Top 10 condo law cases of 2010
Ontario’s courts and tribunals were busy this past year with condominium matters. We reported on over 35 decisions on our microblog over the course of 2010. Here are our picks for the top 10 cases of the year.
#10 -- Lexington on the Green Inc. v. Toronto Standard Condominium Corporation No. 1930, 2010 ONCA 751
The Ontario Court of Appeal held that a condo corporation cannot use Condo Act s.112 to terminate an agreement for the corporation to purchase the superintendents’ unit from a developer where the obligation to enter into such an agreement is set out in the declaration. This is a game-changing decision that can drastically affect a condo corporation’s finances. According to Bob Aaron, new condo buyers must be extraordinarily careful in reviewing the disclosure materials and draft declaration before signing on the dotted line. Caveat emptor -- Buyer beware.
#9 -- Essex Condominium Corporation No. 89 v. Glengarda Residences Ltd, 2010 ONCA 167
In another case dealing with disclosure, the Ontario Court of Appeal overturned a trial judge’s ruling that the condos’ developer failed to adequately disclose that the HVAC system serving the shared facilities was leased. The court then set aside the trial judge’s award of damages made under Condo Act 1990, s.52 (replaced by Condo Act 1998, s.133). While the disclosure statement did not reveal the terms of the lease, interest rate or cost of the equipment, it clearly revealed that the equipment was leased and gave what turned out to be a fairly accurate estimate of the cost. This was held to be sufficient disclosure that the HVAC equipment was not owned by the condo corporation. While it was challenged by the developer/appellant, the court upheld the earlier case of Wellington Condominium Corp. No. 61 v. Marilyn Drive Holdings Ltd., 1998 CanLII 2289, which is the leading case on false and misleading statements under the Condo Act.
#8 -- McFlow v. Simcoe Condominium Corporation No. 27, 2010 ONSC 6260
A mortgagee’s bid to remove and replace the court-appointed administrator of a deeply troubled condo corporation was denied. The administrator was appointed a year earlier at the behest of that same mortgagee and while things were moving slowly, there was demonstrable improvement and no evidence of mismanagement as before. The test for removing a court-appointed administrator of a condominium is the same as the test for appointing one under Condo Act, s.131.
#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.
