Executive Summary: Key Legal and Evidentiary Issues

• Interplay between s. 66(1) of the Residential Tenancies Act, 2006 (RTA) and the concept of negligence in determining whether a tenant’s act or omission “seriously impaired” safety.
• Scope of the Landlord and Tenant Board’s obligation under s. 83(1) RTA to consider “all the circumstances,” including an alleged illegal lockout, when deciding whether to refuse or postpone an eviction.
• Procedural fairness concerns arising from the Board’s refusal to permit evidence and cross-examination on the tenant’s claim that she was kept out of the unit after repairs were completed.
• Proper legal test and framework for internal review of Board orders, including what constitutes a “serious error” and the Review Member’s misstatement of that test.
• Limits of appellate jurisdiction to questions of law only, and when an error in factual findings or evidentiary rulings becomes an error of law warranting intervention.
• Application of s. 134(6) Courts of Justice Act to determine whether an identified error of law is material enough to amount to a substantial wrong or miscarriage of justice, justifying setting aside the Board’s decisions.

Facts of the fire and the tenancy

The appellant, Gordana Gorscak, had been a tenant since 2012 in a five-plex residential building owned by the respondent landlord, Edward Jarzabek. In May 2022, a serious fire occurred in the tenant’s unit after she left a pot of cooking oil unattended on the stove. The fire caused significant smoke and water damage throughout the building, led to the evacuation of all tenants, and resulted in extensive damage to her unit, which was later repaired at a cost of $212,484.71. In attempting to extinguish the fire, the tenant suffered second-degree burns and smoke inhalation and was hospitalized for three days. After repairs, the tenant resumed living in the unit on August 1, 2023. Following the fire, the landlord’s insurer allegedly insisted that tenants carry tenant’s insurance as a condition for renewing the landlord’s policy. The tenant maintained that she was effectively and wrongfully kept out of the unit for a period because she refused to obtain tenant’s insurance, even though it was not required under her lease. This alleged “illegal lockout” later became central to her argument for relief from eviction under s. 83 of the RTA.

The landlord’s eviction application and statutory framework

The landlord served the tenant with a Form N7 – Notice to End Tenancy for Causing Serious Problems in the Rental Unit or Residential Complex under s. 66(1) of the Residential Tenancies Act, 2006. Section 66(1) permits termination where a tenant’s act or omission, occurring in the residential complex, “seriously impairs or has seriously impaired the safety of any person.” The landlord alleged that the tenant’s conduct in leaving oil unattended on the stove had seriously impaired the safety of others in the building. The landlord then filed an application with the Landlord and Tenant Board (LTB) seeking an eviction order on that basis. Section 83 of the RTA also played a crucial role. It requires the Board, when considering eviction, to review all the circumstances and empowers it to refuse an eviction or to postpone enforcement if, having regard to all circumstances, it would be unfair to evict. Section 83(3) further provides that the Board must refuse an eviction if certain serious landlord breaches are proven, such as a serious breach of the landlord’s responsibilities under the Act or a material covenant in the tenancy agreement.

The original Board hearing and decision (Eviction Order)

The Board held hearings on the landlord’s eviction application on October 2 and December 11, 2023. The landlord relied on the Fire Marshal’s report, which concluded that the fire started in the kitchen of the tenant’s unit and was most likely caused by cooking on the stovetop, and on a letter from the landlord’s insurer describing the incident as an “accidental fire caused by a tenant’s negligence.” Photographs and repair costs supported the extent of the damage, which the tenant did not dispute. The tenant’s position was that the fire was an accident and that she was not negligent, as she had been distracted by a distressing phone call with her daughter. The Hearing Member concluded that the tenant’s failure to turn off the stove burner caused the fire and that the fire seriously impaired the safety of all tenants in the building, including the tenant herself. In explaining the reasoning, the Member defined “negligent” as failing to take proper care and found that leaving a pot of oil unattended on the stovetop, even if the tenant was distracted, amounted to negligence. The Board expressly found that the tenant’s omission, or negligence, in failing to attend to her cooking seriously impaired the safety of others and herself, and that the test under s. 66(1) was met. On the relief-from-eviction issue under s. 83, the tenant’s representative argued that it would be unfair to evict given, among other things, the landlord’s alleged conduct in keeping her out of the unit for an extended period while insisting on tenant insurance. However, when the representative attempted to question the tenant about whether she had been refused re-entry following the repairs, the Member cut off that line of evidence and deemed the alleged lockout irrelevant to an eviction for causing a fire. The Member suggested that any lockout concerns could be pursued in a separate claim (e.g., damages), but not within the eviction hearing. Ultimately, the Member granted an eviction order but postponed enforcement until January 31, 2024, under s. 83, finding it would not be unfair to delay the eviction but that it would be unfair to refuse eviction altogether, particularly given ongoing concerns of other tenants about safety and fear of another fire.

