ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 11-53224
DATE: 20151204
BETWEEN:
LISE MAYRAND, Executrix of the Estate of GEORGE WILLIAMS, Deceased
Plaintiff (Respondent)
– and –
CARLETON CONDOMINIUM CORPORATION NO. 66
Defendant (Moving Party)
Rodrigue Escayola, for the Plaintiff (Respondent)
R. Bruce Nelson, for the Defendant (Moving Party)
HEARD: By Written Submissions
Beaudoin J.
decision on motion for leave to appeal
[1] The Defendant, Carleton Condominium Corporation No. 66 (“CCC 66”), seeks leave to appeal the decision of the Honourable Justice Maranger dated September 3, 2015 wherein he granted the Plaintiff, Lise Mayrand (“Mayrand”), leave to amend her Statement of Claim.
[2] At all material times, Mayrand was the owner and occupant of the condominium unit located at 3451 McCarthy Road in the City of Ottawa. CCC 66 is the condominium corporation where the unit is located.
[3] This action arises following a water filtration event which occurred at Mayrand’s unit on or about December 26, 2009. The action was commenced by way of a Notice of Action, issued on December 22, 2011 and a Statement of Claim was subsequently filed on February 9, 2012. Those pleadings make reference to a single water infiltration incident.
[4] On or about March 30, 2015, the Plaintiff served a Notice of Motion wherein she sought leave to amend her claim. The proposed Amended Statement of Claim contained new allegations and referred to additional water infiltration events subsequent to the original incident. There were new causes of action relating to alleged breaches of fiduciary and statutory duties under the Condominium Act 1998, S.O. 1998, C. 19 (the “Act”) and Mayrand sought a declaration that CCC 66’s conduct had been oppressive.
[5] CCC 66 maintains that the original Statement of Claim was defended on the basis that it related solely to the single water infiltration incident. In opposing the motion for leave to amend, the Defendant argued that many of the amendments sought had been improperly pled and that the claims ought to have been pursued in accordance with the mediation and arbitration provisions set out in section 132(4) of the Act. The Defendant had argued that allowing those amendments would work as an injustice as being oppressive, vexatious and an abuse of process. The Defendant asked that the allegations which properly fell within the scope of section 132(4) be stayed.
[6] While the Defendant initially opposed some of the amendments on the basis that they were statute barred, that argument has not been advanced on this motion for leave to appeal.
The Motion Judge’s Decision
[7] At paragraph 5 of his Endorsement of September 3, 2015, Justice Maranger specifically found that the water infiltration problem at the Plaintiff’s unit had not stopped since the original event. He concluded at paragraph 10:
After considering: the affidavits, the pleadings, excerpts from the transcripts of the examinations for discovery, the factums, books of authorities and oral argument presented by each side; I would grant leave to amend the statement of claim on terms, and for the following reasons:
a) Any prejudice to the defendant flowing from the amendments can be remedied by an adjournment or costs.
b) The essence of this lawsuit concerns an ongoing water damage problem to a condominium unit allegedly caused by the negligence or failure of a condominium corporation to properly maintain the common elements. While the amendments come late in the day the crux of what is being requested based on all the evidence should come as no surprise to the defendant. The transcript of the examination for discovery of July 12, 2013 is replete with examples where the plaintiff discloses that there are ongoing problems with leakage and water infiltration into the unit and that the nature of the claim included the ongoing problems.
c) If there are issues or new causes of action that give rise to an intervening limitation period these can be pleaded in the defendant’s statement of defence. In any event on the face of the amended claim some of the specified ongoing problems pleaded are within the last two years: i.e. paragraph 6.9.
d) Nothing precludes the defendant from suing 3rd parties for contribution based on negligent construction work.
e) To deny the amendment could have the result of multiple lawsuits involving the same parties arising from the same issues for the same type of damages. The amendments for all intents and purposes have the effect of rationalizing the issues that divide the two parties.
The Test for Granting Leave
[8] Rule 62.02 (4) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 provides:
Grounds on Which Leave May Be Granted
(4) Leave to appeal shall not be granted unless,
(a) there is a conflicting decision by another judge or court in Ontario or elsewhere on the matter involved in the proposed appeal and it is, in the opinion of the judge hearing the motion, desirable that leave to appeal be granted; or
(b) there appears to the judge hearing the motion good reason to doubt the correctness of the order in question and the proposed appeal involves matters of such importance that, in his or her opinion, leave to appeal should be granted.
