The CAO is investigating if legal costs should be awarded in CAT cases.  The effect of CAT’s Costs Rule No. 45 has generally resulted in no costs awards in records cases except in exceptional circumstances.  Condos should take advantage of this opportunity to convince CAO to award legal costs to the successful party, for the following reasons.

CAT’s jurisdiction was expanded beyond records cases to include disputes regarding pets, vehicles, parking and storage cases as of October 2020, with some mixed results applicable to recovery of legal fees in some CAT cases.  CAT will also assume jurisdiction for noise, odours, smoke, vapour, light or vibration disputes as of January 2022.

Compared to owner-initiated records cases, nuisance cases enforced by Corporations would often involve many kinds of legal concepts.  Condos and their lawyers have already developed systems to process various types of scenarios, having careful regard to previous court precedents.

After a manager’s initial efforts have failed to persuade an offending occupant to cease creating a nuisance, a condo’s  lawyer issues a demand compliance letter to the offender and often educates boards and managers how to assemble conclusive evidence.  Over 90% of rules breaches are resolved (to the relief of neighbours), usually immediately upon receipt of the lawyer’s letter, or through a negotiating process.  If lawyers will no longer be encouraged to warn owners and occupants of their obligation to bear legal fees in cases of proven nuisances, then CAT can expect an avalanche of cases.

Continue Reading CAT should award legal fees

A recent CAT decision about smoking rules contained the following in its introduction:

“ … this Tribunal has identified concerns with the use of the term “grandfathering” generally, as its origins are problematic, notwithstanding its long-standing social usage. The Tribunal believes that the term “grandfathering” is better understood as creating “legacy” provisions. However, the term “grandfathering” will still be used herein, as the parties used it, and the Respondent’s Rules themselves refer to the term that way.”

Which led us to educate ourselves:  https://en.wikipedia.org/wiki/Grandfather_clause

Which requires us to do better –  let’s usher in “legacy” provisions!

The Divisional Court of Ontario recently considered a condo corporation’s application for judicial review of a CAT decision.   However, the court dismissed the application because the corporation did not exhaust its right of appeal under the Condo Act

Judicial review is a process where courts make sure that the decisions of administrative bodies (such as the CAT) are fair, reasonable, and lawful. This process is different from an appeal, where a higher court is asked to review the decision of a lower court due to a mistake. There are different requirements governing judicial review and appeals and the power of the court and the role of parties differ.

The underlying dispute in this case involved a unit owner’s use of a designated accessible parking space located in a lot marked “Visitor Parking Only” and whether the corporation was entitled to charge the owner for the costs of enforcing the parking issue. The CAT decided that it had jurisdiction to hear the parking matter, found in favour of the owner regarding the use of the accessible parking spot and ordered the corporation to pay costs and damages (after the CAT applied Amlani and disallowed the corporation’s enforcement costs).

The corporation’s application for judicial review to the Divisional Court argued that the CAT exceeded its jurisdiction, made several errors of law and breached procedural fairness and natural justice. But the Divisional Court dismissed the application because:

  1. The corporation failed to exhaust its right of appeal under Section 1.46(2) of the Condo Act, which provides that a party to a CAT proceeding has a right to appeal to the Divisional Court on a question of law (i.e., errors in the CAT member’s application of the law). The Divisional Court recognized that it was the Legislature’s intention that CAT decisions be appealed and not submitted for judicial review; and
  2. There were no exceptional circumstances in this case warranting the Divisional Court’s interference by judicial review. Judicial review is a discretionary remedy which is not available where there is adequate alternative remedy, such as the right of appeal built right into the Condo Act. The Divisional Court also noted that the core issues raised by the corporation could have been raised in an appeal.

The corporation in this case must now bring a motion to extend time to properly bring its appeal under the Condo Act (if the unit owner doesn’t consent) since the time to do so expired while the corporation pursued judicial review.

