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

#8 -- McFlow Capital v. Simcoe Condominium Corporation No. 27, 2011 ONSC 7389

The number of condominiums under court administration has grown over the past year, as has the number of reported decisions dealing with appointment of administrators and related issues.   In this case, a motion for directions in an ongoing case that was named #8 in our top 10 list last year, the court gives useful guidance as to the materials that must be prepared and filed when condo administrators seek approval of the reports of their activities and the accounts for their fees and their lawyers’ fees.   This is a good read for anyone trying to understand how a court-appointed administrator should report their activities and fees and the principles behind a court’s approval of those reports and accounts.

#7 – Three-way tie:  Walji v. York Condominium Corporation No. 455, 2011 HRTO 1365, Parkinson v. Carleton Condominium Corporation #43, 2011 HRTO 1209 and Dai v. Metropolitan Toronto Condominium Corporation No. 971, 2011 HRTO 876

Here’s proof that the Ontario Human Rights Tribunal has become an increasingly popular venue for frustrated condo unit owners to bring grievances against condo boards and property managers.   These are just three cases among a whole bunch of complaints that were summarily dismissed as not disclosing an actionable human rights violation or as having no prospect of success.  The first case relates to statements by a board member that the owner’s unit smelled of urine. The second case alleged harassment when the condo required unit owners to remove protective weather stripping from their unit doors.  The third case was brought by a married woman offended by the condo president addressing her as “Miss.”  While these three cases were dismissed, the unit owners who brought them felt sufficiently aggrieved by shoddy treatment by the board or management.  Condos can and should avoid these kinds of proceedings by treating their owners respectfully and managing disputes more proactively.

#6 -- Jakobek v. Toronto Standard Condominium Corporation No. 1626, 2011 HRTO 1901

Just because complaints to the Human Rights Tribunal are often unmeritorious doesn’t mean they can be ignored.  In this case, the condo corporation and its management firm failed to provide a meaningful response and did not participate at the hearing of a unit owner’s complaint related to the condo’s refusal to accommodate a disabled person.   After hearing the unit owner’s evidence (no one from the condo attended), the Tribunal smacked the condominium and its management firm with a $5,000 fine, ordered the condo to amend its bylaws to permit parking mobility-assisting scooters in the garage and ordered the condo and its manager to read up on the duty to accommodate.   Condo corporations that don’t actively respond to and manage HRTO proceedings are playing with fire.

#5 --  Pantoliano v. Metropolitan Condominium Corporation No. 570, 2011 HRTO 738

This was a human rights complaint by a unit owner over condo pool rules that set separate swim hours for kids, prohibited children under age 2 from using the pool and completely banned diapered individuals (baby or adult).  The Tribunal confirmed that age restrictions in recreational facilities at condominium complexes are discriminatory on the basis of family status and consequently struck down the offending rules and awarded the complaining unit owner $10,000 as damages injury to her dignity, feelings and self-respect in response to a hostile environment created by the board during the proceedings.  This case reminds us that the concept of adult-only buildings is utterly dead in Ontario.

#4 -- Waterloo North Condominium Corporation No. 168 v. Webb, 2011 ONSC 2365

In what is probably only the fifth case of its kind, the Ontario Superior Court granted the extraordinary remedy of forcing a unit owner to sell and vacate a condo unit.  In this case, featuring a very brief decision, the court cited years of aggression, violence, threats, vandalism by the unit owner as justification for the remedy.   What’s noteworthy is that this case, like the Korolekh decision of 2010, appears to have been decided on its first appearance, but for an even more modest cost.  This case is a good example of how an efficient, economical and effective compliance application can deal with anti-social behaviour by problem unit owners.    More like these will follow.

#3 -- Pate v. Sinclair, 2011 ONSC 3997

Condo resale agreements often include a condition allowing the purchasers to back out of the deal if their lawyer is not happy with the status certificate issued by the condo corporation.  At issue in this simple discovery motion in a lawsuit over an aborted condo purchase was whether purchasers must answer questions about their lawyer finding the status certificate to be unsatisfactory.  In a nutshell, while a lawyer’s opinion and advice to purchasers would normally be protected by lawyer-client privilege, the privilege related to the opinion itself was waived by the purchasers when they pleaded in their defence that they relied on the lawyer’s opinion in terminating the transaction.  Any advice given by the lawyer as to whether the agreement could legally be terminated would be protected by privilege, but issues surrounding the purchasers’ instructions to their lawyer to terminate the transaction and the issue of “whether” the lawyer gave any advice are not protected and questions about those aspects must be answered.  While it’s not very sexy, this case is a gem for real estate litigators who will get busier when the local real estate market corrects and purchasers seek to nix their deals.  The case also reminds purchasers relying on this clause that they cannot use it in a capricious manner or in bad faith. 

