Patterson v. York Condominium Corporation No. 70 and Myronyuk, 2018 ONSC 3735
Decision Date: August 8, 2018
http://canlii.ca/t/htcmw

Ms Patterson is the owner of a townhouse in YCC No. 70 and was a member of the Board from 2013 to January 2016. The corporation is older and in need of repair. In June 2016 an investigative audit advised doing some repairs and increasing the common expense payments by 14% to build up the reserve fund. After receiving the report the corporation changed property management companies and started working with a company that specializes in older condominiums. The new management company helped the Board to prepare a budget that more accurately reflected its costs. The Board did not proceed with the increase in fees.

Ms Patterson argues that the current board has not fulfilled its obligations under the Condominium Act, and that action is needed to secure the financial well-being and physical integrity of the condominium property. She also alleges “harassment” by Ms Myronyuk, a Board member since January 2016. Ms Patterson asks that Ms Myronyuk be removed from the Board, that YCC No. 70 increase the common expense fees, and that various repairs be undertaken. The Board argues that the problems of the condominium are well in hand, repairs are underway, and that the allegations against Ms Myronyuk are unfounded.

Justice Pollak dismissed the application, as he could find no evidence that the Board had not acted reasonably and in good faith, exercising the care and skill that a reasonably prudent person would exercise. No court intervention is required.

Comment: Justice Pollak remarked, “The former management company may have had an interest in influencing the recommendation in the report to prevent its termination.”

Arif v. Mwebi, 2018 ONSC 4982
Decision Date: August 20, 2018
http://canlii.ca/t/htmft

At the end of June 2018 the applicants entered into an Agreement of Purchase and Sale to buy a townhouse condominium from the respondent, Ms Mwebi. On July 11 there was an amendment to the Agreement, extending the time for the delivery of the status certificate, and giving the purchasers two days to waive the condition. If they did not waive the condition, the Agreement would become null and void. The applicants, after reviewing the status certificate, proposed a further condition on the Agreement, asking that Ms Mwebi clear all maintenance and common expense fees. She refused, took the position that the Agreement had been terminated, proposed to return the deposit, and re-listed the property. A few days later she resold the unit with a closing date of August 17, 2018. On August 13 the applicants were granted an ex parte (emergency) motion seeking a Certificate of Pending Litigation (which would effectively derail the new sale).

In this application, Ms Mwebi asked to have the CPL overturned so she could go ahead with the new sale. Justice Ricchetti granted the motion for the following reasons: 1) In their ex parte motion, the applicants failed to disclose that they had proposed an amendment to the Agreement of Purchase and Sale, which the vendor had rejected. 2) The property is one of many townhouses and therefore not unique. 3) The applicants did not bring the ex parte motion in a timely manner, but waited until the new sale was about to close, putting maximum pressure on Ms Mwebi. 4) There is a bona fide third party purchaser for the unit.

Comment: Costs of $4406 were granted to Ms Mwebi.

Condominium Authority Tribunal Decisions

From July 2018

Mara Bossio v. Metro Toronto Condominium Corporation 965, 2018 ONCAT 6 

MTCC 965 is not obliged to provide Ms Bossio with the 2016 President’s Report, nor with Board meeting minutes from 1997 to 2001, as these documents relate to “actual or contemplated” litigation regarding a dispute between Ms Bossio and the corporation over damage to her unit.

Janet Cangiano v. Metropolitan Toronto Condominium Corporation No. 962, 2018 ONCAT 7

MTCC 962 is not obliged to provide Ms Cangiano with “legible and unaltered” copies of proxy forms from the November 2017 Annual General Meeting.

