Date: 20080123
Docket: T-1118-06
Citation: 2008
FC 71
Ottawa, Ontario, January 23, 2008
PRESENT: The Honourable Mr. Justice Hugessen
BETWEEN:
THE
ATTORNEY GENERAL OF CANADA
Plaintiff
and
NAV CANADA
Defendant
REASONS FOR ORDER AND ORDER
BACKGROUND
[1]
This is a motion for summary judgment brought by the Attorney
General of Canada (the plaintiff), who seeks an order directing Nav Canada (the
defendant) to surrender vacant possession of certain properties which had been
subject to a lease agreement between the parties. In the alternative, the
plaintiff seeks an order specifying which material facts are not in dispute.
For its part, the defendant seeks an order directing the parties to submit the
dispute for resolution by a rental officer pursuant to the Residential
Tenancies Act, R.S.N.W.T. 1988, c. R-5 (the Act).
FACTS
[2]
On March 10, 2005, the parties entered into a lease agreement
regarding seven residential properties (the properties), in Norman Wells,
Northwest Territories, owned in fee simple by Public Works and Government
Services Canada. The lease agreement included terms which may be summarized
(except where directly quoted) as follows:
(1) The defendant would hold the properties
from April 1, 2005 until April 30, 2005, and continue to hold the properties on
a month to month basis until March 31, 2006.
(2) “The residence(s) shall be
used solely as residential and for the purposes incidental thereto for the
employees of Nav Canada and shall not carry on or permit to be carried on
therein any trade or business unless otherwise authorized in writing. The
Lessees [sic] tenants must remain employees of the Lessee throughout the
tenancy unless otherwise acceptable to the Lessor”.
(3) If the defendant held the properties
beyond March 31, 2006, the lease would continue on a month to month basis.
(4) The plaintiff had the right,
“for whatever reason is deemed necessary” in its discretion, to terminate the
agreement, “by a notice in writing giving the Tenant 30 days notice to vacate.”
(5) Any disputes arising out of
the agreement were to be referred to the Federal Court of Canada.
[3]
On October 6, 2005, the plaintiff gave written notice that it was
terminating the agreement in respect of two properties of the defendant’s
choosing, effective March 31, 2006.
[4]
The defendant returned vacant possession of only one property.
[5]
On February 23, 2006, the plaintiff gave
written notice that it was terminating the agreement in respect of two other
properties of the defendant’s choosing, effective May 31, 2006.
[6]
On March 1, 2006, the plaintiff sent the defendant a reminder of
the two notices of termination, along with notice of termination for the three
remaining properties effective June 30, 2006.
[7]
On March 13, 2006, the defendant informed the plaintiff that it
would not vacate the remaining properties. Although attempts were made by the
parties to come to a new lease arrangement, these attempts failed.
[8]
In 2007, the defendant returned vacant possession of two more
properties, but admits to retaining possession of the remaining four properties.
SUBMISSIONS
[9]
The plaintiff submits that the defendant’s
statement of defence, in which it relies solely on the security of tenure
provided by the Act, discloses no genuine issue for trial. In particular, the
plaintiff claims that the Act does not apply to the lease agreement between the
parties, since the trigger for the application of the Act is occupancy, and the
defendant, as a corporation, is unable to occupy the properties as living
accommodations. Furthermore, the plaintiff notes that the provision in the
lease agreement that disputes be resolved by the Federal Court demonstrates
that the parties had not intended the Act to apply.
[10]
The defendant, on the other hand, argues that
the nature of the premises or their intended use, not their occupation,
triggers the application of the Act. In this case, the properties are intended,
by the terms of the agreement, for residential use. Not only does the Act
provide security of tenure, but also mandates that disputes are to be resolved
by a rental officer. Therefore, the defendant requests an order directing the
parties to submit the dispute to the rental officer.
RELEVANT
LEGISLATION
[11]
The following provisions of the Act are
relevant:
1.(1) In this
Act,
“landlord”
includes the owner, or other person permitting occupancy of rental premises,
and his or her heirs, assigns, personal representatives and successors in title
and a person, other than a tenant occupying rental premises, who is entitled to
possession of a residential complex and who attempts to enforce any of the
rights of a landlord under a tenancy agreement or this Act, including the right
to collect rent;
“rental
premises” means a living accommodation or land for a mobile home used or
intended for use as rental premises and includes a room in a boarding house or
lodging house;
“tenancy
agreement” means an agreement between a landlord and a tenant for the right to
occupy rental premises, whether written, oral or implied, including renewals of
such an agreement;
“tenant” means a
person who pays rent in return for the right to occupy rental premises and his
or her heirs, assigns and personal representatives.
6. (1) Subject
to this section, this Act applies only to rental premises and to tenancy
agreements, notwithstanding any other Act or any agreement or waiver to the
contrary.
48. (1) No
person shall terminate a tenancy agreement except in accordance with this Act.
