Evicted for Landlord’s Use: Recent Amendments to S.49 of the Residential Tenancy Act

British Columbia’s Residential Tenancy Act (RTA) has received amendments earlier this year, primarily concerning notices to end tenancies issued by landlords on the basis that they require the rental premises for their own use. Like the series of amendments to both the Act and its Regulation in late 2017 that prevent landlords from signing “vacate clauses” (or “true” fixed-term tenancies) and applying for additional rent increases in most circumstances, these amendments mainly aim to protect the rights and interest of tenants.

Section 49 of the RTA allows residential landlords to unilaterally evict tenants on the following three reasons related to landlords’ own use:

  • The landlord, or a close family member, will occupy the rental unit.
  • The landlord has entered into an agreement selling the unit and the buyer plans to occupy the rental unit.
  • The landlord plans, and has obtained all the required permits, to demolish or renovate the unit in a way that requires it to be vacant.

All of these reasons remain untouched by the amendments. However, the three requirements for any s.49 eviction—notice, opportunity to dispute, and compensation—have all been increased in favour of the tenants.

Notice and Opportunity to Dispute:

Previously, the notice for evictions on all three reasons is two months, but the amendment has extended the period for renovation or demolitions to four months. The window of time the tenants have to appeal these notices before the Residential Tenancy Branch (RTB) has also been extended to 30 days after receiving the notice for renovation/demolition evictions, and 15 days for the first two.

Compensation

It is the landlords’ duty to compensate tenants for one month’s rent for s.49 notices remains unchanged, but a new penalty for failing to provide tenants evicted on the basis of renovations/demolitions the right of first refusal has been imposed in s.51.2-3. The right of first refusal refers to the tenant’s right to enter into a tenancy agreement at the same unit after renovations are completed. This penalty is a steep one, equivalent to 12 times the monthly rent, which is also the newly prescribed amount if the tenant proves that an eviction under s.49 was not issued in good faith, i.e. the landlord did not begin using the unit for stated purposes for at least six months, within a reasonable time after ending the tenancy.

 

By implementing these harsh provisions in place, the provincial government intends to curb landlords’ contravention of the RTA, and incentivize tenants to take them to dispute resolution at the RTB when it is discovered. However, owing to the recency of these amendments, as well as the RTB’s sporadic additions to its decision database, we have yet to read a decision that invokes these updated provisions.

Recent Decisions

However, one of the most recent decisions concerning compensation for a s.49 eviction sheds some light on instances where the landlord issues notice on the basis that they will return to occupy the unit. In Decision 7033, heard in November 2017, the applicant tenant alleges that the landlord has not moved back into the unit after she moved out. However, the arbitrator wrote that:

“… In my view a rental unit is occupied by the Landlord providing they are using it for a personal purpose, even if that purpose is simply to store personal property.”

In time, as more decisions concerning s.49 evictions become available, the public will be able to gain a better idea of how these disputes are resolved, but should keep in mind that RTB decisions are not binding on future hearings.

The provincial government’s Rental Housing Task Force is hosting community meetings across the province to gather ideas for further amendments to existing tenancy legislation, which will be reported to the Premier and the Minister of Municipal Affairs and Housing in fall 2018.

About the Author:

This is our first blog post from articling student, Wen He. Wen is interested in many practice areas including civil litigation, property, and family law. He is equipped with a unique cross-cultural perspective and skillset, having spent his youth in Beijing, China. He speaks Mandarin with native fluency and maintains a legal education column on a local Chinese newspaper. Find out more about Wen by clicking HERE.

OPCA Litigants: Their Own Worst Enemy.

The term “OPCA litigant” (Organized Pseudolegal Commercial Argument litigant) appears to have been first coined by Mr. Justice Rooke of the Alberta Court of Queen’s Bench, in his seminal decision of Meads v. Meads, 2012 ABQB 571*.

Meads was a family law case in which one party chose to advance a number of meritless arguments in an attempt to deprive the court of jurisdiction or otherwise derail the matter. These arguments included claiming that the opposing party, the opposing party’s lawyer, and the court were attempting to “induce him into slavery”. The OPCA litigant produced reams of documents and left a court hearing half way through, apparently out of the fear that by remaining he would accept the court’s jurisdiction over him.

 

Mr. Justice Rooke took the case as an opportunity to release a massive 188 page decision that not only dealt with the issues between the parties, but went on to explore in depth the different types of OPCA litigants and explain why their arguments don’t work.

OPCA litigants have many different varieties. Some of the more common variants include the Freemen on the land” movement, de-taxers and Sovereign Citizens; but there are many others. The main characteristic of OPCA litigants is that they purport to believe that they have some kind of special tactic that will deprive the court of jurisdiction over them, or otherwise exempt them from following the law.

