COURT FILE NO.: 14-62967

DATE: 20180404

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

STEVEN FURR and KATHLEEN LUNDGREN

Applicants

– and –

MICHEL DUHAMEL, EMMY VERDUN and JACK HUGHES and THE KINGS LANDING CO-TENANCY COMMITTEE

Respondents

David McCutcheon, for the Applicants

Bruce Simpson, for the Intervenor Paulette Martel

Eric Appotive and Allison Russell, for the Respondents

HEARD: December 5,6,7, 2017

REASONS FOR JUDGMENT

Beaudoin J.

[1] The Applicants, Steven Furr (“Furr”) and Kathleen Lundgren (“Lundgren”), seek a number of declarations and orders regarding a Co-Tenancy Agreement dated December 15, 1998. This Agreement governs a townhouse development known as “Kings Landing” in Ottawa, Ontario. Furr and Lundgren have been the owners of unit 27 since June 2010.

[2] The Respondents are the members of the Co-Tenancy Committee (“Committee”), which was established to manage Kings Landing’s Shared Property and Shared Expenses. In these Reasons, any reference to the Committee is intended to refer to the Committee in existence at that point in time. Michel Duhamel (“Duhamel”) is the current President. Emmy Verdun (“Verdun”) is the current Treasurer and has held this position since 2008. Jack Hughes (“Hughes”) was elected as Secretary in 2014 and resigned from his position in 2016.[^1]

[3] The Intervenor, Paulette Martel (“Martel”), is the owner of unit 49. She had separately commenced her own proceedings that raised issues in common with this Application, and on August 19, 2015, Justice Roger granted her leave to intervene as an added party in these proceedings and stayed her actions pending the resolution of this Application. None of the other 55 unit owners have chosen to intervene despite the opportunity to do so that was extended by Justice Roger.

[4] Kings Landing is a freehold townhouse development in Ottawa, Ontario, consisting of 60 residential townhouse units (“units”) constructed by Claridge Homes (Riverside), Inc. (“Claridge”) between 1998 and 2000 on lands purchased from the National Capital Commission (“NCC”). The development is bounded by Concord Street North to the south, NCC lands abutting Colonel By Drive to the west, NCC lands abutting Nicholas Street to the north, and Greenfield Avenue to the east. The development faces the Rideau Canal, a registered UNESCO World Heritage site. Kings Landing includes a private roadway, Kings Landing Private, which enters from Concord Street North and runs through the middle of the development from south to north.

[5] Owners of the units own their townhomes and the lands within their unit boundaries in fee simple, but agree to be subject to the provisions of the Co-Tenancy Agreement made in 1998 between Claridge on its own behalf, and Claridge on behalf of future owners of the units. Each of the units is enumerated and described in Schedule “B” to the Agreement. Kings Landing is not a condominium, but rather is a tenancy-in-common. Each owner of a unit also has a 1/61 co-tenancy interest in a tied parcel of land, designated as Parts 2, 66, and 67 of the Reference Plan (“Co-Tenancy Interest”).

[6] In some units, the townhome covers the entire parcel of land allocated to the unit. In others, the unit boundaries also incorporate lands that provide a front, side or rear yard. Such lands allocated to units are individually-owned and are not part of the co-tenancy interest or Shared Property within the meaning of the Co-Tenancy Agreement.

[7] The NCC formally transferred the lands to Claridge in or about 1998. On December 24, 1998, Claridge registered the Co-Tenancy Agreement against the title of each of the units at Kings Landing.

[8] The Application was originally scheduled to be heard on November 21, 2016, but was adjourned due to the illness of the Applicants’ former counsel. Given the Respondents’ desire to proceed without further delay, I convened a case conference on November 23, 2016, to schedule a new hearing date and provide further directions. On that date, I adjourned the Application to June 12, 13, 14, 2017 (and June 15 if necessary). I seized myself of the Application, and on my recommendation, the parties agreed that there would be a “paper trial” on the following core issues:

1. Are the fencing and retaining wall along Greenfield Avenue “Shared Property” within the meaning of the Co-Tenancy Agreement?

2. If not, did the Co-Tenancy Agreement require an amendment with the consent of all owners as opposed to a resolution pursuant to article 9.5?

3. Did the Respondents act in bad faith or in breach of their duties and obligations pursuant to the Co-Tenancy Agreement with regard to items one and two?

The parties would rely on their respective affidavits and on the transcripts of the cross-examinations on those affidavits. I reserved the right to have certain witnesses called to give oral evidence. The stay ordered by Justice Roger on August 19, 2015, in (Martel’s) action 14 – 60824 remained in effect.

[9] The Application could not proceed on June 12, 2017. The Applicants’ former counsel advised that he had a health issue that prevented him from proceeding on behalf of his clients. He sought a further adjournment, which I granted on terms. The Application was adjourned peremptorily to December 5, 6 and 7, 2017. The Applicants were ordered to pay costs “thrown away” to the Respondents and the Intervenor.

The Dispute

[10] At the heart of this dispute is whether the as-built perimeter fence that runs parallel along the easterly boundary of Kings Landing (Greenfield Avenue) is “Shared Property” pursuant to section 2.3(h) of the Co-Tenancy Agreement and whether the retaining wall that runs alongside it forms part of that perimeter fence or is otherwise Shared Property. Section 2.3(h) of the Co-Tenancy Agreement states that Shared Property includes a “sound attenuation fence along the easterly boundary of the lands.” “A sound attenuation fence” is not a defined term, but the term is generally understood to describe a solid fence made of material that differs from the fence that was ultimately constructed.

The Position of the Parties

[11] The Applicants maintain that the as-built fencing and retaining wall are not defined, described, or otherwise included as Shared Property in the Agreement and that the cost of repair, replacement and maintenance thereof is not identified as a shared expense in the Agreement. They say that this issue can be determined on the face of the Agreement.

[12] They submit that the sound attenuation fence consists only of a short portion of a specially-designed sound fence installed by Claridge located along the boundary of the lands running perpendicular to Greenfield Avenue at the side boundary of Unit 31. According to the Applicants, any expansion of the definition of Shared Property to include the as-built fence and retaining wall requires an amendment to the Agreement with the consent of all owners.

[13] The Intervenor takes a similar position, but she disagrees as to the location of the sound attenuation fence. She maintains that the fence along the eastern edge of the private roadway is the fence described in para. 2.3(h) since that fence is located on co-owned land. This is a wooden fence with limited attenuation properties and its construction is similar to the as-built wooden fence along Greenfield Avenue.

[14] The Applicants and the Intervenor stress that the development is not a condominium and that the fence and retaining wall are built on freehold land; for that reason, their maintenance and repair must be the responsibility of the individual owners. They maintain that the Co-Tenancy Agreement provides a relationship between the property owners of the tenancy in common, and nothing else.

[15] The Respondents’ position is that the as-built fencing is Shared Property and is the fence referred to in section 2.3(h) and that the retaining wall is part of the fencing as it is required to support the fence. The Respondents maintain that they applied a proper interpretation of the Agreement on exercising their responsibilities and that no amendment to the Co-Tenancy Agreement was or is required.

The Legal Framework

[16] In the recent Supreme Court of Canada decision of Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633, Justice Rothstein writing for the Court set out the law on contractual interpretation as follows at paras. 47-50:

[A] decision-maker must read the contract as a whole, giving the words used their ordinary and grammatical meaning, consistent with the surrounding circumstances known to the parties at the time of formation of the contract. Consideration of the surrounding circumstances recognizes that ascertaining contractual intention can be difficult when looking at words on their own, because words alone do not have an immutable or absolute meaning:

No contracts are made in a vacuum: there is always a setting in which they have to be placed. . . . In a commercial contract it is certainly right that the court should know the commercial purpose of the contract and this in turn presupposes knowledge of the genesis of the transaction, the background, the context, the market in which the parties are operating.

The meaning of words is often derived from a number of contextual factors, including the purpose of the agreement and the nature of the relationship created by the agreement…:

The meaning which a document (or any other utterance) would convey to a reasonable man is not the same thing as the meaning of its words. The meaning of words is a matter of dictionaries and grammars; the meaning of the document is what the parties using those words against the relevant background would reasonably have been understood to mean.

Contractual interpretation involves issues of mixed fact and law as it is an exercise in which the principles of contractual interpretation are applied to the words of the written contract, considered in light of the factual matrix. [Citations omitted.]

[17] Later, the Court added at paras. 57 and 58:

While the surrounding circumstances will be considered in interpreting the terms of a contract, they must never be allowed to overwhelm the words of that agreement. The goal of examining such evidence is to deepen a decision-maker’s understanding of the mutual and objective intentions of the parties as expressed in the words of the contract. The interpretation of a written contractual provision must always be grounded in the text and read in light of the entire contract. While the surrounding circumstances are relied upon in the interpretive process, courts cannot use them to deviate from the text such that the court effectively creates a new agreement.

The nature of the evidence that can be relied upon under the rubric of “surrounding circumstances” will necessarily vary from case to case. It does, however, have its limits. It should consist only of objective evidence of the background facts at the time of the execution of the contract of both parties at or before the date of contracting. Subject to these requirements and the parol evidence rule discussed below, this includes, in the words of Lord Hoffmann, “absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable man”. Whether something was or reasonably ought to have been within the common knowledge of the parties at the time of execution of the contract is a question of fact. [Citations omitted.]

[18] In Salah v. Timothy’s Coffee of the World Inc., 2010 ONCA 673, 268 O.A.C. 279, the Ontario Court of Appeal provided the following overview of the applicable principles at para. 16:

The basic principles of commercial contractual interpretation may be summarized as follows. When interpreting a contract, the court aims to determine the intentions of the parties in accordance with the language used in the written document and presumes that the parties have intended what they have said. The court construes the contract as a whole, in a manner that gives meaning to all of its terms, and avoids an interpretation that would render one or more of its terms ineffective. In interpreting the contract, the court must have regard to the objective evidence of the “factual matrix” or context underlying the negotiation of the contract, but not the subjective evidence of the intention of the parties. The court should interpret the contract so as to accord with sound commercial principles and good business sense, and avoid commercial absurdity. If the court finds that the contract is ambiguous, it may then resort to extrinsic evidence to clear up the ambiguity. Where a transaction involves the execution of several documents that form parts of a larger composite whole – like a complex commercial transaction – and each agreement is entered into on the faith of the others being executed, then assistance in the interpretation of one agreement may be drawn from the related agreements.

