ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-14-497413
DATE: 20140813
BETWEEN:
METROPOLITAN TORONTO CONDOMINIUM CORPORATION NO. 965
Responding Party / Applicant
– and –
METROPOLITAN TORONTO CONDOMINIUM CORPORATION NO. 1031 and METROPOLITAN TORONTO CONDOMINIUM CORPORATION NO. 1056
Moving Parties / Respondents
Michael A. Spears, for the Applicant
William A. Chalmers, for the Respondents
HEARD: June 20, 2014
b. p. o’marra j.
ruling on motion to convert an application into an action
background
[1] The applicant, Metro 965 and the respondents, Metro 1031 and Metro 1056 are the three residential condominium corporations which make up the condominium development known as Grand Harbour located on Lakeshore Boulevard West in the city of Toronto. All three share certain property, facilities and services and are parties to a Shared Facilities Agreement (the “SFA”) dated May 7, 1991. The Shared Facilities are managed by Royale Grande Property Management Limited, which is also the property manager for both of the respondents. The SFA obliges the three condominium corporations to share certain costs in connection with the operation, management, maintenance and repair of the Shared Facilities in certain proportions.
[2] The applicant commenced the application by way of Notice of Application issued January 29, 2014. The Notice of Application was served without a supporting affidavit.
[3] The applicant sought: a) a declaration that the conduct of the respondents is or threatens to be oppressive or unfairly prejudicial to the applicant or unfairly disregards the interests of the applicant; b) an order prohibiting the conduct of the respondents; c) an order to rectify the matters complained of; and d) costs.
[4] The specific grounds set out in the application dated January 29, 2014 are as follows:
(i) the applicant (also referred to herein as Metro 965) and the respondents (also referred to herein as Metro 1031 and Metro 1056) are the three residential condominium corporations which make up the condominium development known as Grand Harbour, municipally located at 2285/2287/2289 Lakeshore Boulevard West in the City of Toronto;
(ii) Metro 965, Metro 1031 and Metro 1056, which share certain property, facilities and services, are parties to a Shared Facilities Agreement dated May 7, 1991 (“SFA”) which was entered into:
“…for the purposes of providing for the sharing of certain costs and expenses with respect to the Shared Facilities (as such term is hereinafter defined) and to provide for the mutual use, operation, management, maintenance and repair of the Shared Facilities and certain other matters of common interest to the parties hereto;”.
(iii) the Shared Facilities are managed by Royale Grande Property Management Limited (“Royale Grande”), which is also the property manager for both of the respondents;
(iv) the SFA obliges the three condominium corporations to share certain costs in connection with the operation, management, maintenance and repair of the Shared Facilities (as defined in the SFA) in the following proportions:
Metro 965, which owns 39% of the total Grand Harbour site area, contributes 64% to shared costs;
Metro 1031, which owns 14% of the total Grand Harbour site area, contributes 27% to shared costs; and
Metro 1056, which owns 47% of the total Grand Harbour site area, contributes 9% of shared costs.
