Friday, June 8, 2012

Divisional Court Decision Leaves Ontario Landlords Feeling Abused & Vulnerable

If there is one factor that differentiates residential landlord and tenant law from other types of civil legal disputes in Ontario, it's that the damages are rarely if ever fixed at the time the landlord's rental claim is made.  This has the effect of resulting in terrible prejudice to landlords if matters are delayed or protracted.

The Residential Tenancies Act, or at least it's predecessor, was created and matters taken out of the courts in 1998 to provide the public with a process that was cheaper, faster, more accessible but not lacking in fairness.

When rents are owing, particularly if the person has no money, or is impecunious as some refer to that sad state, then a delay for the tenant is almost as good as a win.  If I am judgement proof and carried away from a tenancy by the Sheriff with $8,000 owing, it's better for me than if there was only $5,000 owing.

Which is why time is of the essence, and why s.82 of the Residential Tenancies Act, added to the statute in 2007 by the Liberal government, causes such harm.  Tenants can raise any issue, real or imagined at a hearing for rent, without giving the landlord notice of same.  This invariably results in an adjournment as the landlord wasn't prepared to deal with the new issues, real or imagined.

In the meantime, rent arrears continue to mount by another month a least until the next return date, and whatever judgment the Board ultimately issues, the amount is likely un-collectible.  Sometimes the Board orders money to be paid into the Board by the tenant as a condition of the adjournment, but there are no real-life consequences for failing to do so.

There are lots of tricks to getting delay.  I've written about one above, and a different one in a previous blog entry where a tenant can file a false affidavit claiming that they paid all the money they owe into the Board voiding an eviction order.  The Board then issues an order, without a hearing (ex parte) cancelling the eviction order.  That gives the tenant at least a free month until the matter gets back to the Board on a set aside motion of the ex parte order.  And then another month as you go to the back of the Sheriff's enforcement line when the tenant's deception is discovered by the Board.

But filing Board internal reviews have always been the bread and butter of delay for tenants who have no intention of paying, but every intention of staying.  And it's getting easier.

I was with a client today at the LTB,we had an eviction order against their tenant based on a conduct hearing which the tenant did not attend in early May.  Prior to the Sheriff coming, the tenant filed a review, saying she was confused about the hearing date and didn't attend.  The matter was sent to an initial review hearing this morning, where a Member determines if there has been a serious error.  And since 2008, a review, and a new trial (a hearing de novo) is an automatic, thanks to the Ontario Divisional Court, a mid-level appellate court where all appeals from the Board go.

In the 2008 decision called King-Winton v. Doverhold Investments Limited at the Ontario Divisional Court, the three member panel decided that while the tenant in that case didn't appear at the hearing, she likely intended to appear.  They sent the matter back to the LTB to be re-heard.  They finished with a glowing phrase suitable for a novel saying that:

"Being reasonably able to participate in the proceedings must be interpreted broadly, natural justice requires no less.  The reality is the tenant has never had an opportunity to be heard."

I think that at Divisional Court there is a sign in the judges chambers that says "Natural Justice Requires No Less". as I'm seeing it all the time as justification for giving tenants a second chance at a hearing.  Certainly being reasonably able to participate can be interpreted in many ways and should be fact-specific.  Are there no responsibilities on the tenant to show up?  Does being heard not involve showing up?  And should prejudice to the other side not factor in?  Sure, as a "motherhood" style statement I would agree that the right to appear to defend yourself at trial is crucial, but a decision to grant a review or appeal based on a party missing a hearing must be based on the context and the facts before the Member, including ongoing damages accruing, the merits of the potential defence and the likelihood of a judgement being enforcable.

Apparently not, as today the tenant had her review granted because she was stressed and says she marked the hearing date on her fridge calendar on the wrong date.  I think the Member did the correct thing.  She is bound by the order of Divisional Court, as is my client.  If she had not allowed the review, there would likely have been an appeal of the decision, where the arrears would mount and mount, forever being un-collectible.

So if you are a tenant, what's the point of showing up for the first hearing if it's about rent if you don't intend to pay?  You may as well earn another free month, over-tax the Board's resources and put the small landlord into an even deeper financial hole. 

By the way tenants...this opinion piece does not constitute legal advice, and no client - paralegal relationship has been established by my generic advice!

1 comment:

Earthgoddess winton said...

It's King-Winton here, I'm so happy that I've helped other tenants avoid eviction. My case is used many times a week and this helps many people. I am having having another issue with Doverhold, that will become another precedent case, as I did not understand the seriousness of the interim order and am facing eviction now. The interim order stated I had to remove my belongings from the storage room, where I was storing my belongings, that were thrown out by a tenant , who was bullied by the property manager, who told her she could not rent me storage space. ( even though it is allowed) . I had no storage space, my belongings were thrown-out without notice, and I was late with removing my stuff. It was to be removed by the 4th, and the Superintendent said it would be fine a few days over, as no one was moving in. Then, Doverhold decided to impose the interim order and have me evicted. I appealed it, and lost, as was I could not speak due to a emotional breakdown in court, and now it is going to Divisional court. This is not funny.! The LTB did not accept that I did not realize the seriousness of fulfilling the interim order I was 5 day late, and it did't matter anyway,as no one was moving in. This is only the tip of the case. It will be a big case and expose inefficiencies in the system. King-Winton