2023 ONSC 2211, 2023 ONSC 2211

CITATION : Rosen v. Reed, 2023 ONSC 2211 DIVISIONAL COURT FILE NO.: 73/2023 LANDLORD AND TENANT BOARD FILE NO.: LTB-L-070858-22 DATE: 20230412 SUPERIOR COURT OF JUSTICE – ONTARIO DIVISIONAL COURT Title: DAVID ROSEN, Appellant AND: WENDY REED, Respondent BEFORE: Leiper J. COUNSEL: Yonatan M. Kramer for the Appellant Spencer Toole, for the Respondent E. Fellman for the Landlord and Tenant Board HEARD: April 5, 2023 by teleconference at Toronto Date of Decision: April 12, 2023 E N D O R S E M E N T Introduction [ 1 ] This endorsement follows a case conference with the parties, Mr. Rosen, the Tenant/Appellant and Ms.

Reed, the Landlord/Respondent and their respective lawyers. The parties attended to discuss the outstanding rent arrears, whether an order should be made pending the hearing of this appeal to maintain the stay of the eviction order and a

schedule for the exchange of materials. Prior to the case conference, the parties were advised that, among other things, the court at the case conference “may make orders respecting payment of ongoing rent and rental arrears as a condition of continuing the stay pending appeal in this court.” [ 2 ] The parties agreed upon a schedule, which was approved in a separate set of case management directions.

I reserved on the question of whether there should be an order requiring the Tenant to pay the outstanding arrears of rent as a condition of continuing to benefit from the stay of the eviction order and to pay rent in accordance with the rental agreement, which at the time it was made was $10,000 per month, due on the 16 th of each month. [1] [ 3 ] The Tenant resists paying the arrears because he submits that this amount is the issue in dispute on the appeal—whether the Landlord’s claim to any amount of arrears that are more than the monetary jurisdiction of the Landlord and Tenant Board has been extinguished by virtue of s. 207(3) of the Residential Tenancies Act 2006, SO 2006, c 17 (the “ RTA ”) .

He also submits that the stay of the eviction order should not require his ongoing payment of rent (although he has stated his intention and ability to continue to pay rent while he lives in the unit) pending the appeal because of his intended action in damages against the Landlord for alleged failures to maintain/repair the unit.

[4] The Landlord proposes that an amount equal to the outstanding arrears may be paid into court or into trust, pending theoutcome of the appeal. She submits that she will be potentially prejudiced by the Tenant remaining in the unit, without ensuring that thearrears in rent owing will not be available if the appeal is unsuccessful.

Further, she seeks an order requiring the Tenant to continuepaying his monthly rent as a condition of maintaining the stay of the order for termination pending his appeal. [5] For the reasons below, I conclude that the Tenant should pay into trust the amount of $25,000 on or before April 21, 2023and that he shall continue to pay rent as it becomes due, in accordance with the terms of his tenancy, as a condition of maintaining thestay of the eviction order pending this appeal.

Failure to do so will result in the Landlord being able to move, in writing, with an affidavitin support for an order lifting the stay of the eviction order. The LTB Order and the Issue on Appeal [6] The Landlord applied for an order to terminate the tenancy and evict the Tenant for failure to pay rent.

The Board held ahearing on February 1, 2023, and issued reasons on March 9, 2023, granting the Landlord’s application for an order terminating thetenancy and ordering payment of arrears of rent at the maximum of its monetary jurisdiction: $35,000. [7] The Board found that as of February 16, 2023, the Tenant was in arrears of $50,000.00. The Landlord agreed to waive thearrears above $35,000.00 to proceed with the hearing for the order to evict the Tenant but did not consent to a finding that the Tenantcould void the termination order by paying only $35,000.

The parties made submissions on whether the Landlord could insist onpayment of the entire amount of the rent arrears in order for the Tenant to stay in the unit, under the voiding provisions in s. 74 of theRTA.[2] [8] The Board found that although it could not order a person to pay more than $35,000 in accordance with s. 207(1) of the RTA,that monetary limit does not apply to the “stay and pay” option under s. 74. That option gives a tenant a choice to pay the full amount ofarrears, rent and costs owed to a landlord thus enabling the tenant to remain in the rental unit.

The Board found that this is an option, andnot an order of the Board, thus the Board does not exceed its monetary jurisdiction in interpreting the amount required to void atermination order to be the entire amount of arrears, even where it exceeds $35,000. It is this finding that the Tenant appeals. [9] The Board’s order granted the order for termination sought by the Landlord and ordered payment of arrears of $35,000. Theorder also specified, consistent with its

interpretation of the RTA, that the amount required to void the order for termination as follows: a. $60,186.00 if the payment is made on or before March 15, 2023, OR b. $70,186.00 if the payment is made after March 15, but on or before March 20, 2023. [10] Ultimately, the Tenant did not pay any of the outstanding arrears before the eviction order was enforceable. Instead, theTenant appealed the Board’s order which led to an automatic stay of the eviction order. [11] On the day before the Case Conference, the Tenant paid $45,186 toward the outstanding arrears. This leaves an amountoutstanding of $25,000.