[19] More recently, in Shewchuk v. Blackmont Capital Inc., 2016 ONCA 912, 404 D.L.R. (4th) 512, the Ontario Court of Appeal had to consider when evidence of subsequent conduct of the parties is admissible to interpret their contract. The Court identified the dangers of an over-reliance on subsequent conduct and concluded at paras. 46 and 48:

These dangers, together with the circumscription of a contract’s factual matrix to facts known at the time of its execution, militate against admitting evidence of subsequent conduct at the outset of the interpretive exercise. Evidence of subsequent conduct should be admitted only if the contract remains ambiguous after considering its text and its factual matrix.

Despite its dangers, evidence of subsequent conduct can be useful in resolving ambiguities. It may help to show the meaning the parties gave to the words of their contract after its execution, and this may support an inference concerning their intentions at the time they made their agreement. [Citations omitted.]

[20] In considering the weight to be given to such evidence, the Court concluded at para. 56:

In summary, evidence of the parties’ subsequent conduct is admissible to assist in contractual interpretation only if a court concludes, after considering the contract’s written text and its factual matrix, that the contract is ambiguous. The court may then make retrospectant use of the evidence, giving it appropriate weight having regard to the extent to which its inherent dangers are mitigated in the circumstances of the case at hand, to infer the parties’ intentions at the time of the contract’s execution.

Are the fencing and retaining wall along Greenfield Avenue “Shared Property” within the meaning of the Co-Tenancy Agreement?

[21] The Applicants submit that the issue can be resolved on a reading of the Agreement on its face and that, in any event, I should not interpret the agreement based on events that occurred after the date the Agreement was executed, December 15, 1998.

The Agreement

[22] The recitals to the Agreement state, among other things:

AND WHEREAS this agreement is necessary to define and establish the rights and obligations with respect to the use, operation, management, supervision, maintenance, repair and replacement by the owners, mortgagees and tenants, from time to time respectively of the units on the Lands and with respect to the said Shared Property;

AND WHEREAS pursuant to this Agreement, all purchasers will take title subject to a covenant to be bound by the provisions of this Agreement.

1. Interpretation

Definitions:

a) “Co-Tenancy interest” means the tenancy in common in the lands described I Schedule “C”.

b) “Lands” as “all of the lands and premises described in Schedule “A” attached hereto.

c) “Proportionate Share” means the equal percentage that each of the owners shall bear of the Shared Expenses.

d) “Shared Elements” means certain elements of the project which are for the joint use and mutual use and benefit of only certain owners. These elements are described in Section 2.4.

e) “Shared Expenses” means the expenses relating to the maintenance and repair of the Shared Property and are described herein in Section 4.1.

f) “Shared Property” means the part of the Lands and appurtenances thereon which are described in Section 2.3 and Schedule “C”.

2. Ownership Rights:

2.3 Shared Property: The Shared Property includes the following:

(b) services and utilities located on or under the Shared Property and on or under the units to service the units and the Shared Property, including hydro transformers, pathway lights, catch basins, street lighting and fire hydrants together with conduits and enclosures for hydro and cable utilities;

(e) landscaped areas adjacent to certain units which exits for the exclusive use of certain owners as set out in Section 2.4

(h) the sound attenuation fence along the easterly boundary of the Lands;

(l) any other elements located in the Shared Property which benefit all owners.

2.4 Shared Elements: […]

Other Shared Elements between these owners are:

(c) privacy fences separating the rear yards of the units abutting Greenfield along the easterly boundary of the Lands.

2.6 Landscaped areas: The owners acknowledge there are landscaped areas adjacent to certain Units which form part of the Shared Property which shall be allocated for the exclusive use of the owners and occupants of such units subject to the terms of this agreement and the requirements of the City of Ottawa and the National Capital Commission.

2.7 Shared Expenses: Each of the owners shall contribute in equal shares to the Shared Expenses.

2.11 Contractual relationship between owners. Each owner of a unit is deemed to have contracted directly with each other owner with respect to the provisions in this Agreement.

4. Shared Expenses:

4.1 Shared Expenses: The Shared Expenses of the Shared Property shall include the following:

(c) the cost of repair, replacement and maintenance of the Shared Property;

(d) the cost of landscaping and snow removal of the Shared Property, it being understood and agreed that such landscaping shall include all grassed areas, whether located within unit boundaries or not, save and except for the fenced rear yards of the units abutting Greenfield Avenue along the easterly boundary of the lands;

(e) the cost of repair, replacement, maintenance and snow removal of all driveways, curbs, steps and walkways leading to units and Shared Property, whether they form part of the Shared Property or not;

(g) the cost of legal, accounting, managing, auditing and engineering services or other professional advice and service required by the Co-Tenancy committee;

(k) such other expenses as are normally incurred in maintaining a high quality residential development.

Notwithstanding that certain parts of the dwellings may project into Shared Property, each owner is responsible for maintaining and repairing both the interior and exterior of his or her own dwelling including all door sills and/or thresholds and decks or balconies.

4.2. Expenses Pertaining to Shared Elements: Notwithstanding anything contained herein to the contrary, the Shared Elements, as defined in Section 2.4 are the sole responsibility of those owners enjoying the benefit of same and the cost of their maintenance, repair and replacement is not party of the Shared Expenses as defined herein.

4.3 Payment of Shared Expenses.’ Each owner shall pay to the Treasurer of the Co-Tenancy Committee his Proportionate Share of the Shared Expenses being 1/61 of the total of such expenses at such time or times determined by the Co-Tenancy Committee regardless of when the expense will be incurred, without set off or deduction. The Co-Tenancy Committee may request that payment be made by delivery to the Treasurer a series of monthly post-dated cheques for the owner’s proportionate share of the estimated Shared Expenses for each year. Such sums are to be held by the Treasurer, in trust, and to be used by the Treasurer for the purpose of maintaining the Shared Property and keeping current all Shared Expenses. The reserve fund received by the Treasurer shall be segregated and deposited into a special interest-bearing account to be held by the Treasurer until such funds are required to be expended, or until the owners, by decision confirmed by at least forty (40) of the then current owners direct the Co-Tenancy Committee to use the fund for another purpose.

4.5 Priority of Shared Expenses: The owners agree that every amount from time to time payable by him for Shared Expenses shall constitute a first charge upon the owner’s unit subject only to municipal taxes having statutory priority and that any such amounts that may from time to time be in arrears will have priority to the rights of any purchaser or mortgagee of such interest, whether the instrument in favour of such purchaser or mortgage is registered before or after such common expense payments due. This charge shall be deemed to be a charge to which the Mortgages Act, R.S.O. 1990, c. M. 40 applies.

5. Shared Property

5.2 Substantial Change to Property:

(a) The Co-Tenancy Committee may, by a confirming vote of at least forty (40) owners at a meeting where a quorum is present, make any substantial additions, alternations or improvements to, or renovation of the Shared Property. For this purpose, any addition, alteration or improvements to, or renovation of the Shared Property shall be deemed to be substantial if the cost of such addition, alteration or improvement to or renovation of the Shared Property is in excess of twenty percent (20%) of the current annual budget.

(b) The Co-Tenancy Committee may, by a confirming vote of at least thirty (30) owners at a meeting where a quorum is present, make any other addition, alteration, or improvement to, or renovation of the Shared Property.

5.3 Maintenance of Fencing: The owners covenant and agree not to alter the fencing, and to maintain same to the satisfaction of the Corporation of the National Capital Commission, the City of Ottawa, and the Regional Municipality of Ottawa- Carleton as the case may be.

6. Use of Unit

6.6 Right of Access:

(c) The owners of units abutting Greenfield Avenue along the easterly boundary of the Lands except for builder units 45 to 59 inclusive, 61 and 62 shall have the right to erect and maintain a fence in the rear of the unit provided that there is a one and two tenths (1.2) metre wide gate which permits access along the rear boundary of the unit in those cases where other owner(s) have a right of way over such rear yard. The rear yard of each such unit shall be subject to a right of access in favour of the owners of certain other units in the block in which the unit is situated. It is acknowledge that there may be trees partially obstructing that portion of certain rear yards which is subject to the right of way and, in such event, the owners having the right of access shall be entitled to circumvent such obstacles in order to gain access to their own units.

9. Meeting of Owners

9.5 General: Unless otherwise specified in this agreement, any resolution passed by a majority vote at a meeting of the owners shall be binding on owners and their respective heirs, executors, administrators, successors and assigns.

[23] Contrary to the position taken by the Applicants, I conclude that there is an ambiguity to the Agreement with regard to article 2.3(h). That ambiguity is reflected in the conflicting positions of the Applicants and of the Intervenor. The Applicants emphasize the words “sound attenuation” and point to a short section of fence located within the boundary of one unit on along the northern limit of the development. The Intervenor relies on the words “easterly boundary” to point to a fence located on land held in common on the eastern side of the private roadway, even though the Applicants would argue that this fence has no sound attenuation properties. I also note that paragraph 2.3 Shared Property does not contain an exhaustive list.

The Factual Matrix

[24] Given this ambiguity, I must consider the factual matrix. The Co-Tenancy Agreement was executed between Claridge, as the Developer, and Claridge on behalf of future owners. The interpretation of section 2.3(h) is assisted by an examination of the surrounding circumstances at that time, and in particular, the Site Development Plans approved by the City of Ottawa for the Kings Landing Development.

[25] The Intervenor places great emphasis on the fact that Claridge entered into an Agreement with the NCC that required some of the lands facing Colonel By Drive to be co-owned. While that has a bearing on what lands were to be co-owned, it is equally clear that Claridge had to apply to the City of Ottawa for Site Plan Approval, which it did in mid-December 1997. That Application was accompanied by a Site Plan prepared by Douglas Hardie, Architect, dated September 1997 (later revised to March 31, 1998).

[26] Within this same timeframe, Claridge’s counsel, Susan Gibson of Soloway Wright LLP, had drafted a Co-Tenancy Agreement dated November 20, 1997.

[27] In September 1997, James B. Lennox and Associates prepared and submitted a Landscape Plan as part of the Site Plan Approval process that identifies a “Wood Screen Fence or Noise Fence as required by the Ministry of the Environment” (emphasis added). This fence is drawn all along the entire easterly boundary of Kings Landing.

