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RTA - Definition "Tenant". Smith v. Gega
In Smith v. Gega (Div Court, 2023) the Divisional Court considered an appeal from an RTA decision which found that the appellant "did not meet the definition of “tenant” under section 2(1) of the Residential Tenancies Act, 2006 S.O. 2006, c.17 (“RTA”)", here in a RTA 51 ["Conversion to condominium, security of tenure"] termination and eviction application.
In these quotes the court considers whether the appellant was a "tenant" (which the court held to be a 'question of law') and focusses on the 'heirs' element of that definition::[18] The second issue involves an interpretation of s.51(1) of the RTA, and in particular, the meaning of “tenant” in that section when considered in the context of s.2(1). Section 2(1) defines tenant to include “heirs, assigns and personal representatives” of the tenant.
[19] This issue is a matter of law. The Landlords argue that this issue is a matter of mixed fact and law, but there are no factual findings that need to be made by me to consider this question.
RELEVANT STATUTES
[20] Section 2(1) of the RTA states:Interpretation
2 (1) In this Act, "tenant" includes a person who pays rent in return for the right to occupy a rental unit and includes the tenant's heirs, assigns and personal representatives, but "tenant" does not include a person who has the right to occupy a rental unit by virtue of being, (a) a co-owner of the residential complex in which the rental unit is located, or (b) a shareholder of a corporation that owns the residential complex; ("locataire") (emphasis added). [21] Section 51(1) of the RTA states:51 (1) If a part or all of a residential complex becomes subject to a registered declaration and description under the Condominium Act, 1998 or a predecessor of that Act on or after June 17, 1998, a landlord may not give a notice under section 48 or 49 to a person who was a tenant of a rental unit when it became subject to the registered declaration and description. 2006, c. 17, s. 51 (1) (emphasis added). [22] Smith states that the Board erred in its interpretation of the word “tenant” in section 2(1) of the RTA, and that therefore she remains protected and cannot now be evicted under section 51(1) of the Act.
[23] Smith also argues that if there is any uncertainty as to the intent of the legislature in utilizing the word “heirs” in section 2(1) of the RTA, I ought to favour an interpretation that has a tenant protection focus, recognizing the guidance received from the Court of Appeal in Honsberger v. Grant Lake Forest Resources Ltd. 2019 ONCA 44, para.19:This court has described the RTA as remedial legislation having a "tenant protection focus": Metropolitan Toronto Housing Authority v. Godwin, 2002 CanLII 41961 (ON CA), 161 O.A.C. 57 at para 19. As remedial legislation, the Act must receive "such fair, large and liberal construction and interpretation as will best ensure the attainment of the object of the Act according to its true intent, meaning and spirit". Position of the Landlords
[24] The Landlords state that Smith was not a tenant at the time that the Condominium Declaration was prepared in 2011, and that she therefore cannot be protected under section 51(1) of the RTA. They argue that Smith was essentially an unauthorized assignee of the unit after her mother died in 2018, but when the previous Landlord did not move to evict her after 60 days, a new month to month tenancy was created. The Landlords further submit that the legislature included the words “the tenant’s heirs” in section 2(1) of the Act to address situations where a tenant has died, and their heirs need to pursue proceedings against the landlord where warranted.
[25] In making this decision, I recognize and respect the specialized function of tribunals such as the Landlord and Tenant Board, as described by this court in Planet Energy (Ontario) Corp. v. Ontario Energy Board, 2020 ONSC 598 (CanLII) at paragraph 31:While the Court will ultimately review the interpretation of the Act on a standard of correctness, respect for the specialized function of the Board still remains important. One of the important messages in Vavilov is the need for the courts to respect the institutional design chosen by the Legislature when it has established an administrative tribunal (at para. 36). In the present case, the Court would be greatly assisted with its interpretive task if it had the assistance of the Board’s interpretation respecting the words of the Act, the general scheme of the Act and the policy objectives behind the provision. Analysis
Can a living tenant have “heirs” as defined in section 2(1) of the RTA?
