COURT FILE NO.: CV-17-1750

DATE: 2020 02 04

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Neill S. Turner, Applicant

AND:

Peel Condominium Corporation No. 42, Respondent

BEFORE: TRIMBLE J.

COUNSEL: Kas Marynik, Counsel for the Applicant

Greg Marley, Counsel for the Respondent

HEARD: October 3, 2019

ENDORSEMENT

APPLICATION

[1] In this Application, Mr. Turner seeks an order a) appointing an inspector, b) the removal of the current Board, c) ordering new elections for a new Board, and d) a declaration that the current Board acted oppressively and in a way that was unfairly prejudicial to and disregarded his rights and interests. Further, he seeks an order restraining the current Board from any further action.

[2] Mr. Turner says that he is entitled to this relief because the Board acted unilaterally, and without authority when it entered into an agreement with a contractor to re-clad all of the buildings with new siding and entered into a loan agreement to finance the recladding, among other things.

THE PARTIES

[3] Peel Condominium Corporation No. 42 is a 68-unit, non-profit residential townhouse development in Mississauga. Mr. Turner is a unit owner. He was also a Board member from September 2010 to September 2014.

[4] PCC No. 42 is operated by a Board comprising of five volunteer members who are elected for three-year terms by the unit owners

THE POSITIONS OF THE PARTIES

[5] Mr. Turner raises a number of allegations against PCC No. 42 which can be summarized under the categories, below, the totality of which he says is oppression by the Corporation. I have placed both Mr. Turner’s and the Board’s positions under each heading:

a. Failure to Properly Document Board Meetings and Resolutions

[6] Mr. Turner says that in order for the Corporation’s bylaws to be effective, they must be approved by the Board before they are taken to a general meeting where they are approved by the unit owners. The unit owners approved the bylaws on September 14, 2011. There was no Board meeting at which a Board resolution might have been passed on August 16, 2011.

[7] Mr. Turner also claims that the Board failed to pass a resolution at Board meetings approving the Corporation’s financial statements produced by the Auditors and failed to document the change in property management that occurred in January 2011, before taking the issues to unit owners’ meetings.

[8] Further, the Board changed management and bookkeeping services in 2011, without a proper resolution to do so. Therefore, the services of Mr. Atkin, the property manager thereafter, were not properly retained.

[9] Finally, Mr. Turner complains that the Board’s meetings were irregular and not minuted, and were often not held at all.

[10] PCC No. 42 disputes that its by-laws or the legislation require the Board to approve financial statements by formal resolution or to hold and minute Board Meetings. That is PCC No. 42’s practice, however.

[11] Further, Mr. Turner was a member of the Board for three years while this practice was followed. He never complained about the Board’s actions for the three years he was a member, nor of the procedure the Board followed. As to the audited financial statements, because they are prepared by third party auditors, the Board has no authority to amend them. The Members merely sign them to acknowledge receipt.

b. An Untendered and Unapproved Contract

[12] Mr. Turner says that, beginning in September 2011, the Board entered into three separate contracts to remove the condominium buildings’ old vinyl siding and install replacement vinyl siding. The initial contract was signed on September 19, 2011. It was not accepted by the Board and not put to the unit owners for approval until November 9, 2011, by which time the contract was binding. A contract signed before it is approved by the Board is an improper contract under s.32 of the Act. It is void.

[13] The contract for the Phase II was entered into on May 20, 2013, and provided that units 34 to 39 would be re-clad. Another contract for the same work was entered into in July 2013. In any event, there was not a proper tendering for the Phase II contract. It was not approved by Board.

[14] The contract for the Phase III appears to have been entered into on December 13, 2013. There was no Board meeting which took place between September 3, 2013 and January 8, 2014 at which the Board might have adopted a resolution to proceed with the Phase III of the wall cladding project.

[15] The Board did not notify the unit owners that Phase III was going ahead until January 21, 2014. Therefore, the unit owners did not have the opportunity to requisition a meeting before the contract became binding as set out in s. 97(3) of the Act.

[16] PCC No. 42 argues that Mr. Turner misunderstands both the contract and the maintenance and repair provision of the Condominium Act.

