you have to make sure that your house states: multiple family residence... if the time you bought it , on the Agreement of Purchase and Sale, states :"single family residence",, then you have a trouble... because that means, the house should not be rent it out...
Expose your court case number here, then everyone can check her name. In which court did she sue you? Small claim court or Ontario Rental House Tribunal?
What is the most important in this case is witness! Even though you have some pics, she can still accuse that you made that up. But witness will be more helpful. You need to find your tenants who would like to prove her misbehaviors. And also, you can find the police who handled your case in different times. At last, you can try to find her previous landlord to prove that she did all these on purpose.
All of single house allow maximum 3 homestay students, or 2 unit families in GTA, you also can rent as sharing room if your house is in downtown, or in 10minutes walking distance from a college or university. what ever where the house is, semi-detached or detached, but a town-house can not have a second kitchen inside, a housee with 3 kitchens is illegal.
1400sq town house can be used for 9 people? that is a lot. I knew somebody in downtown rent her town house to 6 people, and her town house is 2500sqf, she got a lots trouble from the city and the fire department because the complain from her neighbor. Town house is connected to each other, is very easy to get complain form neighbor and get fined.