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RTA - Rent Reduction [s.130]. O’Shanter Development Company Limited v. Terry Babcooke et. al
In O’Shanter Development Company Limited v. Terry Babcooke et. al (Div Court, 2022) the Divisional Court considered what was apparently a s.130 RTA tenant application to decrease rent on a reduction in services, particularly the quantum of the rent reduction granted, which invoked the Reg 516/06, s.39 'Rules relating to reduction in services'. Here, the court considers the evidence applied by the LTB, particularly the fact that not all of the multiple tenant parties testified directly:(c) The Member did not err in law when determining the quantum of rent reduction. And she did not fail to provide adequate reasons to support the quantum of 15% of the rent charged.
[21] The appellant points out that section 39 of O. Reg. 516/06 provides that if the reduction in the facility is not reasonable, then the amount of the rent reduction is to be determined based on the value of service or facility, including (i) the cost to the tenant to replace the facility; and (ii) the effect of the reduction on the tenant.
[22] At the hearing, the Member did not accept the Tenants' evidence of the cost of replacing the onsite storage lockers. Because of this, the Landlord complains that since the burden of proof of value to the Tenants and the effect of the change of the facility lies with the Tenants and only 9 Tenants from 8 rental units presented evidence relevant to the second factor (the effect of the reduction), the Tenants did not satisfy its burden of proof. And as a result, the Member erred by relying on this evidence to affix the quantum of a 15% reduction in rent. The Board erred in restricting its analysis solely to a consideration of the effect of the reduction on the Tenants, the second factor set out in subs. 39(6) of the regulation.
[23] The Board is required by statute to adopt the most expeditious method of determining the questions before it. This is a mandatory, not a discretionary, procedural duty (ORHT v. MTHA & Godwin, 2002 CanLII 41961 (ON CA), 2002CanLii 41961 (CA)).
[24] The adjudicator did not decide the amount of the rebate based on evidence particular to any witness or group of witnesses. She specifically stated that she would not do so.
[25] Instead, she looked at effects that could be presumed for all the Tenants. These included the reduced size of the new locker spaces, the inconvenience of off-site storage, and the distress caused in some form to all Tenants by the loss of a service that was included in their tenancy agreement.
[26] I agree with the Respondent that the adjudicator did nothing unusual and that it was appropriate for the Board Member, in line with Godwin, to interpret section 183 of the Act as justifying the crafting of a global remedy based on similar fact evidence from a handful of Tenants in multi-tenant applications (ORHT v MTHA and Godwin, supra at para 73).
[27] In addition to the viva voce evidence of the Tenants at the hearing, the adjudicator also had evidence from other Tenants at a meeting between the Landlord and Tenants with the record of the meeting showing that those Tenants moved into the building partly because of the availability of a locker; that those Tenants found the compensation offered was inadequate; that the replacement lockers offered were inconvenient for those who could not drive; and that those Tenants felt it was unfair for the landlord to gain at their expense.
[28] The adequacy and quantum of compensation for lost services is a question of mixed fact and law.
[29] Regulation 39(2) and (3) set out that if the adjudicator deems the reduction unreasonable, she should consider the value of the service. She should also consider the effect of discontinuance on the Tenants. Cost can be part of the determination of value but is not the sole element.
[30] The adjudicator considered the Tenants’ evidence as to cost but decided that the cost they advanced was the wrong measure to use. She considered other evidence related to the value of the locker to the Tenants in addition to evidence of the effect of discontinuance. This evidence included the fact that the availability of the lockers was a reason Tenants chose to move into the building; the uses to which the Tenants put their lockers; the size of the lockers; the convenience of having readily accessible storage, particularly for items that are used frequently; and how the on-site storage made it easier to buy staple items in bulk.
[31] The Tenants’ evidence was that their locker was like a large additional room, on site, so that the loss was significant and not unlike losing one room in a two bedroom or three-bedroom apartment.
[32] The Board’s decision was an available one based on the evidentiary record it had before it. It was also in accordance with what the statute and the regulations require. The alternatives would have been to make its own factual inquiry as to cost or to refuse a remedy to the Tenants in the face of its own factual determinations that the Landlord’s activities were unreasonable and had an adverse effect on the Tenants.
[33] The Board’s review decision also determined that the adjudicator had carefully considered the value of the locker facilities.
(d) The Member did not err in law by making findings and awarding remedies to Tenants who did not testify at the hearing about the "effect" upon them of the reduction of the facility. She did not deny the Landlord procedural fairness and natural justice.
[34] The Landlord argues that it is procedurally unfair to provide a remedy to Tenants who did not give oral testimony. The Landlord did not raise this issue with the adjudicator but raises it for the first time on this appeal.
[35] First, all the Tenants who were parties participated in the hearing, either through their lawyer or by attending in person. A party is not required to testify. The court can draw an adverse factual inference from the failure of a witness to testify in certain circumstances, but this is a matter of discretion in interpretation of the facts before the court rather than a requirement of law (Mudrazia v. Holjevac et al., 1969 CanLII 345 (ON SC), [1970] 1 O.R. 275, 8 D.L.R. (3d) 221; Godwin, paras 37-38).
[36] Second, the identities of the tenants were known to the Landlord and it could have called a tenant as its witness.
[37] Finally, the Board was permitted to use the testimony of individual Tenants about harm done to them to draw general conclusions about the effect of the Landlord’s actions on Tenants.
[38] The Landlord argues that this could only be done if a formal proposal to this effect had been made at the start of the hearing. I disagree.
[39] The adjudicator chose to base the quantum of compensation on deprivations and inconvenience that, according to her determinations of fact, were common to all Tenants. She explicitly rejected the alternative that some Tenants who testified should receive more compensation than others. Under such circumstances, it is not necessary for the Board to hear from every tenant.
[40] The appellate courts have directed that in circumstances such as this one, the Board should look to the interests of the tenants as a whole, rather than look to the evidence of impact upon individual use by the tenants of one unit (First Ontario Realty v Deng, 2011 ONCA at para 57).
[41] The Board is entitled to order an abatement for all tenants reflecting the average experience without requiring that each individual tenant be called to the stand (Godwin, supra at para 30).
[42] The tribunal had the power to determine its own procedures and to exclude any evidence that is unduly repetitious without the consent of the parties. The Board did not need to hear 23 witnesses about the loss of a locker.
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