Court File and Parties
COURT FILE NO.: CV-15-540417 DATE: 20160705 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
YUK-YING CHEUNG Applicant – and – YORK REGION CONDOMINIUM CORPORATION NO. 759 Respondent
Counsel: Jonathan Fine and Iulia Lurye, for the Applicant Antoni Casalinuovo and Megan Molloy, for the Respondent
HEARD: April 19, 2016
R.F. Goldstein J.
[1] Dragon Boat Fusion Cuisine is a very popular restaurant in the Town of Richmond Hill. The restaurant leases three condominium units owned by the Applicant, Ms. Cheung. The three units are part of York Region Condominium Corporation 759, the Respondent.
[2] The restaurant’s popularity is the crux of the problem on this application. There is simply not enough parking on the grounds to accommodate the patrons. This has been a problem for many years. As a result, in 2009 and then in 2015 the Board of the Respondent passed a by-law to change the parking situation. (I will refer to these by-laws as the 2009 By-law and the 2015 By-law.) The 2009 By-law leased two common element parking spots to each unit holder. Ms. Cheung therefore received 6 spots. The 2009 By-law was technically invalid, but the Board of the Respondent did not discover that until 2015. The 2015 By-law remedied the technical invalidity, but then leased 4 common element parking spots to each unit holder.
[3] Ms. Cheung’s counsel, Mr. Fine, argues that the effect of the 2015 By-law is to privatize parking on the grounds of the Respondent. There are 162 parking spaces and the 2015 By-law assigns 132 of them to unit owners (as an owner of 3 units, Ms. Cheung gets 12 parking spots). Prior to the 2009 By-law parking had been on a first-come, first-served basis. This privatization is, he argues, contrary to the Condominium Act and the Respondent’s Declaration. As a result Ms. Cheung seeks a declaration that the 2015 By-law is not valid. She also seeks a remedy under the oppression section of the Condominium Act.
[4] YRCC 759’s counsel, Mr. Casalinuovo, argues that the 2015 By-law is perfectly valid. Far from being oppressive, he argues, the Respondent is trying to balance the interests of all unit owners in a fair manner. The Respondent’s evidence is that the restaurant patrons have dominated all the parking spots. It is Ms. Cheung, the Respondent says, who is acting in an oppressive manner by trying to maintain her domination of the parking areas.
[5] I agree with the Respondents. The by-law is valid and the Board’s conduct has not been oppressive. For the reasons that follow, the application is dismissed.
Facts
Background
[6] The Respondent is part of the York Corporate Centre, a large area made up of several developments. The Respondent’s declaration was registered on October 19, 1990. Ms. Cheung and her husband (now deceased) purchased three units in 1989 from the developer, prior to registration. The units have been rented out to different restaurants since 1990. The current restaurant, Dragon Boat, has been operating there since 2007. The lease will be up in 2017.
[7] As I have noted, there are 162 parking spaces on the grounds. Five of those spots are designated as accessible parking. Between 1990 and 2009 YRCC’s 162 spots were allocated on a “first come, first serve” basis.
[8] The 2009 By-law was designed to address the parking situation. The 2009 By-law authorized the lease of two common element parking spaces to each condominium unit. There are a series of measures that a condominium board must take to make a by-law valid. One of those measures is that the by-law must be registered on title. The 2009 By-law was not registered. The Board discovered the error in 2014. Although the parties acted as if the 2009 By-law was valid (at least according to the Respondent), it was not. As a result the Board passed a new by-law in 2015. The 2015 By-law essentially did the same things as the 2009 By-law, except that it authorized the lease of four common element parking spaces to each condominium unit.
