Bankruptcy (LTB)

Caselaw.Ninja, Riverview Group Publishing 2021 ©
Date Retrieved:	2024-11-24
CLNP Page ID:	593
Page Categories:	[Payment of Rent (LTB)], [Bankruptcy], [Bankruptcy & Consumer Proposals (BIA)]
Citation:	Bankruptcy (LTB), CLNP 593, <https://rvt.link/2x>, retrieved on 2024-11-24
Editor:	Sharvey
Last Updated:	2024/11/05

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Amiraco Properties Inc. v Letourneau Auch, 2023 ONLTB 59353 (CanLII)

1. The Tenants filed a consumer proposal on July 21, 2023, pursuant to section 66 of the Bankruptcy and Insolvency Act, (R.S.C., 1985, c. B-3) (the ‘BIA’).

2. Section 69.2 of the BIA provides that upon filing of a proposal, all claims provable in bankruptcy are stayed. The stay of proceedings includes proceedings before the Landlord and Tenant Board for rent arrears.

3. Section 69.2 (1) states that “on the bankruptcy of any debtor, no creditor has any remedy against the debtor or the debtor’s property, or shall commence or continue any action, execution or other proceedings, for the recovery of a claim provable in bankruptcy.”

4. A claim provable in bankruptcy is defined as “all debts and liabilities, present or future, to which the bankrupt is subject on the day on which the bankrupt becomes bankrupt” (s. 121(1) of the BIA). This definition includes all rent owing by the Tenants on the date they filed their consumer proposal. Therefore, rent owing by the Tenants as of the date the Tenants filed consumer proposal is a claim provable in bankruptcy, and subject to the BIA stay. In this case that includes rent owing up to July 31, 2023.

5. Furthermore, section 84.2 of the BIA states that a lease cannot be terminated by reason only that the debtor has not paid rent in respect of a period preceding the filing of the bankruptcy.

6. As a result of the BIA stay, the Board cannot issue an order requiring the Tenants to pay rent arrears that constitute a claim provable in bankruptcy or terminate the tenancy due to rent arrears that constitute a claim provable in bankruptcy. This finding is consistent with the Divisional Court’s determination in Forestwood Cooperative v. Pritz [2002] O.J. No. 550:

23. It is beyond dispute that the claim for arrears is provable in bankruptcy. To separate the request for a writ of possession from the money judgment for arrears is artificial and flies in the face of the wording of the section [s. 69.3]. Specifically, the section dictates that the ‘proceeding’ that involves a claim provable in bankruptcy is stayed…

7. Therefore, I do not agree with the Landlord’s submission that the Board has the authority to issue an eviction order as a result of the rent arrears owing by the Tenants that constitute a claim provable in bankruptcy. Further, according to section 69.4 of the BIA, it is the court who has the power to decide if the BIA stay should be varied; the Board does not have the jurisdiction to make any determination on varying/not applying the BIA stay.

8. The rent for the month of August 2023 came due after the Tenants filed their consumer proposal and is therefore not a claim provable in bankruptcy and not subject to the BIA stay.

9. I find that it would not be unfair to amend the application so as to only include rent for the month of August 2023 and allow the application to proceed on that basis.

10. A similar approach was accepted by the Divisional Court in Edward v. Niagara Neighbourhood Housing Co-Operative Inc., 2006 CanLII 16485 (ON SCDC). In that matter the trial judge identified the amount of pre-bankruptcy arrears that were the subject of a stay, but the proceeding continued only in relation to the post-bankruptcy arrears. In dismissing the appeal, the Divisional Court stated that “the effect of a stay under s. 69.3 should be limited to the words of the provision; the stay operates as against the recovery of a claim provable in bankruptcy. There is nothing in the judgment that violates the BIA”.

Centurion Property Associates Inc v Somersett, 2023 ONLTB 38486 (CanLII)

8. Based on the evidence submitted I am satisfied that one of the two joint Tenants, James Somerset, filed a Consumer Proposal under the federal BIA on March 13, 2023. The consumer proposal states that the total liabilities owing is $38,711.00 of that $10,794.00 is owing to the landlord it is not clear the period of the arrears owing on the Consumer Proposal. The second joint Tenant, Michelle Rehel, has not filed a Consumer Proposal.

