CITATION: Lulu Holdings v. Arnold, 2023 ONSC 3467

DIVISIONAL COURT FILE NO.: DC-22-00000656-0000

DATE: 20230608

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: Lulu Holdings Inc. Landlord/Respondent

AND:

J. Gordon Arnold Tenant/Appellant

BEFORE: Justice O’Brien

COUNSEL: S. Juzkiw, for the Applicant

A. Gordon, Self-Represented

HEARD: Via Videoconference in Toronto on June 7, 2023

ENDORSEMENT

Overview

[1] The respondent Landlord brings this motion for an order lifting the automatic stay in place pursuant to r. 63.01(3)(a) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 and quashing the appeal.

[2] The Appellant is a tenant in a rental unit owned by the Landlord. The parties entered into a lease agreement on November 15, 2016. On August 17, 2021, the Landlord and Tenant Board (“LTB”) made an order on consent requiring the Tenant to vacate the rental unit by September 15, 2021 in response to the Landlord’s application to terminate the tenancy for the purpose of the demolition of the rental unit (the “Consent Order”).

[3] The Tenant then appealed the Consent Order to this court. The Landlord brought a motion to quash the appeal. By endorsement dated December 30, 2021 (reported at Arnold v. Lulu Holdings Inc., 2021 ONSC 8125) (the “first Divisional Court endorsement”), the court allowed the motion and quashed the appeal. The court found the appeal to be an abuse of process. It also quashed the appeal because the Tenant had not obtained leave to appeal a consent order, as required by s. 133 of the Courts of Justice Act, R.S.O. 1990, c. C.43 (“CJA”).

[4] On August 2, 2022, the Tenant filed an application seeking review of the Consent Order. By order dated November 21, 2022, the LTB dismissed the request for review and confirmed the Consent Order (the “Review Order”).

[5] On April 25, 2023, Justice Matheson issued directions on this appeal. Those directions required the Tenant to pay $25,000 to the Landlord by May 3, 2023. They also required the Tenant to provide a payment plan to the Landlord by May 3, 2023 for the balance of the arrears. The directions stated that the monthly rent was at least $9,000. Justice Matheson stated that if the Tenant failed to comply with the directions, the Landlord was entitled to notify the court about the non-compliance and request that the appeal be quashed for failure to follow the directions.

[6] On May 3, 2023, the Tenant made the $25,000 payment. He also sent an email with a proposed payment plan, which was that he would make payment of $9,000 from June 1, 2023 and on the first of every month thereafter. The Landlord states that the $9,000 was not paid on June 1, 2023. The Tenant’s evidence is that he has overpaid rent in the amount of $108,000 such that the rent is current up to May 2024.

[7] The Landlord submits that the stay should be lifted for non-compliance with the directions of Matheson J.. He also submits this appeal should be quashed on the following bases:

(a) No appeal lies from a consent order without leave of the court.

(b) No question of law is involved in the appeal and it should be dismissed as devoid of merit.

(c) The appeal is frivolous, vexatious and an abuse of process.

Adjournment Request

[8] This motion was originally scheduled to be heard on March 30, 2023, then adjourned to May 23, 2023 at 2 pm because no judge was available. On May 22, 2023, which was Victoria Day, the Tenant sent the court a letter requesting an adjournment on the basis that his son had an appointment on May 23 at 1 pm at Sunnybrook Hospital. The Tenant called into the hearing from Sunnybrook on his phone. Justice Schabas ultimately adjourned the motion to today. He specified that the adjournment was peremptory to the Tenant and would proceed whether or not the Tenant attended and whether or not he had counsel.

[9] At 10:40 p.m. the night before this motion, the Tenant sent an email to court staff requesting an adjournment. In the email, the Tenant stated that his son required emergency endoscopic surgery. He stated that he was required to attend Sunnybrook this morning to arrange an ICU room for his son and would be “working with hospital staff to prepare for [his] son’s cranial surgery, as soon as possible.” The Tenant wrote that he would be unavailable as he had to be with his son before and after his surgery. He requested an adjournment for a period of 30 to 35 days for his son’s surgery and recovery.

[10] At the outset of the motion, the Tenant joined the Zoom hearing from the hospital. He forwarded a copy of a CT report for his son, which was dated June 3, 2023. He stated that he had received the report the morning of the motion. The report refers to a “redemonstration of chronic hydrocephalus.”

