IN THE SUPREME COURT OF BRITISH COLUMBIA
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Citation: |
Jiang v. You, |
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2018 BCSC 791 |
Date: 20180516
Docket: S1711339
Registry: Vancouver
Between:
(Qin) Jenny Jiang and (Xing) Owen Wang
Petitioners
And
Sung You and Chan Jeon
Respondents
Before: The Honourable Mr. Justice Voith
Reasons for Judgment
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The Petitioner, Appearing on her own behalf: |
Jenny Jiang |
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Place and Date of Hearing: |
Vancouver, B.C. February 23, 2018 |
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Place and Date of Judgment: |
Vancouver, B.C. May 16, 2018 |
[1] The petitioner landlords apply for an order setting aside the October 13, 2017 decision of a Residential Tenancy Branch (RTB) arbitrator (the “Decision”), granting the respondent tenants an order for $2,083.28.
[2] The arbitrator found that the petitioners collected a rent increase from the respondents that did not comply with section 43 of the Residential Tenancy Act, SBC 2002, c. 78 (“RTA”). The arbitrator found that the tenant did not agree to the rent increase in writing, the landlords failed to give notice in the prescribed form, and the rent increase exceeded the allowable increase, outlined in section 43(1) of the RTA.
[3] The arbitrator awarded the respondents the amount of $1,683.28 for overpaid rent, $300.00 that the petitioners had held back despite the respondents having returned their “fobs”, as well as the $100.00 filing fee for a total entitlement of $2,083.28. The petitioners had counterclaimed, claiming $1,650.00 for one month of unpaid rent in August 2017. The arbitrator found that even though the respondents were short a few days on the required one month notice to vacate the petitioners failed to take any reasonable steps to reduce the rent loss it had claimed against the respondents. The petitioners’ counterclaim was dismissed.
[4] The petitioners seek judicial review of both the $2,083.28 award, as well as their dismissed counterclaim, pursuant to section 7 of the Judicial Review Procedure Act, RSBC 1996, c. 241.
[5] Before the arbitrator, the parties agreed to certain facts. The parties entered into a written tenancy agreement providing that the tenancy commenced on May 1, 2014 on a fixed term ending on April 30, 2015. Rent of $1,480.00 was payable on the 3rd day of each month. The petitioners collected $740.00 as a security deposit and $300.00 as a fob deposit. The respondents moved out of the unit on July 31, 2017 and returned the fobs, but the petitioners did not return the fob deposit.
[6] The parties agreed that at the end of the original fixed term (April 30, 2015), the parties did not sign any other tenancy agreements. The parties agreed that from May 1, 2015 onwards, the tenancy continued, though in their petition, the petitioners suggest that it was their understanding that the tenancy continued on a fixed term. The tenancy agreement signed by the parties indicates that at the end of the fixed term, the tenancy may continue on a month-to-month basis or another fixed length of time. However, in a later part of the tenancy agreement, the agreement states that if the agreement does not require the tenant to vacate at the end of the tenancy, the agreement is renewed as a monthly tenancy on the same terms until the tenant gives notice to end the tenancy. From May 1, 2015 onwards, the tenancy was month-to-month.
[7] The parties further agreed that the petitioners increased the rent, effective April 1, 2016 from $1,480.00 to $1,600.00 and did so again, effective November 1, 2016, to $1,650.00. The parties agreed that neither increase was provided on a RTB form, nor was three months’ notice of the increase provided.
[8] On June 27, 2017, the respondents gave notice that they would be vacating the unit on July 31, 2017. The petitioners agreed that the respondents were asked to move out on August 31, 2017 instead. On June 29, 2017, the respondents sent an email message agreeing to move out on August 31, 2017 instead of July 31, 2017, though proof of this correspondence was not in evidence before the arbitrator.
[9] The parties agreed that on July 8, 2017 the respondents, apparently having changed their minds, now informed the petitioners that they would be moving out, as originally planned, on July 31, 2017. The petitioners advertised the unit for rent beginning on September 1, 2017 at a rent of $1,950.00. An open house was also arranged for July 15, 2017. The petitioners did not change the advertisement (that the new tenancy would begin on September 1, 2017 rather than August 1, 2017) after the respondents had indicated that they would be moving out on July 31, 2017.
[10] The petitioners agreed that the attendees at the open house were informed that the unit was available on August 1, 2017, despite what the advertisement said, but said that none of the attendees were interested in renting the unit on August 1, 2017. A new tenant was accepted for September 1, 2017.
