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RTA - Non-Payment of Rent Termination (2). Leginj v. Rahman [rent abatement defence]
In Leginj v. Rahman (Ont Divisional Ct, 2025) the Divisional Court, in the course of an RTA s.210 (non-payment of rent) appeal case conference, stated that a claimed rent abatement may not be implemented without a tribunal order - which IMHO may be misleading in light of set-off abatement defence rights under RTA s.82 ['Tenant issues']:[30] It is also clear law that a tenant may not grant himself a rent abatement or unilaterally deduct expenses from his rent – rent is to be paid unless and until the LTB grants a rent abatement: Shearer v. Oz, 2021 ONSC 7844, at para. 13.
[31] As this Court stated in Maphangoh v. Revera Retirement Homes, 2021 ONSC 7739, at para. 15:The obligation to pay rent as it falls due is fundamental. Where a tenant has defaulted in rent obligations for a long time, this court will require the tenant to make rent payments and reasonable payments on account of arrears to maintain a stay of eviction pending appeal. The statutory stay is intended to preserve the court’s ability to do justice at the end of the appeal, not to enable a tenant to abuse the process of the LTB and the court to live rent-free for a long time. Appropriate terms for interim payment of rent and arrears will depend on all of the circumstances of the case – to allow tenants with good faith appeals, who intend to meet their rent obligations within a reasonable period, to preserve their tenancies – and to bring an end to failed tenancies that cause further loss to the landlord every month that goes by. . Monterozza v. Matthews [bankruptcy]
In Monterozza v. Matthews (Ont Divisional Ct, 2025) the Divisional Court allowed a landlord RTA appeal, here where one of three joint tenants went bankrupt, the LTB refused termination and stayed the application until the bankruptcy discharge.
These quotes are useful for illustrating the member's erroneous response to tenant bankruptcy, of which I have seen few appellate cases - and some related BIA law:[11] On March 4, 2024, the Respondent Tenant, Christine Matthews, filed proof of bankruptcy.
[12] On April 9th, 2024 the LTB issued an Order cancelling the verbal decision for eviction and rental arrears made on February 22, 2024, and stayed the Landlord’s Application. The order stated:The proceeding commenced under file LTB-L-091493-23 has been stayed as a result of the Tenant’s bankruptcy filing pursuant to the Bankruptcy and Insolvency Act. That application is stayed until the Court otherwise decides or until the Tenant is discharged from bankruptcy. [13] The order also confirmed that all arrears of rent that came due on February 15, 2024 would be covered in the bankruptcy of the Tenant Christine Matthews.
[14] On April 26, 2024 the Landlord filed a request to review the order, stating that the order ought to have reflected the amount of rental arrears owed to the Landlord by the two non-bankrupt Tenants. The Landlord also submitted that the adjudicator was incorrect in stating that the bankruptcy filing by Ms. Matthews created an automatic stay of the proceedings as against the two non-bankrupt Tenants regarding the claim for rental arrears.
[15] An Amended order was issued on May 7, 2024, which substituted the words “the Tenant” with the words “the Trustee”, but included no other changes. Therefore, the order staying the Application currently remains in place.
[16] At this time, all three Tenants are still in possession of the rental premises and continue not to make any rental payments.
[17] Through an administrative error, the Landlord’s request for a Review was not heard by the LTB until December 4, 2024, when it was heard in writing. The Review decision from Patrick Shea, the Vice-Chair of the LTB, found that there had been no serious error made by the LTB Member in the February 6 and 22, 2024 appearances, and that the Amended May 7, 2024 order will remain in place unchanged. The Landlord seeks to set aside the stay with respect to the rental arrears owed to him by the two non-bankrupt Tenants.
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[28] The LTB has exclusive jurisdiction to determine all applications pursuant to the RTA (RTA, s.168(2)), and authority to hear and determine all questions of law and fact with respect to all matters within its jurisdiction (RTA, s.174).
[29] If a Tenant fails to pay rent under a tenancy agreement, the Landlord may serve a notice to terminate the tenancy under s. 59(1) of the RTA and proceed to apply to the LTB for an order evicting the Tenant if the Tenant does not void the notice, as per s. 59(3) of the RTA.
[30] A second remedy available to the Landlord for non-payment of rent is to apply to the LTB under s. 87 of the RTA for an arrears-only order against a non-bankrupt joint tenant for both pre- and post- bankruptcy rent.
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[33] Section 69.3(1) of the Bankruptcy and Insolvency Act (“the BIA”) requires a stay of all proceedings for the recovery of a claim provable in bankruptcy, which generally includes rent or other amounts owed by a Tenant. However, s. 179 of the BIA does not prevent a landlord from recovering rent or other amounts owed by a non-bankrupt joint tenant:179 An order of discharge does not release a person who at the time of the bankruptcy was a partner or co-trustee with the bankrupt or was jointly bound or had made a joint contract with the bankrupt, or a person who was surety or in the nature of a surety for the bankrupt. ....