9. Section 69.2 of the BIA provides that upon filing of a proposal, all claims provable in bankruptcy are stayed. The stay of proceedings included proceedings before the Landlord and Tenant Board. Section 69.2 (1) provided that “on the bankruptcy of any debtor, no creditor has any remedy against the debtor or the debtor’s property, or shall commence or continue any action, execution or other proceedings, for the recovery of a claim provable in bankruptcy.” A claim for rent owed up to the date of filing of the Consumer Proposal cannot be pursued, although the Tenants are liable for the rent accrued after that date.

10. Furthermore, section 66.34 of the BIA states that a lease cannot be terminated by reason only that the debtor has not paid rent in respect of a period preceding the filing of the consumer proposal.

11. As a result of the BIA stay, the Board cannot issue an order requiring the Tenant to pay rent arrears that constitute a claim provable in bankruptcy or terminate the tenancy due to rent arrears that constitute a claim provable in bankruptcy. This finding is consistent with the Divisional Court’s determination in Forestwood Cooperative v. Pritz [2002] O.J. No. 550.

12. The rent arrears owing up to the date of the Consumer Proposal are a claim provable in bankruptcy, and the Landlord is not permitted to continue this application with respect to recovery of those rent arrears or seek termination of the tenancy on the basis of the arrears.

Szkoda v Maxwell, 2024 ONLTB 6031 (LTB-L-038272-23-RV)

37. The purpose of section 66.34 is to preserve the tenancy of insolvent tenants who file consumer proposals. Applied to the facts, the application of section 66.34 of the BIA: (a) resulted in the N4 notice not being effective to terminate the tenancy; and (b) prevented the Member from terminating the tenancy and evicting the Tenant based on the L1 application. [See Durham Sports Barn Inc. Bankruptcy Proposal, 2020 ONSC 5938 (CanLII) considering the section of the BIA that parallels s. 66.34 in ‘ordinary’ proposal proceedings.]

...

38. The Tenant is required to pay rent that became payable after the Consumer Proposal Date. The BIA does not stay the filing of an L1 application or restrict the termination of the tenancy based on rent that became payable after the Consumer Proposal Date. For this reason, there is a path forward for the parties to implement the resolution they have reached under the RTA.

Bankruptcy and Insolvency Act (R.S.C., 1985, c. B-3)

50.4 (1) Before filing a copy of a proposal with a licensed trustee, an insolvent person may file a notice of intention, in the prescribed form, with the official receiver in the insolvent person’s locality, stating

(a) the insolvent person’s intention to make a proposal,

(b) the name and address of the licensed trustee who has consented, in writing, to act as the trustee under the proposal, and

(c) the names of the creditors with claims amounting to two hundred and fifty dollars or more and the amounts of their claims as known or shown by the debtor’s books,

and attaching thereto a copy of the consent referred to in paragraph (b).

...

69 (1) Subject to subsections (2) and (3) and sections 69.4, 69.5 and 69.6, on the filing of a notice of intention under section 50.4 by an insolvent person,

(a) no creditor has any remedy against the insolvent person or the insolvent person’s property, or shall commence or continue any action, execution or other proceedings, for the recovery of a claim provable in bankruptcy,

(b) no provision of a security agreement between the insolvent person and a secured creditor that provides, in substance, that on

(i) the insolvent person’s insolvency,

(ii) the default by the insolvent person of an obligation under the security agreement, or

(iii) the filing by the insolvent person of a notice of intention under section 50.4,

the insolvent person ceases to have such rights to use or deal with assets secured under the agreement as he would otherwise have, has any force or effect,

...

69.3 (1) Subject to subsections (1.1) and (2) and sections 69.4 and 69.5, on the bankruptcy of any debtor, no creditor has any remedy against the debtor or the debtor’s property, or shall commence or continue any action, execution or other proceedings, for the recovery of a claim provable in bankruptcy.

...

84.2 (1) No person may terminate or amend — or claim an accelerated payment or forfeiture of the term under — any agreement, including a security agreement, with a bankrupt individual by reason only of the individual’s bankruptcy or insolvency.

