Ontario Condo Law Blog : Toronto Condominium Lawyer & Attorney : Gardiner Miller Arnold Law Firm : Ontario, Ottawa, Hamilton, Kitchener

The transitional details are simple enough. Section 32 of the new Public Inquiries Act, 2009 provides that inquiries commenced under the prior Act will continue to be governed by that prior Act. Inquiries commenced (or condominium inspectors appointed) on or after June 1, 2011 will be subject to the Public Inquiries Act, 2009.

The appointment of a condominium inspector is rare, but we know that one is currently working at MTCC 710 in Toronto. This was a problem condo we reported about in April 2010, when an application to appoint an administrator was pending and later granted by the Superior Court under section 131 of the Condo Act. That administrator subsequently applied for and was given an appointment as an inspector under section 130 of the Condo Act in an unreported decision dated January 5, 2011. One would presume that the administrator required the powers of an inspector to investigate possible irregularities in the finances or records of that condominium or gather information needed to properly administer that condo's affairs.

Because of the extraordinary high cost of appointing someone as an administrator or inspector and then the cost of that person fulfilling their mandate, appointments under sections 130 and 131 are best reserved for the most dire situations as a final option or where the amounts at issue are extremely large. Even where the need is great or the cost is justified, the sad fact is that these appointments are no more than a reactive measure to try and fix a situation that has gone horribly wrong and which has probably arisen because adequate preventative measures and vigilant oversight by owners and auditors did not exist or have failed.

If an inspector has been or is sought to be appointed at your condominium, your condo is quite probably in serious trouble and you should closely monitor the situation, band together with a group of concerned neighbours and get legal advice.

If you are a prospective purchaser and notice in the condominium status certificate that an inspector has been appointed over the corporation under section 130 or that such an application is pending in court, you may wish to seriously consider your purchase before the deal becomes firm. Run, don’t walk, to your lawyer’s office.

#7 -- Jia v. Toronto Standard Condominium Corporation No 1479, 2010 ONSC 3433

A Toronto condo was found liable and ordered to pay $50K for assault and battery when its superintendent physically ejected a “trespasser.”  There is nothing new about the concept of employers being vicariously liable for the acts and omissions of their employees, but the brutal assault in this case is noteworthy. See our case comment and our quotes in the Law Times.

#6 -- East of Bay (2003) Development Corp. v. MPAC, 2010 ONSC 3337

Assessing property for tax purposes is a lot like making sausages – you probably don’t want to see how it’s done.   In this case brought by the condo developer to set aside MPACs assessment for the first two years of the condo’s existence and for a refund of all taxes paid, the court slapped MPAC for its "questionable" two-stage property tax assessment process for new condo units. The fact that MPAC was understaffed and unable to cope with a deluge of new condos on the market was no justification for using a two-stage assessment not expressly permitted by the Assessment Act, s.33(1).

#5 -- Metropolitan Toronto Condominium Corporation No. 675 v. Unit Owners, (unreported)

A condo corporation successfully obtained a court order to amend its declaration to unitize and sell an unused superintendent’s suite despite opposition by at least one unit owner. While it’s good to see a court stepping up to fill the void where needed, it’s troubling that a court might override the requirement in the Condo Act for a large majority of unit owners to democratically approve amendments to the declaration, which could include drastic plans to unitize and sell off common elements, a difficult and controversial decision. It is not clear what percentage of owners supported the amendment in this case as there are few facts set out in the court’s endorsement or the case comment by the condo’s counsel. This type of scenario is arguably addressed more appropriately by a change to the Condo Act rather than judicial intervention.

#4 -- Nipissing Condominium Corporation No. 4 v. Kilfoyl, 2010 ONCA 217

The Ontario Court of Appeal affirmed that single family occupancy restrictions in a condominium declaration do not violate the Ontario Human Rights Code.  While the court’s reasons were sparse, this troubling issue is now definitively answered. We can tell that the Ontario Human Rights Tribunal is listening because they relied on the court’s decision in throwing out a human rights complaint made by that same unit owner on the same issue (see 2010 HRTO 1036).

#3 – TIE: Metropolitan Toronto Condominium Corporation No. 985 v. Vanduzer, 2010 ONSC 900 and Kilfoyl v. Nipissing Condominium Corporation No. 4 (re costs), 2010 ONSC 6023

In cases where unit owners are responsible to fully indemnify their condo corporation for the legal costs of enforcing the declaration, by-laws and rules under Condo Act, s. 134(5), the court can order that the lawyers’ accounts be assessed.  By so doing, the court can ensure that cases are not “overlawyered.” See our case comment on Vanduzer and, for a case applying this principle, see Peel Condominium Corp. No. 452 v. Jaworowski, 2010 ONSC 4567, where the court reduced the recoverable legal costs by a whopping 66% after finding that the corporation’s lawyers had “over-resourced” a condo lien enforcement case.