#2 – Schneeberg v. Talon International Development Inc., 2011 ONCA 687

In a case related to the new Trump Tower in Toronto, the Ontario Court of Appeal agreed that a purchaser was entitled to terminate his new condo purchase agreement because the developer failed to provide occupancy and close the transaction on the specific closing date set out in the agreement.   After a good overview of the law of contract interpretation, the court said that “[t]he proper functioning of the complex and rapidly growing condominium industry depends on agreements that set out all rights and obligations of the parties in a clear fashion.”   Purchasers at other projects shouldn’t get too excited, however, because the wording of the contract in this case had a gaping hole through which the lucky purchaser beat a hasty retreat when the project got delayed and the economy turned south.    “The Donald” likely isn’t very happy with the lawyers who drafted the agreement for this project.

#1 -- Orr v. Metropolitan Toronto Condominium Corporation No. 1056, 2011 CanLII 66010 (ONSC)

Weighing in at 422 paragraphs on 75 pages, it’s only fitting that this behemoth decision, the product of 12 years of litigation ending in 40 gruelling days of trial, makes the top of our list.    At issue in the case was an unauthorized third floor built into the common elements by a previous owner who sold the unit to a purchaser who believed that the third floor was part of her unit.  See Bob Aaron’s column for a short summary of the facts.  To briefly summarize the result, the court dismissed the purchaser’s claim for an order legitimizing the third floor, granted the condo’s request for an order requiring the purchaser to close up the third floor, and awarded damages against the purchaser’s lawyers for negligence in failing to check the floor plans and tell the purchaser that the third floor was not part of the unit.   This single case is worth an entire series of smaller posts on a large number of issues, chief among them being the higher standard by which lawyers will be held in handling condo purchase transactions.  The effects of the case are only beginning to manifest themselves in the real estate bar and will likely give rise to an increase in costs for consumers.  Rumour has it that this case has been appealed, making it possible that our Court of Appeal might comment on some of the more salient legal issues, so there will likely be more that we can write about in the future.

And that concludes our list for this year!  Which of these cases are your favourites?   Would you have chosen any different cases?   Do you have any observations about the trends in the cases we’ve chosen?  Submit a comment below to give us your two cents. 

For you impatient types who would rather not wait until next December to see the top cases of the coming year, follow @ChrisJaglowitz on Twitter and watch our microblog posts to receive frequent updates during the year.  

Thanks for following our blog this year and for all your comments, kudos and support.   Visit us again in January when we dust off our crystal ball and make some predictions about which issues will define condo law in 2012.

[35]  The costs incurred by the applicant in the application were for the purpose of obtaining compliance with the Act. I would fix substantial indemnity costs at $18,000 inclusive of disbursements. The applicant is entitled, however, to full indemnity, which would entail a top-up to costs on a scale as between a solicitor and his own client. In cases where an unsuccessful party is required to pay full indemnity costs to the successful party, there is an inherent danger of "overlawyering" a matter with the knowledge that it is the other party who will have to pay. I do not suggest that overlawyering has happened here. The matter was very ably prepared and argued by counsel for the applicant. On the other hand, a condominium corporation's right to full indemnity is not a carte blanche and the issue is whether the totality of the applicant's legal expenses in relation to this matter is reasonable and therefore recoverable from the respondent. On that point, the court is not in a better position to assess the matter than an assessment officer. I am therefore referring to the assessment officer the issue of full indemnity costs to be assessed as between a solicitor and his own client. The parties are at liberty, however, to agree to the quantum of costs to avoid the additional expense of the assessment.

Three points worth mentioning arise from this passage.

The first point is trite but important for unit owners and their lawyers to know: Condo corporations are typically entitled to 100% costs recovery when they go to court to obtain a compliance order against a unit owner or occupant. The concept that innocent unit owners shouldn’t be subsidizing costs incurred to deal with a guilty party is set out in section 134(5) of the Condo Act, which has been positively enforced by our courts.

Second, a court may direct that the legal costs incurred by a condominium corporation in obtaining a compliance order be assessed by an assessment officer. This helps ensure that lawyers acting for condo corporations do their work efficiently and ensure that their fees are reasonable. It is important to note, however, that the concept of a condo lawyer’s bills being subject to assessment is not new, and costs awards of this sort should not be referred to assessment as a matter of routine. That said, the parties should work together to review the materials and reach an agreement on costs whenever possible, particularly if there is some question about certain dockets or disbursements.

On this second point, unit owners who think that they can secure a sharp reduction in the legal bill by assessing the bill should think twice. While an assessment officer will closely scrutinize the condo corporation’s legal bills, there generally won’t be a significant reduction in the bill unless the assessment officer finds that the work described in the bills was related to other files, or that the handling of the case was inefficient, grossly excessive or demonstrably unnecessary. Moreover, the cost of the assessment process will probably consume any potential reduction that the unit owner might achieve. Indeed, the unit owner is properly responsible for these costs and is likely just adding to his or her own burden by insisting on an assessment.

