A former Toronto Community Housing Corporation tenant has been ordered to repay $68,595 in housing subsidies, pay $15,000 in punitive damages and cover $6,000 in legal costs after the Ontario Superior Court of Justice found that he knowingly concealed property ownership to obtain subsidized housing.
Justice John Callaghan made the order in Toronto Community Housing Corporation v. Yesus et al., 2026 ONSC 5262, released September 25, 2026. It was a civil default judgment following the striking of the defendant’s statement of defence. The reasons make findings of civil fraud; they do not record a criminal conviction.
The court granted the subsidy repayment and a punitive award but refused TCHC’s requests for higher interest rates and substantial indemnity costs.
Defence struck before default judgment
Abenezer Haile Yesus leased a TCHC unit from August 1, 2013, to December 31, 2022. The court found that he repeatedly failed to disclose property ownership when attesting to his financial eligibility, concealing assets that made him ineligible in the circumstances of this case.
TCHC’s investigation also uncovered subletting that breached the lease and the Housing Services Act, the judge said.
After Yesus failed to address the litigation, TCHC brought a motion on notice to strike his defence. Associate Justice McGraw granted that order on February 17, 2026, and awarded TCHC $2,700 in motion costs. Yesus was subsequently noted in default. That earlier costs order is separate from the $6,000 awarded in the September judgment.
No one appeared for the defendant on the default-judgment motion, which was heard in writing.
Default did not remove the need for scrutiny
Callaghan explained that a defendant noted in default is deemed to admit the allegations in the statement of claim. Even so, the court must scrutinize those admissions and the evidence, and decide whether the plaintiff has established both a cause of action and its damages.
On that record, the judge found that TCHC had established a breach of the legislation governing the subsidy and an obligation to reimburse benefits Yesus was not entitled to receive.
The court also found the elements of civil fraud, deceit and fraudulent misrepresentation established: a knowingly false representation, reliance by TCHC and a resulting loss. Callaghan concluded that Yesus knowingly misrepresented his property ownership to qualify for the housing subsidy, causing TCHC to lose $68,595. The judge ordered repayment of that amount.
Punitive damages, but no enhanced interest or costs
In awarding a further $15,000, Callaghan emphasized punishment, deterrence and denunciation. TCHC serves people with low incomes and has limited capacity, he reasoned. Taking benefits without entitlement harms people seeking its assistance, and the conduct required a punitive response.
The judge nevertheless treated the remaining requests separately. TCHC sought increased pre- and post-judgment interest, but Callaghan found no evidence justifying a departure from the rates prescribed by the Courts of Justice Act. The $68,595 compensation award will attract statutory pre- and post-judgment interest.
TCHC also sought costs on the higher substantial indemnity scale. Although the conduct warranted condemnation, Callaghan concluded that the punitive award had already served that purpose and that enhanced costs were unnecessary for it. He instead awarded $6,000 on a partial indemnity basis, finding that amount fair, proportionate and reasonably foreseeable to a person in the defendant’s position.
The costs and punitive damages awards also attract statutory post-judgment interest. The reasons do not say that any of the amounts have been collected.
The decision illustrates the separate assessment of compensation, punishment, interest and costs even in a civil default proceeding. Its findings about subsidy eligibility concern the facts before the court, rather than providing a general determination of other tenants’ eligibility.