#2 -- Weinberg v. Metropolitan Toronto Condominium Corporation No. 1019, 2010 HRTO 1527

The Ontario Human Rights Tribunal dismissed a unit owner's complaint about the condo’s enforcement of a “no pets clause” where an arbitrator appointed under the Condo Act had already considered the complainant’s disability and ordered the dog's removal. The case reminds us that every litigant has only one “kick at the can.” An arbitrator’s ruling on an issue cannot be revisited by another tribunal.   Similarly, in Atkinson v. Essex Condominium Corp. No. 5, 2010 HRTO 123, the Human Rights Tribunal ordered a unit owner’s complaint over a “no pets” clause to be deferred pending the outcome of the condominium corporation’s concurrent enforcement application to the Superior Court. Multiplicity of proceedings should be avoided.

#1 -- Metropolitan Toronto Condominium Corporation No. 747 v. Korolekh, 2010 ONSC 4448

This was unquestionably the top newsmaker of the year. After hearing evidence of a condo unit owner's bizarre behaviour including verbal assaults, besetting and menacing others with a dog, the Court found the unit owner to be "incorrigible, unmanageable" and ordered her to sell her unit.   See our case comment, our article in Condo Business and our quotes in the Toronto Star and the Law Times.  This appears to be only the fifth Ontario case where a sale order was given. The rarity of such orders was underlined in another 2010 case called Condominium Corporation No. 8110264 v. Farkas, where the Alberta Court of Appeal ruled that evicting condo unit owners is an extraordinary remedy, to be granted only when other incremental remedies fail. 

BONUS:   Lahrkamp v. Metropolitan Toronto Condominium Corporation No. 932, (unreported)

As another instalment of a long-running dispute between a unit owner and his condo corporation, an October 2010 decision of the Ontario Small Claims Court explores the issue of owners’ right to inspect records under Condo Act, s.55. The court rejected the argument that every request for records must be accompanied by a reason for the requested records, but held that the right of a corporation to refuse records may be appropriate where the actual motivation behind the request is being challenged, or the burden and expense to the corporation is a serious issue. Each request must be considered on its own merits. A number of requests for different sorts of records are then raised and decided. 

Thanks for reading our blog this year. Have a happy and healthy 2011.

Because the board did not call a meeting in response to the requisition they received in early March, the owners exercised their right under s. 46(5) of the Condo Act to call the meeting themselves. In the days before the scheduled owners’ meeting, the board brought a motion to restrain that meeting until the application to appoint an administrator could be heard. The motion was heard the day before the meeting and the court released its decision on the day of the meeting.

After assessing the circumstances and applying the legal test for granting an injunction, the court found:

1.   There were was a serious issue about whether an administrator should be appointed on account of “the financial problems of the corporation, coupled with the factionalism amongst unit owners and significant governance difficulties”.

2.   There may be irreparable harm if the owners’ meeting proceeded. “The holding of a meeting to elect a new board of directors has the potential to add further instability and uncertainty to an already difficult situation.” Further, the owners calling for the meeting (and, presumably, those planning to run for the board) had filed no plan to deal with the financial crisis.

3.   The balance of convenience favoured delaying the owners’ meeting. “To permit the meeting to proceed inevitably would only add a further layer of litigation to this dispute and increase legal fees.”

Finding that the legal test had been met, the court granted an injunction restraining the requisition meeting, but ordered a two week “cooling-off period” and gave this helpful suggestion:

I encourage the unit owners to put aside their personal disputes and obvious differences and to use the next two weeks to meet informally to try to come up with a realistic plan to address the real financial problems that are staring them in the face. Hard decisions must be made – either significantly cut expenses, or significantly raise common fees, or both. Inaction is not an option. If the level of distrust amongst the unit owners is too high to permit reaching a solution, then perhaps they should think about appointing an administrator who can make the tough decisions for them. I will give the unit owners two weeks to engage in this kind of “reality check” and to explore a common solution.

While sensible, it is unclear whether the cooling-off period will be beneficial or whether the parties at this condominium could ever solve their own problems. Here are three reasons why I would be pessimistic:

First: The opposing owners might not see reality as the rest of us do. The court noted that the unit owners appeared to misapprehend the role and function of the administrator – They seemed to think that the administrator would follow the wishes of the owners. The court also noted that the owners appeared not to fully appreciate the severity of the financial issues facing their condo. While they opposed the board’s decision to download electrical costs to the units, the owners provided no alternative solution to the looming cash crunch.

Second: Indecision, slow action and poor transparency by the board. While the court had little to say about the board, part of the “distrust” by the opposing unit owners likely came from the board being unresponsive to requisitions, which often gives the appearance of being secretive or uninterested in the owners’ concerns. Similarly, the board’s delay in commencing the application for appointment of an administrator probably allowed the situation to fester, adding more fuel to the conflict.

Third: The desperate situation facing this condo probably arose, in part, from apathy. The most recent AGM, for example, did not proceed because quorum was not met, which seems incredible considering that the condo is almost $5 million in the red and had posted a quarter-million dollar loss in its most recent year-end. Owners being asleep at the switch often leads to catastrophe.

In all the circumstances, it seems wise for the court to have ordered the application appointing an administrator to be heard prior to any vote for removal of directors. It is just regrettable that the animosity between these parties made these steps necessary, adding further woe to a community already in crisis.

See: MTCC 710 v. Unit Owners, 2010 ONSC 1873 (CanLII)