A third point is that the $18,000 in costs awarded by the court in this case seems to be in line with other recent decisions. Consider the case of MCC 39 v. Kreutzweiser, another enforcement case decided this spring, where a $19,000 costs award was given against an occupant who refused to remove cats from his condo unit after the board deemed the pets to be a nuisance.

Consider also the 2008 case of Italiano v. TSCC 1507, where a unit owner fought with the condo over whether that owner was making too much noise in his unit. After fighting the case through arbitration and appeals, the owner ended up being responsible to pay the condo’s $80,000 bill, plus his own costs. We described that case previously here.

We’ve said it before, but it is worthwhile saying it again: Unit owners who choose to mount a serious defence to court applications brought by their condominium corporations for compliance orders are gambling with their financial security.

Before coming to court with some vague notion of entitlement or “an issue of principle,” unit owners should think long and hard about whether that notion or principle is worth $15,000 or more out of their pocket, and consider the impact of that cost to them and their family.  There's no need to join the ranks of people who have bankrupted themselves fighting over a dog, etc., in a condo unit. 

Condominium unit owners facing a problem with their condo corporation should do themselves a favour and get legal advice from a specialist in condominium law as soon as possible. That small investment will probably save tens of thousands of dollars and help avert financial catastrophe.

In that case, the unit owner complained to the Human Rights Tribunal that the president of the condo board had treated her poorly by insulting her and instructing the superintendent to provide inferior service to this owner. A number of similar complaints were made by other unit owners on the same grounds.

In finding that the complaint did not disclose any facts or particulars of prohibited discrimination, the Tribunal said the following, which is probably true of a large number of condo-related cases being filed at the Tribunal these days:

While conflict in the context of accommodation can deeply impact those affected, the Tribunal does not have a general jurisdiction to evaluate relationships between condominium corporations and unit owners or to resolve all situations of rudeness, bad treatment or unfairness that may exist in a condominium environment. The jurisdiction of the Tribunal is limited to hearing applications that allege violations of the [Human Rights] Code. With respect to accommodation, s. 2(1) prohibits discrimination because of race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sex, sexual orientation, age, record of offences, marital status, family status, disability or receipt of public assistance.

While it is clear that the applicant is having difficulties with her condominium environment, there is no allegation of discrimination on the basis of one or more of the grounds protected by the Code.

The Tribunal finds that the Application does not raise matters which the Tribunal has the power to decide. Accordingly, the Application is dismissed.

Even though a human rights complaint may be thrown out, as it was in this case, the story might not end there. A condo and its board or managers may yet face other proceedings in other forums. If unit owners feel sufficiently aggrieved by shoddy treatment and insults, they will likely continue their efforts to seek redress and they may, after a long fight, ultimately be successful.

Condo directors or managers who act disrespectfully or permit disrespectful conduct to take place can and should be held to account.  Similarly, condo corporations whose unit owners permit this type of toxic behaviour to pervade their environment will quite rightly bear the financial cost in some form or another and will suffer from a poor community spirit and atmosphere.

That said, unit owners who feel aggrieved by conduct of board or managers should pause, get legal advice and think carefully before launching any sort of legal proceeding. They should also keep in mind that the mediation procedure mandated by section 132(4) of the Condo Act might be especially well-suited to help resolve disputes where the issues are more social or interpersonal in nature than strictly legal or technical. Condo boards and managers would be wise to actively participate in the mediation process to find a solution in such cases at an early stage, before the issues fester and give rise to disruptive and costly diversions.

Unit owners, directors and managers should also consider whether an alternative approach to the traditional adversarial dispute resolution process might help them find a better resolution of a dispute with difficult people, be they owners, neighbours, board members, managers or others. One suggestion is to check out the famous and award-winning book (shown at right) by Professor Bob Sutton of Stanford University. The book describes a particularly sensible-sounding rule with a name that is unmentionable on this blog but is briefly described on Wikipedia here. This book might be good mandatory reading for anyone who lives or works in close quarters to other human beings.  

Do you think that your condominium corporation might benefit from passing the kind of rule suggested by Professor Sutton?   

Does anybody already have a rule like this?  How's it working out?   

What does it mean to owe someone a fiduciary duty? - Florida HOA attorney Donna Berger discusses this commonly-used term and the obligations of condo directors. In a separate post called What should be expected of owners in community associations? she then lists some basic obligations of unit owners that should be common sense but are forgotten or ignored too often.    Fairness is a two-way street.

ROC Boards Should Use Common Sense and Compassion When Enforcing Rules - Scott Gordon of the Florida Resident Owned Community blog cites a recent example of a board acting sensibly in a rule enforcement situation.

The Mezuzah Conundrum - Religious Fixtures on Common Element Doorposts - Bradley Chaplick of Fine & Deo illustrates a delicate scenario that requires a delicate touch when it comes to declaration and rule enforcement. 

Toronto-area readers may wish to get their snow shovels ready.   The winter weather is finally about to begin.