[26] In its decision, the Landlord and Tenant Board found that Smith’s interpretation of section 2(1) "would essentially convert a tenancy into a property right that can be passed between heirs”. The Board then concluded that it did not believe the legislature would have intended this result, and instead, suggests that the legislature intended the use of the word “heirs” to incorporate scenarios where action needs to be taken on behalf of an estate, such as for the purpose of removing property from the unit.
[27] In this regard, the Board’s reasoning is similar to a previous decision from the Landlord and Tenant Board in 1500 Tansley C/O Lakeshore Management v. Smith, 2002 CarswellOnt 3788 (Ont. R.H.T.), in which Member Tinker stated at para. 6:With respect to an heir being included in the definition of tenant, there is no evidence that an heir simply steps into the shoes of the tenant with respect to the occupancy of a rental unit. I find that "heir" was included in the definition of tenant, in order for an estate to recover the deposit or interest on such a deposit, etc. Furthermore, no argument was presented as to whether a month to month tenancy can be considered real or personal property, i.e., something to inherit. [28] The legislation provides little assistance in determining which interpretation of the words “tenant’s heirs” was intended by the drafters of the legislation, nor is the purpose of including these words specified in the legislation. There is certainly no provision or direction that the term “tenant’s heirs” was included only for the purposes of litigation on behalf of the estate of a deceased tenant, as is being argued by the Landlords.
[29] Neither party was able to direct me to a case interpreting the language of “the tenant’s heirs” in section 2(1) of the RTA that involved a similar fact pattern to the present case, where the child of the parents was living with the parents in the apartment at the time the Condominium Declaration was delivered. It is therefore of assistance to review the treatment of the word “tenant” in other locations in the Act.
[30] In particular, it is noteworthy that the Act does specifically contemplate the rights of a tenant’s spouse upon their death. Subsection 3 (1) of the RTA states the following:In particular, it is noteworthy that the Act does specifically contemplate the rights of a tenant’s spouse upon their death. Subsection 3 (1) of the RTA states the following: 3(1) If a tenant of a rental unit dies and the rental unit is the principal residence of the spouse of that tenant, the spouse is included in the definition of “tenant” in subsection 2 (1) of the Act unless the spouse vacates the unit within the 30-day period described in subsection 91 (1) of the Act. (emphasis added) [31] The legislature has therefore taken very specific steps to ensure that a spouse of a tenant has the right to remain a tenant in the rental location after the main tenant has died. If the legislature had intended for children to also be included in the definition of tenant, section 3(1) would have been a natural place to include protections for children of tenants along with the spouse of a tenant. This was not done.
[32] Although I recognize the need to apply a fair, large and liberal construction and interpretation of the Act, I cannot ignore the true intent, meaning and spirit of the Act. Although the words “tenant’s heirs” do appear under the definition of tenant in section 2(1) of the Act, interpreting the phrase “tenant’s heirs” to include children living at the same time as the tenant does not fit with section 3(1) of the Act. The fact that section 3(1) is silent about children being included in the definition of tenant suggests that the legislature did not intend for children to be considered tenants in section 2(1) notwithstanding the use of the phrase “tenant’s heirs” in the definition of “tenant”.
[33] It would have been helpful, and less confusing, if the legislature had precisely stated the reason for including “tenant’s heirs” in the definition of tenant under section 2(1). But since the section provides no further guidance with respect to interpreting these words, I must consider the overall framework of the Act. I can see no specific purpose for interpreting “tenant’s heirs” to include children of a living tenant, which is the interpretation of the section that Smith is encouraging me to adopt.
[34] Smith also argues that the use of the words "tenant's heirs" must be read in conjunction with the legislature's reference to "members of a household" used in section 22 of the RTA. The language of section 22 is as follows:Landlord not to interfere with reasonable enjoyment
22 A landlord shall not at any time during a tenant’s occupancy of a rental unit and before the day on which an order evicting the tenant is executed substantially interfere with the reasonable enjoyment of the rental unit or the residential complex in which it is located for all usual purposes by a tenant or members of his or her household. 2006, c. 17, s. 22. [35] Smith argues that the legislature did not intend for remote or distant heirs who do not have a close connection with a subject property to be classified as a "tenant", but rather, intended the phrase “tenant’s heirs” to include members of a household who are living with the tenant, which is consistent with the language in section 22 of the RTA.
