In Berger v. Kellett et al., 2025 ONSC 2859, the Ontario Superior Court of Justice addressed a question that occasionally arises when residential landlord-tenant disputes intersect with more complex property ownership claims: should a Landlord and Tenant Board (LTB) eviction proceeding be stayed while the Superior Court determines allegations of fraud, beneficial ownership, and breach of a rent-to-own agreement?
Justice McCarthy’s answer was a firm “no,” and his reasoning offers important insights for transactional lawyers advising clients on rent-to-own arrangements, tenancy agreements, and strategies for protecting property interests.
The Factual Background
The dispute centered on a property in Minden Hills. The plaintiff, Avi Berger, claimed he entered into a verbal rent-to-own agreement (RTOA) with James Kellett in May 2021. In 2023, the same parties entered into a residential tenancy agreement. Later that year, Kellett sold the property to Sammie Millis, who became the new legal owner.
When Berger allegedly stopped paying rent, Millis initiated an LTB application for non-payment in March 2024. Berger didn’t file his statement of claim until July 2024, i.e., four months after the LTB application was commenced. In his action, Berger sought a declaration of beneficial ownership based on the RTOA and alleged that he was coerced into signing the tenancy agreement through fraud, misrepresentation, and conspiracy by both Kellett and Millis.
Berger brought a motion to stay the LTB proceeding until the Superior Court could determine his ownership claim and the validity of the tenancy agreement.
The Legal Test for Staying Proceedings
The court applied the well-established test from Canadian Express Ltd. v. Blair (1992): a stay should only be granted where continuing the proceeding would cause injustice because it would be oppressive, vexatious, or otherwise abuse the court’s process. Special circumstances must exist to warrant such a remedy.
The court also considered factors outlined in Farris v. Staubach Ontario Inc. (2004), including the likelihood and effect of parallel proceedings in different forums, the possibility of conflicting results, potential double recovery, and possible delay.
Why the Stay Was Denied
Justice McCarthy denied the motion for several compelling reasons that transactional lawyers should note:
Jurisdictional Clarity: The court relied heavily on Warraich v. Choudhry, 2018 ONSC 1275, which established that the LTB and Superior Court have separate and distinct jurisdictions that can proceed simultaneously without risk of conflicting decisions. The LTB determines whether someone is a “tenant” and whether eviction is warranted for non-payment of rent. The Superior Court adjudicates equitable ownership interests, breach of contract claims, and fraud allegations. These are fundamentally different inquiries.
Timing Matters: Millis initiated the LTB application in March 2024 as a straightforward non-payment eviction, which is the most direct route available to a landlord facing a non-paying tenant. Berger didn’t commence his court action until four months later. The court rejected Berger’s characterization of the LTB proceeding as an “end run” around his Superior Court claim, finding instead that Berger was attempting to circumvent the LTB’s specialized jurisdiction.
Lack of Evidence: Despite alleging fraud, misrepresentation, conspiracy, and coercion, Berger offered “almost no evidence in support.” The allegations remained just that—allegations. This underscores the importance of gathering concrete evidence before launching litigation strategies that depend on serious misconduct claims.
Gross Injustice to the Landlord: Granting the stay would leave Berger in rent-free possession of the property for months or years while the action proceeded through discoveries and trial. The litigation was “barely out of the starting blocks.” No affidavits of documents had been exchanged and no discoveries scheduled. Meanwhile, Millis would remain responsible for taxes, insurance, and upkeep without receiving rent.
No Prejudice to the Tenant: The court found no real prejudice to Berger if the LTB proceeding continued. He could still pursue his beneficial ownership claim and seek remedies like a Certificate of Pending Litigation (CPL) to protect any interest in the land. If he ultimately proved his claims, damages would be available.
Practical Takeaways for Transactional Lawyers
Document Rent-to-Own Agreements Properly: Verbal RTOAs are recipes for disaster. Always reduce these agreements to writing with clear terms regarding purchase price, credits for rent paid, timelines, and conditions precedent.
Consider CPLs Early: If a client claims beneficial ownership of property, advise them to register a CPL immediately to protect their interest while litigation proceeds. The court specifically noted this option remained available to Berger.
Understand Jurisdictional Boundaries: The LTB’s specialized jurisdiction over tenancy matters cannot be easily displaced by commencing a Superior Court action. Advise clients that parallel proceedings can and often will proceed simultaneously.
Evidence Matters: Allegations of fraud and conspiracy require substantial evidence. Before advising clients to pursue litigation strategies based on such claims, ensure proper investigation and documentation.
Timing Is Strategic: The sequence of events mattered in this case. Millis initiated the LTB proceeding first as a routine landlord remedy. Berger’s subsequent court action appeared tactical rather than substantive.
The Berger decision reinforces that the LTB’s jurisdiction over residential tenancies remains robust even when ownership disputes are at play, and that strategic litigation cannot substitute for proper documentation and evidence.
