Buyer Beware: the legal effect of the SPIS

In the recent case of Picard v Grgurich, Ontario’s Divisional Court provided a detailed analysis of the doctrine of caveat emptor (let the buyer beware) and the legal implications of a vendor’s refusal to complete the Seller Property Information Statement (the “SPIS”), also known as the vendor disclosure form.

Background

This case involves a detached rental property in Thunder Bay. Prior to listing the property, the vendor’s real estate agent advised that homes with fully-finished basements generally fetch a higher sale price. Following that advice, the vendor hired a contractor to finish the basement to make the house more appealing.

An offer to purchase was accepted by the vendor with standard conditions; financing, insurance, and home inspection.  The vendor provided an SPIS form with the purchase agreement but did not complete the form.  The Vendor instead crossed out the SPIS, indicating that they were not making any representations or warranties and the purchase was on an “as is” basis.  

Two months after taking possession of the home, the purchaser noticed water in the basement.  The purchaser then hired contractors to repair the damage and sued the seller and a former contractor.

Small Claims Court

At trial before the Small Claims Court, the Deputy judge did not express what specifically amounted to a representation by the vendor, but stated:

“The nature of the failure to disclose in this instance is more significant when considering that the [SPIS] was not completed by (the vendor). He was leaving the impression that he did not know virtually anything about the subject property when he most assuredly did.”

The Deputy Judge found that whether the vendor fraudulently or negligently failed to disclose relevant information was ultimately irrelevant to the legal consequences of the situation. The Deputy Judge ruled that the situation resulted in liability resting on the vendor because a representation of some form happened in this instance. In other words, the Deputy Judge ruled that no representation in itself was a misrepresentation.  The Deputy Judge awarded the Purchaser $25,000.00 in damages. The vendor appealed the decision to the Divisional Court.

Divisional Court Decision

On appeal, the Divisional Court addressed the following issues:

  1. Did the vendor have to tell the Purchaser about the water issue?
  2. Did the vendor fraudulently or negligently misrepresent the status of the basement by crossing out questions and signing the SPIS?

Latent Defect vs Patent Defect

To understand the Court’s decision in this case, it is important to know the difference between a latent defect and a patent defect.  Patent defects are defects that are discoverable on a quick inspection of the property. A vendor has no duty to draw the purchaser’s attention to patent defects. Latent defects are defects which an ordinary purchaser would not be expected to discover in a routine walk through of the property. For example, a crack on an interior wall that was covered up with drywall and no longer visible.

The Divisional Court upheld the concept that a vendor can rely on the defence of caveat emptor so long as there is no attempt at concealing a latent defect.  An act of concealment is an attempt to hide or be willfully blind to a defect known to the vendor. Concealing would be considered a misrepresentation, and therefore, a breach of contract. In other words, so long as there is no attempt at concealment, caveat emptor remains a viable defence for latent defects.

The Court did caution that a purchaser may bring a viable claim if the vendor failed to inform the purchaser of a latent defect that renders the property unfit for habitation, or where the latent defect renders the premise dangerous.

In the case at hand, the Court found that the vendor’s renovations prior to listing the property were simply a good faith effort to increase the value of the property and not to actively conceal any defects.  There was also no factual finding that the property was unfit for habituation or dangerous. During the Court process, the purchaser admitted the home was safe and habitable despite the water issue.

Nature of the SPIS

Completing an SPIS is not mandatory under any provincial law, however, the Thunder Bay Real Estate Board has a by-law that states that every house listed on the MLS must have a Seller Property Information Sheet. Vendors have the option to cross it off rather than fill it out.  In Picard v Grgurich, instead of answering the questions, the vendor crossed out the questions and signed the bottom.

On appeal, the Divisional Court ruled that the Vendor did not fraudulently or negligently misrepresent the status of the basement. The Court explained that, once a vendor “breaks his silence” by answering the questions and signing the SPIS, the doctrine of caveat emptor can no longer be relied on. In this circumstance, the Court held that crossing out the questions on the SPIS was actually a refusal to answer the questions and did not amount to breaking his silence.  The Divisional Court overruled the Small Claims Court and concluded that a failure to complete an SPIS cannot give rise to misrepresentation.   

Summary

As many real estate agents are aware, the SPIS forms can cause uncertainty and liability concerns.  The Small Claims Court decision in this case added much more confusion as it was decided that a failure to make any representations was in itself a misrepresentation by the vendor. On appeal, Justice Nieckarz clarified that this was an error in law and Buyer Beware remains the presumptive rule in real-estate transactions.

One practice point all vendors and purchasers should be aware of is that several Judges have previously concluded that the SPIS cannot be relied on unless (i) the purchase agreement is conditional upon receiving the SPIS; or (ii) the SPIS was completed by the vendor and provided to the purchaser prior to the purchase agreement being signed.  In other words, if an offer is made, accepted, and then the vendor later completes the SPIS, it cannot be relied on as it does not form part of the purchase agreement.

Is Your Condominium Prepared For Recreational Marijuana?

Is Your Condominium Prepared For Recreational Marijuana?

When Ontario’s Cannabis Act, 2017 comes into effect on October 17, 2018, marijuana use, distribution and sale will become legal. Occupants over the age of 19 will be allowed to use recreational marijuana in their unit or common element space, and grow up to four plants for recreational use per residence/unit.

Why You Should Be Concerned

The legalization of marijuana will likely create tension and complaints towards those who are smoking and growing in multi-dwellings complex such as condominiums. It is reasonable to expect the complaints will have merit and be founded on some of these serious concerns:

  • Damage to units and common areas from mould and spores caused by the humidity required to grow marijuana, which can erode drywall, ceilings, floors and damage window seals;
  • Overloaded electrical system from growing lamps and disproportionate use of water required for marijuana plant growth:
  • Increased risk of fire hazards from growing lamps and drying marijuana in stoves and other electrical devices;
  • Odours traveling to other units;
  • Health concerns from mould and spores.

How to Address Legal Marijuana in Condominiums

Many condominium corporations have already limited or banned the use of tobacco in condominiums. Condominium corporations also typically have general restrictions against the creation of nuisances and the use of a unit that may increase the risk of fire or insurance premiums. Further steps could be taken to restrict the consumption and growing of marijuana.

To limit or restrict marijuana use in condominiums, including common areas, units, balconies and exterior grounds, two options are available:

  1. Amend your Declaration, which requires support of 80 to 90% of the of the owners, depending on what is being changed in the declaration; or,
  2. Create a Rule, which is more easily attained than amending the Declaration.

Enacting a by-law to deal with marijuana use is not available because by-laws deal with the governance of condominium corporations.

The best option to limit or restrict marijuana use is to create a rule. The board may make, amend or repeal rules in order to promote safety, security or welfare of the owners and the property and the assets of the corporation, or to prevent unreasonable interference with the use and enjoyment of the units. The rules must be reasonable and consistent with the Condominium Act. The approach should be similar to how other issues are managed, such as tobacco smoking or service animals.

Steps to Introduce a Rule

  1. The board approves the new rule by resolution at a board meeting.
  2. The board must give notice of the proposed rule to the owners that includes a copy of the rule, date for proposed rule to become effective, statement informing owners of the right to request a meeting, and section 46 and 58 of the Condominium Act.
  3. Effective date at least 30 days after the notice was given.
  4. The rule becomes effective on the day after the 30 days unless:  a) The board receives a requisition for a meeting of owners by at least 15% of owners, and b) The board receives a majority vote against the rule by the owners present at the meeting.

Why Act Now?

Approving a new rule can be fast and effortless; however, problems may arise and slow down the process. To avoid struggling with grandfather clauses, it is recommended to implement rules regarding marijuana now.

A grandfather clause is an exception to a restriction that allows individuals to continue doing the restricted act, even if the new restriction would stop them from doing that act. In the context of marijuana use, this could mean that if the rule is passed after the legalization of marijuana, owners could argue that they should be allowed to continue smoking and growing marijuana, despite any new condominium rules. Any new rule would only be imposed on new owners/renters who bought a unit after the rule was passed. However, if a new rule is passed before legalization of marijuana comes into effect, owners would have to abide by that rule and a grandfather clause would likely not apply.

Be aware that restrictions imposed on marijuana without an exception for medicinal purposes will likely be subjected to human rights complaints.

If your condo has yet to address the upcoming marijuana legislation, we encourage you to act now and seek legal advice from one of our lawyers.

Doug Shanks is a business lawyer and senior partner in Thunder Bay at Cheadles LLP who practices condominium law in Ontario. He advises condominium boards and owners of their rights and obligations under laws affecting condominiums and their owners. Bryant Oakes is a law student at Cheadles LLP from Lakehead University Bora Laskin Faculty of Law and was instrumental in preparing this article.

Condominium Status Certificates 3

CASES DEALING WITH STATUS CERTIFICATES

1) Bilorosek v. Vaitkus, (2004) CarswellOnt 5144

Buyer made an offer to purchase a condo from Seller which was conditional on the purchaser obtaining a Status Certificate.  This Certificate included a statement that the condo corporation had no knowledge of any circumstances that may result in an increase in the common expenses for the unit, except possibly for security costs.  The Buyer then relied on this information and waived the Status Certificate condition on March 17th. The sale was to close in mid June (3 months later).

Between mid March and mid June, a number of events took place concerning the condominium corporation.  The condominium corporation sued the developer for lack of co-operation by the developer to allow the condo corporation to do an audit.  As well, it became apparent to the condo corporation that there was a shortfall in the budget for the first year of operation and there was a potential increase in the common element fees.  At the end of March, the condo corporation issued a notice of special assessment for just over $600.00 with respect to security costs and the budget shortfall.  In the first week of May, the condo corporation issued a notice that the monthly maintenance fees would increase from $200.00 a month to $330.00 a month based on the new budget for the next year.

The Buyer became aware of the increase in the common area expenses a short time before the closing date and asked her real estate agent and lawyer to find out what was going on.  On the advice of her lawyer she obtained a second Status Certificate before closing.  The new Status Certificate showed the increase in the common expenses to $330.00 a month and that there was a potential for further special assessments, including substantial repairs as a result of the audit carried out by the condominium corporation representatives.

The Buyer refused to close the transaction.  The Seller sued for forfeiture of the $10,000.00 deposit.  The Court awarded the forfeiture of the deposit to the Seller.  There was no basis for the Buyer to refuse to close, notwithstanding the changes in the circumstances relating to the condominium corporation.

The Seller also sued the condominium corporation and its property management company for an additional $10,000.00.  The basis for the Seller’s claim was misrepresentations in the first Status Certificate. The Court found that any duty that the condominium corporation may have had was owed to the Buyer as required by Section 76(6) of the Condominium Act, and not to the Seller.  Even if there was a duty owed to the Seller, there was no reliance by the Seller on the Status Certificate.  Section 76 of the Condominium Act states that there must be reliance on the Certificate.

2) Unan v. Beckerman, (2005) 31 R.P.R. (4th) 110

The Buyer in the listing agreement stated that the common element fees included the heating and air conditioning costs for the condominium unit.  This was wrong, and the heating and air conditioning costs for the unit were paid for by the Seller separately, since there was a separate HVAC system for each condominium unit.

The Buyer was provided with a Status Certificate but did not review it with his lawyer, since his lawyer was away.  The Buyer waived the Status Certificate condition.

The additional HVAC expense was $250.00 per month that the Buyer would have to pay.  The Buyer calculated this expense was $3,000.00 a year and based on a 50 year life expectancy of the building claimed $150,000.00 from the Seller.  The Buyer also asked for the replacement cost of the HVAC system of $19,000.00, since that would have to be done at least once in the 50-year life of the building. The Buyer was an experienced purchaser and had been the owner of another condominium and on the board of directors.  Twenty-eight months after purchasing the condominium unit the Buyer sold it for $125,000.00 more than the million dollar purchase price from the Seller.

The Judge found that the Seller had negligently misrepresented that the HVAC costs for the unit were included in the common elements expense payable monthly.  The Buyer was entitled to damages but the damages were reduced since the Buyer had an obligation to verify the information regarding the HVAC costs, the Buyer had professional representation and was not an inexperienced purchaser.  Furthermore, the Buyer “failed to conduct the full and detailed search of the condominium documents that he was offered an opportunity to conduct…and…. waived the very conditions that he wants to rely on to obtain damages.”

The Judge said the losses were questionable since he sold the unit at a profit.  As well the claims for replacement of the HVAC and many years of additional monthly costs were unrealistic since the Buyer only owned the condo unit for 28 months.  The Buyer was awarded costs of $250.00 per month for 1 ½ years for a total of $5,500.00.

The Status Certificate was a factor that the Judge took into account in reducing the amount of damages of the Buyer.  The lesson to be learned, of course, is that once the Status Certificate has been provided, the Buyer ignores the Status Certificate at his own risk and if the condition is waived relating to the Status Certificate, the Buyer may be limited in the amount of damages that they can later claim from the Seller.

ADDITIONAL CONDOMINIUM CLAUSES

When representing a Buyer, you may want to consider putting an additional clause in the offer to purchase the condominium.

The Status Certificate is a statement about the condominium corporation and the condominium unit as of the date of the Certificate.  Any changes in that information after the Certificate date may not allow the Purchaser to terminate the agreement of purchase and sale once it has been accepted and the Status Certificate condition waived.

In the case of Bilorosek v. Vaitkus, a Status Certificate was given dated March 14, 2002 and based on that Certificate, the Buyer waived the Status Certificate condition in the Agreement.  The transaction was to close in the middle of June.  Between the middle of March and the middle of June a number of events occurred concerning the Condominium Corporation.  Because of a shortfall in the budget for the first year, there was going to be an increase in the common element fees and a notice of special assessment was issued.  As well, a notice was issued to the unit owners that the monthly maintenance fee was going to increase from just under $200.00 a month to over $330.00 a month for the next year.  The Condominium Corporation sued the developer so that it could do an audit of the information provided by the developer.  The Buyer refused to close on the closing date and was sued for the deposit to be returned, and the Buyer lost the deposit of $10,000.00.

To protect against changes in the circumstances of the Condominium Corporation between the waiver of the Status Certificate condition and the closing date, the following clause could be used.  This clause may not be appropriate in all circumstances, and would likely be a clause that should be considered if there is a fair amount of time between the waiver of the Status Certificate condition and the closing date.  It also might be appropriate if there is a resale of a relatively new condominium that may have changes happening fairly quickly with respect to common element expenses.

The condominium clause that you may want to insert could read as follows:

“This offer is conditional upon the Buyer’s lawyer reviewing another Status Certificate and attachments (“Second Status Certificate”) and finding the Second Status Certificate satisfactory in the Buyer’s lawyer’s sole and absolute discretion.  The _________________ (Buyer/Seller) agrees to request at the _______________ (Buyer/Seller) expense, the Second Status Certificate not later than seventeen (17) days before the closing date and requesting that the Second Status Certificate be issued and dated seven (7) days before closing.

Unless the Buyer gives notice in writing to the Seller on or before four (4) days before the closing date, that this condition is fulfilled, this offer shall be null and void and the deposit shall be returned to the Buyer in full without deduction.

This condition is included for the benefit of the Buyer and may be waived at the Buyer’s sole option by notice in writing to the Seller within the time period stated herein.”

There are some drawbacks to this proposed clause.  There is an additional $100.00 cost to get this Second Status Certificate.  As well, the agreement is going to be conditional right up to four (4) days before closing, which may make for some difficult decisions for the purchaser if they have no other place to live and are intending to move into the condominium on or immediately after the day of closing.

DISCLOSURE STATEMENTS ARE NOT STATUS CERTIFICATES

When a Buyer is purchasing a condominium from a developer, it is not binding on the buyer until they receive a current “disclosure statement” from the developer.  The Buyer has ten (10) days to rescind the agreement after receiving the disclosure statement.  The disclosure statement is not a Status Certificate.

The disclosure statement must contain statements indicating information such as the following.  This is not an exhaustive list of what has to be included in the disclosure statement, only examples.

  • Is the condominium leasehold or freehold, and if so what type?
  • The address of the developer and the address of the condominium.
  • A description of the property.
  • Has the building been converted from a prior use.
  • What units the developer intends to lease.
  • Information about the Tarion New Home Warranty enrollment for the units and the common elements.

If there is a material change in the disclosure statement, then the developer has to deliver a revised disclosure statement within a reasonable time after the change takes place, and at the latest within ten days before the deed is delivered to the buyer, i.e. closing.  The buyer has a right to rescind the agreement within ten days of receiving the revised disclosure statement.

Condominium Status Certificates 2

STATUS CERTIFICATES

1)   NAME
(a) The term “Status Certificates” replaces “Estoppel Certificates”.

2)   TIME
(a) A status certificate which includes all of the required attachments must be given to anyone who requests it within 10 days of receipt of payment for it.

