Chapter 6 - Specific Areas

6.3 - Landlord And Tenant Matters

Introduction

As discussed in our First Report [1] , landlord and tenant matters are a specialized area governed by the Landlord and Tenant Act [2] . Pursuant to that Act, disputed applications must be resolved by a judge.

We noted in our First Report that landlord and tenant applications are placing significant pressure on the Ontario Court of Justice (General Division) as evidenced by the substantial increase in the number of applications filed since 1989/90 [3] , and by the fact that tenants are increasingly defending their positions, as they are entitled to do. We further noted that both landlords and tenants find the civil court process to be too lengthy and difficult to understand and that this has impaired access to the courts for the resolution of these disputes and resulted in an imbalance in the current system. [4]

Based on these observations, the Task Force recommended that a new forum, the logical one being an administrative tribunal, be considered for landlord and tenant disputes. At the time of writing the First Report, there were constitutional difficulties with this approach which did not permit its implementation in Ontario. This constitutional issue, however, was pending before the Supreme Court of Canada; accordingly, the Task Force recommended that "if the Supreme Court of Canada holds that it is constitutionally permissible to place landlord and tenant disputes in an administrative setting...such an option [should] be re-examined". [5]

In February, 1996, the Supreme Court of Canada released its decision in Re Residential Tenancies Act (N.S.). The previous constitutional impediment to creating an administrative tribunal in Ontario to deal with landlord and tenant matters appears now to have been removed. [6]

Discussion of Administrative Tribunal Option for Ontario

In light of this recent Supreme Court of Canada decision, the Task Force makes the following recommendation.

RECOMMENDATION

We recommend that an administrative tribunal for the resolution of landlord and tenant disputes be implemented in Ontario.

Benefits of an Administrative Tribunal

In making this recommendation, we would like to revisit the benefits associated with creating an administrative process for landlord and tenant disputes briefly discussed in our First Report. In doing so, we would like to acknowledge the work that has been done in this area by the Fundamental Issues Group. We have reviewed with interest the comments and suggestions made by Professor Martha Jackman in her research paper with respect to the recommended transferral of landlord and tenant matters to an administrative agency. [7]

a.   Increasing Accessibility: The Need for Less Formal Procedure

Accessibility to the justice system is one of the criteria against which the modern civil justice system must be judged. It is vitally important, therefore, that the civil justice system provide the public with access to a forum where they can have their landlord and tenant disputes resolved quickly and economically.

According to the Macfarlane Study, both landlords and tenants find the current statutory procedure to be highly legalistic, dauntingly complex and unreasonably slow. [8] However, in particular, tenants find the civil justice system to be inaccessible: in the Macfarlane Study, only 1% of applications were brought by tenants; and tenants complained of the intimidating formality and incomprehensibility of the court process. [9]

An important benefit of an administrative tribunal is that, within the limits imposed by the Statutory Powers Procedure Act [10] , it can adopt simplified and informal procedures that are tailored to reflect the unique characteristics of landlord and tenant disputes. [11] We are of the view that the regular court system has proven too formal and cumbersome in structure, and that such disputes could better be dealt with by a more informal, summary proceeding before a tribunal where the parties would feel less inhibited in presenting their case.

b.   Reallocation to a more appropriate Forum

As previously discussed, landlord and tenant applications are placing significant pressure on an already over-burdened court system, and 95% of these applications are for relatively straightforward applications for arrears of rent. In our First Report, we emphasized the importance of "fitting the forum to the fuss". We stated that the forum should be appropriate to the nature and complexity of the dispute and that smaller and less complicated disputes did not require the full range of procedural rights which dominate the superior court process.

The very large majority of landlord and tenant applications are generally not of a complex legal nature and, in our view, do not require to be heard by a judge of the General Division. Indeed, we suggest that they can be dealt with as effectively and more expeditiously through a specialized and less formal administrative process. [12]

c.   Early Resolution of Disputes

The creation of an administrative process provides the opportunity to resolve landlord and tenant disputes quickly outside of a formal adjudicative process. The functional flexibility of an administrative process allows it to be structured to provide the most expeditious resolution of those disputes.

For example, as is the case in Nova Scotia, mediation could be included as an important component in the administrative process. The Macfarlane Study, in recommending that a mediation process be introduced to landlord and tenant disputes, found that over 85% of landlord and tenants interviewed felt that mediation could have resolved their case as effectively as the court process. [13] As noted by Macfarlane, mediation encourages the improvement and maintenance of a continuing relationship, which the parties often have in a landlord and tenant matter, and allows for a quick resolution of the dispute in a consensual and realistic way. [14]

Characteristics of an Effective Administrative Process

In our First Report, we stated that, in order for the public to have a feeling of confidence in the integrity of their civil justice system, they are entitled to:

  • timely and affordable civil justice
  • be able to understand the system which provides that justice, and,
  • basic, straightforward information to assist it when it comes into contact with the system

In addition, we recommended a civil justice system where cases are actively managed, and where appropriate alternative dispute resolution mechanisms are actively employed. In an earlier Chapter in this Report (see Chapter 5.2), we recommended that an early mandatory mediation process be implemented for civil disputes.

