3716724 Canada Inc. v. Carleton Condominium, 2016 ONSC 1296
CITATION: 3716724 Canada Inc. v. Carleton Condominium, 2016 ONSC 1296
COURT FILE NO.: 14-60973
DATE: 2016/02/26
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
3716724 CANADA INC.
Nadia J. Authier, for the Applicant
Applicant
- and -
CARLETON CONDOMINIUM CORPORATION NO. 375
Christy Allen, for the Respondent
Respondent
HEARD: October 15, 2015
REASONS FOR DECISION
ellies j.
[1] In reasons released on December 8, 2015 (2015 ONSC 6626) I held that Carleton Condominium Corporation No. 375 (“CCC 375”) had unfairly disregarded the interests of 3716724 Canada Inc. (“371”) under s. 135 of the Condominium Act, S.O. 1998, c. 19 (“the Act”) by refusing to permit 371 to operate a pay and display hourly parking lot in the condominium building unless 371 hired a full-time security guard.
[2] In those same reasons, I held that CCC 375 had not violated s. 135 of the Act by treating the changes proposed by 371 as “substantial” under s. 97(6) of the Act. By the combined operation of this section with s.98(1)(c), proposed changes to the common elements require the approval of at least 66 and two-thirds per cent of the condominium unit owners. In light of this finding regarding s. 97(6), I invited further written submissions on the issue of the appropriate remedy. I have now received and considered those submissions, for which I wish to thank counsel.
[3] Counsel for 371 submits that s.135(3) of the Act is broad enough to allow the court to order that 371 be permitted to make the changes to the common elements it has proposed, without the need for a vote under s. 97(4) of the Act. In support of this submission counsel relies on two decisions, one of which I referred to in my earlier reasons.
[4] In Girgoriu v. Ottawa-Carleton Standard Condominium Corp. No. 706, 2014 ONSC 2885 (referred to in para. 31 of my earlier reasons), the applicant had purchased a residential unit in one of two adjacent buildings developed by the same developer. Because there were no parking spaces available in the building in which the applicants had purchased their residential unit, they purchased a parking space and storage unit from the respondent condominium corporation in the adjacent building. The Declaration for the respondent’s condominium corporation was later amended to preclude the ownership or use of parking spaces and storage units by non-residents. Although the respondent did not enforce the amended Declaration against the applicants, the amendment effectively made the applicants’ residential unit unsaleable.
[5] The application judge found that the effect of the amendments was oppressive and that the conduct of the board and the corporation in amending the Declaration unfairly disregarded the applicants’ interests. As a result, she ordered that the Declaration be further amended.
[6] Counsel for 371 also relies upon the case of Walia Properties Ltd. v. York Condominium Corp. No. 478, in which the owner of 59 out of 60 residential units in a mixed use condominium corporation had taken control of the condominium Board. The by-laws of the corporation had been drafted to ensure a voting balance between owners of residential versus commercial units by giving the owners of each commercial unit a greater number of votes than the owners of each residential unit. However, a subsequent change to the Act required that owners of either type of unit be restricted to one vote per unit. This change permitted the owner of the residential units to take control of the board. The owners of the commercial units contended that this conduct was oppressive within the meaning of s.135 of the Act.
[7] The application judge held that the removal of the representative of the commercial unit owners from the Board was unfairly prejudicial to and unfairly disregarded the interests of the commercial unit owners, contrary to s. 135 of the Act. However, the application judge questioned her ability to amend the by-laws and, for that reason, did not do so: (Ont. S.C.), [2007] O.J. No. 3032.
[8] In a brief endorsement, the Court of Appeal subsequently granted the commercial unit owners’ appeal and amended the by-law: 2008 ONCA 461.
[9] 371 relies on these cases in support of its submission that this court has the authority under s. 135(3) to order that 375 be permitted to make the changes it proposes without the necessity of a vote by the owners.