[38] The Landlord argues that these statements made by the adjudicator to the parties inaccurately state that the entire Application would be stayed by one Tenant’s bankruptcy, when in fact, the Landlord’s claim for rental arrears against the two non-bankrupt Tenants can continue despite the third Tenant’s bankruptcy as per s. 179 of the BIA.
[39] While the adjudicator does reference the Landlord’s ability to try to collect the rental arrears from the two non-bankrupt Tenants, the Landlord argues that the statement is still misleading. In particular, the Landlord argues that the statement from the adjudicator suggests that the stay of the Application must be lifted to enable the claims for the rental arrears against the two non-bankrupt Tenants to proceed.
[40] The Landlord also argues that the statements made by the adjudicator collectively informed the Landlord’s representative that Ms. Matthews’ bankruptcy would suspend his claims against the non-bankrupt Tenants.
[41] The Landlord argues that the law is clear that the non-bankrupts cannot be protected regarding the money they owe to the Landlord for rental arrears, and that the statements by the adjudicator during the hearings created procedural unfairness for the Landlord. The Landlord’s representative, Ms. Colley, raised the issue of the claims for rent arrears continuing against the two non-bankrupt Tenants, and was clearly told by the adjudicator that Ms. Matthews’ bankruptcy dissolves the claims against the other Tenants. The Landlord argues that by making this statement, the adjudicator shut down any further efforts on the part of the Landlord to seek an order for payment of rental arrears from the non-bankrupt Tenants.
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[53] This is not a situation where there is debate about statutory interpretation. The LTB does not dispute that the Landlord’s L1 Application could have been amended during the hearing to a L9 arrears-only Application if the adjudicator deemed it appropriate to do so.
[54] In the LTB Review order, Mr. Shea, Vice-Chair of the LTB, confirms that the fact that the LTB has the authority to make an order for rental arrears against non-bankrupt Tenants does not mean that the LTB will automatically make such an order. Mr. Shea concluded that the LTB adjudicator did not make a serious error in failing to make an arrears-only order against the non-bankrupt Tenants, as he found that the Landlord had not specifically asked the adjudicator to make such an order, and in addition, the non-bankrupt Tenants were not in attendance. Mr. Shea concluded that the Landlord can now: a) bring a fresh stand-alone LTB application against the non-bankrupt Tenants for rental arrears, or b) begin a proceeding in Small Claims Court to recover the arrears from the non-bankrupt Tenants.
[55] The evidence is clear that the Landlord was in financial distress at the time of the hearing in February 2024. In my view, the fact that Ms. Colley asked the adjudicator about the Landlord’s claim continuing against the two non-bankrupt Tenants was an indirect way of asking the adjudicator to make an arrears-only ruling against those Tenants. Had the adjudicator informed Ms. Colley in response to her question that a rental arrears-only order was available against the non-bankrupt Tenants, it is likely that Ms. Colley would have specifically requested the same.
[56] In addition to the transcript evidence, the content of the adjudicator’s final order dated May 7, 2024 makes it clear that he was unaware that the bankruptcy of Christine Matthews did not stay the Application for rental arrears as against non-bankrupt Tenants, Wayne Bradbury and Roberta Matthews.
[57] The LTB adjudicator made an error of law when he stated to the parties that the bankruptcy of one Tenant would stay the entire proceeding against all non-bankrupt Tenants. The comments of the LTB adjudicator which contained a misstatement of the law resulted in procedural unfairness to the Landlord.
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[65] The incorrect information regarding the impact of the BIA on the Landlord’s rights under the RTA communicated by the adjudicator to the parties was a serious error of law, and also created procedural unfairness for the Landlord. This Court respects the specialized function of the LTB. However, in the circumstance when an LTB adjudicator provides incorrect legal information to the parties, it is appropriate for this Court to intervene. The Landlord’s appeal of the May 7, 2024 LTB order is granted. . Elguindy v. Galaxy Real Estate Core Ontario LP
In Elguindy v. Galaxy Real Estate Core Ontario LP (Div Court, 2024) the Divisional Court dismissed an appeal from "a Review Order, ... of the Landlord and Tenant Board (the “LTB”), which dismissed a Motion to Void an Eviction Order ...", here where the issue was a return to the tenant of funds paid into the Board after an inadequate arrears 'catch-up' payment [RTA 74(11)]:[14] The Member also dismissed the Tenant’s Motion to Void: the Tenant argued that pursuant to section 74(11) of the RTA, the Tenant had paid the $70,069.76 required to void the eviction order. The Member found that the Tenant had in fact only paid a total of $60,381.00, of which $39,886.64 was held in trust by the LTB.
[15] Pursuant to the LTB Rules of Procedure Rule 20.6, which states that if after an order becomes enforceable, the Tenant pays less than the amount required to void the order, then the monies be directed back to the Tenant, the Member directed that the LTB direct any monies held in trust back to the Tenant.