(2) If the agreement referred to in subsection (1) is a lease, the lessor may not terminate or amend, or claim an accelerated payment or forfeiture of the term under, the lease by reason only of the bankruptcy or insolvency or of the fact that the bankrupt has not paid rent in respect of any period before the time of the bankruptcy.

...

136 (1) Subject to the rights of secured creditors, the proceeds realized from the property of a bankrupt shall be applied in priority of payment as follows:

...

(f) the lessor for arrears of rent for a period of three months immediately preceding the bankruptcy and accelerated rent for a period not exceeding three months following the bankruptcy if entitled to accelerated rent under the lease, but the total amount so payable shall not exceed the realization from the property on the premises under lease, and any payment made on account of accelerated rent shall be credited against the amount payable by the trustee for occupation rent;

Peel Housing Corporation v. Siewnarine, 2008 CanLII 31815 (ON SCDC)

[2] The issue to be decided on this appeal is whether the Ontario Rental Housing Tribunal (“the Tribunal”) was correct in staying Peel Housing’s application to evict Ms. Siewnarine. The Tribunal concluded that Ms. Siewnarine’s breach of a mediated settlement, pursuant to the Tenant Protection Act, S.O. 1997, c.24 (“the Act”) was stayed by s. 69.3 of the Bankruptcy and Insolvency Act, R.S., c.B-3 (“BIA”). The Tribunal found further that Peel Housing’s request to re-open the original L2 Application (based on the tenant’s material representation of her income) was also stayed by the BIA. I find her conclusions to be errors in law.

...

[20] Forestwood Co-operative Homes Inc. v. Pritz, [2002] O.J. No. 550 is a decision of a panel of the Divisional Court which considered a different fact situation from the one before us. In that case, a landlord applied for both arrears of rent and for a writ of possession in the same “proceeding”. Indeed, before the Divisional Court, the landlord submitted it did not intend to pursue the arrears and that the claim for a writ of possession could and should be separated from the money judgment. The Divisional Court analyzed the relief sought by the landlord, both arrears and possession, and found them to have been brought in a “proceeding” that involved a claim provable in bankruptcy. The “proceeding” was therefore stayed. The Court found that to separate the request for a writ of possession from the money judgment for arrears was artificial and flew in the face of the wording of the section.

[21] In the matter before us, there is no such linking of a claim for arrears for rent and an application to evict the tenant. As noted above, the Form L4 makes this clear. Only one form of relief is sought in the landlord’s “proceeding”, that of eviction for failing to abide by the mediated settlement.

[22] Similarly, the request to re-open is a separate “proceeding” limited to seeking eviction for misrepresentation of income.

[23] Since the landlord’s application and request to re-open were based solely on the failure of the tenant to abide by the terms of the mediated settlement, the failure entitles the landlord to apply for and obtain an eviction order, should all the conditions of s. 77 be satisfied. Similarly, the failure entitles the landlord to request a re-opening of the original L2 Application. Contrary to the finding of the member, the fact situation before us is different from that in Forestwood Co-operative Homes.

Forestwood Co-operative Homes Inc. v. Pritz, [2002] O.J. No. 550

1. Gerald Pritz and his wife, Denise Christiansen-Pritz (the "appellants") appeal two decisions relating to their occupancy of their residence, a unit municipally known as unit 304, 1180-1190 Forestwood Drive Mississauga, Ontario (the "unit"). In a judgment rendered March 23, 2001 Dunn J. issued a writ of possession together with other relief in favour of the respondent, Forestwood Co-operative Homes Inc. Chapnik J. in her order of April 4, 2001, dismissed the appellants' motion to set aside the judgment.

...

11. Once the order came to the appellants' attention they moved before Chapnik J. to set it aside on two bases relevant to this appeal. They argued that the proceeding in which the judgment was granted had been automatically stayed pursuant to s. 69.3(1) of the Bankruptcy and Insolvency Act (the "Act") and rule 11 of the Rules of Civil Procedure. They also took the position that the respondents had failed to make full and fair disclosure in the material filed in support of the ex parte motion and that accordingly the judgment should be set aside on that basis.

