Pasternak v. 3011650 Nova Scotia Ltd., (2015) 336 O.A.C. 40 (CA)

• Judge: Feldman, Benotto and Brown, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: March 30, 2015
• Jurisdiction: Ontario
• Citations: (2015), 336 O.A.C. 40 (CA);2015 ONCA 391

Pasternak v. 3011650 N.S. (2015), 336 O.A.C. 40 (CA)

MLB headnote and full text

Temp. Cite: [2015] O.A.C. TBEd. JN.005

Gerald Nanne (tenant/respondent) v. 3011650 Nova Scotia Limited c.o.b. as Michipicoten Forest Resources (landlord/appellant)

Joseph Pasternak (tenant/respondent) v. 3011650 Nova Scotia Limited c.o.b. as Michipicoten Forest Resources (landlord/appellant)

Glenn Campbell (tenant/respondent) v. 3011650 Nova Scotia Limited c.o.b. as Michipicoten Forest Resources (landlord/appellant)

(C59236; 2015 ONCA 391)

Indexed As: Pasternak v. 3011650 Nova Scotia Ltd.

Ontario Court of Appeal

Feldman, Benotto and Brown, JJ.A.

June 5, 2015.

Summary:

The Landlord and Tenant Board ordered the landlord to repay rent illegally collected under the Residential Tenancies Act (RTA). In doing so it limited the repayment to a one-year period under s. 135(4) of the RTA. The landlord appealed the finding that the rent was illegally collected because, according to it, the RTA did not apply. The tenants cross-appealed the finding that they were only entitled to repayment of illegally collected rent for a one-year period.

The Ontario Divisional Court, in a decision reported at 317 O.A.C. 211, dismissed the appeal and the cross-appeal. The landlord appealed.

The Ontario Court of Appeal dismissed the appeal.

Landlord and Tenant - Topic 2381

The lease - Renewals - General - In the 1970s, Algoma Central Railway (ACR) became the owner of a large tract of land north of Sault Ste. Marie - In the 1970s and 1980s, ACR leased many one acre sites within the property for recreational use during the summer - The lessees built cottages on their sites - In 1997, ACR sold part of the land, including 429 cottage sites, to the landlord - In 2005 ACR sold the rest of the land and cottage sites to Algoma Timberlakes Corp. - On June 1, 2008, each of the lessees, including the tenants, executed a new lease with the landlord that provided for automatic yearly renewal, unless either party gave notice of termination, for a maximum of 20 years - Section 50(3) of the Planning Act (PA) prohibited a landowner from entering into any agreement that had the effect of granting another person "the use of or right in [the owner's] land" directly, or by entitlement to renewal, for a period of 21 years - The leases were drafted to provide for a term that was less than the 21 year term prohibited under the PA - In 2005, after Algoma Timberlakes acquired its portion of the land, Algoma Timberlakes either tried to evict or increase the rent paid by the tenants who held 20 year cottage leases on the land - The Tenants applied to the Landlord and Tenant Board for a declaration that the increased rents they were paying under the 2008 leases were illegal - The Board agreed and ordered the landlord to repay rent illegally collected under the Residential Tenancies Act (RTA) - In doing so it limited the repayment to a one-year period under s. 135(4) of the RTA - The landlord appealed, asserting that since the leases were governed by the RTA, they could be renewed indefinitely - This potential renewal for a period of more than 21 years was enough to trigger the application of s. 50(3) of the PA, thereby rendering the leases void ab initio - The Divisional Court dismissed the appeal - The Board correctly interpreted s. 50(3) of the PA - The wording of s. 50(3) was directed at the parties entering into an agreement that had the effect of directly or indirectly providing for the use of the land for more than 21 years - In other words, for a lease to be void, it was the agreement entered into by the parties, not a statutory provision, that had to have the effect of providing for a term of usage of more than 21 years - The Ontario Court of Appeal dismissed the landlord's appeal - The court was bound by Matthews v. Algoma Timberlakes Corp. (2010 Ont. C.A.).

Cases Noticed:

Matthews v. Algoma Timberlakes Corp. (2010), 266 O.A.C. 261; 2010 ONCA 468, appld. [para. 2, footnote 1].

Cumming v. Peterborough Police Association, [2013] O.A.C. Uned. 548; 2013 ONCA 670, refd to. [para. 23, footnote 6].

R. v. Labrecque (B.), [2011] O.A.C. Uned. 328; 2011 ONCA 360, refd to. [para. 23, footnote 7].

Royal Bank of Canada v. Trang (2014), 327 O.A.C. 199; 2014 ONCA 883, refd to. [para. 23, footnote 8].

Counsel:

Wendy J. Earle and Matthew Furrow, for the appellant;

Robert G. Doumani and Patrick Harrington, for the respondents;

Brian A. Blumenthal, for the intervener, Landlord and Tenant Board.

This appeal was heard on March 30, 2015, by Feldman, Benotto and Brown, JJ.A., of the Ontario Court of Appeal. The following judgment of the Court of Appeal was delivered on June 5, 2015.