Court File and Parties

Court File No.: CV-20-00652725 Date: 2021-07-27 Superior Court of Justice – Ontario

Re: York Condominium Corporation No. 42, Applicant And: Unit Owners of York Condominium Corporation No. 42 and Mortgagees Thereof Who Are Shown on the Record Maintained Under Section 47(2) of the Condominium Act, 1998 Pursuant to Section 109 of the Condominium Act, 1988, Respondents

Before: Mr. Justice Chalmers

Counsel: J. Fine for the Applicant C. Dirks for the Respondents

Heard: June 21, 2021, by videoconference

Endorsement

Overview

[1] The Applicant, York Condominium Corporation No. 42 (YCC 42) is a 900-unit condominium building located at 330 Dixon Road in Toronto. The Applicant states that the exterior windows in the units are damaged and defective. The Applicant obtained an expert report prepared by Stephenson Engineering which recommends the complete replacement of the windows. The estimated cost is $7 to $7.7 million dollars.

[2] YCC 42 brings this Application for an order amending the Corporation’s Declaration which is registered in the Land Registry Office for the Land Titles Division of York (No. 66) as Instrument No. B294649 on August 18, 1971. YCC 42 takes the position that there is an error or inconsistency in Articles XV (c) and (d) of the Declaration regarding the obligation to maintain, repair and replace the exterior windows. YCC 42 brings this Application pursuant to s. 109 of the Condominium Act, 1988 (the Act) for an order to correct an error or inconsistency in the Declaration.

[3] The Respondents are owners of 47 units in the condominium. They take the position that there is no inconsistency in the Declaration and therefore an amendment is not required. In the alternative, the Respondents argue that if there is an inconsistency, the Applicant’s proposed wording is not clear. Finally, the Respondents argue that if the Application is granted, they wish to proceed with a Cross-Application to address the Respondents’ concerns with respect to the replacement of the exterior windows.

[4] For the reasons set out below, I grant the relief sought and grant an order amending Articles XV (c) and (d) of the Declaration. The Cross-Application is adjourned to August 31, 2021 for a full-day hearing.

Preliminary Issue

[5] The Notice of Application was issued on December 16, 2020. The matter came before Schabas, J. to establish a timetable. By order dated January 28, 2021, he directed that the Respondents were to serve the Notice of Appearance by March 15, 2021, and to deliver its responding materials by April 16, 2021. The cross examinations were to take place by May 14, 2021.

[6] The Respondents delivered the affidavit of one of the unit owners; Patricia St. Louis sworn April 16, 2021. She stated that;

“in principle, the Respondents do not object to an amendment of the Declaration to alter the responsibility for the maintenance of the exterior windows and doors so as to make it a condominium responsibility, as opposed to the individual unit owners. …”

[7] The Respondent did not include a Cross-Application in their responding record.

[8] The Applicant takes the position that the Respondents made a concession in its material that the YCC 42 may assume responsibility for the exterior windows. The cross-examinations took place on June 2, 2021. Counsel for the Applicant objected to any questions with respect to the responsibility for the exterior windows on the basis that the Respondents’ concession made the questions irrelevant.

[9] The Respondents delivered a Notice of Application which was issued on June 2, 2021 (the Cross-Application). In response to the Cross-Application, the Applicant delivered the affidavit of Mr. Godaj sworn June 18, 2021. The Cross-Application came before Sanfilippo, J.in Civil Practice Court on June 15, 2021. Counsel for the Respondents argued that the Application and Cross-Application should be heard at the same time by the same judge. Sanfilippo, J. declined to schedule the hearing to take place at the same time and reserved the issue to the judge hearing the Application.

[10] At the beginning of the hearing today, the Respondents argue that the Cross-Application and Application have issues in common and should be heard together. Counsel for the Respondents requested a brief adjournment of both the Application and Cross-Application to allow for cross-examination on the affidavit of Mr. Godaj.

[11] I deny the request that the Application and Cross-Application be heard at the same time. The Cross-Application and Application do not involve the same issues. The Application is for an amendment to the Declaration. The Cross-Application does not deal with the amendment of the Declaration but instead with the procedure for replacing the windows. The relief sought in the Cross-Application applies only if the Application for the amendment to the Declaration is granted.

[12] The Notice of Application was issued on December 16, 2020 and was subject to a timetable established by Schabas, J. on January 28, 2021. The parties have complied with the timetable and the Application is ready to be argued today. The Cross-Application was not issued until June 2, 2021. It is my view that the hearing of the Application should not be delayed because of the late issuance of the Cross-Application.

[13] The Application hearing will proceed today. The Cross-Application is adjourned to August 31, 2021 for a full-day hearing. If counsel are unable to agree on a timetable for the Cross-Application, the parties may arrange a case conference with me. I am seized of the Cross-Application.

The Issues

[14] The issue to be determined on this Application is whether an amendment of the Declaration is necessary or desirable to correct an error or inconsistency that appears in the Declaration.

