Court File and Parties

CITATION: Galaxy Real Estate Core Ontario LP v. Kirpichova, 2023 ONSC 593

DIVISIONAL COURT FILE NO.: 641/22
DATE: 20230128

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

D.L. Corbett, Nishikawa and Schabas JJ.

BETWEEN:

GALAXY REAL ESTATE CORE ONTARIO LP Respondent / Landlord

– and –

MARTA KIRPICHOVA and EMAD ELGUINDY Moving Parties / Tenants

Counsel: Rob Winterstein, for the Respondent / Landlord Mr Elguindy and Ms Kirpichova, self-represented

HEARD at Toronto (by videoconference): January 23, 2023

REASONS FOR DECISION

D.L. Corbett J.

[1] This motion comes to us as a motion to review the order of O’Brien J. made at a case management conference. Our jurisdiction arises from s.21(5) of the Courts of Justice Act. The test on a review of a judge’s order under s.21(5) is a stringent one: the panel should intervene to vary or set aside the order of a single judge only if they made an error of law or a palpable and overriding error of fact: Marsden v. Her Majesty the Queen, 2012 ONSC 6118, para. 2 (Div. Ct.). Ontario Federation of Anglers and Hunters v. Ontario (Natural Resources and Forestry), 2017 ONSC 518 (Div Ct), para. 7. We dismissed this review motion without calling upon the respondent, with these reasons to follow.

[2] This case followed the ordinary course in Divisional Court for appeals from decisions of the Landlord and Tenant Board, as that process is set out in the court’s current Notices to Profession. Salient portions of the Notice to Profession provide as follows (Notice to Profession – Divisional Court | Superior Court of Justice (ontariocourts.ca)):

D.7. Case Management

1. All matters in Divisional Court, and all steps in all matters in Divisional Court, are subject to judicial case management. The purpose of case management is to facilitate the timely adjudication of all matters in Divisional Court in a cost-effective and proportional manner.

2. When the court is contacted by a party pursuant to this Notice to the Profession, the party’s request is subject to triage by an Administrative Judge of the Divisional Court or a designate. The triage judge may give directions on matters such as (a) jurisdiction, (b) timeliness of the matter, (c) prematurity (d) identification of proper parties to the matter, (e) the mode of hearing (in person or virtual), and (e) (sic) any other issue that, in the opinion of the triage judge, ought to be addressed with the parties. This part of the triage process does not preclude any party from raising preliminary issues with the court after the triage judge has given an initial direction.

3. Where no preliminary issues are identified by the court, the triage judge will give scheduling directions. Parties should raise any preliminary issues they have at the time they address the court’s request for an agreed schedule from the parties.

4. Where the triage judge is of the opinion that a case management conference is required to address any issue, the triage judge may direct that such a conference be scheduled by staff. Case management conferences are held by telephone unless the triage judge directs otherwise. The triage judge is not seized of case management unless the triage judge directs otherwise.

5. Any timetable or deadline set through case management supersedes the deadlines set in the Rules of Civil Procedure.

D.8. Motions for a Stay or Lifting a Stay Pending Appeal or Judicial Review

1. Except in a case of urgency, the court will not schedule or grant a stay or a motion to lift a stay prior to conducting triage and making an initial case management direction/order in accordance with this Notice to Profession. A party seeking a stay of all or part of an order should raise this issue with the court at the earliest opportunity, generally when first contacting the court to request a hearing.

2. Where a party is seeking a stay, that party is expected to agree to serve its materials and to participate in the hearing of the case as quickly as reasonably possible, to minimize the prejudice of any stay that may be granted. Where a party is responding to and opposing a motion for a stay, that party is expected to agree to prepare its responding materials and to participate in the hearing of the case as quickly as reasonably possible, to either obviate the need for a stay or to minimize the prejudice of granting or refusing a stay.

3. An Administrative Judge of the Divisional Court or a case management judge may grant or decline a motion for stay or to lift a stay by case management direction/order or may direct that a motion be brought for a stay or to lift a stay, on such schedule and terms as the judge considers just, and may take into account the parties’ positions on scheduling the underlying case in deciding what process to follow and whether to grant or lift a stay and, if a stay is granted or lifted, on what terms.

