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. Pinto v. Regan and White v. Regan

In Pinto v. Regan and White v. Regan (Div Ct, 2021) the Divisional Court considered issues of duress and the contractual duty of good faith in ordering a new hearing based on an RTA agreement to terminate a tenancy:
[38] The facts on each appeal suggest that the respondent’s intention to obtain vacant possession of each unit on a permanent basis without having to give notice to each appellant under s. 50 was behind each transaction. The real substance of those transactions was not considered by the Member on either motion. Nor did the Member consider if the respondent was acting in good faith when he interacted with each appellant to obtain their signatures on the N11.

[39] The Supreme Court of Canada in Bhasin v. Hrynew, 2014 SCC 71, [2014] 3 S.C.R. 494, established the organizing principle of good faith applicable to all contracts. This principle requires the performance of contractual duties and obligations honestly, not capriciously or arbitrarily, and with regard to the legitimate contractual interests of the other party: see Bhasin, at paras. 63 and 65. The relationship between a tenant and a landlord is contractual in nature and requires that they discharge the obligations they owe to one another in good faith. This duty of good faith includes how the parties conducted themselves toward each other at the end of that relationship.

[40] Section 202 of the RTA imposed a statutory duty on the Member to determine questions of fact and to apply governing principles of law to ascertain the real substance of the transactions and activities regarding the rental units at issue, and the good faith of the parties to the N11. The Member did not consider all the evidence to determine the element of good faith on the part of the respondent other than making a passing reference in the Reasons. The Member did not take the totality of the evidence into account when he applied the substantive law. This amounted to an error of law.


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