..

19. The respondent acknowledges that the claim for arrears is one provable in bankruptcy and therefore governed by the Act. However, in this court the respondent states that it does not intend to pursue the arrears and that the claim for a writ of possession can and should be separated from the money judgment. The respondent submits that the appellants' possessory interest in the unit is based on membership in a co-operative and therefore is not an interest "provable in bankruptcy" as its value cannot be quantified. Accordingly, the claim is not stayed by virtue of s. 69.3 (1) of the Act.

20. First, there is an issue of timing to be addressed. Chapnik J. held that the respondent's claim against the appellants arose after the date of Mr. Pritz' assignment into bankruptcy. The motions judge then, relying on the law that a claim that arises after the filing of a proposal is not affected by the stay of proceedings provided for in s. 69 of the Act, held that the claim was not subject to a stay.

21. With respect, this analysis is based on a misapprehension of the respondent's claim. The law upon which Chapnik J. relied relates to indebtedness incurred after bankruptcy, which is not the case here. The respondent moved before Dunn J. for arrears and the remedy of possession as a result of arrears that accumulated prior to the date of Mr. Pritz' bankruptcy.

22. The respondent's primary argument as to why the claim for possession is not caught by the automatic stay in s. 69.3 (1) of the Act involves a misconception of the nature of its claim and the way in which the section is intended to operate. In the proceeding in which Dunn J. gave his judgment, the respondent claimed arrears and a writ of possession based on an alleged default under the contractual relationship between the parties.

23. It is beyond dispute that the claim for arrears is provable in bankruptcy. To separate the request for a writ of possession from the money judgment for arrears is artificial and flies in the face of the wording of the section. Specifically, the section dictates that the "proceeding" that involves a claim provable in bankruptcy is stayed. The proceeding in which the respondent was pursuing remedies against the appellants for breach of contract is subject to the automatic stay.

468 Ottawa North Residences Corp. v. Melanie Louise Rees ONLTB SOL-14678-20-RV2

3. The Tenant’s representative also seeks an order from the Board confirming the stay of eviction issued under section 69 of the Bankruptcy and Insolvency Act

4. A stay of proceedings under the Bankruptcy and Insolvency Act involves a separate proceeding under federal legislation. A Board order is not required to confirm a stay under that proceeding for the stay to be enforceable. I therefore decline to issue an order addressing the stay of proceedings under the Bankruptcy and Insolvency Act.

5. However, a party who enforces an eviction order that is subject to a stay of proceedings under the Bankruptcy and Insolvency Act may expose themselves to liability under that legislation. Additionally, the offending party who enforces a stayed eviction order may also be exposed to liability under provincial legislation.

SWL-16920-SA (Re), 2008 CanLII 82446 (ON LTB)

1. The Tenant filed an assignment in bankruptcy on April 30, 2008.

2. The Landlords and Tenant entered into a mediated agreement on May 1, 2008, which included arrears from February 1, 2008 to May 31, 2008.

3. The Landlords subsequently made a claim to the Trustee in Bankruptcy for the same arrears for the period from February 1, 2008 to May 31, 2008.

4. The Landlords applied for termination of the tenancy along with the payment of arrears.

5. The Bankruptcy and Insolvency Act, R.S.C. 1985, B-3, as amended, (BIA) under section 69.3 causes an automatic stay in proceedings when there has been an assignment in bankruptcy. As a result, I find that the original application, SWL-13890 was stayed when the Tenant made an assignment into bankruptcy and therefore the Landlord and Tenant Board had no jurisdiction to order termination and payment of arrears in SWL-16920 because it is based on SWL-13890 which is stayed as a result of the assignment in bankruptcy.

TSL-97152-18-RV (Re), 2019 CanLII 87681 (ON LTB)

3. I am satisfied on a balance of probabilities that the Board’s order TSL-97152-18, issued January 7, 2019 contains a serious error. Specifically, I find that the Member erred by dismissing the application because the Tenant was discharged from bankruptcy on July 25, 2017, within the first rental period for which the Landlord claims arrears.

