An owner brought a CAT application alleging she was experiencing unreasonable noise from a common element garage grate and unreasonable noise, odour, smoke and  vapour from a common element industrial vent.  At Stage 3, the condo made a preliminary submission that the CAT did not have jurisdiction to hear the dispute because it was a maintenance and repair dispute under ss. 89 and 90 of the Condo Act. 

The CAT partially accepted this:  while the grate issue was dismissed because it related to maintenance and repair, the exhaust from the industrial vent complaint could proceed to a hearing before the Tribunal.

The owner relied on s. 117(2) of the Act, which prohibits a person from creating or continuing unreasonable noise or any other prescribed nuisance to an individual in a unit or the common elements. Prescribed nuisances include odour and smoke; therefore the exhaust complaint fell within s. 117(2).  

The CAT accepted that s. 117(2) can apply to actions of the condo. In doing so, it acknowledged that a condo corporation can be held responsible for causing unreasonable noise or nuisance. Recently, the CAT has held that condos can be liable to owners for nuisances caused by common element security lights and fountain lights. 

This conclusion recalls two recently dismissed owner applications where the allegation was that infestations from other units or the common elements caused a nuisance and the condo was liable for not remedying the situation.  Afterall, if the CAT will deal with nuisances relating to lights or odours from the common elements why can’t it adjudicate nuisances from creepy-crawlies?  Two reasons: 

1.  Light and odour are a prescribed nuisance under s. 117(2) of the Condo Act, which “no person” shall create or continue.  Infestation is not.

2. The infestation applications were brought against condos under s. 117(1) of the Condo Act, which addresses damage to or injury to a person or property.  Those owners did complain of bites, nuisance and annoyance from the infestations they experienced in their units.  However, to advance infestation as a CAT arbitrable nuisance against the condo, there would have to be a rule or other governing provision (even a nuisance one) which prohibited “any person”, not just an “owner” or “resident”, from causing a general nuisance or infestation.  Without a tie-in via a governing document which might apply to the condo, infestation complaints against a condo will be dismissed.

Takeaway:  Owners advancing nuisance claims should examine whether their claims fall within the prescribed nuisances the CAT can hear if they wish to bring an application against their condo.  A nuisance rule may not be enough if it applies to “owners” or “residents” only (and not “a person”).  Otherwise, owners may have recourse in Superior Court for compliance, oppression or under s. 117(1) for extreme infestation nuisance or damage originating from the common elements.

Owners are not allowed to modify the common elements  as they please. Though owners have broader rights regarding their individual “units”, the line between “units” and “common elements” can often blur, leading to escalated disputes.

In Carleton Condominium Corporation No. 132 v Newton , an owner installed a new garage door and front slab door with glass panels – though the owner had exclusive use of  their garage door and front door, the doors were nonetheless common elements. Section 98 of the Condo Act and the condo’s by-laws required owners obtain the Corporation’s written approval and enter into an alteration agreement with the corporation before altering  any common elements. The owner had done neither before they changed the doors.

After the board discovered the installation, it still tried to work out an alteration agreement to provide its approval after-the-fact. However, the parties could not come to an agreement and the corporation brought a compliance application to restore the original doors; the owner countered with an oppression application.

The Court granted the corporation’s application and dismissed the oppression application. This it not a novel outcome and was a predictable result. However, the Court interestingly commented on the Section 98 process and a board’s discretion in considering alteration agreements:

..it is not the function of the court to stand in the shoes of the condominium Board and make decisions about property management issues (such as what modifications to the common elements should be allowed referable to a particular unit). A unit owner must accept the jurisdiction of a condominium board to make decisions about exclusive use common areas and to enforce rules about maintaining a uniformity of appearance of unit exteriors. This is a core function of a condominium Board.

Notwithstanding the Respondent failed to obtain the approval of the Board at any time for the doors he installed in 2020, he was invited subsequently to apply for the Boards approval, which he did, and there followed lengthy negotiations about the modification to his doors. The Board has offered to pay for the new front door and the installation costs. The Respondent has not been treated in a differential or discriminatory manner from other unit owners with similar compliance issues. The Boards uniformity in appearance concerns are objectively reasonable and in the economic interests of unit owners including the Respondent.

This case emphasizes the importance of following proper procedures when seeking to alter common elements. It also highlights the broad discretion of the condo board in considering alteration agreements, uniformity of appearance of the exterior of a property and reminds us that good communication and negotiation can go a long way in resolving conflicts.

The Condo Act requires condominium corporations to insure against damage to the common elements and (standard) units that is caused by major perils such as fire or water escape. Picture this: you come home from a long day at work, only to find your unit flooded because of a broken dishwasher tube. Fortunately, your condo files a claim with its insurance company and the remediation team is already on-site. You happily assume the condo’s insurer is handling the repairs through their policy.  