[9] The Divisional Court has stated that the test for granting leave to appeal to the Divisional Court from an interlocutory order is an onerous one.[^1] As noted by Justice Nolan in Payne v. Windsor (City), 2011 ONSC 3185, [2011] O. J. No. 5428, at para. 10:
Both the wording of rule 62.02(4) and the case law that has developed make clear that there is rigorous criteria to be satisfied in order for leave to be granted. Unlike many of the Rules of Civil Procedure which begin “a court may,” this rule is framed in the negative and provides that “leave to appeal shall not be granted unless” the moving party satisfies both tests in either sub-rule 62.02(4)(a) or sub-rule 62.02(4)(b). The case law also supports the view that leave is only granted on issues in which the law is unsettled or in which the issues transcend the issues between the parties and require appellate review.
Rule 62.02(4)(a): “A conflicting decision”
[10] The test under rule 62.02(4)(a) has two branches. First, the applicant must show that there is a conflicting decision by another judge in Ontario or elsewhere on the matter involved in the proposed appeal. Second, the applicant must satisfy the court that it is desirable that leave to appeal be granted.
[11] To succeed in a motion for leave to appeal pursuant to rule 62.02(4)(a), it is essential that the applicant satisfy the court that there is a conflicting decision where there is a difference in the principle chosen as a guide to the exercise of a judge’s discretion (Comtrade Petroleum Inc. v. 490300 Ontario Ltd. (1992), 1992 7405 (ON SC), 7 O.R. (3d) 542 at para. 7 (Div. Ct.)).
[12] A judge who exercises his or her discretion when the circumstances of the case are different than in other jurisprudence is not necessarily making a “conflicting decision.” A motion judge’s decision is entitled to deference. Therefore, in order to be successful on a motion for leave to appeal, it is necessary for the appellant to demonstrate that there is a difference in the principles chosen by the motion judge as a guide to the exercise of discretion, and not simply a different set of facts leading to a different conclusion (Nikore v. Proper, 2010 ONSC 2307 at para. 33, 101 O.R. (3d) 469 (Div. Ct.)).
[13] The Defendant submits that Justice Maranger’s decision is in direct conflict with the Ontario Superior Court decision in Alfred v. Wellington Condominium Corp. No. 11, 2010 ONSC 3681, 2010 CarswellOnt 4792. There, the defendant, condominium corporation moved for a stay of the plaintiffs’ proceedings pursuant to section 106 of the Courts of Justice Act, R.S.O. 1990, c C.43 [“CJA”]. Those claims also involved water infiltration into a condominium unit. In granting the stay, the motion judge concluded that the plaintiffs’ action was caught by the mandatory mediation and arbitration provisions of section 134(2) of the Act.
[14] The Defendant submits that Justice Maranger did not refer to the Alfred decision nor did he specifically address whether the Defendant in this action ought to be required to defend an action it maintained falls within the scope of section 132 (4) of the Act.
[15] While the motion judge noted that the denial of the amendments could lead to multiple lawsuits involving the same parties arising from the same issues with the same type of damages, the Defendant argues that Justice Maranger failed to consider that if there was compliance with the Act, all of the issues which divide the parties would effectively be resolved through the more expeditious cost-effective processes provided by that legislation.
[16] In order to grant leave to appeal, I must also be of the opinion that it is desirable that leave should be granted. The Defendant maintains that where there are conflicting decisions on the interpretation of a matter of law; this is a matter of general importance and it should be resolved by way of an appeal to the Divisional Court. The Defendant maintains the decision raises important considerations as it calls into question the proper procedure to be followed when disagreements arise between unit owners and condominium corporations and, in particular, the provisions of section 132(4) of the Act.
[17] The Plaintiff maintains that there are no conflicting decisions. In this case, the motion before Justice Maranger dealt with a proposed amendment to a pleading and this involved a consideration of different principles than under section 106 of the CJA. The Plaintiff emphasizes that the law pertaining to the amendment of pleadings is well settled and that there are no conflicting decisions under that rule.
[18] As set out by the Court of Appeal in Marks v. Ottawa (City), 2011 ONCA 248, 2011 CarswellOnt 2165 (C.A.), at para. 19, the general rule is that amendments are presumptively approved and court should only refuse to grant leave in the following limited circumstances:
a. it would cause an injustice not compensable in costs;
b. the proposed amendments do not show an issue worthy of trial and prima facie meritorious;
c. the proposed amendments, if originally pleaded, would have been struck; and,
d. the proposed amendments do not contain sufficient particulars.