[28] In December 1997, Novatech Engineering prepared a Grading Plan that identifies a retaining wall along a portion of the easterly boundary of the development. It shows a fence running in the same location. A February 1998 Site Servicing Plan shows a step timber retaining wall to be located behind units 47 to 33.

[29] In February 1998, Claridge obtained a noise impact study from Novatech Engineering Consultants Ltd. in which Novatech confirmed that the construction of a 1.8 meter high fence along the rear property line of units backing onto Greenfield Avenue (being units 31-59, 61 and 62) was a necessary noise attenuation measure. According to the Study, the noise barrier height could be constructed by a single barrier or a combination berm and barrier.

[30] In a revised noise impact study dated March 6, 1998, Novatech revised its findings on the basis that the truck volumes were less than initially assumed and found that a noise attenuation fence was no longer required along Greenfield Avenue. A noise barrier was required at the northerly boundary of the development along the side yard of lot 31 adjacent to the Nicholas Avenue right-of-way and perpendicular to Greenfield Avenue. The Landscape Plan was revised to show a wooden decorative fence only along Greenfield Avenue.

[31] The Site Plan Control Approval dated March 31, 1998, addressed the fact that Claridge had agreed to address local community concerns. It reads as follows:

The applicant has made a number of alterations to the Site Plan to address identified concerns. In particular, the applicant has agreed to install decorative fencing for units 45 to 59, 61 and 62 to “open up” the rear of the development to eastern residential properties.

[32] Comments from the Ottawa East Community Association dated March 17, 1998, disclosed that the local community was against the installation of a sound attenuation fence. The President of the Ottawa East Community Association took the position that the sound attenuation fence ought not to be erected and suggested that Claridge erect a wrought iron or similar fence along the three blocks from Concord, three to four feet high, complete with gates and a wooden fence beginning where the retaining wall starts for the remainder of the east side. Rather than erect a wooden fence along the entire length of the Kings Landing Community along Greenfield Avenue, Claridge agreed to install a decorative steel fence from units 45-49 and 61 and 62.

[33] The Landscape Plan was revised as of April 9, 2008, to show that the proposed fence along the easterly boundary of the Lands would be a wooden fence running behind units 45-31, a combination decorative masonry and wrought iron fence running behind units 45-49, 61 and 62 and a fence as required by the Ministry of Environment along the northern limit of unit 31.

[34] A Site Plan Control Agreement dated April 8, 1998, was issued by the City in respect of the Kings Landing development (“Site Plan Control Agreement”) and is registered on title to all units of Kings Landing. It provides:

4. In addition to any of the requirements of this agreement, the owner (Claridge) shall, at the Owner’s sole risk and expense to the satisfaction of the Corporation:

(i) develop and maintain the Owner’s lands in accordance with the after mentioned plans approved by the Corporation in any approved amendments thereto and in accordance with any approved plans relating to private sewer systems, lot grading and drainage for the owners lands in any approved amendments thereto:

(ii) and, provide and maintain the landscaping elements, services, works, facilities and all matters referred to in all said Plans and any approved amendments thereto,...

24. The Owner covenants and agrees that, for the benefit of the subsequent owners of the subject lands and the owner of the adjacent road, the Owner shall notify all prospective purchasers of the dwellings units noted in paragraph 24 herein of the following warning clauses:

(b) Lots 32 – 59, 61, 62 on the approved Site Plan: backing onto Greenfield Avenue

Noise levels due to increasing Greenfield Avenue traffic may continue to be of concern, occasionally interfering with some activities of the dwelling occupants as a sound level exceeds the corporations and the Ministry of environment’s energy and noise criteria. Additional attenuation measures are not proposed;

(c) Lot 31 on the approved Site Plan: backing onto Greenfield Avenue (Noise Barrier)

(iii) The Owner shall be responsible to maintain the integrity of the noise barrier which is illustrated on the approved Site Plan in a good and safe condition, which maintenance shall include the replacement or reconstruction of the barrier as required.

25. Installation and Planting of Landscape Elements

The Owner covenants and agrees that it shall install and plant all landscape elements in accordance with the Site Plan Control Approval, within one year of the date of occupancy, to the satisfaction of the Commissioner of Urban Planning and Public Works. The landscape element shall include but not be limited to, all vegetation and topographic treatment, walls, fences, hard and soft surface materials, lighting, site furniture, free-standing ground-supported signs, steps, lamps, and play equipment, information kiosks and bulletin boards, and other groundcover and new tree(s) and shrubs located on the road allowance.

[35] As noted, the Co-Tenancy Agreement dated November 20, 1997, referred to a sound attenuation fence along the easterly boundary of the lands under Section 2.3(h) of the Agreement. This section was not revised following the revised Novatech report dated March 6, 1998, or following the City’s requirement to install a decorative fence running behind units 45-59, 61 and 62. The same wording remained in all subsequent versions of the Co-Tenancy Agreement and is now the current paragraph 2.3(h) of the Agreement registered on title dated December 15, 1998.

The Retaining Wall

[36] Units abutting Greenfield Avenue include a front and rear yard (and in some cases, side yard) that are individually-owned lands belonging to the respective unit. An Allan Block retaining wall is located on freehold land within the unit boundaries of the rear yards of 17 units abutting Greenfield Avenue. Units 31 through 47 contain the retaining wall. This retaining wall is in the same location as described in the Novatech Grading Plan of December 1997.

[37] The proposed location of the retaining wall was shown on the Grading Plan as a solid dark line running parallel to Greenfield Avenue. It is distinguishable from a second retaining wall previously constructed and maintained by the City, which is closer to Greenfield Avenue and runs parallel to the portion of the retaining wall that is located on units 31-39 (not at issue). A further L-shaped retaining wall is located within the boundaries of unit 38 (also not at issue).

[38] Claridge constructed the retaining wall at the time of the development of Kings Landing. The City has since confirmed that a building permit was not required since the wall’s existence on the Site Plan was part of the Site Plan Control Agreement. A report by EXP Engineering commissioned by the Committee in or about early 2012 contains considerable technical detail regarding the form, purpose and function of the retaining wall in relation to fill placed in the rear yards of units abutting Greenfield Avenue by Claridge during construction.

[39] A description of the site is found at paragraph 6 of the EXP Report:

The site is bounded by Colonel By Drive on the west, by Concord Street on the south in Greenfield Avenue on the east side. A review of the old topographical map indicates that the site was originally located on a ridge which sloped down to the east with the ground surface elevations varying from Elevation 68 m approximately in west part of the site to Elevation 66 m to 62 m approximately along Glenfield (sic) Avenue to the east. The resulting slope has an inclination of 25 to 30 degrees. It appears that as part of Glenfield (sic) Avenue construction, the slope may have been cut back and the concrete retaining wall constructed by others on the west side of the road. It is speculated that raising the grade in the backyards of the residences and the removal of numerous large trees located on the subject property necessitated excavation to considerable depth resulting in the need for the construction of the Allan Black (sic) retaining wall located at the rear of Units 44 to 66.

[40] Photographs of the eastern boundary of the development along Greenfield Avenue show the sharp rise in the elevation. There are two retaining walls. It is the upper retaining wall that is in issue and that retaining wall is clearly seen to be necessary to retain the soil. It is also apparent that the fence relies upon the retaining wall for support.

[41] Despite the arguments of the Applicant and of the Intervenor, ownership of the land is not determinative of the question of Shared Property. According to the Co-Tenancy Agreement, “Shared Property” includes items that are located on the private property of individual owners. For example, paragraph 2.3(b) includes as part of “Shared Property” the utilities and services located on or under the units, including hydro transformers, pathway lights, catch basins, street lighting and fire hydrants. This is not a restricted list and includes “any other elements in the Shared Property that benefit all owners.”

[42] Section 4.1 sets out the Shared Expenses for the Community and it includes expenses for landscaping. The shared expense includes all grassed areas including those grassed areas located on private property. It also includes the repair, replacement, maintenance, and snow removal of all driveways, curbs, steps and walkways leading to the units and Shared Property whether or not they form part of the Shared Property.

[43] The Applicants and the Intervenor urge a narrow reading of the Co-Tenancy Agreement. This ignores the fact that Kings Landing is a small community located in a high quality residential development. In that context, the appearance of this development was and is of importance; to the NCC, because of its prestigious location along the Rideau Canal, but also to the City and the neighbouring community.

[44] The Applicants focus on the words “sound attenuation” and submit that section 2.3(h) must refer to short portion of a specially-designed sound fence installed by Claridge located along the northern boundary of the lands running perpendicular to Greenfield Avenue at the side boundary of unit 31. This cannot be Shared Property since the registered owner of unit 31 is expressly responsible to maintain, repair and reconstruct that fence as set out in the Site Plan Approval and Agreement granted by the City, and that requirement is specifically written into the deed as the responsibility of the owner.

[45] The Intervenor does not think the words “sound attenuation” are important; she points to the fence along the eastern edge of the private roadway as the fence described in section 2.3(h) since it is on co-owned land and she argues that co-ownership of land is determinative. The fence she refers to is a wooden fence with limited sound attenuation properties and its construction is similar to the wooden fence along Greenfield Avenue.

[46] The error of this narrow interpretation is best expressed by the Intervenor’s position that each individual owner backing along Greenfield Avenue is solely responsible to maintain, repair, and replace their respective portion of the retaining wall and fence located on their own property. Furthermore, if an owner chooses not to maintain, repair and replace their section of the fence and retaining wall, then that is their right and their choice.[^2] So if sections of the fence and retaining wall fall apart to the detriment of the whole community (and contrary to the concerns of the local community at large), so be it.

[47] The Applicants and the Intervenor further rely on paragraph 6.6(c), which is found under the heading Right of Access. That paragraph confers on the owners of certain units abutting Greenfield Avenue the right to erect and maintain a fence in the rear yard of their units. This right is subject to the proviso that there be a gate that permits access over the rear of such yard. I am satisfied that this is not a reference to the fence along the easterly boundary, but rather a reference to a fence between those units. There would be no need for a gate to access the steep hill below the retaining wall. On the other hand, a right of access would be necessary in order to maintain the perimeter fence on behalf of the community.

[48] In argument, the Applicants’ counsel had to concede that the only fence that matches the geographical description “easterly boundary of the lands” is the fence that is now in issue.

