As we’re quickly approaching a new year, we’ve taken a look back at the condominium cases that were reported in 2012. As usual, its been an interesting year and for many on the losing side of these court decisions (and sometimes also for those on the winning side), it’s been a costly year. Here is our list of ten notable cases for the year (not in any particular order or ranking). Depending on the issues that our readers are facing, the significance of each case will vary by reader.
Pearson v. CCC No.178 - The court considered whether a condominium corporation could recover as common expenses the legal costs it incurred for legal advice related to the defence of unsuccessful Small Claims Court actions commenced by an owner. In this case, although the declaration clearly stated that legal expenses incurred by the corporation in taking an action against an owner could be recovered in the same manner as common expenses, there was nothing in the declaration that permitted the condo corporation to claim indemnification for its legal costs in defending an action. As a result, the condo corporation’s lien was declared invalid. This case emphasizes the importance of reviewing the indemnification provisions in the declaration to determine what costs are lienable.
York Condominium Corporation No. 137 v. Hayes - The court declined to order a violent owner (who was also a director) to sell her unit, stating that such an order should be reserved for the most egregious cases. In this case, the unit owner engaged in physical assaults, verbal abuse, threats and intimidation against other unit owners. Surprisingly, however, the court determined that this behavior did not constitute a most egregious case.
Toronto Common Element Condominium Corporation No. 1508 v. William Stasyna - A condo corporation was successful in its application for compliance with Section 98 of the Condominium Act against a number of unit owners who had installed patios and planted shrubs on the common elements walkway abutting their backyards. However, the court only awarded costs on a partial indemnity basis because the condo corporation declined to mediate, even though mediation is not required under the Act for non-compliance with the Act. Based on this case, any decision by a condo corporation not to utilize mediation/arbitration should not be made without careful consideration.
Hakim v. Toronto Standard Condominium 1737 - The unit owner had parked his commercial vehicle in the underground garage, even though this was contrary to the height restriction contained in the corporation 's declaration. After the Corporation attempted to enforce compliance, the owner took the position that the corporation's conduct was oppressive and unfair. The unit owner’s claim for oppression was unsuccessful. The court determined the proper test for assessing the corporation's conduct and intention was an objective test looking at the best interests of the corporation as a whole and not the best interests of the individual unit owner.
Boily v. Carleton Condominium Corp. No. 145 - The court determined that the board of directors had acted in bad faith when it attempted to renege on a settlement agreement previously made with a group of requisitioning owners. The court ordered that the legal costs of the group of owners be paid by the corporation, but specifically ordered that the legal costs incurred to enforce the settlement were to be paid by the board members individually, without any re-allocation to the condominium owners. Because of the court’s finding of bad faith by the board members, there would likely be no directors and officers liability insurance proceeds to cover those costs for the directors.
Jones v. Tsige - While not a condominium case, this case has relevance for condo corporations, as it established a new common law tort of invasion of privacy, where the cause of action is called "intrusion upon seclusion." In this case, a bank employee had improperly accessed personal information of her spouse’s ex-wife. Condominium corporations and property managers who have access to the personal information of unit owners, such as banking information, arrears, information about tenants and residents in the unit, or even personal information about an employee or property manager, should take great care in securing the privacy of this information.
Waterloo North Condominium Corp v. Silacshi - This case indicates that a condominium corporation may have the ability to force an owner to undo an unapproved change to an exclusive use common element (such as a balcony), even if many years have passed since the change was made, and even if the change was made by a previous owner. The court held that where there is a breach of a statute (such as the Condominium Act), the Limitations Act does not apply.
Perper v. YRCC 860 – In this case, two owners circulated to other unit owners a letter and a requisition that the judge determined contained false and misleading information about the financial state of affairs of the corporation. Because of this, the judge concluded that the requisition was invalid and the board was not in breach of the Condominium Act by not holding the meeting that was requisitioned.
TSCC 1633 v. Baghai Development Limited – In this case, the corporation’s declaration and rules prohibited use of the common elements, including sidewalks, for anything other than ingress and egress. The owner of the unit and the owner’s tenant, the operator of a grocery store, maintained that the lease agreement specifically allowed the tenant to display wares in the common element sidewalks and that the corporation had allowed such displays for five years and had, in the past, entered into agreements to this effect. The Court of Appeal rejected the claim by the owner/tenant that the corporation’s application was barred by the Limitations Act, and that the corporation’s enforcement efforts were oppressive. Although the corporation spent $200,000 on the proceedings, the court only awarded costs in the amount of $100,000.
MTCC 744 v. Bazilinsky – This case dealt with a condo corporation’s attempt to recover its legal costs relating to its efforts to have a unit owner comply with the no pet provisions in the declaration. (Apparently, the owner had clandestinely kept a parrot in the unit). Although the corporation incurred legal fees in excess of $41,000, it was only awarded costs in the amount of $6,500. The judge said that although Section 134(5) of the Condominium Act entitles the Corporation to recover costs incurred in obtaining a compliance order (which will be added to common expenses for the unit), this section “is not an invitation to counsel to aggressively work on a file or unreasonably build up costs.”
One common thread arising from all of these cases is that litigation is expensive and the results are never guaranteed.