Failure to Vacate on Notice (N12)

Caselaw.Ninja, Riverview Group Publishing 2021 ©
Date Retrieved:	2024-04-25
CLNP Page ID:	1609
Page Categories:	[Personal Use Application (LTB)]
Citation:	Failure to Vacate on Notice (N12), CLNP 1609, <7U>, retrieved on 2024-04-25
Editor:	Sharvey
Last Updated:	2022/06/17

PE Real Estate v. Kelly 2021 ONSC 4661, RVGP 259 (ONSCDC)

[5] ... The initial closing date for the sale transaction was scheduled on August 3. 2018.

[6] The purchaser's stated intention was to reside at the subject premises on acquisition of the property. Accordingly, the landlord commenced the process prescribed pursuant to s. 49(1) of the RTA, to obtain possession of the leased premises on behalf of the purchaser. On May 31, 2019, the landlord served the tenants with a written notice of termination for the purchaser's own use effective July 31, 2018. This date was three days before the closure of the sale agreement.

[...]

[10] As a result of the tenants' decision not to vacate, it was necessary for the landlord to obtain a hearing date from the LTB by filing an application to end the tenancy and evict the tenants. While the landlord could have made such an application on or about May 31, 2018, or at any time thereafter, no such application was filed until July 31, 2018.

[11] As a result of the fact that the appelants were not going to be vacating the subject property by the original closing date, the respondent could not provide the purchaser wth vacant possession on August 3, 2018. Accordingly, the respondent negotiated an extension of the closign date with the purchaser on new terms. Those terms included extending the closing date to September 4, 2018. As well, the landlord incurred a negotiated penalty of $4,000, plus additional costs such as legal fees, property taxes, and other related expenses.

[...]

[17] The thrust of the landlord's claim was two-fold. Firstly, the landlord sought damages because the tenants' action of not vacating the premises before the closing date of the sale on August 3, 2018 caused the landlord to breach the contract of sale with the purchaser. As a result, the landlord suffered damages in several enumerated respects.

[18] Secondly, the landlord asserted that while the RTA provided the tenants with the right to challenge the termination of the lease, the Act itself only deals with issues relating thereto, but does not have jurisdiction over the type of damages the landlord suffered vis a vis the requirement to extend the closing date with the purchaser.

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[31] I find that the deputy judge erred in law in concluding the landlord had a cause of action.

[32] The RTA sets out a complete code dealing with the termination of a tenancy. Section 49(1) of the RTA provides for an eviction mechanism when a landlord is required to terminate a tenancy as a result of a sale to a purchaser who, in good faith, requires possession of the leased property for their own occupation.

[33] It was an error to attribute responsibility (and by extension legal liability) to the tenants as a result of the landlord having to extend the closing date of the transaction for several reasons.

[34] The agreement of purchase and sale was made between the landlord and the purchaser. In no way did that agreement create any legal obligation on the tenant.

[35] Only the landlord could trigger a hearing before the LTB to effect an eviction.

[36] A tenant with a notice to vacate has the right to either vacate in accordance with the notice or challenge the eviction. If a tenant does not vacate (like in this case), the landlord has a statutory right to make an application for an eviction order under s. 43(1) and s. 69(1) of the RTA. Once a notice is given, an application can be made by a landlord to the LTB at any time for an eviction hearing.

[37] In this case, the landlord could have made such an application at any time after May 31, 2018. However, the landlord made the application on July 31, 2018.

[38] The powers of teh LTB are extensive and are prescribed in s. 83 of the RTA. They include the power to grant an eviction, delay, or postpone same: see s. 83(1)(a)&(b). The LTB can also make an order for arrears.

[39] I have concluded that the deputy judge made a number of palpable and overriding errors in her interpretation of the RTA and her conclusion that the tenants were liable for failing to give the landlord sufficient notice of teh intention to challenge the May 31, 2019 eviction notice.

[40] To reiterate, the RTA creates no obligation on tenants to provide notice of intention to challenge the eviction notice. Notwithstanding that, the deputy judge determined that if the tenants were having issues, they "should have provided that information to teh landlord ahead of time; rather than the day before the notice was to take effect." The deputy judge imposed a notice obligation on hte tenants when no such obligation is required in the RTA. That is, she erred in attributing "fault" or legal "responsibility" to the tenants in waiting until just before the termination date set out in the notice to indicate they were not vacating. The tenants were under no obligation pursuant to the RTA to indicate their intention not to vacate by any specific date, or during any specific time period. In reviewing the transcript, it is evident that the deputy judge did not fully appreciate that the obligation to take the necessary steps to evict pursuant to the RTA rests solely with the landlord.

