Condo Law Digest – June 2014

Advertisement for cigars from Havana. Lithograph, 1868
Advertisement for cigars from Havana. Lithograph, 1868

MacKay & Cheney v. Metropolitan Toronto Condominium Corp., 2014 ONSC 2863
Decision Date:  May 12, 2014

In late June 2013 the applicants noticed a strong smell of cigar smoke in their unit. They reported this to the concierge on duty and made a formal complaint to the building’s manager.  About 2 weeks later, as the smell of smoke continued, they contacted their insurance company.  An adjustor investigated and concluded that the contents were smoke-damaged and that the unit was uninhabitable.  The applicants moved to a hotel at the insurance company’s expense.  The owner of the upstairs unit was asked to refrain from smoking cigars in his unit pending an investigation.  (Will it surprise anyone reading this to hear that he did not?) Then followed several months of delays due to vacations (the manager, then the President of the Board), visits by consultants and engineers (one of whom identified the smoke migration between the units as a fire safety risk and violation of the Ontario Fire Code), letters from the Board’s lawyer to the applicants, letters from the applicants’ lawyer to the Board, “dueling correspondence” between the lawyers, differences of opinion among various engineering consultants as to whether the problem of smoke transfer had been definitively solved, and further delays due to inaction.

After five months of living in a hotel and not having their concerns addressed, McKay and Cheney commenced an application, seeking a declaration that the corporation had breached its duty to maintain the common elements and to repair the common elements after damage, and that the members of the Board (named as individual defendants) had breached their duty to act in good faith and exercise reasonable care, diligence and skill.  The present two-day trial, held on an urgent basis, dealt only with the question of repair and maintenance of the common elements.  Justice Mew found that there was evidence that the problem was now solved, although he advised that it may be prudent for the corporation to take additional steps.  In particular, there is an arguable case for further testing between the two units.  He ordered partial costs in favor of the applicants.

Comment: The question of the directors’ personal liability has not yet been addressed.  Justice Mew noted that a “negative attitude” on the part of the Board towards the applicants coloured their decision making.  The applicants were “quickly branded as complainers who had far too quickly ran off to their own lawyers.”  Managers and Boards must remember that judges and arbitrators may not necessarily endorse their views, and that even seemingly “difficult” owners have rights.