Executive Summary: Key Legal and Evidentiary Issues

• Appellants Breen Agnew and Carissa Dupuis sought to evict long-term tenants by transferring a nominal 1% ownership interest in the property from their corporation to themselves, then serving an eviction notice under s. 48 of the Residential Tenancies Act, 2006.
• Section 48(5) of the Act restricts the use of owner-occupation evictions to individual landlords, expressly precluding corporations from invoking this remedy.
• Applying s. 202 of the Act, the LTB found the real substance of the ownership transfer was to evade the corporate prohibition in s. 48(5), and concluded the appellants acted in bad faith.
• On appeal, the Divisional Court found the appellants failed to identify any error of law, as their arguments largely sought to re-argue the facts.
• No right of appeal existed from the Motion Decision, as the denial of an extension of time to seek a review is not a final decision.
• Costs of $3,500 (all inclusive) were awarded to the respondents in the agreed-upon amount.

Facts of the case

Tim Bourgette and Midori Myamoto had been tenants of a rental unit in a mixed-use building for more than fifteen years. For most of that period, the property was 100% owned by Dupuis Agnew Holdings Inc., a corporation wholly owned by Breen Agnew and Carissa Dupuis. The respondents signed their lease with the corporation and paid rent to it throughout the relevant period.

On September 25, 2024, Agnew and Dupuis arranged for the transfer of a 0.5% ownership interest in the property from the corporation to each of them — a combined transfer of 1%. Less than a week later, they served the respondents with an eviction notice naming themselves as the landlords, and subsequently filed an application at the Landlord and Tenant Board (LTB) to evict the respondents under s. 48 of the Residential Tenancies Act, 2006, S.O. 2006, c. 17.

Statutory provisions at issue

Section 48 of the Act permits a landlord to terminate a tenancy where the "landlord in good faith requires possession of the rental unit for the purpose of residential occupation for a period of at least one year." However, s. 48(5) limits the use of this provision to individual landlords — corporations are expressly precluded from relying on it.

Section 202 of the Act requires the Board to ascertain the "real substance" of all related transactions and the good faith of the participants when evaluating such applications.

Court's reasoning and analysis

Following a full hearing that included testimony from Agnew, the LTB dismissed the eviction application. Applying s. 202, the Board found that the real substance of the 1% ownership transfer was to evade the prohibition in s. 48(5) and concluded the appellants had acted in bad faith. The LTB held that the true landlord remained the corporation, and that the appellants were therefore not entitled to invoke s. 48.

The appellants were late in requesting a review of the LTB's Decision and required an extension of time to do so. That request was denied by the LTB. They then appealed both the original Decision and the Motion Decision to the Divisional Court, the latter being the denial of the extension of time to seek a review.

On appeal, Justice Matheson granted an extension of time to appeal the Decision, finding a reasonable explanation for the delay and concluding that the interests of justice favoured deciding the matter on its merits. The appeal itself, however, was limited to questions of law, including issues of procedural fairness.

The court found the appellants had not demonstrated any error of law. Their arguments — including that there was no evidentiary basis for the s. 202 finding, that the Decision failed to address the good faith test under s. 48, that multiple landlords could exist, and that no minimum ownership threshold is required — were all rejected. The court found ample factual support for the LTB's conclusions: the appellants had deliberately chosen to use a corporation when purchasing the property to benefit from corporate ownership advantages, instructed their accountant to transfer a nominal interest just days before commencing eviction proceedings, and allowed rent payments to continue flowing to the corporation throughout. As for the Motion Decision, the court noted there was no right of appeal from a denial of an extension of time to seek review, as it does not constitute a final decision.

Ruling and outcome

The Divisional Court dismissed the appeal from the Decision. The respondents, Tim Bourgette and Midori Myamoto, were the successful parties. Costs were awarded in their favour in the agreed-upon amount of $3,500, all inclusive.