[49] I am satisfied that Claridge intended that section 2.3(h) of the Agreement refer to the as-built fence that is referred to in the plans presented to and approved by the City of Ottawa and at the time Claridge signed the Co-Tenancy Agreement on behalf of future owners. This conclusion is further supported by section 5.3 of the Agreement, which provides:

5.3 Maintenance of Fencing: The owners covenant and agree not to alter the fencing, and to maintain same to the satisfaction of the Corporation of the National Capital Commission, the City of Ottawa, and the Regional Municipality of Ottawa- Carleton as the case may be.

[50] While the Co-Tenancy Agreement makes no reference to the retaining wall, that retaining wall is identified in the Grading Plans prepared by Novatech in 1997, which plans were necessary for Site Plan Approval. As seen in the Report prepared by EXP, a retaining wall was necessary to contain a great deal of soil. Its integrity is of importance to the entire Community, and not just the homes along Greenfield Avenue. If it fails, it affects the appearance and the image of Kings Landing and a failure of the wall could expose the Community to liability if there is damage to those travelling the road below the slope. It is obvious from a review of the photographs placed in evidence that the fence relies upon the retaining wall for support; it cannot perform its intended function without the retaining wall.

[51] To exclude the retaining wall would lead to an absurd result that the fence would be a shared expense, but that wall is somehow excluded, and that the Community could be required to repair one without maintaining the other.

[52] The list of Shared Property is not limited to the items listed in section 2.3. The words: “The Shared Property includes” appear. This is in contrast to paragraph 2.4, which describes Shared Elements and provides that “other Shared Elements… are.” “Shared Expenses” are even more broadly described to include a number of items as well as “such other expenses are normally incurred in maintaining a high quality residential development.” The lack of a specific reference to the retaining wall does not fatally undermine its inclusion as either Shared Property or as a Shared Expense.

[53] I am satisfied that Claridge saw no need to specifically refer to the retaining wall in the Agreement because of the obvious support it provided to retain the soil and support the fence. The retaining wall and fence were constructed and in place when the Agreement was signed. These items were in plain view. Claridge had always undertaken to build a wooden or sound attenuation fence along the eastern boundary as part of its development of the site. For whatever reason, Claridge saw no need to amend the Co-Tenancy Agreement since that is the only fence along the easterly boundary of the lands. The retaining wall was part of the Landscape and Grading Plans of the site and it is obviously necessary to support the fence.

[54] To the extent that it may be required to support this conclusion, I turn to consider subsequent events as provided in Shewchuk.

[55] In accordance with section 3.1 of the Co-Tenancy Agreement, the Shared Property was to be managed by Claridge until such time as the majority of the units were sold. Section 3.2 provided that within 60 days after Claridge ceased to be the owner of a majority of the units, Claridge was to call the first meeting of the unit owners.

[56] On November 8, 1999, a letter was sent to all Kings Landing homeowners regarding this first meeting of unit owners to be held on Tuesday, December 7, 1999, at 7:30 PM. This meeting was to be hosted and moderated by Claridge. Each owner was reminded to read the Shared Property Agreement that had been attached to their Agreements of Purchase and Sale. The letter contained these paragraphs:

For the first part of the meeting, it will help to expedite matters if everyone focuses on shared common property issues. Questions or concerns regarding your specific unit should remain between you and Claridge Homes, and therefore will not be on the evening’s agenda.

Lastly, business discussion will take place under the direction of the Co-tenancy Committee, and with the assistance of Claridge Homes. Such matters as the snow clearing contract, completion of the Shared Property, timing of future meetings, the budget, expenses and receipt of payments, and what Claridge’s future role, if any, is to be, can be tabled, as well as any other issues that may be appropriate.

[57] A list of attendees at the meeting of December 7 includes Martel. The Minutes of that meeting disclose that Susan Gibson, the drafter of the Agreement, was in attendance and she gave a description of the Shared Property and the related Agreement. It was agreed that December 8, 1999, was to be the Shared Property handover date.

[58] Minutes of the December 18, 1999, meeting include a review of what constitutes Shared Property. Two Decisions were taken:

DECISION: At this time the Committee will include the land east of the Greenfield perimeter fence to Greenfield is what is considered Shared Property.

DECISION: The Greenfield perimeter fence will be included in what is considered Shared Property.

[59] It is important to note that the Committee made this decision after having received Ms. Gibson’s advice and that these decisions were made long before any problems or dispute arose with respect to the fence and the retaining wall.

[60] While the Committee may have been in error if it attempted to include the freehold land east of the fence as Shared Property, this conclusion does not undermine the Committee’s decision with respect to the fence. In any event, no one took issue with those decisions at that time.

[61] Minutes of the first Annual General Meeting (“AGM”) of Kings Landing held May 31, 2000, include a list of deficiencies with respect to the Shared Property. These include the fence along Greenfield, gates along Greenfield, missing fence and the retaining wall at the north east end.

[62] On August 25, 2000, Claridge’s counsel, Ms. Gibson, wrote to the then President in response to a request of one of the owners who wished to attach a sunroom to the rear of a unit backing on Greenfield and to move the fence in the rear yard. In that letter she states:

…please bear in mind that the provisions of section 5 do not apply as a unit in question backs on Greenfield and is defined as including the rear yard as well as the building. Furthermore, section 5 deals with alterations to Shared Property (as defined) and section 6 deals with alterations to units (as defined).” She concludes that “Fences are governed by section 5.3 (Shared Property) and may not be altered. If the owner wishes to remove, move or otherwise alter the fence in the rear yard, this is prohibited and a vote of owners at a meeting cannot change that.

[63] Subsequent to the signing of the Agreement, Claridge continued to treat the perimeter fence, including the retaining wall, as Shared Property. This can be seen in correspondence with the Co-Tenancy Committee: there is a letter from the then President, Jim Strang, to Claridge dated June 26, 2000, which acknowledges receipt of Claridge’s summary of deficiencies following the exterior inspection of June 2, 2000, Claridge’s updated list of deficiencies dated May 4, 2001,and a letter from Mr. Strang to Claridge dated May 25, 2001 - Re: Shared Property Deficiencies, which includes a list of deficiencies regarding perimeter fencing and five deficiencies respecting the retaining wall that runs along the east property line adjacent to Greenfield Avenue.

[64] Minutes of the AGM held in May 2005 refer to a Reserve Fund Study completed in January 2005 by Keller Engineering, which included major maintenance and rebuild for the retaining wall as part of the 30-year forecast. Martel attended the 2005 AGM. On cross-examination, Martel recalled that she had received notice that the Reserve Fund Study was on the agenda for the meeting and that it was, in fact, discussed.

[65] In or about June 2011, the Committee obtained an Inspection Report from Keller Engineering respecting the retaining wall, which according to the Reserve Fund Study, was due for maintenance and repair. According to the Keller Report, approximately 40 meters of the retaining wall was required to be removed and replaced at a budgeted cost of $105,655.

[66] On June 12, 2012, Duhamel received an email from the Applicants, which is excerpted in part below:

Thank you for providing an update on the retaining wall. The work to be done on the wall represents an important renovation to our community. As the time and resources involved in completing this project are significant, it’s important that as owners, we adhere to the rules and procedures laid out in our co-tenancy agreement related to this substantial expenditure.

You will note that the bid of $177,387 greatly exceed 20% of the current annual budget. As such, section 5.2(1) of our agreement requires a confirming vote of 40 owners to approve work and associated costs of this improvement project. Although discussed at prior AGM’s, no vote has been taken related to this project. To ensure that as a community we’re dealing with integrity, fairness and impartiality, it’s critical that we adhere to our co-tenancy contract.

As owners, Steve and I, have no issue moving forward with the work. We also believe this sentiment is shared by most owners within our community.

However, it is essential, given the costs and risks associated with this project that we have a formal record of this important work being approved by the co-tenancy. This will help protect all owners within our community and ensure we are not in breach of our contract.

Please provide confirmation that the Committee will seek formal approval of this project (via a confirming vote of owners) prior to the contract being signed as it is required by our-tenancy agreement.

[67] On June 22, 2012, Duhamel received a letter from the Applicants advising that they had no issue moving forward with the work, but they obtained legal advice contrary to Mr. Davidson’s opinion and they insisted that the Committee call a special meeting to hold a confirming vote of owners. Their letter contains this paragraph:

Please also be advised that this letter serves as formal, written notice that the committee must not enter into any contracts or issue any payments for reconstruction of the URW in the absence of a confirming vote of 40 owners in addition, no reconstruction on the URW is commenced by Keller Engineering, its subcontractors or any other party, in the absence of approval appropriate approval by the owners in regard to this matter.

[68] On June 29, 2012, the Committee received a letter from William Hunter of Vice Hunter Labrosse LLP on behalf of the Applicants. Mr. Hunter’s letter took the position that the work required on the retaining wall was an addition, alteration, or improvement to or renovation of the “Shared Property” and a confirming vote of the owners was required before the Committee could retain a contractor to proceed with the work on the retaining wall. Notably, Mr. Hunter stated that “[t]he upper retaining wall appears to be Shared Property pursuant to the Co-Tenancy Agreement.” Mr. Hunter also wrote directly to Keller Engineering.

[69] On July 17, 2012, the Applicants wrote a lengthy letter to Duhamel where they raised several concerns but concluded that they would not be proceeding with their objection to the work on the upper retaining wall. An excerpt of that email is as follows:

Michel, in our email to you of June 17th, we indicated that we had no objection to necessary repair work being performed on the upper retaining wall, but we did have concerns about the approval process and ensuring adherence to the Co-tenancy Agreement.

We will not proceed with our objection to performing reconstruction of the upper retaining wall, provided such work exclusively comprises repair and maintenance only AND that the use of Shared Expenses is restricted to work on Shared Property.

[70] The Applicants did not include the letter from Mr. Hunter or theses emails in their Factum or in any of their materials. Up until that point in time, their objections were solely focussed on whether the work on the retaining wall was a “repair” pursuant to section 4.1 or a substantial change to Shared Property pursuant to section 5.2, and whether a confirming vote of 40 owners was required.

[71] In summary, from 1999 to 2012, the “as-built” fence and retaining wall were considered Shared Property by the Owners.

[72] Having concluded that the fencing and retaining wall along Greenfield Avenue are “Shared Property” within the meaning of the Co-Tenancy Agreement, I need not consider the next issue as to whether the Co-Tenancy Agreement requires an amendment with the consent of all owners as opposed to a resolution pursuant to article 9.5.