OPCA litigants usually represent themselves, as all lawyers are officers of the court with a duty to refrain from vexatious or meritless litigation, and so it is extremely unlikely that a lawyer would knowingly advance the case of an OPCA litigant. Many self-represented parties do an excellent job and would never engage in OPCA tactics, but almost all OPCA litigants are self-represented. This self-representation makes OPCA litigants even more challenging, because the court has a duty to explain the process and render some limited level of assistance to self-represented litigants. In the case of OPCA litigants, the court has to walk a fine line to fulfill their duty to the self-represented party, while also minimizing the impact of the shenanigans in which OPCA litigants routinely engage. The courts across Canada are increasingly aware of this issue, and are actively working to avoid the negative impacts of OPCA litigants.

 

Don’t Buy in to the OPCA!

The various strategies of OPCA litigants are too wide-ranging to fully discuss in this article, but some of them include:

  • Claiming that they are “natural persons” and are subject only to “God’s Law” and not to the laws of man;
  • Alleging that individuals are only obliged to pay income tax if they opt-in to government provided programs, like Canada Pension Plan;
  • Relying upon centuries-old statutes from England as part of an argument that Canadian courts lack jurisdiction to decide legal matters;
  • Claiming that due to procedural irregularities in their creation, Canadian courts only have jurisdiction over admiralty law and the sea, and have no jurisdiction on dry land;
  • Flat out refusing to acknowledge the jurisdiction of the courts, on the basis that the court has no jurisdiction over the individual unless the individual accepts the jurisdiction of the court.
  • Affixing stamps, thumb prints, and Latin phrases to documents, either to deliberately confuse the reader, or out of the belief that these items have some legal significance or impact.

Most troubling is the fact that OPCA argument is often promoted by “gurus” who sell their strategies to gullible individuals. This is especially common with tax evasion schemes where a guru will convince people that a made up strategy can allow them to never pay income tax and thereby take home more money. Often these gurus end up in jail or on the losing end of civil court actions due to their own strategies, but that is little consolation to someone who bought in to the guru’s strategy and ended up facing serious regulatory or criminal penalties; such as going to jail for tax evasion.

Canadian courts have unequivocally rejected the arguments and strategies advanced by OPCA litigants, especially the OPCA claim that the courts lack jurisdiction. The courts exist to enforce the law, to provide a venue for the resolution of disputes, and to create order in our society. In order to do this, the courts need the jurisdiction to fulfill these goals. In Meads at para 370 the court succinctly explained the position of Canadian courts towards OPCA and jurisdiction:

“There is always a court, though perhaps not this one, that has jurisdiction over these litigants and their activities. They cannot opt out. All arguments that invoke ‘immunity’ and indeed any schemes that claim a person can possess or acquire a status that allows them to ignore court authority are incorrect in law.”

The Meads decision goes on to address the other strategies of OPCA litigants, including debunking the idea that centuries-old statutes like the Magna Carta protect individuals from all government legislation, and rejecting the OPCA theory that everything, including paying income tax, is a contract that you can opt out of or terminate.

The court in Meads ultimately concluded that none of the OPCA strategies were valid, and stated that courts should dispose of OPCA arguments as directly as possible to protect those targeted by OPCA litigants, avoid the waste of court time, and to send a clear message that OPCA strategies will not succeed.

The end result is that pursuing these strategies will not magically make the case against you go away, and at most will result in only a temporary delay of the proceedings, while reducing the credibility of any legitimate legal arguments that you may have.

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What to Do When Faced with an OPCA Litigant?

The recent BC Supreme Court case reported under the style of cause For the Peter of the August-Sjodin Family,: sp17uwe./:secwepemc v. Little Shuswap Lake Indian Band, 2016 BCSC 1213, illustrates the damages that a vexatious OPCA litigant can cause.

The unusual style of cause gives away the OPCA strategies of the litigant in this case, who commenced various actions against his tribal band and its officials. The plaintiff was seeking, among other things, access to facilities from which he had been banned and compensation of “$20,000 in functional fiat Canadian currency from each defendant.”

The Notice of Civil Claim contained stamps, fingerprints, numbers and random letters that the court concluded were meaningless. The legal actions started by the plaintiff did not appear to have any merit, but still had to be defended by the defendants, causing significant costs.