About the image: Workers on a suspended scaffold (a swing stage) mount fasteners for a rainscreen in Korolyov, Russia. Photo by Dmitry Ivanov. – Own work, CC BY-SA 3.0, Link

Zenith Aluminum Systems Limited v. 2335945 Ontario Inc., 2018 ONSC 4199
Decision Date: July 11, 2018
http://canlii.ca/t/hsxlr

Zenith provides glazing and aluminum window/wall systems to construction projects. The respondent is a condominium developer and builder carrying on business as “Momentum.” In late 2013 the two companies began negotiations regarding a window wall system to be used in the construction of a condominium project. Zenith eventually quoted a price of nearly $3 million. The quote did not include any pricing or details of a balcony guardrail system for the project, as Zenith doesn’t do this kind of work. (Another company eventually provided a quotation for this part of the project). In August 2014 Momentum accepted Zenith’s quote. In May 2015 the defendant took the position that Zenith should provide the balcony guardrail system as well. They met to discuss the issue and agreed to go to arbitration, and also agreed on arbitration dates as well as on an arbitrator.However no Arbitration Agreement was ever signed.

In early 2017 the parties entered into a tolling agreement (that is, they agreed to waive the right to claim that litigation should be dismissed due to the statue of limitations running out.) In one of those unexpected twists, Zenith never received Momentum’s signed copy of the agreement, because the document was diverted to the “junk” folder of their email system. With no signed arbitration agreement, no tolling agreement, and the limitations period running down, Zenith issued a breach of trust claim. Momentum takes the position that there is no longer an arbitration agreement, and they would like to have the issues resolved in litigation.

Justice Brown ordered that the parties submit to arbitration, get it done by the end of the year, and each bear their own costs.

Comment: Is the moral of this story to always check your spam filter, or to pick up the phone if a document you’re expecting fails to arrive?

Peel Standard CC No. 984 v. 8645361 Canada Limited, 2018 ONSC 4339
Decision Date: July 13, 2018
http://canlii.ca/t/ht020

Justice Glustein has ordered the defendant, Mirza Ahmed, owner of a unit in “Westwood Mall” (PSCC No. 984, the applicant), to sell the unit and to vacate other units that he currently rents. The judge also granted PSCC 984’s motion of contempt of court against Mr. Ahmed for breaches of past court orders. Three prior court orders addressed Mr. Ahmed’s behaviour towards the condominium board and staff. Among other things, he had been forbidden from contacting, communicating, harassing, or coming within 25 feet of condominium personnel. Justice Glustein also denied Mr. Ahmed’s request for adjournment on medical grounds, saying that Mr. Ahmed had not provided adequate reasons why the hearing that had already been adjourned twice should be adjourned a third time.

Comment: PSCC 984 had requested about $40,000 in costs; the judge granted $25,000. Mr. Ahmed did not help his case by telling the judge in an earlier proceeding, “Of course I will not [pay] them.”

About the image: Juliet’s Balcony in Verona by Guilhem Dulous – Own work, CC BY-SA 1.0, Link

Simcoe SCC Nos. 431 & 434 v. Atkins, 2018 ONSC 3105
Decision Date: May 22, 2018
Link to text of decision

This is a dispute about some procedural issues related to a meeting of the owners of units in Simcoe SCC Nos. 431 & 434. The applicants argue that Mr. Atkins, a unit owner, has provided misleading information to other owners in the past, in attempts to discredit the current Boards of Directors. (By way of background, common expense charges for owners recently doubled, and the corporations are suing their developers in relation to first year budget statements.)

Everyone agrees that a meeting of the owners should be held. They disagree as to whether:

1) Owners may use proxies to vote;
2) The court should regulate Mr. Atkins’ communication with the owners before the meeting;
3) The court should make orders regulating the conduct of the meeting.

Justice Copeland ruled as follows:

1) While some of Mr. Atkins’ communications to owners were “unconstructive,” “mean-spirited,” and contained personal insults, this does not warrant preventing the use of proxies.
2) The corporations ask that, prior to the meeting, there be one (and only one) mailing sent to owners. It would enclose submissions from each side of the debate, and the content would be vetted by the lawyers for both parties. The reason given for this request was Mr. Atkins’ previous “misleading” communications with owners. Justice Copeland declined to make this order, saying it would be inconsistent with the democratic model laid out in the Condominium Act.
3) The parties have agreed that an independent person conduct the meeting, and they have even agreed who that person should be. Justice Copeland agreed to make an order for that individual to conduct the meeting, but declined to further manage the conduct of the meeting, leaving it to the chosen individual.

