Hearing de novo at the Landlord and Tenant Board. What does this mean?

STARTING FROM SCRATCH (de novo) after all the work was done!

As we all know, the Ontario Landlord and Tenant Board is having a difficult time in fulfilling its statutory mandate.   Where the fault lies, how it can be fixed, or frankly if this version of the Landlord and Tenant Board can ever be fixed is a fair question that won’t be answered here.

However, the Landlord and Tenant Board’s issues play out in ways that are perhaps unexpected but also not unpredictable.  One of the newer and stranger things that is happening is the Hearing de novo.   This little article will explain what this kind of notice is, what it means, and what you might want to do or say about it.

A hearing de novo is what happens when the Landlord and Tenant Board decides that it is incapable or unable to continue with, follow through, complete an application that has already started, or render a decision (i.e. write an Order).   Currently (early 2023) (and rather frequently) adjudicators are resigning or not being re-appointed after their terms expire.  As this occurs they are failing to complete the applications that have been assigned to them or that they are seized with.  In practical terms this means that hearings have already started and one or more days of evidence has been heard but not completed.  Or, it also may mean that a hearing started, the evidence was heard, and the only thing remaining was for an Order to be issued.

Landlords and Tenants instead of receiving an Order are receiving a Notice of Hearing de novo directing them to attend a new start from scratch hearing.   The only explanation for this Notice of Hearing de novo is on an enclosed endorsement form where a vice-chair explains that the member resigned or was not re-appointed and was therefore unable to complete the matter.   The endorsement goes on to apologize and further promises to schedule the matter on an expedited basis.

Receiving a hearing de novo direction can be very upsetting for one or both of the parties.  A significant amount of effort and expense will have gone into the work already done.  Sometimes, it is a miracle to get cooperation from neighbouring tenants or other witnesses and losing the value of the effort that went into getting the witnesses to attend the original hearing is extraordinarily prejudicial.  Some witnesses risk their own safety and fear retribution for testifying and a hearing de novo discounts that risk and basically requires the witness to do it again.   Query if a party is able to even lead the same evidence or find the same witnesses to testify.   This morning I was on a ZOOM hearing where a tenant was arguing against a hearing de novo because the matter was two years old and the evidence had been highly traumatic when it was originally given two years ago!   

Are there options when an adjudicator resigns or isn’t re-appointed and cases that they have started remain outstanding?   Or is it the case that the LTB’s choice of proceeding by hearing de novo is automatically the only option?

In fact, there are options short of starting from scratch and throwing out all of the work that has been done.  To get a sense of a “big case” where the hearing de novo process was challenged it is worthwhile to review Faruk v. The Landlord and Tenant Board, 2023 ONSC 2191 (CanLII).   There, the Divisional Court considers the effort of the parties in the proceedings and options short of a hearing de novo.

In another case, EAT-77647-18, an adjudicator resigned after all of the evidence had been heard and submissions completed after a lengthy hearing.  The Landlord and Tenant Board directed the case back to a hearing de novo.  There, the parties jointly submitted that the original adjudicator should complete the case because she was seized and relied on section 4.3 of the Statutory Powers Procedure Act (SPPA) which provides that “if the term of office of a member of a tribunal who has participated in a hearing expires before a decision is given, the term shall be deemed to continue, but only for the purpose of participating in the decision and for no other purpose”.   That section would seem to be the necessary authority to at least give an adjudicator who has resigned or not been re-appointed the authority to continue (and presumably be paid) to finish a matter.

Unfortunately, section 4.3 of the SPPA is not the complete answer as the RTA contemplates this section at section 173 RTA and qualifies the scope of section 4.3 SPPA by limiting the authority to continue to a period of 4 weeks.   Query, if an adjudicator who resigns (but is willing to finish what is started) is entitled to continue to finish matters for the remaining period of the term of their appointment plus 4 weeks.

In EAT-77647-18, the parties further jointly submitted that if the adjudicator who heard the case was unable to write the decision that the LTB should appoint another adjudicator to listen to the recording, review the evidence, and if necessary pose questions to the parties and then proceed to make an Order in place of the adjudicator who actually heard the case. 

The LTB accepted that submission and decided the case in this way (by reviewing the materials filed and the recording of the evidence).

It is, in my view, concerning that the LTB is deciding to proceed to a de novo hearing without asking the parties their position.   The LTB appears to be issuing the Notice of Hearing de novo without considering the impact on the parties or without determining whether a hearing de novo is actually necessary or appropriate.   As an example, last week I had another hearing de novo which was scheduled after the adjudicator who heard the case and resigned did not issue a consent Order.   The terms of the consent had been submitted to the adjudicator and all that was needed was to record the terms in an Order.  Why was that sent to a Hearing de novo as opposed to another adjudicator simply stepping in and writing the Order that was asked for on consent?

Hearings de novo are also causing some ethical challenges.   On another matter I was appearing for a landlord on a hearing de novo where he had previously agreed to a termination of the tenancy with a substantial section 82 rent abatement.   The tenant held the leverage at the original hearing as the landlord could not expect to ever get his rent arrears yet the tenant continued to occupy the rental unit.   At the original hearing it appeared unlikely that the matter would get reached that day and a further lengthy adjournment was likely.  At this stage the landlord was worried about future rents that would remain unpaid by the Judgment proof tenant.   Because of this, the landlord agreed to a significant rent abatement to obtain a consent termination and eviction order for 30 days after the hearing.  Given the circumstances at that time, the terms made sense.

Although the LTB received the consent order terms it appeared to have lost the file for some time and hence did not issue the Order.   Fortunately for the landlord, the tenant upheld the terms of the consent without actually ever receiving the Order and moved out in accordance with the consent terms.  The landlord took possession of the unit when the tenant vacated.  Then weeks after the tenant vacated, the LTB issued a Notice of Hearing de novo instead of making an order in accordance with the consent terms.

What made this hearing de novo interesting is that the landlord was intent on pursuing the rent arrears that were owed (less the abatement given).  However, now that the landlord was in possession of the rental unit, the leverage that the tenants had at the original hearing (i.e. possession of the unit) had evaporated.  The landlord, at the hearing de novo, no longer needed to “make a deal” to get the rental unit back and could choose to resile from the abatement that he had previously agreed to.  Or could he?

In my view, the hearing de novo is not an opportunity to resile from a agreement previously made to settle an application.  While the LTB notice does indicate that the application is being considered afresh, it is my view that such a direction from the LTB does not over-ride an agreement made between the parties.  The logic derives from the principle that an “agreement to settle a claim is a contract” (see Canadian Tourism Human Resource Council v. Meadow Wood Communication Group Inc., 1998 CarswellOnt 1114 at para 28).