Court Upholds Tribunal Decision to Approve Rent Increase

On August 26, 2002, The Ontario Superior Court of Justice upheld the decision of the Ontario Rental Housing Tribunal (ORHT) to allow Leadway Apartments Ltd. an above guideline rent increase. All the tenants at the apartment had appealled the Tenant Protection Act order that granted a rent increase of 6.12 per cent above the annual guideline then in effect. The total rent for each of the 86 units was to increase between 9.02 and 10.02 per cent according to the order dated January 15, 2002.

The vast majority of the increase was due to the cost of natural gas, which more than tripled in 2000-2001 over the previous year. By the time of the ORHT hearing in November 2001, the tenants pleaded that to grant the increase would give the landlord an unfair windfall, citing that the cost of natural gas had since declined considerably.

The tenants argued that s. 188 of the Act permitted the tribunal to reduce the amount of the above guideline increase justified by the regulations, even though subs. 138(2) and (6) of the Act clearly stated that extraordinary increases should follow the calculations in s. 24 and 16 of the regulation. The tribunal found that s. 188 did not allow it to ignore the clear reference to the guidelines in subs. 138(2) and (6). The court maintained the judgment of the tribunal and dismissed the appeal by holding that s. 188 of the Act does not confer any substantive rights that would allow the court to ignore subs. 138(2) and (6) or the regulations. The court also suggested that the province review the Act to address the issues raised by the case.

Aird & Berlis LLP acted for Leadway Apartments, with a team that included Bob Doumani, Tom Halinski and Eileen Costello.

Richard Fink of Fink & Bornstein in Toronto acted for the building tenants.