Ania v. Spice Danforth Inc., 2019 ONSC 572
Decision Date: February 15, 2019
http://canlii.ca/t/hxl9f

This is a dispute over an Agreement of Purchase and Sale (APS) of a townhouse condominium. The respondent is a condominium developer. The applicants entered into the agreement with the vendor in September 2016 for a unit that they were to occupy in March 2019. The occupancy date was later extended by one year. The applicants have made deposits of about $55,600 which are being held in trust by the respondent. In January 2018 Spice Danforth asked all purchasers for a binding and unconditional mortgage commitment, issued by a lender. The applicants supplied what they thought was adequate documentation. Over the next few months the vendors asked for more and more documentation, and the applicants did their best to comply. In April 2018 the vendors, not satisfied with the financial documents that the applicants produced, moved to terminate the APS.

It emerged in cross-examination that Spice Danforth was no longer planning a condominium development, but plans to build rental housing instead. The applicants ask the court to declare that the APS is in effect, that their deposit should be returned to them, and that there should be a trial with respect to their damages (as a result of the decision not to proceed with the condo development.) The respondent seeks a declaration that the applicants are in default, and that their deposit is forfeited.

Justice Swinton found that the applicants had complied with the APS and the financing requirements, and that the respondents acted unreasonably and in bad faith. She ordered that the deposit be returned with interest, and that there be a trial regarding the claim for damages.

Comment: Of the 116 purchasers of units in the development, 95 did not qualify for financing.

Horfil Holding Corp. v. Queens Walk Inc., 2019 ONSC 1381
Decision Date: February 27, 2019
http://canlii.ca/t/hxqq3

The applicants are two dentists who have a practice together. The defendants are “Queen’s Walk,” a corporate developer, its directors and officers, “Bridlepath,” a real estate brokerage, and two employees of Bridlepath. The applicants entered into an APS in July 2017 to purchase a commercial unit in an as-yet unbuilt complex. The APS contained a restrictive covenant that the applicants would have the sole dental office. In September 2017 Queen’s Walk terminated the APS, claiming that the applicant’s credit wasn’t adequate. The plaintiffs claim that 1) Queen’s Walk never checked their credit and that they had sufficient funds to close the deal; and 2) Queen’s Walk failed to secure the termination of an agreement with another dentist to purchase a unit in the complex. They commenced an action for breach of contract, inducing breach of contract, deceit, misrepresentation, and negligence.

In this motion, the directors and officers of Queen’s Walk ask that all claims against them be struck. Queen’s Walk asks that claim against them for punitive damages be struck.

Justice Nishikawa decided that 1) There was no reasonable cause of action against the directors and officers of Queen’s Walk and so the claim could be struck. 2) The Statement of Claim does not support a claim for punitive damages against Queen’s Walk, and so that claim is struck. 3) The plaintiffs may amend their claim against Queen’s Walk, but not against directors and officers.

Friedrich v. MTCC No. 1018, 2019 ONSC 1153
Decision Date: February 19, 2019
http://canlii.ca/t/hxl9l

This is a dismissal of an appeal. (However I cannot find the text of the original decision.) Mr. Friedrich owns a unit in MTCC No. 1018. The corporation made a decision to change the entry to Parking Level 1 from a telephone system to a motion sensor with monitored CCTV and a visit by a security guard at least every two hours. MTCC thus met the duty of an occupier under the Occupier’s Liability Act. Justice Myers found that Mr. Friedrich failed to prove that that MTCC No. 1018 breached the acceptable standard of care. Although vandalism occurred after the new system was in place, Mr. Friedrich did not offer any evidence that the corporation’s decision to make the changes was unreasonable or that they foreseeably caused his loss.

Comment: Once again we see judges upholding the principle that a condominium Board’s business judgment is entitle to deference.

About the image: Toronto construction in an earlier time. “Excavating the site of the new Union Station” by Dept. of Public Works – This image is available from the City of Toronto Archives, listed under the archival citation Fonds 200, Series 372, Subseries 30, Item 64. Public Domain, Link

Noguera v. Muskoka Condominium Corporation No. 22, 2018 ONSC 7278
Decision Date: December 11, 2018
http://canlii.ca/t/hwj6w

The applicants, Mr. and Mrs. Noguera, have owned unit 210 of MCC No. 22 since 2014. In 2016 their next-door neighbor Mr. Mitchell informed them that he planned to sell his unit. The Nogueras proposed to the Board that they create an opening between the two units. If the proposal was approved, they would make an offer to purchase unit 211. The Board considered the proposal in March 2016. Both Mr. Noguera and Mr. Mitchell were Board members at the time. Mr. Mitchell indicated that he had a conflict of interest and left the meeting while the proposal was discussed. Mr. Noguera remained for the discussion of the proposal but did not vote on it. He did not feel he had a conflict under the Condominium Act and no one present indicated otherwise. The Board voted to approve the proposal, subject to certain conditions. The written resolution did not include a Section 98 agreement, (that’s the agreement, required by law, that an owner makes with the board before making changes to the common elements.) Previous owners who had made structural changes were similarly not asked to sign Section 98 agreements.

