This appeal asks the Commission to
determine whether an eviction notice was valid, based on a claim of
non-payment of rent.
Background
On April 27, 2020, the Appellant,
Janet Sturgess ("Sturgess") purchased
assets from the Lower Montague Trailer Park Co-operative Ltd. (the
"Co-operative"), being the trailer park land (the "Property"). She states
she also purchased accounts
receivable owing to the Co-operative. At the time of purchase, there were 36
mobile home sites on the Property, 34 of which were occupied. One such site
was occupied by the Respondent, Clyde Quinlan ("Quinlan").
On May 3, 2020 Sturgess served
Quinlan with a notice to terminate their rental agreement due to alleged
non-payment (the "Form 4"). The termination was to be effective June 4,
2020, and cited the following reasons:
"You have
failed to pay your rent in the amount of $9,600.00, which was due on the 1st
day of May, 2020 (s. 13 of Act);"
Quinlan filed an application to set
aside the notice of termination on May 11, 2020 (the "Form 6").
The matter was heard by the Office
of the Director of Residential Rental Property (the "Director") on July 17,
2020. In Order LD20-185, dated July 27, 2020 (the "Order") the Director
allowed Quinlan's application to set aside the notice of termination, and
declared the rental agreement as being in full force and effect. Sturgess
appealed.
The appeal was heard by the
Commission on October 7, 2020. Sturgess appeared on her own behalf. Quinlan
appeared on his own behalf.
Appeals to the Commission under the
Rental of Residential Property Act
are re-hearings, as stated in section 26(2). As such, the Commission
considered the evidence that was before the Director, as well as the
materials filed and submissions made by Sturgess and Quinlan on appeal.
Disposition
The appeal is denied and Director's
Order LD20-185 is confirmed.
The Issues
The Commission will consider the
following questions in determining this appeal:
1.
Did Sturgess and Quinlan have a "rental agreement" as defined in the
Act?
2.
Does Quinlan owe "rent" to Sturgess? If so, in what amount?
Did Sturgess and Quinlan
have a "rental agreement"?
The evidence before the Commission
establishes that Quinlan occupied a mobile home lot in a trailer park
previously owned by the Co-operative.
The Co-operative charged Quinlan a fee of $100.00 per month for use
of the lot. The evidence
establishes that Sturgess purchased the Property on April 27, 2020, but
prior to that date, it was owned by and operated as the Co-operative.
The Commission confirms the finding
of the Director that the
Act
does not apply to any agreement in effect during
the period of time that preceded Sturgess purchasing the Property on April
27, 2020, for the reasons set out in detail in Commission Orders
LR20-27 and
LR20-28.
There is no dispute between the
parties that, prior to April 27, 2020, the Property was a co-operative
housing project. Consequently, to the extent there was a binding agreement
between Quinlan and the Co-operative, this did not constitute a "rental
agreement" as defined in the
Act.
Simply put, prior to April 27, 2020 there was no "rental agreement".
Following the purchase of the
Property, the evidence establishes that there was a rental agreement between
Sturgess and Quinlan. We note that there need not be a formal written
agreement in order for a rental agreement to exist (see section 1(o) of the
Act). Quinlan were living on the Property. The evidence establishes that
Quinlan paid to Sturgess $100 on each of May 1, June 1, and July 1, 2020.
Sturgess considered these payments to be contributions to what she
characterized as "rent arrears". Sturgess prepared a Form 4 dated May 3,
2020 and served that document on Quinlan. By preparing and serving this
document, Sturgess effectively acknowledged that there was a rental
agreement in effect at the time she issued the Form 4.
In Sturgess' written reasons for
appeal, she notes in part:
The "Application by Lessee to
Set Aside Notice of Termination" was filed by persons not a defined as
"lessee" in the Act, therefore the hearing should not have taken place, and
as stated in Sec 16{3) of the Act, "Where the lessee does not bring an
application to set aside the notice, he shall be deemed to have accepted the
termination on the effective date of the notice".
