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