The Nogueras purchased unit 211 and began renovations. Somehow, starting in 2017, relations between the Nogueras and others began to sour. Among other things, the new President of the Board told the Nogueras that they were forbidden from using the lakeside path, based on unproven allegations that they had been looking into the windows of other units. In November 2018 the Board discussed whether the Nogueras should stop renovations until they signed a Section 98 agreement. The Nogueras indicated that they were willing to sign the agreement but not to stop renovations. (Further conflict: A couple of Board meetings held without proper notice to Mr. Noguera, still a Board member; a “heavy-handed” letter to the Nogueras from the Corporation’s lawyer; the President of the Board telling other unit owners that Mr. Noguera was “evil;” secret audiotaping of a Board meeting.)

Justice Matheson had to decide:

1) Was there a quorum at the March 2016 meeting when the Nogueras proposal was discussed?
Answer: Yes. Mr. Noguera did not have a conflict of interest and so his presence counts toward the quorum.

2) Was approval given for one or two openings between units 210 and 211?
Answer: The Board didn’t specifically discuss this question, but they later approved plans that indicated two openings.

3) What about the Section 98 agreement?
Answer: The Nogueras must sign one, but the one proposed by the Board is too broad.

4) How to deal with the other elements of the conflict?
Answer: The Condominium wrongly disparaged the Nogueras and must pay them $10,000 in damages. The Nogueras may use the lakeside path again.

Comment: A wise person once said, “If you don’t like rules, don’t buy a condominium.” I would like to add, “If you can’t set aside personal enmity, don’t become a condominium director.”

About the image: A forest creek in Muskoka by Michael J. Bennett – Own work, CC BY-SA 3.0, Link

1589680 Ontario Inc. v. TSCC 1441, 2018 ONSC 6941
Decision Date: November 21, 2018
http://canlii.ca/t/hw5wj

The plaintiff rents commercial space in TSCC 1441, a downtown condominium. The parties have been in litigation for several years over the use of common elements. In May 2018 the parties met with Justice LeMay in a pre-trial conference that lasted two days. They (apparently) resolved their dispute, and created Minutes of Settlement. However the parties did not sign any releases, as they disagreed as to what should and should not be included in the releases. In this action, the plaintiff is seeking an order making the Minutes of Settlement a Court Order. TSCC 1441 opposes, saying that to do so would be inconsistent with the intentions of the parties when they settled the matter.

Based on his interpretation of the Minutes, Justice LeMay declined to make them a stand-alone Court Order. He dismissed the action without costs.

Comment: Truly a mediator’s nightmare: “The parties started to disagree with each other about the terms and obligations under these minutes almost from the moment that they were signed.”

Brief Notices

In Precision Tree Care Ltd. v. Peel Condominium Corporation 507 (which I summarized last month) Justice Lemon has ordered costs of $10,000 to be paid by PCC 507.

The decision in C.M. Callow Inc. v. Tammy Zollinger et al. (which I summarized in January 2018) has been reversed by the Appeal Court. You may remember that the issue at stake had to do with the termination of a snow removal contract. The trial judge erred by “improperly expanding the duty of honest performance in a manner that went beyond the terms of the winter contract” and also erred in calculating damages.

About the image: “Discussing the War in a Paris Cafe” by Fred Barnard – Illustrated London News, Public Domain, Link

Precision Tree Care Ltd. v. Peel Condominium Corporation et al, 2018 ONSC 5755
Decision Date: September 28, 2018
http://canlii.ca/t/hvb98

This is a motion for security for costs made by the defendant, PCC 507, against Precision Tree Care. (In other words, PCC 507 is asking that Precision Tree Care be legally required to pay money into court to cover a possible future cost order, in the case that PCC 507 prevails in the legal dispute between them and is awarded costs.)

The original dispute is rooted in the cost of tree trimming services. In September 2017 Precision agreed to remove trees and perform other services at PCC 507 for a cost of about $12,000. In December, Precision invoiced PCC 507 for nearly $164,000. Precision argues that the work was a lot more involved than they realized at first as many of the trees were unsafe to climb and they had to bring in heavy equipment at considerable cost. PCC 507 argues that the extra work was not authorized by their property management company, and that an independent arborist they retained valued the work completed by Precision at about $2,000. (PCC 507’s property manager at the time is no longer employed by the company in question.)

In this action, PCC 507 argues that the burden is on Precision to establish that 1) their case has some merit; and 2) they are impecunious (and so an order for security would be unjust). Justice Lemon found “no dispute” that Precision lacks the assets to pay costs if unsuccessful. However he also found that Precision’s case was not “plainly devoid of merit,” as much would depend on the testimony of the former property manager. He dismissed the motion and declined to order security for costs.