3)    CONTENTS
The status certificate must contain;

  • A statement of the common expenses for the unit and the default, if any, in payment of the common expenses;
  • A statement of the increase, if any, in the common expenses for the unit that the board has declared since the date of the budget of the corporation for the current fiscal year and the reason for the increase;
  • A statement of the assessments, if any, that the board has levied against the unit since the date of the budget of the corporation for the current fiscal year to increase the contribution to the reserve fund and the reason for the assessments;
  • A statement of the address for service of the corporation;
  • A statement of the names and address for service of the directors and officers of the corporation;
  • A copy of the current declaration, bylaws and rules;
  • A copy of all applications made to amend the declaration for which the court has not made an order;
  • A statement of all outstanding judgments against the corporation and the status of all legal actions to which the corporation is a party;
  • A copy of the budget of the corporation for the current fiscal year, the last annual audited financial statements and the auditor’s report on the statements;
  • A list of all current agreements mentioned in section 111, 112 or 113 [1] and all current agreements between the corporation and another corporation or between the corporation and the owner of the unit;
  • A statement that the person requesting the status certificate has the rights to review and copy all the agreements referred to in (j);
  • A statement whether the parties have complied with all current agreements between the owner and the Condominium with respect to owner effected changes to the common elements under section 98 of the Bill;
  • A statement with respect to:
    • (i)    The most recent reserve fund study and updates to it,
    • (ii)   The amount in the reserve fund no earlier than at the end of a month within 90 days of the date of the status certificate, and
    • (iii) Current plans, if any, to increase the reserve fund;
  • A statement of those additions, alterations or improvements to the common elements, those changes in the assets of the corporation and those changes in a service of the corporation that are substantial and that the board has proposed but has not implemented, together with a statement of the purpose of them;
  • A statement of the number of units for which the corporation has received notice that such units are leased during the fiscal year preceding the date of the status certificate;
  • A certificate or memorandum of insurance for each of the current insurance policies;
  • A statement of the amounts, if any, that this Act requires be added to the common expenses payable for the unit;
  • A statement whether the Ontario Court (General Division) has made an order appointing an inspector or an administrator;
  • All other material that the regulations made under this Act require.
    • (b) If a status certificate omits material information that it is required to contain, the certificate is deemed to include a statement that there is no such information.
    • (c) If the Condominium does not provide a requested status certificate it is deemed to have given a certificate stating that:
      • There has been no default in the payment of common expenses for the unit;
      • The board has not declared any increase in the common expenses for the unit since the date of the budget of the corporation for the current fiscal year; and
      • The board has not levied any assessments against the unit since the date of the budget of the corporation for the current fiscal year to increase the contribution to the reserve fund.
    • (d) The condominium can charge a fee of $100.00 inclusive of all taxes and disbursements, (such as copying charges, etc…) for providing the certificate.

 

Reproduced with the consent of the Northwestern Ontario Chapter of the Canadian Condominium Institute and the Golden Horseshoe Chapter of the Canadian Condominum Institute, Level 100 Condominium Administration Course.

WHAT IF THE STATUS CERTIFICATE IS WRONG?

Section 76(6) of the Act provides that the Status Certificate binds the Condominium Corporation.

There is no right of rescission in the Status Certificate is wrong.

There is no penalty on the Condominium Corporation under the Act for issuing a Status Certificate that is wrong.

If the Status Certificate is wrong, then the Condominium Corporation may be prevented from taking certain steps against the new unit owner.  For example, if the amount of the common elements expenses was incorrect, then the Buyer may not have to pay the increased amount.  Another example might be if the Seller had made changes to the exclusive use common elements, i.e. a balcony or parking space, without the consent of the Condominium Corporation, but this was not disclosed in the Status Certificate, then the condominium may not be able to force the unit holder to remove the changes.  Another example might be if the Condominium hadn’t provided detail of any increased payments required to the reserve fund, then that increase may not be enforceable against the Buyer.

ONTARIO REAL ESTATE ASSOCIATION (“OREA”) CONDOMINIUM CLAUSES

CONDO – 1 Condition – Review of Condominium Documents – By Specific Date

This offer is conditional upon the Buyer’s lawyer reviewing the Status Certificate and Attachments and finding the Status Certificate and Attachments satisfactory in the Buyer’s Lawyer’s sole and absolute discretion. The _____________(Buyer/Seller) agrees to request at the __________________________________________(Buyer/Seller) expense, the Status Certificate and Attachments within _______ days after acceptance of this Offer.  Unless the buyer gives notice in writing to the Seller not later than 5:00 p.m. on the _____________ day of _____________________ 20, ____ , that this condition is fulfilled, this Offer shall be null and void and the deposit shall be returned to the Buyer in full without deduction. This condition is included for the benefit of the Buyer and may be waived at the Buyer’s sole option by notice in writing to the Seller within the time period stated herein.

CONDO – 2 Condition – Review of Condominium Documents – Within ____ Days

This offer is conditional upon the Buyer’s lawyer reviewing the Status Certificate and Attachments and finding the Status Certificate and Attachments satisfactory in the Buyer’s Lawyer’s sole and absolute discretion ____________(Buyer/Seller) agrees to request at the___________________(Buyer/Seller)  expense, the Status Certificate and Attachments within _______ days after acceptance of this Offer. Unless the buyer gives notice in writing to the Seller not later than 5:00 p.m. on the fifth day (Excluding Saturdays, Sundays and Statutory Holidays) following receipt by the buyer of the Status Certificate and attachments, that this condition is fulfilled, this Offer shall be null and void and the deposit shall be returned to the Buyer in full without deduction. This condition is included for the benefit of the Buyer and may be waived at the Buyer’s sole option by notice in writing to the Seller within the time period stated herein.

CONDO – 3 Alterations By Owner

The Seller represents and warrants that, with respect to the unit, the Condominium Act, Declaration, Bylaws and Rules of the Condominium Corporation have been complied with, and that no improvements, additions, alterations or repairs that require the consent of the Condominium Corporation have been carried out in the said unit, the exclusive use areas or the common elements, unless the required consent has been obtained from the Condominium Corporation. This warranty shall survive and not merge on the completion of this transaction.

CONDO – 4 Alterations/Changes to Unit During Interim Occupancy

The Buyer covenants and agrees that no alterations will be made to the unit during the term of interim occupancy. Upon completion of the transaction, the Buyer agrees to abide by the By-laws and Rules relating to alterations and changes within the unit.

CONDO – 7 Occupancy by Buyer Prior to Completion of Construction

The Buyer acknowledges that the unit being acquired is currently under construction. The Buyer shall take occupancy of the unit provided that the interior of the unit has been substantially completed, notwithstanding that the common areas have not been substantially finished. The Seller agrees to complete same in a good and workmanlike manner in a reasonable period of time. The Buyer further acknowledges that failure to complete either the unit or the common areas by the occupancy date in no way relieves the Buyer from completing the transaction.

CONDO/POTL SCHEDULE “B” – Common Elements Condominium (POTL)

NOTE: To be used with the standard Agreement of Purchase and Sale (Form 100) for the sale of a freehold property that also includes an interest in a Common Elements Condominium.

PROPERTY: The property shall be deemed to include a common interest in the Condominium Corporation being __________________ Condominium Plan No. __________________ as more particularly set out on the Declaration and Description.

STATUS CERTIFICATE AND MANAGEMENT OF CONDOMINIUM: Seller represents and warrants to Buyer that there are no special assessments contemplated by the Condominium Corporation, and there are no legal actions pending by or against or contemplated by the Condominium Corporation. The Seller consents to a request by the Buyer or the Buyer’s authorized representative for a Status Certificate from the Condominium Corporation. Buyer acknowledges that the Condominium Corporation may have entered into a Management Agreement for the management of the condominium property.

MEETINGS: Seller represents and warrants to Buyer that at the time of the acceptance of this Offer the Seller has not received a notice convening a special or general meeting of the Condominium Corporation respecting (a) the termination of the government of the condominium property; (b) any substantial alteration in or substantial addition to the common elements or the renovation thereof; OR (c) any substantial change in the assets or liabilities of the Condominium Corporation; and Seller covenants that if the Seller receives any such notice prior to the date of completion Seller shall forthwith notify the Buyer in writing and Buyer may thereupon at the Buyer’s option declare the Agreement null and void and all monies paid by the Buyer shall be refunded without interest or deduction.

TITLE: Buyer agrees to accept title to the Property subject to the provisions of the Condominium Act and its Regulations and the terms, conditions and provisions of the Declaration, Description and By-laws, Occupancy Standards By-laws, including the Common Element Rules and other Rules and Regulations.

Reproduced with the consent and permission of the Ontario Real Estate Association (“OREA”) ©OREA, for use only by OREA members.

Agreements for management, provision of goods or services on a continuing basis,  provision of facilities to the corporation on other than a non-profit basis,  lease of all or part of the common elements for business purposes and/or the mutual use, provision or maintenance or the cost-sharing of facilities or services entered into before the turnover meeting [1]

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Troublesome Tenants in Condominiums – Part 7

Allison v. Rank City Wall Canada Ltd.

[1984] O.J. No. 3094

45 O.R. (2d) 141

Ontario High Court of Justice Smith J.

February 8, 1984.

E. Allen, for plaintiff.
W. T. McGrenere, Q.C., for defendant.

1     SMITH J.:– This action can be described as involving occupier liability whether it is made to sound in contract, tort or is based on the Occupiers’ Liability Act, R.S.O. 1980, c. 322. The plaintiff, a registered nurse, was a tenant of the defendant under a written lease. She was residing alone in apartment No. 2410 in the Sheppard Centre at 2 Forest Laneway. She was also renting parking facilities in the underground garage adjacent to and being a part of the premises.

2     On May 12, 1981, at about 8:45 p.m., while parking her car, she was brutally attacked by one Howell who was later apprehended and confessed to the crime. He was not in any way connected with the defendant.

3     The lease makes no specific mention of the kind of security the lessor was to provide. There is, however, a general exemption clause which reads as follows:

The Landlord shall not in any event whatsoever be liable or responsible in any way for

117.(a) any personal injury or death that may be suffered or sustained by the Tenant or any employee of the Tenant or any member of the Tenant’s family, his agents or guests, or any other person who may be upon the rented premises or the premises of the Landlord; or

(b) any loss of damage or injury to any property including cars and contents thereof belonging to the Tenant or any member of the Tenant’s family, or to any other person while such property is on the rented premises or on the premises of the Landlord; or

119.  (c) without limiting the generality of the foregoing, any damages to any such property caused by steam, water, rain or snow which may leak into, issue or flow from any part of the rented premises or the premises of the Landlord or from the water, steam, sprinkler or drainage pipes or plumbing works of the same or from any other place or quarter; or

(d) any damage caused by or attributable to the condition or arrangement of any electrical or other wiring; or

(e) any damage caused by anything done or omitted to be done by any tenants of the Landlord.

4.     The plaintiff was security conscious. She said she discussed with Mr. Brown, an authorized representative of the defendant, the fact that she was looking for secure accommodation and that her work would require her to return home at all hours of the evening. Mr. Brown took her on a tour of the parking area, of the laundry room and of the front entrance. He stated that the defendant company had cameras installed. It is not clear whether he was referring to the garage area specifically. The plaintiff may well have thought that he was. She did not observe any cameras in the garage in the four months that she occupied the apartment. In other words, it can be assumed that she knew at some point that there was no monitoring in the garage through cameras, although there were security men on staff. She was told by Brown that there was only one entrance to the P1 parking area which she thought was reserved for residential parking. She always understood that there was only one door into the garage. There were a number of exit doors through which entry could not be gained unless they were for some reason left open.

5.     The plaintiff was not allotted a specific parking spot on the P1 level of the garage. She could use any one of the spaces provided.

6.     The sole outside entrance for cars to the P1 area, was equipped with a device whose mechanism for the opening of the door was triggered by a card in the possession of tenants only. Once inside the parking premises, there was no designation, either for residential or for commercial parking, separating one from the other. There had been a barrier between the two prior to the plaintiff ‘s occupation of the premises. There was none at the time. The plaintiff was in the habit of going straight to a parking space near the door through which she could only gain entry to her building with a key. She followed her normal practice on the day of the assault.

7.     It is clear that in a strict sense, or indeed in any sense, the parking garage was not secure. In addition to the fact that there were exit doors that were not always closed, there were a few commercial vehicle entrances. Access to the garage could also be had with the greatest of ease by anyone walking through the mall and making use of the shuttle area shown on diagram ex. 5. It was equipped with elevators and stairs. The access was available at all times except after 2:00 a.m. when the mall closed. There was no evidence of how the attacker came to be on the premises that evening. But it is clear from the above summary that very little ingenuity on his part was required.

8.     The manager, Mr. Bennett, candidly admitted that there were representations regarding security made in the form of advertisements and orally when the plaintiff applied. He admitted that security was a selling point; that the majority of residents were single women and senior citizens who were attracted to the complex in part because of the security arrangements. In fact, the defendant can be seen to have been clearly security conscious in its installation of some 38 television-monitoring devices. They were mostly focused on the commercial entrances and exits. The front entrances to the residential towers were and are fairly well secured. The panels in the entranceway contain the name of each tenant only, without a corresponding apartment number. The plaintiff said she decided to apply to reside in the complex because her security fears had been allayed by what was represented to her at her initial encounter with the defendant’s representative. The court has no reason to doubt her evidence in this regard.

9.     The defendant recognizes a duty to secure. It argues that the obligation was to secure within reasonable limits thereby giving security a limited meaning. It went on to contend that the complex had been free of problems in six years. There was consequently no reason to foresee what occurred or to think that the system would prove inadequate.

10.     The total parking area, as the plaintiff later learned, was huge. It included 30,000 sq. ft. of parking on P1, P2 and P3 levels and additional parking facilities on the concourse level which coincided with the mall level. The total parking area served the occupants of two commercial towers, of two residential ones, including the plaintiff ‘s and the patrons of the mall.

11.     One security guard only was assigned to patrol the entire parking area every hour. It was a large area to be sure, to be patrolled by one guard in the space of one hour. He did not always complete his tour of inspection in any case for he was called elsewhere on occasion and also had to check all the exit doors to make certain that they were securely shut.

12.     The question now relates to the standard of care to be applied in the circumstances existing here.

13.     The relevant provisions of the Occupiers’ Liability Act are as follows:

134.  3(1) An occupier of premises owes a duty to take such care as in all the circumstances of the case is reasonable to see that persons entering on the premises, and the property brought on the premises by those persons are reasonably safe while on the premises.

 (2) The duty of care provided for in subsection (1) applies whether the danger is caused by the condition of the premises or by an activity carried on on the premises.

 (3) The duty of care provided for in subsection (1) applies except in so far as the occupier of premises is free to and does restrict, modify or exclude his duty.
(My emphasis.)

14.     I will turn to the defendant’s duty in contract in the course of disposing of the questions raised by the exclusionary clause. As far as the common law is concerned, it may be said to have been superseded by the Act, but only in the sense of the Act having abolished the distinction between invitees and licensees. The case-law had of itself gone a long way in that direction. The question which s-s. 3(1) directs the court to ask itself, “Did the defendant take reasonable care in all the circumstances to ensure that persons were reasonably safe while on the premises both in respect to their condition and regarding the activities carried on therein”, is not at all different from the questions based upon M’Alister (or Donoghue) v. Stevenson, [1932] A.C. 562, and the cases following it. Who is my neighbour? Foreseeability and causation remain with us as well.

15.     I have concluded, not without some difficulty, for the argument advanced by the defendant was not devoid of merit — it was urged with some force that the net result of a finding of liability against the landlord would be to make it an insurer — that the landlord failed in its obligation to this plaintiff to make the premises safe for her. The assault in my view was a reasonably foreseeable one and ought to have been guarded against in this case.

16.     The court must place itself in the position of the landlord. The company knew it was dealing with an underground garage in a large urban centre in which the unwary in recent years have fallen prey in more than a number of isolated cases, to sexual and other kinds of assaults. To the knowledge of the landlord, the garage premises were virtually and indiscriminately wide open to the public at large. The plaintiff was concerned about safety. She received certain assurances which she accepted and upon which she acted. In the circumstances, a high obligation was fixed upon the landlord. If that obligation were standing alone and there was a total absence of representations, given the particular conditions obtaining at this complex and given the kind of security provided by the landlord, it might conceivably be difficult to find acts or omissions that would attract liability. That is not the situation that presents itself to me.

17.     The representations distinctly placed a higher burden upon the landlord. It was obligated to make good on its assurances and it failed in this regard. It took no effective steps to protect the residential tenants entering from the garage. I repeat that the plaintiff ‘s concerns had been clearly expressed. She was enticed to these premises and drawn into a contractual relationship by reason of the representations made in the advertisements, by reason of the reputation acquired by the complex and of the oral conversations at the time the plaintiff made her application to lease. The security measures were totally inadequate. Patrolling was insufficient. Lighting was dim. There was no television monitoring of the parking area.

18.     It almost seems as if the security of the residential tenants entering their premises from the garage, was lost in the shuffle. The shuttle itself was designed for the convenience of the patrons of the mall. Most of the television-monitoring devices were mainly directed to commercial areas as stated, as well as the front entrances to the residential buildings. The parking garage was neglected.

19.     The plaintiff testified that she did not know of the unsafe condition of the garage. It was sought to impute such knowledge to her. In my view she was only really aware of one entrance. I accept her evidence in that regard. At any rate, she most certainly did not have the kind of appreciation of the risk that would permit volenti to apply.

20.     The negligence of the defendant consisted of failing to reasonably secure the garage premises once having represented their safe condition or alternatively, of allowing the plaintiff to be lulled into a false sense of security. “You are safe.” The fact that security, such as it was, had worked for six years, was due to chance. I do not accept that the evidence fell short of proving that the aggressor’s presence was due to lack of security. The plaintiff does not need to show precisely how Howell came to be on the premises. He was bent on criminal activity. He engaged in further and similar criminal activity before he was apprehended at or near the premises some months later. The probabilities are that proper security would have prevented this unfortunate assault as would have a warning to the plaintiff. A knowing and conscious plaintiff could have requested escort services as others had on occasion or exercised greater care or taken up residence elsewhere.