[17] Maintenance and repair of the Corporation’s assets is PCC No. 42’s major obligation. The vinyl cladding needed replacement. The job was designed and supervised by and engineer and put to tender. The lowest bidder was retained. One contractor was retained under one multi-phase contract because, by doing so, the contractor guaranteed wage and materials rates would not rise. All aspects of the three-phase recladding of the buildings were appropriate.

[18] Further, Mr. Turner was a member of the Board during the whole time the recladding issue was discussed, and the contract negotiated and signed.

[19] The contract was one contract, not three. The two documents signed for Phase II reflect that the contract was amended because the contractor had changed names.

[20] Notice to owners about the recladding was not deficient. Recladding is a “major repair and replacement” under s. 97(1) of the Condominium Act which did not require unit owner approval. Therefore, notice to the unit owners of the work was not required in order to enter into the contract. Once the Board was satisfied with the quality of the work, it awarded the contract. It held meetings with the unit owners to solicit their views on the mock up with respect to appearance.

c. Improper Notice to Owners

[21] Mr. Turner argues that the Board’s notice to owners was deficient, usually done after the Board’s actions. PCC No. 42 denies this, claiming that Mr. Turner’s understanding of section 97(1) is too literal.

[22] Section 97(1) says that if the Corporation uses materials in repairs or maintenance that “…are as reasonably close in quality to the original as appropriate in accordance with current construction standards…” the work is not an addition, alteration or improvement to the common elements or change in the assets, and thus, no owners’ meeting is required.

[23] Mr. Turner says that the ‘like for like’ requirement in s. 97 means that unless the PCC No. 42 replaces the vinyl siding with siding of the same age and condition of the siding being removed, a Board resolution and approval at a meeting of owners is required.

d. An Improper Loan Taken by The Corporation

[24] Phase III of the recladding (and certain other maintenance issues) could not be completed without either a special assessment on unit owners or a loan of over $400,000.00. The Board decided to proceed with a loan as early as June 2012.

[25] Mr. Turner says that the Board, having decided to obtain financing, required authority of unit owners. After the October 17, 2013 meeting, the President concluded that the Board did not have the necessary authority to borrow. Mr. Turner claims that the process by which the Board obtained authority to borrow, was improper.

[26] PCC No. 42 says that the procedure it used to amend the bylaw to empower it to borrow money was appropriate, and in any event, done with competent legal advice for which the Board Members cannot be liable.

e. Financial Irregularities, Insurance Claim Issues, and Information Flow

[27] Mr. Turner alleges that the president misappropriated money by falsely creating an invoice to justify a payment by the Corporation to her neighbour.

[28] PCC No. 42 says that this was a gift to recognize that this neighbour had spent significant time maintaining the common elements, and was approved by a Board resolution, while Mr. Turner was still on the Board.

[29] Mr. Turner says that the Corporation made an unwarranted payment to a unit owner.

[30] PCC No. 42 also says that Mr. Turner’s allegation that there were irregularities concerning an insurance claim are unfounded. A unit owner had an insurance claim. The unit owner’s insurer made the payment payable to both the owner and PCC No. 42 as co-payees. Since the PCC No. 42 was a co-payee, it cashed the cheque, remitted the funds to the unit owner, and reflected the transaction on its financial statements.

[31] Mr. Turner also claims that PCC No. 42 has not disclosed documents he has demanded of it.

[32] PCC No, 42 concedes that Mr. Turner demanded certain documents. Some of those documents no longer exist, having been destroyed in the normal course. In any event, the requested documents cannot be produced as Mr. Turner demanded them after he brought this Application. Section 55(3) of the Act provides that the corporation shall permit any owner, purchaser. or mortgagee of a unit to inspect and obtain certain records. Section 55(4)(b) prohibits anyone from examining or copying records relating to actual or contemplated litigation.

[33] Further, Mr. Turner is prisoner to his own procedural choices. He did not bring an Action, which would have required the Corporation to produce a broad swath of documents. Mr. Turner chose to bring an Application, with its very limited production obligations. Mr. Turner could have demanded in cross-examination that PCC No. 42 produce the records he wanted. He did not. He could have brought a motion within the Application, he did not.

Result

[34] The Application is dismissed, for the reasons that follow. I have made allowance at the end of these reasons for deciding the issue of costs, if the parties cannot resolve them.

