Ji Zhou and Zili Lu v. Hashem Nia and Abaie

Decision 1: Withdraw the LTB application first — clear the jurisdictional decks before commencing in Superior Court

The conventional response to a stalled LTB proceeding is to wait for the set-aside motion to be heard, accept whatever timeline that produces, and continue with rent accruing in the meantime. That approach would have left the LTB orders extant and given the tenants two doctrinal hooks for jurisdictional defence: res judicata (an extant LTB order on the same subject matter) and forum shopping (parallel proceedings).

We withdrew the LTB application instead. The withdrawal took effect June 1, 2023. From that point forward, there was no extant LTB order, no parallel proceeding, and no live application before the Board. The tenants subsequently disputed whether the withdrawal had been formally completed by reference to the lack of a hard-copy notice; Brown J. rejected that as “form over substance, designed to attempt to delay the defendant’s payment of the arrears owing” (para. 11), citing the LTB adjudicator’s confirmation at the August 15, 2023 attendance that the withdrawal had been “successfully filed and the landlord’s application had been withdrawn as of June 1, 2023.” Withdrawing the LTB application before commencing the Superior Court action removed both res judicata and the forum-shopping framing in advance, before the tenants could deploy them.

Decision 2: Anchor on RTA s. 207(2) — not on s. 207(3)

The tenants’ principal jurisdictional defence was an aggressive reading of s. 207(3): once a party makes a claim before the LTB for an amount within the Board’s monetary jurisdiction, all rights of the party in excess of that monetary jurisdiction are extinguished once the Board issues its order. On that reading, the landlord’s decision to go to the LTB at all foreclosed any later claim above $35,000 — permanently.

We did not litigate s. 207(3) on its merits. Instead we anchored on s. 207(2), which expressly authorizes a Superior Court action where a claim exceeds the Board’s monetary jurisdiction, and on the dispositive point that the LTB orders had been withdrawn before the Superior Court action started. Brown J. accepted both points at paras. 22–24. On s. 207(3) specifically, Brown J. noted that the tenants’ reading was “untenable, unjust and contrary to the interests of the administration of justice” (para. 24) — but more importantly, “in this case, that is not the issue. Rather, the issue is that the order is no longer extant.” The s. 207(2) anchor avoided the need to win a contested doctrinal point; the withdrawal made s. 207(3) factually inapplicable.

Decision 3: Move on summary judgment under Hryniak — the tenants’ defences were doctrinal, not factual

The factual question in this case — did the tenants pay rent? — was not in dispute. The tenants offered no evidence of payment. They offered no reasons for non-payment. Their defences were entirely jurisdictional: s. 207(3) waiver, res judicata, abuse of process. Where the contested issues are doctrinal rather than factual, summary judgment under Rule 20 is the right vehicle, and a trial would add 18–24 months without any benefit on the substantive question.

Brown J. accepted summary judgment was appropriate at paras. 18–19, citing Hryniak v. Mauldin, 2014 SCC 7. On the res judicata defence, Brown J. applied the two-step test from Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44: the LTB’s decision was not final because the eviction order had been stayed by the tenants’ own set-aside motion, and then the underlying application was withdrawn before the set-aside motion could be heard. No final substantive decision on the same issue. The abuse-of-process defence was rejected without merit. With the doctrinal defences gone, the factual record (no rent paid for 16 months, no defence on the merits, no evidence of inability to pay) was straightforward.

Decision 4: Resist the eve-of-hearing settlement offer with no evidentiary support

At the summary judgment hearing, the tenants offered for the first time to settle by using their vacation property in St. Kitts as collateral for the arrears — but capped at $35,000 (the original LTB jurisdiction cap, well below the actual arrears). Counsel for the tenants explained the proposal was driven by Covid-era business hardship and a Canadian travel advisory preventing the tenants from selling property in Iran. No evidence was tendered to substantiate any of these representations. We pressed that absence of evidence and the urgency of mounting arrears. Brown J. did not accept the offer as a basis for staying or modifying summary judgment. Eve-of-hearing offers without evidentiary support, on a motion driven by ongoing financial harm to the moving party, are properly treated as a continuation of the delay tactic identified earlier in the proceeding.

1. Section 207(2) of the Residential Tenancies Act, 2006 is the doorway to Superior Court when arrears exceed the LTB cap. Section 207(2) expressly authorizes a Superior Court proceeding where a claim exceeds the Board’s monetary jurisdiction, and gives the court power to exercise any powers the Board could have exercised. That includes ordering payment, terminating the tenancy, and issuing a writ of possession. Once arrears exceed the LTB’s jurisdictional cap, the LTB process is rarely the fastest path; the Superior Court via summary judgment routinely is.

2. Withdraw the LTB application before commencing the Superior Court action. Leaving an LTB order extant while a Superior Court action is commenced gives tenants two doctrinal defences they would not otherwise have: res judicata (on the extant LTB order) and forum shopping (on the parallelism). Withdrawing the LTB application removes both before they can be deployed. The withdrawal need not be reflected in a hard-copy notice for the timing to take effect; the LTB’s confirmation that the request was successfully filed is sufficient.

3. RTA s. 207(3) does not extinguish above-cap rights when there is no extant LTB order. The aggressive reading of s. 207(3) — that going to the LTB at all extinguishes any future claim above the cap — was rejected by Brown J. as “untenable, unjust and contrary to the interests of the administration of justice.” But the dispositive point in this case was that the order was no longer extant by the time the Superior Court action proceeded. Landlords should be aware that aggressive readings of s. 207(3) may be raised, and should be prepared with both the doctrinal counter-argument and the factual answer that the order has been withdrawn.