[9] According to the Respondent’s evidence, the restaurant’s patrons and employees monopolized the parking until the passage of the 2015 By-law. Oshin Chobanian owns a unit within the Respondent and has been on the Board since June 2014. He described a very toxic parking situation between the restaurant’s patrons and employees, and others trying to use the Respondent’s parking lot. He described the restaurant as being very busy during its peak hours (9 am to 3 pm and after 5 pm). He also described altercations among restaurant customers, between restaurant customers and other customers, and between restaurant customers and business owners within the complex. He further described rather obnoxious behaviour by some of the restaurant patrons involving parking very expensive cars in multiple spots (behaviour that is obviously not Ms. Cheung’s personal responsibility). He states in his affidavit that the parking situation led the Board to pass the 2009 By-law, and ultimately the 2015 By-law.
[10] Siu Man Wong operates a school that services the needs of special needs and autistic children. In her affidavit she confirms Mr. Chobanian’s evidence regarding the parking situation. She is also a patron of the restaurant. She describes the restaurant as always full, with about 30 tables that can accommodate 4-8 people each. She mentioned witnessing altercations between motorists seeking parking spots, although she walked that back somewhat during her cross-examination.
The Expert Evidence
[11] Both parties filed extensive evidence regarding the history of the parking situation at the Respondent and the York Corporate Centre generally. Both relied on expert opinion evidence filed by way of affidavit. Both experts were cross-examined. As might be expected, the experts have come to diametrically opposed positions.
[12] Michael Manett filed an affidavit on behalf of Ms. Cheung. Mr. Manett is an expert in land using planning and development. Attached to his affidavit is a report that analyzes four issues:
- The shared parking formula under the Town of Richmond Hill’s relevant zoning by-law and its application to the Respondent and the York Corporate Centre generally;
- Whether the calculation for the minimum number of shared spaces takes into account parking located anywhere at the York Corporate Centre or only on the Respondent’s land;
- The minimum number of shared parking spaces required for the use of the restaurant;
- Whether the “reserved parking spaces” of the Respondent’s 2015 By-law contravenes the Town’s zoning by-law.
[13] Mr. Manett stated in his analysis that: “According to the Zoning By-law, parking calculations are to be completed as a whole and are not specific to a particular property” within the York Corporate Centre. He went on:
However, historical information and correspondence with Town staff has determined that the shared parking formula is applied on a site basis within the larger area.
[14] Mr. Manett noted that the 2015 By-law is premised on the notion that the guests of the Respondent have the right to park on other areas of the York Corporate Centre. Although he concedes that the Zoning By-law on its face contemplates shared parking for the area, there is no mechanism to enforce it. It should therefore be applied only to individual developments within the York Corporate Centre. When the shared parking formula in the Zoning By-law is applied only to the Respondent, the 2015 By-law undermines the intent of the Town’s zoning by law and creates a significant parking shortfall for all businesses within the York Corporate Centre.
[15] Jonathan Rodger filed an affidavit on behalf of the Respondent. Mr. Rodger is also an expert in land use planning and development. Attached to his affidavit is a report that analyzed two issues:
- Whether the number of required parking spaces under the shared parking formula under the Town’s zoning by-law applies to York Corporate Centre as a whole and not to subdivide portions in isolation;
- Whether the “reserved parking spaces” of the Respondent’s 2015 By-law contravenes the Town’s zoning by-law.
[16] The Town’s parking by-law has a formula for determining how many parking spaces should be available at a given time of the day, with reference to the floor space and type of establishment within the development. Mr. Rodger ultimately determined that the parking formula applied to the York Corporate Centre as a whole. That meant parking for individual developments (such as the Respondent) may be accommodated by other developments within York Corporate Centre.
[17] Mr. Rodger then turned to the validity of the 2015 By-law. He noted that the original site plan for the Respondent called for 173 parking spaces but ultimately only 161 parking spaces were created. Since the 2015 By-law allocated four spaces to each of the 33 units within the Respondent, if 173 parking spaces were actually available that means that there should be 41 “unreserved” spaces within the Respondent for restaurant parking – which, along with 12 spaces allocated, means that there are 53 spots available for restaurant parking. Restaurant use exceeds those 53 spots in the evening, when 80 spaces are required. Assuming that other parking is indeed available within the York Corporate Centre (ie – the shared parking formula does not apply in isolation) then the “reserved parking” spaces under the 2015 By-law does not contravene the Town’s parking by-law.