Analysis

The Application

[15] Article XV (c) and (d) of the Declaration provides:

(a) REPAIRS BY THE OWNERS: All repairs to any unit shall be made by the owner of such unit unless damage to a unit is included in a determination that there has been substantial damage to 25 per cent or more of the buildings as provided in Section 17 of the Act. The Corporation shall make any repairs that an owner is obliged to make and are not made within a reasonable time. Should such repairs by the Corporation be made necessary as a result of the failure of an owner to make such repairs, such owner shall be deemed to have consented to having such repairs made by the corporation and such owner shall be obliged to reimburse the corporation for the cost of such repairs.

(b) REPAIRS BY THE CORPORATION: All repairs to the common elements shall be made by the Corporation. The Corporation shall repair all units providing there has been a determination of substantial damage to 25 per cent or more of the buildings and the owners who own 80 per cent of the common elements have voted to repair as provided in Section 17 of the Act.

(c) MAINTENANCE BY THE OWNERS: All maintenance of any unit shall be made by the owner of such unit. Each owner shall severally maintain the windows and doors of their respective units together with the enclosed balcony as described in Article X subject to the direction and supervision of the Corporation. The replacement of all windows in a unit and all doors leading out of a unit shall be deemed to be maintenance. The Corporation is authorized to replace any windows and any doors leading out of the units providing same are damaged or defective and to charge the unit owner with the cost of replacement.

(d) MAINTENANCE BY THE CORPORATION: The corporation shall maintain the common elements.

[16] YCC 42 argues that the Declaration is inconsistent with respect to the maintenance of the exterior windows.

[17] Schedule “D” provides that each unit is bounded by the unfinished interior surface of the windows. The exterior windows are outside the boundaries of the unit and therefore are a common element.

[18] Article XV (c) provides that each owner shall maintain the windows and doors of their respective units. Article XV (d) provides that the Corporation shall maintain the common elements. Pursuant to Schedule “D” the exterior windows are common elements. The Applicant argues that the Article is inconsistent because on the one hand it states that unit owners are to maintain windows, and on the other hand the condominium is to maintain the common elements which include the exterior windows. The Applicant also argues that Article XV (c) provides that the unit owners are to maintain the windows and doors of their units and that the replacement of windows and doors is deemed maintenance, but also provides that the Corporation is authorized to replace the windows if the windows are damaged or defective.

[19] YCC 42 seeks to clarify the Article to expressly provide that the Corporation is authorized to replace damaged or defective windows. The proposed wording is as follows:

MAINTENANCE BY THE OWNERS: All maintenance of any unit shall be made by the owner of such unit.

Each owner shall severally maintain the enclosed balcony as described in Article X subject to the direction and supervision of the Corporation.

Notwithstanding anything else in this Declaration, the Corporation is authorized to replace any windows and any doors leading out of the units providing same are damaged or defective and the cost of replacement shall be a common expense.

[20] YCC 42 seeks to amend (d) to read as follows:

MAINTENANCE BY THE CORPORATION: The Corporation shall maintain the common elements including any windows and any doors leading out of the units.

[21] The Applicant states that the amendment will result in consistency and conformity, to ensure that every unit holder does not hire their own contractor to replace windows and to ensure all exterior windows are the same. The Applicant also seeks the amendment to ensure that the cost of replacement is a common expense so YCC 42 can collect the cost of the window replacement through a condominium lien. A condominium lien has priority over registered mortgages and ensures that the condominium will collect on the cost: The Act, s. 84-86.

[22] The Respondents argue that the wording of the Declaration is not inconsistent. Article XV provides that the exterior windows are common elements and that the corporation is responsible for maintaining the common elements. Section 92(2) of the Act states that if the Declaration provides that the unit owner is responsible to maintain the common elements, the corporation may carry out repairs. Section 92(4) of the Act provides that the cost incurred by the condominium shall be added to the common expenses. The Respondents argue that this is consistent with the wording of Article XV which provides that if the unit owner does not meet its obligation, the condominium may do the work and hold the unit owner responsible for the cost. The Respondents argue that the individual unit owners should be given the opportunity to repair or replace the windows failing which the condominium may go ahead and do the work.

[23] Section 109(3) of the Condominium Act, 1988 provides:

The court may make an order to amend the declaration or description if satisfied that the amendment is necessary or desirable to correct an error or inconsistency that appears in the declaration or description or that arises out of the carrying out the intent and purpose of the declaration or description.

[24] I am satisfied that there is an inconsistency in Article XV of the Declaration. The exterior windows are a common element. Although the condominium corporation is responsible for common elements, Article XV (c) provides that each owner is responsible for maintaining the windows. This may result in some confusion as between the unit owners and the corporation as to who is responsible for the necessary work. An apparent conflict or confusion with respect to the obligation to maintain and repair as between the condominium corporation and the unit owners is an “error or inconsistency” for the purposes of the Act: Metropolitan Toronto Condominium Corporation No. 590 v. The Registered Owners and Mortgagees of Metropolitan Condominium Corporation No. 590, 2020 ONCA 471, at para.27.

