[1] This is a Motion in Writing for an Assessment, made by the Plaintiff. The Defendant has been noted in default pursuant a Request to Note in Default, dated November 17, 2020.
[2] The Plaintiff Landlord, Valiant Rental Properties (hereinafter “Valiant”) brought a claim seeking compensation for property damages from the defendant, Mr. Paulauskas for damages from pet urine to the hardwood parquet floors and underlying concrete. There were also other damages discovered which are not part of this claim. The damages were discovered after the tenant had vacated the property pursuant to the Tenancy Agreement and when the Landlord inspected the property.
[3] For the reasons that follow, I grant judgment for the Plaintiff for the full sum of their claimed damages, as well as costs and disbursements.
FACTS:
[4] The factual background is quite simple. The Plaintiff Landlord Valiant rented the premises to the Defendant via a Residential Tenancy Agreement, dated October 25, 2018 for one-year. A year later, the tenant vacated, and on October 31, 2019, the Landlord inspected the premises and found the damages to the hardwood floors from pet urine. The photos of the damage are evidence of same. These damages were likely not occasioned by the prior tenant as the prior inspection documents showed the floors then to be in good order.
[5] On January 27, 2020, the Plaintiff launched a claim in the Small Claims Court for recovery of property damages to the premises found after the tenant had vacated the premises.
[6] The Landlord seeks damages of $2,721.11 (broken down as $1,583.06 for material costs, $1,138.05 for labour costs and $35.00 for administration fees) for a total of $2,756.11 in damages. The Case History Report notes no activity from the Defendant in response to the Plaintiff’s Claim.
[7] Prior to proceeding to my ruling on the Assessment, and notwithstanding a failure of the Defendant to respond to this Motion and Claim, it is important to address a significant jurisdictional issue with respect to the matter before me. This matter is an action in the Small Claims Court for property damage occasioned to the rental unit that was discovered by the Landlord after the tenant had vacated the unit.
[8] The general question of whether landlords or tenants should be bringing claims for recovery of monies to the Landlord Tenant Board, or whether those claims should be brought to the Small Claims Court has long-been a confusing exercise. The reasons for decision below are designed to assist with the development of the caselaw, and bring to light recent legislative changes which undoubtedly clarify this issue.
THE LAW:
Recovery of Property Damages after Tenancy has Ended: Jurisdiction of the Landlord Tenant Board or Small Claims Court?
[9] Prior to recent legislative changes with Bill 184, the former Section 89(1) of the Residential Tenancies Act, 2006 read as follows [my emphasis added]:
A landlord may apply to the Board for an order requiring a tenant to pay reasonable costs that the landlord has incurred or will incur for the repair of or, where repairing is not reasonable, the replacement of damaged property, if the tenant, another occupant of the rental unit or a person whom the tenant permits in the residential complex wilfully or negligently causes undue damage to the rental unit or the residential complex and the tenant is in possession of the rental unit.
[10] Section 89(1) as above is to be read in conjunction with the authority of s. 168(2) of the Residential Tenancies Act, 2006, S.O. c. 17 (hereinafter the “Act”), which indicates that the Board has exclusive jurisdiction to determine all applications under this Act.
[11] There are many sections contained within the Act which arguably convey exclusive jurisdiction to the Landlord Tenant Board (hereinafter “LTB”): property damages (s. 89), unpaid utilities (s. 87), landlord’s right to dispose of tenant’s property (s. 41), among others.
[12] The historical caselaw on exclusivity of jurisdiction for landlord-tenant matters as between the LTB and the Small Claims Court is mixed. There are numerous decisions of the Small Claims Court and the Divisional Court which have gone in both directions. There are even conflicting decisions of the LTB which have not followed the decisions of the Small Claims Court. The following summary chronicles a good part of this history, but is by no means exhaustive.
