COURT FILE NO.: CV-06-081392-00

DATE: 2007-05-22

SUPERIOR COURT OF JUSTICE – ONTARIO (Central East Region)

DIVISIONAL COURT

RE: Joanne Dorothy Conrad v. Dale-Avon Apartments Ltd. et al

BEFORE: Madam Justice R. Boyko

COUNSEL: W. Novak and W. Friedman, for the Plaintiffs

I. Marks and S. Pulver, for the Defendants

E N D O R S E M E N T

[1] The defendants seek leave to appeal the order of Loukidelis J. dated April 2, 2007. Loukidelis J. granted the injunctive relief sought by the plaintiffs. The Board of Directors of Dale-Avon apartments Ltd. had decided that the plaintiff was in breach of her occupancy agreement by installing a washer and dryer without their approval and after several months served her with a "Notice of Possession and Sale". The order of Loukidelis J. prevents the defendants from forcibly entering and taking possession of the plaintiff's unit and forcing the sale of her shares prior to trial.

[2] Rule 62.02(4) provides the grounds on which leave to appeal may be granted. The defendants did not put forward an argument under 62.04(a) that there is a conflicting decision on the issue. The defendants base their appeal on 62.02(4)(b). I am not satisfied that there is reason to doubt the correctness of the decision of Loukidelis J. or that the matter is of such importance that leave to appeal should be granted. Leave to appeal from the order of Loukidelis J. is denied for the following reasons.

No reason to doubt the correctness of the order made

[3] There is no reason to doubt the correctness of the order of Loukidelis J. who was satisfied that the legal test to grant an interlocutory injunction set out by the Supreme Court of Canada in R.J.R. MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, was met.

[4] First, the motions court judge was evidently satisfied that a degree of 'uniqueness' had been established on the evidence that this court should be loathe to ignore, particularly given the imminent sale of the Plaintiff's interest in this property if it was not preserved until trial. The Directors of the corporation responsible to manage the premises concede that without this injunction they are in a position to immediately sell the property, exercising their powers, which are akin to power of sale proceedings, which would only leave the issue of damages for trial.

[5] I do not accept the defendants' position that the test for 'uniqueness' of the property was not met because the motions court judge did not have a factual basis on which to find that the plaintiff's property interest was at all 'unique'. First, the defendants acknowledge that the property is located in what they described as a 'posh' Toronto neighbourhood, which was one aspect the judge considered to be relevant to the issue of uniqueness. Second, there was evidence that the unit overlooked a forested ravine and was located in a low-rise, 22-unit building, which are features that on their face would set these premises apart from others and therefore go to the issue of uniqueness. Third, I don't accept as persuasive the defendants' argument that before purchasing her present unit, the Plaintiff had considered other premises outside of Rosedale that she would have taken if the deal had not fallen through and therefore her purchase of the Dale-Avon apartment unit was not selected for the uniqueness of its location. Nor is the uniqueness aspect in my view dependent on the Plaintiff providing evidence to show that no other similar units are available in Rosedale.

[6] In determining whether to grant the interlocutory injunction sought, the 'uniqueness' of the property in question had to be considered as it goes to the issue of irreparable harm. Loukidelis J. was obliged to consider whether or not sale of the property before trial would deprive the litigant from acquiring other similar property and there was some evidence on which he could reasonably conclude that the unit in question was unique.

[7] Second, I reject the defendant's position that there was no serious issue to be tried.

[8] As held by the Supreme Court in RJR-MacDonald at para. 49, the determination of a serious question to be tried is a threshold issue, and the threshold is low. The judge on the application must make a preliminary assessment of the merits of the case.

[9] The defendants maintain that although not constituted under condominium laws, the directors of this corporation and directors of other similar corporations established prior to the enactment of condominium laws rely on caselaw that has developed since the enactment of the Condominium Act. Further, that such caselaw has accorded deference to the directors of condominium corporations and courts have refused to grant injunctive relief, which would prevent the Board of Directors of condominiums from exercising their statutory duties. Indeed courts have held that it is not oppressive for such a Board, on the authority of its shareholders, to enforce its Rules against a shareholder who has breached the Rules and caused discomfort to another shareholder or created a safety hazard. See: Halton Condominium Corporation No. 315 v. Gucciardi, (2004), (O.S.C.) unreported. The defendants maintain that the motions judge erred in not placing weight on this factor when he found that the conflicting evidence as to what the Plaintiff knew at the time she installed her dryer was a serious issue for trial.

[10] Counsel for the defendants argue that regardless of when the plaintiff became aware of the existence of article 27, that required the prior approval of the directors to install a dryer, or however the Directors chose to subsequently address the issue of other unit holders having dryers, is simply a matter within the ongoing responsibility of the Directors. Consequently any non-compliance with the rules made by the Directors amounts to a breach of the plaintiff's occupancy agreement, entitling the Directors to force the sale of her shares to her unit. The defendants maintain that they are entitled to deference in the exercise of their powers under their own rules, which they say is settled law and the courts should be loathe to interfere with the management board decisions.

[11] The court cannot simply ignore the seminal statute under which this particular corporation was created, namely the Ontario Business Corporation Act that does provide for oppression remedies, a remedy sought by the plaintiff here. Whether the facts give rise to an oppression remedy, this issue is on its face a serious issue to the litigants that can't be glossed over having regard only to the law governing management boards constituted under the Condominium Act.

Only a matter of general importance

[12] The defendants' say that as Directors they are responsible to make and enforce rules on a continual basis and pursuant to the occupancy agreement the plaintiff is entitled to comply with them on an ongoing basis. Straying from this line of cases that accords directors deference, would affect other corporations that are similarly situated, namely other corporations created under the Business Corporations Act that are responsible to manage apartment buildings.

[13] I reject the defendants' position that leave to appeal should be granted because this involves a matter of great public importance to boards who are similarly situated. The Condominium Act has been in place for many years and there is no evidence that this is an issue of great public importance. It is however, important to the litigants in this case.

[14] In my view this is not a matter of general importance but one of only particular importance relevant only to the litigants. See: Greslik v. Ontario Legal Aid Plan (1988), 54 O.R. (2d) 110 (Div. Ct).

Costs awarded as a ground of appeal

[15] Loukidelis J. fixed costs in the amount of $6,000 for the motion before him and for one prior motion, which the defendants say was done without their submissions and that this too should be considered as a ground of appeal. The motion court judge had the discretion to order costs and did so.

Conclusion

[16] In conclusion, the motion for leave to appeal is dismissed. Counsel may call the Trial Coordinator in Newmarket to arrange a teleconference call with me to address the issue of costs.

Madam Justice R. Boyko

DATE: Monday, May 22, 2007