21.     Liability under the Occupier’s Liability Act can be restricted according to its terms but the restriction must be specific and brought to the attention of the person whom the legislation intends to protect. There is no reason why cases such as Canada Steamship Lines Ltd. v. The King, [1952] A.C. 192, should not continue to apply.

22.     The exclusionary clause in this lease did not purport to limit liability in respect of negligence and certainly not in respect of negligence alone. Mr. Bennett, the defendant’s manager, accepted counsel’s suggestion that the landlord had not intended by use of that clause to be exonerated from a breach of duty to take care. The plaintiff admits that she read the lease from beginning to end. She did not think the exemption clause derogated in any way from the representations made to her that she would be safe. The exclusionary clause must be construed against the defendant.

23.     I have chosen thus far to found liability upon the conduct of the landlord which in my view fell below the standard dictated by the circumstances and particularly by the representations that induced the plaintiff to reside at this complex. The court can easily choose to resort to the defendant’s contractual obligations it assumed when these parties were brought together as the parties both understand the obligations to be.

24.     The three obligations, i.e., as they arise at common law under statute or in contract, are not mutually exclusive. In this instance, it might be well to emphasize the contractual relationship and I do so. The circumstances, however, in my view, give rise to tortious (in the common law definition) and to statutory liability as well. There is no need to make neat distinctions when defining the nature of the obligations. It is quite sufficient that they did exist and that they were breached.

25.     I now proceed to assess the damages. The specials have not been disputed. They are made up of moving expenses, including transfer of telephone, cleaning of car, some prescription drugs and lost clothing. The evidence supports the total claimed of $363.90.

26.     The incident has already been described. It lasted about five minutes. The plaintiff was struck several times about the head with a blunt instrument. She bled profusely from several scalp wounds.

27.     There were three lacerations across the top of the scalp measuring 11/2, 21/2 and 3/4 ins., respectively, which required 20 nylon sutures. These were inserted at Sunnybrook Hospital to which the plaintiff was transported by ambulance on the night in question. There were other smaller lacerations. There was also a large area that was observed behind her left ear and down her left neck with obvious swelling, tenderness and discoloration. A dorsal contusion to the right hand of some proportion was evident, with swelling and tenderness, especially over the right third finger. Fortunately, there were no fractures.

28.     Understandably, there was a great deal of pain and suffering. The scalp remained extremely tender for some time. The finger hurt. There were headaches. Miss Allison plays squash and still experiences a tingling sensation on the crown of the head when she plays. Her injured finger gets cold quickly in the winter- time.

29.     This 36-year-old lady is fortunate indeed that she escaped with her life. The attack was vicious. The circumstances surrounding it must have been terribly frightening. One week following it, she was still emotionally upset, tremulous, shaky, weeping easily and speaking with an anxious cracking voice. Although she spent only a few hours in hospital, and lost only two days’ work, there remains a certain relatively slight degree of physical damage which will last for an extended period. It is relatively mild or perhaps it should be described as being mild to moderate. The psychological shock, though, was severe and there are permanent emotional scars. These would be more serious had we been dealing with a weaker and less brave lady. She is to be commended. The defendant is fortunate to have to deal with a thick-skulled plaintiff. The assault I should say, was in part at least, sexual in nature, although no intercourse or attempt at intercourse took place. She became a recluse, she said, fearing underground garages and elevators. Her heart palpitates when she hears running behind her. She found her ability to relate in a normal way to men to have been impaired. What remains of the psychological sequelae was estimated by the plaintiff at 75%. I appreciate that percentages in this kind of situation are but a convenient way of describing in a global sense how one still feels and reacts as a result of an experience of the kind which I have described. I am confident she will survive the ordeal well in the long term.

30.     I have determined that her general damages ought to be fixed at $18,000.

31.     There is nothing in the evidence to justify aggravated or exemplary damages against the landlord. The author of this crime, of course, is not a party to these proceedings. There will be judgment for $18,363.90. It seems to me that costs should follow the event.

Judgment for plaintiff.

Indexed as: Cater (Guardian ad litem of) v. Ghag Enterprises Ltd.

Between
Malia Lynn Cater by her Guardian Ad Litem, Katherine Cater and
Randall William Cater, Plaintiffs, and
Ghag Enterprises Ltd. and Strata Corporation-K68, Defendants

Kamloops Registry No. 15490

[1991] B.C.J. No. 656

British Columbia Supreme Court
Kamloops, British Columbia

Houghton J.

Heard: February 12, 1991
Judgment: March 14, 1991

(13 pp.)

Counsel for the Plaintiffs: Roy M. Kahle.
Counsel for the Defendant, Ghag Enterprises Ltd.: S. Dev Dley.
Counsel for the Defendant, Strata Corporation -K68: Frank Scordo.

HOUGHTON J.:– At the commencement of the trial, counsel advised that by an order of the court only the question of liability was to be heard on this trial with a separate trial on the issue of quantum.

Mr. and Mrs. Cater moved into unit 43 of Summit Garden Court, a condominium strata development at 1570 Freshfield Road, Kamloops, B.C. on July 31, 1989. They had not seen the unit before they moved in but had rented it through Mr. J. R. Armstrong, the agent of the defendant, Ghag Enterprises Ltd. which owned the unit. He told Mr. Cater that the right to parking in the space in front of the unit went with the unit. Mr. Armstrong believed that he had given a copy of the rules and regulations to Mr. and Mrs. Cater but I am satisfied that he did not. Mr. Cater had signed the tenant’s undertaking regarding the Strata Corporation – K68 but had gathered the rules from other sources as did Mrs. Cater. Mr. Armstrong did not recall discussing the driveway with Mr. Cater as he said he would have mentioned it to the manager or the strata corporation and nothing was done. However, I accept Mr. Cater’s evidence that the dip in the parking area was noted and mentioned to Mr. Armstrong on the day they were moving in and mentioned again when Mr. Armstrong checked the premises. When the Caters moved in they found the unit in poor condition with a hole in the balcony, a cupboard door off, and so on.
Mrs. Katherine Cater described “a very large hole in the driveway.” She said one couldn’t miss it as one drove in and she told her husband because she banged the bottom of her new car in it. Mr. and Mrs. Cater had a daughter, Malia, aged eight at the time when they moved into the unit. She was hearing impaired and wore a hearing aid. She was an average student, though she required help. She had previously owned a bike and was a good rider and Mr. Armstrong produced an appropriate bike.

Mrs. Cater said that while she was concerned about her car driving through the hole, she never mentioned it to her daughter and didn’t view it as being a danger to her.

On August 17, 1989, Mrs. Cater was upstairs and asked her husband, who was sweeping the driveway, to call Malia who was out riding her bike. Mr. Cater called her and went on sweeping the driveway. Malia drove into the driveway with a six-yearold riding double behind her. She avoided her father by riding into the depression and fell.

Malia was not called as a witness. Neither Mr. nor Mrs. Cater saw what actually happened. Mrs. Cater said she saw her topple. She quoted Malia as telling her later at the hospital that, “her bike had gone into the hole, pulled, and toppled over.” In cross-examination some questions on her examination were put to Mrs. Cater:

Q. Was she riding her bike before she fell or was she walking her bike down?
117.  Now, I’m only going by what she told me in a later date, she said she was getting off her bike, she was pulling in to get off the bike.
288. Q. Oh, I see. So she was coming back from her ride?
A. That’s right, she was going to –
289. Q. All right.
A. – get off.

290. Q. All right. What else did she tell you later on?

117.  It depends when- well, I’m talking when she was in the hospital.

119.  291. Q. Yes.

117.  I mean I could go on and on. What is it you want to know?
Q. Well, I want to know what she says about how the accident occurred?
A. She mentioned that she was going to get off the bike.
293. Q. Yes.

A. And that’s about it, referring to the accident. She’s –

134.  Q. Just that she was going to get off her bike and she fell?

A. Yes.

Q. All right. So about one week you asked her what happened?

(a)  A. Well, we discussed it.

(b)  Q. All right. And she said that she was returning from her bicycle ride, she was getting off when she fell? Yes?
117.  Yeah. She said that – yes, I’d say, she was going to get off her bike.
300. Q. Did she tell you what caused her to fall?
A. No, I didn’t
301. Q. So she’s never told you what caused her to fall?
A. No. She knows that she was in- went into the
302. Q. Don’t worry about what she knows.
A. Okay.
303. Q. I want to know what she told you.

(i)  A. No, she never

(ii)  Q. All right. And that’s all she’s told you about the actual accident is what you’ve just told me today; is that correct?
A. I’d say yes.

Mrs. Cater said that the answers to these questions were true.
Mrs. Cater had described the depression as three feet by three feet and four inches or so at its deepest point.

Mrs. Cater agreed that she had told her daughter not to ride double and had warned her to watch out for traffic. She said she had never seen her daughter ride into the driveway. Malia had always walked the bike out or in when she had observed her.
Mr. Holmes, an experienced adjuster, took photographs of the driveway and other areas in the complex which were put in evidence. Mr. Holmes described the depression as extending from five to six feet from the curb and three to four feet wide along the curb and being five inches deep. He said there was a gentle slope to the deepest part of the depression.

Mr. Cater said Malia came when he called her and he went on sweeping and to avoid him she went towards the hole. He suddenly saw her on the ground. He said she passed him and fell, tire into the hole. After he had picked up the little girl who was riding behind Malia he picked her up and realized her leg was badly broken and she was then taken to hospital.

Mr. Cater understood from Mr. Armstrong that the condominium unit included the parking space in front of it. Mr. Cater said his daughter usually stopped before she entered the driveway. He said she was just coming to a stop when she fell. He said they had one or two conversations about the dip ad he had told her not to drive her bike around the hole.

There was no written lease and I am satisfied that Mr. Armstrong, on behalf of the defendant, Ghag Enterprises Ltd., included the driveway parking area in front of unit 43 with unit 43 when he was leasing the premises. He understood that he was to look after any repairs required on the premises on behalf of Ghag Enterprises. He said he would normally tell the manager or the strata corporation about any problems with the driveway.

In my opinion the depression described in the evidence and shown in the photographs, particularly photographs 1 and 2 and 3 of Exhibit #4, show a depression in the paving that is deep enough and sudden enough to be a hazard to a person walking or getting out of a motor vehicle at that point or to a child riding a bicycle. There was no rule forbidding children riding bicycles in the condominium complex although they were warned to stay away from the entrance to the outside street. It was agreed that the individual parking areas in front of each unit are actually common property under the Condominium Act, (1979) R.S.B.C. 61.
Section 34(1)(d) of the Condominium Act reads:

(c)  The strata corporation shall
keep in a state of good and serviceable repair and properly maintain common property, common facilities and assets of the strata corporation; and . . .”
The strata corporation falls within the definition of occupier in Occupiers Liability Act, R.S.B.C. 1979, c. 303 which reads:

1. In this Act occupier’ means a person who is in physical possession of premises; or has responsibility for, and control over, the condition of premises, the activities conducted on those premises and the persons allowed to enter those premises, and, for this Act, there may be more than one occupier of the same premises; …Mr. Thompson, as I said earlier, understood he was to look after any repairs required on the premises on behalf of Ghag Enterprises and said he would normally tell the manager or strata corporation about any problems with the driveway. He told Mr. Cater he was going to take care of the depression in the driveway and get it fixed. He said if he didn’t tell anyone, nothing would be done.

In Konkin v. Bartel, [1988] B.C.J. No. 1716, Vancouver Registry No. C855911, September 15, 1988, Rowles J., with reference to s. 1 of the Occupiers Liability Act at page 11 and following said:

(c)  “DiCastri in Occupiers Liability (1980) examined the statutory definition of ‘occupier’ as it appears in the Ad and concluded that, ‘Essentially, the statutory definition is declaratory of the common law.’

(c)  In Hartwell v. Grayson Rollo [1947] 1 K.B. 901 (C.A.), Roxburgh J. at 917 referred to a passage from Salmond, as follows:

‘On the issues of negligence I found myself on the statement of law in Salmond on the Law of Torts (10th ed.), at p. 469:

“In dealing with dangerous premises it is necessary to distinguish between the responsibilities of the owner and those of the occupier or possessor. Generally speaking, liability in such cases is based on occupancy of control, not on ownership. The person responsible for the condition of the premises is he who is in actual possession of them for the time being, whether he is the owner or not, for it is he who has the immediate supervision and control and the power of permitting or prohibiting the entry of other persons.

(c)  In the leading case of Wheat v. E. Lacon and Co. [1966] 1 All E.R. 582 (H.L.), Lord Denning said at p. 593:

‘… wherever a person has a sufficient degree of control over premises that he ought to realize that any failure on his part to use care may result in injury to a person coming lawfully there, then he is an “occupier” and the person coming lawfully there is his “visitor.” In order to be an “occupier” it is not necessary for a person to have entire control over the premises. He need not have exclusive occupation. Suffice it that he has some degree of control …

In Salmond on Torts (14th Edn., 1965) p. 372, it is said that an “occupier” is “he who has the immediate supervision and control and the power of permitting or prohibiting the entry of other persons.” This definition was adopted by Roxburgh J., in Hartwell v. Grayson Rollo (45) and by Diplock L.J., in the present case. There is no doubt that a person who fulfils that test is an “occupier.” He is the person who says, “come in” but I think that that test is too narrow by far. There are other people who are “occupiers,” even though they do not say “come in.” If a person has any degree of control over the state of the premises it is enough.

(c)  At p. 601, Lord Pearson said:

“The foundation of occupiers’ liability is occupational control, i.e., control associated with and arising from presence in and use of or activity in the premises. ”
Ghag Enterprises was the owner of unit 43. Ghag Enterprises was occupying the driveway of unit 43 – it had supervision and control over it and it purported to lease it to the Caters. Ghag Enterprises is therefore an occupier within s. 1, and ss. 6 and 3 apply.

Section 6 of the Occupiers Liability Act reads:

6.(1) Where premises are occupied or used by virtue of a tenancy under which a landlord is responsible for the maintenance or repair or the premises, it is the duty of the landlord to show toward any person who, or whose property, may be on the premises the same care in respect of risks arising from failure on his part in carrying out his responsibility, as is required by this Act to be shown by an occupier of premises toward persons entering on or using them.”

The duty of care set out in 5.3 of that Act reads:

(f)  (1) An occupier of premises owes a duty to take that care that in all the circumstances of the case is reasonable to see that a person, and his property, on the premises, and property on the premises of a person, whether or not that person himself enters on the premises, will be reasonably safe in using the premises.
The duty of care referred to in subsection (1) applies in relation to the condition of the premises; activities on the premises; or conduct of third parties on the premises.

9.  Notwithstanding subsection (1), an occupier has no duty of care to a person in respect of risks willingly accepted by that person as his own risks.”
In Zavaglia v. MAQ Holdings Ltd., 50 B.C.L.R. 204, Lamperson J. in commenting on the standard of care owed by a landlord pursuant to s. 3(1) said at p. 216:

“The test is an objective test, namely, that of a reasonable man. The learned author, Mr. Di Castri, at p. 217 of his book outlined several factors that courts have considered in applying this test; they are:

Whether the plaintiff, in the light of his own knowledge, exercised reasonable care for his own safety;

Whether the occupier’s conduct accorded with an accepted standard or practice;

9.  Whether the occupier’s system of inspection or supervision was commensurate with the risk, the length of time the danger was allowed to exist being highly relevant;
The steps necessary to remove the danger and the consequent burden on the occupier; and Whether or not the danger was foreseeable in accordance with the principle enunciated in Donoghue v. Stevenson. [1932] A.C. 562 (H.L.)

The depression in the driveway was obvious to any inspection and had remained there for some months. The necessary patching of the pavement to cure the danger was minor. The danger to people using the driveway, which was also the walkway to the residence, was apparent and the possibility of injury to such people foreseeable.
I find the defendants did not take that care in all the circumstances of the case as was reasonable to see that a person using the premises would be reasonably safe in using the driveway.

Malia at the time of the accident was an eight-year-old with a hearing defect but an average student. It appeared she knew of the depression in the driveway and while she might have appreciated to some extent the danger of riding her bike through the depression, I find that she would not appreciate that danger so as to assume the risks within subsection (3) of 5.3.

On the preponderance of evidence I am satisfied that the accident was caused by the depression when Malia rode her bike into it and it pulled and toppled over.
I find both defendants liable to the plaintiffs.

The defendants submit that the infant plaintiff is contributorily liable. The law respecting the negligence and apportionment of liability of an infant is dealt with by Lambert J.A. in Ottosen v. Kasper, 37 C.C.L.T. 270 at page 275 and following. After referring to s. 1 of the Negligence Act, R.S.B.C. 1979, c. 298, Lambert J.A. said:

“The words used are the words of fault. The question that affects apportionment, therefore, is the weight of fault that should be attributed to each of the parties, not the weight of causation. In many cases they would be the same thing but, particularly in the case of a young child, the weight of fault may well be less than the weight that would be attributed if causation were the basis of the balancing. The point is supported by the reasons of Lord Denning in Gough v. Thorne, [1966] 3 All E.R. 398, [1966] 1 W.L.R. 1387 at 1390 [W.L.R., p. 399 All E.R.] where he says this at page 277:

‘I am afraid that I cannot agree with the judge. A very young child cannot be guilty of contributory negligence. An older child may be; but it depends on the circumstances. A judge should only find a child guilty of contributory negligence if he or she is of such an age as reasonably to be expected to take precautions for his or her own safety: and then he or she is only to be found guilty if blame should be attached to him or her. A child has not the road sense or the experience of his or her elders. He or she is not to be found guilty unless he or she is blameworthy.