Did the Respondents act in bad faith or in breach of their duties and obligations pursuant to the Co-Tenancy Agreement?

[73] The Applicants allege bad faith on the part of the Respondents. The Intervenor is silent on this issue. In their Amended Application, the Applicants sought an order directing a trial of an issue to determine whether or not the Individual Respondents were in breach of their duties and responsibilities as set out in section 3.7 of the Co-Tenancy Agreement and for a further determination as to whether they would be prevented from being identified by the Committee or any owner directly or indirectly under the provision of the Co-Tenancy Agreement for any costs awarded against them.

[74] As Committee members, the Individual Respondents are unpaid volunteers from the Community. The relevant sections of the Co-Tenancy Agreement are as follows:

3. Management of the Shared Property

3.1 Management of Shared Property. […] When a majority of the units have been sold by Claridge, the management and supervision of the maintenance and repair of the Shared Property excluding the party walls shall be exercised by a Co-Tenancy Committee. The duties of the Co-tenancy Committee are as follows:

(a) to prepare an annual budget for the maintenance, repair and general upkeep of the Shared Property and all other areas that are the obligation of all of the Owners under section 4 of the Agreement;

(b) to estimate the amount of Shared Expenses for the ensuing fiscal year;

(c) to establish a reserve fund for contingencies including major repair and replacement of Shared Property;

(d) generally, to oversee the management and operation of the Shared Property and, if deemed necessary, to appoint a property manager which will deal with the day to day management, accounting and general administrative matters and will fully account to the Co-tenancy Committee in respect thereof;

(e) to revise the rules and regulations imposed upon the Owners relating to Shared Property asset out in Schedule “E” to the Agreement relating to the Shared Property, when deemed necessary; and

(f) account to the Owners from time to time with respect to the foregoing and, in particular, to call annual meetings of the Owners in accordance with Section 9 of this agreement.

3.7 Indemnity of Committee Members and Officers. Every committee member and officer of the Co-Tenancy Committee and his heirs, executors, administrators and other legal personal representatives shall be indemnified and saved harmless by the owners from and against:

(a) any liability and all costs, charges and expenses that he sustains or incurs in respect of any action, suit or proceeding that is proposed or commenced against him for or in respect of the execution of the duties of his office; and

(b) all other costs, charges and expenses that he sustains or incurs in respect of the affairs of the Co-tenancy:

provided that:

(i) the Co-Tenancy Committee is advised of any such action, suit or other proceeding, or cost, charge or expense, forthwith after the committee member or officer received notice thereof, and

(ii) the Owners are given the right to join in the defence of the action, suit or proceeding:

Notwithstanding the foregoing, no committee member or officer of the Co-Tenancy Committee shall be indemnified by the Co-Tenancy Committee in respect of any liability, cost, charge or expense that he sustains or incurs in or about any action, suit or other proceeding as a result of which he is adjudged to be in breach of any duty or responsibility set out hereunder, unless in an action brought against him in his capacities committee member or officer he has achieved complete or substantial success as a defendant.

3.13 Agents and Attorneys. The Co-Tenancy Committee shall have the far from time to time to appoint managers, personnel, agents or attorneys to the Co-Tenancy with such powers of management or otherwise, including the party sub-delegate, as may be thought fit. Without limiting the generality of the foregoing, the Co-Tenancy Committee may appoint a property manager which property manager shall be fully accountable to the Co-Tenancy Committee.

11. Indemnification

11.3 Indemnification of Co-tenancy Committee. Except in the case of gross negligence or fraud on the part of the Co-tenancy committee, its servants or agents, the Owners shall indemnify and save harmless the Co-tenancy committee members from and in respect of any and all liability and from all claims or demands or arising out of damage of or injuries to persons or property in or about or in any way connected with the Shared Property and defend at the expense of the owners all suits which may be rendered against the Co-tenancy committee members on account thereof

Position of the Applicants

[75] The Applicants say that it is clear that the Individual Respondents acted imprudently and without the interests of all owners in mind; in effect, they sided with the owners whose properties abutted the easterly boundary and failed to fulfill their duties and responsibilities as contemplated by the Agreement.

[76] The Applicants state that they have been impacted in a special and aggravated way, that they have been set unwillingly apart, and that they have been penalized by the Committee consistently for asserting concerns as a matter of principle.

[77] The Applicants argue they have been unfairly stripped of their voting rights to which they are otherwise entitled to exercise as owners of a unit; they have been subjected to unwarranted legal demands from counsel for the Committee, their title has been slandered by the improper registration of notices of default and other improper notices, and power of sale proceedings have been threatened against their unit. They add that they have lost their community voice and they no longer have quiet enjoyment of what they purchased.

[78] The Applicants say that they were compelled to bring this Application in order to enforce and protect their rights under the Agreement and to challenge the imposition of obligations on owners that are not provided for in the Agreement. They claim that they are also affected by the Committee’s failure to make a full and complete disclosure to them and to other owners of information which it held at material times.

[79] They argue that the Respondents could have and should have taken the necessary steps to have these issues determined once and finally on behalf of all owners.

Position of the Respondents

[80] The Committee maintains that it has always carried out its duties in good faith and in what it believed to be the best interests of the Kings Landing Committee. At all times, the Committee actively sought legal advice on contentious issues with owners, and with respect to the Applicants, and then relied and acted upon that legal advice.

[81] The Respondents say that they have made best efforts to navigate complex community issues in a fair, consistent, and impartial manner and they did not make decisions on the basis of any financial benefit that it would bring them personally.

[82] They note that the Applicants were invited by the Committee to put their names forward for a position on the Committee and that they chose not to do so.

[83] As for the resolution of these issues, on December 17, 2014, each member of the current Committee received an email attaching a letter dated December 15, 2014, from the Applicants’ former counsel enclosing a draft Notice of Application. He proposed that the parties cooperate in submitting an application to the Court seeking a joint determination of the outstanding legal issues based on an agreed statement of facts (on conditions that the Committee take certain steps, including restoring the clients’ full status enjoyed by all unit owners and pay his clients’ legal costs to date). Otherwise, his clients would proceed with the Application as drafted, including allegations of bad faith and intentional conduct on the part of the Committee, which he had instructions to issue by December 24, 2014.

[84] On December 19, 2014, Counsel to the Committee emailed a response explaining that the December 24, 2014, timeline was unrealistic for the reasons as previously discussed by telephone on December 18, 2014. Counsel advised that Nelligan O’Brien Payne was not in a position to respond to the letter because of a conflict of interest arising as a result of similar proceedings having been brought by Martel that included claims against Mr. Davidson and Nelligan O’Brien Payne, and the Committee was in the process of finding new counsel.

[85] Seven days later, on December 24, 2014, Christmas Eve, the Committee received a second letter from the former counsel, advising that the Notice of Application was issued that morning and the Application Record would be served shortly.

The History of the Committee’s Interactions with the Applicants

[86] To some extent, I have already canvassed the history of subsequent conduct to demonstrate that prior Committees had concluded that the fence and retaining wall were openly treated as Shared Property long before any need for costly repairs was identified. Having said that, it is necessary to review the history of this dispute.

[87] In February 2001, the Committee, as part of the Reserve Fund Study, obtained an Inspection Report from Keller Engineering with respect to the retaining wall and the perimeter wood fencing. By that time, they were considered Shared Property.

[88] Another Reserve Fund Study obtained in 2005 revealed that the retaining wall and the perimeter wood fencing continued to be considered as part of the Reserve Fund Study. In 2005, it was estimated that $50,000 would be required over 30 years to repair the retaining wall and $30,000 over 15-20 years to repair the perimeter fence.

[89] On April 1, 2009, Deerpark Management (“Deerpark”) was hired to support the work of the Committee.

[90] In June 2011, the Committee obtained a report from Keller Engineering on the condition of the retaining wall. The Report indicated that the retaining wall was structurally unsound in certain locations and was at risk of collapse. That Report recommended the removal of and reconstruction of approximately four meters of the retaining wall together with significant upgrades and improvements, and also recommended the removal and replacement of portions of the fence located behind the retaining wall.

[91] In the fall of 2011, foundation problems were being experienced by unit owners whose properties were immediately affected by the retaining wall. A special meeting of owners was held on November 10, 2011, to discuss, among other issues, the retaining wall repairs in the context of the foundation issues. Mr. Jurewicz, then-President of the Committee, set out a detailed chronology of what had occurred since the foundation issues were discovered and some of the steps that were being taken; this included the fact that an Engineering Company, EXP, had been retained to investigate the soil conditions and that a report would follow shortly thereafter.

[92] In or about March 2012, four months after commissioning EXP to conduct a geotechnical survey, the Committee retained James Davidson of Nelligan O’Brien Payne LLP to provide a legal opinion on whether the retaining wall could be treated as Shared Property and the costs of reconstruction distributed to all owners. According to the Minutes, the then-Committee recognized that the retaining wall had historically been treated as Shared Property but that it was not listed in the Co-Tenancy Agreement.

[93] The Applicants make much of the fact that there are two versions of Mr. Davidson’s opinion dated March 30, 2012. Mr. Davidson had revised it as result of a question raised by Mr. Jurewicz. Both versions contain the same summary of the facts. Both versions also contained the same following paragraph:

In my view, the retaining wall which is located along the easterly boundary of the lands is part of the Shared Property. I reach this conclusion primarily because the “sound attenuation fence along the easterly boundary of the lands” is clearly part of the Shared Property and it seems to me that the retaining [sic] is essentially part of that sound attenuation fence. [I don’t see how the Committee can maintain the sound attenuation fence without maintaining the retaining wall].

[94] Mr. Davidson acknowledged that the retaining wall is not specifically mentioned in the Co-Tenancy Agreement and that his interpretation was open to challenge. Mr. Davidson attended at the May 29, 2012, AGM and advised those owners present that, in his opinion, the retaining wall was Shared Property. Mr. Jurewicz read a detailed report completed by Keller Engineering in 2011. The Keller Report indicated that the cost to repair the retaining wall would be significantly higher than what had been estimated in the Reserve Fund Study and, accordingly, the Committee would need to increase maintenance fees. The Committee had obtained four quotes from qualified contractors. Keller Engineering recommended the lowest bidder, Prestige, which had submitted a bid of $177,000.00.