[10] In her written submissions, counsel for CCC 375 submits that, while there may be circumstances where it would be appropriate for the court to make the order requested by 371, they are not present in this case. Instead, she proposes that a vote be undertaken under certain conditions, carefully prescribed to respect the rights of 371, the rights of the owners, and this court’s earlier decision. These conditions would include a condition by virtue of which the owners would be provided with a copy of my earlier reasons and a condition by which the Board would be prohibited from saying anything contrary to my finding that it is unreasonable to insist on a full-time security guard.
[11] There is merit in an approach that seeks to strike a balance between the rights of all of the owners. I am also mindful of the principle that a court ought not to decide issues that may not need deciding, which would be the case if the owners approved the changes proposed by 371. However, in my view, this is one of those cases in which an order should be made permitting the proposed changes without the need for any further approval. I arrive at this conclusion for three reasons.
[12] First, conducting a vote will put the unit owners in a position of conflict. As counsel for both parties point out, 371’s request for damages against CCC 375 is still outstanding. As counsel for CCC 375 submits, fairness requires that the owners be advised before they vote that a “yes” vote could be seen to support 371’s claim for damages, whereas a “no” vote could mean that 371 has not suffered any loss because of the Board’s insistence on a full-time security guard. In other words, a “no” vote by the owners could be interpreted to mean that the owners were not going to approve the proposed changes, in any event.
[13] In my view, this would create a conflict for the unit owners. The Board represents the unit owners. The cost of any damages awarded to CCC 375 would ultimately be borne by the owners, even if only by way of an insurance premium increase.
[14] The second reason is closely related to the first. The assumption that a “no” vote could mean that 371 has not suffered any loss as a result of the Board’s insistence on a full-time security guard is based on the premise that the owners of the condominium units would vote without any regard for their own feelings about the need for a full-time security guard, and with complete acceptance of my opinion on that issue. However, there is no way to ensure this with only a “yes” or “no” vote.
[15] Lastly, in this case, I had the benefit of the expert and other evidence that allowed me to make a determination with respect to the merits of the measures 371 proposes to put in place to protect the safety of the owners of the condominium. Essentially, I have held that there is no fair basis upon which to deny 371 the permission it seeks to change the common elements.
[16] For these reasons, I see no value in conducting the vote otherwise required by s.97(4) of the Act. Therefore, an order shall issue permitting the applicant to make the changes referred to in para. 12 and 18 of my earlier reasons without further formality or approval of the unit owners, notwithstanding the requirements of ss. 98(1)(c) and 97(4) of the Act.
[17] In addition to requesting the foregoing order, 371 has requested two further orders. Firstly, it requests an order that CCC 375 be responsible for ensuring that the existing lighting in the parking garage, which has been turned off as a cost saving measure, be turned back on and maintained or replaced as part of CCC 375’s repair and maintenance obligations. No position appears to have been taken by counsel for CCC 375 on this issue. Given that turning these lights back on can only help to make the parking facility safer, I see no reason not to grant the order.
[18] Lastly, 371 requests that I amend paragraph 2 of my earlier decision to reflect the fact that the claim for damages contained in the amended notice of application has simply been adjourned, rather than having been abandoned. I do not believe such an amendment is necessary. My present reasons will be sufficient to clarify that this is the case.
[19] If the parties are unable to agree on the issue of costs, written submissions, limited to five typewritten pages, exclusive of attachments, may be made as follows:
(a) by 371, within 30 days of the release of these reasons;
(b) by CCC 375, within 20 days of the date of receipt of 371’s submissions; and
(c) if necessary, reply by 371, within 10 days of the date of receipt of the submissions of CCC 375.
Ellies J.
Released: February 26, 2016
CITATION: 3716724 Canada Inc. v. Carleton Condominium, 2016 ONSC 1296
COURT FILE NO.: 14-60973
DATE: 2016/02/26
ONTARIO
SUPERIOR COURT OF JUSTICE
3716724 CANADA INC.
Applicant
– and –
CARLETON CONDOMINIUM CORPORATION NO. 375
Respondent
REASONS FOR DECISION
Ellies J.
Released: February 26, 2016