[11] The report does not say anything about emergency surgery nor is there any suggestion in the report of anything specific happening the day of the motion. During the Tenant’s submissions on the adjournment, it became clear that, at most, he was at the hospital attempting to speak to a doctor to request surgery. There was no evidence that this was a reasonable approach, nor that it was necessary for the Tenant to be at the hospital that day.

[12] Given the pattern of notifying the parties and court about medical issues the day before the court hearing, the fact that this matter has been protracted, and the absence of evidence showing that a medical appointment or procedure was occurring on the day of the motion, I denied the adjournment. The Tenant listened to the Landlord’s submissions on his phone from the hospital, then returned home during the morning break to make his own submissions from there.

Analysis of Issues on Motion

[13] For the reasons that follow, the motion is allowed and the appeal is quashed.

Non-compliance with Directions of Matheson J.

[14] Although the Tenant submits he has made an overpayment such that rent is covered until May 2024, the Landlord has provided evidence that the amounts paid to date were to cover increased rent agreed-upon by the parties in a settlement agreement. The terms of the agreement provided that the Tenant would pay rent of $15,000 per month for the period January 1 to June 30 2022 in consideration for extending the vacancy date to June 30, 2022. Pursuant to another settlement agreement dated July 11, 2022, the Tenant was required to provide a non-refundable deposit of $100,000 further to an agreement of purchase and sale for the property.

[15] The Tenant does not deny that he agreed to the increased rent but submits that such an increase was not permitted pursuant to s. 120 of the Residential Tenancies Act, 2006, S.O. 2006, c. 17 (“RTA”). He also submits that Lulu Holdings Inc. was not the Landlord and, therefore, his dealings with that corporation were void. I dismiss the latter argument since, as discussed below, the LTB already found Lulu Holdings Inc. to be the “Landlord” and I do not find this issue to raise any error of law.

[16] The Landlord states that s. 120 of the RTA does not apply, but counsel was unable to point to the relevant section of the RTA that he said authorized the rent increase. He may have been referring to s. 123, but I did not receive submissions on this point.

[17] The issues of the rent owed and whether it is permitted are questions that are better addressed by the LTB. In addition, they are not necessary to resolve this motion, as I find in any event that the appeal should be quashed.

Appeal from Consent Order

[18] I agree with the Landlord that some of the issues the Tenant raises on the appeal arise from the Consent Order or repeat submissions on issues already determined by this court. For example, the Tenant revives submissions made to this court on the previous appeal to the effect that other tenants of the premises (his family members), were not given notice of the intention to terminate the tenancy prior to the Consent order. As this issue arises from the Consent Order, the Tenant would require leave to appeal it to this court. In any event, this court dismissed that issue in the prior appeal. It is res judicata and, therefore, devoid of merit.

[19] The Tenant also submits the Landlord was not acting in good faith when it sought to terminate the tenancy because the rental unit was being demolished. This is a collateral attack on the Consent Order. It is an issue that could have been raised before the LTB, but the Tenant instead entered into the Consent order. Therefore, it must be dismissed for the same reasons as above. To the extent the Tenant relies on allegations of the Landlord’s conduct that post-date the Consent Order, I address them below.

No Question of Law/Devoid of Merit

[20] The Tenant raises other issues arising from the Review Order, which was not issued on consent. I agree with the Landlord that the appeal of these issues should be dismissed as devoid of merit and an abuse of process.

[21] Section 210 of the RTA provides that an appeal from an order of the LTB lies to this court, but only on a question of law.

[22] As set out in the first Divisional Court endorsement, at para. 25, an appeal under the RTA should be quashed in the following circumstances:

(1) Where it does not raise a question of law (including questions of procedural fairness) or is otherwise devoid of merit; and

(2) When it is an abuse of process (including appeals brought for the sole purpose of obtaining a stay of eviction).

[23] Here, the appeal from the Review Order does not raise a question of law. The Review Order addressed two questions: (1) whether Lulu Holdings Inc. was properly named as Landlord when the application on which the Consent Order was based was filed; and (2) whether the proper person/entity filed for the permits that were the subject of the notice of termination. The Tenant had discovered in July 2022 that ownership of the property was transferred to a numbered company in December 2020 before the Landlord filed its application to terminate the tenancy. The Tenant submitted that the Landlord was improperly named in the application and that the order should be nullified.

