Exclusive Possession (Non-RTA)

Caselaw.Ninja, Riverview Group Publishing 2021 ©
Date Retrieved:	2024-11-26
CLNP Page ID:	1975
Page Categories:	[RTA Exempt Tenancies], [Eviction (Commercial Tenancy)]
Citation:	Exclusive Possession (Non-RTA), CLNP 1975, <>, retrieved on 2024-11-26
Editor:	Sharvey
Last Updated:	2022/08/29

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Commercial Tenancies Act, R.S.O. 1990, c. L.7

1 In this Act,

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“landlord” includes a person who is lessor, owner, the person giving or permitting the occupation of the premises in question, and these persons’ heirs and assigns and legal representatives, and in Parts II and III also includes the person entitled to possession of the premises; (“locateur”)

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“tenant” includes a person who is lessee, occupant, sub-tenant, under-tenant, and the person’s assigns and legal representatives. (“locataire”)

2 This Act does not apply to tenancies and tenancy agreements to which the Residential Tenancies Act, 2006 applies. 1997, c. 24, s. 213 (3); 2006, c. 17, s. 247.

2.1 This Act does not apply with respect to a property in which the Crown in right of Ontario has an interest if one of the following circumstances applies in respect of the property:

1. The property was forfeited to the Crown in right of Ontario under any Ontario statute or the Criminal Code (Canada).

2. Possession of the property has been or may be taken in the name of the Crown in right of Ontario under the Escheats Act, 2015.

3. The property is forfeited corporate property to which the Forfeited Corporate Property Act, 2015 applies. 2015, c. 38, Sched. 7, s. 46.

3 The relation of landlord and tenant does not depend on tenure, and a reversion in the lessor is not necessary in order to create the relation of landlord and tenant, or to make applicable the incidents by law belonging to that relation; nor is it necessary, in order to give a landlord the right of distress, that there is an agreement for that purpose between the parties. R.S.O. 1990, c. L.7, s. 3.

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MacKinnon Estate v. MacKinnon, 2010 ONCA 170 (CanLII)

[46] In the end, as I see it, this case turns on the first of those questions, namely, whether Duke and Fanny occupied the property as tenants at will. The answer to that question lies in the nature of the relationship that existed between Duke and his sisters, Mercy and Flora, under the original arrangement by which Duke occupied the property and thereafter, the nature of the relationship that existed between Fanny and her sons, Charles and Warren, under the arrangement by which Fanny occupied the property.

[47] Did Duke and Fanny occupy the property as tenants at will or as licensees? The distinction between the two legal concepts is important in possessory title claims because a tenancy at will creates an estate or interest in the land, whereas a licence to use the land does not, although it may give rise to contractual rights (see Street v. Mountford, [1985] 2 All E.R. 289 at 291 and Errington at p. 154).

[48] For present purposes, s. 5(7) of the Act only comes into play if Duke and Fanny occupied the property as tenants at will. The right of recovery contemplated by that provision carries with it the notion that either the person or persons seeking recovery, or their predecessors, have conveyed an estate or interest in the land. If no such estate has passed, as is the case where the property is occupied pursuant to a licence, there is nothing to be reclaimed.

[49] What then is a tenant at will and what distinguishes a tenancy from a licensee? In Ocean Harvesters, at p. 686 Dickson J. explained that “[A] tenancy at will is created when one person permits another to occupy lands on the agreement, express or implied, that the tenancy is determinable at the will of either”. He further observed at p. 687 that “[E]exclusive possession by the tenant is essential to the demise and the statute will not bar the owner unless the owner is out of possession”.

[50] As for the distinction between a tenant and licensee, at pp. 687-88 Dickson J. adopted as correct the following statement of law expressed by Windeyer J. in Radiach at p. 222:

What then is the fundamental right which a tenant has that distinguishes his position from that of a licensee? It is an interest in land as distinct from a personal permission to enter the land and use it for some stipulated purpose or purposes. And how is it to be ascertained whether such an interest in land has been given? By seeing whether the grantee was given a legal right of exclusive possession of the land for a term or from year to year or for a life or lives. If he was, he is a tenant. [Emphasis in original.]