[13] In Kipiniak v. Dubiel, 2014 ONSC 1344, Mr. Justice H.J. Wilton-Siegel of the Divisional Court overturned a decision of Deputy Judge Barycky (who decided the Small Claims Court did not have jurisdiction to hear the landlord’s claim for compensation for damages). Based on the reasoning from the Divisional Court here, the generalized approach was that the dividing line between jurisdiction or no-jurisdiction in the Small Claims Court over landlord-tenant disputes would usually rest upon whether the tenancy was still live. Put simply, if the tenancy was still active, the jurisdiction was with the Landlord Tenant Board. If the tenancy was over, the jurisdiction was then with the Small Claims Court. Put even more technically, the jurisdictional divide rested upon whether or not the tenant was still in “possession” of the unit.
[14] However, soon thereafter, a new argument regarding the “essential character”[1] of the dispute would become intertwined in this jurisdictional debate. In Efrach v. Cherishome Living, 2015 ONSC 472, Justice Horkins of the Divisional Court affirmed the decision of Deputy Judge McNeely indicating that the LTB had exclusive jurisdiction over a case where the tenants were robbed of their possessions due to the landlord failing to lock the unit doors. The decision in Efrach applied the “essential character” test in Mackie v. Toronto, 2020 ONSC 3801, at para. 44, wherein Justice Perell stated the following in favour of LTB exclusivity,“If the essential character of the dispute, in its factual context, arises from the statutory scheme, it does not matter that the claim is asserted for a cause of action which is ordinarily within the jurisdiction of the courts and upon which the legislation may be silent. The characterization of the dispute is resolved by whether the subject matter of the dispute expressly or inferentially is governed by the statute.”
[15] Later, in Capreit Limited Partnership v. Griffin, 2016 ONSC 5150, Justice Fragomeni for the Divisional Court would again overturn a decision of Deputy Judge Barycky (who was in favour of exclusive jurisdiction of the LTB). The Divisional Court would clarify here that the-then version of s. 89(1) of the Act, would indicate that a precondition to bringing an application (to the Board) was that the tenant must be in possession of the rental unit at the time the application is brought.[2] Capreit stands for the proposition that the Small Claims Court does have jurisdiction to hear an issue of damages arising from section 89(1) of the Act.
[16] In November 2019, Justice Mulligan sitting for the Divisional Court would release Kiselman v. Klerer, 2019 ONSC 6668, a case where the landlord sought to recover rent arrears and property damages arising from a ceased-tenancy. Deputy Judge S. Baker decided the matter in the underlying court and decided that the LTB had exclusive jurisdiction.
[17] In the reasons for decision, Justice Mulligan would go on to render the following reasons for justifying the LTB’s exclusive jurisdiction approach for property damage matters, at paragraph 13 of the decision [my emphasis added]:
[13] The landlord brought a claim in Small Claims Court for rent arrears and damage to the property. The claim was brought after the tenant had vacated the property. The amount of the claim did not exceed the $25,000 cap, then in place under s. 207(1) of the Act. It is plain and obvious that s. 168(2) of the Act gives the Board exclusive jurisdiction to determine claims of this type between landlord and tenant. The parties had a landlord and tenant relationship, and in my view, nothing turns on the fact that the action was started after the tenant was no longer in possession. It is clear that disputes of this sort are the daily fare of the Landlord and Tenant Board. When assessing claims, the Board is in the best position to determine whether claims for rent arrears and allegations of damage to property against the tenant amount to “undue damage” or simply wear and tear as a result of the normal occupancy of a residential unit.
[18] In coming to the decision, Justice Mulligan relied upon reasonings of Deputy Judge T. Marshall in Fong v. Lemieux, [2016] O.J. No. 2695, wherein he indicated that the LTB had expertise in the day-to-day handling of matters involving rental arrears and damage claims to rental units. The Deputy Judge also cited the speed at which the LTB could likely address the matters; much faster than even the Small Claims Court. Justice Mulligan also relied upon the reasons listed above by Justice Horkins sitting for the Divisional Court in Efrach.
