Judge who ruled for N.B. landlord in rent-reduction case owns apartment building | CBC News

New Brunswick Court of King’s Bench Justice Kathryn Gregory, who sided with a landlord in a case involving the way provincial tenancy officers have been phasing-in large rent increases for tenants, owns a five-unit apartment building in Fredericton, property records show.

That does not automatically put her in a conflict of interest to have ruled on the case but a number of legal experts say it is a close enough call to suggest the matter might have been better handled by someone else.

“It’s often very fact-specific when we think that line is crossed,” said Jula Hughes about when a judge is in a conflict of interest.

“But I think it’s important to remember that we care about the appearance of impartiality as much as we care about actual impartiality.”  

Hughes is the dean of Law at Lakehead University in Thunder Bay. She’s also a former law professor at the University of New Brunswick and an expert in the field of judicial ethics.

Gregory was appointed to the court of King’s Bench in November 2020 following a lengthy career as a New Brunswick Crown prosecutor.

Last spring, a case involving two tenants in Saint John landed in her courtroom.   

The tenants had received notices from their landlord of a $200-per-month increase in rent to take effect in March, but applied for a review of that amount with the province’s Tenant and Landlord Relations Office (formerly the Residential Tenancies Tribunal).  

A new policy introduced by the province for 2023 allows tenants who receive increases above 7.3 per cent to have the amount phased-in over multiple years.  

The tenants had been paying  $860 and $900 per month, respectively, and although a tenancy officer assigned to the case found the $200 increase justifiable given market rents in the area, the officer concluded the amount should be phased-in gradually, beginning with a rent increase of $67 per month this year.

“Although I find the [rent increase] notice to be reasonable, I order the increase in rent to be spread over three years,” the officer wrote in each of the two cases.

Gregory ruled that decision was unfair to the landlord because the awarding of a phased-in rent increase is discretionary, not automatic, according to her interpretation of the legislation that created the policy.  She found the landlord was not given the opportunity to oppose the award and have those views weighed in the officer’s decision.

“While there is certainly authority to spread a reasonable rent over several years … the RTT [Residential Tenancies Tribunal] does not provide any explanation for having exercised the discretion to do so,” wrote Gregory.

“It is not an issue of sufficiency of reasons, there are no reasons, period.”

No one has publicly questioned the substance of Gregory’s decision or reasoning but legal experts say her ruling on an issue that her own apartment building could be subject to at some point is problematic.

Trevor Farrow, dean of law at Osgoode Hall in Toronto, said it is important for judges to be viewed by the public as having no personal interest or entanglement in any case they handle.

Like Hughes, Farrow said that applies “not just to actual conflicts, but to perceived conflicts” as well. 

“It is certainly the kind of case where the general public could conclude there might be an issue,” he said. 

Property records show Gregory and a former spouse purchased an apartment building close to the University of New Brunswick’s Fredericton campus in 2002, with Gregory taking sole ownership in 2013.

A tenant leaving the building last week said it caters to students who can rent single rooms for $600 per month, with access to shared kitchen and washroom facilities. There are five units in the building with multiple rentable rooms available in at least some of the units. 

Gregory kept the property following her appointment to the bench, which is itself a grey area. 

Rules outlined in a guidebook for judicial conduct published by the Canadian Judicial Council discourages judges from being involved in business enterprises. 

“Upon appointment, judges must immediately cease practicing law and should divest themselves and remain divested of their interests in commercial and business activities,” states the 58-page publication, Ethical Principles for Judges.

The guidebook does say judges can have what it calls “passive” investments that “do not constitute carrying on a business,” but cautions that the investment must be “truly passive with little active management required.”

Philip Bryden is a professor emeritus at the University of Alberta and former dean of the University of New Brunswick’s law school.  

He said owning a rental property might be allowable for a judge under some circumstances but it would have to be carefully organized.

“I would have thought that if an apartment building were held by the judge as a real estate investment, with management of the building being done by a property management company, it might fall into the category of a passive investment,” wrote Bryden in an email to CBC News.

“But if the judge was actively involved in letting the premises and the day-to-day management of the property that might well be considered to be carrying on a business.”

Beyond the propriety of owning an apartment building, Bryden, Farrow and Hughes all say it would have been important for Justice Gregory to disclose her status as a landlord to alert parties in the case to a potential conflict.

However, it is not clear if that happened.

Richard Devlin, a professor at Dalhousie’s Schulich School of Law, said it is not certain that Justice Gregory acted improperly by hearing and ruling on the issue of how the province regulates rent increases by landlords but it is not clear her conduct was free of trouble, either.

“The question is might this situation undermine public confidence in the impartial administration of justice,” said Devlin.

“It’s really not for me to openly give an opinion on this because I don’t have all the facts, but I do think there’s enough here to warrant attention by the media and by others.”

Attempts to reach Justice Gregory for comment through the Saint John court were referred to the office of Court of King’s Bench Chief Justice Tracey DeWare in Moncton.  

Last week, Deware’s office said the chief justice had received the requests for information, but had not yet provided a response.