Rahimi v. Regional Assessment Commissioner, Region No. 9, 1997 CanLII 12097 (ON SC)

Tenancy or licence

Notwithstanding the applicants' submission that I should expound the words "rented" or "leased" in their grammatical and ordinary sense, counsel referred me to no fewer than 15 legal authorities to assist the court with the interpretation of "leased" and several authoritative dictionary definitions and judicial pronouncements on the meaning of "rented". In my view, I need go no further on the question of tenancy than the decision of the House of Lords in Street v. Mountford, [1985] A.C. 809, [1985] 2 All E.R. 289 (H.L.), which establishes the test for a tenancy at common law. The hallmarks of a tenancy are exclusive possession for a term at a rent. But, as I read this case, the court there determined that if the agreement confers on the occupier exclusive possession, this is prima facie a grant of an interest in land. The question to be asked and answered is what is the fundamental right that the occupier has secured? The House of Lords adopted at p. 827 the summary of the issue as stated in a decision of the Australian High Court in Radaich v. Smith (1959), 101 C.L.R. 209 at p. 222:

What then is the fundamental right which a tenant has that distinguishes his position from that of a licensee? It is an interest in land as distinct from a personal permission to enter the land and use it for some stipulated purpose or purposes. And how is it to be ascertained whether such an interest in land has been given? By seeing whether the grantee was given a legal right of exclusive possession of the land for a term. If he was, he is a tenant. And he cannot be other than a tenant, because a legal right of exclusive possession is a tenancy and the creation of such a right is a demise. A reservation to the landlord, either by contract or statute, of a limited right of entry, as for example to view or repair, is, of course not inconsistent with the grant of exclusive possession. Subject to such reservations, a tenant for a term or from year to year or for a life or lives can exclude his landlord as well as strangers from the demised premises . . .

In my view, Street v. Mountford stands for the proposition that, while the parties may call it otherwise, the grant of exclusive possession is the singular distinguishing feature between a licence and a lease. It is true that exclusive possession is not decisive. The court may well find exceptional circumstances which, notwithstanding exclusive possession, negative an intention to create the legal relationship of landlord and tenant: Errington v. Errington, [1952] 1 K.B. 290, [1952] 1 All E.R. 149 (C.A.); Booker v. Palmer, [1942] 2 All E.R. 674, 87 Sol. Jo. 30 (C.A.); Cobb v. Lane, [1952] 1 All E.R. 1199, [1952] 1 T.L.R. 1037 (C.A.). These cases are explained by Denning L.J. in Facchini v. Bryson, [1952] 1 T.L.R. 1386 at pp. 1389-90, 96 Sol. Jo. 395 (C.A.), as follows:

In all the cases where an occupier has been held to be a licensee there has been something in the circumstances, such as a family arrangement, an act of friendship or generosity, or such like to negative any intention to create a tenancy . . .

Naegele v. Oke, 1916 CanLII 577 (ON CA)

Page 504:

Neither can the arrangement be construed to be a lease, though the parties so characterise it, for it is of the essence of a lease that the lessee acquire the exclusive possession of the leased premises: Watkins v. Milton-next-Gravesend Overseers (1868), L.R. 3 Q.B. 350; Glenwood Lumber Co. v. Phillips, [1904] A.C. 405. No exclusive possession of any part of Halliday's lands was acquired by Naegele.

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The written agreement of September, 1911, is, I think, to be construed as relating to the existing ram and pipes and to their then use for supplying water to lot 13. The evidence shews clearly that it was drawn to confirm and continue that which had been in existence and in actual use under an oral agreement for seven or eight Years, and was not a general right to take water. That which the plaintiff Naegele acquired under his agreement with the Hallidays was, therefore, I think, a license personal to himself, good for 49 years, subject to earlier determination by his death, or because he was no longer in occupation of the Naegele farm, so as to enable him to enjoy the benefits of the license.

No estate in the lands of Halliday (or Oke) was acquired by Naegele. The license does not include " assigns," and so "was not transferable.

At the time this action was instituted, Francis Naegele had sold the lands to which the hydraulic ram conveyed the water, and Pitblado, the purchaser, was in possession, so that, on the date when the writ was issued, he (Francis) had no rights capable of enforcement by the Court.

As Naegele's interest amounts only to a personal license by his grantors and not to any estate or interest in the lands of his grantors, I do not think that Oke was in any way bound (even with notice) by the license granted by his predecessor in title. The right was a personal right given by the Hallidays to Naegele. Not being an interest in the lands, Oke on his purchase took the land clear of any right or license.

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Gottardo Properties (Dome) Inc. v. Toronto (City of), 1998 CanLII 6184 (ON CA)

[31] The licensees suggested that their occupancy of the SkyBoxes was too transient to be assessable. I would not give effect to this argument. Whether occupancy is transient or permanent depends on the context. Realistically the SkyBoxes are used only during sports and other entertainment events at the SkyDome. In that context the licensees' occupancy of the boxes is sufficiently permanent to be assessable.