[36] Smith’s analysis pertaining to section 22 of the RTA requires the addition of the words “who are living with the tenant” to the words “tenant’s heirs” in section 2(1). The legislature could have added these words if the intention had been to allow children living with a tenant to be included in the definition of “tenant”. I must interpret the legislation by considering the plain, ordinary use of the words, and resist the temptation to add in qualifying words or language that was not included by the drafters of the legislation.
DOES SMITH’S INTERPRETATION OF “HEIRS” CREATE A PROPERTY RIGHT IN A RENTAL UNIT THAT CAN BE INHERITED?
[37] Smith argues that the Board was incorrect when it concluded that including “heirs” in the plain text definition of “tenant” would create a property right that can be passed between heirs. Smith states that a “property right” is defined in Black's Law Dictionary as "the rights given to the person or persons who have a right to own the property through purchase or bequest." This definition indicates that a property right coincides with the ownership of a property, or the bequest of ownership of a property through a will or inheritance. As Smith was, and continues to be, a person paying rent, there is no suggestion that she or her parents had ownership of the unit. There is no dispute about this fact.
[38] However, I read the Board’s decision to indicate that if heirs can be automatically considered as tenants under the lease, that would create a situation akin to property rights, which cannot exist in a rental situation. This is an important point to consider, and weighs against the interpretation of “tenant’s heirs” that is being suggested by Smith. . Maple Leaf Acres Members’ Association v Ellig
In Maple Leaf Acres Members’ Association v Ellig (Div Court, 2023) the Divisional Court considered a mobile-home, non-profit corporation landlord's RTA s.9 appeal of a finding that the Act applied to them. The case turned centrally on the definition of "tenant" which reads:“tenant” includes a person who pays rent in return for the right to occupy a rental unit and includes the tenant’s heirs, assigns and personal representatives, but “tenant” does not include a person who has the right to occupy a rental unit by virtue of being,
(a) a co-owner of the residential complex in which the rental unit is located, or
(b) a shareholder of a corporation that owns the residential complex; .....
[11] Except as otherwise provided in the RTA, that legislation applies to all “rental units” in “residential complexes” despite any term in a tenancy agreement that suggests otherwise: RTA, s. 3(1). Subject to certain statutory exceptions, the following terms are defined in s. 2(1):a. A “residential complex” includes a mobile home park;
b. A “rental unit” means any living accommodation (including a site for a mobile home) used or intended for use as residential premises;
c. A “landlord” includes the owner of a rental unit or any other person who permits occupancy of a rental unit;
d. A “tenant” includes a person who pays rent in return for the right to occupy a rental unit; and
e. “Rent” includes the amount of any consideration paid by a tenant to a landlord for the right to occupy a rental unit and for certain ancillary services, facilities and privileges. [12] In his application to the Board, Mr. Ellig argued that the monthly amount he paid to the Association constituted “rent”. Therefore, he was a “tenant’ within the meaning of the RTA, establishing a landlord and tenant relationship between the parties. He disputed that any statutory exception applied, with the result that the RTA applied to his relationship with the Association.
....
[15] In its decision, the Board accepted Mr. Ellig’s submission that he was a “tenant” who paid “rent” to the Association to occupy a “rental unit” (the mobile home site) in a “residential complex” (the mobile home park), which established a landlord and tenant relationship between the parties: Board decision, at paras. 21-22. The Board rejected the Association’s submission that the parties’ relationship fell within an exclusion from the RTA’s application, stating that it was not persuaded that membership in the Association was tantamount to being a shareholder: at paras. 15-16.
....
V. Interpretation of “shareholder”
[24] In this appeal, the Association raises the issue of whether the Board erred in law in its interpretation of the term “shareholder” in the definition of “tenant” in s. 2(1) of the RTA. Determination of that issue is a question of statutory interpretation.
....