In this particular case I have no doubt that there was no blameworthiness to be attributed to the plaintiff at all.

The child, Malia, was eight years old at the time of the accident. She had been warned to keep away from the depression and not to ride double. In the circumstances she could not be expected to exercise the care of an adult or older child. However, she was familiar with riding her bike and knew the rules and problems. She ought to have taken some responsibility and precautions for her own safety.

I find Malia Cater 25% contributorily negligent.

I find the defendants 75% liable for the plaintiffs damages. Costs will follow the event.
The plaintiff has asked that costs be paid forthwith, however, the taxation of costs depends on quantum under the Rules and ought to be left until the completion of the case with the assessment of damages.

HOUGHTON J.

 

Case Name:
Pham v. Strata Plan NW 2003

Between
Yen Thi Pham, Plaintiff, and
The Owners, Strata Plan NW 2003, Defendant

[2007] B.C.J. No. 785

2007 BCSC 519

Vancouver Registry No. S060379

British Columbia Supreme Court
Vancouver, British Columbia

Maczko J.

Heard: March 29 and 30, 2007.
Judgment: April 18, 2007.

(26 paras.)

Real property law — Condominiums — Bylaws — Condominium Corporation — Rights and obligations — Unit holders — Liability of — Action by Pham for payment of moneys held in trust by her solicitor dismissed and counterclaim by Strata for damages resulting from an illegal grow operation in Pham’s rental property allowed — Pham benefited from the work done by Strata, which cost them $106,730 to repair the damage for which she was responsible — It would be unconscionable to require Strata to bear the burden of those costs and thereby permit Pham to benefit from her conduct.

Action by Pham for payment of moneys held in trust by her solicitor and counterclaim by Strata for damages resulting from an illegal grow operation in Pham’s rental property — An illegal grow operation was raided by police in Pham’s rental property — Damage was caused to the apartment and surrounding area — Strata contacted Pham, as managers of the apartment complex, in order to recover costs associated with the clean-up — Pham ignored all communication by Strata in that regard — The work was completed and Pham was sent a bill for $106,730 — Strata put a lien on the property and Pham decided to sell and netted $61,500 which were held in trust by Pham’s solicitor pending the action — HELD: Action allowed — The statute and bylaws provided Strata with the authority it needed to carry out the repairs and charge Pham — On three occasions Pham was provided with letters informing her of what they intended to do and she made no objection and stood idly — Pham benefited from the work done by Strata, which cost them $106,730 to repair the damage for which she was responsible — It would be unconscionable to require Strata to bear the burden of those costs and thereby permit Pham to benefit from her conduct.

Statutes, Regulations and Rules Cited:
Strata Property Act, S.B.C. 1998, c. 43, s. 3, s. 31, s. 31(a), s. 31(b), s. 112(1), s. 112(2), s. 133, s. 133(1), s. 133(1) (a), s. 133(1)(b), s. 133(2), s. 135(1), s. 135(1)(a), s. 135(1)(b), s. 135(1)(c), s. 135(1)(d), s. 135(1)(e), s. 135(1) (f), s. 171, s. 171(1), s. 171(1)(a), s. 171(1)(b), s. 171(1)(c), s. 171(1)(d), s. 171(2), s. 171(3)

Counsel:
Counsel for Plaintiff: Andrew Davis.
Counsel for Defendant: John D. Shields.

 

1.     MACZKO J.:– There are two actions before the court being tried pursuant to Rule 18A. One is by the plaintiff to have approximately $61,500.00, which is being held in trust by the plaintiff’s solicitor, paid out to her. The other action is by the defendant, by way of counterclaim, seeking judgment against the plaintiff in the amount of $106,730.39.

2.     The plaintiff owned an apartment in a strata complex at 10732 Guildford Drive, Surrey, British Columbia. She claims that she rented out the apartment to two people who, without her knowledge, operated a marijuana grow operation in the apartment. The defendant alleges that the apartment was never rented and the grow operation was run by the plaintiff. For the purposes of this 18A, I am not required to resolve that disputed fact.

3.     The grow operation caused significant damage to the plaintiff’s apartment, to a neighbour’s apartment and to common areas. On February 11, 2005, the police raided the apartment and the grow operation was closed down. On February 15, the strata corporation through its agent, the property manager, wrote to the plaintiff telling her about the damage and telling her that she will be obliged to pay the costs of repairs. The letter also advised the plaintiff that she had not paid her strata maintenance payments. At no time did she pay strata maintenance payments. She did not respond to the letter of February 15.

4.     The defendant again, through its property manager, wrote to her on February 28, 2005 outlining in detail the illegal marijuana grow operation and setting out the damages to the neighbour’s unit and to the common property, the health hazard caused by the growing mould and asbestos, and the risk of electrical fire because of modifications that had been made to the electrical system. The letter told her that the work to fix the problems would begin shortly and that she would be charged for the cost. The letter also outlined her breaches of the strata corporation’s bylaws, which included:

causing a nuisance;

interference with other owners’ right to enjoyment of their property;

illegal activity in her unit;

using the unit contrary to the purpose for which it was supposed to be used; and

failing to advise the council that she would not be living in the unit as required by the bylaws.

5.     The plaintiff did not respond to this letter. The defendant wrote to her again on April 26, 2005 notifying her that the work would be commencing that day and would take approximately 2-3 weeks to complete. The letter also informed the plaintiff that the cost of the work would be in excess of $70,000 and that there was a $50,000 deductible on the insurance policy because the damage was caused as a result of a grow-op in the apartment. She was again informed that she would be charged for the cost of repairs. The plaintiff did nothing, said nothing and gave no indication at any time that she objected to the procedure or that she would do the repairs herself.

6.     The work was completed and the plaintiff was sent a bill for $106,730.39. The defendant put a lien on the property. The plaintiff decided to sell the apartment and netted $61,500.00 after paying out the mortgage. These monies have been held in trust by the plaintiff’s solicitor pending the outcome of this action.

7.     The issue before me is whether the defendant had the legal authority to carry out the repairs and to charge the plaintiff for them. The plaintiff’s reply to the counterclaim is a bare denial which reads as follows:

117.  The does [sic] not oppose the granting of the relief set out in the following paragraphs of the Defendant’s Notice of Motion dated January 5, 2007: None

117.  The Plaintiff opposes the granting of the relief set out in the following paragraphs of the Defendant’s Notice of Motion dated January 5, 2007: All

117.  The Plaintiff will rely on the following affidavits: To follow.

8.     The plaintiff alleges that she rented out the apartment and was not responsible for the damage caused by the marijuana grow operation. However, the bylaws require that she obtain permission from the strata corporation before she is permitted to rent out the apartment. She did not obtain that permission. Section 3 of the Strata Property Act, S.B.C. 1998, c. 43 (the “Act”) provides:

117.  3 Except as otherwise provided in this Act, the strata corporation is responsible for managing and maintaining the common property and common assets of the strata corporation for the benefit of the owners

9.     Section 133 of the Act provides:

117.  133(1) The strata corporation may do what is reasonably necessary to remedy a contravention of its bylaws or rules, including doing work on or to a strata lot, the common property or common assets; and

119.  removing objects from the common property or common assets.The strata corporation may require that the reasonable costs of remedying the contravention be paid by the person who may be fined for the contravention under section 130.

10.     In my view, the statute and the bylaws provide the corporation with the authority it needed to carry out the repairs and charge the plaintiff for them.

11.     In his argument, counsel for the plaintiff raised a number of defences to the counterclaim which I will deal with one by one.

Counsel for the plaintiff argued that the plaintiff was never given written notice demanding payment

12.     Section 112 of the Act provides:

117.  112(1) Before suing or beginning arbitration to collect money from an owner or tenant, the strata corporation must give the owner or tenant at least 2 weeks’ written notice demanding payment and indicating that action may be taken if payment is not made within that 2 week period.

Before the strata corporation registers a lien against an owner’s strata lot under section 116, the strata corporation must give the owner at least 2 weeks’ written notice demanding payment and indicating that a lien may be registered if payment is not made within that 2 week period.

13.     Counsel for the plaintiff argued that the plaintiff was never given written notice demanding payment. This issue was never pleaded and there is no evidence to support the defence. The plaintiff was notified on February 15, February 28 and April 26 that the work was going to be done and that she would be charged for the cost. In her own affidavit, the plaintiff says that “the defendant purported to incurred [sic] expenses totalling $106,730.39 in respect of the above work. Attached hereto as Exhibit “G” are copies of the bill and the supporting material.” An invoice showing the details of the monies spent, totalling $106,730.39, is exhibited to the affidavit along with all the individual invoices supporting the details of the account. She clearly had received the invoice, but nowhere in her affidavit does she say that there was no written demand or when she received the invoice.

134.  The plaintiff argued that the lien was not properly filed

14.     If the lien was filed contrary to law, the problem is now moot because the corporation removed the lien in order to permit the property to be sold.

The plaintiff argued that before the strata corporation sues under s. 171 of the Act, the suit must be authorized by a resolution passed by three-quarters vote at an annual or special general meeting

15.     Section 171 provides as follows:

117.  171(1) The strata corporation may sue as representative of all owners, except any who are being sued, about any matter affecting the strata corporation, including any of the following matters:
the interpretation or application of this Act, the regulations, the bylaws or the rules;

119.  the common property or common assets;
the use or enjoyment of a strata lot;
(a)  money owing, including money owing as a fine, under this Act, the regulations, the bylaws or the rules.

Before the strata corporation sues under this section, the suit must be authorized by a resolution passed by a 3/4 vote at an annual or special general meeting.
(b)  For the purpose of the 3/4 vote referred to in subsection (2), a person being sued is not an eligible voter.

16.     This defence was not pleaded and there is no evidence that any such resolution had been obtained. Counsel for the defendant says he first heard about this defence a few days before the trial when plaintiff’s counsel showed him his argument.

(i)  The plaintiff argued that pursuant to s. 135, the strata corporation must not require a person to pay the cost of remedying a contravention of a bylaw or rule unless the strata corporation has received a complaint

17     Section 135 provides as follows:

135.(1) The strata corporation must not impose a fine against a person,

119.  require a person to pay the costs of remedying a contravention, or
deny a person the use of a recreational facility

117.  for a contravention of a bylaw or rule unless the strata corporation has
(a)  received a complaint about the contravention,
(ii)  given the owner or tenant the particulars of the complaint, in writing, and a reasonable opportunity to answer the complaint, including a hearing if requested by the owner or tenant, and
(c)  if the person is a tenant, given notice of the complaint to the person’s landlord and to the owner.

18.     I find that the letters of February 15, February 28 and April 26 are notice of a complaint in writing. The evidence shows that there was, in fact, a complaint from an owner. The plaintiff had plenty of opportunity to answer the complaint and there is no evidence she requested a hearing.

The plaintiff argued that there is a responsibility on the strata corporation to maintain insurance and to pursue diligently any claim that could be made to protect the interests of the owners

19.     The strata corporation, in fact, did have insurance in the amount of $15,255,000. The corporation made a claim. However, it was denied because the insurance company assessed the insurable loss at $27,642.00. Because the damage was caused by growing something in an apartment, the deductible was $50,000. There is no evidence that the defendant could have recovered anything by suing the insurance company. At the very least, that would require some expert opinion that there was a reasonable chance of success against the insurer before I could conclude that the council did not act properly in pursuit of the claim.

The plaintiff argued that, pursuant to s. 31, the council members must act honestly and in good faith.

20.     Section 31 provides:

117.  31 In exercising the powers and performing the duties of the strata corporation, each council member must act honestly and in good faith with a view to the best interests of the strata corporation, and exercise the care, diligence and skill of a reasonably prudent person in comparable circumstances.

21.     This defence was not pleaded and there is no evidence that the council members did not act honestly and in good faith, or did not exercise reasonable care and diligence in the performance of their responsibilities.

(c)  The plaintiff argued that the defendant did not give the plaintiff an opportunity to do the repairs herself

22.     This defence to the counterclaim was not pleaded and neither the statute nor the bylaws require that the defendant give the plaintiff an opportunity to do the repairs. Even if that were a requirement, I find that the plaintiff acquiesced in what the defendant did. On three occasions she was provided with letters informing her of what they intended to do and that the costs would be visited upon her. She made no objection and stood idly by while the defendant did the repairs. I find that even if the defendant did fail to perform any of the procedural requirements, I do not think the plaintiff can benefit from them. I would rely on the principle of equitable fraud to deny the plaintiff’s claim.

23.     The principle may be invoked where the court is of the opinion that it would be unconscionable for a person to avail themselves of the benefit obtained through their unfair dealings or unconscionable conduct. In First City Capital Ltd. v. British Columbia Building Corp. (1989), 43 B.L.R. 29 at 37 (B.C.S.C.) quoted with approval in Performance Industries Ltd. v. Sylvan Lake Golf & Tennis Club Ltd., [2002] 1 S.C.R. 678, 2002 SCC 19 at para. 39, McLachlin C.J.S.C., as she then was, said that equitable fraud “refers to transactions falling short of deceit but where the Court is of the opinion that it is unconscientious for a person to avail himself of the advantage obtained.”

24.     Here, the plaintiff was responsible for the damages. The damage emanated from her apartment. Either she did it or she rented the apartment, contrary to the bylaws of the strata corporation, to tenants who caused the damage. She benefited from the work done by the defendant, which cost the defendant $106,730.39 to repair the damage for which she was responsible. It would be unconscionable to require the defendant to bear the burden of these costs and thereby permit the plaintiff to benefit from her conduct.

25.     The plaintiff’s action is dismissed. The defendant will receive judgment for $106,730.39 plus court order interest.

26.     Costs will follow the event.

Troublesome Tenants in Condominiums – Part 6

Case Name: Niagara North Condominium Corp. No. 125 v. Waddington

Between
Niagara North Condominium Corp. No. 125, Applicant
(Appellant), and
Heather Waddington, Respondent (Respondent in Appeal)
APPLICATION UNDER section 134 of the Condominium Act,
R.S.O. 1990, c. C-26.

[2007] O.J. No. 936

2007 ONCA 184

Docket: C44800

Ontario Court of Appeal
Toronto, Ontario

J.I. Laskin, H.S. LaForme and R.P. Armstrong JJ.A.

Heard: October 4, 2006.
Judgment: March 16, 2007.

(34 paras.)

Civil procedure — Pleadings — Striking out pleadings or allegations — False, frivolous, vexatious or abuse of process — Appeal from the dismissal of appellant’s application to have the respondent’s two cats removed from condominium — The condominium owner had already unsuccessfully applied to have the cats removed — Appeal dismissed — The application was a re-litigation of an identical claim against the respondent, and was therefore an abuse of process.

Appeal by Niagara North Condominium from the dismissal of its application to have the respondent’s two cats removed from a condominium. The respondent Waddington was the owner of two cats and a tenant of a condominium unit in St. Catharines. The owner of the condominium unit brought an application in the Superior Court of Justice to have Waddington’s cats removed from the building pursuant to a “no pets” policy. The application was dismissed. The condominium owner did not appeal the dismissal of the application. However, Niagara brought a subsequent application for the same relief. The chambers judge dismissed the subsequent application as an abuse of process. On appeal, Niagra claimed that the chambers judge failed to apply the correct test for abuse of process, and that she failed to consider the relevant factors for the exercise of her discretion, which should have included the scheme of the Condominium Act and the merits, the prejudice to Niagara and the owners of the units, the failure of the owner to join Niagara in the first application, the importance, relative ease, and practicality of Niagara’s intervention in the first application, the inability of Niagara to appeal the decision in the first application, and the lack of opportunity for Niagara to make submissions in the first application.

HELD: Appeal dismissed with costs of $10,000. The chambers judge was entitled, in the circumstances, to invoke the doctrine of abuse of process, as Niagara’s application was a re-litigation of an identical claim against Waddington. Although Niagara was not a party to the first application, it took the initiative when it made the demands on Waddington to remove her cats and threatened litigation against her. When she did not comply with the demands to remove the cats, the unit owner was the named applicant in the first application. However, Niagara provided virtually all of the evidence in respect of the application. Although not a party in the formal sense, Niagara was therefore an active participant in the promotion of the first application.

Statutes, Regulations and Rules Cited:
Condominium Act, R.S.O. 1990, c. C-26, s. 7(4)(b), s. 58(1)
Ontario Rules of Civil Procedure, Rule 5.03(1), Rule 5.03(4)

Appeal From:
On appeal from the judgment of Justice L.M. Walters of the Superior Court of Justice dated January 5, 2006.

Counsel:
Derek A. Schmuck, for the appellant.
Robert J. Hooper and Kelly Buffett, for the respondent.

The judgment of the Court was delivered by:

1.     R.P. ARMSTRONG J.A.:– Ms. Heather Waddington is the owner of two cats. She is also the tenant of a condominium unit at 215 Glenridge Avenue in the City of St. Catharines. The owner of the condominium unit brought an application in the Superior Court of Justice to have Ms. Waddington’s cats removed from the building. The application was dismissed by Justice J.W. Quinn of the Superior Court of Justice. The condominium owner did not appeal the dismissal of the application. However, Niagara North Condominium Corp. No. 125, the appellant, brought a subsequent application for the same relief. Justice L. Waters of the Superior Court of Justice dismissed the subsequent application as an abuse of process. The appellant now appeals the judgment of Walters J.