[19] To make matters more complicated, the jurisdictional issue was also discussed within a line of caselaw for claims for unpaid utilities brought before the Small Claims Court in Luu v O’Sullivan, 2012 CanLII 98396 (ON SCSM). In Luu, Deputy Judge Sebastian Winny, was in favour that the claim for unpaid utilities was within the exclusive jurisdiction of the LTB on the basis that the tenants were still in possession of the unit. The Luu decision addressed the internal conflict at the LTB wherein “Interpretation Guideline 11” stated that some hydro charges might be pursued before the LTB and others may not, thus creating a dual system of multiple claims before multiple adjudicative bodies. What is important about the decision of Deputy Judge Sebastian Winny’s decision in Luu is that he openly stated in his decision at para. 55 that, “... The question of the Board’s jurisdiction over the utilities component of rent payable in residential tenancies cries out for appellate resolution.”
[20] Deputy Judge Winny, in his decision, would ironically foreshadow the very adjudicative confusion that would eventually become the tribunal reaction to his reasons in Luu. Despite his attempt to admirably clarify jurisdiction at the Small Claims Court level, two later decisions of the Landlord Tenant Board[3] would be openly critical of the Deputy Judge’s approach in Luu and deny jurisdiction of the LTB for unpaid utilities. This would be a litigant’s horror situation of both adjudicative bodies denying jurisdiction to decide the same issue, thus leaving the public with no recourse for recovery.
[21] Nearly a decade later, after Luu, Deputy Judge David José would tackle the same question of jurisdiction for a claim brought under the Small Claims Court for unpaid utilities. In Dick v Robinson, 2021 CanLII 48732 (ON SCSM), having reviewed the post-forensic fall-out from Luu, Deputy Judge José came to the opposite conclusion as Deputy Judge Winny.
[22] I cite Deputy Judge José’s reasonings in Dick v. Robinson, at para. 23, “We should not have a system that requires a Landlord to start multiple proceedings. We should not have two forums resisting and rejecting the same claims – it potentially leaves the public without any recourse at all. If I follow the Luu Decision and deny the Landlord’s Claim for unpaid utilities, the Board may very well do likewise, leaving them without recourse.” Despite agreeing with Deputy Judge Sebastian Winny’s attempt of creating a singular stream-lined forum for recovery at the LTB, Deputy Judge José’s final reasoning of accepting jurisdiction of the Small Claims Court in Dick v. Robinson was sympathetically decided in light of the LTB caselaw wherein it was shown the Board adjudicators were rejecting jurisdiction for unpaid utilities.
[23] Another sympathetic approach to the rights of litigants in this confusing jurisdictional regime was taken by Deputy Judge H. Witteveen in Heafy v Craig, 2020 CanLII 20506 (ON SCSM), wherein the judge had to deal with s. 41 of the Act which dealt with applications by the tenant in relation to property on the rented premises after the lease had terminated. Deputy Judge Witteveen’s commentary at paragraphs 23-24 is most instructive:
[23] There is something attractive about the simplicity of arriving at jurisdiction following a defined event such as termination of the lease or giving up possession of the premises. Unfortunately, that simple test does not definitively resolve the question of jurisdiction because there are “post termination” applications to the LTB that are specifically provided for in the RTA. I think s. 41 is a clear example of such a case.
[24] Those favoring jurisdiction in the LTB frequently refer to the specialized nature of the LTB and its governing legislation. Indeed, this is the raison d’etre for the creation of specialized boards. The opposite view is principally fueled by a concern with avoiding a vacuum where the Board refuses or has no jurisdiction leaving an aggrieved party without a remedy. Such a situation would be untenable.
[24] In Heafy, Deputy Judge Witteveen would end-up granting the motion to deny that the Small Claims Court had jurisdiction but would instead stay the matter in Small Claims out of an abundance of caution if the Plaintiff was able to demonstrate that the LTB had in-turn refused jurisdiction.
[25] Therefore, in reviewing the history of the jurisdictional split, there was a clear historic divide between two general camps: Generally, there were those judges who viewed that the LTB had exclusive jurisdiction landlord-tenant related disputes (Efrach, Kiselman, Fong, Luu, Heafy). There were then those judges who (for their own reasons) felt that the Small Claims Court should have jurisdiction over landlord-tenant matters (Kipiniak, Capreit, Dick). There was also the uncertainty as to whether or not the LTB itself would accept jurisdiction even if the Superior Courts had deemed it did not have jurisdiction for certain landlord-tenant matters.