[19] The Plaintiff submits that the motion judge appropriately considered and applied these factors in exercising his limited discretion to allow the amendment under rule 26.01. As for the Alfred decision relied upon by the Defendant, the Plaintiff repeats that a moving party must demonstrate a difference in the principles used to guide the court’s discretion in arriving at its decision. A mere difference in the result cannot result in a conflicting decision to meet the test under rule 62.02(4)(a).
Conclusion
[20] I agree with the Plaintiff that the Alfred decision cited by the Defendant is not a conflicting decision. The Defendant’s motion for a stay of proceedings in that case involved different legal principles and it was brought at the outset of the proceedings and the factual matrix was significantly different. Moreover, the motion judge determined that not all claims or disputes between unit owners and a condominium corporation must be resolved by mediation or arbitration. He also concluded that that section 132(4) did not apply where an oppression remedy is sought as it is this case. Having come to that conclusion, I need not consider the second branch of rule 62.02(4)(a).
Rule 69.02(4)(b) “Good reason to doubt the correctness of the decision”
[21] The test under rule 62.02(4)(b) also contains two branches. To succeed in a motion for leave to appeal pursuant to rule 62.02(4)(b), the applicant must satisfy the court that (1) there is good reason to doubt the correctness of the motion judge’s decision and (2) that the appeal raises matters of general importance (Bell ExpressVu Limited Partnership v. Morgan (2008), 2008 63136 (ON SCDC), 67 C.P.C. (6th) 263 at paras. 1-3 (Ont. Div. Ct.) )
[22] The phrase “good reason to doubt the correctness of a decision” does not require a conclusion that the decision in question was wrong or even probably wrong. Nor does it require that the judge hearing the leave motion would have decided it differently had he or she been presiding as the motion judge. The test is whether the decision is open to serious debate (Judson v. Mitchele, 2011 ONSC 6004 at para 15, 108 O.R. (3d) 129. See also Ash v. Lloyd’s Corp. (1992), 1992 7652 (ON SC), 8 O.R. (3d) 282 at 284 (Gen. Div.)).
[23] In this case, the Defendant submits that it is not entirely clear how the motion judge reached his decision and where the parties are unable to conclude with certainty basis for which the motion judge came to his decision, the decision can be said to be open to serious debate.
[24] Further, the Defendant argues that is open to serious debate whether the motion judge considered and properly considered the legal principles applied and approved by another court in a previous and conflicting decision, there is good reason to doubt the correctness of the decision.
[25] Here, the Defendant notes that while the motion judge acknowledged that it was prejudiced by the amendments, Justice Maranger did not identify or explain the nature of the prejudice. The motion judge did not make an order as to costs and concluded that no adjournment was necessary as the trial date has not been set. Since it is unclear how any prejudice flowing from the amendments was to be remedied, CCC 66 argues that Justice Maranger’s decision can therefore be said to be open to serious debate. Finally, the Defendant argues that there is good reason to doubt the correctness of his decision as he clearly failed to consider the mandatory provisions of the Act including section 132 (4) and the whole jurisprudence.
[26] The Defendant argues that the second element of the test under rule 62.02 (4)(b) is met in that the proposed appeal involves a matter of general and public importance and not just a matter that is relevant only as between the parties. Compliance with and the applicability of section 132 (4) of Act is a requirement for all condominium corporations and unit owners in the province of Ontario. That the Defendant maintains that Justice Maranger’s decision has broad implications which call into question the proper procedure to be followed when disagreements arise between unit owners and condominium corporations. I conclude that the motion judge dealt with issue of prejudice including whether any claims were stature barred and he addressed the matter of costs. While Justice Maranger’s reasons were short, paragraph 8(c) of his reasons disclose that he was aware of the Defendant’s arguments that the alternate procedures under the Act should be applied. In my view, the central issue being advanced here is the applicability of the mediation and arbitration provisions of the Act and it is useful to look at those statutory provisions now.
Mediation and Arbitration
- (1) Every agreement mentioned in subsection (2) shall be deemed to contain a provision to submit a disagreement between the parties with respect to the agreement to,
(a) mediation by a person selected by the parties unless the parties have previously submitted the disagreement to mediation; and
(b) unless a mediator has obtained a settlement between the parties with respect to the disagreement, arbitration under the Arbitration Act, 1991,
(i) 60 days after the parties submit the disagreement to mediation, if the parties have not selected a mediator under clause (a), or
(ii) 30 days after the mediator selected under clause (a) delivers a notice stating that the mediation has failed. 1998, c. 19, s. 132 (1).