[11] The arbitrator began by noting that the parties did not sign any additional tenancy agreements after the fixed term ended on April 30, 2015.
[12] The arbitrator first looked at whether the 2016 rent increases complied with the RTA. Section 42 of the Act provides that:
(1) A landlord must not impose a rent increase for at least 12 months after whichever of the following applies:
(a) if the tenant’s rent has not previously been increased, the date on which the tenant’s rent was first established under the tenancy agreement;
(b) if the tenant’s rent has previously been increased, the effective date of the last rent increase made in accordance with the Act.
(2) A landlord must give a tenant notice of a rent increase at least 3 months before the effective date of the increase.
(3) A notice of a rent increase must be in the approved form.
[13] The arbitrator next turned to section 43 of the Act which stipulates the amount that a landlord can raise rent by. The allowable rent increase for 2016 was 2.9%. Section 5 of the Act provides that landlords and tenants may not avoid or contract out of any provision of the Act or its Regulations.
[14] The arbitrator found that the petitioners did not provide the required notice, did not use the required form, and collected a rent increase significantly more than the amount allowed under the Regulations. The arbitrator concluded:
As the Tenant did not agree in writing to the rent increases and as the rent increases were over the allowable rent increases I find that the Tenants are entitled to return of the increased amount of rent as claimed in the amount of $1,683.28 ($539.56 + 1,143.72).
[15] The arbitrator next turned to the petitioners’ counterclaim for unpaid August 2017 rent. Section 7 of the Act provides that where a tenant does not comply, the tenant must compensate the landlord for damage or loss that results. However, the Act requires the landlord to do whatever is reasonable to minimize, or to mitigate, their damage or loss. The arbitrator found that the petitioners failed to mitigate their losses. The petitioner’s counterclaim was dismissed.
[16] Pursuant to section 79(2) of the RTA, the petitioners applied for a review of the Decision. The petitioners presented “new” evidence, in the form of emails that sought to establish that the respondents had consented in writing to the rent increases, and evidence of fraud on the part of the respondents during the hearing.
[17] With regards to this “new” email evidence, the review arbitrator held:
After careful consideration of the Landlords’ submissions, I find the Landlords have not provided new and relevant evidence as contemplated under Policy Guideline #24. The evidence referred to was dated before the original hearing and is not new…
[18] The review arbitrator further considered the petitioners’ “fraud” evidence:
After careful consideration of the Landlords’ submissions and evidence, I find there is insufficient information to demonstrate that false evidence on a material manner was provided to the Residential Tenancy Branch, and that this evidence was a significant factor in the making of the decision. Rather, it appears that the arbitrator relied on the evidence of both parties confirming rent increases were not agreed to by the Tenants in writing, but that the Landlords provided rents at comparable properties in the area as justification for increasing the rent…
[19] Both grounds were dismissed on review.
[20] There were two principal issues before the arbitrator.
[21] First, did the petitioners increase the rent in accordance with the RTA, when rent was increased on April 1, 2016 and then again on November 1, 2016? If not, are the respondents entitled to a return of rent monies?
[22] Second, are the petitioners entitled to unpaid rent for the month of August 2017 because the respondents did not give a month’s notice of their intention to vacate on July 31, 2017? If so, what amount, if any, are the petitioners entitled to recover?
[23] Each party also asked for recovery of the $100 filing fee.
[24] While not addressed in submissions, where a party has taken advantage of a tribunal’s reconsideration power – as the petitioners have done here – it is the reconsideration decision that represents the final decision of the tribunal and it is the reconsideration decision that is judicially reviewed: Yellow Cab Company Ltd. v. Passenger Transportation Board, 2014 BCCA 329 at para. 40.
[25] However, the review arbitrator did not address all of the submissions raised in this judicial review, and the petitioner’s submissions were overwhelmingly directed to the Decision. Therefore, in analyzing the petitioner’s submissions, I have necessarily referred to both the arbitrator’s and review arbitrator’s decisions.
[26] The petitioners submit that the arbitrator made the following errors:
a) The arbitrator erred when he found that the respondents never agreed in writing to the rent increase. In support of its submission, the petitioners attach email correspondence between themselves and the respondents in advance of the rent increase.
b) The arbitrator erred in law by dismissing their counterclaim for one month of unpaid rent in August 2017. In support, the petitioners referred me to the relevant provisions of the RTA, namely section 45.
[27] Further, the petitioners apply for a “charge against the tenant lying under the oath”. I understand this to mean that the petitioners ask for compensation from the respondents for “the suffering we went through and the cost we spent on this legal process”.