2.     For the reasons which follow, I would dismiss the appeal.

THE FACTS

3.     The appellant, Niagara North Condominium Corp. No. 125, is located at 215 Glenridge Avenue in the City of St. Catharines. The condominium complex contains 135 units. It was originally an apartment building which was converted to a condominium complex in June 1997.

4.     The respondent, Ms. Heather Waddington, is the tenant of unit 410. Unit 410 is owned by 669758 Ontario Ltd., the shares of which are owned by 215 Glenridge Avenue Ltd. Partnership. 215 Glenridge Avenue Ltd. Partnership is also referred to as the owner of unit 410 in these proceedings and no issue appears to be taken with that designation. Ms. Waddington entered into a lease with the owner of the unit on May 5, 2003. When she moved into unit 410, she brought her two cats with her. The cats continue to live in unit 410.

5.     Article 11, subsection 7 of the appellant’s Declaration provides:

No animal, livestock, fowl, fish, reptile or insect (a “Pet”) shall be permitted or kept in the building. Any owner shall, within two (2) weeks of receipt of written notice from a Board or Manager requesting removal of any such animal, permanently remove such animal from the property.

6.     Rule 12 of the rules and regulations of the corporation provides:  No pets shall be permitted in the building.

7.     The evidence before the court indicated that before the building was converted to a condominium complex the occupants of the building were permitted to have pets in their apartments. After the building was converted to a condominium complex, the persons who had pets in their apartments were permitted to keep them there until the pets either left or died.

8.     The property manager of the appellant sent a letter to Ms. Waddington on November 24, 2003 demanding that she remove her cats from the building by December 8, 2003. A second letter dated May 11, 2004 demanded that the cats be removed by May 25, 2004. A third letter dated July 23, 2004 advised that an inspection of the condominium unit would take place on August 7, 2004 “to confirm there are no pets living in the unit and you are complying with Article 11 subsection 7 of the Declaration”. Finally, a letter dated October 26, 2004 addressed to Ms. Waddington from the property manager demanded that the cats be removed by November 15, 2004 and advised that an inspection would be carried out on November 16, 2004. The letter of October 26, 2004 also indicated that failure to comply with the demand to remove the cats would result in litigation commenced by the appellant condominium corporation. In particular, the letter said:

If the pet(s) have not been permanently removed, this matter will be referred to the Corporation’s solicitor to obtain a court order to have the pet(s) permanently removed from the property.

9.      Ms. Waddington did not remove her cats from unit 410.

10.     Litigation followed. However, it was the owner of the unit and not the appellant condominium corporation that commenced the proceedings. On January 4, 2005, 215 Glenridge Avenue Ltd. Partnership, commenced its application (“the first application”) against Ms. Waddington for:

117.  a declaratory order stating that Ms. Waddington is in breach of the Declaration of the Niagara North Condominium Corp. No. 125; and, a compliance order for the removal of the cats.

11.     The first application was supported by an affidavit of Richard Rosenman. Attached to his affidavit are the four letters sent by the property manager of the appellant to Ms. Waddington dated November 24, 2003; May 11, 2004; July 23, 2004; and October 26, 2004. An affidavit of Peter Greco, the property manager of the appellant, was also filed in support of the first application. Finally, an affidavit of Lynn Berthiaume, the building superintendent of the appellant, was filed in support of the first application.

12.     The first application proceeded before Justice J.W. Quinn of the Superior Court of Justice in St. Catharines on January 20, 2005. Judgment was reserved to February 18, 2005 when Justice Quinn released a six page endorsement in which he gave his reasons for dismissing the application.

13.     Quinn J. found that the provisions banning pets in the Declaration and the rules of the appellant condominium corporation failed to comply with the provisions of the Condominium Act, R.S.O. 1990, c. C-26. In paragraphs 16, 17 and 18 of his reasons, Quinn J. said:

 [16] Subsection 58(1) of the Condominium Act does not authorize a condominium corporation to make a blanket rule banning all pets. Only if pets compromise “the safety, security or welfare of the [unit] owners and of the property and assets of the [condominium] corporation” (clause 58(1)(a)) or if they constitute an “unreasonable interference with the use and enjoyment of the common elements, the units or the assets of the [condominium] corporation (clause 58(1)(b)), may the board of directors ban or prohibit their presence. There is no evidence that the cats of the respondent run afoul of clauses (a) or (b) of subsection 58(1). And it cannot be said that the presence of all pets inherently constitutes a breach of those clauses.

 [17] I also think that, if any part of a declaration conflicts with subsection 58(1) it is void and unenforceable. In other words, where, pursuant to clause 7(4)(b) of the Condominium Act, a declaration contains “conditions or restrictions with respect to the occupation and use of the units or common elements,” a condominium corporation cannot go beyond that which is permitted in subsection 58(1).

 [18] Consequently, the declaration and rules of the Corporation are insufficient to prohibit the presence of the cats.

14.     The owner of unit 410 did not appeal the decision of Quinn J.

15.     On September 20, 2005, seven months after the decision of Quinn J. was released, the appellant issued a notice of application (“the second application”) in the Superior Court against Ms. Waddington, in which it sought the same relief as had been sought by the owner of the condominium unit in the first application, i.e. the removal of the two cats from the condominium unit.

16.     The appellant filed an affidavit of its property manager, Peter Greco, in support of the second application. The Greco affidavit contained essentially the same evidence that had been placed before the judge in the first application, including the letters dated November 24, 2003; May 11, 2004; July 23, 2004; and October 26, 2004 addressed to Ms. Waddington demanding the removal of her two cats from the building.

17.     Ms. Waddington filed two affidavits in opposition to the second application. She deposed that she suffers from a brain injury and is disabled. She receives Ontario disability support and lives on a limited income. She deposed that she had never received any complaints about her cats. She attached a report to her affidavit from her psychologist who opined that Ms. Waddington’s cats are an important focus in her life and that they make a significant contribution to her health and well-being. Her psychologist further said that she would suffer an unreasonable and unnecessary hardship if she were required to give up her cats. Ms. Waddington’s family physician also provided a report in which she said that, “her cats are a vital part of her life and I know that the loss of her treasured pets would set her back considerably”.

18.     The second application was heard by Walters J. on January 5, 2006. She dismissed the second application. Her endorsement reads as follows:

Last year the owner of the unit in question brought an application against the same Resp. requesting the exact same relief in this application. Justice Quinn denied the application. No appeal was taken. The Cond. Corpn. which knew all the particulars of the first application – in fact it’s employee swore the affid. used in the appln. never asked to be joined in the action to be heard either in front of Quinn J. or at a subsequent appeal. The exact same facts + issues are before me as were in front of Quinn J. last year. Although technically this may not be res judicata, as the applicant is a different party, the issues are identical. In these circum-stances proceeding with the appln. would be an abuse of process. The applicant wants an appeal of Quinn J.’s order without going through the appeal process.

Appl. also asked that motion be adj so that this matter could be placed back before Quinn J. With respect, all that would do is ask Quinn J. to sit on appeal of his earlier decision. This is prejudicial to the Resp. Accordingly, the Appln is dismissed.

The Resp. is entitled to costs fixed in the amount of $2,500, incl of GST & disb.

THE APPEAL

19.     The appellant alleges that the application judge made several errors including:

119.  she failed to apply the correct test for abuse of process;
119.  she failed to consider the relevant factors for the exercise of her discretion including:

the scheme of the Condominium Act and the merits;
the prejudice to the appellant and the owners of the units;
the failure to join the appellant in the first application;
the importance, relative ease and practicality of the appellant  intervening in the first application;
the inability of the appellant to appeal the decision in the first application; and
the lack of opportunity for the appellant to make submissions in the first application.

ANALYSIS

Did the application judge err in failing to apply the correct test for abuse of process?

20.     The appellant submits that the application judge erred in law when she failed to articulate and apply the legal test for abuse of process. In particular, the appellant asserts that the application judge was required to ensure that her decision on the issue of whether the second application constituted an abuse of process resulted in fairness and justice to the parties.

21.     The application judge did not articulate a test for abuse of process. Abuse of process is a doctrine designed to provide a remedy in a variety of situations including a remedy for the unfairness of relitigating the same issue against the same party in circumstances where issue estoppel does not apply. Abuse of process is essentially a fairness doctrine. In Toronto (City) v. Canadian Union of Public Employees (C.U.P.E.), Local 79, [2003] 3 S.C.R. 77, Arbour J. engaged in a thorough review of the doctrine. She cited with approval at para. 37 the dissenting judgment of Goudge J.A. in Canam Enterprises Inc. v. Coles (2000), 51 O.R. (3d) 481 (C.A.) at paras. 55-56:

The doctrine of abuse of process engages the inherent power of the court to prevent the misuse of its procedure, in a way that would be manifestly unfair to a party to the litigation before it or would in some other way bring the administration of justice into disrepute. It is a flexible doctrine unencumbered by the specific requirements of concepts such as issue estoppel. See House of Spring Gardens Ltd. v. Waite, [1990] 3 W.L.R. 347 at p. 358, [1990] 2 All E.R. 990 (C.A.).

One circumstance in which abuse of process has been applied is where the litigation before the court is found to be in essence an attempt to relitigate a claim which the court has already determined.

22.     Arbour J. in the City of Toronto also cited, with approval at para. 38, D.J. Lange, The Doctrine of Res Judicata in Canada (2000) at pp. 347-48 in support of the policy grounds which underlie abuse of process in these circumstances:

The two policy grounds, namely, that there be an end to ligitation and that no one should be twice vexed by the same cause, have been cited as policies in the application of abuse of process by religitation. Other policy grounds have also been cited, namely, to preserve the courts’ and the litigants’ resources, to uphold the integrity of the legal system in order to avoid inconsistent results, and to protect the principle of finality so crucial to the proper administration of justice.

23.     While the application judge’s very brief endorsement does not provide a fulsome analysis of the issues to be decided by her, it is clear that she concluded that to permit the second application to proceed would be unfair and unjust given that the identical claim was disposed of in the first application and considering the appellant’s apparent involvement in the initiation of the first application. While one might have preferred a more fulsome set of reasons from the application judge, I do not find her endorsement to be so bereft of analysis that it does not explain why she reached her conclusion. Her endorsement taken together with the application record provides this court with a basis to engage in meaningful appellate review.

Did the application judge err in failing to consider the statutory scheme of the Condominium Act and the merits of the case?

24.     The application judge did not consider the relevant sections of the Condominium Act and the merits of the case. Since she dealt with the application before her on the basis of abuse of process she did not go further. Indeed she expressly told counsel for the appellant that she did not intend to consider the merits.

25.     But, what if the decision in the first application was simply wrong in law?1 Would that be a decisive factor in favour of the appellant? In other circumstances, an erroneous decision on the merits in the initial proceeding might make a difference although we were not cited any authority in support of that proposition. In any event, in these circum-stances, where the unit owner (the first applicant) and the appellant (the second applicant) were so inextricably connected to the identical claim against the same respondent, I think an erroneous decision, if there be one, is not a decisive factor. The unit owner could have exercised his right of appeal to the Court of Appeal but did not.

Did the application judge err in failing to consider the prejudice to the appellant and the owners?

26.     The appellant submits that the application judge failed to consider the prejudice to the appellant in not being able to enforce the no pets prohibition and the uncertainty caused in the building with respect to the housing of pets as a result of the decision in the first application. It seems to me that if there was any such prejudice, it was not of such a degree that would justify setting aside the application judge’s exercise of discretion in this case.

Did the application judge err in failing to consider that the owner of the condo-minium unit and Ms. Waddington should have taken steps to join the appellant in the first application?

27.     The appellant submits that the application judge should have considered that neither the owner of the condominium unit nor Ms. Waddington took any steps to add the appellant as a party to the first application to ensure that the result would be binding on the appellant. The appellant cites rule 5.03(1) and rule 5.03(4) of the Rules of Civil Procedure, which deal with the joinder of necessary parties.

28.     In my view, there was no obligation on Ms. Waddington to move to add the appellant as a party to the application. In all probability, counsel for Ms. Waddington, if he put his mind to it, would have assumed that the appellant made a conscious decision not to join in the application. In any event, the fact that the appellant was not a party to the first application, was likely the subject of some discussion between it and the unit owner. If they concluded that the unit owner alone would proceed in order to avoid potential costs or other consequences so be it.

Did the application judge err in failing to consider the importance, relative ease and practicality of intervening?

29.     During a dialogue, at the hearing of the second application, between the application judge and counsel for the appellant, the application judge suggested that the appellant could have sought to be added as a party in the first application. The appellant submits that this would not have been practical. First, the appellant argues that on such a motion, the unit owner would likely have opposed the motion because the appellant would have sought its costs against the unit owner which are provided for in the condominium declaration. This argument is pure speculation. Given the co-operation that existed between the unit holder and the appellant, I think this is an unlikely scenario. Second, the appellant argues that it would have had no reason to believe that there was any risk of the unit owner not succeeding in his claim and therefore presumably had no reason to seek to be added as a party. If that is so, then the appellant made a tactical decision and must accept the consequences.

Did the trial judge err in failing to understand that the appellant had no right of appeal from the decision in the first application?

 30.     When the application judge’s endorsement is read as a whole, I believe it is clear that she fully understood that the appellant could not appeal the decision in the first application. Her words: “the applicant wants an appeal of Quinn J.’s order without going through the appeal process” must be read in context. The gist of her reasoning is that the appellant in the second application was, in effect, attempting to appeal the first decision. Although there was considerable discussion between the application judge and counsel for the appellant concerning the possibility of the appellant becoming involved in an appeal on the first application, I do not accept that any of that discussion would lead this court to reverse her decision on abuse of process.

Did the application judge err in failing to consider that the appellant had no opportunity to make submissions to the court in the first application?

31.     The appellant argues that the application judge failed to consider the unfairness of the first application judge’s decision in light of the fact that before Quinn J. determined the appellant’s pet prohibitions to be unenforceable, he did not accord the appellant the opportunity to make submissions on the issue. I see no merit in this argument. As already observed, the appellant obviously made a conscious decision not to join in the first application as a party.

CONCLUSION

32     I accept that the application judge was entitled, in the circumstances of this case, to invoke the doctrine of abuse of process. Here we have the relitigation of an identical claim against Ms. Waddington. Although the appellant was not a party to the first application, the appellant took the initiative in making the demands on Ms. Waddington to remove her cats and threatened litigation against her. When she did not comply with the demands to remove the cats, the unit owner was the named applicant in the first application. However, the appellant provided virtually all of the evidence in respect of the application. Although not a party in the formal sense, the appellant was an active participant in promoting the first application.

33.     The application judge’s use of the doctrine of abuse of process terminated the second proceeding and prevented the unfairness to Ms. Waddington of being twice vexed by the same cause.

34.     In the result, I would dismiss the appeal. I would award the respondent her costs of the appeal on a partial indemnity basis fixed in the amount of $10,000 including disbursements and GST.

R.P. ARMSTRONG J.A.
J.I. LASKIN J.A.:– I agree.
H.S. LaFORME J.A.:– I agree.
cp/e/qlgxc/qllkb

1. The appellant relies upon a number of authorities which uphold “no pets” provisions in condominium declarations. See York Condominium Corp. 382 v. Dvorchik, [1997] O.J. No. 378 (S.C.); Waterloo North Condominium Corp. No. 186 v. Weidner, [2003] O.J. No. 2496 (S.C.); Peel Condominium Corp. No. 78 v. Harthen (1978), 20 O.R. (2d) 225 (Cty. Ct.); Metropolitan Toronto Condominium Corp. No. 776 v. Gifford, [1989] O.J. No. 1691 (Dist. Ct.); York Region Condominium Corp. No. 585 v. Gilbert, [1990] O.J. No. 130 (Dist. Ct.); Peel Condominium Corp. No. 338 v. Young, [1996] O.J. No. 1201 (Gen. Div.); Metropolitan Toronto Condominium Corp. No. 949 v. Irvin, [1992] O.J. No. 1598 (Gen. Div.).

View Next Section

Troublesome Tenants in Condominiums – Part 5

Case Name: Carleton Condominium Corp. No. 555 v. Lagacé

Between
Carleton Condominium Corporation No. 555, and
Guy Lagacé, Barbara Stinson-Shea and John Bowman Spero

[2004] O.J. No. 1480

Court File No. 03-CV-24074

Ontario Superior Court of Justice

Aitken J.
April 13, 2004.

(34 paras.)

Real property — Condominiums — Corporation — Liability of unit holders — For legal costs.

Determination of costs in an application brought by Carleton Condominium Corporation No. 555 against owners of a condominium. Carleton had been granted an order requiring the tenant to conduct himself in a particular fashion regarding parking spaces. If he breached the conditions, his tenancy was to be terminated. The owners consented to this order. The tenant then abandoned the premises. At issue was whether the owners of the unit were responsible for Carleton’s costs. Carleton had notified the owners of the tenant’s continued contravention of the rules and gave them the opportunity to deal with the breaches. The owners took the tenant’s word that he would try harder. Carleton did not notify the owners before bringing the litigation. Carleton claimed costs of $7,137 including $2,701 for preparation for the costs argument.
HELD: Carleton was entitled to costs of $3,600 against the owners. If it had provided reasonable notice to the owners before bringing the litigation, legal fees may have been avoided, or could have been significantly reduced. The owners were responsible for the breach of the rules by their tenant.

Statutes, Regulations and Rules Cited:
Condominium Act, 1998, ss. 117, 119, 134, 134(3)(b), 134(5).

Counsel:
James Davidson and Nancy Houle, for the applicant.
Patrick J. Lafrange, for the respondents, Barbara Stinson-Shea and John Bowman Spero.
No one appearing for Guy Lagacé.