Analysis

[35] All of the Actions of the Condominium and its Board of which Mr. Turner complains, with the exception of oppression, are questions that turn on whether the Board’s actions complained of met the standard of care that Condominium Corporation’s Board Members must meet.

[36] The standard of care governing the conduct of Condominium Corporation’s Board Members is set out in section 37 of the Condominium Act which reads:

(1) Every Director and every officer of the Corporation in exercising the powers and discharging the duties of office shall,

a. Act honestly and in good faith; and

b. Exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

(2) …

(3) A director shall not be found liable for a breach of a duty mentioned in subsection 1 if the breach arises as a result of the director’s relying in good faith upon,

a. Financial statements of the Corporation that the auditor in a written report, an officer of the Corporation or condominium manager who provides condominium management services to the Corporation under an agreement between the Corporation and either the manager or a condominium management provider represents to the director as presenting fairly the financial position of the Corporation in accordance with generally accepted accounting principles; or

b. A report or opinion of a lawyer, public accountant, engineer, appraiser or other person whose profession lends credibility to the report or opinion.

[37] I turn now to the allegations Mr. Turner advances against the Board, and the factual findings necessary to determine each issue.

a. Failure to Properly Document Board Resolutions

[38] Mr. Turner alleges that on a number of instances, the Board made decisions without having called proper Board meetings and/or having adequately documented those meetings with Minutes. For example, he says that the current management company, GSA, seized managerial control without a Board resolution, and the bylaws and financial statements were accepted by the Board without appropriate meetings.

[39] The President of the Corporation, Ms. Sliwinski, admitted that there was no specific Board meeting and no resolution was passed with respect to change in management companies. However, she recalls a conversation which took place between the owner of GSA and other Board members, although she could not remember who was present. Mr. Turner acknowledged in paragraph 10 of his first affidavit that the prior manager was terminated when GSA was appointed, and therefore, the Corporation needed a new management company and had to act. Mr. Turner did not allege that GSA’s predecessor was improperly terminated.

[40] With respect to the new management company, there is no indication that anyone, at any Board meeting subsequent to GSA’s being appointed, objected to the appointment of GSA. Mr. Turner acknowledged, inferentially, that GSA had to be retained.

[41] With respect to Board decisions and meetings more generally, under section 90 of the Act, the Condominium Corporation is charged with maintaining the Corporation’s assets.

[42] Section 55 requires the Corporation to keep “adequate records”, including the financial records of the Corporation and “A minute book containing the minutes of owners’ meetings and the minutes of board meetings.”

[43] Section 97(1) provides that a Condominium Corporation is required to hold Board meetings to approve maintenance and repair of the assets, and to hold meetings of the unit owners when it undertakes significant alterations to the assets of the Corporation. As indicated elsewhere, section 97(3) of the Act exempts decisions with respect to maintenance and repairs from the requirement to hold unit owner meetings in subsection (2).

[44] Given the statute’s requirements concerning meetings and record keeping, I was directed to no authority to support the general proposition Mr. Turner advances that an action taken by the Board requires a formal meeting, and that any act of the Board that was not made at such a meeting is invalid. While section 32 of the Act requires that decisions be made by the Board provided quorum is present as defined in the bylaws, there is no requirement that meetings be formal.

[45] The Act does require that Minutes of Board meetings be kept and placed in the Corporation’s Minute Book. While I was directed to no authority about what Minutes should contain, common sense and good corporate governance suggest that the Minutes must be written documents that record at least the date of the meeting, members present, proposition(s) or issues considered, and the decisions made. Where “meetings” constitute a series of discussions between board members, the totality of which amount to quorum, a written record should be created to reflect the discussions and decision made.

[46] In this case, I am satisfied that to the extent that the Board may not have kept Minutes of each meeting, such failure was not intentional or for any lack of good faith.

[47] In any event, this complaint is moot with respect to Mr. Turner’s complaints. For each of the specific events Mr. Turner complains of, he was a member of the Board. As I find below, he was a full participant in the discussions of the Board during his tenure. To the extent that the Board’s procedures were inappropriate, he took no steps to regularize them or bring them into compliance. Irrespective of any failure to properly minute Board meetings, Mr. Turner cannot complain that the Board (of which he was a member) prejudiced him in any way as an owner, as he, as an owner, was aware of what the Board was doing by virtue of his being a Board member.

b. An Untendered and Unapproved Contract

[48] In undertaking the recladding of the buildings, the Board was discharging its obligation to maintain and repair the common elements of the Corporation. Mr. Turner was on the Board at all material times with respect to this project. The Board retained an engineering company to prepare the specifications and tender the work. The engineer also supervised the work.

