Executive Summary: Key Legal and Evidentiary Issues

• Whether a stay of proceedings under the Bankruptcy and Insolvency Act (BIA) should be lifted to allow a creditor’s claim to proceed before the Landlord and Tenant Board (LTB).

• Determination of whether a creditor’s claim for damages and unpaid rent should be admitted as a contingent claim in the proposal.

• The court's authority versus the LTB’s jurisdiction to value and decide landlord-tenant disputes.

• Assessment of whether the debtor acted in good faith and made full disclosure in her proposal documents.

• The creditor’s attempt to bypass the LTB process by invoking section 135 of the BIA for claim valuation.

• The implications of a contingent claim on the administration and dividend distribution in proposal proceedings.

Facts of the case

Raven Wendy Suzann Farrow filed a consumer proposal under the Bankruptcy and Insolvency Act (BIA) on November 14, 2023. Marc de la Courneuve, who claimed to be her former landlord, alleged that Ms. Farrow owed him unpaid rent and caused malicious property damage. He had initiated proceedings against her before the Landlord and Tenant Board (LTB), with a hearing scheduled for May 2024. However, those proceedings were stayed due to the filing of her proposal.

Mr. Courneuve was unaware of the proposal until May 2024, when he was informed by the Trustee. He filed a claim with the Trustee, which was initially flagged as contingent, later accepted, then reverted to contingent again due to the lack of a judgment from the LTB. The Trustee explained it could not value the claim because Ms. Farrow had filed a defense in the LTB proceeding, making it a disputed claim.

In February 2025, Mr. Courneuve had brought a motion to annul the proposal, which was dismissed by Justice Kershman. He brought a second motion in July 2025 seeking, among other relief, to lift the stay, force the Trustee to value his claim, and request a ruling under sections 178 and 198 of the BIA that the debt not be released. The latter request was later withdrawn.

Outcome of the decision

The motion was heard by Associate Justice Perron. The Court held that the LTB was the appropriate forum to determine the landlord-tenant dispute and to assign a value to Mr. Courneuve’s claim. The Trustee’s position—that the claim could not be valued without an LTB decision—was accepted. The Court rejected Mr. Courneuve’s assertion that the Court or Trustee should directly assess the claim, especially in the absence of any documentary evidence such as pleadings, receipts, or invoices.

All parts of Mr. Courneuve’s motion, except the request to lift the stay, were dismissed. The Court granted his request to lift the stay under section 69.4 of the BIA, finding that he would be materially prejudiced if the LTB could not proceed and make a determination. It emphasized that it was equitable and in the interests of all proposal stakeholders to allow the LTB to value the claim so that the Trustee could continue administering the proposal and distribute dividends accordingly.

Ms. Farrow opposed the motion, arguing that she acted in good faith, always dealt with Mr. Courneuve’s father, and paid rent in cash. She further contended that Mr. Courneuve’s repeated attempts to have the Court or Trustee value his claim, despite prior directions, were vexatious. However, the Court declined to rule on the substance of the LTB claim and made no findings on its merits due to a lack of evidence.

The decision clarified that no further motions should be brought within the proposal proceedings and that all landlord-tenant issues would be resolved solely by the LTB.