Docket A-017-04
Order LR04-15

IN THE MATTER of an appeal, under Section 25 of the Rental of Residential Property Act, by Suzanne Peters against Order No. LD04-149 of the Director of Residential Rental Property dated June 22, 2004.

BEFORE THE COMMISSION

on Thursday, the 22nd day of July, 2004.

Weston Rose, Commissioner
Anne Petley, Commissioner
Norman Gallant, Commissioner

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Order

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Participants

1.   Appellant:

Suzanne Peters

2.  Respondents:

Michael Burke

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Reasons for Order

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1.  Introduction

Suzanne Peters (the Appellant) appealed Order LD04-149 (Exhibit E-7) issued by the Office of the Director of Residential Rental Property (the Director) on June 22, 2004.  The Appellant's Notice of Appeal (Exhibit E-8) was received by the Island Regulatory and Appeals Commission (the Commission) on July 6, 2004. 

The Director's Order and this present appeal concern the residential premises located at 81 Walthen Drive in Charlottetown (the premises) and arise from an Application for Enforcement of Statutory or Other Conditions of Rental Agreement (Exhibit E-1), filed by Michael Burke (the Respondent), dated and received on September 17, 2003.   

The appeal was heard in the Commission's main hearing room in Charlottetown, Prince Edward Island on Monday, July 19, 2004.

2.  Background

The Appellant and her husband Eric Peters purchased the premises in February 1989 with the Appellant's brother-in-law Reg Peters looking after the rental business at that time.  The Respondent's sister Linda Mitchell and their mother Jessie Burke moved into the premises in 1990.  Linda Mitchell passed away in January 1991.  Jessie Burke planned to live with her other daughter.  The Respondent was at that time seeking a place to live.  The Respondent met with Reg Peters and was apparently informed that rent was $675 per month and the security deposit was one month's rent.  The Respondent understood from Reg Peters that if he took over the premises the security deposit would be returned upon the end of his tenancy.  The Respondent moved into the premises in February.  In April 1991, Sharon Burke, wife of the Respondent, paid $675 to Jessie Burke to reimburse her for the security deposit they expected they would receive at the end of their tenancy. 

On June 29, 2003, the Respondent notified the Appellant that he would vacate the premises on July 30, 2003.  The Respondent seeks the return of the security deposit of $675 plus interest which he understood was originally paid by his late sister Linda Mitchell.

The Appellant contends that Linda Mitchell had never paid a security deposit and therefore they do not have to return any security deposit to the Respondent.   

On September 17, 2003 the Respondent filed an Application for Enforcement of Statutory or Other Conditions of Rental Agreement pursuant to section 8 of the Rental of Residential Property Act (the Act), R.S.P.E.I. 1988, Cap. R-13.1, for an order that a security deposit in the amount of $675 be found to be owed and be paid.   A hearing was held before the Director on November 18, 2003, pursuant to paragraph 4(2)(d) of the Act. 

In the Director's Order, issued June 22, 2004, the Director accepted the evidence of the Respondent (lessee) that a security deposit of $675 had been paid.  The Director noted the failure of Reg Peters to provide evidence and thus concluded that his evidence would have been adverse to the Appellant's (lessor) position that no security deposit had been paid.  The Director found that a $675 security deposit had been held in trust, and the Appellant was ordered to return the security deposit, plus interest of $305.44 for the period February 1, 1991 to November 30, 2003, for a total of $980.44, to the Respondent.

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

3.  Decision

The appeal is allowed in part, as the Commission finds that a security deposit was originally paid to the Appellant, but the Commission is not satisfied that this security deposit was equal to one month's rent.  The Commission orders that the Appellant pay the Respondent $300, plus interest in the amount of $136.19 (for the period February 1, 1991 to November 30, 2003) for a total payable of $436.19 as a return of security deposit plus interest.  The reasons for the decision follow.

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.  

The Commission finds that the onus is on the Appellant to establish that no security deposit was paid.  There is very little documentation before the Commission.  There is no oral evidence available from the parties to the original rental agreement, that is to say Linda Mitchell and Reg Peters.  Since Reg Peters could have testified, but did not, and since the Appellant is well aware of the importance of providing his testimony, the Commission finds that the Appellant has not satisfied this onus and therefore the Commission finds that a security deposit was, in fact, paid.

However, the Commission is not satisfied that the security deposit amounted to $675.  While the Respondent believes that the security deposit was $675, and had reimbursed his mother for that amount shortly after taking over occupation of the premises, the Commission accepts the testimony of the Appellant that they currently charge a security deposit of $350 for this very unit.  In addition, the Commission has reviewed Exhibit E-6.2 which is a 1988 lease to another party of the duplex unit adjacent to the premises.  While the premises and adjacent unit were not owned by the Appellant until 1989, Exhibit E-6.2 does indicate a rental of $675 per month with a security deposit of $300 per month.  The Commission accepts the Appellant's testimony that they carried forward the existing rental agreements when they purchased the duplex which contained the premises.  The Commission finds that, in all likelihood, the security deposit paid by Linda Mitchell to the Appellant would have been $300. 

The Commission therefore orders the Appellant to pay the Respondent $300 for the return of the damage deposit, plus interest accumulated from the time the Respondent took over the premises in February 1991 until the date of the hearing before the Director in November 2003, said interest amounting to $136.19, for a total payable to the Respondent of $436.19. 

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