The tenant’s request for review before the Board (Review Order)

The tenant then sought an internal review of the Eviction Order. She argued that the Hearing Member had improperly refused evidence about an alleged illegal lockout and related communications (including text messages), and that this refusal meant the Member had failed to consider all relevant circumstances under s. 83(1) and s. 83(3) of the RTA. She also alleged that certain evidence was wrongly excluded for procedural reasons, and that the Member’s findings mischaracterized or ignored parts of the record. The Review Member dismissed the request for review. In reasons, the Review Member found that the Hearing Member had allowed the tenant and her representative to present their case extensively and that any interruptions were aimed at keeping the hearing focused and efficient. The Review Member concluded there was no bias or procedural unfairness and that both parties had adequate opportunity to present evidence and argument. The Review Member also found that the decision to exclude some text messages was in line with LTB practice directions and rules regarding timely filing of evidence and relevance to the issues. The Review Member emphasized that the review process is not an opportunity for a party to correct their own litigation mistakes or reargue the case but is limited to addressing serious errors by the Board, such as significant legal, factual, or procedural errors. Concluding that no serious error had been shown, the Review Member denied the request for review and left the Eviction Order in place.

Appeal to the Divisional Court and standard of review

The tenant appealed to the Ontario Divisional Court, which can only hear appeals from LTB orders on questions of law. The court reviewed the framework: questions of law are about the correct legal test; questions of fact concern what actually happened; and mixed questions of fact and law involve applying a legal test to established facts. The standard of review on legal questions is correctness. The court also noted that a factual finding may give rise to an error of law if it is based on no evidence, irrelevant evidence, or an irrational inference. On procedural fairness, the court applied the appellate standard of correctness but with significant deference to the LTB’s procedural choices, recognizing the tribunal’s expertise and need to manage a high-volume caseload in an expeditious way while still affording parties an opportunity to be heard. The court further confirmed its remedial powers on appeal: it may affirm, rescind, amend, or replace a decision or remit the matter back to the LTB. However, under s. 134(6) of the Courts of Justice Act, an identified error of law must be material—it must result in a substantial wrong or miscarriage of justice—to justify appellate intervention.

Issue 1: The legal test under s. 66(1) RTA and the role of negligence

On the first main issue, the tenant argued that the Hearing Member applied the wrong test under s. 66(1) of the RTA by focusing on whether the tenant was negligent. Section 66(1) requires proof that a tenant’s act or omission has seriously impaired or has seriously impaired the safety of any person and that the act or omission occurred in the residential complex. The statutory text does not expressly require proof of negligence as a separate element. The Divisional Court accepted that negligence is not a necessary component of the statutory test; the correct inquiry is whether an act or omission seriously impaired safety, not whether that act or omission meets the civil standard of negligence. The court held that the Member erred in law by suggesting that the omission had to amount to negligence in order to satisfy s. 66(1). However, the court characterized this legal error as inconsequential in this case. The Member had already found on the evidence that the tenant’s omission (failing to turn off the stove burner and leaving hot oil unattended) caused a fire that seriously impaired safety. The added finding of negligence went “further than needed” and did not alter the outcome, because even without the negligence label, the statutory standard under s. 66(1) was clearly met. As a result, the court held that this error of law did not cause a substantial wrong or miscarriage of justice and did not justify setting aside the decision on this ground alone.