In our view, these considerations are equally applicable to an effective administrative process for the resolution of landlord and tenant disputes and should be borne in mind in the design of such a system.

As well, in designing an effective administrative process, it is important to take into account concerns that have been expressed about conferring responsibility for the resolution of landlord and tenant disputes to such a forum. [15] It has been noted, for example, that unless guarded against, administrative procedures can become overly formalized and complex to the extent that they unnecessarily replicate the formality of the court process. [16]

Concerns have also been expressed that, if an administrative process is not properly funded with adequate staffing levels, problems with delays and backlogs will become endemic and severely curtail the effectiveness of this forum. [17]

Other concerns are that, if safeguards are not in place to ensure that its decision-makers are independent, impartial and of the highest quality, the perception will arise that the administrative forum dispenses "second class justice", with the result that the system will lose all credibility. [18]

We share these concerns and acknowledge the importance of addressing them in the design of an effective administrative process.

RECOMMENDATION

While the Task Force is not in a position to recommend the exact nature and form of an administrative process, we recommend that it should include the following characteristics:

  • it should be a single process before an independent tribunal with exclusive jurisdiction of first instance;
  • there should be a right of appeal to a single judge of the Divisional Court on questions of fact and law, with no automatic stay pending appeal;
  • the tribunal should actively manage cases, rather than simply adjudicate, with the objective of ensuring the most expeditious and effective resolution of the dispute; in this regard, an early mediation process should be an important component;
  • the tribunal should enhance public access by ensuring that its procedures are simple, easily understood, and responsive to the unique characteristics of such disputes and that information about its procedures are clearly and broadly communicated;
  • the tribunal should be adequately staffed; adjudicators should be broadly representative of the Ontario public, properly trained, with demonstrated expertise and understanding of the unique issues in this area; similarly, its administration must be staffed by qualified and trained personnel at all levels;
  • the tribunal must be properly and adequately funded from the outset to ensure its credibility and integrity and to guard against the crippling consequences of operating in a backlog environment.

Current Situation in Ontario

The Task Force understands that, in light of the recent Supreme Court of Canada decision, the government of Ontario is actively considering the option of creating a provincial tribunal to deal with landlord and tenant matters. A discussion paper was recently released by the Ministry of Municipal Affairs and Housing inviting comments on an appropriate dispute resolution system. [19] It is noted in the paper that the government "is proposing to create a new dispute-resolution system independent of the courts to adjudicate both rent control matters and other landlord and tenant matters". [20] The exact nature of the model will be finalized after a period of consultation. Issues for consideration in the paper include the following: the relationship between the dispute resolution system and government; the appointment of adjudicators; the dispute resolution process, including the use of mediation; and rights of appeal.

For the reasons discussed earlier in this Chapter, we support the government's direction in this regard and commend for its consideration our recommendations set out above.


Footnotes:

[1] First Report of the Civil Justice Review (Toronto: Ontario Civil Justice Review, March 1995), c.17.2 [hereinafter "First Report"].
[2] R.S.O. 1990, c.L.7.
[3] Based on 1994/95 court statistics, there has been a 47% increase in applications filed since 1989/90: Court Statistics Annual Report (September, 1995).
[4] See Julie Macfarlane, Project Coordinator, The Landlord/Tenant Dispute Resolution Project: Final Report and Recommendations (May, 1994), at pp. 61, 63 - 64 [hereinafter "Macfarlane Study"]. In the Macfarlane Study, the vast majority of cases in the sample were initiated by landlords, 95% of which were for arrears of rent; only 1% were actions brought by tenants.
[5] First Report, supra, note 1, at p.302.
[6] Re Residential Tenancies Act, (N.S.), [1996] 1 S.C.R. 186.
[7] Martha Jackman, The Reallocation of Disputes from Courts to Administrative Agencies (July 13, 1995) [hereinafter "Jackman"].
[8] Macfarlane Study, supra, note 4, at pp. 3 and 68 - 80.
[9] Id., at pp. 4 and 80.
[10] R.S.O. 1990, c.S.22.
[11] Jackman, supra, note 7, at pp. 47 - 48.
[12] Macfarlane Study, supra, note 4, at pp. 46 and 83 - 84.
[13] Id., at p.198.
[14] Id., at p.143. See, also, Jackman, supra, note 7, at pp. 41 - 49.
[15] See, generally, Jackman, supra, note 7, at pp. 50 - 56.
[16] Id., at p.53.
[17] Id., at pp. 55 - 56.
[18] Id.
[19] Province of Ontario, Ministry of Municipal Affairs and Housing, Tenant Protection Legislation: New Directions for discussion (June 25, 1996).
[20] Id.,at p.7.

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