A few weeks later, the repairs are complete but you receive a letter from the condo demanding you pay for the deductible on the insurance policy. In this case, the condo asks you to pay $100,000 or else this amount will be added to your common expenses. How could this happen?

Even though the condo has to maintain insurance coverage for this damage and indeed activates its policy, you are not necessarily off the hook. If the insurance coverage is triggered, the condo may have the right to chargeback the lesser of (a) the cost to repair the damages and (b) the deductible limit of the insurance policy in two scenarios:

  • The owner, through an act or omission, caused the damage to the owner’s unit; and
  • The condo has passed a by-law that allows it to chargeback the lesser amount for damage to common elements and other units so long as the condo did not cause the damage.

In this scenario, damage originated from the owner’s unit and the condo did not cause the damage, so the owner is still liable if the condo has passed the appropriate by-law.

To avoid a similar situation, it’s important for unit owners to obtain comprehensive insurance coverage for their units. We commonly see owners with coverage up to approximately $25,000 towards insurance deductible chargebacks despite skyrocketing insurance deductibles in recent years. To use the example above, an owner would still be liable for $75,000 out-of-pocket. We recommend owners periodically check their insurance policy against the condo’s policy to ensure “gapless” coverage. Don’t be caught off guard by unexpected charges – take the time to review the condo’s insurance certificate or latest periodic information certificate which will set out the deductibles in various scenarios.

Parties seeking costs awards from the CAT must understand that the Tribunal has the discretion to award costs: even if a party is entirely successful on their claim, there is no guarantee it will receive its full costs, if any. In January 2022, the CAT published a practice direction which informs the public how the CAT will exercise its discretion based on the common principles of proportionality, reasonableness and nature of the parties’ conduct.

Though the practice direction aims to provide clarity on the Tribunal’s discretion to award costs, a recent CAT decision leaves us with less certainty than we hoped.

Metropolitan Toronto Condominium Corporation No. 1240 v. Debnath, 2023 ONCAT 56

A condo started a CAT application against a unit owner for repeatedly violating its noise and nuisance provisions by playing loud music at all hours. The owner told the property manager that the loud music was intended to drown out violent sounds from an adjoining unit, but that owner otherwise did not participate in the CAT hearing. In their absence – and on the basis of the condo’s evidence – the CAT held the owner was in violation of the condo’s Declaration and Rules.

In seeking full indemnity costs from the owner, the condo relied on three different – albeit overlapping and similar – indemnity provisions in its Declaration and Rules. The CAT recognized that:

  • Despite receiving multiple warnings before the condo brought its application, the owner “has persistently shown a lack of response to overtures to comply”;
  • It would be unfair for other owners to be called upon to subsidize the costs of enforcing compliance against another owner; and
  • The condo’s legal fees were overall reasonable.

Despite these findings, the CAT only awarded the condo 50% of its legal fees.

A positive highlight of this decision – Reasonableness is the prevailing principle

Although the condo’s noise/nuisance prohibitions in its governing documents were worded such that the noise/nuisance could be “in the opinion of the board or the manager”, the CAT held that the exercise of this discretion must still be reasonable. We commonly see unfettered language like this but the CAT held that “bald assertions by a manager would not suffice in the absence of valid objective evidence assessed in good faith”.

This is critically important and it reinforces the spirit of fairness embedded in the Condo Act.

Lingering confusion – Making sense of indemnification provisions, Amlani and the CAT

Returning to costs and indemnification, the CAT missed the mark. In awarding only 50% of the condo’s legal fees, it noted that the documents submitted by the condo “suggest some challenges in the owner’s life situation”.

We are sensitive to the host of potential issues that could affect how or why an owner might behave the way they do. Even in the face of crystal-clear breaches, issues such as mental illness, disability or other personal matters often call for sensitivity, discretion and accommodation from the condo. But on this point, the Tribunal’s decision does not elaborate on what these challenges were or how the CAT weighed them. For the CAT to make a discretionary decision to reduce the condo’s entitlement, its decision needs to be better articulated to allow the public to appreciate the Tribunal’s reasoning.

The CAT also suggested that the indemnity provisions “did not expressly refer to compliance costs” and that “one provision of the Declaration only spoke to costs relating to damage to property”. It isn’t clear how much weight the CAT gave this in coming to its decision, but one of the Declaration provisions and the Rule the condo relied on was sufficiently broad to capture “any losses, costs or damages incurred by the Corporation by reason of a breach of any rules and regulations”.

In my view, the CAT overlooked the broad reach of the condo’s indemnity provision. It overemphasized whatthe costs relate to(i.e. compliance or common element damage) rather than why the costs were incurred(i.e. by reason of an owner’s breach).