[28] In relation to the first two grounds of judicial review, the petitioners seek an order setting aside the October 13, 2017 Decision of the arbitrator. The third ground is essentially a demand for costs of this judicial review.
[29] The RTB is considered an expert tribunal and its arbitrators and dispute resolution officers are entitled to a high degree of deference on account of both their expertise and a privative clause contained in section 84.1 of the RTA. Further, section 58 of the Administrative Tribunals Act, SBC 2004, c. 45 (“ATA”), states that if a tribunal’s governing statute contains or incorporates a privative clause, relative to the courts the tribunal must be considered to be an expert tribunal in relation to all matters over which it has exclusive jurisdiction.
[30] Section 58(2) of the ATA states:
(2) In a judicial review proceeding relating to expert tribunals under subsection (1)
(a) a finding of fact or law or an exercise of discretion by the tribunal in respect of a matter over which it has exclusive jurisdiction under a privative clause must not be interfered with unless it is patently unreasonable,
(b) questions about the application of common law rules of natural justice and procedural fairness must be decided having regard to whether, in all of the circumstances, the tribunal acted fairly, and
(c) for all matters other than those identified in paragraphs (a) and (b), the standard of review to be applied to the tribunal’s decision is correctness.
[31] Section 58(2) provides that the Court can only interfere with respect to “a finding of fact or law or an exercise of discretion” if it is “patently unreasonable”. Binnie J., writing for the majority in Canada (Citizenship and Immigration) v. Khosa, 2009 SCC 12, described the effect of section 58(2)(a) of the ATA as follows:
[19] Generally speaking, most if not all judicial review statutes are drafted against the background of the common law of judicial review. Even the more comprehensive among them, such as the British Columbia Administrative Tribunals Act, S.B.C. 2004, c. 45, can only sensibly be interpreted in the common law context because, for example, it provides in s.58(2)(a) that “a finding of fact or law or an exercise of discretion by the tribunal in respect of a matter over which it has exclusive jurisdiction under a privative clause must not be interfered with unless it is patently unreasonable”. The expression “patently unreasonable” did not spring unassisted from the mind of the legislator. It was obviously intended to be understood in the context of the common law jurisprudence, although a number of indicia of patent unreasonableness are given in s. 58(3). Despite Dunsmuir, “patent unreasonableness” will live on in British Columbia, but the content of the expression, and the precise degree of deference it commands in the diverse circumstances of a large provincial administration, will necessarily continue to be calibrated according to general principles of administrative law. That said, of course, the legislature in s. 58was and is directing the B.C. courts to afford administrators a high degree of deference on issues of fact, and effect must be given to this clearly expressed legislative intention. [Emphasis in original]
[32] In Viking Logistic Ltd. v. British Columbia (Worker’s Compensation Board), 2010 BCSC 1340, Holmes J. held:
[63] In sum, “patently unreasonable”, in s. 58(2)(a) of the ATA, is not to be simply replaced by “reasonable”, because such a substitution would disregard the legislator’s clear intent that the decision under review receive great deference. Standing at the upper end of the “reasonableness” spectrum, the “patently unreasonable” standard in s. 58(2)(a) nonetheless requires that the decision under review by defensible in respect of the facts and the law. It is in the inquiry into whether the decision is so “defensible” that the decision will enjoy the high degree of deference the legislator intended.
[33] The standard of review of the Decision and of the review decision is patent unreasonableness.
[34] Much of the oral and written submissions of the petitioners focused on whether the respondents consented in writing to the April 2016 rent increase. The petitioners presented email correspondence between the parties where the respondents appeared to accept the April 2016 rent increase and sent revised cheques.
[35] Section 43(1)(c) of the RTA states that a landlord may impose a rent increase only up to the amount agreed to by the tenant in writing. However, the email evidence tendered at the review hearing and on judicial review before this Court was not presented by the petitioners before the arbitrator and the review arbitrator correctly held that such evidence was in hands of the petitioners at the time of the hearing. It is unclear why the petitioners did not present the email evidence before the arbitrator. It is also unclear why the petitioners, based on the record, agreed at the time of the hearing that the tenants did not agree in writing to either of the increases.
[36] Further, the review arbitrator addressed the email evidence, and dismissed its admissibility on the grounds that the petitioners failed to provide “new and relevant evidence” that was unavailable to them at the original hearing. Had the petitioners wished to rely on the email correspondence as evidence that the tenants consented in writing to the rent increase in April 2016, that evidence could and should have been tendered before the arbitrator at the original hearing. I appreciate that the petitioners are self represented, that English is not their first language and that aspects of both the RTA and the hearing process may seem technical and foreign. Nevertheless, the narrow question before me is whether the review decision was patently unreasonable.
