Wednesday, March 21, 2018

Can a $500,000 Personal Injury Negligence Claim be an RTA Matter?

This is a crazy one.  I've been concerned lately about the confusion between things that happen in a rental unit, versus things that should be litigated under the Residential Tenancies Act (the "RTA") at the Landlord and Tenant Board (the "LTB").  For instance, a murder committed in a rental unit does not get prosecuted at the Landlord and Tenant Board.  But there are more subtle analogies.

Recently a number of cases have been litigated at Small Claims Court where there is ongoing confusion about whether a former Landlord can go to the Small Claims Court after a tenant is no longer in possession and the LTB loses jurisdiction.  Often Small Claims Court turns them away!  The Small Claims Court has also been routinely refusing to deal with unpaid utility claims from a rental unit, even though the LTB under the RTA can not deal with utilities.  It's a mess and it's leaving people with rights, but no remedies.

But this one takes the cake, and leaves us scratching our heads.  It's about the limitation period for a former tenant to file a personal injury claim styled in negligence at the Superior Court, after the one year limitation in s.29(2) of the RTA has elapsed.  The issue is whether the former tenant with a claim older than one year but not yet two years can seek a remedy at Superior Court in a claim for negligence based on the normal 2-year limitation period under Ontario's Limitation Act.  Or because it happened in a rental, does the 1-year period under the RTA apply?  Section 29(2) of the RTA speaking to tenant claims reads:

Time limitation
29(2) No application may be made under subsection (1) more than one year after the day the alleged conduct giving rise to the application occurred.

This dispute in a case called Ritlyn Investments Limited v. Estate of Armand Letestu arose in the context of a serious personal injury where the injury occurred in a rental unit.  The plaintiff died before the matter got to Court but in 2016 the Estate of the deceased sued the former landlord at the Superior Court for $500,000 in compensation based on alleged negligence. For some reason and in hindsight the root of this problem, the plaintiff pleaded that the landlord failed to maintain the unit, and therefore was negligent causing the injury.  Before trial, the defendant smartly filed a motion asking for the claim to be dismissed based on the one-year limitation period in the RTA having run.  Well, the plaintiff's ran into the wrong motions judge.  The motion was granted, the matter was found to be governed by the rules of the RTA including its limitation period, and was dismissed as being out of time, brought more than one year from the date of the incident.

I had been following the case from the start, and had thought the outcome from the motions judge was perverse.  I felt that the motions judge needed to look at the true nature, context and texture of the claim, often referred to as the essential character of the dispute.  I also felt that the motions judge should have given more weight to the Occupiers' Liability Act and not just focus on the fact the alleged negligence happened to occur in a rental unit.

I remember thinking at the time that someone was going to appeal the dismissal to the Ontario Court of Appeal (the "OCA") and it's going to be reversed, as you really can't take a $500,000 personal injury case and apply RTA rules and process to it.

And sure enough, in 2017 the Estate appealed the motion judge's decision to the OCA.  After the appeal was heard, the OCA overturned the decision of the motion judge, and decided the claim could proceed as the applicable limitation period was two years.  I remember reading the OCA decision, and thinking how badly the decision was written and how that might not be the end of it. The OCA decision read in part:

"While we express no opinion on the result in Efrach. We disagree with the conclusion that the one year limitation period for applications to the Board applies to actions before the Superior Court for non-repair. The motion judge here erred in following the reasoning in Efrach and concluding that the court lacked jurisdiction over the action."

So the central issue was the one year limitation period in s.29(2) of the RTA, and the OCA disagreed with the reasoning in a case called Efrach.  But....they never analyzed it and said WHY they disagreed with the reasoning in Efrach.  I think they just wanted to reverse the decision because the previous result was so perverse and shouldn't stand as a precedent. In my opinion the Court was intellectually lazy.

Tied up in all this is s.207 of the RTA which allows a landlord and tenant case with a claim for more than $25,000 to be decided by a judge at Superior Court instead of at the LTB.  However s.207 says that the same rules and statute apply when deciding it.  It seems clear to me that in those rare cases when s.207 of the RTA allows the matter to go to the Superior Court for adjudication, that the Superior Court can't pick and chose which parts of the RTA to follow.  They have to follow the statutory wording of the RTA rigidly which includes the one year limitation period.

Following the reversal at the OCA, the defendant asked for permission to bring the case to the Supreme Court of Canada.  That's called a "leave" application.  This morning I read that the Supreme Court of Canada denied the defendant leave to appeal.  Reasons for denying leave are rarely if ever given. The Supreme Court's refusal to hear the appeal means the all is now well in the world of personal injury law and the trial can go ahead.

So we are now in a situation where the decision from the OCA stands.  The one-year limitation period in the RTA somehow does NOT apply to cases for greater than $25,000 going to the Superior Court and adjudicated under the RTA's s.207 provisions.  But we don’t have a clue as to why.

Now you might say I'm being pedantic, that the right thing happened here for the wrong reason.  After all, how often will this happen?  But a similar thing happens a lot in Small Claims Court which is part of the Superior Court of Justice.  Tenants who have missed the one year limitation period under the RTA at the LTB re-file the claim at Small Claims Court, hoping that the general two year limitation period from Ontario's Limitations Act will apply.  I’ve successfully defended a claim at Small Claims Court brought against my client by a former tenant 18 months after the tenant moved out, arguing that regardless of where it’s heard, the 1 year period applies.  That was then.  Now I just don’t know.

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