The opening paragraphs to Berman v. York Condominium Corp. No. 99 could not have set up the starting point for an oppression application any better:

The oppression remedy starts by someone having an expectation….But to be actionable at law, a person’s feeling of expectation must also be objectively reasonable. In addition, even if a reasonable expectation is not met, the applicant also needs to show that he has been oppressed, unfairly prejudiced, or unfairly disregarded.

In Berman, the owner complained the condo acted oppressively since it failed to replace his windows when he wanted them replaced. With no evidence that his windows failed or required replacement, the court found he had no reasonable expectation to have his windows replaced earlier than they were. The only reasonable expectation he had was that the board of directors would manage the condominium corporation honestly, in good faith, and with due diligence required by the statutory standard of care in s. 37 (1) of the Condo Act.

Continue Reading Oppression in condominiums: “Feeling of expectation” must be objectively reasonable

Our Autumn 2021 issue of Condo Alert! reports on the continuing prevalence of the Ontario Superior Court to follow the mandate set by higher courts that matters which are subject to mediation and arbitration must proceed by that route (even when undefended) and summarizes January 2022 changes to the Act and CAT.

We hope you had a nice summer – thanks for reading!

A Toronto condominium community recently endured a tenant from hell. In MTCC 1025 v. Hui, residents, security staff and contractors were subject to a tenant’s threatening and disturbing behaviour, including:

  • Threatening a security guard with a knife;
  • Exposing himself and performing lewd acts in the common elements of the condominium building;
  • Attempting to force his way into a resident’s car and a contractor’s van;
  • Defacing unit doors and nearby walls;
  • Setting up a chair and blocking the entrance of the building, not allowing residents to enter (so they had to enter via the loading dock), and the list goes on.

The owner of the unit cooperated with the corporation from the outset. She delivered an eviction notice to the tenant and applied to the Landlord and Tenant Board for an urgent hearing, but the request for an expedited hearing was denied. The corporation brought an application for a compliance order against the tenant and owner.  At some point in the interim, the tenant was arrested and therefore no longer on site.

The court had no trouble granting a compliance order against the tenant for breaching section 117 of the Condo Act (which prohibits any dangerous activity that is likely to damage property or cause injury), the corporation’s declaration, rules and the Occupational Health and Safety Act when misconduct was levelled at staff.

But who was responsible for the corporation’s costs of the application?

Continue Reading Cooperative unit owner pays the price for tenant’s outrageous conduct

The Province of Ontario announced that effective September 22, 2021, Ontarians will need to be fully vaccinated (which they define as having two vaccination doses for at least 14 days) and provide proof of vaccination status along with photo ID to access certain public settings and facilities. The Province is implementing a “vaccine passport” initiative in “higher-risk indoor public settings where face coverings cannot always be worn”.

The vaccine passport system applies to “indoor meeting and event spaces” and “facilities used for sports and fitness activities such as gyms and recreational, with the exception of youth recreational sport”. While condominiums are not “public settings” in the conventional sense, there are many areas within the condominium that are considered public settings (albeit only to residents/guests of the condo) such as party rooms, gyms and pools. It is our opinion that the vaccine passport system would apply to condos with party rooms, indoor gyms, courts, fitness studios or pools.

Residents will be required to prove their vaccination status before entering these facilities. The Province is expected to provide procedural clarification but we anticipate that front-desk staff, concierge and property managers will need to review vaccine receipts before permitting entry. We anticipate that residents will only need to provide proof of vaccination on a one-time basis as these facilities are specifically intended for a smaller segment of the population – in other words, actual residents and their guests – and one cannot get unvaccinated.

COVID is one of the greatest challenges of our time and the vaccine passport is added work for condo residents and staff. We expect the vaccine passport will be controversial to some, but one of the key features of condo living is that it is communal: therefore, everyone needs to cooperate and work together in the collective interest of the community. We are optimistic the vaccine passport will bring us closer to a return to normalcy.

In February 2021, the provincial Home Construction Regulation Authority (HCRA) became responsible for licensing and regulating home builders and sellers in Ontario. This was previously overseen by the Tarion Warranty Corporation (TARION).