Application
(2) Subsection (1) applies to the following agreements:
An agreement between a declarant and a corporation.
An agreement between two or more corporations.
An agreement described in clause 98 (1) (b) between a corporation and an owner.
An agreement between a corporation and a person for the management of the property. 1998, c. 19, s. 132 (2).
Disagreements on budget statement
(3) The declarant and the board shall be deemed to have agreed in writing to submit a disagreement between the parties with respect to the budget statement described in subsection 72 (6) or the obligations of the declarant under section 75 to mediation and arbitration in accordance with clauses (1) (a) and (b) respectively. 1998, c. 19, s. 132 (3).
Disagreements between corporation and owners
(4) Every declaration shall be deemed to contain a provision that the corporation and the owners agree to submit a disagreement between the parties with respect to the declaration, by-laws or rules to mediation and arbitration in accordance with clauses (1) (a) and (b) respectively. 1998, c. 19, s. 132 (4)
[27] The Plaintiff responds that CCC 66 waited more than three years before requesting that the matter be referred to arbitration. By then, the pleadings had long closed, affidavits of documents have been exchanged, a mediation under Rule 24.1 had been held, discoveries have been conducted and the parties had attended a pretrial conference.
[28] The Plaintiff relies on case law where courts have held that when a defendant fails to request arbitration at the first opportunity and the parties have engaged in steps specific to the civil litigation process over and above the delivery of pleadings, the defendant has been deemed to have waived the right to arbitration. The Plaintiff submits that the Defendant raised the request pertaining to arbitration with undue delay and, as such, it waived the application of s. 132(4) of the Act.
[29] More importantly, the Plaintiff maintains that the arbitration process contemplated by section 132 the Act only applies to disagreements with respect to the declaration bylaws and rules and not to claims pertaining to breaches of the Act.
[30] Mayrand maintains that the present matter does not involve a disagreement with respect to the declaration, bylaws and rules (at least, not solely). Her claim deals with CCC 66’s failure to meet its statutory obligations to repair and maintain the common elements. Moreover, she is seeking an oppression remedy under section 135 of the Act and, as noted, the courts have ruled that an oppression claim does not have to be adjudicated through arbitration, even though the conduct complained of may also be related to disagreement about the declaration, by-laws or rules.
[31] The Plaintiff argues that the Court of Appeal has recognized that when arbitration does not apply to all the matters raised in a claim, it is appropriate to proceed to court to avoid a multiplicity of proceedings.
[32] Finally, the Plaintiff submits that this motion does not raise important legal considerations regarding the applicability of certain provisions of the Act and that these considerations are already well-settled in law and have been subject to multiple court decisions.
Conclusion
[33] In McKinstry v. York Condominium Corp. No. 472, (2003), 2003 22436 (ON SC), 68 O.R. (3d) 557 (S.C.), Juriansz J. (as he then was) considered Section 132(4) of the Act. . In that case, the applicability of section 132(4) to claims made under section 135 of the Act was considered as well as the issue of waiver. At the outset, Justice Juriansz appears to give section132 a broad application at paras. 19 and 20:
[19] The legislature’s objective in enacting s. 132 is to enable the resolution of disputes arising within a condominium community through the more informal procedures of mediation and arbitration. To attain this objective, the phrase "with respect to the declaration, by-laws or rules" in s. 132(4), which applies to disagreements between owners and the condominium corporation, should be given a generous interpretation. It applies, in my view, to disagreements about the validity, interpretation, application, or non-application of the declaration, by-laws and rules. It must be noted that s. 132(4) does not require owners and condominium corporations to submit disagreements with respect to the Act to mediation and arbitration.
[20] The first issue is whether s. 132(4) applies where the initiating party wishes to claim damages resulting from the disagreement as well as resolving the dispute. The term "disagreements" in s. 132(4) should be interpreted broadly to encompass claims for damages arising from the subject matter of the disagreement. Such a broad interpretation is most consistent with the provision's objective of resolving disputes by informal procedures rather than by court action. A great many disagreements about declarations, by-laws and rules will be about responsibility for expenditures or about damage caused by failings or neglect. Imposing mediation and arbitration to resolve these disagreements, but requiring court action to claim money somehow at issue because of the disagreement, would frustrate the provision's aim to have disputes resolved quickly and efficiently.