[26] However, at the time of the decision in Dick v. Robinson (May 21, 2021) the legislative amendments for Bill 184 had not yet come into force. Deputy Judge José’s decision does an excellent job of showing the light at the end of the tunnel via the new legislative amendments in Bill 184 which would clarify the issues of jurisdiction over unpaid utilities.
[27] Finally, most recently, the Divisional Court released a decision of Justice S. Bale in Wu v. Adler, 2022 ONSC 188 (CanLii). Justice Bale heard an appeal of Deputy Judge Davis’ trial decision holding the tenants responsible for rent arrears. It was raised on appeal by the tenants that the Small Claims Court did not have jurisdiction. Justice Bale noted the jurisdictional divide in caselaw between Kiselman/Capreit/Efrach and Capriet/Brydges[4]. That being said, Justice Bale was critical of the strict approach taken in Kiselman because the matter in Wu involved an unfair situation where the named tenant never actually lived on the premises. It was in-fact the tenant’s ex-girlfriend who “possessed” the unit the entire time of the lease. At paragraph 42, Justice Bale explains his reasoning for distinguishing Kiselman v. Klerer:
[42] It is not clear from the appellate judge’s reasons in Klerer whether he is saying that the Board has jurisdiction notwithstanding the restrictions in ss. 87(1) and 89(1), or that a landlord has no remedy for arrears of rent or damages, if the tenant has moved out. The former would require the Board to ignore the clear restrictions in those sections; the latter would be unfair to landlords. It cannot be that a tenant can move out leaving the landlord without recourse for unpaid rent, and in the case of damages, a landlord may have no idea that the rental unit has been damaged, before the tenant moves out.
[28] In Wu, Justice Bale has highlighted yet another confusing outcome arising from the Act’s previous insistence on jurisdiction being predicated upon “possession” of the “tenant”. Justice Bale ends his decision by mentioning the incoming amendments and that, “…as a result, the question of jurisdiction should no longer arise” (at para 47).
[29] As at today’s date, the legislative amendments in Bill 184 are now in force. It is more than likely that the roller-coaster ride of jurisdictional confusion has finally been resolved by the Legislative amendments in Bill 184, which I shall refer to below.
Jurisdictional Question: Legislative Clarity – Bill 184
[30] On July 21, 2020, “Bill 184 - Protecting Tenants and Strengthening Community Housing Act, 2020” was given Royal Assent. However, the changes to the Residential Tenancies Act, 2006, S.O. 2006 c. 17, would take effect on September 1, 2021[5]. For the issue of property damages, section 89(1) of the Act (which formerly indicated that an application could only be made while the tenant was in possession of the unit) now reads:
Application for compensation for damage
89 (1) A landlord may apply to the Board for an order requiring a tenant or former tenant to pay reasonable costs that the landlord has incurred or will incur for the repair of or, where repairing is not reasonable, the replacement of damaged property if,
(a) while the tenant or former tenant is or was in possession of the rental unit, the tenant or former tenant, another occupant of the rental unit or a person permitted in the residential complex by the tenant or former tenant wilfully or negligently causes or caused undue damage to the rental unit or the residential complex; and
(b) in the case of a tenant or former tenant no longer in possession of the rental unit, the tenant or former tenant ceased to be in possession on or after the day subsection 21 (1) of Schedule 4 to the Protecting Tenants and Strengthening Community Housing Act, 2020 comes into force. 2020, c. 16, Sched. 4, s. 21 (1).
[31] The new amendment makes it clear that landlords can now bring an application before the LTB for damages arising from the tenancy, regardless of whether the tenancy is active or not. The only caveat is that applications made after the end of a tenancy must be made no later than one year after the tenant or former tenant has ceased to be in possession of the rental unit, as per s. 89(1.1) of the revised Act.