D.12. Appeals from decisions of the Landlord and Tenant Board

Requests to Set Aside Stays

1. A Landlord wishing to make a request to set aside a stay of an order of the Landlord and Tenant Board pursuant to R.63.01(5) of the Rules of Civil Procedure may make that request by taking the steps set out below.

2. Emailing the Divisional Court at the email address corresponding to the judicial region where the case originated (see the table at D.2.1. above) and requesting that the court lift the stay or schedule a motion for an order lifting the stay. The email should attach a copy of the notice of appeal and the certificate of stay respecting the appeal. The email should explain the reason(s) why the landlord is seeking to have the stay lifted and, if these reasons include non-payment of rent, should set out a brief accounting of the rent. The court will then give written directions and/or schedule a case management teleconference respecting the landlord’s request to set aside the stay.

3. The court may issue case management directions requiring payment of ongoing rent and payment of or on account of arrears, in default of which the court may order the stay lifted, or, where a case management judge concludes that payment of ongoing rent and payment of or on account of arrears will not be made in accordance with reasonable terms for such payments, the case management judge may order the stay lifted.

4. Any party with a stay pending appeal is responsible to move promptly with their appeal, and a case management judge may impose a schedule for obtaining transcripts and serving appeal materials that reflects this principle. Where a party with a stay fails to comply with a directed schedule for the appeal, a case management judge may, for this reason, order that the stay of the LTB order be lifted.

[3] The tenant’s Notice of Appeal was provided to the court, along with other required information, on November 22, 2022. The tenant followed the intake process prescribed by the Court’s Notice to Profession.

[4] Nishikawa J., the “intake/triage judge”, gave the following direction, provided to the parties on November 24, 2022:

Justice Nishikawa directs me to advise you as follows:

1. The LTB found that outstanding rent was $54,489.60 as of November 30, 2022 and that monthly rent is $1,673.28.

2. The tenants are directed to confirm the accuracy of these figures or, if they say that they are not accurate, to state: (a) the current amount of arrears; (b) the current monthly rent; and to provide the court with proof of payment of any rent payments the tenant has made that are not reflected in the LTB's calculations. This information shall be provided at least one week before the case management conference referred to below.

3. At the case management teleconference, the court may make orders respecting payment of ongoing rent and rental arrears as a condition of continuing the stay pending appeal in this court. The court may also establish a schedule for exchange of appeal materials and the date for hearing of the appeal.

[5] On November 25, 2022, the parties were given notice of the case management teleconference, to be held before O’Brien J. on December 6, 2022.

[6] Justice O’Brien’s decision was provided to the parties by email, and states as follows:

Today’s case conference was scheduled in part to address the terms of the tenants’ stay from eviction in this matter. The tenants proposed that pending appeal they would pay rent of $1600 per month plus $200 per month for a total of $1800 per month. The landlord proposed that the tenants pay the full rent as found by the Landlord and Tenant Board (“LTB”), which is $1,673.28 per month, plus substantial payments towards the arrears of rent. The LTB found arrears of rent as of the end of November 2022 to be $54,489.60. I understand that this amount reflects the tenants not having paid rent for two and a half years.

The tenants also submitted that the named Respondent, Galaxy Real Estate Core Ontario LP is not their landlord. However, this is the name of the Respondent on the appeal, as well as the name of the party that appeared at the LTB and which the LTB treated as the landlord in its order. The LTB decision does not address any issue having been raised with respect to the identity of the landlord. In addition, the tenants today admitted that they had not been paying rent to any other entity. In these circumstances, the rent and payment towards arrears shall be paid to Galaxy Real Estate Core Ontario LP without prejudice to the tenants raising any issue regarding the identity of the landlord at the hearing of the appeal.

In the absence of any evidence provided by the tenants to the contrary, I accept that the correct rent is the amount found by the LTB, that is, $1,673.28 per month. In addition, in view of the substantial arrears owing and the complete failure to pay any rent, I am ordering a significant payment of monthly rental arrears. The terms of the ongoing stay are as follows:

• The tenants shall pay the monthly rent of $1,673.28 plus $2,500.00 to Galaxy Real Estate Core Ontario LP for a total of $4,173.28 on the first of each month commencing January 1, 2023.