Issues and Analysis
[18] Although the parties have filed voluminous records and conducted extensive cross-examinations on lengthy affidavits, this Application really boils down to two issues:
(a) Is the 2015 By-law valid? (b) Is Ms. Cheung entitled to relief under the oppression remedy?
(a) Is the 2015 By-law valid?
[19] Mr. Fine, Ms. Cheung’s counsel, argues that by virtue of ss. 17(2) and 18(1.1) of the Condominium Act the Respondent’s common element parking spaces cannot be leased out for the exclusive use of unit holders. If the Respondent wants to lease out common element parking spaces, he argues, it can only do so if the declaration provides for it. He points to s. 7(2)(f) of the Condominium Act. That paragraph provides that the declaration must specify all parts of the common elements that are to be designated for the exclusive use of individual unit owners. Since the declaration does not provide for exclusive use common elements, the 2015 By-law is ultra vires. The Board had no power to pass it. The 2015 By-law is therefore invalid.
[20] Mr. Fine further argues that the 2015 By-law is invalid because it does not address any of the subjects in s. 56(1) of the Condominium Act, and because it is unreasonable, oppressive, and discriminatory. He also relies on the expert evidence of Mr. Manett that the 2015 By-law violates the Town’s Zoning By-Law, because parking is not available on other parts of the York Corporate Centre.
[21] I respectfully disagree. The 2015 By-law is valid. It is not necessary for me to consider the validity of the 2009 By-law because all agree that it was not registered and was therefore not valid (although the 2009 By-law obviously has some impact on the analysis).
[22] I start first with the Condominium Act itself, and the power of the Board to lease common elements. That power is found within s. 21(1)(a) of the Condominium Act:
- (1) The corporation may by by-law, (a) lease a part of the common elements, except a part that the declaration specifies is to be used only by the owners of one or more designated units and not by all the owners…
[23] A plain reading of s. 21(1) permits the corporation to lease a part of the common elements. The only parts of the common elements that the corporation may not lease are those parts that are dealt with specifically by the declaration. The declaration, as the Applicant correctly notes, does not mention common elements. The Condominium Act itself gives the Board authority to manage the affairs of the condominium corporation: s. 27(1). It is the Board that passes the by-laws. I agree with the Applicant that a restriction cannot be imposed by by-law where that restriction could only have been done by a declaration: York Condominium Corporation No. 400 v. Comcraft Services Ltd., 1988 CarswellOnt 622 (Dist.Ct.); affirmed at 1990 CarswellOnt 1821 (C.A.). That, however, is not what the 2015 By-law purports to do.
[24] The 2015 By-law leases some of the common elements (the parking) to the occupants. Each unit is assigned four spots. The Applicant gets 12 spots because she owns three units. Section 21(1) of the Condominium Act clearly permits that unless a declaration says otherwise. The declaration does not prohibit it.
[25] There are advantages and disadvantages to condominium ownership, just as there are advantages and disadvantages to freehold ownership. Condominium owners give up the element of total control over the common elements of the condominium in exchange for the advantages of common ownership: Muskoka Condominium Corporation No. 39 v. Kreutzweiser, 2010 ONSC 2463 at para. 8.
[26] Mr. Fine also argues that the by-law cannot be discriminatory. He says that the 2015 By-law is discriminatory because it is aimed solely at his client.
[27] In my respectful view this argument must also fail. The 2015 By-law is obviously aimed at the parking situation. The parking situation is a problem that is common to all unit holders because of one unit holder – Ms. Cheung’s tenant. A by-law is not discriminatory simply because it aims at a problem caused by one-unit holder. It would only be discriminatory if it solved the problem by imposing different prohibitions or obligations on that one unit-holder. The solution in this case is to lease an equal number of parking spaces for all units. That does not discriminate against the Applicant; in fact it confers a benefit because the condominium corporation has allocated a larger number of parking spaces exclusively to her.
