Tenant sought compensation based on landlord’s delay for apartment he had to vacate
The British Columbia Court of Appeal ruled that an arbitrator erred by conflating the distinct tests for “extenuating circumstances” and “exceptional circumstances” in her analysis of whether the landlord timely occupied a rental unit the tenant had to vacate.
In Kassam v. 1129728 B.C. Ltd, 2026 BCCA 33, the respondent landlord issued a notice to end tenancy under s. 49(4) of BC’s Residential Tenancy Act, 2002 (RTA). As required by the notice, the appellant tenant vacated his apartment so that the landlord could occupy the unit. The landlord’s principal occupied the unit 14 months after the tenant had to vacate.
The tenant applied to the Residential Tenancy Branch (RTB) for 12 months of rent as compensation under s. 51(2) of the RTA. The tenant did not challenge the landlord’s good faith in issuing the notice to end tenancy.
The RTB arbitrator addressed the issue of whether the tenant was entitled to a monetary order for compensation due to the landlord’s failure to accomplish the purpose stated in the notice to end tenancy.
The arbitrator found the landlord liable, as it failed to establish “exceptional circumstances” resulting in its failure to occupy the unit within a reasonable period after the notice of termination took effect. The arbitrator found the tenant entitled to $102,000 in compensation, representing 12 months’ rent at $8,500 per month.
The landlord applied for a judicial review of the arbitrator’s decision. On Jan. 31, 2025, a judge of the Supreme Court of British Columbia found the arbitral decision patently unreasonable – the standard of review required by s. 58(2)(a) of BC’s Administrative Tribunals Act, 2004 – and remitted the matter to the RTB for a rehearing. The tenant appealed.
Arbitrator’s conflation of tests
The Court of Appeal for British Columbia granted the appeal to the limited extent of remitting the matter to the BC Supreme Court, rather than the RTB, for a rehearing. The appeal court otherwise dismissed the appeal.
As noted by the appeal court, the RTB arbitrator cited s. 51(3) of the RTA, which required her to determine whether “extenuating circumstances” justified the landlord’s failure to occupy the rental within a reasonable period after the tenancy’s termination. However, the arbitrator then applied the “exceptional circumstances” test.
The appeal court pointed out that “extenuating circumstances” and “exceptional circumstances” involved different tests and that extenuating circumstances were not inherently exceptional.
Upon reading the decision as a whole, the appeal court found that the arbitrator issued a patently unreasonable decision with an obvious legal error. Specifically, the appeal court held that the arbitrator:
- repeatedly mentioned the wrong legal test in her analysis
- failed to consider the correct test
- failed to tackle the landlord’s onus under s. 51(3)
- improperly assumed that “extenuating” and “exceptional” were synonymous
- based her finding that “exceptional circumstances” did not exist on irrelevant grounds relating to whether the landlord ended the tenancy in good faith
The appeal court added that the arbitrator’s references to good faith undermined her factual findings.
Given its ruling, the appeal court deemed it unnecessary to address the questions of whether the decision arose from a procedurally unfair hearing or whether the compensation awarded to the tenant was excessive.
Procedural issues
Next, the appeal court tackled the issue of whether the RTB director, whom the tenant did not name in his notice of appeal, had to apply for addition as a respondent.
At the beginning of the hearing, the appeal court considered such an application necessary under the Court of Appeal Rules, B.C. Reg. 120/2022, and granted the application to add the RTB director as a respondent on appeal.
Lastly, the appeal court held that it should remit the matter to the Supreme Court, not the RTB, as recent amendments to the RTA removed this matter from the RTB director’s monetary jurisdiction.