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[41] The deputy judge erroneously concluded that, as part of the statutory process for eviction, the tenants were obligated to give notice of their intention to challenge the eviction notice at an earlier (unspecified) date. However, the RTA does not prescribe a timeline or deadline by which a tenant must give notice of an intention to challenge an eviction notice. It was an error to conclude there was any timeline or deadline, or that there was a shared legal responsibility in that respect.

[42] Pursuant to s. 71 of the RTA, a landlord can make application to the LTB immediately upon giving notice of eviction under s. 69 of the RTA. Given this provision, it was an error in law for the deputy judge to conclude that the tenants were in any way required to give notice - reasonable or otherwise. The landlord had control of the process by law and failed to take steps in a timely manner to appear before the LTB. [...]

[43] The deputy judge erred in interpreting the Act in a manner that ignored, or otherwise disregarded, the statutory and unambiguous rights of the tenants to challenge the eviction notice by not vacating the premises. Section 43 of the RTA provides a tenant who receives a notice of termination the right to refuse to vacate the premises until there is an order by the LTB terminating the tenancy and evicting the tenant. By her ruling, the deputy judge shifted the responsibility from the landlord to give notice of eviction and proceed to the LTB in a timely manner to a joint responsibility that includes an obligation for tenants to state their intention. This is contrary to the provision of s. 43 of the RTA.

[44] Section 37(1) of the RTA provides that a tenancy may be terminated only in accordance with the Act.

[45] Pursuant to the order of the LTB dated August 20, 2018, the tenancy between the parties did not legally terminate until August 26, 2018.

[46] It was patently unreasonable for the deputy judge to hold the tenants liable for not vacating the premises during the term of the tenancy.

[47] It was an error to hold the tenants liable to the landlord with respect to its dealings with a third party without a finding that the tenants violated the RTA in any manner.

[48] The deputy judge found that the tenants "knew or ought to have known that the landlord required vacant possession." That phrasing denotes that the tenants had some type of legal obligation to the landlord regarding his dealings with the purchaser. No such duty existed in contract or tort. In the context of the statutory scheme for evictions of a tenant in the event of a bona fide sale to a third-party purchaser intending to use the premises, it was an error in law to conclude that the tenants' failure to act - to either notify earlier or vacate on or before July 31, 2018 - was actionable.

[49] The landlord's damages were not caused by the tenants' refusal to vacate the premises - an exercise of their statutory right to challenge the eviction notice. Rather, it was the failure of the landlord to take timely steps to ensure that the LTB hearing was conducted before the termination date (and by extension, the closing date). That caused the landlord to have to renegotiate the agreement of purchase and sale.

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[58] The deputy judge erred in not concluding that the minutes of settlement resolved all issues arising out of the tenancy. It was an overriding and palpable error to find that a cause of action existed outside the regime of the RTA.

[59] The agreement of purchase and sale was between the landlord and a third party. The tenants were in no way a party (legally or beneficially) to that transaction.

[60] But for the application to the LTB, there could be no issue for the landlord being unable to provide the purchaser with vacant possession on August 4, 2018.

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[64] The RTA regulations and the LTB rules prescribe a complete code governing when a tenant may be liable. The listing of those conditions is limiting.

[65] There is nothing in the RTA addressing "forced delays in selling the property." The failure to include that consideration in the RTA does not mean that, by default, a common law entitlement to make such a claim exists.

[66] Furthermore, and, in any event, there can be no common law claim for such damages on the evidence of this case.

[67] The deputy judge refers to the date of notice which, in her view, was an actionable delay caused by the tenants' exercise of their statutory right to challenge the eviction notice. All of that is grounded in an interpretation of the wording of the scheme and the provisions available pursuant to the RTA that allow a landlord to evict a tenant for a purchaser of the leased premises. It cannot be both ways. If the claim is grounded in the Act, then the minutes of settlement and resultant LTB order are a complete resolution of all issues.

[68] Alternatively, if the landlord is correct and the board cannot rule on "damages" for forced delays in selling the property, then the deputy judge committed different errors in law. That is, she grounded a claim for damages in either a non-referenced statute, or a common law duty of care or contract not covered by the RTA. In either way, she committed a reversible error.

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[71] I reject the landlord's submission that the failure of the tenants to raise the issue of the landlords' subsequently filed claim for damages before the LTB provides a basis for its claim. No party can be required to raise a jurisdictional issue in anticipation of a claim in a different legal jurisdiction that has not even been contemplated or filed.

[72] In any event, such a "failure" cannot legally confer jurisdiction on the Small Claims Court judge to award damages at common law when no such jurisdiction exists."