Tharani Holdings Inc. v. Metropolitan Toronto Condominium Corporation No. 812, 2022 ONCA 93

Court of Appeal for Ontario

Date: 20220131 Docket: C69209

Before: MacPherson, van Rensburg and Roberts JJ.A.

Between:

Tharani Holdings Inc. Applicant (Appellant)

And:

Metropolitan Toronto Condominium Corporation No. 812, Anil Jhamtani, Nina Evans, Selvan Veerasingam, Sritharan Sabaratnam, Joe Accardo and Aksharan Sritharan Respondents (Respondents)

Counsel: Pradeep Chand, for the appellant Karen Kisiel, for the respondents

Heard: January 25, 2022 by video conference

On appeal from the order of Justice Edward M. Morgan of the Superior Court of Justice, dated February 22, 2021.

Reasons for Decision

Overview

1At the conclusion of the hearing of this appeal we advised that the appeal was dismissed with reasons to follow. These are our reasons.

2The appeal concerns challenges to the administration of Metropolitan Toronto Condominium Corporation No. 812 (“MTCC 812”), which is a condominium corporation consisting of 64 commercial units and appurtenant common elements, located on Markham Road in Toronto. The affairs of MTCC 812 are governed by a board of directors consisting of five volunteer directors. The appellant Tharani Holdings Inc. (“Tharani Holdings”) owns three units in the building. Mr. Balasubramaniam Palaniappa is the principal of Tharani Holdings.

3The appellant has pursued other proceedings respecting the management and control of the board of MTCC 812, resulting in, among other things, a court order requiring the holding of an annual general meeting.

4The appellant commenced an application against MTCC 812, five of its current and former directors and its property manager. The notice of application, which is 22 pages long, alleges numerous breaches of the Condominium Act, 1998, S.O. 1998, c. 19 (the “Act”), General Regulation O. Reg. 48/01, and the by‑laws and board election procedures of MTCC 812. The appellant sought, among other things, the removal of the respondent directors, the appointment of an inspector, the application of the oppression remedy, and damages.

5The application judge dismissed the application. He noted that the appellant’s arguments, stripped to their core, concerned various alleged technical breaches of the Act or other regulations by the respondents. They lacked a “central, overarching focal point”, and were comprised of “what appear to be formalistic errors made by the [MTCC 812] board that amount to little in substance”: at para 3. He characterized the appellant’s position as follows: “[B]reach of the rules is a breach of the rules, and a breach demands a remedy regardless of the effect (or non-effect) of the breach”: at para. 18. Considering the appellant’s allegations on the whole, the application judge concluded that they failed to demonstrate any evidence of substantively harmful conduct by the respondents.

Issues on Appeal

6Although a number of issues are raised on appeal, in essence the appellant makes two arguments: that the application judge engaged in conduct giving rise to a reasonable apprehension of bias; and that he failed to conduct the necessary analysis in refusing to grant a remedy.

Reasonable Apprehension of Bias

7There is no merit to the bias allegation. Referring to a transcript of the hearing, the appellant points to passages where the application judge characterized the appellants’ complaints as a “litany of petty, stuff, petty disputes… and no big picture”, and asked the appellant’s counsel to provide an overview, and to indicate whether there was “anything big”, or whether it was “a litany of small, small bickering with the Board”.

8Contrary to the appellant’s submission, these comments did not suggest that the application judge had pre-determined the issues in the application; rather, they were a reasonable effort on the part of the application judge to ascertain the basis on which the appellant was seeking various remedies, and whether there were grounds for the relief that was sought. As the application judge demonstrated, he was “open to hearing” the appellant’s substantive complaints that would give rise to a remedy.

Failure to Grant a Remedy

9As for the submissions concerning the application judge’s failure to impose certain remedies: declaring the automatic disqualification of MTCC 812’s directors for not complying with disclosure requirements under s. 29 of the Act and ss. 11.6 and 11.10 of O. Reg. 48/01; a compliance order under s. 134 of the Act; the appointment of an inspector under s. 130; or relief under the oppression remedy section, s. 135, there is no reason to interfere with the application judge’s decision that no remedy was warranted for what were essentially technical breaches.

10First, the application judge considered the evidence and concluded that, while the directors may not have formally disclosed their identities, and the fact that in some cases their units were owned by family members or their personal corporations, the appellant knew the identities of the directors. In the absence of any actual harm to the appellant, it was within the discretion of the application judge to decline to disqualify the respondent directors. Indeed, the application judge reasonably concluded that an order disqualifying the directors and requiring a new election could put the affairs of MTCC 812 in disarray.

11Nor did the application judge err in failing to consider or invoke the oppression remedy under s. 135 of the Act, to make a compliance order or to award damages under s. 134, or to appoint an inspector under s. 130. He reasonably concluded that, without evidence of any harm or prejudice to the appellant, there was no basis for an oppression remedy or for any other remedy.

12On appeal the appellant did not argue that the application judge had overlooked or ignored evidence of actual harm or prejudice it had sustained as a consequence of any irregularities in MTCC 812’s administration, or point to any such evidence. Rather, the argument on appeal, as at first instance, was that any breach of the Act, regulation or condominium governing documents, required a remedy. The application judge reasonably, and in our view correctly, observed that the remedial provisions in the Act are permissive. And, contrary to the appellant’s submission, the application judge assessed the various complaints cumulatively, finding that there was no evidence, overall, of “substantively harmful conduct by the Respondents”: at para. 21.

13The application judge was well aware and critical of the various irregularities the appellant had argued. He stated in para. 43:

…[A]lthough there is no real wrongdoing by the board, and the current board shall remain in place until the next election is held pursuant to the requirements of the Act, regulations and corporate by-laws, the Condo Corp’s board effectively brought this proceeding on itself. Its own lackadaisical attitude toward the rules governing its operation has prompted the Applicant’s intense scrutiny. The Applicant may be the board’s litigation adversary, but the board members and the Condo Corp’s manager seem to be their own worst enemy.

14However, there was no evidence that the irregularities were ongoing or causing real prejudice. Notably, the application judge pointed out that the auditing of financial statements was underway, and that there was no practical value in auditing previous fiscal years without cogent evidence indicating a reason to do so.

15In exercising his discretion to refuse a remedy under ss. 130, 134 and 135 of the Act, the application judge was entitled to conclude that the appellant’s grievances raised technical breaches of the Act that did not require a remedy. His reasons clearly set out why he dismissed the application.

Disposition and Costs

16For these reasons the appeal was dismissed, with costs to the respondents on a partial indemnity basis fixed at $5,300, inclusive of HST and disbursements.