Comment: Justice Copeland closed with some stirring words on the importance of civil, open, and calm discussion in condominium communities, and an order for costs of $14,000 on a partial indemnity basis against Simcoe SCC Nos. 431 & 434. She declined to order costs against the directors personally.

About the image: By Ryan Somma from Occoquan, USA – Rally to Restore Sanity: What Do We Want? A Civil and Rationally Compelling Discussion of the Facts!, CC BY-SA 2.0, https://commons.wikimedia.org/w/index.php?curid=64269180

Sennek v. Carleton Condominium Corporation No. 116, 2018
Decision Date: March 22, 2018
http://canlii.ca/t/hr686

This is an involved costs decision regarding legal proceedings between Manorama Sennek and Carleton Condominium Corporation No. 116. Laurentian Bank Company, Ms Sennek’s mortgage holder, was granted intervenor status. The purpose of this hearing was to determine 1) the amount of costs owing by Ms Sennek; and 2) whether and to what extent the costs could be added to the common expenses of her unit and recoverable by lien. (This is important, because it would mean that the condominium corporation would have priority over the bank in recovering monies. The mortgage principal is about $141,000.)

Last year Ms Sennek was declared a Vexatious Litigant. The legal wrangling between her and CCC No. 16 started with small claims court actions over tree pruning, the size of the parking spot accompanying her unit, and a flowerbox she installed that did not comply with the condominium’s bylaws. The original lien, registered in 2015, was for the costs of removing the flowerbox – around $760. It was open to the Laurentian Bank to pay that amount (plus legal fees) to have the lien discharged. They chose not to do this. The litigation “spun wildly out of control” and CCC No. 116 had to spend a great deal of money to respond to the “voluminous” materials Ms Sennek submitted. In this decision, Justice Sheard discusses Bills of Costs for five different motions and hearings, in addition to the costs for the Vexatious Litigant application and the original small claims court hearing. Based on her analyses, she awarded costs of nearly $110,00 to CCC No. 116, with about $85,000 recoverable by lien under the Condominium Act.

Comment: The Laurentian Bank submits, “that it had no expectation or reason to fear that the costs related to the removal of a flower box could escalate to over $100,000.00.” Quite.

Lahrkamp v. Metropolitan Toronto Condominium Corporation No. 932
Decision Date: March 16, 2018
http://canlii.ca/t/hr1pm

This is another decision relating to costs. Mr. Lahrkamp sought leave to appeal the costs decision against him of just over $21,000. These costs arose in a small claims court matter that both parties agree was worth $1500. Mr. Lahrkamp argued that the Deputy Judge Prattas failed to consider the principle of proportionality in awarding costs. However Justice Sachs denied the appeal, saying that the Deputy Judge made very clear that Mr. Lahrkamp had behaved unreasonably during the proceedings, which entitled him to make an award exceeding the limits for costs in the Small Claims Court.

Comment: Earlier this year Mr. Lahrkamp was declared a Vexatious Litigant.

Brief Notice

Since beginning this blog, I have come across many decisions regarding Dewan v. Burdet – a complex case with many parties, stretching back over 20 years. I have always quailed at summarizing any of them. In what may (finally) be close to the end of the line, the Ontario Court of Appeal has dismissed an appeal against the order of Justice Kane, granted the “minority” owners leave to appeal the costs order, and allowed their cross-appeal on costs.