[24] The LTB found that the change in ownership of the property did not oust the Landlord as “landlord” under the RTA for the purposes of the application. The Landlord continued to fall within the definition in the RTA following the transfer of ownership. The LTB relied on numerous facts, such as that the same individual was the 100% owner of both the Landlord and the numbered company, and that the role of the Landlord in managing the property remained unchanged.

[25] For similar reasons, the LTB also found that the fact that the Landlord was named in the permit did not mean s. 73(b) of the RTA operated to invalidate the applications. The LTB also specifically found that the substance of the permit process demonstrated the good faith intention of the Landlord to proceed with the project.

[26] The Tenant has not raised any question of law on this appeal. He submits that Lulu Holdings Inc. was not the owner of the property and therefore had no legal right to demolish the rental unit. He claims that the eviction therefore was “based on serious errors and fraudulent misrepresentation.” These submissions do not identify an error of law. At most they take issue with the LTB’s application of the facts to the definition of “landlord” in the RTA, although the Tenant’s submissions do not engage with that definition. In any event, the Tenant’s submissions fail to identify any extricable legal principle that could constitute an error of law.

[27] The Tenant also submits that the Landlord engaged in conduct after the Review Order that constituted bad faith. There was no motion to introduce fresh evidence. Even if I were to take the allegations as sworn evidence, they would not form a basis to interfere with the LTB’s finding on the Review Order that the Landlord did not act in bad faith.

Abuse of Process

[28] This matter has been ongoing for an extended period. The Tenant consented to his eviction, then appealed that order to this court, which was found to be an abuse of process. Although the Landlord could have then evicted the Tenant, it failed to do so because the parties entered into settlement discussions. This allowed the Tenant to file the request for review and obtain a further stay from the LTB. When the Review Order was dismissed, the LTB lifted its stay of eviction, but the Tenant then filed this appeal and obtained another stay.

[29] I find this appeal to be an abuse or process for the following reasons:

(a) The Tenant previously consented to the termination of the tenancy.

(b) The new technical issue regarding the identity of the Landlord was dismissed by the LTB and does not raise an issue of law.

(c) The Tenant has attempted to revive issues already dismissed by this court as an abuse of process.

(d) This court previously found at para. 33 of the first Divisional Court endorsement that the Tenant had “repeatedly reached agreements and then failed to fulfill them, instead taking steps to postpone the termination of the tenancy while not paying rent.”

[30] Overall, I am satisfied that the Tenant again has initiated this appeal, which is devoid of merit, to obtain the automatic stay of eviction under the CJA. The appeal therefore constitutes an abuse of process.

Disposition and Costs

[31] The appeal is quashed.

[32] The Landlord sought an order requiring the immediate eviction of the Tenant. However, the Tenant submits that he will require extra time due to his son’s medical condition and the need to retrofit any new home to accommodate his son’s needs. The Landlord did not object to an extension on the date of eviction as long as the rent is paid.

[33] Given the challenge of determining the appropriate rent, as discussed above, I order the Tenant to pay an additional $9,000 in rent by June 15, 2023 (for June rent) and on the first day of each month starting on July 1, 2023 and up to and including September 1, 2023. Commencing October 1, 2023, the Landlord will be entitled to evict the Tenant. The payment of $9,000 per month on June 15, 2023, July 1, 2023, August 1, 2023 and September 1, 2023 shall be without prejudice to the Tenant commencing proceedings in the appropriate forum if he takes the position they constitute an overpayment of rent. If the Tenant fails to make the additional $9,000 payment on June 15, 2023, July 1, 2023, August 1, 2023 or September 1, 2023, the Landlord may bring a motion in writing requesting that the Tenant be evicted immediately.

[34] The parties both stated that they would seek $15,000 in costs if successful on the motion. The Landlord justified this amount on the basis that it included the costs of the appeal. The Tenant agreed that this amount was reasonable. As the Landlord is the successful party, the Tenant shall pay the Landlord $15,000 in costs all-inclusive within 30 days.

O’Brien J

Date: June 8, 2023