I stumbled upon Leaf v. Wang, 2026 ONSC 1503, a recent Divisional Court decision that clarifies whether the Landlord and Tenant Board (the “LTB”) or Small Claims Court has jurisdiction over damages resulting from the termination of a residential lease agreement before the lease term commenced. The decision also points out an ongoing issue regarding the adequacy of reasons provided by Deputy Judges in the Small Claims Court.
The Appellants signed the Standard Form Lease with the Respondent. The tenancy was to commence on September 1, 2021. In advance of the tenancy term, the Appellants contacted the Respondent requesting early access to clean the premises. The Respondent then terminated the lease because the Appellants were “too pushy.”
The Appellants brought a Tenant Application before the LTB for the return of their deposit, and they brought a Small Claims Court action for breach of contract, claiming damages for storage and moving expenses, and hotel accommodations.
Prior to the commencement of Trial, the Deputy Judge dismissed the action for lack of jurisdiction. The Deputy Judge found that the Small Claims Court did not have jurisdiction to hear the Trial as the claim for damages was in the exclusive jurisdiction of the LTB under the Residential Tenancies Act (the “RTA”).
The Deputy Judge found:
“The essential character of the action derives from Landlord and Tenant issues. Pursuant to amendments to the Residential Tenancies Act starting from September 1, 2021, Landlord and Tenant issues are within the exclusive jurisdiction of the Landlord and Tenant Board. I find that this tenancy was to start September 1, 2021 and as such is a Landlord and Tenant Board matter.”
Justice Fraser of the Divisional Court found that the Deputy Judge erred, as the reasons provided by the Deputy Judge, including what provisions of the RTA were relied upon, did not permit them to understand the basis they concluded that a breach of a tenancy agreement before the commencement of the tenancy fell within the exclusive jurisdiction of the LTB.
Despite the Divisional Court’s best efforts to ascertain the relevant provisions of the RTA, they could not find anything that would address the damages claimed for a pre-contractual breach that would bring the Deputy Judge to reach their decision.
As the Deputy Judge did not receive evidence or make factual findings, the matter is now being returned to the Small Claims Court for a new Trial before a different Deputy Judge.
The Court’s concern regarding the adequacy of reasons provided in Small Claims Court decisions is reflected in Justice Fraser’s reference to Maple Ridge Community Management Ltd. v. Peel Condominium Corporation No. 231, 2015 ONCA 520, where the Court of Appeal points out an issue that, in some cases, Small Claims Court decisions lack adequate reasons. Small Claims Court decisions must be sufficiently clear to permit judicial review on appeal. The decision must explain to the litigants what has been decided and why. However, the informal nature of the Small Claims Court, as well as the volume of matters it handles, means decisions will not always be as thorough. Failing to take the Small Claims Court context into account only serves to restrict access to justice by unnecessarily imparting formality and delay into a legal process that is designed to be informal and efficient.
It has now been established that the LTB’s exclusive jurisdiction only applies to disputes where the tenancy has commenced, and any damages relating to pre-contractual breaches can be heard by the Small Claims Court.
Murray Brown, Licensed Paralegal