In Potherat v, Slobodian, 2021 BCSC 1536, Justice Crabtree of the British Columbia Supreme Court found that the decision of an arbitrator of the B.C. Residential Tenancy Branch was neither patently unreasonable nor wrong when read as a whole. In determining whether a decision is patently unreasonable, the court is required to examine both the reasons and the outcome. Justice Crabtree quoted extensively from the arbitrator’s reasons; while sentences or paragraphs are sometimes quoted by courts when reviewing arbitral awards, it is rare that large portions of the arbitrator’s reasons are quoted. Justice Crabtree followed Sherstobitoff v. British Columbia (Workers’ Compensation Appeal Tribunal), 2019 BCSC 1659, which held that that reasons “are to be read as an organic whole, not parsed or dissected in search of error”. Justice Crabtree found that the petitioner’s submissions were a parsing of the decision.
The background facts are as follows. Beginning in June 2016, the respondents rented an apartment from the petitioner in Vancouver pursuant to a month-to-month tenancy arrangement. The landlord intended for her mother to eventually move from France to Vancouver to occupy the unit. In January, 2019, the landlord informed the respondents that she intended to take back the unit. The plan was for her mother to live in the unit for a six-month period from April to October, 2019. On January 29, 2019, the landlord served a two-month notice to end tenancy of the unit as required by the statute. The respondents vacated the premises on March 1, 2019 – before the expiration of the landlord’s notice.
The landlord’s mother booked a roundtrip ticket from Paris to Vancouver. She resided in the unit for just over two months, from April 5, 2019 to June 24, 2019. She then returned to France for a previously scheduled medical specialist appointment on July 17, 2019, but did not thereafter return to Vancouver.
While the landlord was making preparations for her mother’s arrival, she was also planning an extended family vacation in the fall of 2019 to spend a term in France. This was in part to assist her mother with the immigration process and with organizing her affairs in France for a move to Canada. This trip was planned to occur from August 13 to December 27, 2019; overlapping with some of the six-month period the mother was supposed to spend in Canada.
In the summer of 2019, the landlord advertised the unit on Airbnb for 30-day stays commencing that summer, to help defray costs of her vacation. When the respondents discovered the ad, they brought an application for dispute resolution with the Residential Tenancy Branch, under s. 49 of the Residential Tenancy Act, S.B.C. 2002, c. 378. The respondents sought monetary compensation under s. 67 of the Act.
The primary ground for the application was that under the s. 51(2) of the statute, a landlord may end a tenancy if a “close family member” (defined to include a parent) of the landlord intends in good faith to occupy the rental unit, but, a prescribed monetary sum is to be paid to the tenants unless that occupation is to last for at least 6 months. Under s. 51(3) a landlord may be excused from making this payment if “extenuating circumstances” prevented the use of the unit for the stated purpose “for at least 6 months’ duration”.
The application was heard by the statutory arbitrator via teleconference on June 23, 2020, at which time the arbitrator heard evidence about four potential “extenuating circumstances: the mother’s requirement to be out of the country for medical reasons; the planned vacation; the landlord not wanting her mother to be alone in Vancouver while she was on vacation with her family; and the landlord assisting with the mother’s immigration matters. The arbitrator issued a decision on July 8, 2020, corrected July 16, 2020, that awarded the respondents their claimed compensation. He found that the landlord had failed to show that there were any “extenuating circumstances” that would excuse her from paying the tenants compensation.
On September 1, 2020, the landlord petitioned the court to set aside the decision, or in the alternative, remit the matter back to the arbitrator for reconsideration. Justice Crabtree noted that the standard of review of an arbitrator’s decision under the Residential Tenancy Act is patent unreasonableness. The landlord argued the decision was patently unreasonable. One of the grounds the landlord advanced was that the arbitrator’s decision failed to define “extenuating circumstances” which could relieve the landlord from the payment requirement. This argument failed.
Justice Crabtree found that the arbitrator was not required to provide a definition of “extenuating circumstances”. This followed the Supreme Court of Canada decision of Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, which held that a failure to address every possible meaning of a statutory provision is not fatal to a decision by an administrative tribunal. What was required was for the arbitrator to apply this term in a manner consistent with the text, context and purpose of the Residential Tenancy Act. It was also not fatal to the decision that the arbitrator failed to mention Residential Tenancy Policy Guideline 50, which discusses s. 51(2) and the meaning of “extenuating circumstances.” The arbitrator is by statute presumed to be an expert in the tribunal’s jurisdiction. A full review of the decision also did not support the submission that the arbitrator took too restrictive a view of this term. There were four specific circumstances raised by the petitioner, all of which the arbitrator considered. None of them constituted an extenuating circumstance. Justice Crabtree found the “reasons point to a detailed analysis that examined each of the circumstances proffered by the petitioner and considered whether the evidence was sufficient to establish an extenuating circumstance, thereby relieving the landlord of the obligation imposed” under statute. The result was logical, consistent, and supported by the evidence. There was no basis to support a finding that the arbitrator’s assessment was patently unreasonable.
First, as previously explained in B.C. – Court outlines reasoning process to be followed by arbitrator in interpreting agreement on re-hearing – #521, arbitral awards are not typically subject to “judicial review”. This is a unique feature under the Residential Tenancy Act, which at s. 5.1 incorporates by statute the judicial review process from the Administrative Tribunals Act, S.B.C. 2004, c. 45, and at s. 58(5) expressly excludes BC’s domestic Arbitration Act, S.B.C. 2020, c. 2, which provides for appeals on a question of law or applications to set aside in certain specific circumstances.
Second, note the reference by the Court to principles articulated by the Supreme Court of Canada in Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65. As has been discussed in N.W.T. – Court applies Vavilov to commercial arbitration awards subject to statutory right of appeal – #419 and Supreme Court – for those SCC justices willing to consider it, Vavilov applies to private commercial arbitration where legislation provides for appeal – #420, the law is not settled as to whether the principles from Vavilov on the applicable standard of review apply to appeals in commercial arbitration or only to appeals from arbitrations directed by statute. This matter was clearly a statutory arbitration, as the Residential Tenancy Act directed the parties to proceed to arbitration for their dispute at ss. 58-59.