About the image: By Michael – FLOWERBOX REGENT’S CANAL, CC BY 2.0, Link

Scicluna v. Solstice Two Limited, 2018 ONCA 176
Decision Kate: February 23, 2018
http://canlii.ca/t/hqktm

This is an appeal by two parties against the decision made by Justice Brown in Scicluna v Solstice. Ms. Scicluna agreed to purchase a condominium from Solstice Two and advanced just over $293,000. She lost her job and was unable to pay the remaining $78,000. At first, Solstice Two agreed to return to Ms. Scicluna all of the money she had advanced, less $30,000, provided that the condominium was resold. It was indeed resold (for $435,000). However Ms. Scicluna refused to sign the release document, mistakenly believing that Solstice would keep $60,000 rather than $30,000. She commenced a claim, and in response Solstice invoked the forfeiture provision in their original agreement, demanding to retain every cent that Ms. Scicluna had paid. Justice Brown granted Ms. Scicluna relief from forfeiture but instead of giving the money to Ms. Scicluna, she gave it to Ms. Scicluna’s trustee in bankruptcy, Keven Thatcher and Associates (KTL).

In this action, Ms. Scicluna argues that Justice Brown erred in giving the money to KTL, and Solstice argues that Ms. Scicluna should not have been granted relief from forfeiture. The appeal judges upheld Justice Brown’s decision. Regarding the claim by Solstice, it would be a “grossly disproportionate windfall” for them to retain the full amount paid by Ms. Scicluna. Regarding Ms. Scicluna’s appeal, she did not fully disclose to KTL her claim to the deposit on the condo, or her lawsuits against Solstice. It would not advance the principles of the Bankruptcy and Insolvency Act for her to retain the funds.

Comment: Costs of $5000 each from Ms. Scicluna and Solstice were granted to KTL. The trial judge had declined to order costs, saying that the matter should have settled. (For anyone keeping track, there has now been a full trial and an appeal over a matter that “should have settled.”)

Axess Law Professional Corporation v. Sood
Decision Date: February 1, 2018
http://canlii.ca/t/hq5ln

This is an appeal of a small claims court decision. Mr. Sood purchased a condominium in 2015 and was represented in the transaction by Axess. Two different taxes were due on the purchase: Ontario Land Transfer Tax and Municipal Land Transfer Tax. As it happened, on the very day that Mr. Sood’s transaction closed, an automatic software update in the system at Axess introduced an additional step in order to have both taxes included on the Trust Ledger Statement. When the transaction closed, the Transfer document included both taxes, but Axess never received the funds for the Municipal Transfer tax from Mr. Sood. Instead the funds were automatically paid out to the tax authority from the law firm’s own accounts.

Three months later, when Axess noticed the error, they requested payment from Mr. Sood. He refused, and Axess commenced a small claims court action. Mr. Sood’s appeal relies on Subsection 2(1) of the Solicitor’s Act. The legal arguments turned on whether or not the tax payment should be considered a “disbursement.” In the end, Justice Matheson denied the appeal.

Comment: Liability for tax goes to the purchaser, not their lawyers.

Brief Notices

An appeal has been denied in White Snow and Sunshine Holdings Inc. v. Metropolitan Toronto Condominium Corporation No. 561. Costs of $10,000 were awarded to the respondent. I summarized this dispute over access to condominium amenities in September 2017.

Manorama Sennek’s appeal from the judgment declaring her to be a “vexatious litigant” has been dismissed. Carleton Condominium Corporation No. 116 has spent “well over” $100,000 on disputes with her.

About the image: Lobby of the Old Commercial Appeal Building, Memphis, 1961 by Zeamays – Own work, CC BY-SA 3.0, Link

Jones v. 2341464 Ontario Inc., 2018 ONSC 717
Decision Date: January 30, 2018
http://canlii.ca/t/hq4hm

In May 2013 the parties entered into an agreement of purchase and sale. The applicants were to purchase a pre-construction unit in a building on Niagara Street for $649,000. The occupancy date was to be on or before September 1, 2014. In May 2013 the occupancy date was moved to no later than February 1, 2015. Construction did not actually begin until May 2016. In February 2017 the applicants were advised of some changes to the layout of the condominium units, including the removal of balconies. The applicants decided to proceed with the purchase despite these changes. Later the same month the defendant contacted the respondents and advised them that, due to the delays and to costs they had incurred in the planning process, they would no longer honour the purchase and sale agreement. The new price (on which the applicants had “first right of refusal”) was to be $875,000.

