2024 ONSC 7051

Court File and Parties

COURT FILE NO.: BK-33-3132918 DATE: December 16, 2024 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: IN THE MATTER OF THE BANKRUPTCY OF JUSTIN EVAN STEVENSON

BEFORE: Associate Justice Perron

COUNSEL: Eric Lay, for the moving parties Vince and Colleen Battista Justin Evan Stevenson, self-represented bankruptee

HEARD: December 2, 2024

Endorsement

[1] This is a motion by Vince and Colleen Battista (the “Landlord”) seeking an Order declaring that the stay pursuant to section 69.3 of the Bankruptcy and Insolvency Act (the “BIA”) does not apply to certain paragraphs of the Order of the Landlord and Tenant Board (“LTB”) made July 24, 2024 (the “LTB Order”). In particular, the Landlord seeks an Order that the stay does not apply to provisions in the LTB’s Order requiring Mr. Stevenson to vacate the unit and deliver possession to the Landlord and compelling the Sheriff to enforce the eviction.

[2] The Landlord recognizes that the provisions from the LTB’s Order requiring that certain amounts be paid by Mr. Stevenson are subject to the stay of proceedings triggered by the insolvency filing.

[3] Mr. Stevenson’s tenancy commenced on or about September 18, 2023, pursuant to a residential tenancy agreement. Mr. Stevenson stopped paying rent and certain utilities on February 1, 2024.

[4] The Landlord commenced an Application at the LTB on February 27, 2024. The LTB hearing took place on June 27, 2024.

[5] The LTB Application was determined on July 24, 2024, by Member Rachel Gibbons. In her order, Member Gibbons set out deadlines for certain amounts to be paid and provided that if payment was not made pursuant to the LTB Order, Mr. Stevenson was required to vacate the unit by September 15, 2024. If the unit was not vacated by September 15, 2024, the LTB Order provided that the Landlord could file the Order with the Sherriff for enforcement.

[6] Mr. Stevenson applied for a review of the LTB Order on August 23, 2024. That review was denied on August 26, 2024. No further appeal was made from these orders.

[7] Mr. Stevenson did not make any of the payments required by the LTB Order and did not vacate the unit by September 15, 2024. Despite Mr. Stevenson’s failure to pay any rent since February 2024, the Landlord continues to incur carrying and maintenance costs for the property (i.e. mortgage, taxes, insurance) and also pays for the water utilities.

[8] The Landlord took steps to file the LTB Order with the Sherriff on September 16, 2024, and the Sherriff scheduled an attendance at the unit for October 4, 2024 for purposes of evicting the tenant. Mr. Stevenson was served with the Notice to vacate by the Sherriff’s office on September 25, 2024.

[9] Mr. Stevenson made an assignment in bankruptcy on September 25, 2024.

[10] The Sherriff’s office refused to carry out the eviction on account of the bankruptcy filing and takes the position that an order lifting the stay in bankruptcy is required prior to it carrying out the eviction.

[11] The Landlord has therefore brought the within motion seeking an Order that the stay does not apply or alternatively, seeking an Order lifting the stay. The Landlord’s position is that as they are only seeking to enforce the provisions of the LTB Order that require that they have possession of the unit, and as that claim is not a “claims provable” pursuant to section 121(1) of the BIA, the stay under section 69.3 is not triggered.

[12] Section 121 (1) of the BIA defined “claims provable” as:

All debts and liabilities, present or future, to which the bankrupt is subject on the day on which the bankrupt becomes bankrupt or to which the bankrupt may become subject before the bankrupt’s discharge by reason of any obligation incurred before the day on which the bankrupt becomes bankrupt shall be deemed to be claims provable in proceedings under this Act.

[13] The LIT does not take a position on the motion.

[14] Mr. Stevenson opposes the motion. He acknowledged that he has not taken steps to appeal the LTB Order (or to appeal the order denying his request to review the decision). He also acknowledges that he has not paid any rent to the Landlord, although he indicated that he had recently received advice that he should pay rent to the LIT for the LIT to hold in trust pending further determinations and that he intends to do so. As of the date of the motion, Mr. Stevenson has not paid any such amounts to the LIT as he is awaiting the outcome of the motion.

[15] Mr. Stevenson advised that a further application has been scheduled for hearing before the LTB in January 2025. It appears that this application deals with: outstanding rent arrears after the filing in bankruptcy as well as ongoing and additional maintenance issues raised by the tenants. When asked to provide clarifications of any “new” maintenance issues arising after the date of the LTB Order, Mr. Stevenson indicated that these maintenance issues were all related to an aggravation of the mice issue in the rental unit.

[16] In her reasons for decision at paragraph 13, Member Gibbons expressly considered the mice issue raised by Mr. Stevenson at the LTB hearing as well as other maintenance issues raised by him despite the fact that disclosure of those issues was only made to the Landlord the day before the hearing. The LTB Order was therefore made notwithstanding the maintenance issues raised by Mr. Stevenson. The LTB Order, and findings made in its reasons, cannot be ignored, or revisited by this Court and is subject to the principle of res judicata (Paterson v City of Oshawa, 2023 ONSC 2287 at paragraph 31).

[17] The Landlord only seeks to enforce the provisions of the LTB Order that entitle them to possession of the unit. The provisions of an order providing for eviction and possession of a rental unit is not an order for “debts and liabilities” and is therefore not a “claims provable” pursuant to section 121(1) of the BIA (In the Matter of the Bankruptcy of Sylvie Marie Lafond (AKA Jane Lafond) of the City of Ottawa, in the Province of Ontario, 2023 ONSC 4065).

[18] In addition, this is not a case where a landlord seeks to terminate a lease on account of non-payment of rent. The Landlord’s application to terminate the lease for non-payment occurred approximately 7 months prior to the bankruptcy filing. The LTB Order was made 2 months prior to the bankruptcy filing. Therefore, section 84.2 of the BIA which prohibits termination of leases based upon claims provable in an insolvency does not apply to this matter.

[19] Therefore, the stay pursuant to section 69.4 of the BIA does not apply to the provisions of the LTB Order that relate to the tenants’ eviction and the Landlord’s right to possession of the rental unit.

[20] This is also a case where I would have alternatively granted an order lifting the stay pursuant to section 69.4 of the BIA. Just like in the Lafond matter, the lifting of the stay does not affect the rights of Mr. Stevenson’s other creditors and as the Landlord continues to incur expenses in connection with the unit, it would be just and equitable to lift the stay (see Lafond at paragraph 20; Paterson v City of Oshawa, 2023 ONSC 2287 at paragraphs 32 and 42). I also note that despite the fact that he has not paid rent since February 2024, Mr. Stevenson has falsely claimed in his Statement of Affairs to be paying rent in the amount of $2,400 which was also the case in the Paterson decision.

[21] For the reasons above, the motion is granted and an Order will go as requested.

[22] As the Landlord was successful on the motion, I also find that it is appropriate for the Landlord to have its costs of the motion on a partial indemnity basis in the amount of $2,215.50 payable within 30 days.

Karen Perron Associate Justice K. Perron Date: December 2, 2024