The Commission notes that where
there is no rental agreement there is no lessee, but there is also no
lessor. There would thus be no
authority for Sturgess to issue a valid Form 4.
We find this conclusion to be untenable and does not accurately
reflect the relationship between the parties.
In Sturgess' arguments which she
presented at the hearing before the Commission (see Exhibit E-13) she notes
in part:
Section 9 of the Landlord
Tenant Act determined that there was no rental agreement that existed at the
time I purchased the property.
Any attempt to show that a
lessor-lessee relationship existed outside the Act, to show
that an agreement existed
"by virtue of this Act or otherwise" cannot be supported by any
evidence.
Neither the Director nor the
Commission has any jurisdiction to make a determination as to whether the
Landlord and Tenant Act, Cap. L-4 applies to this matter.
Sturgess has not provided the Commission with any evidence that the
Supreme Court of Prince Edward Island has determined that the Landlord and
Tenant Act applies prior to Sturgess' purchase of the trailer park.
Sturgess also noted the following in
her arguments:
The Commission determined that
by serving a squatter with an eviction notice, the Commission deems that the
squatter is immediately considered to be a tenant or lessee, and that a
rental agreement has been confirmed.
There is no evidence before the
Commission that a court with jurisdiction, either at common law or pursuant
to the Trespass to Property Act, Cap. T-6 has determined that
Quinlan was a "squatter".
Does Quinlan owe "rent" to
Sturgess?
The Director found that the sum of
$9,600.00 (see Form 4) that Sturgess claims she acquired by way of purchase
and assignment of accounts receivable from the Co-operative when she
purchased the property was not "rent" as defined in the
Act. The Commission agrees.
The Supreme Court of Prince Edward
Island has the sole jurisdiction to adjudicate claims of debts due by virtue
of a claimed purchase and assignment of accounts receivable.
A lessor is only permitted to evict
a lessee for non-payment of rent when rent is not paid in accordance with a
rental agreement. As any previous arrangement between the Co-operative and
Quinlan is exempt from the
Act, an eviction for failure to pay rent would
need to be based on a new rental agreement between Sturgess and Quinlan.
The evidence before the Commission,
and the Director's Order, establish that effective May 1, 2020, the rent for
a lot located on the Property is $200. At the time that Sturgess served the
Form 4, Quinlan had paid $100. He subsequently paid $100 on June 1 and on
July 1, 2020. The Director noted that Quinlan considered these payments to
be for rent. The Commission also
notes that the Director's Order establishes site rent as $200.00 per month.
While Quinlan was in arrears in the amount of $100 at the time he was
served with the Form 4, he most certainly was not in arrears of rent to the
sum of $9,600.00. The Director
determined that the Form 4 is invalid due to this substantial discrepancy.
The Commission agrees with this finding.
While rent may be owed, it must be accurately quantified in a Form 4
in order to be valid.
NOW THEREFORE,
pursuant to the
Island Regulatory and Appeals Commission
Act and the
Rental of Residential Property Act
IT IS ORDERED THAT
1.
The appeal is denied.
2.
Director's Order LD20-185 is
confirmed.
DATED
at Charlottetown, Prince Edward Island,
this 16th day of October, 2020.
BY THE COMMISSION
:
Erin T. Mitchell, Panel Chair & Commissioner
M. Douglas Clow, Vice-Chair
NOTICE
Sections 26.(2), 26.(3), 26.(4)
and 26.(5) of the
Rental of Residential Property Act
provide as follows:
26.(2) A lessor or
lessee may, within fifteen days of the decision of the Commission,
appeal to the court on a question of law only.
(3) The rules of court governing appeals apply
to an appeal under subsection (2).
(4) Where the Commission has confirmed,
reversed or varied an order of the Director and no appeal has been taken
within the time specified in subsection (2), the lessor or lessee may
file the order in the court.
(5) Where an order is filed pursuant to
subsection (4), it may be enforced as if it were an order of the court.