 

AITKEN J. (endorsement):–

Nature of Proceedings

1.     Carleton Condominium Corporation No. 555 (“CCC 555”) is seeking its costs of this Application against two of the three Respondents, Barbara Stinson-Shea and John Bowman Spero, who are the registered owners of Unit 11, Level 2, CCC 555 (“6034 Red Willow Drive”). The third Respondent, Guy Lagacé, was the tenant of these premises.

2.     On May 29, 2004, I heard and granted CCC 555’s Application for an order requiring Lagacé to cease and desist from conduct contravening the Condominium Act, 1998, S.O. 1998, c. 19 and the Applicant’s Declaration, By-laws and Rules, and more specifically, to conduct himself in a particular fashion regarding parking spaces. If Lagacé breached the stipulated conditions, his tenancy was to be terminated. Stinson-Shea and Spero consented to this order being made. Subsequently, Lagacé abandoned the premises. The sole issue that I now have to decide is whether Stinson-Shea and Spero, as the owners and landlords of 6034 Red Willow Drive, should be responsible to pay CCC 555’s costs in getting an order against their unruly tenant. If so, should those costs be on a partial or substantial indemnity basis?

Legal Framework

3.     CCC 555 relies on the following statutory provisions as establishing its right to have its costs against Stinson-Shea and Spero:

Condominium Act, 1998:

117.  No person shall permit a condition to exist or carry on an activity in a unit or in the common elements if the condition or the activity is likely to damage the property or cause injury to an individual.

119.  (1) A corporation, the directors, officers and employees of a corporation, a declarant, the lessor of a leasehold condominium corporation, an owner, an occupier of a unit and a person having an encumbrance against a unit and its appurtenant common interest shall comply with this Act, the declaration, the by-laws and the rules.

 (2) An owner shall take all necessary steps to ensure that an occupier of the owner’s unit and all invitees, agents and employees of the owner or occupier comply with this Act, the declaration, the by-laws and the rules.

134.  (1) Subject to subsection (2), an owner, an occupier of a proposed unit, a corporation, a declarant, a lessor of a leasehold condominium corporation or a mortgagee of a unit may make an application to the Ontario Court (General Division) for an order enforcing compliance with any provision of this Act, the declaration, the by-laws, the rules or an agreement between two or more corporations for the mutual use, provision or maintenance or the cost-sharing of facilities or services of any of the parties to the agreement.

(3) On an application, the court may, subject to subsection (4),

(a)  grant the order applied for;
(b)  require the persons named in the order to pay,

(i)  the damages incurred by the applicant as a result of the acts of non-compliance, and
(ii)  the costs incurred by the applicant in obtaining the order; or

(c)  grant such other relief as is fair and equitable in the circumstances.

 (4) The court shall not, under subsection (3), grant an order terminating a lease of a unit for residential purposes unless the court is satisfied that,

(a)  the lessee is in contravention of an order that has been made under subsection (3); or
(b)  the lessee has received a notice described in subsection 87 (1) and has not paid the amount required by that subsection.

 (5) If a corporation obtains an award of damages or costs in an order made against an owner or occupier of a unit, the damages or costs, together with any additional actual costs to the corporation in obtaining the order, shall be added to the common expenses for the unit and the corporation may specify a time for payment by the owner of the unit.

4.     As well, CCC 555 relies on the following provisions in its Declaration, By-laws and Rules as establishing its rights to costs on a substantial indemnity basis:
Declaration

 4. UNITS

 4.1 Occupation and Use. The occupation and use of the units shall be in accordance with the following restrictions and stipulations:

(c)  The owner of each unit shall comply and shall require all residents, occupants and visitors to his or her unit to comply with the Act, this Declaration, and the by-laws, and the rules and regulations passed pursuant thereto.

(f)  Any owners leasing their unit shall not be relieved from any of their obligations with respect to the unit which shall be joint and several with their tenant.

 8. INDEMNIFICATION

8.1 Indemnification. Each owner shall indemnity and save harmless the corporation from and against any loss, cost, damage, injury or liability whatsoever which the corporation may suffer or incur resulting from or caused by an act or omission of such owner, the owner’s family or any member thereof, any other resident or occupant of that unit or any guests, invitees, licensees or agents of such owner or resident to or with respect to the common elements and/or all other units, except for any loss, cost, damages, injury or liability caused by an insured (as defined in any policy or policies of insurance) and insured against by the corporation.

All payments pursuant to this clause are deemed to be additional contributions toward the common expenses and recoverable as such or by such other procedure the corporation elects.

9.  GENERAL MATTERS AND ADMINISTRATION

9.2 Units Subject to the Act, Declaration, By-laws, Rules and Regulations. All present and future owners, tenants and residents of units, their families, guests, invitees, licensees or agents shall be subject to and shall comply with the provisions of the Act, this Declaration, the by-laws, and any other rules and regulations of the corporation.

The acceptance of a transfer/deed of land, or the entering into a lease, or the entering into occupancy of any unit, shall constitute an agreement that the provisions of this Declaration, the by-laws, and any other rules and regulations, as they may be amended from time to time, are accepted by such owner, tenant or resident, and all of such provisions shall be deemed and taken to be covenants running with the unit and shall bind any person having, at any time, any interest or estate in such unit as though such provisions were recited and stipulated in full in each and every such transfer/deed of land or lease or occupancy agreement.

9.5 Notice. Except as hereinbefore set forth, any notice, direction or other instrument required or permitted may be given if served personally by delivering same to the party to be served, or to any officer of the party to be served, or may be given by ordinary mail, postage prepaid, addressed to the corporation at its address for service herein, to each owner at his or her respective unit or at such other address as is given by the owner to the Corporation for the purpose of notice, and to each mortgagee who has notified its interest to the corporation at such address as is given by each mortgagee to the corporation for the purpose of notice; and if mailed as aforesaid the same shall be deemed to have been received and to be effective on the first business day following the day on which it was mailed. Any owner or mortgagee may change its address for service by notice given to the corporation in the manner aforesaid.

By-law No. 1

13.  RULES AND REGULATIONS

13.1 Rules and Regulations. The rules and regulations attached hereto as Schedule “A” shall be observed by the owners and occupants of the units. The Board may amend such rules or may make such further and other rules as required to promote the safety, security, or welfare of the owners and of the property or for the purpose of preventing unreasonable interference with the use and enjoyment of the common elements and of the units.

Schedule “A” Rules and Regulations

… Any loss, cost or damages incurred by the Corporation by reason of a breach of any rules and regulations in force from time to time by any owner, the owner’s family, guests, servants, agents or occupants of that unit, shall be borne by such owner and may be recovered by the Corporation against such owner in the same manner as common expenses.

1.  GENERAL

(b)  Rules as deemed necessary and altered from time to time by the Corporation shall be binding on all unit owners and occupants, their families, guests, visitors, servants or agents.

Background Facts

5.     Commencing in the summer of 1999, Lagacé engaged in various activities in and around 6034 Red Willow Drive that contravened the Condominium Act, 1998 and the Declaration, By-laws and Rules of CCC 555. These activities included:

–  excessive noise past 11 pm,
–  littering of the property,
–  congregating and smoking in the stairwell at the building,
–  violating the parking rules relating to CCC 555,
–  using threatening, abusive and offensive language towards other owners, residents and employees of the property management firm of CCC 555,
–  engaging in threatening conduct towards other owners, residents and employees of the property management firm of CCC 555,
–  engaging in the use of marijuana,
–  engaging in conduct which necessitated City of Ottawa by-law officer intervention, and
–  engaging in conduct which necessitated police intervention.

6.     The property manager of CCC 555 at the time was Axia Property Management Inc. (“Axia”). The person assigned to CCC 555 was Michael Faulkner. Axia received numerous verbal and written complaints about Lagacé’s conduct. Commencing in August 1999, various letters and notices were given to “The Occupants” of 6034 Red Willow Drive, advising them of the complaints and seeking their compliance with CCC 555’s Rules and Regulations.

7.     On March 17, 2000, Axia contacted Stinson-Shea and Spero for the first time, advising them of the numerous complaints that had been received concerning their tenants at 6034 Red Willow Drive. This resulted in their being a site meeting on June 6, 2000, at which time Stinson-Shea, Spero, and Faulkner met with Lagacé, reviewed the various complaints with him, and obtained his undertaking to comply with the Condominium’s Rules and Regulations.

8     The evidence submitted on behalf of CCC 555 is that on October 6, 2000, Axia sent a second letter to Stinson-Shea and Spero advising that the problems with their tenants were continuing. Stinson-Shea denies that either she or Spero ever received this letter.

9     Significantly fewer complaints were received by Axia concerning the occupants of 6034 Red Willow Drive, until October 2001, when Lagacé acquired what was described as a Pit Bull dog. On October 11, 2001, Faulkner sent a letter to Lagacé advising that the dog had to be removed from the property immediately. In December 2000, Stinson-Shea and Spero had retained Axia to act as their property manager in renting 6034 Red Willow Drive, and Shawn Paul was the employee at Axia responsible for their account. Faulkner’s October 11 letter indicates that a copy was being provided to Paul. Neither Faulkner nor Paul sent a copy of the letter to Stinson-Shea or Spero.

10     Further complaints regarding Lagacé resulted in a further letter being sent to him on May 31, 2002. This letter was also copied to Paul. Neither Faulkner nor Paul sent a copy of the letter to Stinson-Shea or Spero.

11     On January 1, 2003, Megacorp Property Management Inc. (“Megacorp”) took over management of CCC 555. Axia remained the property manager for Stinson-Shea and Spero.

12     In April 2003, there were further problems with the occupants of 6034 Red Willow Drive using visitor parking spaces inappropriately. Tickets were issued against Lagacé. This, in turn, resulted in angry and aggressive confrontations on his part with representatives of Megacorp. Megacorp responded on May 1, 2003 with a letter to Lagacé stating that he could not enter or communicate with Megacorp’s office at any time; instead all further communications had to be through his landlord, namely Stinson-Shea and Spero. A copy of this letter was sent to Stinson-Shea and Spero. This was the first time since receipt of the June, 2000 letter (if the evidence of Stinson-Shea is accepted) or the October 6, 2000 letter (if the evidence proffered on behalf of CCC 555 is accepted) that Stinson-Shea and Spero received notification that their tenant, Lagacé, was causing problems at CCC 555.

13     Stinson-Shea and Spero received a copy of the Application Record for these proceedings in May 2003. They immediately consulted a lawyer. Although they filed an Appearance, they did not contest the Application of CCC 555. Their only concern was the costs which CCC 555 were seeking from them.

Analysis

14.     Counsel for CCC 555 argued that CCC 555 is entitled to its costs on a substantial indemnity basis from Stinson-Shea and Spero as the owners of 6034 Red Willow Drive due to the wording of s. 134(5) of the Condominium Act, 1998, which is reproduced above. I do not accept this argument.

15     Section 134(5) simply provides that if a corporation obtains an award of costs in an order made against an owner or occupier of a unit, the costs shall be added to the common expenses for the unit and collected accordingly. This subsection does not speak to the question of whether a costs order should be made in the first instance. Section 134(3)(b) confirms that the court, on an application by the condominium corporation for an order requiring someone to comply with the declaration, by-laws or rules of the corporation, may make an order requiring the persons named in the order to pay the costs incurred by the condominium corporation in obtaining the order. It does not require the court to do so.

16     That being said, the relevant portions of the Declaration, By-laws and Rules of CCC 555, all reproduced above, make it clear that (1) the owner of each unit shall require any tenant of that unit to comply with the Condominium Act, 1998, and CCC 555’s Declaration, By-laws and Rules; (2) the unit owner continues to have all obligations with respect to the unit, even if the unit is leased to a tenant; (3) the obligations of the owner and those of the tenant are joint and several; (4) the unit owner is responsible to indemnify and save harmless CCC 555 from any cost which CCC 555 may incur resulting from an act or omission of a tenant or the owner with respect to the common elements and/or all other units; and (5) all payments required to be made as a result of that indemnification are to be considered additional contributions toward the common expenses and are recoverable as such by CCC 555.

17     At first blush, these provisions should result in Stinson-Shea and Spero indemnifying CCC 555 for the costs incurred by the condominium corporation in bringing this Application against Lagacé. Certainly there is precedent for such an order being made (see York Condominium Corp. No. 71 v. Sullivan, [1990] O.J. No. 840 (Dist. Ct.)). Stinson-Shea and Spero argue that, despite the provisions of CCC 555’s governing documents, they should not have to pay any costs to CCC 555 because they were not given appropriate notice of their tenant’s contraventions of the condominium’s Rules and Regulations. They argue that had they been given appropriate notice, they would have taken steps to correct the situation, and those steps would have been much cheaper and simpler than the proceedings brought by the corporation. As a supplementary argument, Stinson-Shea and Spero suggest that the corporation should have sought some costs against Lagacé, who was, after all, the person who actually breached the condominium’s Rules and Regulations.

18     Neither the Condominium Act, 1998, nor the Declaration or By-laws of CCC 555, explicitly requires CCC 555 to notify unit owners of contraventions of rules by their tenants before CCC 555 seeks to recover from the owners the costs associated with its litigation against tenants. Nevertheless, I find that implied in the Declaration, By-laws and Rules of CCC 555 is a duty on the condominium corporation to provide an owner with notice of a tenant’s contraventions before the corporation seeks legal costs against the owner for litigation against the tenant brought to enforce compliance with the condominium’s governing documents.

19.     By virtue of the Condominium Act, 1998 and the governing documents of the condominium corporation, the party with whom the condominium corporation has a legal relationship is the unit owner, not the tenant. The unit owner also has a legal relationship with the tenant, by virtue of landlord and tenant law and the terms of the tenancy agreement between them. By virtue of the owner’s legal position between the condominium corporation and the tenant, the owner is responsible for the tenant’s behaviour while occupying the condominium unit. The condominium corporation looks to the owner to live up to the terms of the condominium declaration, by-laws, rules and regulations. The owner requires the tenant in the tenancy agreement to agree to comply with those condominium documents. In the case of a breach, the corporation demands compliance from the owner, who in turn, demands compliance from the tenant.

20.     The Condominium Act, 1998 does not establish the strict liability of unit owners for all infractions of tenants, even if they have had no notice of the infractions. The wording of s. 119(2) to the effect that an owner shall take “all reasonable steps” to ensure that an occupier of the owner’s unit complies with the Act, the declaration, the by-laws and the rules, implies that the owner has to know what is going on at the unit so that he or she can take whatever steps would be reasonable to deal with any problems. Put another way, it only stands to reason that the owner has to be notified of any unacceptable conduct on the part of the tenant if it is the owner’s responsibility to vouch for that conduct and to take reasonable steps to correct problems. In many, if not most, situations, the unit owner who is renting to a tenant does not live at the condominium complex. If the property manager of the complex does not inform the owner of tenant infractions, how can the owner live up to his or her responsibility to ensure that the tenant abides by condominium rules? It would be contrary to public policy to expect unit owners to become private investigators checking up on their tenants to see if they are breaching any rules. It makes much more sense for the condominium’s property manager to notify the unit owner of any significant or on-going breaches.

21.     The first question to consider is what notice was provided to Stinson-Shea and Spero. There is no dispute that Stinson-Shea and Spero received notice in March 2000 of certain problems being caused by Lagacé and his guests, primarily related to noise and general comportment. To their credit, Stinson-Shea and Spero took steps to deal with the complaints, meeting with Faulker and Lagacé in June 2000. They left the meeting assuming there would be no further contraventions by Lagacé.

22.     There is a letter authored by Faulker and dated October 6, 2000 that purportedly was sent to Stinson-Shea and Spero outlining continuing infractions by Lagacé. The sworn evidence of Stinson-Shea is that she and Spero never received this letter. I note that it was sent to the same address as the letter of March 17, 2000, which was received by Stinson-Shea and Spero. The onus is on Stinson-Shea and Spero to establish that they did not receive notice of Lagacé’s contraventions. In regard to the letter of October 6, 2000, they have not met that onus.

23.     There is no dispute that letters to Lagacé dated October 11, 2001 and May 31, 2002 outlining on-going complaints and problems were copied to Paul, the employee at Axia acting as the property manager for Stinson-Shea and Spero. It is uncontroverted that Paul did not bring these letters to the attention of Stinson-Shea and Spero. The fact that Paul did not notify Stinson-Shea and Spero of the October 11, 2001 and May 31, 2002 letters from Faulkner is not an oversight that can be placed at the door of the condominium corporation. Faulkner was acting as the corporation’s agent in sending a copy of the letter to Paul. In receiving that letter, Paul was acting as the owners’ agent, even though he was working for the same property management company as Faulkner. Paul may have breached his contractual obligations to Stinson-Shea and Spero as their property manager, or he may have breached his duty of care to them. However it is considered, Paul’s neglect to bring the continuing problems regarding Lagacé to the attention of Stinson-Shea and Spero does not entail unreasonable conduct on the part of CCC 555. It is not a reason to deny CCC 555 any costs pursuant to the terms of its Declaration, By-laws and Rules.