Ultimately the court made an order that the plaintiff would have to provide security for costs before he could proceed with his action. This meant that the plaintiff could not take any steps in his lawsuit without putting an amount in to court that was deemed sufficient to cover the defendant’s costs if the plaintiff ultimately lost the case. Unfortunately the defendants were left with no recourse against the plaintiff to cover the already substantial legal costs that they had been forced to incur, because the plaintiff had no money. It is unlikely that the plaintiff would come up with the security for costs, and so his case was effectively at an end.

OPCA litigants usually end up in disputes with the government, but in civil actions against a private defendant the OPCA litigant can cause you to incur substantial costs just to deal with the OPCA litigant’s nonsense. If the OPCA litigant has no money these costs may be impossible to recover, so dealing with an OPCA litigant as cost effectively as possible is a priority.

 

The following are some of the strategies available to limit the damage caused by OPCA litigants:

  • Make an application to strike the OPCA plaintiff’s pleadings. This involves an application to a Master of the court, or a judge, and if the application is successful then the plaintiff’s claim against you can be dismissed. More likely the court may order that the plaintiff amend their claim, which limits the benefits of this option.
  • If the OPCA litigant actually has property, then you may pursue an award of special costs against them in order to recover the legal fees that you were forced to incur due to their meritless claim. This is possible where the OPCA litigant’s conduct has risen to an outrageous level and fulfills the legal test for an award of special costs. Unfortunately, many OPCA litigants are also flat out broke so no award of costs could ever be collected.
  • Seek security for costs where the OPCA litigant’s claim, defence or application is clearly meritless. This strategy appears to be gaining popularity to deal with the fact that many OPCA litigants will never pay a costs award after the fact. Where appropriate, your counsel might apply to the court for an order that the OPCA litigant be forced to pay into court an amount to cover costs before they can proceed with their litigation. For impecunious and vexatious OPCA litigants, this might prevent them from being able to proceed with their litigation.
  • Finally, for particularly persistent OPCA litigants someone may ultimately need to make an application to have them declared a vexatious litigant. If successful, that type of application can result in an order prohibiting the OPCA litigant from starting new lawsuits without the permission of a judge.

 

Conclusion

Many people would love to write their name in capitals, reference some centuries-old statute, throw in some incorrectly used Latin phrases and a few thumb prints for good measure, and completely avoid income tax, child support, or other obligations. Fortunately this is simply not possible.

The various OPCA schemes only end one way, with the OPCA litigant on the losing end; despite any meritorious arguments that they may have had before resorting to OPCA strategies. There are techniques for dealing with OPCA litigants, should you ever have the misfortune of facing one in a civil matter.

If you do find yourself in such an unfortunate situation, it is wise to seek experienced legal counsel as soon as possible. Velletta & Company is proud to offer a full range of legal services, including civil litigation defence. We have dealt with OPCA litigants in the past, including securing special costs awards against OPCA litigants. Contact us today!

 


*To anyone who is interested in reading more about this topic, the author recommends the Meads decision above as an excellent starting point as it cites many of the important OPCA decisions in Canada.

Pre-Judgement Garnishing Orders

Pre-Judgement Garnishing Orders:
A pre-judgement garnishing order is an extraordinary remedy that can get money paid into court before a trial, and helps insure that the plaintiff will not end up with a paper judgement against a defendant who has no assets or funds. A plaintiff may apply to the court for a pre-judgement garnishing order immediately after filing their notice of civil claim, and before serving the defendant and thereby alerting them to the lawsuit.

If the garnishing order is granted, the parties named in the order who owe money to the defendant must instead pay those funds into court. The person upon whom the order is served is referred to as the “garnishee”. The funds are then held until the court makes an order regarding who gets the funds – the plaintiff or the defendant. The result is that the plaintiff can secure part of their claim early on, before the defendant even knows that they are being sued. This element of surprise helps to prevent the defendant from dissipating or hiding their funds once they know about the lawsuit.

Criteria:
Pre-judgement garnishment is an unusual remedy, because even though the plaintiff has not yet proven their case, they are able to garnish funds owed to the defendant. Because of the invasive nature of this remedy, there are strict requirements in order to qualify for a pre-judgement garnishing order. If these requirements are not met, the order is often refused or, if granted, may be set aside upon the application of the defendant. In order to obtain a pre-judgement garnishing order, the following criteria must be present:

1: the claim must be for a debt or liquidated amount: Debt is generally the more common claim, where funds have been advanced or a party owes money pursuant to a contract. A liquidated amount usually arises where the parties have inserted language into a contract that specifies the amount of the damages in the event that one party breaks the contract.

2: the plaintiff must deduct all just discounts: The courts have held this to mean that the plaintiff must deduct the amount of any claim of the defendant which, if ultimately accepted at trial, would establish that a sum was owed from the plaintiff to the defendant. In essence the plaintiff must make allowance for all potential claims of set off, or counterclaims of the defendant.

