Executive Summary: Key Legal and Evidentiary Issues

• The Landlord and Tenant Board found that Mustafa Pakzad was never a tenant but an unauthorized occupant, and ordered his eviction and payment of compensation.
• Pakzad appealed and obtained a statutory stay, which was later conditioned on interim payment terms set by O'Brien J.
• Failure to comply with those payment terms — specifically, non-payment of the required $5,000 arrears instalment by October 15, 2025 — resulted in the stay being lifted.
• On review, Pakzad argued the LTB proceedings were void due to a defective Power of Attorney, but the panel found this argument went to the merits of the appeal and was not relevant to the stay conditions.
• Considerable deference is owed to a case management judge's discretionary orders; a review panel will only intervene for an error of law or a palpable and overriding error of fact.
• An occupant's inability to pay rent or arrears does not entitle them to remain in a rental unit without compensation, and a landlord is not required to subsidize their occupant.

Facts of the case

Mustafa Pakzad occupied a rental unit owned by Yen Pham (and Vinh Pham). By decision dated August 13, 2025 (2025 ONLTB 61586), the Landlord and Tenant Board (LTB) determined that Pakzad had never been a legal tenant and was an "Unauthorized Occupant" of the landlord's premises. The LTB fixed compensation payable by Pakzad at $5,775.84 for his use of the unit from March 16, 2025 to August 6, 2025, plus $40.11 per day thereafter, granted possession of the unit to the landlord, and delayed enforcement of the eviction order until after August 31, 2025. Pakzad appealed to the Divisional Court and obtained a statutory stay of the eviction order.

Payment terms and conditions of the stay

Following a case conference on October 7, 2025, O'Brien J. imposed interim payment conditions as a prerequisite for maintaining the stay pending appeal. Pakzad was directed to pay $1,220 as compensation for October 2025 on or before October 10, 2025, $1,220 on the first of every subsequent month beginning November 1, 2025, $5,000 toward arrears by October 15, 2025, and $3,001.14 on November 12, 2025 for the remaining arrears. Pakzad made the first payment of $1,220 by October 10, 2025, but failed to pay the $5,000 instalment or any amounts thereafter. The landlord then moved to lift the stay. On October 29, 2025, O'Brien J. — having accepted the landlord's uncontested evidence — lifted the stay on the basis that Pakzad had not complied with its conditions. Pakzad subsequently sought to have that order varied or set aside, ultimately bringing a review motion before a three-judge panel of the Divisional Court pursuant to s. 21(5) of the Courts of Justice Act, RSO 1990, c. C.43.

Court's reasoning and analysis

The panel affirmed that on a s. 21(5) review motion, considerable deference is owed to a case management judge's exercise of discretion; intervention is warranted only where there is an error of law, a palpable and overriding error of fact, or a decision so clearly wrong as to amount to an injustice (Rosen v. Reed, 2024 ONSC; Galaxy Real Estate v. Kirpichova, 2023 ONSC 593; Franchetti v. Huggins, 2022 ONCA 111, para. 5). The court emphasized that a review motion is not a "second kick at the can" and that it is not the panel's task to conduct a de novo hearing on appropriate payment terms.

Pakzad advanced two principal arguments. First, he contended that the LTB proceedings were void ab initio due to a defect in the landlord's Power of Attorney. The court rejected this, noting that: the argument may not have been raised before the LTB at all; if it was, the LTB's factual finding that the landlord was properly constituted is not subject to appeal under s. 210 of the Residential Tenancies Act; any defect in the Power of Attorney appeared readily curable; and, critically, even if the defect were fatal, Pakzad remained obligated to pay for his occupation of the unit regardless. Second, Pakzad argued the payment terms were unduly onerous, particularly given his financial circumstances. The court found this unpersuasive, observing that Pakzad had been occupying the unit without paying anything since March 2025, that he had not made a reasonable payment proposal to O'Brien J. at the appropriate time, and that the proper opportunity to negotiate terms was at the case management conference — not through iterative review motions. The court noted that Pakzad's monthly Ontario Works benefit was roughly $750, supplemented by family assistance to cover the monthly rate of approximately $1,220, and that his inability to pay arrears stemmed from personal financial reversals — including substantial veterinary bills and a cessation of employment — which, while sympathetically acknowledged, were not the landlord's responsibility.

Ruling and overall outcome

The Divisional Court (D.L. Corbett, McKelvey, and Schreck JJ.) dismissed the review motion, finding no reviewable error in O'Brien J.'s orders. The panel confirmed that the same principles applicable to tenants — requiring ongoing payment of rent and meaningful payments toward arrears as a condition of maintaining a stay pending appeal — apply equally to unauthorized occupants. The respondent landlord, Yen Pham, was the successful party. No costs were ordered.