If the tenants fail to pay the full amount owed, the landlord may file motion material with the Court without notice seeking an order lifting the stay.

The parties shall also comply with the following schedule with respect to the exchange of materials on the appeal:

• By December 7, 2022, counsel for the LTB, Mr. Fellman, shall provide information to the tenants regarding how to request the recording of the hearing from the LTB.

• By December 9, 2022, the tenants shall request the recording of the hearing from the LTB.

• By February 17, 2023, the tenants shall file their material on the appeal.

• By March 3, 2023, the landlord shall file its material on the appeal.

• By March 17, 2023, the LTB shall file its material on the appeal, if any.

The tenants are directed to serve Mr. Fellman of the LTB with any material they file in this matter.

The Registrar for the Divisional Court in Toronto is asked to schedule this appeal for a half-day hearing before a panel of three judges no sooner than April 17, 2023, with a date to be provided to the parties by January 31, 2023.

[7] The primary basis urged for review of this order is that the respondent is not the landlord and is not entitled to receive rent. The tenants argue that O’Brien J. ought not to have ordered any payments, or ought to have ordered that any payments be paid into court rather than to the respondent pending the appeal.

[8] The basic facts set out in the endorsement of O’Brien J. establish an extreme case of non-payment of rent for more than two years, with accumulated arrears exceeding $54,000. The appellants do not contest the quantum of unpaid rent. In this context, ordering the tenants to pay ongoing rent and to make payments towards arrears pending the appeal was reasonable. The actual payment terms ordered are reasonable: compared to previous similar cases, cited below, the terms are lenient. There is no basis for us to interfere with the order for payment or for the quantum.

[9] The issue of the proper identity of the landlord entitled to receive rent was raised with O’Brien J. Her Honour considered the issue and made her order without prejudice to any argument the tenant may make on the appeal itself. We note that if there is a bona fide argument about the correct identity of the landlord, it was, and is, open to the tenant to seek to bring the person they say is the proper landlord into the proceedings as a necessary and proper party. The tenant asserts that multiple persons have sought to collect unpaid rent, but no documents have been provided to reflect this assertion. In oral argument, the tenant says that these efforts have been by way of telephone calls. We are not prepared to accept that there is any real contest as to who the landlord is on the basis of this vague and unsubstantiated claims respecting collections efforts. On the record before us, the landlord holds title to the premises through a bare nominee, collects rents with the assistance of a property management company, and has been so doing since 2020.

[10] In oral argument, the tenant submits that transactional documents provided by the landlord to show its relationship to the property are “obviously bogus” because they are signed by the same person on behalf of multiple parties. We do not accept this bald allegation. The inference from common signatories is that the parties are related entities.

[11] We see no error in principle in the decision of O’Brien J. ordering that the payments be made to the respondent pending appeal, and no basis to interfere with her exercise of discretion.

[12] The tenant raises an issue about the impugned order being made by a case management judge, at a case management conference, where formal motion materials have not been delivered and there is no evidence under oath. The process followed in this case was consistent with the court’s practice, reflected in the terms of the Notice to Profession quoted above. It has been followed consistently in this court to address issues such as the ones decided by O’Brien J. (a) quickly, (b) efficiently for the parties and the court, (c) at minimal cost to the parties, and (d) following a fair process. See, for example: Gencay v. Capreit Limited Partnership, 2021 ONSC 8293 (Div. Ct.); Margulis v. E. Manson Investment Limited, 2021 ONSC 377 (Div. Ct.), 2020 ONSC 7969 (Div. Ct.); Mahdieh v. Joo, 2020 ONSC 7771 (Div. Ct.); Herchawi v. Quddus, 2020 ONSC 6822 (Div. Ct.);

[13] The tenant’s fundamental obligation is to pay rent. Proceedings before the LTB and before this court are not a basis upon which a tenant may default in their fundamental obligation to pay rent over the long-term. To quote from Maphangoh v. Revera Retirement Homes, 2021 ONSC 7739, 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.