(v) the Shared Facilities consist in part of the areas which provide ingress or egress to the individual parking garages (the “Shared Garage Areas”), the roadways, driveways and walkways which provide means of access at the Grand Harbour site (the “Shared Accessways”), and all the landscaping (the “Shared Landscaping”), all of which are defined collectively in the SFA to mean the “Shared Common Element Areas”. The SFA makes it the obligation of each of the individual condominium corporations to maintain, operate, repair and replace, at a shared cost, the Shared Common Element Areas which are situate on their property. Areas such as the parking garage structures themselves, including the stone planter areas above the garage (i.e. being the rest of the structure apart from those portions which provide ingress and egress) are not covered by the SFA and are the exclusive responsibility of the individual condominium corporation to manage, maintain and repair;
(vi) the SFA further requires that each condominium corporation maintain, operate, repair and replace various shared services situate on their property (such as heating and air conditioning, domestic hot and cold water, common sections of sanitary and storm systems, etc.) and which are utilized by all three condominiums;
(vii) the conduct of the respondents, with respect to the operation and administration of the SFA, has been or threatens to be oppressive or unfairly prejudicial to the applicant or unfairly disregards the interests of the applicant, in a number of ways including, but not limited to, the following:
(a) refusing to recognize the right of Metro 965, pursuant to the terms of the SFA as referred to above, to manage, operate, maintain and repair the Shared Common Elements on its property;
(b) entering into a garage repair contract (the “Contract”) without the approval of Metro 965, contrary to Article 6.09 of the SFA;
(c) authorizing under the Contract the replacement of the garage concrete floor membrane in all garage areas in addition to many stone planter areas above the garage, when such matters are not “shared” items and which are the exclusive responsibility of the individual condominium corporation to address;
(d) as a result, obliging the applicant to contribute 64% of the $800,000 cost of the Contract;
(e) refusing to recognize the right of Metro 965 to manage, operate, maintain and repair shared services situate on its property and instead insisting that such property be managed by Royale Grande;
(f) as a result of the grossly negligent management on the part of Royale Grande, which is routinely overlooked or otherwise ignored by the respondents, the applicant has suffered damage to its property, including flooding of units, and as a result of Royale Grande’s improper and/or inadequate maintenance of the shared services on its property, in particular the HVAC system and the domestic hot water system, the residents of Metro 965 have been exposed to serious life/safety issues;
(g) applying pressure tactics to have the applicant approve financial statements (when the applicant had serious concerns about the validity of certain contracts which had been entered into relating to the Shared Facilities) contrary to legal and/or equitable rights and protections afforded to Metro 965 in Articles 6.11 and 6.12 of the SFA;
(h) the respondents, both of which are managed by Royale Grande, historically forming a voting block to force Metro 965, which carries the greatest financial burden, to pay for projects such as landscaping the courtyard of Metro 1056, for which it receives little or no benefit;
(i) renewal of the landscaping contract by Royale Grande without approval from or consultation with the applicant, notwithstanding that landscaping costs significantly exceeded the budgeted amounts for such service; and
(j) a general lack of due diligence in the administration of service contracts creating budget overruns which Royale Grande routinely charges back to the corporations, with Metro 965 obliged to pay 64% of such charges;
(viii) all of the above are legitimate and reasonable expectations held by the applicant which have been violated by the conduct of the respondents;
(ix) Section 135 of the Condominium Act, S.O. 1998, c. 19, as amended; and
(x) such further and other grounds as the lawyers may advise.
[5] On May 30, 2014, the applicant served its affidavit and application record in support of the application. The applicant’s affidavit was sworn by Robert St. George on May 29, 2014. This affidavit consists of 122 paragraphs over 67 pages. There are 60 exhibits attached.
position of the parties
[6] The respondents submit that this application should be converted to an action based on the following considerations:
There are material facts in dispute.
There are complex issues that require expert evidence related specifically to the design, operation and maintenance of the HVAC systems at the Grande Harbour as well as the design, operation and maintenance of the water systems at the Grande Harbour and the structural issues regarding the parking garage at the Grande Harbour.
There are complex issues that require the weighing of evidence.
If the matter were to proceed by way of application, the respondents would be compelled to prepare and serve affidavits from at least seven fact witnesses.
The respondents would be compelled to prepare and serve affidavits from at least two expert witnesses dealing with the HVAC and water systems as well as the parking garage.
[7] The applicant submits that there is no dispute about what the respondents have done and there is no dispute as to the impact of those actions on Metro 965. Further, the applicant submits that a conversion to an action would add two years before the issues could be determined in court.
general principles in determining whether to convert an application into an action
[8] A motions judge may convert an application into an action before the hearing of the application.
Rule 38.10, Rules of Civil Procedure.
University Health Network v. Made in Japan Japanese Restaurants Ltd. [2003] O.J. No. 2026 (S.C.).
[9] It is well established that an application should be used when there is no matter in dispute and when the issues to be determined do not go beyond the interpretation of a document.
Collins v. Canada (Attorney General) (2005), 2005 28533 (ON SC), 76 O.R. (3d) 228 (S.C.) at para. 28.
