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RTA - Settlements [s.78/194]. Pinto v. Regan and White v. Regan
In Pinto v. Regan and White v. Regan (Div Ct, 2021) the Divisional Court considered the awkward double-negative wording of RTA 77(8) on a motion to set aside a landlord's ex parte order:[22] Section 77(8) of the RTA requires the Board to apply the following test when deciding the motion of a tenant to set aside an eviction Order:(8) If the respondent makes a motion under subsection (6), the Board shall, after a hearing, …
(b) make an order setting aside the order under subsection (4), if the Board is satisfied, having regard to all the circumstances, that it would not be unfair to do so; or .....
[26] On a motion to set aside an eviction Order under s. 77(6), the moving party is almost always the tenant. For that reason, the determination under s. 77(8)(b) of whether it would not be unfair to set aside the Order is normally focused on the fairness to the respondent landlord. As the moving party, the tenant would logically take the position that it would be fair for the Board to make the requested order, having regard to all the circumstances.
[27] Section 77(8)(b) does not specify which party bears the onus to prove the fairness or unfairness on a motion to set aside an eviction Order. Nor does it provide that either party is to satisfy the Board that the Order to set aside an Order must not be made if making that Order would not be fair, as that would put the burden on the respondent in either case. By using the double negative, the legislature placed the onus on the tenant to satisfy the Board that, having regard to all the circumstances, it would not be unfair to make the order requested.
[28] The Member had a positive duty under s. 77(8)(b) to grant the Order on each motion if it was satisfied it would not be unfair to make that order. In order to determine whether making that Order would not be unfair, the Board was required to make its order “having regard to all the circumstances”. The broad language to consider “all the circumstances” I take to mean the factual matrix that provides the context in which the dispute between the parties arose in its widest sense. This requirement reinforces the remedial nature of the RTA and its purpose to protect tenants’ rights: Musse, at paras. 53 and 58; Honsberger v. Grant Lake Forest Resources Ltd., 2019 ONCA 44, 431 D.L.R. (4th) 1, at para. 19.
[29] If the Member made a decision on a motion under s. 77(6) without regard to all the circumstances, or by ignoring items of evidence the law required him to assess when he made findings of fact and reached conclusions, there was an error of law made: Canada v. Southam Inc., at para. 41. If the appellants can show that the Member incorrectly identified or interpreted the legal standard, failed to apply the proper test or ignored evidence he was bound to consider, he made an error of law: Yatar, at para. 28. Similarly, if the Member applied an incorrect standard than that prescribed by statute in the performance of his statutory duty, the result is an error of law: Musse, at para. 48.
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[32] The Member reached his conclusion that it would be unfair to the respondent to set aside the eviction Orders. While he recited the evidence given by the respondent to find that the respondent has a bona fide intent to move forward with the renovations, he failed to consider whether, on the evidence of all relevant circumstances, it would not be unfair to him if the appellants were given the proper notice to exercise their rights under the RTA. For instance, he did not consider how it would not be unfair to the respondent to require him to serve each appellant with an N13 Termination notice under s. 50(1). As another example, the Member did not explain why it would not be unfair to the respondent if either appellant was given the opportunity to exercise her right of first refusal to reoccupy her rental unit under s. 53 after the renovations were completed.
[33] I conclude that the Member made an error of law when he determined that it would be unfair to set aside the eviction Order against each appellant. This was not the test he was to apply under s. 77(8)(b) of the RTA. The Member was required to determine that to make the order on the motion of each appellant would not be unfair to make, having regard to all circumstances. To compound the error, he failed to take all of the evidence regarding those circumstances into account when he made the decisions under appeal. . Nicholls v. Zsiga
In Nicholls v. Zsiga (Div Ct, 2021) the Divisional Court considered a court-LTB jurisdictional mess where parties at the LTB under a mediated settlement [where you can except RTA provisions under RTA 194(2)] agreed to leave some issues to the small claims court, even though the issues were within the LTB's exclusive jurisdiction. The result was a minor absurdity were the minor quantum case was sent back down to the court nine years after the settlement:[18] Nightingale J., sitting as a single judge of the Divisional Court in Morrison v. Rose, 2018 ONSC 3635 (CanLII), considered a situation where a settlement before the LTB contemplated that certain claims, even though they fell within the jurisdiction of the LTB, “would be resolved all at once in the same forum in Small Claims Court” along with other claims which, the LTB held, were not within its jurisdiction. The Small Claims Judge in that case declined to hear the LTB matters. Nightingale J. found that the trial judge erred in not following the direction of the LTB.
[19] Morrison, however, is distinguishable. In Morrison, the LTB made a finding that it did not have jurisdiction over certain claims. In order to avoid a multiplicity of proceedings, the LTB declined jurisdiction over other claims that it could have heard, so as to allow all the interrelated claims to be dealt with all at once in one proceeding. This is consistent with the approach taken by a full panel of the Divisional Ct. in Trinidade v. Jantzi, 2021 ONSC 1927. There, the Court held that the LTB can, and should, decline jurisdiction in favour of proceedings already underway in the Superior Court of Justice where it is necessary to prevent an abuse of process. In both cases, the reasons are founded on provisions of the Statutory Powers Procedure Act. These cases stand for the proposition that the LTB’s exclusive jurisdiction may yield in certain circumstances where it is necessary in the interests of justice.
[20] Here, however, there is no comparable issue. There is no suggestion that the mediated settlement of some of the plaintiff’s claims before the LTB, and the deferral of LTB jurisdiction over others, was necessary to prevent an abuse of process. Indeed, as the deputy judge found, the plaintiff’s maintenance claims could have been brought before the LTB.