[49] Recladding the building is a major repair which triggered section 97(1) of the Act. That section provides that where the corporation undertakes its repair obligation “…using materials that are as reasonably close in quality to the original as is appropriate in accordance with current construction standards, the work shall be deemed not to be an addition, alteration or improvement to the common elements or a change in the assets of the corporation for the purpose of this section.”

[50] PCC No. 42 says that the recladding was done using materials that were reasonably close in quality and kind to the original, in accordance with current construction standards. Therefore, it is not deemed to be an addition, alteration or improvement to the common elements or a change in the assets of the Corporation that triggered a unit owners’ right to requisition a meeting under section 97(1).

[51] Mr. Turner argues that section 97(1) applies only where there is a replacement or repair of an asset using materials of the same age and condition as those being replaced. In other words, if the Board replaces a 25-year-old roof, they are only exempt from notifying unit owners and affording them the right to requisition a meeting to approve the work if the Board replaces that roof with a roof with the same amount of wear and tear. Otherwise, the Corporation is making an addition, alteration or improvement to the common element, or a change in the Corporation’s assets, thereby requiring notice under s. 97(3), which permits owners to requisition a meeting at which they may consider and oppose the work.

[52] Mr. Turner does not give any authority for this interpretation of section 97. Further, this is an absurd interpretation. The clear legislative intent of section 97(1) is that if the Board, in discharging its obligation to maintain the Corporation’s assets, repairs or replaces assets with new materials as similar to the originals in kind and quality as can be done while still complying with current code or other legislative or regulatory requirements, no owner meeting is required for approval.

[53] In this case, there is no evidence to support any inference other than the new cladding was a replacement of existing cladding, contemplated in section 97(1). The Board was within its rights to proceed with the recladding work without notice to the unit owners. No consent or approval of the unit owners was required before undertaking the work as section 97(3) was not engaged.

[54] This finding disposes of any allegation concerning the propriety of the re-cladding contract. For completeness, however, I turn to that question now.

[55] On the basis of all of the evidence, I see no impropriety with respect to any aspect of the contract.

[56] Based on his understanding of s. 97, Mr. Turner argues that Phase I of the contract was entered into on September 19, 2011, without notice to the unit holders of the fact of the contract, their right to requisition a meeting, the cost of the project, or how the project would be funded or carried out. He says that the Board meeting was not held until November 9, 2011 where the Board approved the contract.

[57] I am satisfied that the September 19, 2011 date reflects when the proposal was given to the Board. I am satisfied on the basis of the evidence that the contract was not binding until the Board meeting on November 9, 2011.

[58] Notwithstanding that owner approval of this contract was not required, there was a Board meeting on October 13, 2011, at which time the directors discussed and agreed that the work would be undertaken in terms of finishing up a mock-up of the wall cladding before negotiations would continue, and the contract finalized. This evidence is uncontradicted. Up until that time, while the price had been fixed by the tendering process, there were still other contract details which remained outstanding, such as start and completion dates.

[59] Notice to the unit holders concerning the recladding was given after November 9, 2011. The purpose of the notice was to inform the unit owners of the nature of the work, and obtain their opinions with respect to the aesthetics of the work. It was not held to obtain unit owners’ permission to undertake the work.

[60] Mr. Turner says that Ms. Sliwinski signed a contract on May 29, 2013 to re-clad units 34 through 39 (Phase II), and that Mr. Atkin, the property manager, signed another contract in July 2013 with a different contractor for Phase II of the recladding which applied to recladding the same units. Therefore, there were two separate contracts binding the Corporation for the same work. In any event, Mr. Turner alleges that the Board failed to tender for Phases II and III of the recladding with a different company, thereby breaching its obligations.

[61] With respect to the third phase, PCC No. 42 executed the contract on December 13, 2013 for recladding the remaining 42 units of the complex. Mr. Turner says that no meeting was held to approve that expenditure until January 8, 2014, there having been no Board meetings between September 3, 2013 and January 8, 2014. The first notice to unit owners of the commencement of Phase III was a notice sent on January 21, 2014. Mr. Turner says that Ms. Sliwinski unilaterally bound the Corporation with the December 16, 2013 contract.

