Exclusivity of Jurisdiction:

Question: What court or tribunal should I use in Ontario if my landlord is suing me for rent arrears and damage after I moved out?

Answer: A paralegal at Access Ontario Legal Services can help you determine whether your dispute is an exclusive Landlord and Tenant Board matter under the Residential Tenancies Act, 2006 or a Small Claims Court issue, since jurisdiction can depend on the specific claim and whether the tenant is still in possession. If the landlord and tenant relationship exists and the claim fits the type the Act sends to the Board, the Board can have exclusive jurisdiction and Small Claims Court may be ousted even if the tenant already vacated.   If you file in the wrong place, the case may be dismissed and you may lose the ability to restart correctly, so it helps to confirm the venue early before deadlines pass.   For quick guidance in Ontario, call (905) 302-1851 to discuss your facts and the most likely proper forum for your rent arrears, deposit return, and “undue damage” versus normal wear and tear concerns.

Is a Case a Landlord Tenant Board or Small Claims Court Issue?

Where a dispute between a landlord and a tenant should be initiated can be very challenging to determine.  For some issues, depending on whether the tenant is still living in the unit, the matter must proceed at the Landlord Tenant Board; and yet, for the same issue, if the tenant already moved out, or failed to move in, the matter is barred from proceeding at the Landlord Tenant Board.  The rules on where a legal case should be started can be confusing.  Further, if a case is started in an improper venue, the case may be tossed out, perhaps with the inability to start again in the proper venue.  For these reasons, it is very important to review the case issues and the law requiring jurisdiction to ensure that the case is properly commenced.

The Law

In most cases involving a dispute between a residential landlord and tenant, the Residential Tenancies Act, 2002, S.O.  2006, Chapter 17 will be applicable.  With most cases the legal issue in dispute is conferred upon the Landlord Tenant Board for exclusive decision making authority per section 168 of the Residential Tenancies Act, 2006,  Where certain decisions must be made by the Landlord Tenant Board, the jurisdiction of the Small Claims Court is ousted; Brydges v. Johnson, 2016 CanLII 4942; Finney v. Cepovski, 2015 CanLII 48918 at 17; Efrach v. Cherishome Living, 2015 ONSC 472 at 6; Mercier v. Hawco, 2014 CanLII 141 at 6 to 7; Fraser v. Beach, 2005 CanLII 14309 (ON CA) at 15.  Unfortunately, the Residential Tenancies Act, 2006 provisions can at times be unclear and cause confusion as many provisions are vague and perhaps conditional.  Accordingly, when some specific legal issues arise, determining whether the matter must proceed at the Landlord Tenant Board can become difficult.

Recently, the Divisional Court ruled in Kiselman v. Klerer, 2019 ONSC 6668 regarding the often confusing issue of whether the landlord should pursue a former tenant for rent arrears and damage to the rental unit at the Landlord Tenant Board rather than the Small Claims Court and it was said:

Multiplicity of Proceedings

Sometimes the jurisdiction conditions can cause a multiplicity of proceedings occuring in two places such as where tenancy relations break down prior to the move-in date whereas the tenant must apply to the Landlord Tenant Board for return of a rent deposit as governed by section 107(1) of the Residential Tenancies Act, 2006; and yet, the landlord may be forbidden from applying to the Landlord Tenant Board per the section 87(1) condition that require the landlord's access to the Landlord Tenant Board be available for certain matters only if the tenant is in possession of the rental unit.  For example, this circumstance often occurs where a tenant tries to 'opt out' of a lease at the last moment, for whatever other reason, by failing to occupy the rental unit and then subsequently seeking return of a first and last rent deposit.  Regardless of the reason the tenant seeks return of the rent deposit, the tenant must pursue the return of the rent deposit at the Landlord Tenant Board per section 107(1) which provides that the Landlord Tenant Board may hear a case about why the rent deposit should be returned and this section coupled with the section 168 exclusive jurisdiction provision imposes the absoluteness of the requirement that the rent deposit question be decided by the Landlord Tenant Board.  Contrarily, in the same situation, if the landlord wishes to claim loss of rent arising from the 11th hour opt out by the tenant, the landlord must proceed to the Small Claims Court by virtue of inaccess to the Landlord Tenant Board that arises from thesection 87(1) condition that the landlord may seek rent arrears from the Landlord Tenant Board only if the tenant remains in possession of the rental unit - and in this situation the tenant failed to take possession of the rental unit.  It is interesting to note that the tenant may be with good reason to opt out at the last moment, the tenant may even be in the right with a good enough reason to 'win'; however, the tenant must pursue return of the rent deposit via the Landlord Tenant Board and the landlord must pursue the loss of rent at the Small Claims Court despite the multiplicity of proceedings problem that arises.

With the above said in regards to a multiplicity of proceedings, principles of natural justice may permit, and perhaps require, that one of the proceedings be stayed until a decision is made in the other forum and then the decision in the matter that was stayed may need to follow the factual decisions in the matter decided upon first.  This procedural Stay of one of the two processes ensures that the risk of two opposing factual decisions are avoided whereas two opposing factual decisions would put the administration of justice into disrepute.

Conclusion

Whether a legal dispute between a landlord and tenant must proceed at the Landlord Tenant Board will depend on the issue in dispute.  For some legal issues, the matter must absolutely be heard by the Landlord Tenant Board as a matter of 'exclusive jurisdiction'.  For other legal issues the Landlord Tenant Board may be without jurisdiction and therefore lack authority to hear the matter at all.  Understanding which type of legal issues must proceed at the Landlord Tenant Board and which must proceed elsewhere is highly important to ensuring that a case gets properly heard and that justice gets done.