[12]
Although the Act provides several methods by
which a party can terminate a tenancy agreement, at sections 50 to 63, it is not
possible under the Act for a landlord to terminate a tenancy agreement
in order to continue using the premises as rental premises.
[13]
The Act also provides that, in order to resolve
disputes which arise under the Act, the landlord or tenant are to apply to a
rental officer, or in certain cases, the Supreme Court.
ANALYSIS
[14]
The test for summary judgment under the Federal
Courts Rules, S.O.R./98-106, is whether or not there is a genuine issue for
trial. That means an issue of fact. Where there is no issue of fact but the
case raises only one or more questions of law, the Court may, and normally
should, resolve that or those questions and render judgment accordingly (see
Rule 216(2)).
[15]
Given the very large area of common ground
between the parties in the present case the only question is whether the Act
applies to the lease agreement between the parties. If the Act does not apply,
the defendant’s statement of defence discloses no genuine issue for trial, as
it rests entirely on the security of tenure provided in the Act. If the Act
does apply, then a rental officer, rather than this Court, is the appropriate
forum for the resolution of the dispute.
[16]
Subsection 6(1) of the Act states that it
applies to “rental premises and to tenancy agreements”. Therefore, the Court
must determine if the properties are “rental premises”, and if the lease
agreement is a “tenancy agreement”, as defined by the Act.
[17]
The lease agreement between the parties states
that the properties are to be used only for residential purposes. It is clear,
therefore, that the properties are “rental premises”, defined in the Act as “a
living accommodation or land for a mobile home used or intended for use as
rental premises [.]”.
[18]
This leaves the question of whether the lease
agreement is a “tenancy agreement”, which is defined in the Act as “an
agreement between a landlord and a tenant for the right to occupy rental
premises”. It is fairly clear that the plaintiff falls within the definition of
“landlord”, as owner of the properties. It is equally clear, however, in my
opinion, that the defendant, a corporate body, is not a “tenant”, defined as “a
person who pays rent in return for the right to occupy rental premises”. In my
opinion, the defendant does not fall within this definition, because, although
it pays rent, it does not, and cannot, occupy rental premises which are defined
as “living accommodation”. Rather, the defendant is paying for the right to
provide the rental premises to its employees.
[19]
I find support for my view in the decision of
the Northwest Territories Supreme Court in Northwest Territories Housing
Corp. v. Yellowknife Syndicate, [1990] N.W.T.R. 269, [1990] N.W.T.J. No.
170, in which the question was whether the Act was “applicable respecting a
lease granted by an apartment complex owner to a corporation for use by tenants
of the corporation as living accommodation”? (para. 1). The Court determined
that, on a literal and a liberal interpretation of the Act, it was not, because
the corporation rented the complex in order to rent the premises in the complex
to others. According to the Court:
Examining the [Act]
as a whole […], it is apparent that it is intended to provide more effective
and less cumbersome legislative means to enable tenants to assert and protect
their legal rights against landlords where the tenants have the right to occupy
rented living accommodations. […] Bearing in mind the usual disparity of
bargaining power and financial resources between such tenants and their
landlords, the Act is evidently intended to restore the balance of power
through the public employment of a rental officer to try and mediate and, if
necessary, to adjudicate disputes between them. By the same token, the Act
was not intended to apply to what are essentially commercial leasehold
transactions between freely-contracting equals under which the lessee,
usually a substantial corporation, does not occupy the premises for purposes of
its own residential living accommodation [emphasis added] (para. 18).
[20]
Therefore, in my opinion, although the
individuals who reside in the properties might in other circumstances be
protected by the Act, the defendant cannot claim such protection as it is not a
“tenant” as defined and as a consequence the lease agreement is not a “tenancy
agreement”. I would conclude that there is no genuine issue for trial. The
lease agreement between the parties having come to an end, both by having been
terminated according to its terms, and the end of the term established in the
agreement itself, I would grant the order sought by the plaintiff.
[21]
I would emphasize that I reach this conclusion
solely on my reading and construction of the Act itself. I do not accept
plaintiff's contention that the Act cannot apply simply because the parties did
not intend that it should do so. The Act is clearly a legislative expression of
public policy and it is not permissible for persons to contract out of the
obligations it imposes by simple private agreement.
[22]
The plaintiff is entitled to its costs to be
assessed.
ORDER
THIS COURT ORDERS that
1. The plaintiff’s
motion for summary judgment is allowed.
2. Letting Agreement
No. 71337 entered into between Public Works and Government Services Canada and
Nav Canada is terminated.
3. The defendant shall deliver vacant possession of
the properties located at 6 Woodland Drive, 8, 18 and 20 Sahcho Avenue in the
Town of Norman Wells in the Northwest Territories to Public Works and
Government Services Canada within 30 days of the date of this Order, unless
otherwise agreed to by the parties.
4. The plaintiff is awarded costs to be assessed.
“James
K. Hugessen”
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