[62] Mr. Turner also complains that each of the three phases was not set out for tender, separately.

[63] The evidence indicates that Mr. Turner’s view of the nature of the contract is not correct.

[64] First, I am persuaded that the recladding involved one contract, pursued in three phases, over an extended period of time. The Board opted to proceed in this way in order to insulate PCC No. 42 from increased wage rates and materials costs which the contractor said would be up to10% per year. Mr. Turner has not produced any evidence or opinion to suggest that the Board, in not tendering each phase separately, breached its standard of care or obligation to the unit owners.

[65] Second, there were not two contracts for Phase II. The contractor changed its name which required a new contract to be entered, on the same terms as the old. This new contract was approved by the Board on May 28, 2013.

[66] The evidence persuades me that the Board, from August 2013 onward, discussed both funding the remaining recladding of the 42 units, and the necessity of doing so. All Board Members were aware that the project was moving forward and agreed to it. PCC No. 42 submits that the Board’s decision occurred before the contract was executed and was merely formally documented at the Board meeting of January 8, 2014. I agree.

c. Improper Notice to Owners

[67] I have dealt with this question under the heading of dealing with the specific acts that Mr. Turner alleges the Board took improperly.

d. An Improper Loan Taken by the Corporation

[68] Mr. Turner alleges that the plan to borrow money was under consideration as early as June 2012, a full year before the plan was proposed. He says that PCC No. 42 had neither the budget sufficient for the total recladding expenditure, nor a bylaw authorizing borrowing.

[69] The evidence discloses that the Board began to consider the idea of a loan (to complete the recladding and to do other repairs and maintenance work) in August 2013, not June 2012. The 2012 date appears to be a product of metadata or a coding date found on the face of the Miller Thomson LLP term sheet. There is no information in the record that indicates that those terms were sent to the Corporation before August 2013.

[70] Mr. Turner is correct in that PCC No. 42’s by-laws did not provide the Board with the power to borrow. It is also clear from the evidence that in order to complete the recladding and other maintenance work, PCC No. 42 would either have to borrow or levy a special assessment on the unit owners. The Board opted to borrow.

[71] The Board held two-unit owners’ meetings in order to obtain the necessary votes under the bylaw to amend the bylaw to permit borrowing. While the Board obtained approval by a majority of the owners, it failed to obtain the necessary super majority required to amend the bylaws to provide the Board with the authority to borrow.

[72] After the second meeting, faced with the need to complete the recladding and other repair and maintenance, the Board took legal advice as to if and how it could borrow the necessary funds. The lawyer advised PCC No. 42 that it could obtain the power to borrow under the Condominium Act by a) amending the annual budget of the Corporation to provide for the borrowing, b) giving notice of this amendment to all of the unit owners, and c) advising the owners that they could requisition a meeting to vote against this change.

[73] The Board followed the lawyer’s advice. The revised budget and documentation were sent to the owners as required by the bylaw and there was no objection to the proposed borrowing. The loan documents were signed by two Board Members on January 31, 2014, one of which, on its face, was Mr. Turner.

[74] In his March 30, 2017 Affidavit, Mr. Turner states that he is certain that he was never given, nor did he receive, any disclosure concerning any loan document relating to the loan that was signed. Further, he did not knowingly execute the January 31, 2014 loan agreement and related documents. He does not disagree that it was his signature on the loan agreement. He does not know, however, how the loan document came to bear his signature. It must be a forgery as there was no meeting of the Board to sign the documents.

[75] In his January 8, 2019 Affidavit, Mr. Turner wondered, however, whether he signed the loan documents by mistake.

[76] PCC No. 42 concedes that there was no formal meeting of the Board at which minutes were taken. However, the other Board Members (Ms. Sliwinski and Ms. Marvalho) and Mr. Atkins testified in their Affidavits that the Board (with Mr. Atkins in attendance) had their informal meeting at Ms. Sliwinski’s unit for the sole purpose of discussing and signing the loan documents, and that Mr. Turner signed the loan documents on behalf of the corporation.

