Loboda v. Lee, 2012 MBCA 79

Citation: Loboda v. Lee, 2012 MBCA 79 Date: 20120820 Docket: AI 12-30-07816 IN THE COURT OF APPEAL OF MANITOBA BETWEEN : ) L. Loboda ) on his own behalf LEONARD LOBODA ) ) K. Lee (Landlord) Applicant ) on her own behalf ) ) T. D. Gisser - and - ) for the Residential Tenancies ) Commission ) KIMBERLY LEE ) Chambers motion heard: ) August 9, 2012 (Tenant) Respondent ) ) Decision pronounced: ) August 20, 2012 MARC M.

MONNIN J.A. 1 The applicant, Leonard Loboda (the landlord), seeks to appeal a decision of the Residential Tenancies Commission (the RTC) made June 15, 2012, whereby it ordered that he return all but $50 of Ms Lee ’ s (the tenant) security deposit and pay her an additional amount for moving expenses and costs. 2 The landlord’s application for leave raises two grounds which he argues amount to errors of law, namely: 1) that the amount awarded for compensation for moving expenses exceeds the prescribed sum allowed under The Residential Tenancies Act , C.C.S.M., c.

R119 (the Act ); and 2) that the RTC combined the previous order from the Residential Tenancies Branch (the RTB) when, as this was a hearing de novo , that order was no longer in effect. 3 The tenant was not duly served with the material as she was out of the country, but participated by telephone conference and did not object to the matter proceeding, notwithstanding a lack of proper service. 4 In order to obtain leave to appeal a decision of the RTC, this court has stated on numerous occasions the criteria that must be met. As I summarized in Dhillon v. Prejet et al. , 2011 MBCA 76 , they are (at para. 3): …

a) the appeal must involve a question of jurisdiction or of law as opposed to requiring the court to become involved in assessing issues of fact;

b) the case must be one that warrants the attention of the court; i.e., that it is of sufficient importance, not just in the immediate case, but in other similar disputes; and

c) there must be an arguable case of substance; that is, one with a reasonable prospect of success. See J.C. Property Management v. Benard , 2011 MBCA 1 at para. 7 .

FACTUAL BACKGROUND 5 While it is not usual to outline the facts in great detail when determining a leave to appeal application, I believe that in this case they are pertinent in dealing with the grounds of appeal raised by the landlord. 6 The facts as found by the RTC are that in early 2011 the tenant, responding to an online ad, viewed a suite belonging to the landlord. At that time she was in a lease ending May 31, 2011. The tenant, who is a member of the armed forces, was scheduled to leave on a military exercise on April 25, 2011, for about three weeks.

As the RTC noted: Central to the dispute is whether or not there was an agreement between the parties to allow firstly Ms. Lee to store her belongings in the rental unit in advance of June 1, 2011, and whether there was an agreement to allow her to move all of her items in prior to leaving on her military exercise on April 25, 2011, for about 3 weeks. 7 While there was a written lease agreement which did not make mention of the earlier move of furnishings, the tenant alleged that there had been a verbal modification whereby she was to pay an extra $150 a month for ten months.

According to the landlord, the amount was to allow her to move in “a few things for storage.” 8 After the tenant moved her personal belongings to the suite in mid-April, a dispute arose and she was not allowed back into the building on the ground that the lease did not commence until June 1. After an exchange of correspondence, as found by the RTC, the landlord terminated the lease. However, the tenant was not allowed to return to the apartment to clean up or to pack her belongings.

A moving company was retained to do so and moved the tenant to another apartment with a lease commencing May 2011. 9 The tenant filed a claim with the RTB seeking compensation for having to pay rent for two different locations, return of the security deposit, as well as payment of the moving costs. 10 The landlord filed a claim for cleaning of the apartment, as well as damage to it. He presented photographic evidence to the RTB. 11 The RTB made an order allowing the landlord to retain $820 of the security deposit for repair of damages, cleaning and storage costs.

The balance of the security deposit was ordered returned to the tenant. 12 The tenant appealed to the RTC. 13 At the hearing of the appeal before the RTC, the landlord indicated that he had been made aware that the hearing was de novo such that he had to adduce his evidence anew. He attempted to obtain from the RTB the photographs that he had tendered, but the documents had been misplaced.

He indicated he brought that fact to the attention of the RTC, but that they were unable to find the photographs. 14 When the tenant noted that, at the hearing before the RTC, she had provided the panel with the black and white copies of the photographs which had been given to her, the landlord agreed that had in fact occurred. This issue did not merit comment by the RTC in its ruling and it would appear that sufficient evidence as to the nature of the damages allegedly caused by the tenant to the apartment was before the RTC for it to render its decision.

