Court of Appeal for Ontario

Date: 2019-07-18 Docket: C66368 & C66416

Judges: Feldman, Hourigan and Brown JJ.A.

Between

2214416 Ontario Inc. Applicant (Respondent)

and

Peel Standard Condominium Corporation No. 937, also known as Brisdale Plaza Inc., Maple Ridge Community Management and Royal Paan Respondents (Appellants)

Counsel

Carol A. Dirks and Rachel Fielding, for the appellant, Peel Standard Condominium Corporation No. 937, also known as Brisdale Plaza Inc. (C66368)

Ben V. Hanuka, for the appellant, Royal Paan (C66416)

Harpreet Singh Makkar, for the respondent

Heard: July 4, 2019

On appeal from: The Order of Justice Price of the Superior Court of Justice, dated December 7, 2018, with revised reasons reported at 2018 ONSC 7296.

Reasons for Decision

[1] Pursuant to s. 135 of the Condominium Act, 1998, S.O. 1998, c. 19 (the "Act"), the application judge granted the relief in paras. 4 and 5 of his order dated December 7, 2018 (the "Order") on the basis that at the time of the February 8, 2018 hearing: (i) the respondent, 2214416 Ontario Inc. ("221"), had a pending sale of its two units; and (ii) the proposed purchaser of the units intended to operate an Indian and Mughlai restaurant, as described in art. 2.01(d)(xii) of the Declaration.

[2] On this appeal, the appellant, Royal Paan, sought leave to adduce fresh evidence, which disclosed that: (i) the sale of 221's two units did not proceed; and (ii) later in 2018, 221 leased one unit to Punjab Insurance and the other to Wireless Hut under separate leases that now run for 5-year terms. As well, the fresh evidence discloses that one of the tenants enjoys a right to terminate its lease on short notice but has no present intention of doing so, in part because of the significant amount the tenant has spent on leasehold improvements to the unit. The respondent does not dispute the accuracy of those facts. Given the reliability of that fresh evidence, its cogency to the operation of the discretionary relief granted by the application judge in his Order, and the unavailability of that evidence at the time of the hearing, we granted leave to admit that fresh evidence.

[3] In light of that fresh evidence, there is no realistic prospect that 221 will be able to use its two units for an art. 2.01(d)(xii) restaurant within the period of Exclusive Business Use stipulated in art. 2.01(f) of the Declaration. As matters have transpired, the equitable relief granted to 221 by paras. 4 and 5 of the Order provides no practical benefit to it.

[4] We have no doubt that had the application judge known the facts now disclosed by the fresh evidence, the relief in paras. 4 and 5 would not have been granted. In those circumstances, we set aside paras. 4 and 5 of the Order: Courts of Justice Act, R.S.O. 1990, c. C.34, ss. 134(1)(a) and (c).

[5] The appellant, Peel Standard Condominium Corporation No. 937 ("PSCC 937"), acknowledges that at the hearing it had conceded the relief granted by para. 1 of the Order.

[6] As to paras. 2 and 3 of the Order concerning the production by PSCC 937 of a record showing the Exclusive Business Use enjoyed by any unit owner, we are not persuaded that the application judge erred in making those orders. PSCC 937 did not disclose to the application judge (or to this court by way of fresh evidence) the document upon which it relied to take the position that the owner of Unit 6, Royal Paan, had the Exclusive Business Use under s. 2.01(d)(xii).

[7] However, the fresh evidence discloses that after the argument of the motion, PSCC 937 has delivered a list of units with Exclusive Business Uses, thereby satisfying paras. 2 and 3 of the order.

[8] Para. 6 of the Order directed an assessment of 221's damages resulting from PSCC 937's breach of s. 135 of the Act. Given that we have set aside para. 4 of the Order containing a declaration that one aspect of PSCC 937's conduct breached s. 135, any damages remaining for assessment would be limited to the motion judge's finding in para. 2 of the Order that PSCC 937's conduct in refusing to provide a record of Exclusive Business Uses was unfairly prejudicial to and unfairly disregarded 221's interest.

[9] During oral argument, it became clear that although PSCC 937 understood that Royal Paan operated a restaurant within the Exclusive Business Use described in 2.01(d)(xii) in its Unit 6, Royal Paan's position was that its operation did not comply with that Exclusive Business Use, but may comply with a similar Exclusive Business Use where food and other materials may be sold, described in 2.01(d)(x). Royal Paan's competing claim to exclusive use under article 2.01(d)(xii) was based on a notice it purported to give to PSCC 937 in a letter dated October 10, 2017 in respect of Units 7 and 8.

[10] In our view, the evidence discloses that any damages 221 could claim against PSCC 937 in regard to its failure to provide the record regarding Unit 6 would, at most, be nominal damages. The undisclosed information in the possession or ultimate control of PSCC 937 that it believed had the effect that Unit 6 held the Exclusive Business Use for art. 2.01(d)(xii) was of no moment with respect to 221's claim for damages flowing from the aborted sale of its units. If PSCC 937 had disclosed the information before the hearing and it confirmed PSCC 937's position that an art. 2.01(d)(xii) use was not available to 221, the sale transaction would be at an end. If it did not confirm PSCC 937's understanding about Unit 6, it would not mean that 221 would be granted that exclusive use because Royal Paan was taking the position that it had the exclusive use by reason of its October 10, 2017 letter to PSCC 937 advising of its intention to convert its use of Units 7 and 8 to an art. 2.01(d)(xii) use. In either case, the production of the records would not have permitted 221 to close the transaction. Therefore, the failure to produce the records does not lead to any damages resulting from the failed sale of the units. In these circumstances, no basis remains for a damage claim by 221 against PSCC 937. We therefore set aside para. 6 of the Order.

[11] Para. 7 of the Order reserved the determination of the costs below to the judge hearing the assessment. Since we have set aside para. 6 directing the assessment, it falls to this court to determine both the costs below and the costs of appeal. In light of all the circumstances and the outcome, we conclude that this is an appropriate case where there should be no order as to costs and each party should absorb its costs incurred below and on appeal.

[12] By way of summary, we allow the appeal in part and set aside paras. 4, 5, 6, 7 and 8 of the Order. We make no order as to the costs below or of the appeal.

"K. Feldman J.A."

"C.W. Hourigan J.A."

"David Brown J.A."