[77] Generally, resolving the conflict between witness testimony in an Application that turns on the credibility of the witnesses is resolved based on their cross-examinations. Where the cross-examinations do not permit the credibility issue to be resolved, the trial of an issue should be ordered.

[78] Mr. Turner says he did not sign the loan documents knowingly. It might have been a mistake or a forgery. The other Board members and property manager said that they saw Mr. Turner sign the loan documents. They were all cross-examined on the subject.

[79] In this case, whether Mr. Turner’s signed the loan documents can be resolved on the record, both in terms of direct evidence or indirect evidence that Mr. Turner did not deny. For example:

a. On Thursday, January 9, 2014 at 2:30 p.m., Mr. Turner emailed the other Board Members in support of the loan;

b. The Minutes of the January 8, 2014 Board Meeting indicate that Mr. Turner moved the approval of the term sheet by the lender;

c. The loan agreement and related documents required six signatures. They are dated January 31, 2014 and are purportedly signed by Mr. Turner;

d. On February 10, 2014 at 1:28 p.m., Mr. Turner emailed the Board members suggesting the text of a speech he thought should be given to all unit owners, in which he defended the loan agreements;

e. The February 10, 2014. Minutes of Owners’ Meeting record that Mr. Turner gave a version of the speech in his 1:28 p.m. email, in which he defended the loan agreements.

[80] The Board urges me to also rely on a letter that Ms. Sliwinski attached as Exhibit B to her Affidavit sworn on May 23, 2019. Ms. Sliwinski said in para. 5 of that Affidavit that Mr. Turner circulated this letter to all unit owners on or around February 11,2014. In the letter, he admitted that he signed the loan agreements, a fact he now denies. Mr. Turner says that this Affidavit and attachments were served after cross-examinations were complete and is not admissible under R. 39.03. Further, Mr. Turner was not cross-examined on it, nor has he had the opportunity to respond to that Affidavit.

[81] For the reasons Mr. Turner cited, I decline to consider the undated letter Ms. Sliwinski says Mr. Turner distributed on February 11, 2014. It would be unfair to him to admit the document.

[82] Even without the recently produced letter, I find that on a balance of probabilities, Mr. Turner was involved in the informal Board meetings about the loan and that he signed the loan documents. The documents, above, are consistent with Mr. Turner’s having been involved in the Board’s discussions about the loan and signing the loan documents. They are not consistent with his position on this Application.

[83] Further, the loan documents comprise 6 individual documents each of which bears a signature purported to be Mr. Turner’s, and which he does not deny is his signature. This is incompatible with his statement that he signed the documents by mistake or inattentiveness.

[84] Finally, Mr. Turner has produced no evidence that the signature (other than his denial of the fact) is not his.

e. Irregularities, Insurance Claim Issues, and Information Flow

[85] I do not find that the insurance claim issues and other irregularities Mr. Turner complains of fall below the standard of care set out in the Condominium Act. The facts do not suggest a breach of the standard of care. Mr. Turner produced no expert or opinion evidence that suggest a breach of the standard of care in respect of the irregularities complained of.

Irregularities

[86] Mr. Turner alleges that there were a number of financial irregularities that he observed. He alleges that Ms. Sliwinski had the corporation make a payment to a unit owner that was her friend, which he alleges was a misappropriation. He also alleges that in August 2014, Revenue Canada notified PCC No. 423 that it needed an HST registration number, but that Ms. Sliwinski declined to sign the documents that Revenue Canada required.

[87] Both of these alleged irregularities are explained. The Board decided to make a one-time payment to a neighbour of Ms. Sliwinski because the neighbour had done work on the common elements for the Corporation. Mr. Turner was part of that Board. With respect to the HST registration number for PCC NO. 41, Ms. Sliwinski explained that she did not sign the document as she was concerned that doing so might jeopardize her ongoing disability payments.

Insurance issue

[88] In his Application, Mr. Turner alleges that Ms. Sliwinski arranged to have money paid to a friend. The evidence indicates that a unit owner made a claim against his or her insurer as a result of damage to the unit. The insurer, in indemnifying its insured unit owner, made the cheque payable to the Condominium Corporation as co-payee with the unit owner. Because of this fact, the Corporation was required to process the payment and reflect it on its books.