[95] According to the Minutes, there was no objection to this expenditure, nor were there any comments from the Community questioning whether the retaining wall was Shared Property, nor did any owner request that the draft 2012 AGM Minutes be amended. Martel submits that she did object, but that her objection was not recorded. In my view, nothing turns on this since her objections were recorded soon after. Furr was in attendance at that meeting.

[96] There were other divisive issues in the Community that were discussed at the AGM: the purchase of an adjoining piece of property known as Redmond Place and the relocation of air conditioning units.

[97] Duhamel was appointed President. He then circulated a letter to the Community outlining what he considered to be priorities for the Committee; this was followed by a newsletter providing an update on the retaining wall. On June 12, 2012, Duhamel received the e-mail from the Applicants referred to in paragraph 66. Following this email, there was an exchange of several emails between the Applicants and the Committee. As part of the exchange, Duhamel provided a copy of the June 2011 Keller Report and an excerpt from a legal opinion obtained by the former Committee advising that the cost to repair the retaining wall was not considered an improvement or a change to the Shared Property but rather it is maintenance and repair, which fell under the responsibility of the Committee.

[98] The issue then was whether the work was a “Repair” or an “Improvement” to Shared Property. The Applicants offered to meet to discuss the matter in person, which offer was accepted. The parties met on June 24, 2012.

[99] On June 29, 2012, the Committee received the letter from William Hunter previously referred to. As noted, Mr. Hunter took the position that the work required on the retaining wall was “an addition, alteration, or improvement to or renovation of the Shared Property” and a confirming vote of the owners was required before the Committee could retain a contractor to proceed with the work on the retaining wall. Notably, Mr. Hunter stated that “[t]he upper retaining wall appears to be Shared Property pursuant to the Co-tenancy Agreement.” Mr. Hunter also wrote directly to Keller Engineering.

[100] On July 12, 2012, Mr. Davidson responded to Mr. Hunter’s letter maintaining his conclusion with respect to the Committee’s authority to proceed with retaining a contractor to complete the work on the retaining wall. He further advised that the Committee would wait until July 31, 2012, to sign the contract in order to afford Mr. Hunter’s clients an opportunity to call a meeting of the owners. In the July 2012 Community newsletter, the Committee advised the Community of the objection raised and the legal opinion obtained by Mr. Davidson in response to same.

[101] The Applicants responded on July 17, 2012, as already noted. The Applicants asked for copies of the Keller contract, which were provided on July 23, 2012. The contract was signed on July 31, 2012.

[102] On October 11, 2012, the Committee received an opinion from Mr. Davidson as to whether the Committee could levy a special assessment in order to cover the costs incurred to repair the retaining wall.

[103] On October 30, 2012, there was a special meeting of the owners called by the Committee, at which the Committee described the work that had been completed on the retaining wall and certain future work that would be required to complete the reconstruction. The Community was informed that Keller Engineering had advised that the portion of the retaining wall that had not been repaired would also require repairs in the next five to eight years. As the original anticipated life of the retaining wall was 30 years, there was not enough money in the Reserve Fund to pay for these repairs in five years.

[104] The Committee announced that it would impose a $3,300 special assessment on each owner to cover the costs of the reconstruction, along with a $55.00 additional monthly assessment (“Additional Monthly Assessment”) earmarked to fund anticipated future repairs of the retaining wall. The Applicants advocated for another option but this was defeated in a vote put to the owners. At the special meeting, Martel objected to the retaining wall being considered as Shared Property and her objection was recorded in the Minutes.

[105] A copy of a newsletter containing the draft Minutes of the October 30, 2012, special meeting was circulated by the Committee in or about early December 2012 and it referred to the fact that an earlier Committee had decided in 2002 to treat the retaining wall as Shared Property.

[106] On December 12, 2012, Furr sent an email requiring “that the Committee provide to us all written records related to the ‘decision’ to add the wall to Shared Property.” Furr was now taking the position that the Committee lacked authority to include the retaining wall as part of the Kings Landing Shared Property and the Applicants declined to pay any part of the special assessment or additional monthly assessment but continued to pay the usual Co-Tenancy Fee.

[107] Duhamel conferred with Verdun and Mr. Davidson who confirmed that he stood by his original opinion that the retaining wall was Shared Property. Duhamel responded to Furr’s inquiry on December 19, 2012.

[108] Deerpark sent Furr and Lundgren a letter on February 21, 2013, seeking payment of arrears in relation to the special assessment. On March 5, 2013, Duhamel received a letter from a lawyer, Bruce Simpson, on behalf of Martel taking the position that the retaining wall was not on co-owned lands and that there was no agreement to contribute to its maintenance. On March 6, Duhamel received a letter from the Applicants responding to the letter from Deerpark. The Applicants advised that they had received independent legal advice that they were not responsible in any way to contribute to the upkeep and/or reconstruction of the retaining wall.

[109] Following the receipt of these letters, the Committee sought legal advice from Mr. Davidson once again. In an email dated March 8, 2013, Mr. Davidson confirmed that it was his opinion that the retaining wall is part of the Shared Property; however, he did acknowledge that there was room for argument on the point because the Co-Tenancy Agreement is not clear. He provided suggestions as to how the issue might be resolved, which included seeking a vote of the owners to adopt a resolution confirming that the sound attenuation fence along the easterly boundary of the lands includes the retaining wall. Mr. Davidson further recommended that the Committee write to the owners of the units that back onto the retaining wall to suggest that they seek independent legal advice. Mr. Davidson also recommended that the Committee write to defaulting owners to confirm its position that they were in default of the special assessment and that interest was accruing. The Committee did this on March 21, 2013.

[110] The Committee sent out a Budget Notice stating that the new Co-Tenancy Fee for the period April 1, 2013, to March 31, 2014, would be $222 per month. According to the Notice, part of the fee increase consisted of a $55.00 per month increase in Shared Expenses, for the next five years as a special contribution to the Reserve Fund for future reconstruction of the retaining wall. The budget also included an increase of $10,000 to account for possible legal fees that could be required to resolve a dispute among homeowners with respect to whether the retaining wall was Shared Property.

[111] The Applicants indicated that they would not be paying any money for the retaining wall reconstruction. Further emails and correspondence were exchanged. On April 13, 2013, the Committee circulated a newsletter to all owners providing notice that the Committee intended to resolve the issue of the retaining wall as per Mr. Davidson’s advice. That notice said:

In order to resolve this issue, the Co-Tenancy Committee has contacted Mr. Davidson again. On his advice, the Committee plans to address this issue at the next Annual general Meeting on May 28, 2013 and put it to a vote under section 9.5 of the Co-Tenancy Agreement.

Section 9.5 Unless otherwise specified in this Agreement, any resolution passed by a majority vote of the owners shall be binding on owners and their respective heirs, executors, administrators, successors and assigns.

The Committee recognizes that unanimous agreement is required to amend the Co-Tenancy Agreement. However, the vote at the AGM is intended to permit owners to vote on an agreed interpretation of the Agreement regarding the retaining wall.

If some owners are not satisfied with the outcome of the vote at the AGM, the next step would be Arbitration under section 12.1 of the Agreement, which also requires a meeting of the owners and a majority vote as the first step in the process.

12.1 Arbitration If, during the continuance of this Agreement, there is any dispute, difference, or question which is not covered by the provision of this Agreement or which has not been resolved at the the meeting of the owners by decision approved by the majority of owners, the such dispute or question shall be referred to arbitration {…}

The Co-Tenancy Committee is hopeful that the dispute about the status of the retaining wall can be resolved by majority vote at the Annual General Meeting in May 28, 2012 [sic]. Failing that, the committee will take the necessary steps to proceed to Arbitration.

It should be noted that owners have refused to pay the fees related to the retaining wall are considered to be in arrears. However, while owners were in arrears are normally not permitted to vote at meetings of owners under Section 9.4 of the Co-Tenancy Agreement, all owners who have paid the regular Co-Tenancy fees will be permitted to vote at the Annual General Meeting (i.e., regular fees excluding the additional assessments for repairs to the retaining wall)

[112] By letter dated April 17, 2013, distributed to the Community, Martel set out her position that the only section of fence that constituted Shared Property was the section of fence behind the mailboxes along the private roadway at the south-east boundary of the property.

[113] On April 17, Duhamel extended an invitation to both the Intervenor and the Applicants to present their positions to the owners at the AGM in order to have as much information available to the owners before they voted on the issue of the retaining wall. There was a further exchange of information and Duhamel met with the Intervenor on April 18, 2013, and with the Applicants on April 19, 2013.

[114] On April 25, 2013, Furr emailed Verdun and asked that their views be included in the newsletter; namely that the Co-Tenancy Committee or any subset of the owners lacked any authority to treat the retaining wall as Shared Property.

[115] When it came time to send out the newsletter and the notice of the AGM, the Committee decided not to include the last paragraph of Furr’s position because the Committee viewed it as inflammatory. Furr emailed the Committee and accused it of having failed to accurately set out his position and withholding key information from the Community.

[116] On April 29, 2013, Duhamel received another email from Furr advising that he had received a copy of the letter that the Committee sent to the owners of the units backing onto Greenfield Avenue on March 21, 2013. Furr alleged that the letter was “highly inappropriate” and that he would “promptly be providing a copy of your letter to our legal counsel.” Furr then listed what he alleged were seven “factual and legal errors.” Furr demanded a copy of Mr. Davidson’s legal opinion stating that the retaining wall was Shared Property and that the Committee correct “in writing” the factual errors and misrepresentations “you’ve made on our behalf to the owners that received your private letter.”

[117] On May 7, 2013, Verdun responded to Furr’s inquiry by providing an excerpt of Mr. Davidson’s opinion dated March 30, 2012. Furr responded that same day to say that he suspected that there was no legal opinion from Mr. Davidson prior to the 2012 AGM, but in the event that there was one, he requested a complete and full copy of Mr. Davidson’s legal opinion.

[118] On May 9, 2013, Furr emailed Duhamel demanding copies of yet more documents and requiring that they be provided by May 13, 2013. Duhamel responded by inviting Furr to again look through the Kings Landing boxes and binders himself.

[119] On May 13, 2013, Verdun responded to Furr to advise as follows:

I can assure you, as a member of the previous Co-Tenancy Committee, that we did receive a legal opinion from James Davidson that the retaining wall is Shared Property, in March 2012, before we authorized repairs to the retaining wall.

There has been much correspondence with James Davidson since the spring of 2012 on the issue of the retaining wall and I do not have time to print and provide you with copies of everything. James will be at the AGM and will provide his legal views on the various issues related to the retaining wall.

