2007 BCSC 257 Berry and Kloet v. British Columbia (Residential Tenancy Act, Arbitrator)

Before: The Honourable Mr. Justice Williamson

Reasons for Judgment

Counsel for the Petitioners Sarah Berry and Jeremy Kloet	David Mossop, Q.C.
Counsel for the Respondent Hollyburn Properties Limited	Stephen Mellows
Date and Place of Hearing:	February 12, 2007
	Vancouver, B.C.

[1] On September 21, 2006, the petitioners were served with a notice to end tenancy pursuant to s. 49(6) of the Residential Tenancy Act, SBC 2002 c. 78 (the “Act”). The grounds upon which the notice were based were that the landlord required that the rental unit be vacant in order to carry out certain renovations.

[2] The relevant portion of the statute reads as follows:

49(6) A landlord may end a tenancy in respect of a rental unit if the landlord has all the necessary permits and approvals required by law, and intends in good faith, to do any of the following:

(b) renovate or repair the rental unit in a manner which requires the rental unit to be vacant

[3] The petitioners applied pursuant to s. 47 (4) of the Act for an order setting aside the notice to end the tenancy.

[4] The Dispute Resolution Officer rendered a decision on December 22, 2006 dismissing the tenant’s application.

[5] The petitioners come before this court upon a judicial review seeking an order setting aside the Dispute Resolution Officer’s decision on the grounds that it is patently unreasonable.

[6] The parties agree that the standard of review in these circumstances is one of patent unreasonableness.

[7] I note that when a landlord seeks to end a tenancy for purposes of renovation, s. 49(6) of the Act sets out three requirements:

(1) The landlord must have the necessary permits;

(2) The landlord must be acting in good faith with respect to the intention to renovate; and

(3) The renovations are to be undertaken “in a manner that requires the rental unit to be vacant”.

[8] There is no dispute here concerning necessary permits, nor whether the landlord intended in good faith to undertake the renovations.

[9] The issue is whether the decision of the Dispute Resolution Officer was patently unreasonable in her treatment of the question of whether the renovations required the rental unit to be vacant.

[10] I conclude that the decision of the Dispute Resolution Officer is patently unreasonable and should be set aside.

[11] I start from the accepted rules of statutory interpretation. I conclude that the Act is a statute which seeks to confer a benefit or protection upon tenants. Were it not for the Act, tenants would have only the benefit of notice of termination provided by the common law. In other words, while the Act seeks to balance the rights of landlords and tenants, it provides a benefit to tenants which would not otherwise exist. In these circumstances, ambiguity in language should be resolved in favour of the persons in that benefited group: See (Canada Attorney General) v. Abrahams, [1983] 1 S.C.R. 2: Henricks v. Hebert, [1998] B.C.J. No. 2745 (QL)(SC) at para. 55:

I think it is accepted that one of the overriding purposes of prescribing statutory terms of tenancy, over and above specifically empowering residential tenants against the perceived superior strength of landlords, was to introduce order and consistency to an area where agreements were often vague, uncertain or non-existent on important matters, and remedies were relatively difficult to obtain.

[12] The petitioners rely upon Allman v. Amacon Property Management Services Inc., 2006 BCSC 725, a judgment of Slade, J. of this court.

[13] In that case, the review judge set aside the decision of an arbitrator (now called a Dispute Resolution Officer) which had denied the petitioners’ application to set aside a notice to end tenancy. At para. 22, Slade, J. observed that the decision of the arbitrator was:

... devoid of any analysis of whether the renovations, due to their nature and extent, require (ie make necessary) vacant possession.

[14] Further, at para. 24, he wrote:

The primary consideration is whether, as a practical matter, vacant possession is required due to the nature and extent of the renovations.

[15] In the decision at bar, considerable evidence was led by the landlord about the nature and extent of the renovations. The Dispute Resolution Officer stated, at para. 14, that she realized she must be satisfied that the nature and extent of the renovations “require vacant possession”. She also observed that the landlord had acknowledged that revision of their proposed renovation schedule “was not impossible”.

[16] The tenants brought evidence to show that some of the required renovations were already being performed at the date of the hearing, while the rental unit was being occupied. The tenants suggested that this was proof that the tenancy does not need to be terminated for the renovations to be undertaken. The tenants also said that they would be willing to vacate the suite temporarily, and to remove their belongings, if it was necessary in order to accommodate renovations. I emphasize that the Dispute Resolution Officer set out this evidence in her decision.