The Landlord argues that having paid only part of the arrears owing, the Tenant is seeking to live in the unit atreduced rent to the detriment of the Landlord and is unfairly receiving the advantage of the automatic stay of the termination ordertriggered by the filing of the appeal. [12] The Tenant filed several decisions of the Board in which the Board limited the amount payable to void an order ofenforcement to the Board’s monetary jurisdiction: See for example, Galaxy Real Estate Core Ontario Properties LP v Deen, (ON LTB); Guo v Apiou, (ON LTB).

There are other decisions by the Board in which the amountstipulated by the Board to void an order for termination exceeds the Board’s monetary jurisdiction: See for example, Simpson v Bellisle, (ON LTB); Nishnawbe Homes Inc. v Pangowish, (ON LTB).

It is unclear whether any of thedecisions had the benefit of submissions on the interrelationship between the monetary jurisdiction of the Board, the difference betweenthe amounts which can be ordered and the amounts required to void an order and whether a landlord has forfeited all rights to arrearsowed by applying for relief before the Board. [13] The Tenant further relies on the provisions in s. 207(3) of the RTA which provide:

(3) If a party makes a claim in an application for payment of a sum equal to or less than the Board’s monetary jurisdiction, all rights ofthe party in excess of the Board’s monetary jurisdiction are extinguished once the Board issues its order. 2006, c. 17, s. 207 (3). [14] The Landlord argued before the Board, and at the Case Conference, that allowing the Tenant to void the order without payingall of the arrears owing to the Landlord would allow the Tenant to benefit financially from his own breach of the tenancy agreement.

TheLandlord submits that this issue has been decided in favour of her position in the decision of the Divisional Court in Hornstein v. RoyalBank 2010 CarswellOnt 4482, 2010 ONSC 3134, 190 A.C.W.S. (3d) 261 at para. 13, in which Ferrier, J. quashed an appeal, finding thatthe tenant’s position that the monetary cap should apply to the voiding provisions was without merit. In that decision, Ferrier, J wrote:“To hold that the monetary cap applies to “the outstanding arrears of rent” would result in an absurdity.

The defaulting tenant couldcontinue ad infinitum to merely pay the monetary limit and continue in possession, all the while continuing in default.” Analysis [15] The Divisional Court may set terms requiring payment of arrears and rent for an appellant to continue to benefit from the stayof an eviction order pending an appeal from a decision of the Board to avoid litigants unfairly living rent-free and abusing the process ofthe court: Mahdieh v.

Kim, 2023 ONSC 825 . [16] This appeal raises a live question as to the application of the statutory limits on the Board’s jurisdiction to determine theamount of arrears payable by a tenant opting to trigger the “stay and pay” voiding of the eviction order. The Board has decisions beforeit which are on both sides of the question. At the same time, the Tenant is occupying a rental unit with substantial rent and having the

benefit of that unit. There is a recent history of this Tenant allowing a large amount of arrears to accumulate, requiring the Landlord to take action to recover rent owed. There is a live dispute as to repairs which has not been adjudicated.

On balance, I conclude that there would not be irreparable harm to the interest of either the Tenant or the Landlord to require ongoing payment of rent, as agreed upon, while the Tenant remains in the premises and pending the outcome of this appeal. [ 17 ] On the issue of the outstanding arrears, I have also considered the context and the last-minute part payment of arrears by the Tenant. The risk to the Tenant if he prevails in his action on the appeal is that he will not have access to the capital involved to preserve the stay, however if those funds are held in trust, he will not lose the funds.

The risk to the Landlord is that if those funds are not set aside pending the outcome of the appeal, the Tenant may not repay the outstanding arrears and could potentially refuse to pay the arrears (as he did in the recent past) even if the Landlord is successful on the appeal. On balance, I conclude that the fairest decision to make at this stage is to require the Tenant to pay the current outstanding arrears into trust.

CONCLUSION [ 18 ] I order that the Tenant shall pay into trust to counsel for the Landlord, the amount of $25,000 on or before April 21, 2023, and he shall continue to pay rent as it becomes due, in accordance with the terms of his tenancy, as conditions of maintaining the stay of the eviction order pending this appeal. If these steps are not taken, the Landlord may move in writing to set aside the stay, with an affidavit in support of that motion. _______________________________ Leiper J. Released: April 12, 2023