3: the plaintiff must know the identity of someone who owes money to the defendant: This is usually a bank at which the defendant holds an account. For bank accounts you need to know the specific branch at which the account is located. You can garnish anyone who owes money to the defendant, including employers – although there is a limit to the amount of wages that you can garnish. The funds must be actually owed at the time the order is served upon the garnishee, and so to garnish anything other than a bank account, your timing will likely need to be impeccable in order to serve your garnishing order on the garnishee after the debt has become due, but before it has been paid to the defendant.

Risks:
The largest risk is usually that you will pursue pre-judgement garnishment and end up not getting enough to have made the garnishment proceedings worth it. If the defendant has no money in their bank account, or if the garnishee does not in fact owe money to the defendant, then there is nothing for the garnishing order to seize.

The second risk of pre-judgement garnishment is that the defendant can apply to have the order set aside and the funds returned. Courts have held that, due to the invasive nature of pre-judgement garnishment proceedings, there must be meticulous compliance with the procedural requirements. In particular, the affidavit of the party who seeks the garnishing order must provide all the information for the registrar to approve the order. Since the application is without notice, the applicant must make full and frank disclosure in their affidavit.

Despite the onerous requirements to obtain a pre-judgement garnishing order, this type of order can be a valuable tool in your civil collection matter. Having funds paid into court will provide you with some peace of mind knowing that if you obtain a judgement, you should at least receive the amount of the funds in court. Garnishing a debtor’s bank account also demonstrates that you are taking the matter seriously, and having funds paid into court can motivate the debtor to make a reasonable proposal to satisfy the debt.

Four Paragraph Decision from the BC Supreme Court Provides Much Needed Clarification on Default Judgment Rules

The BC Supreme Court published a four-paragraph decision today that should be of some interest to the litigation bar in BC, particularly those whose practice includes creditors remedies.

Rule 3-8(2) of the Supreme Court Civil Rules allows a party to take default judgment against a party who has failed to respond to a claim by making a filing with the court registry if the claim is in a specified and ascertainable amount.   This means that if the Notice of Civil Claim specified the damages as a dollar figure, the Plaintiff can take judgment quickly and inexpensively, with no court appearances needed.  Where the damages are not specified as a dollar figure, the Plaintiff is required to make an application before a judge to assess the damages.

The court registry has in the past rejected applications for default judgment where there is a specified sum plead in the Notice of Claim, and where there are also alternative claims for general damages.  This would force the plaintiff to bring the claim to a judge for damages to be assessed.  This is a costly and inconvenient process, particularly if the Plaintiff is concerned about a dry judgment, or has limited resources to pursue collection.  Today’s decision seems to indicate that filings for default judgment will now be accepted and entered despite alternative pleadings being made.  This gives lawyers greater flexibility in drafting their claims, as they will not have to consider excluding general damages claims if the case may possibily proceed to default.

The court’s decision in Trustees of the Interior Lumbermen’s Pension Plan v. Moore, 2016 BCSC 89 is printed below:

[1]             THE COURTI am prepared to grant the order. 

[2]             I do so on the basis — and you may wish this to be transcribed, because it may be something that is of use to the profession generally — but in my view, Rule 3-8(3) of the Supreme Court Civil Rules, B.C. Reg. 168/2009 makes it clear that a party may obtain default judgment on a claim for money that is in a specific ascertainable amount. 

[3]             There is nothing in the Rules that precludes a party from doing so where the claim happens to be coupled with a claim in the alternative.

[4]             I am allowing the appeal and you may take the order.

 

 

Joint Tenancy and Your Residence

Many homes have more than one person on the title to the property. Confusion often arises over what it means to co-own a piece or property, and the implications that it can have in the future. Spouses may own a property together with the objective of having it pass automatically to one of them if the other dies or parents may put their children on the title to the parent’s home in contemplation of avoiding probate fees.

The terminology in this area of law can become confusing. The general term for two or more people owning property together is “co-ownership”, and each person who has their name on the title to the property is a “co-owner”.  Co-ownership of property also involves the terms “tenancy” and “tenant”, but in this case these terms have nothing to do with landlord and tenant law or leases. There are two main legal forms in which people can co-own a piece of real estate.

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Caveat Emptor in Real Estate Transactions

As lawyers practicing in the area of real estate litigation, we often find ourselves advising clients who have purchased a home, only to discover after moving in that the home is full of many problems and defects that they weren’t made aware of.  Faced with expensive repairs and renovations, disappointed home buyers will often turn to the seller of the property for these costs.  This article deals with the types of circumstances in which a vendor of real estate can be held responsible for defects discovered by the seller after purchase.