Please note that the current and previous Co-Tenancy Committees have acted in good faith.

[120] According to Duhamel, the continued demands for documents with deadlines being imposed, and unfounded allegations of wrongdoing on the part of the Committee being raised by Furr, were taking a toll. On May 13, 2013, Duhamel emailed Furr to say:

Concerning your ongoing demand for information and documents, as we are already having difficulty to find enough time to prepare for the upcoming AGM in addition to a myriad of other commitments, you are more than welcome to come look through the Kings Landing boxes and binders. The only restriction is that any document cannot leave the premise.

Lastly, I find the tone of your emails, insinuations of wrongdoing, and the use of deadlines to be inappropriate. Since you appear to have higher expectations of the time that Emmy, Lynne and I have available to dedicate to our community, I would encourage you or Kathleen to submit your nomination for the position of secretary and come help the Committee deal with all these issues.

Neither of the Applicants responded to Michel’s invitation to go through the boxes of Kings Landing documents, nor did either of them submit their nomination for the position of secretary.

[121] On May 15, 2013, Duhamel provided Furr with a copy of Mr. Davidson’s legal opinion dated March 30, 2012, stating that the retaining wall was Shared Property. Furr responded by email requiring copies of the documents Mr. Davidson referenced in his opinion dated March 30, 2012. In addition, Furr noted that the excerpt of Mr. Davidson’s opinion provided by Verdun on May 7, 2013, did not appear in the opinion that Duhamel had provided earlier that day by email. Furr required a copy of the document from which that excerpt had been taken. Furr required that the documents be provided no later than May 21, 2013, so that his lawyer could review same in advance of the AGM. Duhamel provided Furr with copies of the documents he requested on May 17, 2013, and asked Verdun to locate the document from which she had extracted the extract.

[122] It took Verdun several months to track down the document from which she had extracted the quote. Verdun and the Committee later realized that there were two slightly different versions of Mr. Davidson’s legal opinion, which has been explained earlier. Verdun provided a full copy of Mr. Davidson’s opinion from which she had extracted the excerpt to Furr on November 8, 2013.

[123] On May 2, 2013, Mr. Davidson had provided the Committee with a revised legal opinion with respect to the retaining wall to take into account the Amberwood[^3] decision. It did not change Mr. Davidson’s opinion with respect to whether the retaining wall was Shared Property but rather emphasised the importance of assumption agreements upon re-sale of the units. In that opinion letter, Mr. Davidson states that he was “advised by Heinz Keller that the fence is not anchored or in any way physically connected to the retaining wall – but the fence of course relies upon the retaining wall for support.”

[124] On May 21, 2013, Furr and two other owners wrote to Mr. Davidson taking the position that he was in a conflict of interest. That letter was copied to the Committee and to the managing partner of Nelligan O’Brien Payne LLP.

[125] That revised opinion was provided to Lundgren on May 24, 2013. Lundgren then wrote to the community enclosing a copy of Mr. Davidson’s opinion, intimating that the Committee had not been transparent with the owners.

[126] Mr. Davidson attended the AGM and just prior to the start of the meeting, he handed each owner a copy of a memorandum on law firm letterhead dated May 28, 2013, as to whether the retaining wall constituted Shared Property that a bare majority of the owners present at a meeting could “agree upon a common interpretation of” under section 9.5 of the Co-Tenancy Agreement.

[127] Martel presented her position that Shared Property under the Co-Tenancy Agreement cannot be located on private property, and because the retaining wall was located on the private property of the units backing onto Greenfield Avenue, it cannot be Shared Property. It was Martel’s position that the only “sound attenuation fence” that qualified as Shared Property was the fence behind the mailboxes at the entrance to Kings Landing because that fence was located on Shared Property.

[128] Furr presented his position that the retaining wall is not Shared Property because it is not specifically mentioned in the Co-Tenancy Agreement. In his view, the sound attenuation fence referred to in the Co-Tenancy Agreement was located at the northeast corner along the northerly property line for Lot 31, which was perpendicular to Greenfield Avenue and faces Nicholas Street. He also raised his concerns that, in his view, the motion recommended by Mr. Davidson was not valid, as it would amend the Co-Tenancy Agreement and an amendment requires unanimous agreement of all the owners.

[129] Duhamel presented the reasons for which the Committee understood the perimeter fence, including the retaining wall, to be treated as Shared Property by all previous Committees and by Claridge and by all original owners until the objection in October 2012. Duhamel indicated that a failure to resolve the retaining wall issue by vote would result in arbitration or court proceedings, which could cost over $30,000 in legal fees payable out of the Co-Tenancy funds.

[130] After the presentations, there was significant discussion on the issue followed by a vote on the resolution as proposed by Mr. Davidson. The Committee allowed the owners who had not paid the special assessment to vote. 39 votes were recorded in favour of the resolution and 16 votes were recorded in opposition. The Applicants’ and the Intervenor’s votes were counted for the purpose of this motion.

[131] Given the importance of the retaining wall issue, it had dominated the entire time allocated for the AGM on May 28, 2013. The AGM was adjourned at approximately 11:30 pm to be reconvened to deal with the outstanding items on the Agenda. Before adjourning the meeting, the owners elected Helene Thomas (“Thomas”) to the position of secretary to the Committee. At the last AGM, Julie Hopkins had been elected to the position of secretary for a three-year term. According to Duhamel, she resigned two months into her term following threats of litigation from the Applicants. Lynne Johnson filled in temporarily until a new secretary could be elected at the 2013 AGM.

[132] On June 5, 2013, the Committee sent out a Notice that the continuation of the 2013 AGM would take place on June 26, 2013. The remaining issues on the agenda included:

a. A vote on the location of the sound attenuation fence;

b. A vote on the relocation of the air conditioning units; and,

c. Any new business.

[133] The Notice also contained the following paragraph:

Owners are reminded that those who have not paid the $3300 per unit for the repair of the retaining wall and the additional maintenance fee of $55 per month for the future repairs of the retaining wall, are still in default and will not be able to vote at the upcoming meeting. It is therefore recommended that if you want to be able to vote (in person or by proxy) at the next meeting that you pay any arrears to Deerpark prior to the meeting.

[134] On June 7, 2013, Furr received a letter from Deerpark requiring payment of the special assessment including alleged arrears of the $55 per month increase to the Co-Tenancy Fee dating back to April 1, 2013. On or about June 20, 2013, Furr wrote to Duhamel to advise that he and Lundgren did not accept the validity of the retaining wall and fence motions and would not pay the special assessment and additional monthly fee absent unanimous agreement by the owners to amend the Agreement. He also objected to the Committee’s denial of their right as owners to vote.

[135] At the continuation of the AGM on June 26, 2013, the following motion was made:

Be it resolved that in addition to the retaining wall located along the easterly boundary of the Lands, the sound attenuation fence located along the easterly boundary of the Lands (referred to in paragraph 2.3(h) of the Co-Tenancy Agreement) includes the entire perimeter fence on the easterly side of the Lands, including the fence dividing the Lands from 99 Greenfield Avenue, as well as the fence along Greenfield Avenue comprised of both wood and brick and iron.

[136] The motion passed with 32 voting in favour (plus one owner in default) and 14 voting against (plus three owners in default).

[137] On June 27, 2013, the day after the second part of the 2013 AGM, Furr took the position that all documents ought to have been stored with the Secretary, Thomas, in accordance with the Co-Tenancy Agreement. He further requested that all documents be transferred to Thomas before Duhamel left on vacation on June 30, 2013.

[138] Also, on June 27, 2013, Thomas requested that the documents be transferred to her because both Verdun and Duhamel were scheduled to be away on holidays over the same two-week period. Duhamel raised concerns about the high turnover of the position of Secretary and the fact that Thomas had accepted the position reserving the right to resign. Thomas eventually agreed in early July 2013 that it made more sense for the documents to remain with Duhamel.

[139] On July 24, 2013, Duhamel offered to put the issue of timely responses and access to documentation from the Committee on the agenda of the next meeting of owners. He had also been pushing to make documents electronically available to all owners.

[140] Furr continued to insist that the documents remain with the Secretary even though Thomas responded that “circumstances have put the documents in the care of the president and I feel that the documents should remain there at this time till the committee reviews how the documents should be kept (what format) and what filing system we should use to preserve all of the communities documents.”

[141] On September 3, 2013, Duhamel responded to advise that the issue of the transfer of documents was closed but invited Furr to come and look through the Co-Tenancy documents himself if he was unable to wait for Verdun’s return. On September 25, 2013, Thomas resigned as Secretary due to health reasons.

[142] According to Duhamel, the demands from the Applicants for documents with short turnaround deadlines were becoming onerous since the Committee was now down to two members. Accordingly, Verdun contacted Mr. Davidson’s colleague Ms. Christy J. Allen at Nelligan O’Brien Payne for a legal opinion regarding the Committee’s obligations in providing information.

[143] Ms. Allen advised that:

• Owners are entitled to see records, but only for purposes appropriately related to the property;

• Board/ Committee members cannot be unreasonably beset with owner requests for records

• In short, owners cannot set out on “fishing expeditions”, by requiring the Committee to produce each and every document related to a particular issue or topic. It sounds as though the types of requests that the King’s Landing Committee has recently received are of this nature.

• In addition to the foregoing, you are absolutely correct that the Committee must be mindful of issues of privacy and confidentiality when it is responding to owners’ requests for records. In particular, in our view, it would not be proper to allow an owner access to records related to other owners or units, nor would it be proper to allow an owner access to records that related to actual or pending legal action (such as strategic advice, etc.)

[144] After the resolutions were passed with respect to the retaining wall, the Committee received letters on a monthly basis from the Applicants wherein they refused to pay the additional assessment of $3,300.00 as well as the additional $55 per month. They remained up to date on their Co-Tenancy Fees that were unrelated to the retaining wall.

[145] On December 30, 2013, and January 20, 2014, Furr received demand letters from Nelligan O’Brien Payne LLP on behalf of the Committee, demanding payment of the special assessment and additional monthly assessment plus legal costs and threatening registration of notices under section 71 of the Land Titles Act, R.S.O. 1990, c. L.5 (“Section 71 Notice”) and the initiation of power of sale proceedings. The January 20, 2014, letter threatening Power of Sale was also sent to the Applicants’ mortgage lender, National Bank.