[34] In concluding that the Arbitrations Act, 1991, S.O. 1991, c.17 applied to arbitrations under section 132, Justice Juriansz noted at para. 24 “that the court may refuse to stay a proceeding for a number of reasons, such as undue delay in bringing the motion to stay the proceeding or the matter is a proper one for default or summary judgment. Thus, it is clear that matters subject to arbitration may proceed in court in some circumstances.”
[35] He ultimately concluded that section 132(4) did not apply to a proceeding where an oppression remedy under section 135 is claimed. He also determined that the Defendant in that case was too late in raising the applicability of section 132 at para. 44:
[44] In this case, the defendants must be taken to have waived the application of s. 132(4) as they raised it for the first time in [page569] their Amended Statement of Defence, amended February 2003, after all examinations for discovery had been completed. That was too late for the defendants to raise the issue. In any event, the plaintiffs’ s. 135 application brought within their action is not subject to s. 132(4).
[36] Similarly, in Toronto Common Element Condominium Corporation No. 1508 v. William Stasyna, 2012 ONSC 1504, 2012 CarswellOnt 2945, Justice Quigley considered the McKinstry decision and determined that that section 132(4) did not apply to breaches of the Act such as are claimed here with regard to alleged breaches sections 89 and 90 of the Act.
[37] In Nipissing Condominium Corporation No. 4 v. Simard, 2009 ONCA 743, 2009 CarswellOnt 6498, the appellant had sought an order dismissing or staying the respondent’s application on the ground that sections 132 and 134 of the Act required that the dispute be resolved through mediation and arbitration and that the Superior Court had no jurisdiction over the matter. The appellant appealed from the dismissal of its motion. The defendant was the owner of the units and the other parties were tenants. It was conceded that the mediation and arbitration provisions of the Act do not apply to tenants.
[38] At paras. 9, 10 and 11, the Court concluded:
[9] Section 7(5) of the Arbitration Act, 1991, S.O. 1991, c.17, states as follows:
(5) The court may stay the proceeding with respect to the matters dealt with in the arbitration agreement and allow it to continue with respect to other matters if it finds that,
(a) the agreement deals with only some of the matters in respect of which the proceeding was commenced; and
(b) it is reasonable to separate the matters dealt with in the agreement from the other matters.
Charron J.A. described this subsection in Brown v. Murphy (2002), 2002 41652 (ON CA), 59 O.R. (3d) 404 at para. 12, as granting a discretion to a trial judge to refuse a stay of proceedings where it is unreasonable to separate the matters subject to arbitration from the other matters that were part of the claim and were not subject to arbitration.
[10] Section 138 of the Courts of Justice Act, R.S.O. 1990, c. C.34 provides that multiplicity of proceedings should be avoided. Rule 1.04 sets out the objective of securing the just, most expeditious and least expensive determination of the matter on its merits. Proceeding against the appellant in one forum and the tenants in another would arguably run contrary to both provisions.
[11] The arbitration provisions do not apply to all of the matters raised in the application. All of the matters can, however, be addressed by way of an application. The motion judge had to decide whether it was appropriate to proceed in one or two different forums. His decision to avoid “sectioning off” the two main aspects of the claim and to proceed in one forum was within his discretion. We see no reason to interfere.
[39] Even if it could be said that section 134 applied to some of the Plaintiff’s claims, it was open to Justice Maranger to conclude, as he did, that all matters should be dealt within the action already commenced by the Plaintiff and he exercised his discretion appropriately. I conclude that there is no reason to doubt the correctness of his decision and accordingly the second branch of rule 60.02(4)(b) need not be considered.
[40] Unless the parties agree otherwise, the successful Responding Party should provide her brief submissions as to costs, not exceeding 5 pages within 20 days of the release of this decision. The Moving Party is to respond within the following 20 days.
Mr. Justice Robert N. Beaudoin
Released: December 4, 2015
COURT FILE NO.: 11-53224
DATE: 20151204
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
LISE MAYRAND, Executrix of the Estate of GEORGE WILLIAMS, Deceased
Plaintiff (Respondent)
– and –
CARLETON CONDOMINIUM CORPORATION NO. 66
Defendant (Moving Party)
decision on Motion for Leave to appeal
Beaudoin J.
Released: December 4, 2015
[^1]: Bell Expressvu Limited Partnership v. Morgan, 2008 63136 (ON SCDC)