24.     I find that CCC 555 took adequate steps from March 2000 to May 2002 to notify Stinson-Shea and Spero of Lagacé’s continued contravention of condominium Rules and Regulations, and to give Stinson-Shea and Spero the opportunity to do something to rectify the situation. As far as CCC 555 was concerned, aside from the one meeting in June 2000, Stinson-Shea and Spero did not take any steps to deal with Lagacé’s breaches. They had known that their tenant had caused significant problems at the condominium complex in 1999 and 2000, yet had simply taken their tenant’s word in June 2000 that he would try harder. As far as CCC 555 was aware, on three subsequent occasions, Stinson-Shea and Spero received further information that problems persisted, and they did not intervene. By the time the corporation started the litigation, they had not heard from Stinson-Shea and Spero for almost three years. There is no evidence that, during this period, Stinson-Shea or Spero called or wrote to the condominium corporation to see if their tenant’s behaviour had improved. There is no evidence that they instructed their property manager to keep on top of the problem. There is no evidence that they initiated any inquiries whatever from June 2000 forward.

25.     On the other hand, when Megacorp decided to issue an application on behalf of CCC 555 early in May 2003, it knew that no one on behalf of CCC 555 had contacted the owners of 6034 Red Willow Drive since May 2002. Various incidents had occurred during the year which would have added fuel to any steps taken by the owners to end their tenancy agreement with Lagacé. The corporation did not know whether, once armed with this new evidence, the owners would take immediate steps to terminate the tenancy agreement, a step that could have been taken at far less cost to them than the costs now being sought by the corporation. From the documents available to me, it appears that CCC 555 chose to commence litigation at the same time that it sent a copy of its May 1, 2003 letter to Lagacé.

26.     Should CCC 555 be denied its costs because prior to actually commencing the Application against Lagacé, Stinson-Shea and Spero, it did not notify Stinson-Shea and Spero of the intended litigation? Without hesitation I find that it would have been prudent on the part of Megacorp, acting for CCC 555, to notify the owners directly of the condominium’s intention to commence legal proceedings to deal with Lagacé if the owners did not immediately take the necessary steps to terminate Lagacé’s tenancy through landlord and tenant proceedings. At the very least, it would have shown good judgment for Megacorp to write to Axia, as the owners’ property managers. I contemplate that in certain factual circumstances, this absence of recent notice to the owners of continuing problems and impending litigation will result in the condominium corporation not being allowed to collect its litigation costs from the owners. In the factual circumstances of this case, I am not prepared to deny the corporation any costs based on the lack of recent notice to the owners. What I will do, however, is reduce the costs the corporation can recover.

27.     The evidence of Stinson-Shea is that had she and Spero known of the litany of breaches by Lagacé, they would have taken steps to terminate his tenancy. I accept their evidence that at least from October 2000 forward, they personally had no knowledge of the continuing problems, and presumably that is why they did not do anything about them. I also accept their evidence that, had the corporation contacted them after the events of April 2003, and prior to commencing litigation, they would have taken legal steps to rectify the situation. They did consult a lawyer as soon as this litigation was commenced. Therefore, had CCC 555 provided reasonable notice to Stinson-Shea and Spero in advance of commencing this litigation, the legal fees associated with this litigation may have been avoided altogether, or could have been significantly reduced. In these circumstances, I cannot conclude that all of the fees and disbursements charged to CCC 555 by Nelligan O’Brien Payne are “costs … incurred by the Corporation by reason of a breach of any rules and regulations in force from time to time by any owner, … or occupants of that unit …”

28.     In this respect, I differentiate this case from those such as Peel Condominium Corp. No. 338 v. Young, [1996] O.J. No. 1478 (Gen.Div.); Peel Condominium Corporation No. 449 v. Amy Elizabeth Frances Hogg, a decision of Carnwath J. dated March 13, 1997; Frontenac Condominium Corporation No. 7 v. Jim Gallant and Connie Armstrong, a decision of Ratushny J. dated September 27, 2001; and Carleton Condominium Corporation No. 66 v. Helena Brown, a decision of Polowin J. dated September 7, 2001. In all of those cases, costs were awarded on a solicitor-client or substantial indemnity scale. It is to be noted, however, that in each case, the judge stated that the person against whom the costs order was being made had been given specific notice of the problem that eventually necessitated the court application and had been given the opportunity of addressing the problem before the litigation was started.
Quantum of Costs

29.     The Bill of Costs presented by Nelligan O’Brien Payne is in the amount of $7,137.02 inclusive of GST and disbursements. Of this sum $3,000 represents legal fees for the original application seeking an order for compliance against the tenant, $2,701.25 represents costs attributable to preparation for the costs argument, and $500 represents counsel fees when submissions on costs were heard. Disbursements totaled $884.82.

30.     The hourly rates of the lawyers involved on the file are reasonable.

31.     I find the time, and therefore fees, attributable to the issue of costs to be excessive: it is greater than the time and costs associated with the Application itself.

32.     I also find the disbursements excessive. For example, I have difficulty understanding why $178.35 would be incurred for courier expenses on such a simple file. Also I do not allow costs for such items as tabs and bindings, in that I consider these included in normal office overhead. The way the Bill of Costs is prepared lumps these disbursements in with photocopying charges, which I would allow.

33.     This was a relatively simple matter, with the Application being a chronology of events, largely documented with letters and notices. Minimal argument was required at the initial hearing. The Bill of Costs was easy to prepare and is only two pages in length. The case law was easy to assemble, being largely cases argued by Nelligan O’Brien Payne.

34.     In all of the circumstances, I conclude that the legal costs incurred by CCC 555 that can reasonably be considered “costs … incurred by [CCC 555] by reason of a breach of any rules and regulations in force from time to time by [Stinson-Shea and Spero], … or [Lagacé] …” amount to $3,600 inclusive of disbursements and GST. This sum shall be added to the common expenses of Unit 11, Level 2, CCC 555 in the amount of $300 per month, until paid.

View Next Section

Troublesome Tenants in Condominiums – Part 4

Selected Sections of the Residential Tenancies Act, 2006

S.O. 2006, CHAPTER 17

Termination only in accordance with Act
37 (1) A tenancy may be terminated only in accordance with this Act.

Termination by notice
(2) If a notice of termination is given in accordance with this Act and the tenant vacates the rental unit in accordance with the notice, the tenancy is terminated on the termination date set out in the notice.

Termination by agreement
(3) A notice of termination need not be given if a landlord and a tenant have agreed to terminate a tenancy.

When notice void
(4) A tenant’s notice to terminate a tenancy is void if it is given,
(a) at the time the tenancy agreement is entered into; or
(b) as a condition of entering into the tenancy agreement.

When agreement void
(5) An agreement between a landlord and tenant to terminate a tenancy is void if it is entered into,
(a) at the time the tenancy agreement is entered into; or
(b) as a condition of entering into the tenancy agreement.

Application of subss. (4) and (5)
(6) Subsections (4) and (5) do not apply to rental units occupied by students of one or more post-secondary educational institutions in a residential complex owned, operated or administered by or on behalf of the post-secondary educational institutions.

Same
(7) Subsections (4) and (5) do not apply to rental units in a residential complex with respect to which the landlord has entered into an agreement with one or more post-secondary educational institutions providing,
(a) that the landlord, as of the date the agreement is entered into and for the duration of the agreement, rents the rental units which are the subject of the agreement only to students of the institution or institutions;
(b) that the landlord will comply with the maintenance standards set out in the agreement with respect to the rental units which are the subject of the agreement; and
(c) that the landlord will not charge a new tenant of a rental unit which is a subject of the agreement a rent which is greater than the lawful rent being charged to the former tenant plus the guideline.

Same
(8) The maintenance standards set out in the agreement and referred to in clause (7) (b) shall not provide for a lower maintenance standard than that required by law.

Same
(9) If the landlord breaches any of clauses (7) (a), (b) and (c), the agreement referred to in subsection (7) is terminated and the exemption provided by subsection (7) no longer applies.

Same
(10) The landlord shall be deemed to have not breached the condition in clause (7) (a) if,
(a) upon a tenant ceasing to be a student of a post-secondary educational institution that is a party to the agreement with the landlord, the landlord takes action to terminate the tenancy in accordance with an agreement with the tenant to terminate the tenancy or a notice of termination given by the tenant; or
(b) a tenant sublets the rental unit to a person who is not a student of a post-secondary educational institution that is a party to the agreement with the landlord.

Same
(11) Either party to an agreement referred to in subsection (7) may terminate the agreement on at least 90 days written notice to the other party and, upon the termination of the agreement, the exemption provided by subsection (7) no longer applies.

Restriction on recovery of possession
39 A landlord shall not recover possession of a rental unit subject to a tenancy unless,
(a) the tenant has vacated or abandoned the unit; or
(b) an order of the Board evicting the tenant has authorized the possession.

Non-payment of rent
59 (1) If a tenant fails to pay rent lawfully owing under a tenancy agreement, the landlord may give the tenant notice of termination of the tenancy effective not earlier than,
(a) the 7th day after the notice is given, in the case of a daily or weekly tenancy; and
(b) the 14th day after the notice is given, in all other cases.

Contents of notice
(2) The notice of termination shall set out the amount of rent due and shall specify that the tenant may avoid the termination of the tenancy by paying, on or before the termination date specified in the notice, the rent due as set out in the notice and any additional rent that has become due under the tenancy agreement as at the date of payment by the tenant.

Notice void if rent paid
(3) The notice of termination is void if, before the day the landlord applies to the Board for an order terminating the tenancy and evicting the tenant based on the notice, the tenant pays,
(a) the rent that is in arrears under the tenancy agreement; and
(b) the additional rent that would have been due under the tenancy agreement as at the date of payment by the tenant had notice of termination not been given.

Termination for cause, misrepresentation of income
60 (1) A landlord may give a tenant notice of termination of the tenancy if the rental unit is a rental unit described in paragraph 1, 2, 3 or 4 of subsection 7 (1) and the tenant has knowingly and materially misrepresented his or her income or that of other members of his or her family occupying the rental unit.

Notice
(2) A notice of termination under this section shall set out the grounds for termination and shall provide a termination date not earlier than the 20th day after the notice is given

Termination for cause, illegal act
61 (1) A landlord may give a tenant notice of termination of the tenancy if the tenant or another occupant of the rental unit commits an illegal act or carries on an illegal trade, business or occupation or permits a person to do so in the rental unit or the residential complex.

Notice
(2) A notice of termination under this section shall set out the grounds for termination and shall provide a termination date not earlier than,
(a) the 10th day after the notice is given, in the case of a notice grounded on an illegal act, trade, business or occupation involving,
(i) the production of an illegal drug,
(ii) the trafficking in an illegal drug, or
(iii) the possession of an illegal drug for the purposes of trafficking; or
(b) the 20th day after the notice is given, in all other cases.

Definitions
(3) In this section,
“illegal drug” means a controlled substance or precursor as those terms are defined in the Controlled Drugs and Substances Act (Canada); (“drogue illicite”)
“possession” has the same meaning as in the Controlled Drugs and Substances Act (Canada); (“possession”)
“production” means, with respect to an illegal drug, to produce the drug within the meaning of the Controlled Drugs and Substances Act (Canada); (“production”)
“trafficking” means, with respect to an illegal drug, to traffic in the drug within the meaning of the Controlled Drugs and Substances Act (Canada). (“trafic”)

Termination for cause, damage
62 (1) A landlord may give a tenant notice of termination of the tenancy if the tenant, another occupant of the rental unit or a person whom the tenant permits in the residential complex wilfully or negligently causes undue damage to the rental unit or the residential complex.

Notice
(2) A notice of termination under this section shall,
(a) provide a termination date not earlier than the 20th day after the notice is given;
(b) set out the grounds for termination; and
(c) require the tenant, within seven days,
(i) to repair the damaged property or pay to the landlord the reasonable costs of repairing the damaged property, or
(ii) to replace the damaged property or pay to the landlord the reasonable costs of replacing the damaged property, if it is not reasonable to repair the damaged property.

Notice void if tenant complies
(3) The notice of termination under this section is void if the tenant, within seven days after receiving the notice, complies with the requirement referred to in clause (2) (c) or makes arrangements satisfactory to the landlord to comply with that requirement.

Termination for cause, damage, shorter notice period
63 (1) Despite section 62, a landlord may give a tenant notice of termination of the tenancy that provides a termination date not earlier than the 10th day after the notice is given if the tenant, another occupant of the rental unit or a person whom the tenant permits in the residential complex,
(a) wilfully causes undue damage to the rental unit or the residential complex; or
(b) uses the rental unit or the residential complex in a manner that is inconsistent with use as residential premises and that causes or can reasonably be expected to cause damage that is significantly greater than the damage that is required in order to give a notice of termination under clause (a) or subsection 62 (1).

Notice
(2) A notice of termination under this section shall set out the grounds for termination.

Non-application of s. 62 (2) and (3)
(3) Subsections 62 (2) and (3) do not apply to a notice given under this section.

Termination for cause, reasonable enjoyment
64 (1) A landlord may give a tenant notice of termination of the tenancy if the conduct of the tenant, another occupant of the rental unit or a person permitted in the residential complex by the tenant is such that it substantially interferes with the reasonable enjoyment of the residential complex for all usual purposes by the landlord or another tenant or substantially interferes with another lawful right, privilege or interest of the landlord or another tenant.

Notice
(2) A notice of termination under subsection (1) shall,
(a) provide a termination date not earlier than the 20th day after the notice is given;
(b) set out the grounds for termination; and
(c) require the tenant, within seven days, to stop the conduct or activity or correct the omission set out in the notice.

Notice void if tenant complies
(3) The notice of termination under subsection (1) is void if the tenant, within seven days after receiving the notice, stops the conduct or activity or corrects the omission.

Termination for cause, reasonable enjoyment of landlord in small building
65 (1) Despite section 64, a landlord who resides in a building containing not more than three residential units may give a tenant of a rental unit in the building notice of termination of the tenancy that provides a termination date not earlier than the 10th day after the notice is given if the conduct of the tenant, another occupant of the rental unit or a person permitted in the building by the tenant is such that it substantially interferes with the reasonable enjoyment of the building for all usual purposes by the landlord or substantially interferes with another lawful right, privilege or interest of the landlord.

Notice
(2) A notice of termination under this section shall set out the grounds for termination.

Non-application of s. 64 (2) and (3)
(3) Subsections 64 (2) and (3) do not apply to a notice given under this section.

Termination for cause, act impairs safety
66 (1) A landlord may give a tenant notice of termination of the tenancy if,
(a) an act or omission of the tenant, another occupant of the rental unit or a person permitted in the residential complex by the tenant seriously impairs or has seriously impaired the safety of any person; and
(b) the act or omission occurs in the residential complex.

Same
(2) A notice of termination under this section shall provide a termination date not earlier than the 10th day after the notice is given and shall set out the grounds for termination.

Termination for cause, too many persons
67 (1) A landlord may give a tenant notice of termination of the tenancy if the number of persons occupying the rental unit on a continuing basis results in a contravention of health, safety or housing standards required by law.

Notice
(2) A notice of termination under this section shall,
(a) provide a termination date not earlier than the 20th day after the notice is given;
(b) set out the details of the grounds for termination; and
(c) require the tenant, within seven days, to reduce the number of persons occupying the rental unit to comply with health, safety or housing standards required by law.

Notice void if tenant complies
(3) The notice of termination under this section is void if the tenant, within seven days after receiving the notice, sufficiently reduces the number of persons occupying the rental unit.

Notice of termination, further contravention
68 (1) A landlord may give a tenant notice of termination of the tenancy if,
(a) a notice of termination under section 62, 64 or 67 has become void as a result of the tenant’s compliance with the terms of the notice; and
(b) within six months after the notice mentioned in clause (a) was given to the tenant, an activity takes place, conduct occurs or a situation arises that constitutes grounds for a notice of termination under section 60, 61, 62, 64 or 67, other than an activity, conduct or a situation that is described in subsection 61 (1) and that involves an illegal act, trade, business or occupation described in clause 61 (2) (a).

Same
(2) The notice under this section shall set out the date it is to be effective and that date shall not be earlier than the 14th day after the notice is given.

***form 5

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Troublesome Tenants in Condominiums – Part 2

5.  Remedy in Damages

The condominium corporation can seek costs from a unit owner who violates the condominium by-laws. Therefore, a condominium corporation can require the unit owner to pay for the damages their tenant caused.  The unit owner can then recover such costs from the tenant.

Pham v. Strata Plan NW 2003 [2007] B.C.J. No. 785 (B.C.S.C.)

Facts: Pham, the unit owner, rented her unit to two tenants who operated a marijuana grow operation.  The operation caused significant damage to the unit and the common areas.  After the police shut down the operation, the condominium corporation, through the property manager, wrote to Pham advising her that she was to pay for the cost of repairs to the common areas and any outstanding maintenance fees owed by the tenants.  When Pham did not respond, additional letters were sent.  The repair work was done costing over $100,000.  The condominium corporation placed a lien on the property.  Pham sold the property and netted $61,500.

Question: Whether or not the condominium corporation could dip into the net sale proceeds to recover part of the cost of repair?

Ruling: The unit owner was responsible for the damages caused by the tenant.  It was found that the condominium corporation had the right to carry out the repairs under its by-laws.  Pham had not properly rented out the unit in accordance to the by-laws.  Pham was enriched by the repairs paid by the condominium corporation.  It would be unconscionable for the unit owner to benefit from her conduct and for the corporation to bear the costs.

The unit owner is responsible for the damages caused by the tenant if the unit owner would be enriched by the repairs performed by the condominium corporation.

Re. E.R. and C.,  Unreported (September 2, 2004) 04-0375 (Ont Sup. Ct.)

