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RTA - Common Law. Li v. Yuen Ming Ma
In Li v. Yuen Ming Ma (Ont Div Ct, 2025) the Ontario Divisional Court dismissed an RTA s.210 landlord's appeal, here brought against an order that found "the landlord had retained the tenant’s money illegally ... because he failed to return the payment for last month’s rent the tenant had provided at the outset of the tenancy" despite the LL's damages set-off argument.
Here the court considers the application of the common law in RTA-LTB proceedings [s.17 'Covenants interdependent']:Did the Board err in refusing to consider equitable set-off and expectation damages?
[15] The landlord submits the Board erred by refusing to consider his own damages caused by the tenant’s breach, both as equitable set-off and expectation damages. During the hearing, the Board member refused to allow the landlord to submit evidence of damages caused by the tenant’s early termination of the lease.
[16] I do not find any error in the Board’s approach. The landlord relies on s. 17 of the RTA to argue the Board was able and required to apply common law damages principles. Section 17 allows the Board to apply common law rules in certain circumstances. It provides:s.17 Except as otherwise provided in this Act, the common law rules respecting the effect of a serious, substantial or fundamental breach of a material covenant by one party to a contract on the obligation to perform of the other party apply with respect to tenancy agreements. (emphasis added) [17] Section 17 does not capture the circumstances before the Board. Leaving aside whether the Board can apply equitable principles, s.17 only applies “except as otherwise provided” in the RTA. But the RTA has specific provisions that deal with the circumstances here. Section 88 addresses the payment owed by a tenant who vacates without giving sufficient notice. The Board properly applied s.88 in this case to conclude the tenant was owed the return of $1,300. Section 88.1 permits a landlord to apply to the Board for an order requiring a tenant or former tenant to pay costs, including where the tenant interfered with a “lawful right, privilege or interest of the landlord.” However, the landlord did not apply to the Board under s.81.1, so the Board was not required to consider the landlord’s claims for other losses. This ground of appeal is dismissed.
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