2014 QCCQ 10109, 2014 QCCQ 10109

Cressaty c. 9222-0938 Québec inc. 2014 QCCQ 10109 COURT OF QUEBEC Administrative and Appeal Division CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL No: 500-80-028883-149 DATE: October 17, 2014 ______________________________________________________________________ PRESIDED BY THE HONOURABLE DAVID L. CAMERON J.C.Q. ______________________________________________________________________ ALAIN CRESSATY Petitioner/Tenant v. 9222-0938 QUÉBEC INC.

Respondent Lessor ______________________________________________________________________ JUDGMENT [ 1 ] I am seized of the petition of the Tenant, Alain Cressaty, for permission to appeal a decision of the Régie du logement, (the "Board"), presided by Marc C. Forest, Commissioner, rendered in Montreal on May 6, 2014, in case no 140616 31 20140305 G. The Decision [ 2 ] The decision resiliated the residential lease between the parties because of frequent late payment of rent, ordered the expulsion of the tenant and all occupants and condemned the tenant to judicial disbursements.

Provisional execution was not included in the original demand and the Commissioner refused to permit an amendment of the proceedings after the close of evidence and argument to add the request for provisional execution. The Suspension of Execution [ 3 ] On July 24, 2014, a judge sitting in practice division ordered the suspension of execution pending the hearing of the motion for leave to appeal, which was presented August 13, 2014. Upon taking the present judgement under advisement, I extended the suspension of execution until judgement.

The Grounds for Appeal [ 4 ] The tenant raises a series of grounds for appeal which can be summarised as follows: 1. The Commissioner erred in not requiring the Lessor to prove that the late payments were caused by the Tenant and that they had a prejudicial effect on the Lessor's business; 2. The Commissioner erred in the conduct of the hearing by not asking the Lessor to testify as to his own involvement in the late payments and by disregarding evidence that his conduct in postponing the pickup of rent let to a good-faith agreement that rent could be paid at a later date; 3.

The Commissioner erred in not considering a judicial admission made by the Lessor in his testimony; 4. The Commissioner erred in the conduct of the hearing by not permitting the Tenant to bring evidence in the form of the testimony of the Tenant's brother and that of his mother on the question of the Lessor's conduct in allowing them to pay the rent later than on the first of the month; 5. The Commissioner erred in failing to consider the history of past unsuccessful attempts on the part of the Lessor to evict the Tenant as a factor in assessing the evidence; 6.

The Commissioner erred in not giving the Tenant the chance to pay the rent in order to avoid resiliation of the lease. Analysis [ 5 ] Neither party presented a transcription of the hearing but the undersigned took the unusual step of listening to the electronic recording provided by the Tenant. [ 6 ] Several of the grounds raised by the Tenant concern the conduct of the hearing.

[ 7 ] It is possible, despite the rapid pace of the exchanges between the Commissioner and the Tenant, to hear the attempts by the Tenant to make known his desire to have his mother and his brother testify. [ 8 ] It appears from the evidence as a whole that the Lessor was complaining that rent was tendered by these other family members, who were not occupants of the residence, on behalf of the Tenant. The Tenant seems to have been taken by surprise by the idea that he would have to answer evidence that his family members had not paid on time, and he stated that he would have liked to have them present to testify.

He apparently misunderstood the proceedings by thinking that only evidence of his own late payment would be taken into consideration. [ 9 ] The Commissioner seems either to not hear the request, or he simply disregards it without comment.

In either case, one is left with a serious doubt as to the fairness of the process. [ 10 ] I am of the view that in the present matter the apparent failure to guide a party in the conduct of the proceedings, including explaining the need for testimony to fill a gap in the evidence and allowing a continuation to another date to facilitate this, can constitute a failure to follow the requirements of natural justice. [ 11 ] The role of the Commissioner is made clear in the law [1] : 63.

At the time fixed for the proof and hearing, the commissioner shall call the case, acknowledge the presence or absence of the parties and proceed with the proof and hearing. The commissioner shall summarily instruct the parties on the rules of evidence and each party shall state his pretensions and introduce his witnesses.

The commissioner shall give equitable and impartial assistance to each party so as to render effective the substantive law and to ensure that it is carried out. [underlining added for emphasis] [ 12 ] There is a serious indication in the present case that the Tenant succumbed without having had the benefit of such assistance. [ 13 ] The other grounds go to the substance of the case. [ 14 ] There is no discussion in the decision about the defence, which was based on the allegation that the Lessor had in fact tolerated the late payment on an ongoing basis and had created the equivalent of a tacit agreement that the rent could be paid later than on the first of the month. [ 15 ] The reasons for judgment are set out in two succinct paragraphs: [4] De plus, le locateur démontre que le loyer est fréquemment payé en retard, ce qui cause un préjudice sérieux dans la gestion de son immeuble.

