, a question of facts is about the events between the parties, and a question of mixed fact and law is about whether the facts satisfy the legal tests for the case. [4] Appellate courts must be cautious in characterizing a question as a question of law and where the legal principle is not readily extractible from the question, the question is one of mixed fact and law. [5]
[23] The standard of appellate review of the Board’s decision on a question of law is reasonableness. [6]
[24] Pursuant to s. 134 (3) of the Courts of Justice Act [7], an appellate court may quash an appeal in a proper case. However, the power to quash an appeal is a power that should be used sparingly. [8]
[25] Where an appeal is limited to a question of law and the grounds of appeal do not raise a question of law, the appeal may be quashed. [9]
[26] An appeal may be quashed where it is manifestly devoid of merit. [10]
[27] In landlord and tenant matters, an appeal may be quashed as an abuse of process where the appeal is being used as a stratagem to delay eviction. [11]
3. Analysis
[28] The Baloguns’ appeal should be quashed for two discrete reasons.
[29] First, their grounds of appeal appear to be questions of fact or questions of mixed fact and law and not questions of law. As noted above, where an appeal is limited to a question of law and the grounds of appeal do not raise a question of law, the appeal may be quashed.
[30] Second, assuming that the Baloguns’ appeal presents an extractable question of law, then that ground of appeal, associated with how a landlord charges rent and the treatment of utility charges, is manifestly devoid of merit.
[31] In Graham v. H & R. Property Management Ltd. [12] and Gonte Construction Limited v Tenants of 90 Eastdale Avenue and 2 Second Ave. [13], the Divisional Court held that the Landlord and Tenant Board made a reasonable decision on a question of law in holding that since utilities are a prescribed service, where a landlord and tenant agree to pay for a prescribed service as part of rent, the Landlord may increase the rent at any time pursuant to s. 123 of the Residential Tenancies Act, 2006.
[32] The case at bar follows Graham v. H & R. Property Management Ltd. [14] and Gonte Construction Limited v Tenants of 90 Eastdale Avenue and 2 Second Ave..
[33] In the immediate case, the Board’s decision was well within the range reasonable decisions and it was fair decision for the Baloguns who, practically speaking, were in no worse position and probably in a better position than they were under the old lease where they would pay for utilities.
[34] There is no merit to their submission that the Board made an error in law in failing to consider s. 138 of the Residential Tenancies Act. For the reasons noted above, section 138 was not relevant to the new lease. In the immediate case, the Landlord was not seeking to terminate the lease based on the Balogun’s failure to pay a utility charge. The Landlord was seeking to terminate the lease based on the Balogun’s failure to pay all their rent.
[35] The Landlord also submitted that the Baloguns’ appeal should be dismissed as a stratagem to delay eviction and to avoid the payment of rent. Having regard to the two discrete reasons to quash the appeal, it is not necessary for me to make any finding in this regard.
Conclusion
[36] For the above reasons, the Baloguns’ appeal is quashed.
[37] If the parties cannot agree about the matter of costs, they may make submissions in writing beginning with the Landlord’s submissions within twenty days of the release of these Reasons for Decision followed by the Tenants’ submissions within a further twenty days.
Perell, J.
Released: December 14, 2018