By Jonathan Blair, Lawyer, Community Law Program

As the affordability crisis continues to grow in British Columbia, more tenants are fighting eviction notices, as the consequences of losing their housing in the current market could be disastrous. This has meant that more tenants are going to hearings before the Residential Tenancy Branch (“RTB”), leading the government to increase funding to the RTB in an attempt to alleviate some of the delays that have been generated by this increase in cases[1].

In addition, we are also seeing more challenges to decisions of the RTB at the court level, through judicial review, which is generating new binding law regarding the Residential Tenancy Act (the “Act”) and fair hearings at the RTB. Unfortunately, most people (including RTB decision makers) are not made aware of recent cases that may alter the law in this area. As a result, the Community Law Program here at CLAS is hoping to begin a regular series of updates on court cases in this area.

As a starting point, this post is going to ring in the New Year by providing an update on a couple decisions released in the final month of 2022. If you would like an introduction to judicial reviews more generally, please refer to our blog series on the various aspects of judicial review found here: https://clasbc.net/intro-to-jr-what-is-judicial-review/.

The three most important cases released in December 2022 are McNeil v. Elizabeth Fry Society of Greater Vancouver 2022 BCSC 2174 (McNeil); G.W.G. Woodcrafters Ltd. v. Bourque,  2022 BCSC 2228 (Bourque); and Jadavji v. Yin, 2022 BCSC 2260 (Jadavji). As a notice of appeal has been filed for McNeil, I am only going to cover Jadavji and Bourque in this update.

Jadavji v. Yin, 2022 BCSC 2260

Jadavji is a good reminder of the importance of raising every relevant issue at the tribunal level or you will likely be cut off from making that argument on judicial review, even it would be successful had it been raised.

In this case, a tenant had previously filed for dispute resolution with the RTB seeking compensation for money spent on repairs to their rental unit as well as a reduction in the rent until further repairs were made by the landlord. The tenant was successful and in May 2021, the RTB made an order for monetary compensation as well as a reduction in rent until the landlord did specific tasks (the “Initial Order”). By July 2021 the landlord believed they had done the tasks required in the Initial Order, though the tenant continued to pay the reduced rent because they took the position that the repairs had not been done adequately. In February 2022 the landlord gave the tenant a 10-day notice to end the tenancy for unpaid rent, including arrears going back to August 2021, which the tenant disputed.

The RTB heard the matter in April 2022 and an arbitrator found that the landlord had done the repairs required by the Initial Order. The tenant had no longer been entitled to reduced rent and had therefore failed to pay the rent since August 2021. The arbitrator gave the landlord a monetary order for the arrears and upheld the eviction of the tenant, granting the landlord an order of possession. The tenant applied to the Supreme Court of British Columbia for judicial review of this second RTB decision.

At judicial review, the only issue was whether the arbitrator had erred in failing to consider s. 66(2)(b) of the Act, which states:

(2) Despite subsection (1), the director may extend the time limit established by section 46 (4) (a) [landlord’s notice: non-payment of rent] for a tenant to pay overdue rent only in one of the following circumstances:

…

(b) the tenant has deducted the unpaid amount because the tenant believed that the deduction was allowed for emergency repairs or under an order of the director.

The tenant argued that they clearly believed that the rent deduction had been allowed under the Initial Order and the arbitrator was therefore required to consider whether the tenant should be provided additional time to pay the withheld portion of the rent, pursuant to s.66(2)(b), rather than be evicted.

The judge found that the arbitrator was not required to consider s.66(2) before dismissing the tenant’s application. She found that the language of the section was permissive and that it would be unreasonable to require an arbitrator to consider every discretionary power under the Act before issuing an order of possession. However, had the tenant raised the issue of relief under s.66(2)(b) at the second RTB hearing, which they did not, then the arbitrator may have been required to explain why they did or did not exercise that discretion.

For tenants, this decision raises some concerns. The judge’s reasoning regarding the language of the legislation, and the unreasonableness of requiring RTB arbitrators to consider “every discretionary power” under the Act, is brief. Most discretionary powers have permissive language, that is what makes them discretionary. Similarly, though it would be unreasonable to require an arbitrator to review all discretionary powers, it does not seem unreasonable to require an arbitrator to consider a discretionary power that the legislature drafted to explicitly deal with the provision under dispute and the exact fact scenario before them.

RTB arbitrators are deemed (by s. 58 of the Administrative Tribunals Act) to be experts with regards to the Act, and therefore should be aware of the relevant provisions and policies regarding the issues in front of them (this is why they are given so much deference by the courts). Moreover, in a system designed to be accessed mostly by unrepresented litigants, where disputes are often given only one hour to be heard and as a result lengthy legal submissions are not made, it is even more important that arbitrators be aware of the relevant law and policies governing the issues before them without needing them to be raised by the parties.

