Docket A-003-04
Order LR04-03

IN THE MATTER of an appeal, under Section 25 of the Rental of Residential Property Act, by Mike Power and Cheryl Myers against Order LD04-048 of the Director of Residential Rental Property dated February 17, 2004.

BEFORE THE COMMISSION

on Tuesday, the 9th day of March, 2004.

Weston Rose, Commissioner
Brian McKenna, Vice-Chair
Anne Petley, Commissioner

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Order

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Participants

1.   Appellants:

Mike Power and Cheryl Myers

2.   Respondent:

Laura Fanning
Represented by Ken Gallant

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Reasons for Order

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1.  Introduction

Mike Power and Cheryl Myers (the Appellants) appealed Order LD04-048 (Exhibit E-20) issued by the Director of Residential Rental Property (the Director) on February 17, 2004.  The Appellant's Notice of Appeal (Exhibit E-21) was received by the Island Regulatory and Appeals Commission (the Commission) on February 18, 2004.

The Director's Order and this present appeal arise from a Notice of Termination by Lessor of Rental Agreement issued by Kevin Gallant per Laura Fanning (the Respondent) for a rental dwelling located at RR #2 Hunter River, Prince Edward Island.

The appeal was heard in the Commission's main hearing room in Charlottetown, Prince Edward Island on Monday, March 8, 2004.

2.  Background

The Appellants, as lessees, entered into a rental agreement with the Respondent, as lessor, on August 15, 2003 to rent the dwelling located at RR#2 Hunter River. 

In November 2003 and January 2004, the Respondent issued a Notice of Termination of Rental Agreement (Notice) to the Appellants.  In each Notice, the Respondent alleged that the Appellants failed to pay rent due on the first day of the applicable month.

On January 28, 2004 the Respondent filed an application pursuant to subsection 13(3) of the Rental of Residential Property Act (the Act), R.S.P.E.I. 1988, Cap. R-13.1, for an order to terminate the rental agreement on the basis that the Appellants are persistently and/or habitually late in the payment of rent.   A hearing was held before the Director on February 12, 2004, pursuant to paragraph 4(2)(d) of the Act. 

In the Director's Order, issued February 17, 2004, the Director found that the Appellants had been persistently and habitually late in the payment of rent on a number of occasions since entering into the rental agreement in 2003.  The Director found that the Respondent had established just cause for the termination of the rental agreement effective February 17, 2004.

The Appellants appealed the Director's Order to the Commission.

3.  Decision

The appeal is denied.

In this matter the Commission must first satisfy itself that the reasons for the order to terminate the rental agreement were valid, and secondly that the Director acted in accordance with the provisions of the Act in issuing Order LD04-048.

The Appellants have failed to provide sufficient evidence to support their request to have Order LD04-048 reversed or varied.  The Commission is satisfied the reasons to terminate the rental agreement were valid and the Order was issued in accordance with the provisions of the Act.  Accordingly, the Commission confirms the decision of the Director in Order LD04-048.

Sections 25 and 26 of the Act read as follows:

25. (1) Any party to a decision or order of the Director, if the party has appeared or been represented at the hearing before the Director, may appeal therefrom by serving on the Commission, within twenty days after receipt of the decision or order of the Director, a notice of appeal in the form prescribed by regulation.

(2) Appeals made to the Commission shall be heard by it within thirty days of receipt of the appeal.

(3) Where an appeal is not made under subsection (1), the parties are deemed to have accepted the decision of the Director and the decision is final. 1988,c.58,s.25; 1990,c.53,s.7; 1991,c.34,s.1,2; 1991,c.18,s.22 {eff.} Nov. 4/91.

26. (1)  An appeal to the Commission shall be by way of a re-hearing, and the Commission may receive and accept such evidence and information on oath or affidavit as in its discretion it considers fit and make such decision or order as the Director is authorized to make under this Act.

(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. 1988,c.58,s.26; 1990,c.53,s.8; 1991,c.18,s.22 {eff.} Nov. 4/91.  

Subsection 13(3) of the Act reads as follows:

13(3)  Where a lessee is persistently or habitually late in the payment of rent the lessor may apply to the Director for such order, including termination of the rental agreement as the Director considers just.

The Appellants submitted that they do not dispute that the October 2003 cheque was returned NSF.  However, the Appellants submit that the November 3, 2003 Notice was "unjust and invalid" as the Appellants never had the opportunity to pay the rent with that cheque and that cheque was never returned NSF.  The Appellants also state that they never informed Mr. Gallant that they needed more time.  Rather, Mr. Power had informed Mr. Gallant that he would have to wait until the final date set out in the November 3, 2003 Notice before receiving November's rent.

The Appellants submitted that the January 2004 rent remained unpaid as they were paying $400 per month to heat the dwelling and yet, in spite of this cost, the dwelling was so cold that the pipes were freezing.

The Respondent submitted that in November 2003 she went to her local Bank of Nova Scotia branch in British Columbia to attempt to have the November rent cheque certified.  The bank checked into the matter and advised her that there were insufficient funds for the cheque to clear.  The Respondent explained that had she merely deposited the cheque, her bank would have placed a 20 day hold on the cheque.  The Respondent also stated that after having received a NSF cheque from the Appellants the previous month, she had the right to demand cash or a certified cheque.

At the hearing, both parties discussed in considerable detail their respective positions on issues such as the condition of the dwelling, the status of the contents of the dwelling and the cost to heat the dwelling.  However, the Commission reminds the parties that the issue to be addressed on this appeal is whether or not the lease should be terminated pursuant to subsection 13(3) of the Act. 

While the November 2003 rent cheque was never returned NSF, the Appellants by their own admission waited until November 24, 2003 to pay the November rent as Mr. Parker considered the November Notice to be unjust and invalid.

Although there may be some doubt as to whether or not the November 2003 rent would have been paid on time had the Respondent not attempted to have the November rent cheque certified, the Commission finds that a pattern of late payment exists based on the October 2003 and January 2004 rent cheques, both of which were returned NSF.

Upon a review of the evidence and upon hearing the parties, the Commission finds that the evidence demonstrates that the Appellants were persistently or habitually late in the payment of rent and the Director was acting within the Act in issuing Order LD04-048.  The Commission therefore has no basis to set aside this Order and this Order is hereby confirmed.

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