Facts: E.R. rented his condominium unit to C.  C’s son, J, moved in with C.  J. caused various nuisances in the condominium common areas.  Complaints were made against J. to the property management company.  E.R. was contacted, and the condominium corporation warned E.R. that if he did not deal with his unruly tenants, the condominium corporation would seek a compliance order.  E.R. terminated the lease, but before C. and J. vacated, J. hosted a party and additional damage was done to the common areas.

Question: As J. was not a tenant, who was responsible for the costs of repair to the condominium common areas?

Ruling: C., the tenant, is responsible for the actions of his guest, J.  C. and J. are responsible for the costs of the repair and the cost of the court application to the unit owner, E.R..  However, E.R. is ultimately responsible to the condominium corporation for all damages done by the tenant.

Tenants are responsible for the actions of their guests.  The unit owner is responsible for the damages caused by the tenants and their guests; but the unit owner can seek to recover such damages from the tenants.

Halton Condominium Corporation No. 315 and Sid Gucciardi and Caterina Gucciardi (April 15, 2004) 04/11605 (Ont. Sup. Ct.)

Facts: The Gucciardis purchased a condominium unit and noticed that there were some pockmarks and footprints on the concrete in the porch.  The Gucciardis contacted the builder regarding the defect, but the builder took no action.  Years later, the concrete began to crack and the Cucciardis contacted a contractor to install ceramic tiles over the cement.  However, the by-laws required that the condominium corporation’s consent before improvements or renovations could be made to a unit.

Question: Whether or not the unit owner can bypass the condominium by-laws to make improvements to the unit?

Ruling: The installation of the ceramic tiles was a renovation and not a repair despite the fact that the cement was cracking.  Condominium ownership was part unique and part communal.  The by-laws of the condominium corporation were the “fundamental rule”, and must be “abided by all the unit holders”.  The unit holder must restore the porch’s cement flooring and pay for the costs of the condominium corporation.

The condominium by-laws are the ultimate rules to be followed by all who reside in the condominium.


 

6.  Self-Help Not Recommended

The condominium corporation should not resort to self-help remedies.  Removing a tenant’s item that is left in the common area may result in a charge under the Criminal Code for theft.


7. Remember Occupier’s Liability

Ontario’s Occupier’s Liability Act imposes an obligation on the occupier to ensure the safety of all those on its premises.  The condominium corporation is responsible for the safety of everyone who uses the common areas (such as unit owners, tenants, and guests).

The condominium corporation can also be liable for injuries that a tenant suffers around the unit or in the common areas.

Cater (Guardian of ) et al. v. Ghag Enterprises Ltd., et al. [1991] B.C.J. No. 656 (B.C.S.C.)

Facts: The plaintiff was a tenant at the defendant condominium.  The plaintiff had an eight year-old daughter who enjoys riding her bicycle.  There was a hole in the driveway area.  One day, the daughter rode her bicycle into the depression and broke her leg.  The tenant brought an action against both the unit owner and the condominium corporation.

Question: Who was responsible for the girl’s injuries?

Ruling: The condo corporation and the unit owners were both occupiers; therefore, they were jointly responsible for the injuries of the girl.  Liability was attributed 75% to the unit owner and the condo corporation and 25% to the girl.A condo corporation can be held jointly liable for the injuries suffered by a tenant while on the condominium premise.

Allison v. Rank City Wall Canada Ltd. [1984] O.J. No. 3094 (Ont. H.C.J.)

Facts: The plaintiff, a tenant at the defendant’s apartment building, was assaulted in the underground parking garage.  The lighting in the parking area was dim, and there was infrequent security patrolling.  There was also no close-circuit television monitoring.  There was a limited liability clause in the lease contract that limited liability of the landlord to any harm suffered by the tenant.

Question: What is the effect of a limited liability clause on the harm suffered by the tenant?

Ruling: The apartment owner was found negligent because the safety measures were inadequate.  The limited liability clause did not limit the apartment building’s obligation to take reasonable precautions to ensure the safety of its tenants.

A condominium corporation must take reasonable precautions to ensure the safety of the tenants in the common areas.


 

8.  Residential Tenancies Act and the Unit Owner

The Residential Tenancies Act provides that a tenancy may be terminated only in accordance with this Residential Tenancies Act (“RTA”) (Section 37(1)).

The Landlord is not entitled to recover possession of a rental unit subject to a tenancy unless the tenant has vacated or abandoned the unit, or an order of the Board under the RTA evicting the tenant has authorized the possession   (Section 39 of the RTA).

There are only certain specific reasons under the RTA for a landlord to terminate a tenancy before the end of the term.  Those basically deal with non-payment of rent, termination for cause for misrepresentation of income, illegal acts, damage, interference with reasonable enjoyment, an act impairing safety, too many persons in the unit and further contravention after prior notice of termination (Section 59-68 of the RTA);

An application by the Landlord after notice of termination is required before possession can be obtained unless the landlord and tenant agree that the tenant is going to leave, and an agreement in the prescribed form is executed after the lease commences.

Under Section 134 of the Condominium Act, it is possible to get an order of the court to terminate a tenancy if the tenant breaches an existing court order, or the tenant has failed to remit common expenses after the owner has defaulted on the payment and the tenant has received written notice from the Condominium Corporation to make the payments to the Condominium Corporation.  (Section 134 of the Condominium Act).


 

SUMMARY

There are remedies available to the Condominium Corporation to deal with problem tenants.  The Condominium Corporation has to involve the unit owner right from the beginning, and try and get the unit owner to enforce the obligations of the tenant and the tenant’s guests.  If the problems require going to the courts, then the “devil is in the details” and the Condominium Corporation has to make sure that the necessary notices and demands have been sent to the unit owner and the tenant and that the necessary steps are taken in the courts to remedy the problem.  The remedy may be getting a court order requiring the tenant to comply with the rules of the condominium and requiring payment for damages.  If that is not sufficient, then it may be necessary to subsequently ask for a termination of the tenancy agreement.  If the unit owner and the tenant don’t pay for the damages, then eventually the Condominium Corporation can have the condominium unit sold to pay for the damages.

A unit owner that faces a problem tenant is well advised to try and make sure that the tenant complies with its obligations and that the Condominium Corporation does not have to bring any court proceedings to get the tenant to comply.  If the Condominium

Corporation brings the court proceedings, then the unit owner will often end up paying for the legal costs of the Condominium Corporation on a substantial indemnity basis (i.e. almost 100% of the legal costs).  If the unit owner ends up going to court to deal with the tenant under the Condominium Act, then the Condominium Corporation may want to be a party to the application, so that if the application fails then the Condominium Corporation is not prevented from asking the court for a similar order arising from the same fact situation.

 (The invaluable help of Karen Poon, Articling Student with Cheadles LLP in assisting with the preparation of these materials is gratefully acknowledged by Doug Shanks.)


 

Selected Sections of the Condominium Act, 1998

S.O. 1998, CHAPTER 19

Notification by owner

83   (1)   The owner of a unit who leases the unit or renews a lease of the unit shall, within 30 days of entering into the lease or the renewal, as the case may be,

(a) notify the corporation that the unit is leased;

(b) provide the corporation with the lessee’s name, the owner’s address and a copy of the lease or renewal or a summary of it in the form prescribed by the Minister; and

(c) provide the lessee with a copy of the declaration, by-laws and rules of the corporation.

Termination of lease

(2)   If a lease of a unit is terminated and not renewed, the owner of the unit shall notify the corporation in writing.

Record of notices

(3)   A corporation shall maintain a record of the notices that it receives under this section.

Lien upon default

85  (1)   If an owner defaults in the obligation to contribute to the common expenses, the corporation has a lien against the owner’s unit and its appurtenant common interest for the unpaid amount together with all interest owing and all reasonable legal costs and reasonable expenses incurred by the corporation in connection with the collection or attempted collection of the unpaid amount.

Expiration of lien

(2)   The lien expires three months after the default that gave rise to the lien occurred unless the corporation within that time registers a certificate of lien in a form prescribed by the Minister.

Certificate of lien

(3)   A certificate of lien when registered covers,

(a)  the amount owing under all of the corporation’s liens against the owner’s unit that have not expired at the time of registration of the certificate;

(b)  the amount by which the owner defaults in the obligation to contribute to the common expenses after the registration of the certificate; and

(c)  all interest owing and all reasonable legal costs and reasonable expenses that the corporation incurs in connection with the collection or attempted collection of the amounts described in clauses (a) and (b), including the costs of preparing and registering the certificate of lien and a discharge of it.

Notice to owner

(4)   At least 10 days before the day a certificate of lien is registered, the corporation shall give written notice of the lien to the owner whose unit is affected by the lien.

Service of notice

(5)   The corporation shall give the notice by personal service or by sending it by prepaid mail addressed to the owner at the address for service that appears in the record of the corporation maintained under subsection 47 (2).

Lien enforcement

(6)   The lien may be enforced in the same manner as a mortgage.

Discharge of lien

(7)  Upon payment of the amounts described in subsection (3), the corporation shall prepare and register a discharge of the certificate of lien in the form prescribed by the Minister and shall advise the owner in writing of the particulars of the registration.

Default with respect to leased unit

87  (1)   If an owner who has leased a unit defaults in the owner’s obligation to contribute to the common expenses, the corporation may, by written notice to the lessee, require the lessee to pay to the corporation the lesser of the amount of the default and the amount of the rent due under the lease.

Service on lessee

(2) The corporation shall give the notice to the lessee by personal service or by sending it by prepaid mail addressed to the lessee at the address of the unit.

Notice to owner

(3)   If the corporation gives a notice to a lessee, it shall give a copy of the notice to the owner of the unit that the lessee has leased.

Service on owner

(4)  The corporation shall give the copy of the notice to the owner by personal service or by sending it by prepaid mail addressed to the owner at the address for service that appears in the record of the corporation maintained under subsection 47 (2).

Rent paid to corporation

(5)   Upon receiving a notice under subsection (1), the lessee shall make the required payment to the corporation even if an encumbrancer of the unit has acquired the right of the lessor to receive rent under the lease.

No default in lease

(6)   The payment to the corporation shall constitute payment towards rent under the lease and the lessee shall not by reason only of the payment to the corporation be considered to be in default of an obligation in the lease.

Changes made by owners

98  (1)   An owner may make an addition, alteration or improvement to the common elements that is not contrary to this Act or the declaration if,

(a)   the board, by resolution, has approved the proposed addition, alteration or improvement;

(b)   the owner and the corporation have entered into an agreement that,

(i)    allocates the cost of the proposed addition, alteration or improvement between the corporation and the owner,

(ii)   sets out the respective duties and responsibilities, including the responsibilities for the cost of repair after damage, maintenance and insurance, of the corporation and the owner with respect to the proposed addition, alteration or improvement, and

(iii) sets out the other matters that the regulations made under this Act require;

(c)   subject to subsection (2), the requirements of section 97 have been met in cases where that section would apply if the proposed addition, alteration or improvement were done by the corporation; and

(d) the corporation has included a copy of the agreement described in clause (b) in the notice that the corporation is required to send to the owners.

No notice or approval

(2)   Clauses (1) (c) and (d) do not apply if the proposed addition, alteration or improvement relates to a part of the common elements of which the owner has exclusive use and if the board is satisfied on the evidence that it may require that the proposed addition, alteration or improvement,

(a)   will not have an adverse effect on units owned by other owners;

(b)   will not give rise to any expense to the corporation;

(c)   will not detract from the appearance of buildings on the property;

(d) will not affect the structural integrity of buildings on the property according to a certificate of an engineer, if the proposed addition, alteration or improvement involves a change to the structure of the buildings; and

(e) will not contravene the declaration or any prescribed requirements.

When agreement effective

(3)   An agreement described in clause (1) (b) does not take effect until,

(a) the conditions set out in clause (1) (a) and subsection (2) have been met or the conditions set out in clauses (1) (a), (c) and (d) have been met; and

(b) the corporation has registered it against the title to the owner’s unit.

  Lien for default under agreement

(4)   The corporation may add the costs, charges, interest and expenses resulting from an owner’s failure to comply with an agreement to the common expenses payable for the owner’s unit and may specify a time for payment by the owner.

  Agreement binds unit

(5)   An agreement binds the owner’s unit and is enforceable against the owner’s successors and assigns.

  Deductible

105(1)   Subject to subsection (2) and (3), if an insurance policy obtained by the corporation in accordance with this Act contains a deductible clause that limits the amount payable by the insurer, the portion of a loss that is excluded from coverage shall be a common expense.

Owner’s responsibility

(2)   If an owner, a lessee of an owner or a person residing in the owner’s unit with the permission or knowledge of the owner through an act or omission causes damage to the owner’s unit, the amount that is the lesser of the cost of repairing the damage and the deductible limit of the insurance policy obtained by the corporation shall be added to the common expenses payable for the owner’s unit.

Same, by-law

(3)   The corporation may pass a by-law to extend the circumstances in subsection (2) under which an amount shall be added to the common expenses payable for an owner’s unit if the damage to the unit was not caused by an act or omission of the corporation or its directors, officers, agents or employees.

Owner’s insurable interest

(4)   The amount payable by an owner under this section or as a result of a by-law passed under this section constitutes an insurable interest of the owner.

Use of common elements by owners

116       An owner may make reasonable use of the common elements subject to this Act, the declaration, the by-laws and the rules.

Dangerous activities

117       No person shall permit a condition to exist or carry on an activity in a unit or in the common elements if the condition or the activity is likely to damage the property or cause injury to an individual.

Compliance with Act

119(1)   A corporation, the directors, officers and employees of a corporation, a declarant, the lessor of a leasehold condominium corporation, an owner, an occupier of a unit and a person having an encumbrance against a unit and its appurtenant common interest shall comply with this Act, the declaration, the by-laws and the rules.

Responsibility for occupier

(2)   An owner shall take all reasonable steps to ensure that an occupier of the owner’s unit and all invitees, agents and employees of the owner or occupier comply with this Act, the declaration, the by-laws and the rules.

Right against owner

(3)   A corporation, an owner and every person having a registered mortgage against a unit and its appurtenant common interest have the right to require the owners and the occupiers of units to comply with this Act, the declaration, the by-laws and the rules.

Mediation and arbitration

132(1)   Every agreement mentioned in subsection (2) shall be deemed to contain a provision to submit a disagreement between the parties with respect to the agreement to,

(a) mediation by a person selected by the parties unless the parties have previously submitted the disagreement to mediation; and

(b) unless a mediator has obtained a settlement between the parties with respect to the disagreement, arbitration under the Arbitration Act, 1991,

(i)    60 days after the parties submit the disagreement to mediation, if the parties have not selected a mediator under clause (a), or

(ii) 30 days after the mediator selected under clause (a) delivers a notice stating that the mediation has failed.

Application

(2)   Subsection (1) applies to the following agreements:

1.   An agreement between a declarant and a corporation.

2.   An agreement between two or more corporations.

3.   An agreement described in clause 98 (1) (b) between a corporation and an owner.

4.   An agreement between a corporation and a person for the management of the property.

Disagreements on budget statement

(3)   The declarant and the board shall be deemed to have agreed in writing to submit a disagreement between the parties with respect to the budget statement described in subsection 72 (6) or the obligations of the declarant under section 75 to mediation and arbitration in accordance with clauses (1) (a) and (b) respectively.

Disagreements between corporation and owners

(4)   Every declaration shall be deemed to contain a provision that the corporation and the owners agree to submit a disagreement between the parties with respect to the declaration, by-laws or rules to mediation and arbitration in accordance with clauses (1) (a) and (b) respectively.

Duty of mediator

(5) A mediator appointed under clause (1) (a) shall confer with the parties and endeavour to obtain a settlement with respect to the disagreement submitted to mediation.

Fees and expenses

(6)   Each party shall pay the share of the mediator’s fees and expenses that,

(a) the settlement specifies, if a settlement is obtained; or

(b) the mediator specifies in the notice stating that the mediation has failed, if the mediation fails.

Record of settlement

(7)   Upon obtaining a settlement between the parties with respect to the disagreement submitted to mediation, the mediator shall make a written record of the settlement which shall form part of the agreement or matter that was the subject of the mediation.

Compliance order

134(1)   Subject to subsection (2), an owner, an occupier of a proposed unit, a corporation, a declarant, a lessor of a leasehold condominium corporation or a mortgagee of a unit may make an application to the Superior Court of Justice for an order enforcing compliance with any provision of this Act, the declaration, the by-laws, the rules or an agreement between two or more corporations for the mutual use, provision or maintenance or the cost-sharing of facilities or services of any of the parties to the agreement.

Pre-condition for application

(2)   If the mediation and arbitration processes described in section 132 are available, a person is not entitled to apply for an order under subsection (1) until the person has failed to obtain compliance through using those processes.

Contents of order

(3)   On an application, the court may, subject to subsection (4),

(a) grant the order applied for;

(b) require the persons named in the order to pay,

(i) the damages incurred by the applicant as a result of the acts of non-compliance, and

(ii) the costs incurred by the applicant in obtaining the order; or

(c) grant such other relief as is fair and equitable in the circumstances.

Order terminating lease

(4)   The court shall not, under subsection (3), grant an order terminating a lease of a unit for residential purposes unless the court is satisfied that,

(a) the lessee is in contravention of an order that has been made under subsection (3); or

(b) the lessee has received a notice described in subsection 87 (1) and has not paid the amount required by that subsection.

Addition to common expenses

(5)   If a corporation obtains an award of damages or costs in an order made against an owner or occupier of a unit, the damages or costs, together with any additional actual costs to the corporation in obtaining the order, shall be added to the common expenses for the unit and the corporation may specify a time for payment by the owner of the unit.

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