BC Supreme Court refuses to set aside an arbitrator’s decision in a residential tenancy dispute

The BC Supreme Court has refused to set aside an arbitrator's decision in a residential tenancy dispute because it was filed beyond the two-year limitation period.

In Zhang v. First Service Residential BC Ltd., 2023 BCSC 361, Yan Ru Zhang petitioned the BC Supreme Court to set aside an arbitrator's decision with the Residential Tenancy Branch (RTB), dismissing her application for the return of her security deposit and damages. The arbitrator rejected her claim because she had filed her application outside the two-year limitation period. Zhang argued that the arbitrator's decision was "patently unreasonable" because the arbitrator did not consider her discretionary power to extend the limitation period.

In 2017, Zhang started rending a bedroom in an eight-bedroom home in Willow Street, Vancouver, BC. When Zhang was away on vacation, other tenants left the residence in a mess. Zhang and the landlord FirstService Residential BC disagreed over who was responsible for cleaning the home. The landlord eventually issued a one-month notice to end Zhang's tenancy. Zhang filed for dispute resolution with the RTB.

Discretionary power to extend limitation periods

Zhang claimed that the arbitrator had the discretionary power to extend or waive limitation periods, and her failure to consider whether to exercise that discretion made her decision patently unreasonable. Zhang claimed that the discretionary power is in the Residential Tenancy Act (RTA) and the COVID-19-related orders in effect during the pandemic.

In 2020, BC declared a provincial state of emergency due to the COVID-19 pandemic and issued ministerial orders to deal with the problem of access to justice during the pandemic.

The landlord and the RTB asserted that the pandemic-related ministerial orders did not grant the arbitrator any discretion to extend the limitation period at the time of the hearing, as the government had repealed these measures by December 2021. They further claimed that under the RTA, the plaintiff must file the claim within two years from the date the tenancy to which the matter relates ends or is assigned. The RTB director and the landlord referred to this as the "ultimate limitation period."

Residential Tenancy Act

Zhang's argument that the arbitrator had a discretion under the RTA to extend the two-year limitation period failed to persuade the appeal court. According to the court, the relevant provisions of the RTA clearly stated that while the arbitrator had discretionary power to extend some time limits in exceptional circumstances, this did not apply to the two-year limitation period.

COVID-19 related orders

Zhang argued that the pandemic ministerial orders should have guided the arbitrator, such that the arbitrator should have considered her discretionary power to extend the two-year limitation period when Zhang's hearing occurred in December 2021. She asserted that the ministerial orders were in effect when she filed her application for dispute resolution in August 2021.

The RTB director and the landlord argued that the orders were repealed at the time of the hearing, and whatever discretionary power was in those orders to extend mandatory periods was no longer applicable.

The appeal court ruled that the date Zhang filed her application for dispute resolution was not the relevant date for the ministerial orders. The decision-maker must exercise the authority to waive, suspend or extend a mandatory period when the decision-maker is called to act. In this case, the arbitrator was called to act at the December 2021 hearing when this discretionary authority was no longer available.

The court further said nothing in the RTA made the filing date relevant to determine whether the arbitrator had authority under the COVID-19 orders to extend timelines.

The court emphasized that the limitation period does not stop running for residential tenancy matters after the plaintiff filed a dispute such that timelines continue to be suspended until the hearing. The arbitrator must have the legislative authority to extend the limitation period at the hearing date to hear the dispute. The RTB COVID Practice Directive also clearly stated that not all timelines would be extended. The directive also provided that the two-year limitation period of the RTA is a timeline that the RTB director had no discretion to extend.

The appeal court said, "it was not patently unreasonable for the arbitrator not to have considered a discretionary power to extend the two-year limitation period that she did not have. In my view, it would have been patently unreasonable for the arbitrator to have done so." The court ultimately dismissed Zhang's petition.