[25] I am also of the view that the Respondents’ position that the unit owners should be given the opportunity to repair or replace the windows failing which the corporation would go ahead, is an “unworkable result”: Metropolitan Toronto Condominium Corporation No. 590, at para. 26. It is not practical to permit each unit owner to retain their own contractors to undertake the work.

[26] The Respondents also argue that the Applicant ought to have attempted to obtain the consent of the unit owners to the change in the wording of the Declaration rather than proceeding with an Application pursuant to s. 109 of the Act. Section 107 of the Act provides that the corporation shall not amend the declaration unless 90% of the owners approve the proposed amendment. The Applicant argues that it is almost impossible to get 90% of the owners to agree to an amendment. The corporation can instead proceed pursuant to s. 109 of the Act. There is no requirement that the corporation must first proceed under s. 107 of the Act. The two sections provide different routes to amend the Declaration and are mutually exclusive: Carleton Condominium Corporation No. 26 v. Unit Owners, 2009 ONSC 22548, at para 13.

[27] The Respondents also argue that the wording proposed by YCC 42 is confusing and inconsistent. The proposed amendment deals only with the exterior windows. There is no change in the Article with respect to the balconies. The Respondents state that to be consistent, the amendment should also provide that the balconies are common elements and are the responsibility of the condominium corporation. The Applicant states that it is satisfied with the proposed wording and it is not concerned about the exterior balconies. The Applicant states that if the Respondents are concerned about the wording of the Article, they can bring their own application to clarify the wording. YCC 42 notes that there is no Application before me today with respect to any amendment of the Article to deal with the balconies.

[28] I agree with the submissions of YCC 42. The only matter before me today is the wording proposed by the Applicant. I am satisfied that the proposed wording is necessary to correct the inconsistency in Article XV of the Declaration with respect to the maintenance and repair of the exterior windows. The proposed wording is not confusing. I grant the relief sought by the Applicant.

The Cross-Application

[29] The Respondents bring the Cross-Application for an order setting out the procedure to be followed by YCC 42 in replacing the exterior windows. The Respondents seek the following:

a. obtain a new class 1 reserve fund study by a licenced professional engineer with respect to the repair and replacement of the exterior windows and doors (the Study);

b. approve a plan for the future funding of the reserve fund (the Funding Plan) within 120 days of receiving the Study and within 15 days send to all owners a notice containing a summary of the Study, Funding Plan and a statement in which the Funding Plan differs from the Study;

c. call and hold a meeting of the unit owners to provide information with respect to the proposed repair and/or replacement of the exterior windows and doors;

d. an order that YCC 42 shall not enter into any contract for the repair or replacement of the exterior windows and doors until the requirements of (b) have been satisfied;

e. an order that YCC 42 shall obtain a minimum of three quotations for engineering services for the design and scope of work for the repair and replacement of the exterior doors and windows; and

f. an order that YCC 42 shall be required to follow a competitive bidding process and obtain a minimum of three sealed bids from window companies selected by a licenced engineering firm.

[30] The Cross-Application is adjourned to August 31, 2021.

Disposition

[31] I grant the relief sought in the Application and order that the Declaration is amended as follows:

Article XV(c):

“MAINTENANCE BY THE OWNERS: All maintenance of any unit shall be made by the owner of such unit. Each owner shall severally maintain the enclosed balcony as described in Article X subject to the direction and supervision of the Corporation. Notwithstanding anything else in this Declaration, the Corporation is authorized to replace any windows and any doors leading out of the units providing same are damaged or defective and the cost of replacement shall be a common expense.”

Article XV(d):

“MAINTENANCE BY THE CORPORATION: The Corporation shall maintain the common elements including any windows and any doors leading out of the units.”

[32] The Applicant was successful on the Application and is entitled to its costs. Before this endorsement was released, I received Bills of Costs from the parties. The Applicant seeks partial indemnity costs in the amount of $8,131.62 inclusive of counsel fee disbursements and HST. The Respondent seeks partial indemnity costs of $9,790.32 inclusive of counsel fee, disbursements and HST. I award costs to the Applicant fixed in the amount of $7,500 inclusive of counsel fee, disbursements and HST.

[33] Order to go in accordance with the draft order filed and signed by me.

[34] I adjourn the Cross-Application to August 31, 2021 for a full-day hearing. I am seized. I expect Counsel will agree to a timetable for the Cross-Application. If the parties require any assistance with respect to the timetable, a case conference may be arranged with me.

[35] Pending the return of the Cross-Application, YCC 42 shall not enter into a contract for the repair or replacement of the exterior windows or doors. This does not preclude the Applicants from consulting with unit owners and proceeding with the tender process.

DATE: JULY 27, 2021