‘A potential floodgates issue’
The Sahotas’ lawyers fought back, arguing the Supreme Court was not the appropriate place for such a case. A trio of B.C. Court of Appeal judges heard arguments on that question Thursday.
“We are dealing at this juncture with a potential floodgates issue,” said Michael Katzalay, acting on behalf of the Sahotas and their companies.
He argued such disputes belonged before the Residential Tenancy Branch, the B.C. agency set up to resolve disputes between landlords and tenants. Its process is simpler and less costly, Katzalay said, adding, “I would submit it favours the tenants.”
But the lawyer representing the Regent tenants, Jason Gratl, said cases of a certain magnitude, such as the one involving the Regent residents, deserve a higher level of scrutiny and procedural fairness.
“(It) is a process that’s designed for fast adjudication, for procedurally unencumbered adjudication,” Gratl said of the tenancy branch. “When the stakes get large enough, for the protection of the residents and the fairness to the landlords both, the legislature intended these matters to be adjudicated by a higher court with better qualifications and a higher level of accountability and a level of evidentiary protection available that’s simply not available before the Residential Tenancy board.”
The judges reserved their decision for a later date.
Two months after Gates’ suit was filed, Gratl launched a similar class-action suit on behalf of residents of the Balmoral Hotel, another Sahota-owned SRO across Hastings Street from the Regent.
Meanwhile, 150 Balmoral residents are trying to figure out where they will live after the Monday deadline set in an evacuation order by the City of Vancouver, which cited “imminent danger” in the building due to extreme disrepair.
Wendy Pedersen, tenant organizer with the DTES SRO Collaborative, said Balmoral residents started hearing this week that the Sahotas would offer compensation packages to displaced tenants. Residents had been told to expect notices outlining details to be slipped under their doors Thursday, she said, “but there’s lots of unknowns.”
The proposed class-actions over the Regent and Balmoral are the first of their kind in B.C., said Doug King of the Pivot Legal Society. In 2011, King filed an action on behalf of residents of two SROs in the Downtown Eastside, the Wonder and the Palace Hotel. However, that was filed with the tenancy branch.
Though that action was successful in getting compensation for some tenants, he said Thursday “we felt we were very limited by the structure and statutory framework of the Residential Tenancy Act.”
“With a class action, it allows an already vulnerable group to band together and be represented as a class rather than have to fight a landlord as a group of individuals, and in theory the Supreme Court could order a lot more in terms of compensation,” King said. “If the Sahota lawsuit is certified as a class it could be a really positive step in organizing tenants against deficient landlords.”