A homeowner (“Covey”) who had leased his home under a one year lease to tenants who later terminated their tenancy on the advice of their physician, applied for judicial review of two decisions of an arbitrator under the Residential Tenancy Act, R.S.B.C. 1996, c. 406. In the first decision, the arbitrator had ruled in favour of the tenants and, in the second one, the arbitrator reviewed and rejected fresh evidence that Covey brought forward in support of his position. The court dismissed Covey’s application on the basis that the decision of the arbitrator and his review of that decision were not patently unreasonable.

Administrative law – Landlord and tenant – Leases – Termination – Evidence – Damages – Arbitration and award – Judicial review application – Standard of review – Patent unreasonableness

Covey v. St. Denis, [2003] B.C.J. No. 1795, British Columbia Supreme Court, July 22, 2003, Melnick J.

Covey had rented his house to Tyrone and Rosemarie St. Denis on a one-year lease for $800 a month. About three months prior to the end of the one year term, the tenants advised Covey that they would be terminating their tenancy on the advice of their physician, due to environmental conditions within the house, including the presence of mildew and mould, that were adversely affecting their daughter’s health. The tenants moved out having paid the full rent for the months during which they resided there.

At the initial arbitration, Covey claimed for damages for the cost of repairs, utilities, loss of rent, and loss of wages. The arbitrator decided that Covey had failed to establish that the repairs were for damage caused by the acts of the tenants and that they were not ordinary wear and tear. The arbitrator further determined that since the tenancy agreement did not provide that the cost of utilities would be paid for by the tenants in addition to their rent, Covey was not entitled to his claim for the cost of utilities. The claim for damages for loss of rent was also denied given that the tenants had elected to end their tenancy on the grounds of a breach of a material term of the tenancy agreement by the landlord as provided by section 83 of the Residential Tenancy Act. Covey’s claim for lost wages was also denied. The arbitrator determined that the claim for lost wages was not a valid claim for damages for which a tenant could be held responsible, since the landlord’s activities and employment outside the scope of being a landlord did not bear on the tenancy.

Covey then applied for a review of the arbitrator’s decision under section 59 of the Residential Tenancy Act. Covey submitted that he had new and relevant evidence that was not available at the time of the initial hearing. The same arbitrator considered the new evidence and decided that his original decision should stand. In particular, the arbitrator noted that the new evidence was proffered by parties who could not be considered impartial in the matter, and further, that some of the investigations made to assess damage on the property post-dated the tenancy of Mr. and Mrs. St. Denis and one inspection was even made during a subsequent tenancy.

The court applied the pragmatic and functional approach mandated by the Supreme Court of Canada’s decision in Pushpanathan v. Canada (Minister of Citizenship & Immigration), [1998] 1 S.C.R. 982 in order to determine the appropriate standard of review under the circumstances. The court held that as the claims and issues posed by Covey were primarily fact-related and, given that the Act provided for a system of dispute resolution between landlords and tenants presided over by arbitrators with significant expertise and experience in the area of residential tenancy disputes and law, a standard of patent unreasonableness was applicable. The court noted that the legislation afforded arbitrators a great deal of scope in process and decision making, indicating that a deferential approach should be taken.

Covey also argued that the arbitrator erred in not applying section 42(1)(a) of the Residential Tenancy Act, a section dictating that a notice of the end of a tenancy agreement must be in writing and signed by the landlord or tenant giving the notice. The court held that where tenants elected to end the tenancy on grounds of a breach of a material term by the landlords, their only obligation was to “advise” the landlords of their intention to end the tenancy. As such, the tenants properly advised the Coveys of their intention to leave the home and thereby satisfied their statutory obligation.

The court otherwise agreed with the consideration of the additional evidence tendered by Covey at the second arbitration, and held that overall, the decisions of the arbitrator were eminently reasonable. Covey’s application for judicial review was dismissed.

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