The CAT’s discussion on the drafting forces us to revisit the Amlani saga. I am a vocal supporter of the Amlani decisions (see here and here) and I will always emphasize that the case law is clear that condos can only seek compliance-related costs pursuant to a court order (or an order from an arbitrator or Tribunal such as the CAT) and this cannot be circumvented through deft drafting of an indemnity provision. The problem I anticipate is that by distinguishing “costs related to the common elements” and “costs generally” in an indemnification clause, the CAT invites crafty lawyers and condo boards to continue overstating the drafting of an indemnification provision. How an indemnity provision is drafted is important with respect to what costs can be recovered (i.e. compliance costs, costs relating to physical damage, any costs, etc.) but it cannot change how those cost are recovered: compliance costs are only recoverable once a breach has been proven in court, CAT or arbitration and costs are awarded accordingly.

Conclusion

There’s no denying the work the CAT has done – and continues to do – in providing justice and fairness in the condo community.  Since expanding its jurisdiction to capture nuisance issues, the CAT has done a great job at issuing decisions that are legally-principled and balance corporation and owner interests. But of course, there’s always room for improvement, especially as it relates to costs.

With clearer decisions and less hesitation to award costs against owners who breach the governing documents, the CAT has the potential to move from the final arbiter of justice to the preeminent deterrent for non-compliance.

In our Spring 2023 Issue of Condo Alert! we look at the CAT’s recent decisions refusing access to records. The often used “litigation exemption” is examined in the context of a longstanding and far reaching dispute between an owner and condo. We also discuss the occasional “director’s request” for records – where an individual director asks to see records an owner would usually be exempt from examining.

Last month, we blogged about the importance of having clear and concise governing documents. A recent CAT decision highlights the value of communicating rules to residents and how poor communication might lead to unnecessary disputes.

In this case, the CAT dismissed a dispute relating to the “communication of rules” because it had no jurisdiction over the applicant’s complaints of confusing parking signs. The complaint did not relate to provisions within the governing documents that govern parking. The CAT described the condo’s parking signs as communicating the rules poorly, but determined that “changing, altering, even remove the parking signs will not alter the rules governing parking” and didn’t bring the dispute within the CAT’s jurisdiction.

This decision is a further reminder that messages to residents about the condo’s governing documents and how they are implemented should be transparent and straightforward. Supplementary or informal announcements about the rules such as signs at the property, notices and even enforcement letters should convey the rules consistently and simply so there’s no confusion.

The Condominium Authority Tribunal (“CAT”) and Superior Court operate on virtual platforms, with CAT hearings typically concluding via written argument.  These forums have their own rules and directions and, occasionally, comments from adjudicators to guide process.  This decision from the Superior Court comments on using written materials efficiently and to win in modern practice.

Gone are the days of “bullshit baffles brains.”  Writing is expected to be clear, concise and simple.  A client’s expectation of their lawyer in litigation should be that they will advocate in a focused way.  Time and money should be spent considering that 95% of disputes will resolve versus filing materials to paper the trial of the century. 

But the lawyer’s job also starts with the client’s material.  A recent CAT decision described the disputed rules in that case as:  “unhelpful, outdated, and difficult to enforce fairly and consistently.” The CAT strongly recommended that the condo undertake a review of its rules and either amend them or create more suitable ones.

In that vein, boards and managers (and drafting condo lawyers) need to consider ways they can improve at the source.  Take a look at governing documents and see whether they are easy to understand and enforce.  Demand letters should be straightforward so that owners and adjudicators can understand them.  Set yourself up for success in compliance or enforcement, whether voluntary or ordered by the CAT or court, by keeping it simple.

Before CAT, condominiums typically brought compliance applications under s. 134 of the Condo Act to force unwilling residents to comply with the Condo Act and the condo’s declaration, by-laws and rules. And beyond ordering compliance with the Condo Act, declaration, by-laws and rules, judges have the broad discretion to “grant such other relief as is fair and equitable in the circumstances”. Notably, a judge (and not the CAT) can order a resident be permanently removed from the condo in extreme circumstances. This is what a Toronto condo sought in Toronto Condominium Corp. No. 1445 v. Catalli. Despite this broad discretion, the Catalli decision is a reminder on just how exceptional and difficult it is to remove someone on a compliance application.

The condo alleged that the Mr. Catalli had “a history of dangerous behaviour” and specifically referred to a lone incident where a fire broke out from his unit and caused extensive damage. Mr. Catalli was apparently criminally charged with arson by negligence, which he pleaded guilty to. Mr. Catalli argued that the fire was caused by faulty wiring – supported by a letter from an electrical contractor – and that he received no notice of his behavioural issues before this fire, save for one noise complaint for playing loud music. Interestingly, the condo seemed to indicate that any issues with Mr. Catalli’s conduct resulted from medical issues and not behavioural ones; Mr. Catalli showed he was receiving ongoing treatment and was on stabilizing medication.