[14] In argument, the tenant argued that I should recuse myself from this motion because of directions I made in my capacity as case management judge of this review motion. There is no merit to this argument. The tenant asked me, as the judge case managing this review motion, to vary, set aside or stay the order of O’Brien J. It is axiomatic that I was not sitting on review or appeal from O’Brien J. while I was case managing this motion. The tenant objected to the direction I provided that the tenant must comply with the order of O’Brien J. pending this review motion, and that if the tenant did not do so, the order would be enforced and the stay of eviction lifted. This court made it as clear as is possible that the order of O’Brien J. was in effect, and not stayed, and that the tenant had to comply with that order pending hearing of this review motion. Such a statement is not controversial legally, nor does it convey any prejudgment of the review motion itself. Indeed, in addressing a self-represented litigant, the direction was intended to assist the tenant, to make it clear what the consequences would be of non-compliance with the order of O’Brien J. “Making routine procedural orders prior to a hearing does not give rise to a reasonable apprehension of bias on the part of an administrative judge, a motions judge, or a case management judge” [Kivisto v. Law Society of Ontario, 2021 ONSC 6394, para. 9 (Div. Ct.)]. Finally, I note that at the same time that I refused to interfere with the order made by my colleague, I expedited the hearing of this review motion so that it was brought before a panel about a month after the review motion was initiated. This required assembling a special panel of this court

[15] During oral argument, the tenant argued that the terms ordered by O’Brien J. are too onerous and we should order less onerous terms, such as a monthly payment of $1,800 pending appeal. It is not our task to conduct a de novo hearing on appropriate terms for maintaining the stay pending appeal. As stated by Sachs J. in a different context:

We are being asked to set aside a discretionary decision of a single Divisional Court judge. We owe that decision considerable deference and it is important that we do not encourage the use of s.21(5) of the Courts of Justice Act, as an opportunity to get a “second kick at the can” in front of three, as opposed to one, Divisional Court judge. The strain on the already limited resources of our court that this causes is obvious. (Kastner v. Health Professions Appeal and Review Board, 2022 ONSC 5553, para. 54

This point is all the more important in the context of landlord and tenant matters, where the amounts in issue are modest (relative to the cost of court proceedings), and one or both parties are often self-represented. The process followed in this case gave fair notice to all. It gave the tenant an opportunity to place information and evidence before the case management judge respecting the rent arrears. It gave notice that an order could be made at the case management conference for payment on account of rent and arrears. All of this was accomplished with the exchange of a few emails and one telephone call with a judge. No costs were ordered for these steps in the process. And it was all accomplished in about two weeks after commencement of the appeal. The resulting order fairly balances the interests at stake and is well within a range of reasonable results. The process invoked by the tenant in response – more procedurally rigorous – and much more expensive – has led to an adverse costs award against the appellants of $4,000 by order of George J.A. (for proceedings taken in the Court of Appeal in relation to the order of O’Brien J.), and a further adverse costs order from this court set out below ($5,000). From the tenant’s perspective, they now face an additional obligation of $9,000, which will not be applied against outstanding arrears. From the landlord’s perspective, it is “down” another $9,000 that it believes it is unlikely to recover. Incurring these costs over the issues raised on this review motion serves to highlight the practicality and efficacy of the case management process followed in this case.

[16] With arrears at over $54,000, if the tenant cannot afford to meet the payment terms ordered by O’Brien J., then this is a failed tenancy. In response to this point, in oral argument, the appellants submitted that they will make arrangements to borrow money to pay whatever the courts decide is owed at the end of the process. If the tenant is able to do that at the end of the process, we see no reason why the tenant cannot do that to meet the payment terms ordered by O’Brien J.

[17] There is no basis to interfere with the order of O’Brien J.; this motion is dismissed, with costs fixed at $5,000, payable by the appellants to the respondent within thirty days.

___________________________ D.L. Corbett J.

I agree___________________________ Nishikawa J.

I agree___________________________ Schabas J.

Date of Release: January 28, 2023

DIVISIONAL COURT FILE NO.: 641/22
DATE: 20230127

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

D.L. Corbett, Nishikawa and Schabas JJ.

BETWEEN:

Galaxy Real Estate Core Ontario LP Respondent / Landlord

– and –

Marta Kirichova and Emad Elguindy Moving Parties / Tenants

REASONS FOR DECISION

D.L. Corbett J.

Date of Release: January 28, 2023