[28] I illustrate the point with this example: some people in a residential condominium own a dog. All of the dogs owned by occupants create waste on the grounds of the condominium. If the board passed a by-law requiring only a specific dog owner to pick-up their dog’s waste, that by-law would certainly be discriminatory. A by-law requiring all dog owners to pick up their dog’s waste would obviously not be. I frankly fail to see how the 2015 By-law is any different when it comes to parking.
[29] I turn now to whether the 2015 By-law addresses any of the matters set out in s. 56(1) of the Condominium Act. Mr. Fine argues that because the 2015 By-law does not address any of the matters set out in 56(1) the 2015 By-law is invalid. Sub-section 56(1) states that the board may make amend or repeal a by-law not contrary to the Condominium Act or the declaration. Mr. Fine points to s. 56(1)(k), which permits a board to make by-laws restricting the use and enjoyment that persons other than occupants may make of the common elements. He argues that this provision means that a board is not entitled to lease the common elements to be because it does not give specific authority to lease common elements to occupants.
[30] I must also respectfully disagree with that argument as well, because it is not what s. 56(1)(k) says on its face. Section 56(1)(k) is obviously aimed at regulating use by non-occupants of common elements. That would include, for example, making rules about the number of guests an occupant may take to the condominium pool (if it has a pool). In any event, that argument flies in the face of the language of s. 21(1) of the Condominium Act.
[31] Mr. Fine further argues that the by-law is not valid because it is inconsistent with the declaration: Carleton Condominium Corp. No. 279 v. Rochon (1987), 59 O.R. (2d) 545 (C.A.). A by-law may not be contrary to the declaration, obviously, but this one is not. The declaration states:
Use of Common Elements: Subject to the provisions of the Act, this Declaration, and the By-Laws, and any Rules passed thereto, each owner has the full use, occupancy and employment of the whole or any part of the common elements, except as herein otherwise provided.
[32] Thus, the declaration must be read with s. 21(1) of the Condominium Act, which grants the Board the authority to deal with the common elements.
[33] Mr. Fine also relies on Rosen v. Grey Condominium Corporation No. 31, 2012 ONSC 3347. In my respectful view, that case illustrates the point I am making and does not assist the Ms. Cheung. The condominium corporation in that case put restrictions on the ability of an owner to lease their unit. The owner sought a declaration that the by-law was ultra vires. Tulloch J. (as he then was) agreed. The declaration contained no reference to the ability of the board to restrict ownership and use in that way. There was no question that the Condominium Act permitted a condominium to put restrictions on leasing units, but those restrictions could not be impose by by-law without authorization in the declaration: see paras. 47-49. Justice Tulloch stated at para. 49:
If the legislature had intended to grant condominium owners the authority to pass a by-law restricting leasing, then it would have made reference to leasing in subsection 56(1) of the Act. As indicated by way of comparison, restrictions on leasing are explicitly listed in subsection 7(4)(c) of the Act as being properly found in a condominium corporation’s declaration.
[34] In other words, a condominium’s declaration does not have to specifically authorize leasing of the common elements. It must specifically prohibit restrictions on leasing of individual units. That case does not assist Ms. Cheung.
[35] Mr. Fine also argues that the evidence that the restaurant has monopolized the parking is exaggerated. He is critical of much of the evidence filed by the Respondent, arguing that much is hearsay and was exposed during cross-examination as unfounded (much of the Applicant’s material is also hearsay).
[36] That may be so, but the central factual assertion of the Respondent – that the restaurant has monopolized the parking – is neither contradicted nor challenged by Ms. Cheung’s evidence. Indeed, Ms. Cheung appears to confirm the Respondent’s evidence on that point. In her affidavit, Ms. Cheung states that she needs to use all of the shared parking spaces. Not some – all. In paragraph 17 of his affidavit, Edward Cheung (Ms. Cheung’s son) states:
The Restaurant requires the use of the shared parking spaces on YRCC 759’s property to ensure that there is sufficient parking for its patrons and employees.