Issue 2: Procedural fairness and exclusion of evidence on the alleged illegal lockout

The second issue—ultimately decisive—concerned whether the Board denied the tenant procedural fairness by refusing to allow evidence on whether the landlord refused to let her return to the unit after repairs were completed. The tenant’s position was that she had been effectively locked out for a lengthy period because she declined to purchase tenant’s insurance, and that this alleged wrongful conduct by the landlord was directly relevant under s. 83(1) and potentially s. 83(3) when deciding whether to grant or refuse an eviction order. The transcript showed that when the tenant’s representative tried to examine her on where she had been living and whether the landlord had allowed her to return, the Hearing Member intervened and stopped that line of questioning as irrelevant. The Member repeatedly emphasized that the only issue before the Board was whether the tenant should be evicted for causing the fire, deliberately or negligently, and told the representative that if the tenant wanted to pursue the lockout issue, she could sue the landlord separately. Yet, in the written reasons on s. 83, the Member later stated there was “no evidence presented during testimony” of the alleged refusal to permit the tenant to return to the unit and treated the “lockout” allegations as having been raised only in submissions. The Divisional Court found this problematic. Because the Member had refused to allow testimony and cross-examination on the lockout question, the lack of evidence was the direct result of that procedural ruling. The tenant was thereby prevented from putting forward evidence central to her argument that the landlord had committed a serious breach and that all the circumstances under s. 83(1) and (3) justified refusing eviction. The court emphasized that s. 83(1) obliges the Board to consider all circumstances before granting an eviction and that this obligation reflects the remedial, tenant-protective nature of the RTA. Although the LTB has often interpreted s. 83(3)(a) as requiring an ongoing landlord breach to trigger the mandatory refusal of an eviction, the broader discretion under s. 83(1) is not so narrowly confined. Even if the usual remedy for an illegal lockout is a separate claim for damages or rent abatement, the alleged lockout can nonetheless be a relevant circumstance when deciding whether an eviction would be unfair. The court concluded that the Board’s refusal to permit the tenant to adduce evidence and to cross-examine on the alleged illegal lockout was a denial of procedural fairness and an error of law. This was not a minor or technical error: the court held it was material because the lockout issue was a significant theme of the tenant’s defence and central to how the Board should exercise its discretionary power under s. 83. Without the excluded evidence, the court could not assess whether a fully informed Board might have refused or mitigated the eviction. For that reason, s. 134(6) of the Courts of Justice Act could not be used to save the decision, and appellate intervention was required.

Issue 3: The Review Member’s test for reviewing the order

The third issue related to the internal review process at the LTB. At the outset of the review hearing, the Review Member told the tenant’s representative that “the test is whether there are serious errors of law,” framing the review as being limited to serious legal errors. In reality, the Board’s Rules and Interpretation Guidelines contemplate that a “serious error” justifying review can include jurisdictional errors, procedural errors, unreasonable findings of fact on material issues, clearly wrong interpretations of the RTA, unreasonable exercises of discretion, and potentially determinative new evidence that was previously unavailable. The Divisional Court held that the Review Member misstated the test by narrowing it to “serious errors of law,” rather than the broader concept of “serious error” as set out in the Rules and Guidelines. Nonetheless, the court considered this misstatement in context and determined that, standing alone, it did not warrant setting aside the Review Order. There was no clear indication that any issue the tenant sought to raise would have been outside the proper scope of review if the test had been correctly articulated, and the real substantive error lay in the original Hearing Member’s treatment of the lockout evidence and s. 83, which the Review Member then failed to remedy.

Outcome, disposition, and monetary award

In the result, the Divisional Court allowed the tenant’s appeal. It held that, although the Board’s emphasis on negligence under s. 66(1) was an immaterial legal error, the refusal to admit and consider evidence about the alleged illegal lockout was a denial of procedural fairness and an error of law that directly undermined the Board’s duty to consider all relevant circumstances under s. 83 of the RTA. Both the Eviction Order and the Review Order were set aside, and the matter was remitted to the Landlord and Tenant Board for a new hearing, should the landlord choose to pursue eviction again. The court also ordered costs in favour of the tenant. The respondent landlord, Edward Jarzabek, was directed to pay the appellant tenant, Gordana Gorscak, a total of $9,000.00 in costs, inclusive of disbursements of $3,828.95 (largely transcript costs) and applicable taxes, making Ms. Gorscak the successful party with a quantified monetary award in that amount.