D. Analysis and conclusion
[50] As explained below, I have concluded that the Board did not err in law in interpreting the term “shareholder” in clause (b) of the definition of “tenant” in s. 2(1) of the RTA as not including a member of a not-for-profit corporation without share capital.
[51] In the Board’s decision, at paras. 21-22, the Board found that Mr. Ellig pays “rent” to the Association, consisting of the fee he is required to pay for the right to occupy a mobile home site (being a “rental unit”) in the Association’s mobile home park (being a “residential complex”). On that basis, Mr. Ellig would be in a landlord and tenant relationship with the Association unless he falls within an exclusion from the “tenant” definition because he is a “shareholder” by reason of being a “member” of the Association. With the latter qualification, I understand that the Association does not challenge that conclusion, which in any case would be a question of mixed fact and law that is not reviewable by this court.
[52] The error that the Association alleges relates to the interpretation of the term “shareholder” in the exclusionary language of the “tenant” definition. There is no dispute that this issue raises a question of law reviewable on a correctness standard. The Association has the burden of establishing that the required standard has not been met.
[53] In applying the textual/contextual/purposive approach to statutory interpretation set out in Rizzo and Blue Star Trailer, the starting point is to consider the ordinary or plain language of the legislation: Blue Star Trailer, at para. 24. Consideration should also be given to the context of the legislative language and the purpose of the legislation: Blue Star Trailer, at para. 25.
[54] Although the Board’s analysis in the decision under review was rudimentary in nature, the approach that it took to the interpretation of “shareholder” was consistent with those principles. I see no legal error in the Board’s conclusions that would justify appellate intervention.
[55] While the Board did not refer specifically to the purposes of the RTA as set in s. 1, the Board as an administrative decision maker would be familiar with the legislation it was charged with administering and the interests of the parties that the legislation were intended to protect. As stated in s. 1, the legislation’s purposes included “to provide protection for residential tenants from unlawful rent increases and unlawful evictions” and “to balance the rights and responsibilities of residential landlords and tenants”. As noted in Matthews, at para. 23, the purpose of extending the protections in the RTA to mobile home site leases was to provide the lessees “with security of tenure and other protections” available to them under the RTA. Those protections would be of particular significance to a leaseholder (like Mr. Ellig) whose lease expires in less than a year and whose rights as a member depend on his continued status as a leaseholder.
[56] In the Board decision, at paras. 10-11, after setting out the definition of “tenant” in s. 2(1), the Board referred to Mr. Ellig’s rights as a member that (according to the Association) did not “have the hallmarks of a typical landlord and tenant relationship”. At para. 12, the Board acknowledged the Association’s position that “a member of non profit corporation without share capital is akin to a shareholder and therefore not a tenant under the Act”. Elsewhere in the decision, the Board also referred to members’ rights that the Association argued were analogous to those of shareholders: at paras. 3, 15, 16, 18, 20, 22.
[57] In its decision, at para. 15, the Board recognized that the literal words of the exclusionary language in the definition of “tenant” apply to a “shareholder”, which does not specifically refer to a “member”. Having considered the Association’s submissions (including those relating to nature of members’ rights), the adjudicator concluded that “I do not find the terms ‘member’ and ‘shareholder’ to be interchangeable.” The adjudicator stated his preference for a “plain reading” of that provision, stating that “I am not persuaded by the argument that [Mr. Ellig’s] membership in the corporation is tantamount to being a shareholder.” At para. 16, the Board went on to state that “[w]hile a member and a shareholder have similarities, that alone does not make them the same.”
