Court File and Parties
COURT FILE NO.: 23-2920051 DATE: 2023-06-12
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: In the Matter of the Bankruptcy of Sylvie Marie Lafond (AKA Jane Lafond) of the City of Ottawa, in the Province of Ontario
BEFORE: Associate Justice A. Kaufman
COUNSEL: Andrew Ferguson, for the creditors Jenna Falcomer and Mackenzie Truman Angele Sylvie Lafond, Bankrupt, Representing Herself Maureen Theresa Parent, for the LIT, Hoyes, Michalos & Associates Inc.
E N D O R S E M E N T
[1] Jenna Falcomer and Mackenzie Truman are Angele Sylvie Lafond’s landlords. They bring this motion for a declaration that the stay of proceedings imposed by section 69 of the Bankruptcy and Insolvency Act, does not apply to the eviction ordered by the Landlord and Tenant Board (“LTB”) on February 24, 2023. Alternatively, they request an order to lift the stay.
Background
[2] Ms. Lafond and her landlords entered into a lease agreement on August 15, 2021, which stipulated an 8-month term. According to the landlords, Ms. Lafond ceased paying rent in November 2021 and refused to vacate the premises.
[3] On February 24, 2023, the landlords obtained an order from the LTB to terminate Ms. Lafond’s tenancy unless she paid either $27,244 by February 28, 2023, or $29,494 by March 7, 2023. Failure to comply with the order would require Ms. Lafond to vacate the rental unit on or before March 7, 2023. Additionally, the order stipulated that if Ms. Lafond did not vacate the unit by March 7, 2023, the landlords could proceed to file the order with the Sheriff for enforcement of the eviction.
[4] Ms. Lafond sought a review of the LTB’s February 24, 2023 decision, but her request was denied on March 7, 2023.
[5] On March 9, 2023, Ms. Lafond filed for bankruptcy, and Hoyes, Michalos & Associates were appointed as the trustee of her bankruptcy estate.
[6] Since Ms. Lafond did not make any payment by March 8, 2023, the landlords proceeded to enforce the eviction order. However, they were informed on March 9, 2023, that the Court enforcement office would not carry out the eviction due to Ms. Lafond's bankruptcy and the resulting stay of proceedings.
[7] The LIT does not take a position on this motion.
Issue
[8] The sole issue at hand is whether the stay imposed under section 69 of the Bankruptcy and Insolvency Act applies to the eviction component of the LTB’s order. The landlords acknowledge the monetary component of the LTB’s order is subject to the stay.
Submissions
[9] Ms. Lafond submitted materials on the day of the motion, and Mr. Ferguson, representing the landlords, did not object to this late filing. He requested the motion to proceed.
[10] I have reviewed Ms. Lafond's materials. She raises several issues that do not have any bearing on the issue before the Court.
[11] Ms. Lafond submits that the landlords did not terminate the tenancy in accordance with the provisions of the Residential Tenancies Act. However, in my opinion, this is a matter that should have been raised before the LTB. Ms. Lafond's request for a review of the order was denied, and no appeal has been pursued. Therefore, this issue falls outside the jurisdiction of this court.
[12] Ms. Lafond also included correspondence with the landlords related to her complaints about their entry into her rental unit. This evidence is irrelevant to the matter at hand and falls within the LTB’s jurisdiction.
[13] In their submissions, the landlords argue that Ms. Lafond is a second-time bankrupt and adept at "gaming" the system. Ms. Lafond provided information regarding the circumstances of her previous tenancies. However, these circumstances do not bear any relevance to the issue before the Court, as Ms. Lafond herself acknowledges by stating that “her previous rental history has no impact on this case”.
[14] Ms. Lafond provided evidence that she obtained new employment and that, since she filed for bankruptcy, she has made a partial payment of rent. She also made submissions about the difficulty of obtaining alternate housing.
[15] She also provided a letter from her family law lawyer who advises that, if Ms. Lafond lost her housing, this would have a negative effect on her ability to maintain the current parenting schedule. Finally, she provided confirmation that she has attended counseling from Family Services Ottawa’s Woman Abuse Program. In a letter of support Family Services Ottawa’s clinical manager confirms that Ms. Lafond’s ex-partner harassed and controlled her, and it supports an order that information regarding Ms. Lafond’s housing not be shared with her ex-partner for safety reasons.
Analysis
[16] Section 69 of the BIA provides that, subject to certain exceptions, no creditor has any remedy against an insolvent person or her property, or shall continue the execution of any proceeding for the recovery of a claim provable in bankruptcy, until the trustee has been discharged or the insolvent person becomes bankrupt.
[17] Section 121(1) of the BIA defines a claim provable in bankruptcy as encompassing all present or future debts and liabilities that the bankrupt is subject to on the day of bankruptcy or may become subject to before discharge due to obligations incurred before that day.
[18] While I acknowledge the family circumstances affecting Ms. Lafond, the eviction aspect of the LTB’s order cannot be classified as a “debt or liability”; it is an order requiring the vacation of a property.
[19] The purpose of the BIA's stay provisions is to prevent actions by creditors that might grant them an advantage over other creditors. In this case, the landlords are seeking enforcement of a valid order for the possession of their own property. There is no possibility that allowing them to enforce this aspect of the LTB’s order would confer on them an advantage over any of Ms. Lafond's other creditors.
[20] If I am wrong about the eviction order not being subject to a stay, I would exercise my discretion and lift the stay under section 69.4 of the BIA.
[21] To lift the stay, the Court must be satisfied that the creditor would be materially prejudiced by the continuation of the stay, or that it is equitable on other grounds to lift the stay. Material prejudice may be established if the claims against the bankrupt are debts that would not be discharged. Here, lifting the stay would not affect the assets available to Ms. Lafond’s creditors for distribution.
[22] The landlords had initially agreed to rent the unit to Ms. Lafond for a duration of 8 months in 2021. She has occupied the unit and owes them approximately $30,000 in rent. The landlords have been covering the unit's expenses (mortgage, water, hot water tank, etc.) without receiving rent from Ms. Lafond. Given these circumstances, if the stay were to apply to the eviction aspect of the LTB’s Order, I conclude that it would just and equitable to lift the stay.
Confidentiality / Sealing Order
[23] Ms. Lafond requested an order to prevent the landlords from discussing these proceedings with others. However, the only supporting evidence for this request is the letter from Family Services Ottawa, which supports Ms. Lafond's request that her housing and location information, as well as her personal life, not be shared with her ex-partner.
[24] Since these reasons do not disclose Ms. Lafond's housing or location, there is no need for a sealing order. Additionally, there is no evidence before the Court to substantiate that the landlords have shared any information with Ms. Lafond's ex-partner, warranting such an order.
Costs
[25] The landlords are seeking costs for the motion, with Mr. Ferguson stating that they have incurred approximately $6,000 in legal fees. They request costs on a partial indemnity basis.
[26] The landlords were successful in their motion. I award them costs in the amount of $3,500, payable within 30 days.
Alexandre Kaufman
ASSOCIATE JUSTICE KAUFMAN DATE: June 12, 2023
Cited References
- RSC 1985, c B-3 (the “BIA”).
- 2006, SO 2006, c 17.
- BIA, s. 121(1).
- Re Cohen (1948), 29 C.B.R. 111, affirmed (1948) 29 C.B.R. 163 (Ont. C.A.).
- Re Koval (2003), 48 C.B.R. (4th) 103 (Ont. S.C.J.).