The court refused the condo’s application to remove Mr. Catalli from the premises. First, the court was not convinced that Mr. Catalli would be an ongoing source of harm: the only evidence the condo pointed to was the fire which the court believed was an issue of faulty wiring rather than Mr. Catalli’s conduct. Second, the court acknowledged that Mr. Catalli is managing his medical issue and that it was “reluctant to stigmatize him for his past mental health problems”.

Forcing an owner to sell their unit or a resident to permanently move out has been considered by the courts to be the “ultimate and harshest remedy available…it should be reserved for the most egregious cases”. Such orders have only been awarded where the owner/resident is “incorrigible and unmanageable,” has been “given opportunities to reform their ways but exhibits an unwillingness to change” and “persistently refuses to abide by the community’s rules in extreme ways”. The judge in Catalli did not believe Mr. Catalli’s behaviour met this high bar.

This is an interesting decision that unfortunately doesn’t give us as much factual context as we would have liked. Still, here are Tony’s Takeaways:

“Ongoing Conduct”: the Catalli decision made an interesting point in addressing the condo’s safety concerns with Mr. Catalli: the judge held that this concern “must be based on evidence of ongoing conduct, not past conduct alone”. I understand the rationale and agree with how it was applied in Catalli.

However, I am concerned this decision minimizes the gravity of past conduct and overemphasizes “ongoing conduct”. This does not adequately consider the nature or severity of past incidents. For example, a violent resident could assault others in the condo but in the time it takes the condo to commence its compliance application and be heard by the courts, the resident has been in jail for most of this period and has assaulted no one on their return. On the plain text of this decision, the court would not order the residents removal.

But let’s say that after the application is concluded, the resident in my hypothetical assaults someone again, and the condo succeeds on its “second kick at the can” in removing the resident via another compliance application. Sure, the resident and their threats are now gone but at what expense? In answering this rhetorical question, another person has been assaulted and the condo has spent a lot of time, money and stress dealing with the violent resident. There needs to be greater emphasis on the nature/severity of the conduct – otherwise, precarious situations could be ticking time-bombs instead of a manageable risk with a clear solution.

Improve Record-Keeping: Keeping an incident log in a unit file is crucial for record-keeping. But an incident log is only as valuable as the quality of the incident reports. Any time there is an issue with an owner/resident, a note/report/summary of the incident needs to be prepared. These notes/reports/summaries should be detailed, objective and prepared as soon as possible while memory and recollection are at their best.

Be Reasonable: It’s trite to mention this in any condo-related commentary, but we constantly see the need to reemphasize this. While we wish the Catalli decision provided more insight into Mr. Catalli’s “history of dangerous behaviour”, it suggests  that the best card the condo could lead with was this fire incident. Fires are undoubtedly serious situations that demand immediate attention but in this context, on the evidence we can glean from the decision and with Mr. Catalli demonstrating he did not contribute to the fire and that he addressed his medical issues, Mr. Catalli’s “dangerous behaviour” seems like a flash in the pan; a full-blown compliance application to remove him is disproportionate and unnecessary. 

Although the CAT’s jurisdiction has been expanded since its inception, the CAT’s decision in Brady v. PCC 947 is a reminder that disputes outside section 117(2) of the Condo Act will likely be dismissed even though owner-applicants have succeeded in other forums.  

A unit owner brought a CAT application against the condo corporation for banging noise from plumbing in the building. The owner claimed that the noise was negatively affecting the peaceful enjoyment of her unit. The condo investigated and made repairs, but the owner reported that the noise continued. The owner alleged that there was a construction deficiency with the plumbing. The owner pointed to provisions in the condo’s by-laws relating to the condo’s duty to maintain common elements and the declaration, which prohibited noise and nuisance in any unit to another.

The CAT determined that the issues raised in the application were beyond the jurisdiction of the Tribunal under section 117(2) of the Condo Act, which prohibits unreasonable noise from one unit to another. The evidence in this application highlighted that the noise complained of may have resulted from a construction, maintenance, or repair problem under sections 89 and 90 of the Condo Act.

The CAT was sympathetic to the owner’s circumstances but could not grant any relief as the complaint was outside of its jurisdiction. The application was dismissed.

We start the 11th volume of our newsletter, Condo Alert!, Winter 2022, with our annual Top 10 condo cases review. 

The CAT expanded its jurisdiction on January 1, 2022 to include noise and nuisance cases, and with that 2022 saw an influx on CAT decisions on wide ranging matters, from pets to nuisance to what did or did not fall within its jurisdiction. We also saw the return of the damages award for oppression and a reinforcement of stays being ordered when parties attempted to by-pass mandatory mediation and arbitration.

We are thrilled to see our readership continue to grow this year. We wish you all health and happiness in 2023!

All the best in the new year,

Andrea