[17] The heart of the Dispute Resolution Officer’s decision is para. 17, which I reproduce in full:

The Act does not define vacancy and section 49(6)(b) merely states that the landlord can end the tenancy if the renovation or repair is done in a manner that “requires the rental unit to be vacant” without defining any specific length of time vacancy would be required in order to support a notice to end tenancy under that section. While I am satisfied that it is possible for the landlord to adapt the renovation schedule and conduct the renovations in a piecemeal fashion, I find that the rental unit will need to be vacant for at least 3 days to allow for refinishing of the hardwood floors and retiling of the bathroom and kitchen floors. The tenants have acknowledged that vacancy is required for some period of time. In drafting the Act, legislators did not stipulate a minimum length of time that vacancy is required to support a notice to end tenancy under section 49(6)(b) and I am not willing to find as a matter of law that the legislators had intended a minimum length of time to be required. I am satisfied that the landlord has met the burden of establishing that the rental unit must be vacant in order to accomplish the intended renovations.

[18] As can be seen, the Dispute Resolution Officer found that the rental unit would need to be vacant for at least three days. She also noted the tenants acknowledged that vacancy is required. However, in this analysis she ignored the evidence before her that the tenants were prepared to vacate the premises for the period of time necessary for the renovations.

[19] I conclude that this was patently unreasonable. As noted, s. 49(6) of the Act sets out three requirements:

(a) The landlord must have the necessary permits;

(b) The landlord must be acting in good faith with respect to the intention to renovate; and

[20] The third requirement, namely, that the renovations are to be undertaken in a manner that requires the rental unit to be vacant, has two dimensions to it.

[21] First, the renovations by their nature must be so extensive as to require that the unit be vacant in order for them to be carried out. In this sense, I use “vacant” to mean “empty”. Thus, the arbitrator must determine whether “as a practical matter” the unit needs to be empty for the renovations to take place. In some cases, the renovations might be more easily or economically undertaken if the unit were empty, but they will not require, as a practical matter, that the unit be empty. That was the case in Allman. In other cases, renovations would only be possible if the unit was unfurnished and uninhabited.

[22] Second, it must be the case that the only manner in which to achieve the necessary vacancy, or emptiness, is by terminating the tenancy. I say this based upon the purpose of s. 49(6). The purpose of s. 49(6) is not to give landlords a means for evicting tenants; rather, it is to ensure that landlords are able carry out renovations. Therefore, where it is possible to carry out renovations without ending the tenancy, there is no need to apply s. 49(6). On the other hand, where the only way in which the landlord would be able to obtain an empty unit is through termination of the tenancy, s. 49(6) will apply.

[23] This interpretation of s. 49(6) is consistent with the instruction in Abrahams and Henricks to resolve ambiguities in drafting in favour of the benefited group, in this case, tenants. Practically speaking, if the tenant is willing to empty the unit for the duration of the renovations, then an end to the tenancy is not required. It is irrational to think that s. 49(6) could be used by a landlord to evict tenants because a very brief period was required for a renovation in circumstances where the tenant agreed to vacate the premises for that period of time. It could not have been the intent of the legislature to provide such a “loophole” for landlords.

[24] In this case, the Dispute Resolution Officer turned her mind to the first dimension but failed to address the second. The renovations required refinishing of hardwood floors and retiling of bathroom and kitchen floors. Thus, as a practical matter, she found that the unit had to be empty for the renovations to take place. Indeed, the tenants acknowledged that vacancy was required for some period of time. The first dimension of the “vacancy” requirement was met.

[25] However, the second dimension was not met. The tenants were willing to vacate the premises for the amount of time required to perform the renovations. Thus, the renovations could have been performed without resorting to a termination of the tenancy. The Dispute Resolution Officer failed to address whether the renovations could be performed without putting an end to the tenancy. In so failing, she did not deal properly with whether vacating the unit was “required” as is mandated by s. 49(6) of the Act.

[26] The irrationality of her conclusion is in effect acknowledged by the respondents in their submissions. Counsel observed that there was no minimum time frame for necessary vacancy set out in the Act. He noted that, on the facts before her, the Dispute Resolution Officer determined that three days was enough – that is to say, if the tenants had to vacate the premises for three days, the requirements of the statute would have been met. He also observed that in other cases, perhaps one day is enough if “for example, hazardous insulation is being removed”.

[27] The problem with this interpretation is that it ignores the second dimension of the “vacancy” requirement. On this interpretation, if a Dispute Resolution Officer found that any period of vacancy was required for a renovation, even a single day, a tenancy could be terminated. Such a finding flies in the face of the purpose of the statute, which is to balance the rights of tenants and landlords. It is irrational to think that a landlord could terminate a tenancy because a very brief period of emptiness was required.

[28] In failing to address this second aspect of the “vacancy” requirement, the Dispute Resolution Officer’s decision was patently unreasonable.

[29] In the result, the Dispute Resolution Officer’s order of December 22, 2006 is set aside, as is the order granting possession effective January 15, 2007 to the respondents.

[30] The petitioners will have their costs of this application and of the application with respect to a stay before Mr. Justice Silverman.

“L.P. Williamson, J.”
The Honourable Mr. Justice L.P. Williamson

Citation:	*Berry and Kloet v. British Columbia (Residential Tenancy Act, Arbitrator),*
	2007 BCSC 257