Court File and Parties

COURT FILE NO.: CV-15-531007 DATE: 20160906 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

METROPOLITAN TORONTO CONDOMINIUM CORPORATION NO. 1395 on its own behalf and on behalf of all unit owners of Metropolitan Toronto Condominium Corporation No. 1395, Applicant – and – HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO, AS PRESENTED BY THE DIRECTOR OF TITLES, Respondent

Counsel: Timothy M. Duggan, for the Applicant Eunice Machado and Ashley Boyes, for the Respondent

HEARD: August 16, 2016

G. DOW, J

Reasons for Judgment

[1] The applicant, Metropolitan Toronto Condominium Corporation No. 1395 (“MTCC 1395”) seeks to compel Her Majesty the Queen in Right of Ontario, as represented by the Director of Titles (“Director of Titles”) to accept and register the result of an agreement the Board of Directors of MTCC 1395 (“Condominium Board”) reached with the owners of the development’s retail and commercial component, First Capital Holdings (Ontario) Corporation (“First Capital”). The agreement pertains to development adjacent and above 77-87 Avenue Road. The agreement resulted in updating the common elements of the residential entrance way of 55A Avenue Road and 18A Hazelton Avenue, the transfer of small parcels of land between the parties and altered easements previously described in the Declaration of MTCC 1395 and as contained in Schedule “A” which is registered in the Land Title Offices as part of the P.I.N. 21196-0012 (LT).

[2] The portions of the common elements affected are jointly owned by the 53 unit holders as tenants-in-common. There are also two service room units.

[3] The Director of Titles opposes the relief sought on the basis the Condominium Board failed to follow the required procedure under section 17.1 and section 124 of the Condominium Act, 1998, S.O. 1998, c.19 which requires a vote to be held and at least 80% of the unit holders be in favour.

Background

[4] The original agreement creating MTCC 1395 was made when the development was constructed and occupied in or about 2001. The agreement in question was reached in March, 2013. The result of the agreement would be known to the unit holders as the work has proceeded and, as I was advised by counsel, it is substantially complete.

[5] The Condominium Board, likely through advice it received, proceeded to obtain the necessary approval of the unit holders by following section 107 of the Condominium Act by calling a meeting for October 2, 2013 and providing materials to all unit holders. The materials included a letter from the lawyers for MTCC 1395, a Notice of Special General Meeting, an Agenda, the proposed amended Schedule “A” (to the Condominium Declaration), drawings, photos and renderings of the work to be done, an Ontario Municipal Board decision issued August 30, 2013 and a Consent form.

[6] The Ontario Municipal Board (“OMB”) decision was an appeal by a unit holder from the City of Toronto, Committee of Adjustment decision to grant the variances required to give effect to portions of the agreement. In dismissing the appeal, the OMB stated not only did the changes maintain the general intent and purpose of Toronto’s Official Plan but provided for improvement to the “high quality and vibrancy of the shopping experience along Avenue Road, deemed to be one of Toronto’s premier retail streets” (paragraph 10). The OMB also concluded the renovation would “renew and revitalize the commercial and retail components” of the building “while invigorating the condominium lobby entrances” (paragraph 16).

[7] Following the meeting on October 2, 2013, the Condominium Board received 80% or 43 executed Consents and proceeded to prepare and submit the draft amended document to register the changes to the property owned by MTCC 1395 as well as the easements released and granted. The Director of Titles advised the Condominium Board in or about April, 2015 of its position that the procedure set out under section 124 of the Condominium Act was required to be followed which includes that a vote be held by the unit holders with at least 80% approving the transaction. This application was issued June 24, 2015 with an original return date of May 10, 2016 but adjourned to August 16, 2016.

Analysis

[8] Counsel for MTCC 1395 made various arguments that sought to regularize what has occurred. The primary one is that it had to follow section 107 of the Condominium Act which does not refer to any need to comply with section 124. In my view, section 107 sets out the process to “amend the declaration or the description”. Section 124 deals with the sale of “the property or a part of the common elements” which occurred in this instance and is the preferable procedure to follow. Fortunately, section 134 of the Condominium Act provides for an application to the Superior Court of Justice with, as stated by Justice Hourigan of the Court of Appeal in Toronto Standard Condominium Corp. No. 1908 v. Stefco Plumbing & Mechanical Contracting Inc., 2014 ONCA 696 at paragraph 21: “that s. 134 grants the court a broad discretion to fashion an appropriate remedy, having regard to the equities of the case”. I propose to follow that comment.

Disposition

[9] At the outset of submissions, counsel advised the title of proceeding required amendment from “The Director of Titles” to the proper description of the respondent, “Her Majesty the Queen in Right of Ontario, as represented by the Director of Titles”. This request was made on consent and is so ordered.

[10] Counsel for the Director of Titles suggested adjournment of this application for the purpose of serving all unit holders with notice of this application. I am advised there are five new unit holders to the condominium since the meeting on October 2, 2013. The notice should indicate that if a unit holder did not respond within 30 days by notifying MTCC 1395 and the Court, their previous consent would be deemed to be a vote in favour. Any unit holder that was not consenting to the application could pay the requisite court fees, and file material. Any unit holder that did not consent would be advised of his or her right under section 125 of the Condominium Act that they “may, within 30 days of the vote, submit to mediation a dispute over the fair market value of the property or part of the common elements that has been sold, determined as of the time of sale”. The expectation was that few, if any, would incur the expense and risk to exercise a right that may not have any value.

[11] The alternative is to approve the application requiring a copy of these reasons and the formal court order be provided or served on each unit holder (including the five who had subsequently sold their unit) by regular mail, delivery to each unit, electronic means if available or by any two of these methods (for all but the five former unit holders) and is so ordered. This will inform the unit holders of what has occurred and is going to occur. That is, an amendment to and registration of the changes to the precise legal description of the property owned and the easements released and granted.

[12] I am reinforced in this conclusion to have the consent obtained become the equivalent of a vote under section 124 as a more efficient, less costly way to proceed that is also more likely to bring finality to the process. It also respects the need for Condominium Boards to follow the process required. This decision should be restricted to its unique facts as opposed to being a precedent to using section 107 in the manner attempted.

[13] This decision does not impinge a unit holder’s right to pursue whatever legal remedy they believe they are entitled to. In this regard, counsel made submissions regarding unit holders making application to the Superior Court of Justice to recover damages under section 133 (False, Misleading Statements), section 144 (Compliance Order) and section 135 (Oppression Remedy).

[14] As a result, an order shall issue in a form approved by the parties and signed by me (to also be served on all unit holders identified above and in the manner described) that facilitates registration of the agreement reached between MTCC 1395 and First Capital with regard to the transfer of land and the granting and releasing of easements.

[15] Given these results and the circumstances of this matter and after submissions from counsel, there shall be no costs awarded to either party.

Mr. Justice G. Dow Released: September 6, 2016