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In a recent Ontario decision, the court found a tenant’s attempt to appeal her eviction was an abuse of process that allowed her to continue not paying rent and stay her eviction while awaiting the appeal hearing.

Landlord Takes Possession of Condominium Unit

The landlord owns a rental unit in a condominium building in Toronto, which she bought on March 1, 2018.

The landlord took over the lease when she purchased the unit. The rent was $2,072 per month payable on the first day of each month.

After the landlord took possession of the unit, she became aware that the tenant did not reside in the apartment, but, rather, that she was using it for short term rentals. At that time, the condominium agreement allowed for short term rentals in the building.

However, in 2019, the condominium corporation notified condominium owners that it intended to amend its rules to prohibit the sub-leasing of condominiums for short term rentals. The landlord notified the tenant of these changes, but the parties were unable to resolve the issue.  

The landlord subsequently received notices from the condominium corporation that she was in breach of the new condominium rules.

The Order of the Landlord and Tenant Board

The landlord brought an application to the Landlord and Tenant Board (the “Board”) to terminate the tenancy based on the tenant’s violation of the condominium’s rules. The notice of termination was served on the tenant on November 21, 2019. The tenant then stopped paying rent as of December 1, 2019.

Following the hearing, on February 4, 2020, which the tenant did not attend, the Board issued a decision in which it found that the tenant operated a short term rental business that interfered with the landlord’s “lawful right, privilege or interest” because it exposed the landlord to sanctions from the condominium corporation. In addition, the Board found that the tenant had not paid her rent since December 1, 2019. Based on these findings, the Board ordered that the tenancy was to be terminated as of February 15, 2020 and that the tenant was to pay outstanding rent. 

On February 15, 2020, the tenant requested that the Board review the eviction order, which it refused to do.

By notice of appeal dated February 28, 2020, the tenant appealed the eviction order and the review decision to the Divisional Court. The tenant claimed that her lease explicitly allowed her to use the apartment for short term rentals. In addition, she claimed that she had been traveling between December 26, 2019 and February 4, 2020, and that she therefore did not receive the notice of hearing.

The commencement of the tenant’s appeal resulted in an automatic stay of the eviction. After serving her notice of appeal, the tenant continued to not pay rent.

In response, the landlord argued that the appeal should be quashed on two grounds:

  1. It was devoid of merit because it did not raise a question of law; and 
  2. It was an abuse of process because the tenant’s failure to pay rent demonstrated that the appeal was only brought for the purpose of obtaining an automatic stay of the eviction.

Court Orders Eviction of Tenant for Abuse of Process

First, after reviewing the tenant’s arguments, the court agreed with the landlord that the appeal was devoid of merit because it did not raise a question of law.

Turning to the landlord’s second argument, the court reviewed the relevant principles relating to an argument of abuse of process:

“This Court has consistently held that launching an appeal for the sole purpose of obtaining the stay of an eviction in the context of landlord and tenant proceedings is an abuse of process […] 

[O]ne of the key indicia that a party is trying to “game the system” is a circumstance where the Tenant persistently fails to pay rent prior to and throughout the appeal period without any explanation for the failure to pay rent or any evidence of an intention to remedy the situation.”

At the hearing, the tenant had admitted to not using the apartment as her own residence but rather as part of a short term rental business. As soon as it became evident that she may not be able to continue using the apartment for her business, she stopped paying rent.  The court found that her failure to pay rent had nothing to do with any hardship caused by the COVID-19 pandemic but was a clear attempt to avoid making payments she may not be able to recoup through her business. 

The court found that such circumstances were particularly abusive given that the tenant appeared to continue sub-letting the premises without paying any rent to the landlord.

As a result, the court found that the tenant’s appeal was a clear abuse of process and quashed the appeal. In addition, the court vacated the automatic stay of the Board and stated that the landlord may file the Board’s eviction order with the Sheriff on August 31, 2020. Finally, the court ordered the tenant to pay costs to the landlord in the amount of $7,000. 

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