En effet, la preuve a révélé que le locataire a payé de nombreux mois en retard depuis deux à trois ans. [5] La preuve révèle que les faits suivants sont des conséquences du retard de paiements du locataire, les difficultés pour le paiement de l'hypothèque et le paiement des divers créanciers du locateur. [ 16 ] I am of the view that this obvious insufficiency of motivation gives ample justification for the authorisation of an appeal in the present matter. [ 17 ] The degree of motivation is even less than that referred to in the jurisprudence [2] . [ 18 ] The rule that requires proper motivation of a decision is one of the cornerstones of the administrative law system.

In the present type of case, it is expressly embodied in

article 79 [3] of the Act : 79. Every decision of the board must be substantiated and transmitted to the parties concerned, in the manner provided in the rules of procedure. A copy of a decision, certified true by the commissioner having heard the case or by the person authorized for that purpose by the chairman, has the same value as the original. [underlining added for emphasis] [ 19 ] There is another issue that should be considered by the Court that will hear the appeal. The Lessor provided evidence showing the dates of payment over a period going back to November 2010.

The demand was preceded by an earlier judgement dated February 10, 2014 on a case for resiliation for non-payment of rent for September 2013 through January 2014. [ 20 ] The Tenant paid the arrears of $ 3,800 at the hearing and thus avoided resiliation, succumbing only to an award of judicial disbursements. [ 21 ] Thus, at the hearing on the present case, there were only three months of rent in issue after the earlier judgement: February, March and April. [ 22 ] The Commissioner seems to disregard the evidence that the March rent was paid on February 24, that the February rent was paid on February 2, and that the rent for April was tendered at the hearing.

There is no mention of the Tenant's explanation that he

brought the rent to the hearing of April 23, 2014 as he had done on the earlier occasion, perhaps believing that it was the best way to insure that he could make proof of payment. [ 23 ] The Court that hears the appeal should give thought to whether the Lessor had in fact opted in favour of the recourse of a simple resiliation for non-payment when it instituted its earlier proceedings, thereby renouncing the recourse for frequent late payment and whether the judgement of February 10 therefore renders the issue of prior late payment moot. [ 24 ] At the very least, should not the Commissioner have considered this option of recourses as evidence that the Lessor had in fact renounced the effects of late payment for the past?

Should not the issue of late payment and prejudice have been limited to the period contemporary with the hearing, where only the month of April was technically late? [ 25 ] Finally, the issue of prejudice is dealt with in the hearing only perfunctorily, with the Commissioner asking what the prejudice consisted of and the Lessor stating that frequent absences from work to collect rent caused him to miss work as a stockbroker, thereby missing the opportunity to make trades.

Apart from this point, which is caught up in the question of whether the Lessor set appointments for payment after the first day of the month, the proof of prejudice was the simple assertion that the Lessor had an hypothec to pay and needed liquidity for repairs.

There is no evidence of a precise financial character to substantiate the allegation. [ 26 ] Can this be considered sufficient evidence of prejudice? [ 27 ] Given the issues in the appeal, which pertain both to process and to evidentiary issues, the parties should be prepared to proceed as in a trial de novo , with both parties having the opportunity to making their case with all the necessary evidence. FOR THESE REASONS, THE COURT : GRANTS the motion for leave to appeal the decision rendered by the Régie du logement rendered on May 6, 2014, in case no 140616 31 20140305 G.

AUTHORISES the appeal on the following questions: 1. Did the Commissioner err in not requiring the Lessor to prove that the late payments were caused by the Tenant and that they had a prejudicial effect on the Lessor's business; 2. Did the Commissioner err in the conduct of the hearing by not asking the Lessor to testify as to his own involvement in the late payments and by disregarding evidence that his conduct in postponing the pickup of rent led to a good-faith agreement that rent could be paid at a later date; 3.

Did the Commissioner err in not considering a judicial admission made in his testimony by the Lessor; 4. Did the Commissioner err in the conduct of the hearing by not permitting the Tenant to bring evidence in the form of the testimony of the Tenant's brother and that of his mother on the question of the Lessor's conduct in allowing them to pay the rent later than on the first of the month; 5. Did the Commissioner err in failing to consider the history of past unsuccessful attempts on the part of the Lessor to evict the Tenant as a factor in assessing the evidence; 6.

Did the Commissioner err in not giving the Tenant the chance to pay the rent in order to avoid resiliation of the lease. _________________________________ DAVID L. CAMERON J.C.Q. Mr Alain Cressaty Petitioner/Tenant Mtre Kabir Khattabi Attorney for the Respondent/Lessor Date of hearing: August 13, 2014 [2] Zaslavski c. Gestion Navarex inc . 2014 QCCQ 6589 , Ullah c. Rusimov , 2013 QCCA 6478 , Beaudry c. Akhtar , 2010 QCCQ 7970 .