4. However, for the purpose of this application, the relevant date in the Tenant’s bankruptcy proceedings is the day when there was an assignment in bankruptcy – i.e. June 21, 2017. Pursuant to section 69.3 of the Bankruptcy and Insolvency Act, the assignment resulted in an automatic stay of proceedings up to the assignment date. However, the first rental period covered by the N4 Notice of Termination begins after the assignment date, on July 1, 2017. Therefore, the stay does not impact this application or the Board’s proceedings and the application should not have been dismissed. Accordingly, the Landlord’s request to review is granted.

CET-78361-18 (Re), 2018 CanLII 141458 (ON LTB)

5. Order CEL-66257-17-AM issued on May 30, 2017 ordered the Tenant to pay rent arrears up to May 31, 2017 of $2,331.42.

6. The Landlord refused to provide the Tenant with a parking space until he paid outstanding rent arrears. The Landlord’s letter dated July 27, 2018 was submitted. The Tenant disputes any arrears because he said that he was discharged from bankruptcy and all debts were extinguished. The Landlord submitted that the Landlord was not a named creditor in the bankruptcy filings and therefore believes it is entitled to collect rent arrears owed.

...

9. Section 22 of the Act provides that a landlord shall not substantially interfere with the reasonable enjoyment of the rental unit for all usual purposes by a tenant.

10. Section 23 of the Act specifies that a landlord shall not harass, obstruct, coerce, threaten or interfere with a tenant. Harassment is generally defined as “a course of conduct which one knows or should know to be unwelcome by the other person and which one pursues for no legitimate purpose” (Grimard v. Knight 2006 O.R.H.T.D.).

11. Subsection 123(1) contemplates that a landlord may increase rent charged if the landlord and tenant agree to add a parking space.

12. The Tenant was erroneously provided with a key to the parking garage by one of the Landlord’s staff on or about July 20, 2018. The Landlord made it clear in their letter dated July 27, 2018 that there was no agreement to provide Tenant with a parking spot. Therefore the Tenant was not entitled to park in the garage. The Landlord gave the Tenant notice about parking illegally and the consequences the Tenant would face if he failed to remove his vehicle. Therefore the Tenant is not entitled to the costs claimed for parking tickets he incurred because he chose to disregard the notices given to him by the Landlord.

...

15. By refusing to provide the Tenant with a parking space upon request because the Tenant owes the Landlord rent arrears, the Landlord has substantially interfered with the Tenant’s reasonable enjoyment.

16. The Landlord has no contractual obligation based on the written tenancy agreement to provide the Tenant with parking. Moreover, pursuant to section 123 there must be agreement between a landlord and a tenant to add a service/facility and the Landlord is not obligated to add a parking space solely because the Tenant requests one.

17. However, by refusing the Tenant’s request for parking because the Landlord believes the Tenant owes rent arrears has a punitive effect on the Tenant. In his testimony, JP denied that there was a company policy regarding refusal of parking because of rent arrears despite his written letters stating that the policy of the Landlord is to decline all requests for additional services to tenants who have rent arrears. The intention of the Landlord to single out this Tenant is evident in their letter of August 7, 2018 which comments about the Tenant’s personal bankruptcy, his choice to purchase a vehicle and his request for parking.

18. The impact of the Landlord’s refusal has a substantial impact to the Tenant. He has to travel longer distances from the unit to retrieve his vehicle and loses time from work. The Tenant said he is embarrassed to tell his friends that he is not allowed to park at his home.

19. The Tenant is entitled to a parking space based on availability of a suitable spot. If the Landlord does not provide the Tenant with a parking space, the Tenant is entitled to deduct $69.00 per month from his rent to pay for alternate parking. I have calculated this amount from the $138 cost the Tenant said he was required to submit for first and last month parking charges.

SOL-21484-11 (Re), 2012 CanLII 21993 (ON LTB)

The Landlord applied for an order to terminate the tenancy and evict S. J. (the 'Tenant') based on arrears of rent.

1. The Tenant declared bankruptcy and the arrears listed on the application were included in the Tenant’s list of outstanding debts.

