Case: One Clarendon Inc. v. Finlay, 2024 ONCA 323 (CanLII)

Keywords: landlord/tenant; automatic stay pending appeal

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Synopsis:

The Moving Party owns a residential apartment building in Toronto. Tenants move in June, 2021. Rent stops being paid shortly thereafter, in September, 2021. An “unfortunate ‘cat and mouse’ game” begins. The tenants herein are “among the most accomplished of those who know how to ‘game the system’”; the Court previously observes their conduct “appears to be abusive of the system”. (See para. 3).

The Court of Appeal per Black J.A. grants judgment in the principal amount of $153,539.00 against the tenants and leave to issue a writ of possession. (See para. 4). The tenants fail to vacate. They appeal “in the hope that the automatic stay…would delay the enforcement of the order”. (See para. 6).

The Moving Party seeks a discretionary order to lift the stay so that the eviction can proceed as scheduled. The Court of Appeal per Lauwers J.A. grants the order on the basis that, pursuant to Rule 61.06(1), “there is good reason to believe that the [tenants’] appeal is frivolous and vexatious and that the appellant has insufficient assets in Ontario to pay the costs of the appeal”. (See para. 8).

Importance:

This case is noteworthy because it demonstrates the effective use of procedure to lift the automatic stay pending appeal at the Court of Appeal for Ontario. In the context of non-payment of rent, the Court of Appeal affirmed the “logic of Penny J.” in the case of Schwartz v. Fuss, 2021 ONSC 1159 at para. 14:

It is well settled that unjustified non-payment of rent while under the purported protection of the statutory stay of enforcement of [Landlord and Tenant Board] orders pending appeal, can be regarded as an abusive process and is otherwise sufficient grounds to warrant the lifting of the stay. There is no authority, statute or regulation that permits a residential tenant to withhold ongoing rent pending an appeal. (See para. 8).

In the circumstances of this case, the tenants’ “frivolous, vexatious, and abusive” strategy was “evident”. As noted by the Court of Appeal, there had been a “litany of proceedings”, including 33 separate litigation events involved in this matter. From an access to justice perspective, helpful that the Court of Appeal herein has clarified the application of the procedure, and provided a useful precedent for similarly situated landlords. (See para. 9).

Ultimately, the Court of Appeal lifted the stay and granted an order for security for costs in the amount of $261,374.10 – including an order that the tenants post security for costs the Friday following the release of the decision. (See para. 11).

Counsel for the Moving Party: Sanj Sood

Counsel for the Responding Parties: no one appearing

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