[146] In January 2014, the work for the arbitration regarding the air conditioning issue (which was scheduled for April 2, 2014) was ramping up and the Committee was down to two members. Starting at the end of January 2014 through to the end of March 2014, Lundgren began sending multiple requests to the Committee for information concerning the purchase of Redmond Place. As the Committee was busy preparing for the upcoming arbitration, the Committee advised Lundgren that her requests for this information would have to wait until after the arbitration. Lundgren insisted upon the information, attending at Duhamel’s unit for that purpose.

[147] In or about March 2014, Furr discovered that the Committee had registered a notice on title to their unit, which purported to certify the retaining wall and fence motions (“Notice”). This notice was also registered on title of all units.

[148] In March 2014, the Committee circulated a notice to owners advising of a Co-Tenancy Fee increase for the 2014-2015 year. Fees were increased to $233 per month beginning April 1, 2014. The Notice referred to this as an “additional contribution to the Reserve Fund to cover the second half of repairs to the retaining wall.”

[149] On March 24, 2014, Lundgren sent an email to Mr. David Duncan of Deerpark Management taking issue with the fact that documents relating to the Co-Tenancy were not available when she and Furr attended at their offices on March 18, 2014, for a pre-arranged meeting with Laura Duke, assistant property manager. Ms. Duke had advised them upon their arrival that the documents would not be provided upon advice from Nelligan O’Brien Payne. Duhamel received correspondence from Mr. Duncan alleging that both Furr and Lundgren had been abusive to his staff.

[150] On March 27, 2014, Martel also began emailing Deerpark Management demanding immediate access to the Kings Landing documents for the following day.

[151] On March 27, 2014, the Committee met with Ms. Allen to discuss the ongoing strain that the requests for information were having on the Committee and Deerpark Management. The Committee was also concerned that other owners may be unwilling to serve on the Committee. As a result, the Committee sought a vote of owners at the next AGM to implement a policy with respect to requests for information and an anti-harassment policy.

[152] On March 29, 2014, Furr wrote to the Committee and Deerpark Management to reiterate his position directing the Committee to immediately remove the February 26, 2014, Notices registered on the title to his unit. He enclosed a cheque in the amount of $178.00 ($233.00 less $55.00) for payment of the Co-Tenancy Fee.

[153] At this time, the Committee was dealing with serious allegations against the Committee, James Davidson and Nelligan O’Brien Payne from another owner (Chapadeau) and the threat of an imminent law suit.

[154] On April 11, 2014, Ms. Allen sent a letter to each of the owners of the 17 units whose property “contains” part of the retaining wall along the easterly boundary of Kings Landing to advise that there was a group of owners (i.e. the Applicants, the Intervenor and Chapadeau) that did not agree with their opinion that the retaining wall was part of the “Shared Property” as defined under the Kings Landing Co-Tenancy Agreement and that they understood that this group of owners planned to commence a court action with respect to this issue. She further advised that if this group of owners was successful, then the owners of the 17 units would be directly affected and may be found responsible for 100% of the costs associated with the retaining wall (including the recent major repairs). Ms. Allen recommended that they seek independent legal advice with respect to this issue.

[155] On April 20, 2014, the Committee distributed a newsletter to the Community to update the owners on these and other issues, including a motion that would be brought by Chapadeau at the 2014 AGM to remove Duhamel from his position as President of the Committee.

[156] On May 1, 2014, Furr emailed the Committee and requested a response confirming that he and his spouse would have the right to vote at the upcoming AGM no later than May 7, 2014. After consulting with Ms. Allen, Verdun responded to Furr to advise that the same voting procedures would be followed as at the previous AGM in that their vote would be recorded but not counted in the results.

[157] On May 5, 2014, the Committee distributed the Notice of the May 2014 AGM scheduled for June 2, 2014, at 7 pm, which included the Agenda, Notes on the Agenda, and the proposed policies on requests for information and anti-harassment.

[158] On May 20, 2014, Bruce Simpson advised that he had issued his client’s Statement of Claim. On May 29, Furr emailed the Respondents and demanded that the s. 71 Notices be removed.

[159] The 2014 AGM took place on June 2, 2014. Ms. Allen attended in order to deal with any legal questions that the owners had with respect to the issues on the Agenda and to explain the importance of having a buyer execute an assumption agreement should an owner consider selling his or her unit.

[160] The motion to adopt the anti-harassment policy was carried with 33 votes in favour, 16 against and 2 abstentions. The votes of the three owners in default were included in these numbers. If their votes had not been included, it would not have changed the result.

[161] The motion to adopt a policy for the request of information and documentation was carried with 44 votes in favour and eight votes against. The votes of the three owners in default were included in these numbers. If their votes had not been included, it would not have changed the result.

[162] The Chapadeau motion to remove Duhamel as a Committee member was unsuccessful, with 39 votes against the motion and 15 votes in favour. At Chapadeau’s request, the voting was by secret ballot. The votes of the three owners in default were included in these numbers. If their votes had not been counted, it would not have changed the result.

[163] Hughes put his name forward as Secretary, and although it was not her intention, Verdun agreed to again stand as Treasurer as no one else from the Community was willing to come forward. No other nominations were received from the floor, and Hughes and Verdun were acclaimed as the Secretary and Treasurer respectively, with 44 votes in favour and none against.

[164] Meetings of the Committee and of owners have continued. This Application was issued on December 24, 2014.

Analysis and Conclusion

[165] I have set out the history of this dispute in considerable detail, although it does not capture the entirety of the communications that from part of the Record. In my view, the sheer volume of these documents provides the lens through which the actions of the Individual Respondents must be viewed. These documents reveal the continued efforts made by the Respondents to satisfy the Applicants’ unrelenting demands for documentation and information. The Applicants declined offers to sit on the Committee and preferred to engage in a campaign against the Committee members that led the community to eventually vote for, and approve, policies on requests for information and against harassment. The monetary amount in issue in this Application is approximately $6,600.00 per homeowner. Only the Applicants and the Intervenor have refused to pay these amounts.

[166] Since 1999, the Co-Tenancy Committee and the Community treated the as-built fence and retaining wall as Shared Property. Decisions were made by previous Committees long before any need for costly repairs and without consideration as to who might be impacted by the failure of the retaining wall. Duhamel does not benefit from any decisions as he is not an “affected owner.” During this time, the Individual Respondents were dealing with other contentious issues as well. For a significant period of time, Duhamel and Verdun were the only remaining Committee members trying to respond to the Applicants’ demands.

[167] The record shows that, at all times, the Committee consistently sought legal advice prior to taking any action that would impact the community or any owner. If anything, it acted out of an abundance of caution. The Applicants’ allegations that Mr. Davidson was somehow in a conflict of interest have no merit. He was counsel to the Committee. The Committee was entitled and required to seek legal advice to assist it in the discharge of their responsibilities in the management of Shared Property. Mr. Davidson was aware of the issues arising from the interpretation of the Agreement. He attended at meetings to explain his position and his advice to the Committee.

[168] The Applicants and the Intervenor had their own counsel. The Applicants claimed to have a differing legal opinion, but they did not share it. They were communicating directly with Mr. Davidson and copying the managing partner of his law firm with their allegations. I am satisfied that the Respondents provided all of the information requested, gave the Applicants access to everything, and were being transparent.

[169] If anything, it is the Applicants who have been less than transparent. They did not disclose their emails and correspondence where they agreed at one time that the retaining wall was Shared Property.

[170] Furr’s Affidavit in support of the Application is problematic. At paragraph 83 of Furr’s affidavit, he alleges that Lundgren had to wait 11 months to get a response from the Committee about Mr. Davidson’s opinion regarding sections 5.2(a) and (b) of the Agreement, yet he failed to disclose a response he received from Duhamel dated a few days after his original request. When confronted with this in cross-examination, Furr engaged in a hair-splitting exercise and refused to acknowledge that Duhamel’s responding email said what it said.[^4]

[171] Furr further admitted to being untruthful and of having altered an email reply from Verdun of May 7, 2013, which he attached as exhibit ZZ to his affidavit.[^5] In my view, this admission fatally undermines the Applicants’ allegations of bad faith.

[172] In their factum, the Applicants allege that parties acting in good faith, with the understanding that final resolution of all issues was in the interest of all future unit owners, should have no difficulty in coming to an early recognition of the advantage of consensus and cooperation. They submit there was “a soft way to go forward and a hard way” in resolving the issues. They accuse the Committee of choosing the “hard way.” They say they were left with no choice but to prosecute this application.

[173] The Applicants’ attempts to portray themselves as victims who were forced to bring this application are contradicted by the record before me. Their communications consist of a catalogue of insinuations, deadlines and demands. Their counsel did not extend an offer of compromise on December 17, 2014, he delivered an ultimatum to the Respondents with an unrealistic timeline. On December 24, Christmas Eve, the Applicants issued their application seeking extensive relief including allegations of bad faith and intentional conduct. They went so far as to name Hughes, who had no responsibility for these events. Given the extent of these materials, it is evident that they had been prepared well in advance of December 17, 2014, with no realistic intention of seeking any form of compromise.

[174] I find that the Individual Respondents acted, at all times, in good faith, and that the allegations of bad faith are without merit.

[175] Having made these findings, I invite the Respondents to submit their position on costs, not exceeding 10 pages, within 30 days of the release of this decision. The Applicants and the Intervenor are to respond 30 days thereafter.

Mr. Justice Robert N. Beaudoin

Released: April 4, 2018

COURT FILE NO.: 14-62967

DATE: 20180404

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

STEVEN FURR and KATHLEEN LUNDGREN

Applicants

– and –

MICHEL DUHAMEL, EMMY VERDUN and JACK HUGHES and THE KINGS LANDING CO-TENANCY COMMITTEE

Respondents

REASONS FOR JUDGMENT

Beaudoin J.

Released: April 4, 2018

[^1]: Jack was elected to the Committee after the events giving rise to this Application.

[^2]: Cross examination July 6, 2016 p. 28-30, Q. 147-159

[^3]: Durham Condominium Corporation No. 123 v. Amberwood Investments Ltd. (2002), 2002 CanLII 44913 (ON CA), 58 O.R. (3d) 481, 157 O.A.C. 135 (C.A.).

[^4]: Cross-examination of Steven Furr, dated July 16, 2016, pp. 96-99, Q. 488- 502.

[^5]: At p. 109, Q. 544- 562