Information Flow

[89] Since July 17, 2018, Mr. Turner has requested records in relation to the auditor’s resignation, tender documents and the bids received, various Board Minutes, documents relating to the loan and other lenders of whom PCC No. 42 made inquiries and who may have offered terms for the loan.

[90] As with other allegations that the Board failed to meet its standard of care that it owed unit owners, Mr. Turner has produced no expert evidence with respect to the standard of care or its breach.

[91] PCC No. 42 has refused to produce most records requested, relying on section 55(3) and (4) of the Condominium Act which reads:

(3) the Corporation shall permit an owner … to examine or obtain copies of the records of the Corporation in accordance with the regulations, except those records described in subsection (4).

(4) the right to examine or obtain copies of records under subsection (3) does not apply to,

a. …..

b. Records relating to actual or contemplated litigation, as determined by the regulations or insurance investigations involving the Corporation.

[92] The PCC No. 42 says that it cannot produce those documents to Mr. Turner because of section 55(4)(b) of the Condominium Act. The documents he requests relate directly to the litigation that he commenced.

[93] I agree with PCC No. 42’s position. No motion is brought with respect to the production of documents.

[94] Section 55(1) of the Act requires a condominium corporation to keep adequate records and sets out a list of those records, which includes “the financial records of the corporation” and any records prescribed by regulation. Section 13(1)(5) of O. Reg. 48/01 requires the corporation to keep, “records that relate to actual or contemplated litigation and that the corporation creates or receives.”

[95] “Actual or contemplated litigation” is defined in s.1.(2) of O. Reg 48/01:

1. (2) In the Act and this Regulation,

“actual litigation” means a legal action involving a corporation; (“instance en cours”)

“actual or contemplated litigation” means actual litigation or contemplated litigation; (“instance en cours ou envisagée”)

“contemplated litigation” means any matter that might reasonably be expected to become actual litigation based on information that is within a corporation’s knowledge or control; (“instance envisagée”)

[96] The interpretation of s. 55(4)(b) of the previous version of the Act was addressed in Fisher v. Metropolitan Toronto Condominium Corporation No. 596, [2004] O.J. No. 5758 (S.C.J.), a case involving a unit owner’s request for documents from the corporation concerning litigation by others against the Condominium. The Court held that purpose of the subsection is to maintain litigation privilege or solicitor/client privilege with respect to records of the condominium corporation that may relate to litigation or pending litigation between a unit owner and the corporation.

[97] As in Fisher, Mr. Turner is seeking disclosure of records relating to this Application and his dispute with the condominium corporation. He made a request for “various documents” on July 17, 2018, which was denied on July 24, 2018 because of section 55(4)(b). He filed a document request in October of 2018. The Corporation refused to provide Board meeting minutes for one year preceding the request for the same reason.

[98] Based on the evidence before me, PCC No. 42’s production has been in compliance with the Act.

f. Oppression

[99] I do not find oppression in the circumstances of this case.

[100] Under section 135 of the Condominium Act, if the court determines that the conduct of the Corporation is, or threatens to be, oppressive or unfairly prejudicial to the applicant or unfairly disregards the interests of the applicant, it can make an order to rectify the matter including an order prohibiting the conduct referred to in the application and an order requiring the payment of compensation.

[101] In addressing section 135, the court must apply a broad and flexible interpretation. The court must remember that section 135 protects the legitimate expectations of unit owners, not their wish lists, and the court must balance the objectively reasonable expectations of the owner with the Condominium Board’s ability to exercise judgement and secure the safety, security and welfare of all owners and the Condominium’s property and assets (see: McKinstry v. York Condo. Corp., 2003 22436 (ON SC), [2003] O.J. No. 5006 (S.C.J.) at para. 33; Ballingall v. Carleton Condo. Corp. 2015 ONSC 2484, at para. 92 to 98; and Hakim v. Toronto Standard Condo. Corp. No. 1737, 2012 ONSC 404 at paras. 38 and 40).

[102] The Court must apply a two-part test for oppression. First, it must determine whether the evidence supports the reasonable expectation of the applicant? If so, does the evidence establish that the reasonable expectation was violated by conduct falling within “oppression”, “unfair prejudice”, or “unfair disregard”? (see: Toronto Standard Condo. Corp. No. 2051 2019 ONCA 43, Ballingall v. Carleton Conto. Corp. 2015 ONSC 2484, at para. 93, and Brasseur v. York Condo. Corp. No. 50., 2019 ONSC 4043, at para. 119).