[32] Other areas have also been clarified, including the area of unpaid utilities, which indicates that under the amended Act, a landlord may now apply to the LTB for unpaid utilities either during tenancy or within one year of the tenancy ending (s. 88.2 of the revised Act). This anticipated change was summarized succinctly in Dick v. Robinson by Deputy Judge José.
[33] The amendments above are to be read in conjunction with the Hansard debate history of Bill 184. On May 26, 2020, the Honourable Steve Clark, moved for a Second Reading of Bill 184 and explained the purpose of the amendments (at 7912-7913)[6]:
Right now, some processes are handled by the Landlord and Tenant Board while some go to Small Claims Court. If a tenant physically damages an apartment—for example, kicking down a door or punching a hole in a wall—the landlord can seek compensation with the Landlord and Tenant Board. But if the tenant doesn’t pay their utility bill, a landlord has to go to Small Claims Court. It’s confusing, and it can be quite expensive. So we’re proposing to make the process simpler and more efficient for landlords. If passed, the changes would allow landlords to go to the Landlord and Tenant Board for unpaid rent, utility bills and damage costs for up to one year after the tenant moves out. This would allow landlords the same opportunity to access the board as is available to tenants after they move out.
...
The changes would shift many disputes, such as unpaid utility bills, from Small Claims Court to the Landlord and Tenant Board, making the resolution process simpler and more streamlined for landlords. And it would make it easier for landlords to recover the costs that they incur not just for damages but also for bad tenant behaviour. It would streamline and cut red tape at the Landlord and Tenant Board over time and where appropriate, including making it easier to access alternatives to formal hearings, like mediation.
[34] It is clear that one of the fundamental purposes of Bill 184 is to end the confusing back-and-forth jurisdictional wars that have dogged the LTB, the Small Claims Court and the Divisional Court for so long.
[35] With respect to retroactivity, there are also several headings under the new amendments to the Act that deal with a “Transition” period. Under the revised s. 89(4) for property damage, this transition provision specifically indicates that these new amendments “... shall not affect any court proceeding for an order for payment of compensation for damage to the rental unit or the residential complex that is commenced before the day that subsection comes into force and has not been finally determined before that day.”
[36] Some brief analysis is warranted here. The amendments to Bill 184 received Royal Assent on July 21, 2020 but did not come into force until recently, on September 1, 2021. It would seem to be that the revised Act would still allow the Small Claims Court to retain jurisdiction over any particular landlord-tenant matter that was commenced prior to September 1, 2021. This would make sense, as there would likely be a “gray zone” of matters (such as the instant case of Valiant) which might be ousted due to limitations reasons by the LTB. It also is evident that if the LTB always had exclusive jurisdiction pre-Amendment, then there would be no reason to place a “transition” clause. The existence of the “transition” clauses accepts that indeed there are cases where the Small Claims Court did have jurisdiction prior to September 1, 2021 and seeks to allow those matters to run their course.
[37] A potentially broad reading of the imposition of s.89(4) and the reciprocal transition period sections in the revised Act, might suggest that the Legislature had intended to correct years of confusion by suggesting that the Small Claims Court always had jurisdiction reaching back to all those years before the Bill 184 amendments. I do not read this as such. I simply see the transition period amendments as being a simple way for the Legislature to protect those parties who commenced court proceedings outside of the LTB before September 1, 2021. The Legislature has now clarified the confusion and the jurisdictional roller-coaster ride is over for those areas affected by Bill 184.
ANALYSIS: Jurisdictional Issue – Landlord-Tenant Property Damage claim before the Small Claims Court
[38] Having reviewed the status of the law above, and the legislative changes, this now brings me to the analysis and ruling on the Valiant matter. In this matter, the Defendant vacated the premises at the end of the one-year lease around October 25, 2019. This Small Claims Court matter was commenced by the Landlord on January 27, 2020. This motion in writing was brought on August 21, 2020. There were court delays due to COVID-19 that had nothing to do with the Plaintiff. This motion in writing was scheduled for January 14, 2022 at its first opportunity. The importance of this date is that if for any reason, I were to deny jurisdiction, the Plaintiff would likely be out of time to commence an application before the LTB (one-year) under either the old or new Act.