[58] At para. 16, the Board also found that in determining the scope of the exclusory language in clauses (a) and (b) of the tenant definition, “the legislature’s purpose was to exclude persons that fall within the realm of owners from being tenants.” In my view, that is a “plausible interpretation” (to use the words of Blue Star Trailer, at para. 25) that meets the correctness standard of review. Clause (a) of the tenant definition excludes a co-owner of the residential complex; clause (b) excludes a shareholder of a corporation that owns the residential complex, which may be characterized (through its shareholding) as an indirect owner of the residential complex (emphasis added). The Board found that Mr. Ellig’s rights as a member would not bring him “within the realm” of an owner, as explained below:In this case, the Tenant owns nothing apart from his mobile home. He has no tangible asset he can liquidate if he chooses to. He has a vote amongst 520 others on how things operate and the amount he pays. The possibility that one day he could receive an equal portion of the corporation’s value, after liabilities, were it to dissolve or be wound up is not in my view an asset of consideration. There is no guarantee any value would ever come of it. [59] As further justification for its findings, the Board also stated that “had the legislature intended ‘members’ of a corporation be excluded from the definition of tenant, they could have quite easily said so in the legislation”: at para. 15. As set out in the Board’s factum provided for the appeal, the legislature provided exemptions from the RTA for other types of living accommodations, including the following:a. “housing cooperatives incorporated under the Co-operative Corporations Act, R.S.O. 1990, c C.35”: RTA, ss. 94.1(2) and 5(c); and
b. “living accommodation that is subject to the Public Hospitals Act, the Private Hospitals Act, the Fixing Long-Term Care Act, 2021, the Ministry of Correctional Services Act or the Child, Youth and Family Services Act, 2017”: RTA, s. 5(e). [60] The RTA does not include a similar exemption for a living accommodation that is occupied by a member of a not-for-profit corporation without share capital incorporated under the NPCA. Those specific exemptions from the RTA provide further support for the Board’s interpretation of the legislation in this case.
[61] I also see no legal error relating to the Board’s reliance on (or failure to rely on) the reasoning in previous Board decisions. As the Board observed in its review decision, the Board is not bound by previous Board decisions, although the Board was free to consider previous Board decisions in reaching its own decision. To the extent that it did so, it was open to the Board to adopt reasoning that may have been obiter or to decline to follow or distinguish previous Board decisions as being inapplicable in the circumstances.[7]
[62] As previously noted, the Association argues that in interpreting the term “shareholder” in the definition of “tenant”, I should prefer the reasoning in the 2015 decision in Topolinsky, the parties to which were the Association and a different resident of the same mobile home park. In the decision under review, the Board stated that it “did not find the [Topolinsky] decision persuasive since at that time, lease holders at the property were shareholders whereas they currently are not”: Board decision, at para. 19.
[63] In my view, the Board had good reason to be skeptical about the reasoning in Topolinsky. As noted previously, the adjudicator in that case made various references to the applicants’ rights as “leaseholders”, “shareholders” and “members”. The adjudicator did not, however, expressly identify the issue of whether the term “shareholder” in the tenant definition included a “member” of a non-share corporation. Reading the Topolinsky decision as a whole, there is reason to question whether the adjudicator was influenced by the erroneous statement in the applicants’ leases that each leaseholder would be issued one share of the Association: see footnote 3, supra. Unlike the adjudicator in Topolinsky, the Board in the decision under review clearly understood that a “member” did not fall within the literal wording of the RTA, the starting point for the analysis under the textual/contextual/purposive approach to statutory interpretation.
[64] As well, I am not persuaded by the Association’s reliance (for context) on s. 133(1) of the Corporations Act, under which certain sections of that statute relating to share-capital corporations also apply with necessary modifications to non-share corporations and in so applying, the word “shareholder” means “member” for that purpose. The unequivocal language of the Corporations Act may also be taken as supporting the position that if the legislature had intended the term “shareholder” in the RTA to include “member”, the RTA would have so provided by clear and express language barring persons in Mr. Ellis’ position from its statutory protections.
[65] Another countervailing consideration is found in ss. 3(3) and 3(4) of the RTA, under which a provision of the RTA would prevail if it conflicts with a provision of another Act. Sections 3(3) and 3(4) provide as follows:Conflicts, mobile home parks and land lease communities
(3) In interpreting a provision of this Act with regard to a mobile home park or a land lease community, if a provision in Part X [which applies to mobile home parks and land lease communities] conflicts with a provision in another Part of this Act, the provision in Part X applies.
Conflict with other Acts
(4) If a provision of this Act conflicts with a provision of another Act, other than the Human Rights Code, the provision of this Act applies.
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