[37] If Ms. Cheung’s point is that she should be able to use all the shared parking spaces, then that very obviously confirms the Respondent’s point about monopolization.
[38] Mr. Cheung further states that the restaurant’s patrons have had to park at other complexes within the York Corporate Centre and on the street because parking at the Respondent is limited. Some of those patrons have received parking infractions and the restaurant has had to reimburse them. The restaurant’s operator has told him that he has lost business because of the parking situation. The restaurant’s operator has told Ms. Cheung the same thing.
[39] It is uncontroverted that the Board passed the 2009 By-law and the 2015 By-law out of a deep sense of frustration over the parking issue. The unit holders overwhelmingly approved the changes.
[40] I therefore find that the restaurant did indeed make heavy use of the available parking spots prior to the enactment of the 2015 By-law. That use was to the detriment of the other unit owners within the Respondent. I also accept that the 2015 By-law (and to a lesser extent the 2009 By-law) has had a detrimental effect on the restaurant. Since the enactment of the 2015 By-law other unit owners have put up reserved parking signs. I accept Mr. Cheung’s evidence that some of the other businesses often have empty spots when the restaurant is at peak capacity. That, however, does not mean that the 2015 By-law is oppressive or discriminatory. It means that not everyone is using the assigned parking spots assigned to them at all times. It is a unit holder’s right to not park in their designated space as much is at is their right to park in their designated space.
[41] Thus, I do not see how the Board’s actions can be called unreasonable. There was a parking problem and it had to be remedied. The Board came up with a solution that it believed would remedy the problems and treat all owners on an equal basis. It is not my job to second-guess the Board and substitute my judgment for theirs unless the by-law is clearly unreasonable or contrary to the Condominium Act or the declaration: York Condominium Corp. No. 382 v. Dvorchik, [1997] O.J. No. 378 (C.A.) at paras. 5-6; Metropolitan Toronto Condominium Corp. No. 1170 v. Zeidan, 2001 CarswellOnt 2495, [2001] O.J. No. 2785 (Sup.Ct.) at para. 45.
[42] An aspect of reasonableness is whether the patrons of the restaurant have the ability to park in other parts of the York Corporate Centre. In my view, they do. As Mr. Mannett, the Applicant’s expert concedes, the zoning by-law on its face contemplates that parking will be available throughout the York Corporate Centre. Furthermore, as Mr. Rodger mentioned in his analysis, whether over-flow parking is required depends on the time of day. The Applicant concedes that on its face the 2015 By-law does not contravene the zoning by-law. I also note that if Mr. Mannett is correct that, historically, parking has not been available in other parts of the York Corporate Centre, then it strikes me as entirely reasonable that the Board would be required to manage the available parking for the benefit of all unit holders.
[43] I turn now to whether the actions of the Board have been oppressive.
(b) Is Ms. Cheung entitled to relief under the oppression remedy?
[44] The Applicant says that the by-law is oppressive primarily because it is contrary to her reasonable expectation to have shared parking. She also says that the by-law will drive her out of business.
[45] I must also disagree that the Board’s conduct has been oppressive. If anything, it was the Applicant’s conduct (albeit not intentionally) that was oppressive prior to the 2009 By-law.
[46] Section 135(2) of the Condominium Act permits a judge to remedy a situation that is oppressive or unfairly prejudicial to a unit holder. In BCE Inc. v. 1976 Debenture Holders, 2008 SCC 69, [2008] 3 S.C.R. 560 the Supreme Court set out the proper approach to the oppression remedy at para. 56:
In our view, the best approach to the interpretation of s. 241(2) is one that combines the two approaches developed in the cases. One should look first to the principles underlying the oppression remedy, and in particular the concept of reasonable expectations. If a breach of a reasonable expectation is established, one must go on to consider whether the conduct complained of amounts to "oppression", "unfair prejudice" or "unfair disregard" as set out in s. 241(2) of the CBCA.