[39] Based on a plain-reading of the revised Residential Tenancies Act, 2006, modified by Bill 184 under s. 89(1), and in conjunction with the “transition” period section of s. 89(4), I am of the opinion that the Small Claims Court does have jurisdiction to adjudicate this matter, which is brought during the transition period prior to September 1, 2021. Had it not been for the imposition of Bill 184, however, I was in great agreement with the reasons for decision in the Divisional Court’s decision in Kiselman (also supported in Efrach, Fong, Luu, and Heafy) which are in favour of exclusive jurisdiction of the LTB over property damage claims post-tenancy’s end. In my mind, the balance of the caselaw seemed to favour that a specialized tribunal such as the LTB would be most appropriate to handle such matters such as property damage claims arising from the tenancy.
[40] However, considering that there will be fewer and fewer of these transitional matters that will exist beyond September 1, 2021, there seems to be no point whatsoever to continue any debate about jurisdiction for property damage claims as between the LTB and the Small Claims Court. The most important consideration in my mind is to move these transitional matters through the legal system and to their eventual conclusion. The Valiant matter was brought on the backdrop of a confusing legal context to the Small Claims Court. It is within the best interests of justice that I simply decide the matter here and now, as opposed to even staying the matter so that Valiant will need to potentially start a new matter with the LTB (possibly to even face a limitation issue).
[41] This approach makes the most practical sense at this juncture, and I believe it is in line with the scheme of the newly revised Act, the object of the Act and the intention of Parliament[7] to simplify landlord-tenant proceedings. Put even more simply, my interpretation of the “transition” clauses in the Act are generally as follows: If the Small Claims Court matter was commenced before September 1, 2021, then the Small Claims Court can have jurisdiction. If the matter is commenced on or after September 1, 2021, then these claims are all exclusive jurisdiction of the Landlord Tenant Board.
DAMAGES ASSESSMENT:
[42] In proceeding with the damages Assessment, I have reviewed the Plaintiff’s Claim, and attachments which include non-exhaustively, detailed invoices, inspection reports, photos of damages to the unit, and the original signed lease. A detailed description of the work performed to remediate the premises due to the urine was assistive.
[43] In addition, I appreciated the detailed description of the square footage (830 sq/ft) and type of material used to replace (laminate flooring). The Plaintiff submitted that they used their in-house maintenance company to perform the repairs to mitigate the damages and avoid extra costs, which is understandable. Upon review of the material and labour costs, they appear to be exceedingly reasonable for the work performed. It is accepted that a heavy clean of the concrete would have been necessary prior to relaying the flooring. I also notice there are no demolition or disposal fees, which would have been necessary in these circumstances. A full replacement of the parquet flooring at today’s rates would have been significantly more in materials and labour than the $1,583.06 for material costs and $1,138.05 for labour that is being sought by Valiant.
[44] Based on the damages suffered and generalized knowledge of construction that hardwood floors (and particularly parquet floors) cannot be easily replaced by a partial repair, it was entirely reasonable for Valiant to have replaced the entire floors. Flooring technology has improved over the decades, but laminate flooring is unlikely to be an “improvement” or betterment to hardwood floors, no matter what the type. This approach is consistent with the trial decision of Deputy Judge Hunt and affirmed by the Divisional Court by Justice Lederman in Butala v. Xia et al., 2014 ONSC 932.
ORDER:
[45] Having reviewed the Plaintiff’s Claim, the motion record and all exhibits, photographs, invoices, evidence and materials submitted by the Plaintiff, I ORDER AS FOLLOWS:
A) Judgment is granted to Valiant for the full sum of their damages claimed at $2,756.11.
B) Valiant shall be awarded their costs at $400 for inconvenience and expense pursuant Rule 19.05, of which is inclusive of disbursements. The total award is therefore, $3,156.11.
C) Pre-judgment interest shall be fixed at 0.5% and post-judgment interest is fixed at 2%, both in line with the Courts of Justice Act, and the posted rates online pursuant O. Reg 339//07. "
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