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Setting up a Sole Proprietorship

Sole proprietorships are usually the simplest, easiest, and most affordable business structure for a small business or new venture; however, there are still a number of things that need to happen to set up a well organized sole proprietorship. Dealing with these issues up front is a valuable investment because it can avoid serious headaches as your business grows. It is a lot easier to deal with the organization of your business at the start, before you become busy marketing and dealing with customers or clients. The following are some general concerns with sole proprietorships. Depending on the type of business there may be other important steps necessary to establish a sole proprietorship. Getting these simple first steps out of the way can give you more time to focus on your business later.

1: Name registration:

A business name can be a valuable asset. As a sole proprietor, you can carry on business under your own name without having to register or take any formal steps. An example of this would be “Joe Blogg’s Lawn Maintenance”. The name is sufficient to identify your business and distinguish it from other businesses, while making it clear to the public who they are dealing with. The British Columbia Partnership Act creates a legal requirement to register your name if you are doing business under a name other than your own and your business involves “trading, manufacturing, or mining”.

Even if you carry on a type of business that does not require name registration, it is still a good idea to register your business name if you are not using your own name. Registering your business name will not totally prevent other businesses from using the same name, but it will provide some measure of protection by publically establishing when you started your business using that name.

2: Insurance:

The simplicity of a sole proprietorship is that the individual carries on business as themselves with no intervening legal entity. This makes things affordable and creates a fairly efficient tax structure, but it also comes at a significant cost – the sole proprietor is personally liable for all their business debts and for any liability arising from the activities of the business. Depending on the type of business, insurance can be vital. Because the sole proprietor is personally liable, any accidents or injuries that occur due to the business’ negligence will probably result in a claim against the sole proprietor. Damages for a personal injury or destruction of property can be very high, and a claim against the business could put your major assets, like your home, at risk.

3: A Strong Accounting System:

There is a common misconception that having a business allows the business owner to write off all sorts of “business” expenses like meals or a personal vehicle that is mainly used for pleasure. While there are appealing tax deductions that can be achieved through owning your own business, the real rationale behind a tax deduction is to allow businesses to incur legitimate expenses while pursuing a profit. Writing off borderline personal expenses can be a violation of the Income Tax Act. As a sole proprietor it is important to keep detailed and accurate records of your business expenses so that you can claim all of your legitimate expenses at the end of the year, and avoid getting into trouble for inadvertently claiming expenses that were not legitimately connected to your business. Setting up a good accounting system from the beginning, and saving your receipts, can save you trouble later on, and make it easier for your accountant to file your taxes.

4: Business Contracts

Even as a sole proprietor you will still need strong and enforceable contracts with your customers or clients. These types of agreements will vary greatly depending on the type of business that you operate. Joe Blogg’s Lawn Maintenance might need a simple regular service contract that governs the ongoing relationship with a client, whereas a business consultant might need a one-time agreement that is very detailed.

Well drafted contracts are clear and lay out the rights and responsibilities of each party so that everyone knows what they can expect. Having clear contracts can actually make it easier to collect your receivables and reduce your delinquent accounts by avoiding misconceptions with your clients. Above all, well drafted contracts are legally binding and provide you with a remedy should a dispute develop and you find it necessary to go to court and collect upon your account.

If you are intending to have employees in your business, then it is very important to have employment contracts. Many small businesses do not have employment contracts and may also be unaware of the obligations placed on employers under the British Columbia Employment Standards Act. With employees it is especially important to clarify the terms of the relationship at the outset, and having a clear and fair employment contract can help foster a productive and respectful relationship with no unpleasant surprises for either party.

In conclusion, setting up a sole proprietorship is relatively simple, and depending upon your industry it can be the perfect structure for your small business or start-up company. As your business grows you can then think about incorporating when the time is right. In the meantime, making sure that your sole proprietorship is properly registered and well organized can save you time and money and give you more time to focus on running your business. We love helping small businesses, so if you need a name registration, business contracts, or if your small business is growing and you are considering incorporating, give us a call.

Can I Sue My Home Inspector?

Purchasers of residential real estate in British Columbia will typically engage the services of a home inspector prior to purchasing a home.  For most British Columbians, a home is the biggest purchase they will ever make, and a proper home inspection can provide some assurance as to the quality of the home and can reveal defects that could otherwise catch the buyer unawares after purchase.

In some cases, a buyer may seek redress against a home inspector if the inspector failed to identify defects or misrepresented the home or their findings in some way.

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