Executive Summary: Key Legal and Evidentiary Issues

• Care Givers Inc. appealed a Residential Tenancies Tribunal decision awarding $107,481.25 in damages to its landlord, Dr. William Taylor Investments Inc.
   
• Jurisdictional arguments centered on whether the Residential Tenancies Act, 2018 applied given the tenant's use of the premises for rehabilitative and therapeutic care.
   
• Procedural fairness issues arose from the Tribunal's decision to permit the landlord to call an additional witness after the close of its case.
   
• Hearsay concerns were raised over an estimate of sewer-backup damages given by a witness who relied on information from an abatement contractor.
   
• Evidentiary rules under section 46 of the Act gave the Adjudicator broad discretion over hearing procedure.
   
• Justice Stacy Ryan applied a correctness standard across the grounds of appeal and dismissed the appeal in its entirety.
   

Facts of the case

Care Givers Inc. rented a property from Dr. William Taylor Investments Inc. under an agreement entered into on July 5, 2018, with an initial term running from July 1, 2018, to July 1, 2019, at a monthly rent of $1,950.00. Care Givers used the premises to house individuals requiring specialized programming for complex social, emotional, behavioural, and developmental needs, and the landlord permitted modifications to the property on the understanding that Care Givers would restore it to its original condition before vacating. Care Givers stopped housing individuals at the property as of November 2022 and gave written notice of termination on January 31, 2023, though the parties continued the tenancy on a month-to-month basis under the same terms. Rent continued to be paid while Care Givers searched for contractors to complete the restoration, and an RFP for the work was issued in April 2023 and extended to June 29, 2023. Between June 28 and July 27, 2023, a sewer backup caused significant damage to the property. Following a hearing, the Residential Tenancies Adjudicator ruled in favour of the landlord and ordered damages of $107,481.25, in a decision rendered May 16, 2025 under Application #2024-0137-NL.

Policy and legislative provisions at issue

The appeal turned on section 3 of the Residential Tenancies Act, 2018. Section 3(1) provides that the Act applies wherever a landlord and tenant relationship exists in respect of residential premises, regardless of any contrary agreement or statement. Section 3(4)(c) excludes from the Act's application living accommodation used or occupied for penal, correctional, rehabilitative, or therapeutic purposes, or for the purpose of receiving care. Care Givers argued this exclusion applied because of the property's intended use in housing individuals with care needs. The Adjudicator's authority to control hearing procedure was also at issue under section 46(2), which allows the director to prescribe rules of procedure and evidence, and section 46(4), which sets out the director's powers respecting witnesses and examination.

Reasoning and analysis

Justice Ryan applied a correctness standard to each ground of appeal. On the jurisdictional question, the Adjudicator had found that the lease agreement made no mention of the intended use of the premises and that nothing in its terms suggested a rehabilitative or therapeutic purpose, notwithstanding the landlord's understanding that Care Givers intended to house clients receiving such care. Justice Ryan agreed there was no error, noting the only evidence of the property's purpose came from the landlord's own testimony and that, in any event, the premises had been vacant since November 2022, undermining any claim that they were still being used for a care-related purpose at the relevant time. On the case-splitting issue, Justice Ryan reviewed the Adjudicator's decision to permit the landlord to call one additional witness, out of four requested, after the Adjudicator became concerned that excluding the evidence would produce a "skewed version of events." Applying the procedural fairness principles set out in Baker v. Canada (Minister of Citizenship & Immigration), Justice Ryan found the Adjudicator had not erred in allowing this evidence. On the hearsay ground, Justice Ryan considered the estimate provided by the witness Mr. Noel, who calculated damages using information from an abatement contractor about the scope of work typically required after a sewer backup. Because the abatement contractor himself testified at the hearing, Justice Ryan concluded the evidence was not hearsay and had been properly admitted and relied upon.

Ruling and overall outcome

Justice Ryan found no errors of law in the Adjudicator's decision and dismissed the appeal on all grounds raised. Dr. William Taylor Investments Inc., the landlord and First Respondent, was the successful party, and the underlying damages award of $107,481.25 in its favour was left undisturbed. The First Respondent was also awarded its costs of the appeal, to be assessed in accordance with Column 3 of the Scale of Costs in the Appendix to Rule 55 of the Rules of the Supreme Court, 1986.