[103] In Brasseur, the court held that ‘oppressive conduct’ is conduct that is coercive, harsh, harmful, or an abuse of power; ‘unfairly prejudicial’ conduct is conduct that adversely affects the claimant and treats him or her unfairly or inequitably from others similarly situated; and ‘unfair disregard’ means to ignore or treat the interests of the complainant as being of no importance. The court held that in order to determine whether the Condominium Corporation’s conduct was oppressive, it had to look at the cumulative effect of the conduct complained of, the nature of the relationship to the parties, the extent to which the complained of conduct was foreseeable, and the detriment to the interests of the complainant.

[104] In this case, for the reasons stated under the headings above, I am unable to say that the Condominium’s conduct of which Mr. Turner complains amounted to oppression, unfair prejudice, or unfair disregard of Mr. Turner’s interests. Many of the actions complained of are ones which occurred while Mr. Turner was on the Board. He did not, at the time, register any difficulty with the decisions made.

[105] Mr. Turner’s expectations are not objectively reasonable. His view or expectation of the Board’s conduct at times borders on perfection, and at other times is based on an erroneous understanding of parts of the Condominium Act. His view of the facts and his understanding of the contracts entered into, is flawed. The evidence on this Application does not support Mr. Turner’s view of what happened, in most circumstances.

[106] In retrospect, the Board’s activities can be seen as being less than perfect. However, that is not the measure of their conduct. The Board’s conduct, on the face of it, appears reasonable as defined by the statute except with respect to creating Minutes for every Board meeting.

[107] With respect to the financial statements, the loan, the process by which authority could be gained to borrow money and the recladding project, the Board took the advice of lawyers or other professionals and followed that advice.

[108] On the evidence before me, it appears that the Board met its obligation with respect to meeting and decision-making. The Board meetings and their decisions should have been documented. However, Mr. Turner is not prejudiced, as a unit owner. Mr. Turner was a member of the Board, and as I have found, an active participant in the Board discussions about the things of which he now complains. He was fully informed about Board decisions as a member and is not prejudiced as a unit owner, by the failure to have minutes of the meetings which he was a member.

[109] As to the question of oppression, I do not find that the Board’s conduct, at any time, was coercive, harsh, harmful, or an abuse of the Board’s power. I do not find that the Board’s conduct adversely affected Mr. Turner and treated him differently unfairly or in equitably from others similarly situated. I also do not find that the actions of the Board, of which Mr. Turner was a part, ignored or unfairly treated his interests as being of no importance.

[110] The issue of appointing an inspector was not argued before me. It was raised in the Application, however, so I turn to it now, briefly.

[111] Section 130 of the Act provides that on application by a unit owner, the court may make an order appointing an inspector to conduct investigation of certain enumerated matters. It appears that Mr. Turner seeks this remedy under s. 130(2)(b) (which permits an inspector to be appointed to investigate complaints about the corporation’s records under s. 55(1)) or s. 130(2)(d) which permits an audit of the accounts and records of the corporation). The court can make the order if a) the applicant seeks the order in good faith, and b) the order is in the best interests of the applicant.

[112] On the evidence before me, I make no finding that Mr. Turner is not acting in good faith.

[113] Based on the foregoing, I see no financial or other impropriety that makes it in Mr. Turner’s best interest to appoint an inspector under s. 130 of the Act.

Costs

[114] PCC No. 42, having been successful in this Application, is presumed entitled to its costs. If the parties cannot agree on the question of costs, I will decide the question of who pays whom costs, and in what amount, in writing. Submissions are limited to three double-spaced pages excluding cases, bills of costs, and other supplementary materials. PCC No. 42’s submissions are to be served and filed by 4 p.m., 21 February 2020, and Mr. Turner’s by 4 p.m., 6 March 2020.

TRIMBLE J.

Date: February 4, 2020

COURT FILE NO.: CV-17-1750

DATE: 2020 02 04

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Neill S. Turner, Applicant

AND:

Peel Condominium Corporation No. 42, Respondent

Counsel: Kas Marynik, Counsel for the Applicant

Greg Marley, Counsel for the Respondent

ENDORSEMENT

Trimble J.

Released: February 4, 2020