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Rent hikes based on gas spike are `illegal,' appeal told

Toronto Star - June 29, 2002
by Kerry Gillespie

A provincial law that allowed landlords to permanently increase rents based on last year's one-time spike in energy costs is illegal, a group of Toronto tenants argue.

In a case that could affect tens of thousands of Toronto tenants, the group's lawyer Richard Fink appeared in Divisional Court yesterday to appeal a decision of the Ontario Rental Housing Tribunal.

But lawyer Robert Doumani, representing the tenants' landlord, says the appeal has little legal merit and accused Fink of using the courts to argue a political issue. "This is a political appeal to try and get the government's attention."

Fink's argument centres on Section 188 of the Tenant Protection Act.

It states that when deciding a rent increase, the tribunal shall ascertain the "real substance" of the applications and "may have regard to the pattern of activities relating to a residential complex."

Each year, a landlord is allowed to raise the rent by a set amount 3.9 per cent for 2002. But hundreds of landlords applied for extra increases, saying the guideline wasn't enough to recoup their heating costs during last winter's spike in natural gas prices.

Fink argued Section 188 gives tribunal adjudicators the ability to think about the long-term pattern, heating bills went up, then came back down and therefore temper rent increases. But a tribunal regulation, also created by the province, instructs adjudicators to follow a mathematical formula.

The statue gives discretion and the regulations take it away, and that is unacceptable in law, Fink argued.

Doumani disagreed, arguing Section 188 allows adjudicators to think within the rules but not ignore them.

Fink was surprised the provincial government didn't send its own lawyer to argue the appeal.

"Maybe they don't take it seriously or maybe they're too embarrassed to defend this legislation," he said.

But Jim Miller, spokesperson for Housing Minister Chris Hodgson, said the province didn't want to get into a political debate in court.

"It's rewriting legislation in the middle of court, that's not something we want to do," he said.

One of the judges on the three-judge panel appeared to have a similar view, as he encouraged the two sides to walk "arm in arm" up to Queen's Park and settle the matter there.

The judges reserved their decision.

If Fink wins, the case could help thousands of Toronto tenants appealling their rent increases.

"We're not saying the landlords shouldn't get any rent increase for gas costs, we're just saying they should get less," he said.

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