Justice Favreau found the original agreement of purchase and sale to be valid and enforceable. He made an order of specific performance granting the applicants occupancy of their unit within 30 days, and also awarded them $20,000 in costs.

Comment: Justice Favreau said that it was “evident” that the respondents were reluctant to complete the sale so they could benefit from an increase in the value of real estate since the agreement was made.

Toronto Condominium Corp. 1462 v. Dangubic, 2018 ONSC 491
Decision Date: January 19, 2018
http://canlii.ca/t/hpvh1

Mr. Dangubic owns a unit in TSCC No. 1462. Justice Morgan describes him as “not a good neighbor,” as he has violated other residents’ rights of quiet enjoyment, has gotten into verbal conflicts with others, and has left obscene and aggressive voice messages. TSCC charges that he owes over $14,000 in common expenses; these consist mainly of the legal cost of compliance letters and of a lien, and costs of attempted collection of arrears. The main legal issue at stake is whether the lien registered by TSCC 1462 is valid.

Justice Morgan ruled that the lien was indeed valid, as Mr. Dangubic was aware of the claim against him, knew the circumstances of why and how fees were incurred, and the fees are reasonable for the legal work done. He granted TSCC 1462’s request for summary judgment and also granted them costs on a substantial indemnity basis of over $16,000.

Comment: Disruptive owners should understand that the legal cost of getting them to comply with the corporation’s rules will not be borne by the owners at large.

About the image: Building under construction in Rosario, Argentina, which like Toronto is experiencing a construction boom. CC BY-SA 2.5, Link

C.M. Callow Inc. v. Tammy Zollinger et al., 2017 ONSC 7095
Decision Date: November 27, 2017
http://canlii.ca/t/hp00r

C.M. Callow Inc. is a property maintenance company that provided winter and summer maintenance at a condominium complex in Ottawa, managed by the Condominium Management Group (CMG). CMG terminated the two-year winter maintenance contract with Callow earlier than expected, while Ms. Zollinger was property manager. The issues in this trial were whether CMG was in breach of contract, and if so, what are Callow’s damages?

Callow’s position is that the CMG decided to terminate the winter maintenance contract in March 2013 but did not advise him until Sept 3013. Between March and September, while Callow was fulfilling the summer maintenance contract, Ms. Zollinger and certain board members falsely represented that the winter maintenance contract would be renewed or extended. During this time, Callow provided extra “freebie” services to enhance the property, as an incentive to CMG to renew the two-year contract.

CMG’s position is that Callow’s winter maintenance work did not meet their expectations, and that they were within their rights to terminate the contract with 10-days notice, and they did not falsely represent nor act in bad faith.

This case hinged primarily on two things: the evidence (including emails exchanged among board members and the parties’ credibility), and some fundamental principles of common law contracts. Justice O’Bonsawin favoured the evidence provided by Callow, saying that witnesses for the defendant were prone to exaggeration and answered questions in ways that were at odds with the written record. She found no evidence that Callow’s work was below standard. Furthermore, parties to a contract have a duty to act honestly in their dealings and not seek to undermine the other’s interests in bad faith. CMG actively deceived Callow by not disclosing their intention to terminate the contract. Justice O’Bonsawin awarded damages of just over $80,000 (the value of the contract after expenses and the value of equipment leased in anticipation of fulfilling the contract) to Callow.

Comment: Speak with a lawyer before breaking a contract, no matter how reasonable you believe your position to be.

About the image: Snow removal in Westmount (Montreal) Canada in 1944 by Conrad Poirier – This image is available from Bibliothèque et Archives nationales du Québec
Public Domain, Link