[47] A number of cases have described oppression. The cases have developed in the corporate law context, but the concepts are equally applicable in condominium law. In Niedermeier v. York Condominium Corporation No. 50, 2006 CarswellOnt 3935, [2006] O.J No. 2612 (SupCt.) at paras. 5-6 Shaw J. described the elements of oppression. In summary, oppression may be conduct that is:
- Coercive, abusive, burdensome, harsh, or wrongful;
- An abuse of power that undermines confidence that the condominium’s affairs are being conducted properly.
[48] At para. 4 and paras. 7-8 of Niedermeier Shaw J. also dealt with conduct that is unfairly prejudicial or unduly disregards the interests of a unit holder. Conduct that is unfairly prejudicial is conduct that limits or injures a unit holder’s rights or interests in a manner that is unfair or inequitable. Conduct that ignores the interests of the unit holder or treats the interests of the unit holder as being of no importance constitutes unfair disregard.
[49] In my respectful view, my colleague D.A. Wilson J. set out the proper approach in Orr v. Metropolitan Toronto Corp No. 1056, 2011 ONSC 4876 at para. 158:
It must be recognized that the Board is charged with the responsibility of balancing the private and communal interests of the unit owners and their behaviour must be measured against that duty. The court does not look at the interaction between the Board and the Plaintiff in isolation. Justice Juriansz (as he then was) articulated some limits to the oppression remedy's power and the balance of interest that must be borne in mind in McKinstry v. York Condominium Corp. No. 472, 2003 CarswellOnt 4948 (S.C.J.):
It must be remembered that the section protects legitimate expectations and not individual wish lists, and that the court must balance the objectively reasonable expectations of the owner with the condominium board's ability to exercise judgment and secure the safety, security and welfare of all owners and the condominium's property and assets ...
[50] The Court of Appeal varied Her Honour’s judgment but did not deal with the oppression issue: Orr v. Metropolitan Toronto Corp No. 1056, 2014 ONCA 855.
[51] Ms. Cheung was very clear in her affidavit that she needs all of the parking at the Respondent and intends to use it for her own needs. Indeed, she stated very candidly:
I want to be able to use all 162 shared parking spaces on YRCC 759’s property because a 230 seat restaurant requires the use of a sufficient number of parking spaces to accommodate its patrons.
[52] I understand that Ms. Cheung had an expectation that her tenant would be able to use “all” the shared parking spots. That had been the situation prior to 2009. Her material is replete with assertions that for many years parking had been on a “first come, first served” basis. First come, first served appears to mean, in practice (and in Ms. Cheung’s expectation) that the patrons of the restaurant could use every single un-allocated parking spot. That, of course, is not a legitimate or a reasonable expectation. Indeed, it is what led to the parking problems in the first place.
[53] Thus, there is no need to consider the second part of the two-part oppression test. Even if I were required to do so, I find it difficult to understand how the actions of the Board could be called oppressive when the owner of three units in a 33-unit development wishes to use 100% of the available shared parking for her tenant. I think, frankly, that the oppression goes in the other direction.
[54] I understand that Ms. Cheung feels that the parking situation may detrimentally affect her tenant’s business. That cuts both ways. There is evidence that other unit holders believe that the parking situation is causing a problem for them and harming their business.
[55] Ms. Cheung’s real complaint, with respect, is not that the Board treated her differently from the other owners. The Applicant’s real complaint is that the Board did not treat her differently from the other owners. In essence, Ms. Cheung says that the board has acted unfairly and oppressively by taking away her special extra parking privileges. That is no basis upon which to grant a remedy.
Disposition
[56] The Application is dismissed.
Costs
[57] The Respondent may, within 15 days of the release of these reasons, serve and file a costs outline and submissions of no more than two pages. The Applicant may, 15 days after it receives the Applicant’s costs outline and submissions, serve and file its own costs outline and responding submissions of no more than two pages.
R.F. Goldstein J.