[32] A second and important qualification on assessable occupancy or use turns on the concept of exclusivity. Although the requirement of exclusivity permeates the caselaw there have been few judicial explanations of the concept. In my view, the explanations that have been offered are not entirely satisfactory because they do not determine assessability when there is simultaneous occupancy. One explanation suggests that the exclusivity required is not absolute exclusivity but is related to the purpose of the occupancy or use. The occupancy or use must be sufficiently exclusive to permit the occupant to carry out the purpose for which it acquired an interest in the land. As Krever J. observed in Saga, supra, at p.78:

It is not difficult to discern in the case law the need for the exclusiveness of the occupation or use to be related to the purpose for which the land is occupied or used ...

[33] Similarly, Widdicombe et al., Ryde on Rating 13th ed. (1976), a leading English text on assessment states at p. 27: "that one of the ingredients of rateable occupation is that the occupation must be exclusive for the particular purposes of the possessor. ... Occupation is exclusive if the occupier can exclude all other persons from using the land in the same way as he does."

Razor Management Inc. v. Municipal Property Assessment Corporation, 2018 ONSC 3042 (CanLII)

[15] In determining a landlord and tenant relationship, the principles set out in Exchange Corp. Canada Inc. v. Mississauga (City), [2014] O.J. No. 694, 2014 ONCA 113, 2014 CarswellOnt 1526 ("Exchange Corp.") are instructive. In that case, at para. 22, the court cites British American Oil Co. v. DePass, 1959 CanLII 125 (ON CA), [1960] O.R. 71, [1959] O.J. No. 710 (C.A.) for the principle that whether an agreement creates the relationship of landlord and tenant or merely that of licensor and licensee will depend on the intention of the parties as ascertained by a review of the document.

[16] The Divisional Court in the Exchange Corp. case identified the following elements in distinguishing a tenancy from a licence agreement: (i) the creation or transmission of an estate in the tenant and a transfer of control of the premises to the tenant (at para. 9); (ii) exclusive possession granted to the tenant in relation to the purpose for which occupation is intended; and (iii) restrictions imposed on the tenant to the extent that they undermine the exclusivity of possession (at para. 23).

[17] For the reasons that follow, I find that RMI is a tenant within the extended meaning of the definition of tenant in the statute. Consequently, the licensed land is liable to assessment and taxation.

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[20] Regarding the licence agreement between the parties, RMI submits that the agreement is referred to as a "licence" agreement, not a lease, the parties are referred to throughout the agreement as the "licensor" and the "licensee", and there is a prohibition against an interpretation of the agreement or any clause in a way that creates a different relationship between the parties. However, in a document pre-dating the licence agreement, dated October 26, 2011, which sets out recommendations for a shared use agreement between the parties, reference is made to a "possible Five Year lease renewal". The nature of the relationship created by the instrument under examination depends on the substance of the instrument and not its form or the form of the expressions used in it: Chatham (City) v. Raleigh (Township), 1964 CanLII 131 (ON SC), [1965] 1 O.R. 168, [1964] O.J. No. 816 (H.C.J.) ("Chatham (City)").

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[23] As noted, "tenant" for the purposes of the Assessment Act, includes an "occupant" and the person in possession other than the owner. In Mount Sinai Hospital v. Municipal Property Assessment Corp., [2003] O.J. 4295, [2003] O.T.C. 970, 126 A.C.W.S. (3d) 553 (S.C.J.), at para. 9, Karakatsanis J. set out the essential elements for rateable occupation, namely, (i) actual occupation; [page395] (ii) exclusivity for the particular purposes of the possessor; (iii) value or benefit to the possessor; and (iv) permanence (citing David Widdicombe, et al., Ryde on Rating, 13th ed. (London, Butterworths, 1976), at 26-27).

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[35] In Gottardo, Laskin J.A. held, at para. 29, that mere transient use is not assessable. There must be some degree of permanence in the usage. I find that both parties meet the permanence test. The TDSB owns the licensed land on which the sports facility is situated. On that land it operates Monarch Park Public School and no evidence was led to suggest that it will not be operating this secondary school on these premises for the foreseeable future.

[36] The initial term of the licence granted to RMI, being 21 years less two days, is of considerable duration. RMI also has [page398] an office and personnel on the licensed land, who, according to the sworn evidence of Mr. Raizenne, are there all day, every day.