The landlord did not raise this issue as a ground of appeal, only that he wished me to be aware that this had occurred. 15 The RTC concluded that there had been an agreement whereby the tenant was allowed to store some of her personal effects in the apartment prior to June 1 and that she could have moved all of her belongings into the unit prior to her leaving on her military exercise on April 25, 2011. It also found that, in exchange for that arrangement, the tenant was to pay an additional $150 per month for ten months.

The RTC found that she did not agree to pay $1,500 to store some of her belongings for less than two months. 16 The panel also concluded from the evidence that the landlord terminated the lease by his email of April 28, 2011, and the only issue between the parties was to make arrangements for the tenant to pick up her belongings.

It found that the landlord wrongfully refused to allow the tenant access to the property either to pack or to move out, and that as a result the tenant incurred significant costs to retain a moving company to pack and move her personal items. 17 The RTC dismissed the landlord ’ s claims for damage to the apartment and for storage save for a nominal amount of $50 for storage. As to the tenant’s claim, the panel found that since the landlord terminated the lease without proper notice and did not allow access to the tenant, the requirement to hire a moving company to pack and move was compensable.

The RTC ordered as follows: In the result, the landlord shall retain $50.00 of the security deposit plus interest of $2,011.43 ($2,000.00 + $11.43) in full satisfaction of his award for storage fees. [The RTB order] already ordered the landlord to return $1,183.67 of the security deposit to the tenant. The landlord shall return the remaining balance of the security deposit in the amount of $777.76 ($2,011.43 - $1,183.67 - $50.00) plus $1,253.44 for the moving expenses plus costs of $55.00 for a total of $2,086.20 to the tenant.

ANALYSIS 18 Turning now to the grounds of appeal.

a) Maximum for Moving Expenses 19 The landlord argues that the RTC erred in law by allowing moving costs of $1,253.44. It is his position that the Act only allows a maximum of $500 for moving costs. While he made no specific reference to any provisions of the Act , he argued that such a maximum was set out in the RTC’ s material which is distributed to the parties who appear before it. 20 I received a helpful brief from the RTC’s counsel which provided the relevant provisions of the Act and regulations .

While the regulations do prescribe a maximum of $500 for moving expenses, that prescribed amount is applicable only when the RTC is proceeding under specific provisions of the Act , dealing with certain situations. 21 Specifically, those situations are, as set out in the RTC’s brief: • Section 68(4) in respect of the contravention of section 68(1) or 68(1.1) – rent increases with the expectation or intention that the increase will cause the tenant to vacate the rental unit; or increases in tenant services charges with the expectation or intention that the increase will cause a tenant to vacate the rental unit; •

Section 93.1(2) – termination by the tenant for reduction or withdrawal of services regarding a fixed term tenancy agreement; •

Section 93.2(2) – termination by the tenant for reduction or withdrawal of service regarding a tenancy agreement without fixed term; • Section 98(3) – termination by a landlord in respect of the circumstances set out in section 98(1); • Section 99(3) – termination by a landlord with respect to the circumstances in section 99(1). 22 In this case however, the compensation ordered by the RTC was to provide relief in accordance with its powers under s. 170(1), which allows it to vary a decision or order of the Director or make any decision or order that the Director could have made. Under s. 154(1) the Director can make an order: … 5. Requiring a person who has … breached a tenancy agreement

a) to compensate another person affected for loss suffered or expense incurred as a result of the contravention or breach; …. …. 23 There is no arguable error of law with respect to the RTC’s decision to order the moving costs that it did after having found that the landlord breached the tenancy agreement by wrongfully terminating it.

b) Combination of the RTB and RTC Orders 24 The landlord argues that because the RTC, in the final paragraph of its decision, maintained that part of the RTB’s order that a portion of the security deposit be returned to the tenant, the RTC did not conduct a hearing de novo as it was required to do. Therefore, it committed an error of law.

25 I see no merit to this argument. It confuses the nature of the hearing with the remedy which was available to the RTC once it has reached its conclusions of fact. The RTC, after having heard the evidence afresh, concluded that the Director’s determination as to whether there was a breach by the landlord was incorrect. It reached a different conclusion, namely that the landlord was not entitled to any of the security deposit save for $50 and had breached the tenancy agreement, requiring compensation of the tenant for the moving expenses incurred by the latter.

It was entitled to do so. 26 The remedy it chose was to continue that portion of the Director’s order which had the landlord returning the majority of the security deposit, but to also order that the balance of it be provided, as well as an additional amount for the moving expenses and costs. That was within its powers under s. 170(1), namely to vary the decision and to make such other order as the Director could have made. Accordingly, there is no arguable error of law in proceeding in the manner in which it did. 27 For these reasons the application for leave to appeal is dismissed. J.A.