Comment: It will be interesting to see if the parties can settle their dispute without coming back to court.

Barta v. Rudolph, 2018 ONSC 6208
Decision Date: October 17, 2018
http://canlii.ca/t/hvl93

This is an appeal of a Small Claims Court judgement. In August 2015 Mr. Rudolph signed a one-year lease agreement to rent Ms. Barta’s condominium unit starting November 1, 2015. Before signing the lease, Mr. Rudolph had several air quality tests done, as his daughter, who suffers from mold toxicity, planned to visit him and occasionally live in the unit. In October 2015 Mr. Rudolph presented Ms. Barta with a deficiency list of 13 items, all of which she addressed. In early November 2015 Mr. Rudolph gathered dust samples from the unit and sent them to a lab in the U.S.to perform an Environmental Relative Moldiness Index Report (ERMI), as his daughter’s specialist doctor in the U.S. had advised that she could not go into the unit without this test being performed. The test came back positive. Mr. Rudolph advised Ms. Barta that the unit was “not fit for human habitation” and that he would not be moving in.

At the trial, Ms. Barta testified that she called two or three private mold companies who told her that they had never heard of the ERMI test, and that they could do nothing if there was no visible indication of mold. She was unable to rent the unit and sold it in April 2016. Mr. Rudolph, for his part, agreed that he could have done the ERMI test before signing the lease, and that he would not have moved into the unit even if Ms. Barta had taken further steps to remediate the mold. The trial judge ordered Mr. Rudolph to pay Ms. Barta $20,688 for lost rent, costs, and interest.

Mr. Rudolph’s main argument for the appeal was that the trial judge did not apply the “fit for habitation” test. Justice Conway dismissed Mr. Rudolph’s appeal, saying it was clear from the trial judge’s reasons that he understood the test, even if he did not explicitly articulate it. Justice Conway ordered that Mr. Rudolph pay costs of $8500.

Comment: Sometimes I think that if people stopped throwing good money after bad, the appeal courts would have far less to do.

About the image: “Branches on a rainy night” by J.smith – Own work, CC BY-SA 3.0, Link

Metropolitan Toronto Condominium Corporation No. 596 v. Best View Dining Ltd., 2018 ONSC 5058
Decision Date: September 4, 2018
http://canlii.ca/t/htssb

This is a motion in an on-going dispute between a commercial tenant and a mixed-use condominium corporation, stemming from noise complaints. In September 2017 MTCC No. 596 obtained an order requiring Best View Dining to abate the noise disturbing residential owners. The noise problems persisted, and in November 2017 MTCC No. 596 brought a contempt motion. Justice Perell became seized of the matter in April 2018. He put off consideration of the contempt motion, reserved the matter of costs, and made an interim order requiring more steps to address the noise problems. MTCC No. 596 alleges that they incurred close to $39,000 in legal fees and engineering costs between November 2017 and May 2018. They asked Best View Dining for reimbursement and informed them that if they didn’t pay, the amount would be added to their common expenses. Best View did not pay, and in July 2018 the corporation registered a lien.

In this motion, Best View Dining seeks an order from the court discharging the lien. They argue that the lien was premature, given that there had been no ruling on the contempt motion. Justice Perell found that the lien was proper and dismissed the motion. Best View’s “real objection,” he charged, was that MTCC No. 596 was “presumptuously writing itself a blank cheque” before the court could review the claim for costs. However if there was an overcharge, this could be resolved upon the return of the contempt motion. If the contempt motion never comes back, then the dispute over the amount of the lien could be resolved under the Mortgages Act.

Comment: Let’s hope, for everyone’s sake, that there is some technological solution to the noise problem.

Taft Management Inc. v Gentile, 2018 CanLII 82880 (ON SCSM)
Decision Date: August 27, 2018
http://canlii.ca/t/htth4

The defendant is the chairman of the board of TSCC No. 2003. Following a November 2016 board meeting he sent two emails to the rest of the board, raising concerns about the performance of the plaintiff, at that time the property manager of the condo. Taft somehow obtained copies of these emails, and found that they contained “false and damaging” statements. Taft brought a claim against Gentile, and in this motion, Gentile asks the court to dismiss the claim based on anti-SLAPP provisions.

(SLAPP is “strategic litigation against public participation.” The legislation is intended to encourage freedom of expression on matters of public interest.)

Justice Prattas dismissed the motion, saying that the matters discussed in the emails were “communications related to matters involving the everyday affairs at the Condo” and not in the public interest. The plaintiff’s claim can proceed to trial, and the parties will bear their own costs.

Comment: Mediation can be highly effective in disputes such as this, where feelings run high and the financial stakes are relatively low.

About the image: Monkey enjoying a quiet moment by Daisuke tashiro from Japan – snow monkey, CC BY-SA 2.0, Link