G.W.G. Woodcrafters Ltd. v. Bourque,  2022 BCSC 2228

Turning to Bourque, this was a case that came before the court not as an RTB judicial review but rather as a dispute regarding the Commercial Tenancy Act (“CTA”). However, one of the arguments made by a respondent in Bourque was that the tenancy in dispute fell under the Act and was therefore exclusively in the jurisdiction of the RTB and the petition should therefore be dismissed.

The petitioner landowner in Bourque had leased three properties to the respondent in 2011 (there were two respondents but only one participated in the action). The owner applied to the court under the CTA for a declaration that the leases had been terminated and for a writ of possession for the properties. The respondent admitted that two of the properties had been leased for their towing business, but stated that the other property, the Cedar Building, was leased for residential purposes, and was therefore governed by the Act.

In determining this jurisdictional question, the judge found that the respondent did reside in the Cedar Building, full-time in the beginning and part-time after 2018. The judge then went on to consider s.4(d) of the Act, which states:

4 This Act does not apply to

…

(d) living accommodation included with premises that

(i) are primarily occupied for business purposes, and

(ii) are rented under a single agreement

On the first issue, whether the premises are primarily occupied for business purposes, the judge found that all three buildings, including the Cedar Building, were occupied primarily for business purposes. He found that though the respondent had resided in the Cedar Building full-time for a period, the primary purpose of the premises was so that the respondent could effectively run their towing business, and that the initial purpose of the lease could not be unilaterally changed by the respondent.

Turning to the issue of whether the premises were rented under a single agreement, the judge found that the Cedar Building and the other two properties had been leased under separate agreements. The judge therefore found that, since the Cedar Building was not rented under a single agreement with the other two buildings, that s. 4(d)(ii) was not satisfied, and the Act continued to govern. The judge also rejected the owner’s argument that s. 44(1)(d) of the Act applied because the respondent stopped living in the Cedar Building full-time in 2018. Section 44(1)(d) states that a tenancy ends if the tenant vacates or abandons the rental unit. However, the judge found (correctly) that shifting from residing full-time to part-time in a rental unit does not constitute either vacating or abandoning the rental unit.

The judge’s reasoning in Bourque regarding the issue of the jurisdiction of the Act is somewhat confusing. In dealing with whether the premises were primarily occupied for business purposes, the judge appeared to find that each of the three properties, separately, met this element:

[80]       Accordingly, having concluded that the original and intended use of the leased premises, including the Cedar Lot, the Lenzi Lot, and the Cedar Building, was for business purposes, Mr. Bourque cannot unilaterally change the commercial nature of the tenancy.

In fact, the judge even found that, after 2017, the two other properties were not available for use but that the respondent was able to continue to operate the towing business out of the Cedar Building.

The judge then found that the three buildings were leased under separate agreements and used this to find that the Act applies. However, it seems like the question that needed to be answered was whether the Cedar Building itself, as a live/work space, primarily occupied for business purposes, was rented under a single agreement, not whether all three properties were rented under a single agreement.

In other words, had the respondent only ever rented the Cedar Building, where they resided but which was primarily occupied for business purposes, would the outcome have been the same? I do not think so. In that scenario, both elements would have been met. So, how is it that was changed by the fact that the respondent leased three separate properties, all of which were for business purposes.

The judge cites Gardiner v. 857 Beatty Street Project, 2008 BCCA 82 (“Gardiner”), from the court of appeal for the principle that the purpose of the premises cannot be unilaterally changed. However, in other respects, the decision in Gardiner could be seen as contradicting Bourque. In Gardiner the court of appeal found that the Act did not apply to a live/work artist studio, as it was primarily occupied for business purposes. It is hard to see any distinction between the artist studio in Gardiner and Cedar Building in Bourque.

The purpose of the second element appears only to apply to situations where there are separate agreements governing the business and residential aspects of a premises. However, if there is only one property that is being lived in, which is primarily occupied for a business purpose, and living and working aspects of the property are governed by one single agreement, as was the case of the Cedar Building in Bourque, then the Act would seem not to apply based on the plain language of the s. 4(d) and previous decisions such as Gardiner. As a result, it is probably worth using Bourque with caution when faced with a work/live premises in an RTB (or CTA) hearing, as I think that the RTB (and courts) will likely follow Gardiner rather than Bourque.

On the other hand, if you are looking for a good statement of the principle that going from living somewhere full-time to living there part-time does not constitute vacating or abandoning a rental unit, Bourque may come in handy.

[1] See https://www.cbc.ca/news/canada/british-columbia/b-c-boosts-funding-for-residential-tenancy-branch-to-address-long-wait-times-1.6698914