[21] This case raises the narrow question, apparently for the first time, whether, as part of a mediated settlement before the LTB, the parties can agree, and the LTB can endorse, implicitly if not explicitly, that a proceeding otherwise within the jurisdiction of the LTB can proceed before the Small Claims Court.
[22] Section 194(2) is confined to a very narrow set of circumstances. The parties must agree, as part of a mediated settlement before the LTB, to an action which might otherwise contravene a provision of the RTA and the LTB must be prepared to countenance that mediated settlement as being, not only in the party’s interests but in the broader public interest as well. It will be the rare case where this confluence of interests will align in this way. It will be the even rarer case (or perhaps never) where the LTB, in the role of mediator, will countenance the deferral of its jurisdiction over a residential tenancy claim in the absence of some compelling reason to do so. Within that narrow set of circumstances, however, the scope of the provision appears broad: “despite subsection 3(1) … a settlement mediated under this section may contain provisions that contravene any provision under this Act.”
[23] While the most obvious form of LTB endorsement of a mediated settlement would be, as it was in Morrison, an express order or finding of the LTB, s. 194(2) does not require that; it is sufficient to come within the purview of s. 194(2) that a settlement mediated under the LTB’s auspices has been reached and accepted by the LTB.
[24] Unambiguous proof of the preconditions for the application of s. 194(2) would, absent an express order of the LTB, also be rare. Here, the contents of para. 34 of the ASF, supported by the defendant’s conduct in failing to raise any objection to Small Claims Court jurisdiction, meets the required threshold under s. 194(2).
[25] While there are “policy” concerns around undermining the broad and necessary effect of s. 3 of the RTA and the LTB’s exclusive jurisdiction under s. 168(2), these concerns are mitigated by the narrow, highly unusual set of circumstances necessary to come within the s. 194(2) exception. I must also consider, in weighing this broader concern, the fact that the parties have, apparently in good faith, invested a huge amount of time, energy and cost in the Small Claims Court trial. A great deal of time has gone by since the events in question. The plaintiff’s access to the LTB is, by now, time-barred. The parties are entitled to have an adjudicated end to this dispute, one way or another.
[26] In these unique circumstances, I find that the plaintiff’s claim falls within the purview of s. 194(2). This constitutes an exception to the otherwise overarching jurisdiction of the LTB in this case and the prohibition against “contracting out”. The evidence supports the conclusion that the LTB, implicitly at least, endorsed the parties’ agreement in a mediated settlement. The Small Claims Court, as a result, has jurisdiction to hear and decide this dispute on the merits.
[27] The plaintiff asks the Divisional Court to go further and to decide the case on the merits. I can think of no circumstance in which an appellate court would do such a thing unless, perhaps, the legal question of jurisdiction was the only issue in dispute. Here, everything is in dispute. It was the substance of those disputes that took six days of trial before the deputy judge.
[28] The deputy judge heard all of the evidence, reviewed all of the documents and considered all of the submissions. Only he can assess the reliability, credibility and weight of the evidence and arguments. My conclusion, that in the unique and highly unusual circumstances of this case, the Small Claims Court has jurisdiction to resolve this dispute, is in no way a comment on any aspect of the merits of the plaintiff’s claim or the defendant’s defence. That is for the deputy judge, and the deputy judge alone, to decide.
[29] For these reasons, I remit the matter to the deputy judge to decide the claim on the merits.
[30] I am compelled to say, by way of concluding observation, that the resources and cost of these proceedings has been completely out of proportion to the matters and amounts in issue. There has never been, as far as I can tell, any formal effort to settle this case. The parties reached a settlement of the LTB proceeding with the assistance of a mediator. They would be well advised to reach a settlement in this one as well. To this end, I strongly recommend, as a precondition to the matter being remitted to the deputy judge for a decision on the merits, that the parties attend (and share the cost of) a mediation before a private mediator to engage in a bona fide, concerted effort to resolve this matter without the need for further legal/judicial proceedings. . Michael v. Koehler
In Michael v. Koehler (Div Court, 2023) the Divisional Court considers a moot s.78 'settlement order':[23] Had I exercised the Court’s discretion to hear this matter, I nevertheless would have dismissed the appeal. The Tenant acknowledged that they agreed to the termination of the tenancy with the Tenant to vacate by July 31, 2022 and to pay $300/month for May, June and July 2022. After the expiry of the three months, the Landlord was entitled to evict, without relying on the S.78 Term being included in the Order. The S.78 term having been spent, there is no prejudice to the Tenant as a result of it having been included in the Settlement Order. I would not set aside the balance of the Settlement Order to which the Tenant consented, even if I was of the view that the S.78 Term should not have been included in the Order.
[24] In any event, subsection 204(1) of the RTA gives the Board the discretion to include in an Order, whatever conditions it considers fair in the circumstances. The exercise of a discretionary power of the Board is not a question of law, absent some error of legal principle.[4] The Tenant has not raised an error in legal principle concerning the exercise of the Board’s discretion under subsection 204(1) of the RTA, other than erroneously claiming that their consent was necessary for the Board to impose the S.78 Term. The Tenant’s appeal amounts to a challenge of the Board’s discretion to impose a condition, which is outside this Court’s jurisdiction which is restricted to errors of law.
[25] The Tenant’s argument that the Settlement Order was not procedurally fair because they did not have an opportunity to seek further advice from Duty Counsel before the S.78 Term was added is devoid of merit. A review of the transcript indicates that the Tenant never requested an opportunity to seek further advice from Duty Counsel.
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