2015 QCCQ 9570, 2015 QCCQ 9570

Ong c. Ngo 2015 QCCQ 9570 COURT OF QUEBEC (Division administrative et d’appel) CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL TOWN OF MONTREAL Civil Division N° : 500-80-031534-150 DATE : October 2, 2015 ______________________________________________________________________ BEFORE THE HONOURABLE SCOTT HUGHES, J.C.Q. ______________________________________________________________________ MAY ONG Plaintiff v.

SHUI CHEONG NGO Defendant ______________________________________________________________________ JUDGMENT ON A MOTION FOR LEAVE TO APPEAL FROM THE RÉGIE DU LOGEMENT (Article 91 of the Act respecting the Régie du logement (C.Q.L.R. c. R-8.1)) ______________________________________________________________________ [ 1 ] May Ong seeks leave to appeal two decisions rendered by the Régie du logement. The first decision cancels her residential lease and orders her expulsion [1] .

The second dismisses her request to revoke the initial decision [2] . [ 2 ] This motion was served within the legal delays to contest both decisions [3] . THE APPLICABLE RULES [ 3 ]

Article 91 of an Act respecting Régie du Logement ( the Act ) states: 91. An appeal lies, on leave of a judge of the Court of Québec, from decisions of the Régie du logement when the matter at issue is one which ought to be submitted to the Court of Québec . […] (Emphasis added) [ 4 ] Does this case include an issue which ought to be submitted to the Court of Québec? [ 5 ] The jurisprudence of this Court has consistently decided that leave to appeal should be granted according to the following criteria:

a) the issue is serious, new, controversial or of general interest [4] ;

b) the contested decision shows a apparent weakness: manifest error, gross or dominant error of facts, dominant error in administration of evidence [5] ;

c) disrespect of the rules of natural justice [6] . THE FACTS [ 6 ] It is admitted that Mrs. Ong has not paid her rent for a long period of time, apparently since 2009. In lieu of rent, the file indicates that she transferred shares in two different companies to Mr. Ngo. These transfers were also guaranteed by hypothecs in favour of Mr. Ngo in the amounts of $116, 771 and $233, 542. [ 7 ] Mr. Ngo complained of unpaid rent and undertook proceedings before the Régie du logement. The decision dated April 21, 2015 [7] , dismissed his claim deciding that the Régie du logement had no jurisdiction for execution of the hypothecs that Mr. Ngo invoked as the basis of his rights:

« [12] Le locateur fait défaut de démontrer qu’il est le locateur et/ou le seul locateur en vertu d’un bail. L’existence de la pièce L2 suggère une relation contractuelle distincte de celle d’un bail ou, à tout le moins, pouvant interpréter et ainsi préjudicier ceux des parties. Il apparaît ainsi que la qualification de la nature des relations contractuelles entre les parties n’est pas clairement établie. Or, c’est le fardeau du locateur. [13] Le présent forum ne possède pas la compétence juridictionnelle pour déterminer les droits et obligations issus de L2.

En conséquence, le Tribunal rejette la demande pour défaut de compétence. » [ 8 ] A motion for leave to appeal is presently pending before the Court [8] . [ 9 ] Soon after this decision, Mr. Ngo undertook new proceedings, this time invoking a residential lease for the period of September 1, 2014 to August 31, 2015. This recourse culminated in the first decision contested here. [ 10 ] In the decision dated June 22, 2015 [9] , the Régie du logement decided that the hypothecs were not a relevant defense to the claim for unpaid rent.

Therefore, the documentary evidence (the hypothecs in particular) was not taken into consideration: « [5] En ce qui concerne la décision soumise (Ngo c. Ong, 2015 QCRDL 12043 ) par la locataire, le Tribunal ne peut la retenir puisque la preuve en l’instance démontre que l’entente conclut par le passé se terminait au 31 juillet 2014, ce qu’admet la locataire à l’audience et dans un courriel du 22 août 2014 (pièce P-1) . » THE ISSUES [ 11 ] Mrs. Ong is acting here without the aid of an attorney.

Her motion does not, as the rules provide, set out the issues she proposes ought to be submitted to the Court. [ 12 ] Also, at this stage, the Court must not evaluate Mrs. Ong’s chances of succeeding on appeal but only whether or not there are defensible arguments to be put to the Court on the merits. [ 13 ] The gist of her reasoning is contained in the following paragraphs of her motion for leave to appeal: « 11.

At the 2 nd and 3 rd hearings above at the Regie du Logement, information put forward by plaintiff regarding the 2 hypothecs taken by the Defendant Shui Cheong Ngo against the plaintiff were ignored and considered irrelevant. Each hypothec is for a value of CAD $116,771.00, making a total value of CAD $233,542.00. 12.

Such $ valuation and the creation of the hypothecs were decided upon by defendant himself who rejected a straight transfer of shares to cover the rent outstanding as he had apparently declared rental income from the said property for the previous years and had paid tax on the declarations – and did not now want to incur any potential capital gains tax if he disposed of the shares himself, 13. Defendant has the option to execute the hypothecs. The total value of CAD $233,542 will cover any past rent and rent obligations for more than 3 years, going forward, from Aug 2014. 14.

In view of the existing hypothecs, no rent is due from plaintiff – and no eviction order is valid arising from the decision of the Regie dated 22 nd June 2015 – because the decision on the 21 st April is still binding. » {Sic} [ 14 ] Basically, Mrs. Ong argues that there was an agreement between the parties that she not pay the rent and that her transfer of shares and the hypothecs would serve as or guarantee payment.

These facts and the legal arguments stemming therefrom have not been discussed by the Régie du logement. [ 15 ] Failure by the Régie to do so constitutes an issue which falls within the category described at paragraph 5

b) of this judgment. [ 16 ] Mrs. Ong also argues: « 15. The plaintiff would suggest that the current convoluted scenario is highly improper and legally unacceptable, allowing the defendant to potentially circumvent the legal process to evict defendant May Ong for unpaid rent whilst maintaining 2 registered hypothecs against the same defendant. » {Sic} [ 17 ] This issue falls within the reasons described in paragraph 5

c) of the judgment. [ 18 ] These are subjects that ought to be submitted to the Court of Quebec. [ 19 ] Since Mrs. Ong has not proposed specific questions in her motion, the Court will do so in the conclusions of this judgment. [ 20 ] These questions are not aimed to bind the judge who will hear the merits of this case but only to guide the parties in the preparation of their hearing on the appeal. [ 21 ] Lastly, since the Régie du logement has not taken into account any of these facts or arguments, it is appropriate that hearing de novo be ordered. [ 22 ] For these reasons, the court : [ 23 ] Grants the motion for leave to appeal the decisions dated June 22 and July 31, 2015;

[ 24 ] Orders that the appeal proceed as a de novo hearing; [ 25 ] Declares , without aiming to bind the judge on the merits, that the following questions are appropriate:

a) Is there a residential lease between the parties?

b) If so, what effect do the transfer of shares and the hypothecs in favour of Shui Cheong Ngo have on the obligations of May Ong as tenant?

c) Should the lease have been cancelled? [ 26 ] Without costs . __________________________________ SCOTT HUGHES, J.C.Q. Mrs. May Ong Plaintiff (not represented) […] Beaconsfield (Québec) […] Me Léa Denicourt Fauvel LAZARIS & ASSOCIÉS Attorney for the Defendant 615, boul. René-Lévesque Ouest Montréal (Québec) H3B 1P5 Date of hearing : August 27, 2015