2. The Tenant paid additional rent that came due after the applying for bankruptcy protection.

3. The Landlord's application relating to eviction of the Tenant based on arrears of rent is discontinued.

TEL-89192-18-RV (Re), 2018 CanLII 111757 (ON LTB)

6. There is no dispute the Tenant has not paid the total rent the Tenant was required to pay for the period from December 1, 2017 to July 31, 2018. Because of the arrears, the Landlord served a Notice of Termination effective March 2, 2018.

7. The Tenant paid $2,800.00 after the application was filed.

8. The arrears of rent owing for the period ending July 31, 2018 total $4,710.09.

...

19. In March of 2018 the Tenant made a consumer proposal in bankruptcy. For some unknown reason the Landlord was not identified as a creditor and was unaware of the bankruptcy proceedings.

20. Given all of the above, I find that it would be unfair to grant relief from eviction pursuant to subsection 83(1) of the Act. Even if the Tenant were able to pay off the rent arrears, his behaviour indicates it is highly unlikely he will start paying rent on time. The Tenant seems to have more difficulties with his financial situation than he can explain and his evidence is simply insufficient to support the assertion that he can or will pay rent on time in the future. As a result, it would be unfair to grant relief from eviction and the Board’s standard eviction order shall be issued.

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 (CanLII)

[16] Section 69 if the BIA provides that, subject to certain exceptions, no creditor has any remedy against an insolvent person or her property, or shall continue the execution of any proceeding for the recovery of a claim provable in bankruptcy, until the trustee has been discharged or the insolvent person becomes bankrupt.

[17] Section 121(1) of the BIA defines a claim provable in bankruptcy as encompassing all present or future debts and liabilities that the bankrupt is subject to on the day of bankruptcy or may become subject to before discharge due to obligations incurred before that day. [3]

[18] While I acknowledge the family circumstances affecting Ms. Lafond, the eviction aspect of the LTB’s order cannot be classified as a “debt or liability”; it is an order requiring the vacation of a property.

[19] The purpose of the BIA's stay provisions is to prevent actions by creditors that might grant them an advantage over other creditors. [4] In this case, the landlords are seeking enforcement of a valid order for the possession of their own property. There is no possibility that allowing them to enforce this aspect of the LTB’s order would confer on them an advantage over any of Ms. Lafond's other creditors.

[20] If I am wrong about the eviction order not being subject to a stay, I would exercise my discretion and lift the stay under section 69.4 of the BIA.

[21] To lift the stay, the Court must be satisfied that the creditor would be materially prejudiced by the continuation of the stay, or that it is equitable on other grounds to lift the stay. Material prejudice may be established if the claims against the bankrupt are debts that would not be discharged. [5] Here, lifting the stay would not affect the assets available to Ms. Lafond’s creditors for distribution.

[22] The landlords had initially agreed to rent the unit to Ms. Lafond for a duration of 8 months in 2021. She has occupied the unit and owes them approximately $30,000 in rent. The landlords have been covering the unit's expenses (mortgage, water, hot water tank, etc.) without receiving rent from Ms. Lafond. Given these circumstances, if the stay were to apply to the eviction aspect of the LTB’s Order, I conclude that it would just and equitable to lift the stay.

Paterson v. City of Oshawa, 2023 ONSC 2287 (CanLII)

[1] The Landlord of the residential property leased by the Bankrupts at 899 Beatrice Street E., Oshawa, Ontario (the “Property”) appears on these Motions to lift the stay of proceedings under s.69.3(1) of the Bankruptcy and Insolvency Act, RSC 1985, c B-3, (the “BIA”) with respect to each of Bankrupts, who are both tenants in the Property under a lease with the Landlord, to permit the landlord to direct the Sheriff to obtain possession of the Property and that the provisions of s.84.2 of the BIA do not apply.

[2] Both Bankrupts and the Landlord, each represented at the hearings, appeared on August 23, 2022, October 19, 2022 and November 7, 2022 before Peter Nicholson, a Member of the Landlord and Tenant Board (“Nicholson”) at a hearing under the provisions of the s.69 of the Residential Tenancies Act, 2006, SO 2006, c 17, (the “RTA”) where the Landlord was seeking an Order to terminate the Tenancy of the Bankrupts and to evict the Bankrupts as they had not paid rent to the Landlord.