The HCRA sets standards for competence and conduct while TARION continues to oversee warranty claims and complaints relating to new construction.  HRCA also administers an “Ontario Builder Directory” which has now been updated to include charges filed against a builder (not just convictions).

The HCRA released its first list of charges on August 4, 2021. A Richmond Hill property builder was charged with 10 counts of “illegal vending” for selling properties without an HCRA license or TARION registration – an 11th charge was laid for failing to produce evidence during a search warrant.

A judgment of the Superior Court from mid-July also saw a builder ask the court for an injunction to stop TARION from carrying out a conciliation process where purchasers demanded delayed occupancy compensation.  The builder argued that the delay was “unavoidable” because of water supply issues and COVID-19, and therefore compensation was not payable.  The purchasers demanded TARION conciliation with the builder as part of the TARION process.  If TARION found the delay unjustified, it would compensate purchasers, seek reimbursement from the builder, and put a notation in the builder’s record of a “chargeable conciliation.”  The chargeable conciliation would also be noted in the HCRA’s Ontario Builder Directory.

The court denied the builder’s injunction as it was not equitable or just to deprive new homeowners from warranty protection.  Claims submitted to TARION are meant to be a quick and inexpensive way for homeowners to seek compensation for late occupancy and the conciliation process was designed to prioritize interests of the consumer over the interest of the builder.

The court found that if an injunction was granted, builders who were concerned about how TARION might rule on a warranty claim would have an incentive to pre-emptively file an application with the court to stop conciliation and potentially avoid an adverse ruling – this frustrates the purpose of the Ontario New Home Warranties Plan Act.  There was no public interest advanced by the builder in trying to stop the TARION conciliation and the court found that there was harm to the public interest in doing so.

It is interesting to see the interplay between TARION and HCRA and how they function to protect consumers.

A Toronto condominium corporation finds itself in the news lately (link to article here) over a hotly-contested election.

Two unsuccessful candidates brought a legal proceeding claiming election interference after they won on an initial count by a slim margin of two votes but lost on a recount. The candidates claim their proxies were disqualified without reason and votes were illegitimately added the ballot box. In the wake of a close election we often see accusations of conspiracy, corruption and impropriety thrown around. In this condo’s case, this has resulted in a nasty legal battle: both sides reportedly incurred at least $200,000 in legal fees so far.

While the truth remains to be seen, the financial and time cost devoted to determining who’s right seems extreme; the issue is clearly important to those involved and it is up to the parties whether to continue the battle.  Whatever the case may be, Tony’s Takeaway is that these problems are avoidable.

Whether meetings are held electronically or in-person, here are a few best practices we suggest to ward off accusations of “stolen elections” or demands to “stop the count”:

Continue Reading Condo elections, dodging “fake news” and voter fraud

We recently blogged about the current framework governing electronic signatures in Ontario (here). In a May 2021 case, the Divisional Court recognized text messages as a valid digital signature in a dispute between parties over a debt for leasehold improvements and the application of the Limitation Act, 2002.

Civil claims in Ontario must generally be started within two years of an “act or omission” giving right to the claim. The “limitations clock” starts to run on the date of the act or omission but can be extended in certain circumstances such as where a debtor acknowledges the debt to the creditor. The acknowledgment must be in writing and signed. The clock starts to run on the date of the acknowledgment.

In this case, there was a dispute over money owing to a contractor. Some invoices were paid but the last was partially outstanding. The parties exchanged text messages on June 2, 2016, where the debtor recognized the debt but refused to make payment until the project was completed to his satisfaction. The contractor brought a claim in the Small Claims Court for the balance owing and successfully argued that the text exchange was an acknowledgment of debt under s.13 the Limitation Act, 2002 and the claim was brought in time of the two-year limitation period (with the clock starting from the date of that text exchange).  The text exchange was within 2 years of the start of the claim.  The last payment made to the contractor was outside of 2 years of the start of the claim.

Continue Reading E-signatures continued – Are text messages valid digital signatures?