[37] The arbitrator’s finding, based on the record that was before him at the time, is consistent with one of the RTA’s purposes, “to protect tenants from being exploited by landlords”: Darbyshire v. Residential Tenancy Branch (Director), 2013 BCSC 1277 at para. 14. The RTA governs many aspects of residential landlord-tenant relationships and ensures that tenants are not unfairly exploited by their landlords. This is why it is necessary that rent increases comply with various statutory preconditions: three months’ notice to the tenant (s. 42(2)), using a prescribed RTB form (s. 42(3)), and rental increases that comply with the Regulations to the RTA (s. 43(1)(a)).
[38] Accordingly, I do not consider that either the Decision or the review decision, that the rent increases were unlawful, were patently unreasonable. This ground is dismissed.
[39] Whether the respondents owed unpaid August 2017 rent to the petitioners turned on the application of section 7 of the RTA, which provides compensation to the non-defaulting party to a tenancy agreement, so long as the non-defaulting party took steps to mitigate or minimize the loss or damage.
[40] In Fok v. British Columbia (Residential Tenancy Dispute Resolution Officer), 2010 BCSC 1613, Punnett J. held at para. 78:
… [T]he test of proof of damage and loss claims recoverable pursuant to s. 7 of the Residential Tenancy Act required that the following components be satisfied:
a) Proof that the damage or loss exists;
b) Proof that this damage or loss happened solely because of the actions or neglect of the [petitioner] in violation of the Act or agreement;
c) Verification of the actual amount required to compensate for the claimed loss or to rectify the damage;
d) Proof that the claimant followed section 7(2) of the Act by taking steps to mitigate or minimize the loss or damage.
[41] Before the arbitrator, the focus was on the fourth element: did the petitioners take steps to mitigate or minimize their loss or damage? Before addressing this point, I would point out that, in addition to whether the petitioners sufficiently mitigated their losses, it was open to the arbitrator to find that the respondents did provide one month notice that they intended to vacate the unit on July 31, 2017.
[42] In emails dated June 27, 2017 and June 28, 2017, the respondents notified the petitioners that they would be moving out of the unit at the end of July 2017. In reply, the petitioners erroneously informed the tenants that the tenants could not move out until the end of August 2017, because “The end of August is also the end of our contract”. This was clearly wrong. The tenancy was month-to-month and not on a fixed term. The petitioners acknowledged as much in an August 2016 email to the respondents, where they indicated:
Anyway we are on month to month contract, if you decide to leave, please just give us a month and a week notice.
[43] On this evidence, as I have said, the arbitrator could have concluded that the respondents did, in fact, give one month notice of their intention to vacate. Nevertheless, the arbitrator held that the notice was a few days late, but that the respondents failed to appropriately mitigate and were not entitled to claim unpaid rent for August 2017.
[44] The arbitrator came to the following conclusions regarding the petitioners’ failure to mitigate appropriately:
a) The petitioners advertised the unit at a much higher rental amount ($1,950.00 instead of $1,650.00); and
b) The petitioners did not change the start date of the new tenancy to August 1, 2017, despite notice that the respondents would be vacating on July 31, 2017.
[45] Mitigation is a mixed question of fact and law with which this Court should usually not interfere: Falc v. Mainstreet Equity Corp., 2009 BCSC 410 at para. 15. In this case, for various reasons, I consider that the arbitrator’s determination was not patently unreasonable.
[46] First, it was not patently unreasonable for the arbitrator to find that increasing the rent by $300/month does not comport with the principles of mitigation.
[47] Second, it was not patently unreasonable to find that the petitioners ought to have taken additional steps to try to secure a new tenant for August 1, 2017 when they had been put on notice that the respondents were vacating, and they had held an open house on July 15, 2017 where they advertised to prospective tenants that the unit would be available on September 1, 2017.
[48] Third, the arbitrator had already found that the petitioners unlawfully increased the rent twice in 2016 and therefore the $1,650.00 counterclaimed by the petitioners was an unreasonable amount.
[49] I see no reason to disturb those findings. This ground is dismissed.
[50] The petitioners have also asked for a charge, in the form of monetary compensation, against the respondents. Given that the petitioners have been unsuccessful at the original hearing, the review hearing, and on judicial review, this aspect of the application is dismissed.
[51] The application for judicial review of the arbitrator’s Decision and/or of the review decision is dismissed.
“Voith J.”