Keith Whitney Homes Society v. Payne, 1992 CanLII 7691 (ON SC)

The residents were required to sign a licensing agreement. The licensing agreement required the resident to pay rent monthly according to his or her financial capability and provided that if the rent was not paid on time this was deemed to be notice by the resident that he or she intended to vacate the premises. The agreement also contained rules of conduct.

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I accordingly conclude that the applicant's premises are not residential premises within the definition of the Landlord and Tenant Act.

The second issue

The next issue that I must determine is whether the right of occupation given to Mr. Payne is in the nature of a licence or of a tenancy.

The law on the second issue

I have been referred to Donald Lamont's helpful work, Residential Tenancies , 4th ed. (Toronto: Carswell, 1983) where the author discusses at pp. 14-15 the distinction between the relationship of landlord and tenant on the one hand and licensor and licensee on the other. It is suggested that in considering this problem I must have regard to more than whether the resident has exclusive possession of the premises. In this case there is no question that the respondent has exclusive possession of his bedroom subject to the applicant's right to inspect on an annual basis. However, I must also consider whether the applicant is subject to rules restricting his use of the premises and, more fundamentally, the intention of the parties as expressed in the agreement which they have made.

In the case before me, the agreement between the parties which is to be found at Exhibit A to the affidavit of the respondent filed under Tab 8 of the application record is very much more than a lease. As previously noted, it provides for building rules and a host of other regulations, including an extensive section on conflict and dispute resolution.

I conclude that the agreement between the parties was intended to be an agreement for far more than the use by Mr. Payne of a designated room within the applicant's premises. It was an agreement whereby Mr. Payne would be admitted to a community, expected to participate in the decisions of the community and to be governed by its rules. To that extent the applicant and the respondent intended to create an agreement that was personal in nature.

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The applicant has referred me to the decision of Doyle Co. Ct. J. in Maxwell v. Brown (1982), 1982 CanLII 2161 (ON SC), 35 O.R. (2d) 770 (Ct. Ct.) and the authorities and cases reviewed by him in that decision.

That case concerned whether the Act applied to the relationship between the occupant of a room in a rooming house and the owner of the house. The learned judge relied upon decisions of Lord Denning M.R. in Abbeyfield (Harpenden) Society Ltd. v. Woods , [1968] 1 All E.R. 325, [1968] 1 W.L.R. 374 (C.A.) and Marchant v. Charters , [1977] 3 All E.R. 918, [1977] 1 W.L.R. 1181 (C.A.), to support his conclusion that the occupant in the case before him did not have a sufficient stake in his room to bring him within the Act and was a mere licensee.

The troublesome question of tenancy or licence was reviewed thoroughly by the House of Lords in the recent case of Street v. Mountford, [1985] 2 All E.R. 289, [1985] 2 W.L.R. 877. Lord Templeman, with whose opinion the other members of the panel concurred, suggest that the decisions in Abbeyfield and Marchant were sustainable on the grounds that the occupier was a lodger and did not enjoy exclusive possession. At p. 299 All E.R. His Lordship said:

But in my opinion, in order to ascertain the nature and quality of the occupancy and to see whether the occupier has or has not a stake in the room or only permission for himself personally to occupy, the court must decide whether on its true construction the agreement confers on the occupier exclusive possession. If exclusive possession at a rent for a term does not constitute a tenancy then the distinction between a contractual tenancy and a contractual licence of land becomes wholly unidentifiable.

In dealing with the suggestion that it is the intention of the parties that is to be determined, His Lordship said at p. 300:

My Lords, the only intention which is relevant is the intention demonstrated by the agreement to grant exclusive possession for a term at a rent.

His Lordship was of the opinion that a tenancy arose whenever there was a grant of exclusive possession for a fixed or periodic term at a stated rent.

It was not suggested by the applicant that the respondent was a roomer. He was given exclusive possession of his room, and, together with other members of his "apartment", the kitchen, bathroom and living room, for so long as he paid the stipulated monthly rent.

It is clear that the parties cannot turn a tenancy into a licence merely by calling it one.

In this case, the parties called the agreement a licence, and it contained provisions not found in the usual form of lease. But it did give the respondent exclusive possession of accommodation for a term in return for rent, and applying the test in Street v. Mountford, supra, I find the respondent to be a tenant, and the relationship between the parties to be that of landlord and tenant.

I am prepared to hear submissions as to costs, but in the absence of an appointment being taken out for that purpose within ten days, costs shall be to the applicant.

Order accordingly.