[10] Where the legislature has stipulated that a proceeding may be brought by application, there is a prima facie right to proceed by application and the matter should not be converted into an action without good reason.
Sekhon v. Aerocar Limousine Services Co-operative Ltd., 2013 ONSC 542.
[11] When issues of credibility are involved the matter should proceed by way of an action.
Gordon Glaves Holdings Ltd. v. Care Corp. of Canada (2000) 2000 3913 (ON CA), 48 O.R. (3d) 737 (C.A.) at para. 30.
[12] A factual dispute simpliciter in itself is not sufficient to convert an application. The facts in dispute must be material to the issues before the court.
Niagara Airbus Inc. v. Camerman (1989) 1989 4161 (ON SC), 69 O.R. (2d) 717 (H.C.) at pp. 725 and 726.
[13] In determining whether to convert an application into an action the following factors are relevant:
(1) whether material facts are in dispute;
(2) the presence of complex issues that require expert evidence and/or a weighing of the evidence;
(3) whether there is a need for pleadings and discoveries; and
(4) the importance and impact of the application and of the relief sought.
Collins v. Canada at para. 5.
analysis
[14] After reviewing the record and hearing submissions of counsel it is my view that this application should be converted into an action. While the applicant has the prima facie right to choose an originating process by way of application if so authorized by the rules or statute, the court maintains the right to convert the application into an action for good reason.
[15] Based on the material presented it is difficult to accept that there are no disputes as to what the respondents have done or the impact of those actions on Metro 965. The applicant alleges that the conduct of the respondents threatens to be oppressive or unfairly prejudicial to the applicant or unfairly disregards the interests of the applicant. The grounds include item (f) on page 7 of the Notice that refers to the following:
“as a result of the grossly negligent management on the part of Royale Grande, which is routinely overlooked or otherwise ignored by the respondents, the applicant has suffered damage to its property, including flooding of units, and as a result of Royale Grande’s improper and/or inadequate maintenance of the shared services on its property, in particular the HVAC system and the domestic hot water system, the residents of Metro 965 have been exposed to serious life/safety issues;”
[16] Further, item (j) amongst the grounds set out in the notice is the following submission:
“a general lack of due diligence in the administration of service contracts creating budget overruns which Royale Grande routinely charges back to the corporations, with Metro 965 obliged to pay 64% of such charges;”
[17] Based on the materials presented, it is reasonably foreseeable that there will be significant material facts in dispute as well as issues that will require expert evidence. In all likelihood, that will entail responding experts with different opinions.
[18] The sheer volume of the matters deposed to in the St. George affidavit and the accompanying 60 exhibits paint a picture of a proceeding that is beyond the proper role of an application judge bearing in mind the potential responses.
[19] The applicant is concerned that this proceeding will take much longer to complete if it is converted to an action. However, if this matter were to remain an application the motions judge could still order that it proceed as an action. That would add further delay to the proceeding.
[20] In my view, the interests of justice and procedural fairness require that this matter be converted into an action.
disposition
[21] For the reasons above, I order as follows:
This application is converted into an action. The applicant shall be the plaintiff and the respondents shall be the defendants.
The plaintiff shall deliver a statement of claim within 15 days from today’s date.
The defendants shall deliver their pleadings within ten days after receiving the plaintiff’s statement of claim.
This action is referred to a case managing Master to set a timetable.
[22] Written costs submissions with a costs outline totalling no more than three pages must be filed by all parties within 30 days.
B. P. O’Marra J.
Released: August 13, 2014
COURT FILE NO.: CV-14-497413
DATE: 20140813
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
METROPOLITAN TORONTO CONDOMINIUM CORPORATION NO. 965
Responding Party / Applicant
– and –
METROPOLITAN TORONTO CONDOMINIUM CORPORATION NO. 1031 and METROPOLITAN TORONTO CONDOMINIUM CORPORATION NO. 1056
Moving Parties / Respondents
RULING ON MOTION TO CONVERT
AN APPLICATION INTO AN ACTION
B. P. O’Marra J.
Released: August 13, 2014