...

[17] The Bankrupts admitted that they are continuing to not pay rent after bankruptcy to the Landlord, again blaming the Landlord for interfering with their ODSP Child Tax Credit, which Nicholson considered and still granted the RTA Orders in the Board Decision, including denying the request by the Bankrupts to forestall eviction. This is very problematic in Bankruptcy for a number of reasons.

...

[37] The Bankrupts took none of the steps, before they filed assignments into Bankruptcy, that would have had the effect of voiding the termination of the tenancy under the RTA Orders.

[38] In this case the Order that the Landlord is seeking is narrowed to not the usual order allowing the action to continue, but specifically to enforce a portion of the RTA Orders, to recover possession of the Property, and not to collect the pre-bankruptcy monetary compensation in the RTA Orders:

“2. THIS COURT ORDERS that the Stay of Proceedings established by section 69.3(1) of the BIA shall be and is hereby lifted for the sole purpose of permitting Lodin to enforce paragraphs 3 and 4 of the Order of the Landlord and Tenant Board dated November 21, 2022 (the “LTB Order”) whereby Lodin was granted the right to file the LTB Order with the Sheriff for the Regional Municipality of Durham to obtain possession of the lands and premises known municipally as 899 Beatrice Street East, Oshawa, Ontario (the “Property”).

3. THIS COURT ORDERS that Section 84.2 of the BIA does not apply to the termination of the lease between Lodin and the bankrupt Danika Cheryl Elizabeth Tara Paterson "

[39] Section 84.2 of the BIA reads:

“84.2 (1) No person may terminate or amend — or claim an accelerated payment or forfeiture of the term under — any agreement, including a security agreement, with a bankrupt individual by reason only of the individual’s bankruptcy or insolvency.

Lease

(2) If the agreement referred to in subsection (1) is a lease, the lessor may not terminate or amend, or claim an accelerated payment or forfeiture of the term under, the lease by reason only of the bankruptcy or insolvency or of the fact that the bankrupt has not paid rent in respect of any period before the time of the bankruptcy.”

...

[40] In this case, the termination of the lease occurred by operation of the RTA Orders by the failure of the Bankrupts to void the termination of the lease by the operation of the RTA Orders, prior to their Bankruptcies, or after. In this case, the additional failure of the Bankrupts to continue to pay rent after the Bankruptcy, makes this a situation where the termination of the lease is not “…by reason only of the bankruptcy or insolvency or of the fact that the bankrupt has not paid rent in respect of any period before the time of the bankruptcy.”

[41] In my view, as the Bankrupts have admitted they have taken no steps to void the RTA Orders before their Bankruptcies, and have admitted they have paid no amounts to the Landlord in the 4 months after their Bankruptcies.

[42] In addition the Landlord has proven that he has suffered prejudice in the 4 months since the Bankruptcies by having to continue to pay the carrying costs on the Property and that each month that liability and the Landlord’s prejudice continues to increase, with absolutely no evidence before the Court that this will ever change.

[43] In addition, as I have found above, the Bankrupts, by claiming rent as expenses on the Statements of Income and Expenses provided to the Trustee, despite paying no rent post- Bankruptcy to the landlord, are in breach of their duties under s.68 and s.158 of the BIA, and this is also resulting every month with an increasing unpaid surplus income obligation to the Trustee by each Bankrupt, as long as this situation continues unresolved.

[44] I find that the Landlord has satisfied the test to be met on the motions and that there is basis for the orders against each of the Bankrupts and sound reasons to grant those orders, consistent with the scheme of the BIA.

[45] Accordingly, for these reasons, and exercising my Registrar’s Discretion I have determined that the orders requested in the motions are properly granted and I have signed the appropriate orders in each of the Bankruptcies.

[46] Nothing in this decision purports to affect the future rights of either Bankrupt or the Landlord under the RTA which has the jurisdiction to deal with residential tenancies issues, and this decision is limited to the lifting of the stay requested with respect to the termination of the Lease between the Landlord and the Bankrupts, to permit the enforcement of the terms of paragraphs 3 and 4 of the RTA Orders, as requested by the Landlord on these Motions.