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[36] With respect to the Member’s decision to order the payment of the rent paid into the LTB out to the Tenant, I agree with her that Rule 20.6 of the LTB Rules provides that this is what is supposed to happen. However, I note that a previous version of these rules provided the opposite — until 2018, the monies held were to be paid to the landlord. I also note that Rule 1.6 of the LTB Rules states the following:In order to provide the most expeditious and fair determination of the question arising in any proceeding the LTB may,
a. waive or vary any provision in these Rules ... [37] Thus, the Member had a discretion not to apply Rule 20.6 in the interests of fairness. Furthermore, the Landlord made a submission before her that applying Rule 20.6 would not be fair. Instead of dealing with that submission on the merits, the Member simply applied Rule 20.6 without considering whether to exercise her discretion to waive the rule. This was an error of law. . Anca International Holding Group Inc. v Zhao
In Anca International Holding Group Inc. v Zhao (Div Court, 2024) the Divisional Court dismissed an RTA s.210 appeal against an eviction order, here with premises that rented for over $15,000 a month though the matter proceeded before the LTB.
Here the court dismisses the tenant's late-brought RTA 82 (tenant's rights setoff against non-payment termination) argument:[5] The appellants’ arguments on the appeal stem from the tribunal member’s denial of their request for an adjournment of the hearing. They submit that the refusal of the adjournment denied them procedural fairness. They say the denial of the adjournment led the tribunal member to refuse to allow them to present repair invoices to set off against rental arrears as allowed under s.82 of the statute. They say that the denial of the adjournment led the tribunal member to have incorrect or inexact evidence about the tenants’ ability to pay a proposed payment plan. They say the denial of the adjournment led the tribunal member to fail to understand factors necessary to guide the discretionary decision to deny an eviction under s. 83 of the statute.
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[39] .... During the hearing, Mr. Juzkiw submitted that the tenants wanted an opportunity to show they had incurred costs that could be set off against rent under s. 82 of the statute. But Rule 19.4 of the tribunal’s Rules of Procedure specifically requires disclosure of particulars of s. 82 defences and documents in advance of the hearing. The tribunal member held:6. At the hearing, the Tenants' legal representative sought to raise several issues under section 82 of the Residential Tenancies Act, 2006 (the 'Act'). The Tenants legal representative acknowledged that they did not provide the Landlord or the Board with a written description of each issue they intended to raise under section 82 as required under section 82 of the Act and Rule 19.4 of the Board's Rules of Procedure. The Tenants' legal representative, not their agent, provided no evidence that they were unable to comply with the disclosure requirements and as a result, the Tenants were not permitted to raise any issues under section 82 of the Act. The Tenants may still have an opportunity to bring their own application against the Landlord to address the issues they sought to raise at this hearing under section 82. [40] Once again, I see no error of law in the tribunal member’s decision. He simply applied the Rules of Procedure of the tribunal in face of unexplained non-compliance by the tenants. The refusal of an adjournment did not deny the tenants the ability to rely on their repair expenses. Their failure to follow the Rules of Procedure meant that they could not do so in this hearing. Subject to the passage of time, they continue to have whatever rights to reimbursement for repair expenses they may be able to prove. . Anca International Holding Group Inc. v Zhao
In Anca International Holding Group Inc. v Zhao (Div Court, 2024) the Divisional Court dismissed an RTA s.210 appeal against an eviction order, here with premises that rented for over $15,000 a month though the matter proceeded before the LTB.
Here the court clarifies that the LTB's $35k monetary order limitation does not operate so as the restrict 'catch-up payments' over that amount:[41] In their factum, the tenants submitted that the tribunal was not entitled to require them to pay their full arrears to avoid the eviction order. While it is indeed the case that the tribunal cannot grant judgment on arrears in excess of $35,000, case law in this court confirms that this monetary limit does not apply to the amount of arrears needed to be paid to void an eviction order. It would be a gross abuse if tenants could stall payment and then reinstate their leases by paying a fraction of their arrears. While the landlord will only have judgment for $35,000 enforceable going forward, the lease will be terminated. That is the trade-off provided by the statute. Rosen v. Reed, 2023 ONSC 6482 (CanLII) and Galaxy Real Estate Core Ontario LP v. Kirpichova, 2023 ONSC 593 . Telan v. Elm Place
In Telan v. Elm Place (Div Court, 2023) the Divisional Court applied the 'effect of payment' [RTA 45] provisions that bars the doctrine of estoppel when a tenant pays some back-rent, thus enabling the landlord to continue to pursue termination:Additional Issue: Novation
[20] Although not pursued in oral argument, Ms. Telan submitted in her factum that a novation occurred when the landlord accepted rent payments pursuant to her existing tenancy agreement. It does not appear this argument was raised before the Board. In any event, s. 45 of the Act expressly provides that unless a landlord and tenant agree otherwise, “the landlord does not waive a notice of termination, reinstate a tenancy or create a new tenancy” by accepting arrears of rent or rent payments after the Board makes an eviction order. There was no evidence before the Board that the parties had agreed to a novation. This ground of appeal is dismissed.
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