Court File and Parties

COURT FILE NO.: CV-22-00686480 DATE: 20230328 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: IMAM HUSSAIN ASSOCIATION, PIARA LAL RAHUL, XUEQUAN HUANG, NGOC HUYNH, ZHU LIN, DUAN JIANH, WENSHENG TAN, LI CHEN & JUANG TAM, SIZU HU AND YIBI XIE, Plaintiff

AND: METROPOLITAN TORONTO CONDOMINIUM CORPORATION NO. 960, SHIUPONG MANAGEMENT LTD., PROPERTY SERVICES ENTERPRISES INC., KWOK CHIUWONG AND NEXT WAVE INSURANCE CANADA, Defendants

BEFORE: Justice Papageorgiou

COUNSEL: Manjinder Singh for the Plaintiff

READ: March 28, 2023

Endorsement

The motion

[1] The plaintiffs are owners of 18 condominium units located at 328 Passmore Avenue Scarborough (the “Condominium”).

[2] The defendant the Metropolitan Toronto Condominium Corporation No 960 (the “Corporation”) is a condominium corporation established pursuant to the Condominium Act in respect of the Condominium. The materials before me do not set out who the other defendants are.

[3] This urgent motion was read by me today. The plaintiffs indicate that they served the defendants by email on March 27, 2023 at 12:33 pm. As will be seen, the purported urgency relates to an Annual General Meeting being to be held today, on March 28, 2023, at 4:00 pm where an election will be held with respect to two directors of the Corporation.

[4] The urgent motion seeks: a) an Order removing the criteria regarding the payment of a Special Assessment Fee to participate in the election of directors; b) to reschedule the Annual General Meeting to a future date so that the plaintiffs would have time to file nominations for the election of directors and participate in the election; c) An order removing the owner of unit 35 as a director; d) An order for supervised conduct of the Board of Directors.

[5] The plaintiffs do not cite any sections of the Condominium Act pursuant to which they may seek this relief, or any other statute. Therefore, although they do not say so, it is plain that they are seeking injunctive relief.

Decision

[6] As of the writing of this endorsement, no materials have been filed by any of the defendants. However, in my view, the motion may be determined in their favour, without any need for materials filed on their behalf.

[7] The motion with respect to the relief claimed at paragraphs 4a), b) and d) is dismissed because, the plaintiffs have not made out their case for the relief sought, or that this motion is urgent and could not have been brought with the proper service on the defendants.

[8] The motion with respect to the relief set out at paragraph c) is adjourned. The plaintiff may schedule the argument of this motion and a schedule for the filing of materials related to it at Civil Practice Court.

Analysis

[9] Pursuant to the Supreme Court of Canada decision in RJR MacDonald v. Canada (Attorney General), [1994] 1 S.C.R. 311, at p. 334, the usual test for an interlocutory injunction is as follows:

(a) Is there a serious issue to be tried? Where a mandatory order is sought, the moving party must establish a prima facie case.

(b) Will the party requesting the injunction suffer irreparable harm if the injunction is not granted? and

(c) Does the balance of convenience weigh in favour of granting an injunction or denying it?

Urgency

[10] The Corporation has scheduled the Annual General Meeting for March 28, 2023 (“AGM”) to be conducted by zoom. Two new directors will be elected at the AGM and the plaintiffs are not being permitted to participate because they have not paid a Special Assessment levied by the Corporation.

[11] The Special Assessment relates to a fire which occurred at the Condominium, which is alleged to have begun at unit 35 and which occurred in September 2020.

[12] The Statement of Claim pleads that the Corporation sent letters dated August 22, 2022 threatening the plaintiffs’ with notices of lien on their units if the Special Assessment was not paid within 7 days; therefore, the plaintiffs have known about this Special Assessment since at least that time.

[13] The notice of the AGM within the materials is dated March 8, 2023. This notice occurred almost three weeks before the AGM and there is no explanation as to why the plaintiffs are bringing this motion the day before the meeting as an urgent motion.

[14] I add that the plaintiffs have attached to their Notice of Motion the draft minutes of the November 2, 2021 Annual General Meeting where details as to the Special Assessment were raised, where unit owners raised objections to it and where owners raised specific objections as to the voting rights of unit owners who did not pay the Special Assessment.

[15] There is no urgency to this motion; the plaintiffs should have brought this motion sooner if they expected to be able to stop the AGM and the election of new directors.

[16] Nevertheless, I will proceed to consider the merits of the motion.

Prima facie case—the Special Assessment

[17] The plaintiffs do not merely seek to stop the AGM, but to remove the criteria for participation in the AGM as the pre-curser to rescheduling it. These, together with the order seeking Court supervision of the Board, are mandatory orders.

[18] The plaintiffs say that the Bylaws of the Corporation expressly provide for strict liability of an owner of the unit to pay “for the restricted deductible loss arising with respect to costs of repairs, replacement, or rectification of a damaged component.”

[19] They say that the Corporation improperly levied the Special Assessment “to cover the shortfall of the Insurance Claim & the amount to be settled by the Condominium Insurance rather than claiming from the Condominium Insurance and the insurance of Unit 35.”

[20] The Bylaws attached to the Statement of Claim provide as follows:

8(a) Replacement and Deductible—The Corporation’s insurance shall provide full replacement value for each insured component subject to a deductible amount (whereby no insurance coverage applies to the extent of that deductible amount) which in the opinion of the Corporation and its insurance representative is a reasonable deductible amount in the circumstances applicable to the Corporation, as determined from time to time.

(b) Owner’s Liability—Pursuant to s. 105(2) and (3) of the Act, if any damage, loss or failure to any Damaged Component is caused by:

(i) the owner, lessee of the owner’s unit, a person occupying the unit or visiting therein, or any employee, agent, contractor, visitor or guest of any such person, whether or not with the permission or knowledge of the owner;

(ii) the owner’s failure to maintain the owner’s Basic Unit and Standard Improvements or failure by any person who owns, possesses or controls any other item, component or contents contained within the boundary of the owner’s unit to maintain or repair them; or

(iii) a major peril or extended peril as defined in the Corporation’s insurance policy originating from an Event of Damage which arises from within the owner’s unit,

Then the owner of the unit shall be strictly liable for reimbursing the Corporation to the extent of the amount of the Restricted Deductible Loss arising with respect to the cost of repairs, replacement or rectification of any such Damaged Component.

(c)the terms used herein shall be defined as follows:

(i) A “Damaged Component” shall consist of any of the owner’s Basic Unit and each of the Standard Improvements thereto as referred to in Article 3(b ) hereof contained within the owner’s unit boundaries, together with any damaged portion of the Corporation’s common elements, exclusive use common elements, assets, structures, facilities, components, alterations or installations thereon, and together with any other Basic Unit and the Standard Improvements thereto as referred to in Article 3(b) contained hereof within the boundaries of any other unit, which have suffered damage or failure originating from an Event of Damage arising within the owner’s unit. A component shall not qualify as a “Damaged Component” if it is excluded as a Standard Improvement in the Corporation’s standard unit by-law, or if it is a component which is not insured by the Corporation’s insurance policy, or if it is an owner’s or occupant’s improvement or betterment to a component.

(ii) An “Event of Damage” shall mean any event of any cause of damage or loss to, or failure of any of the owner’s Basic Unit or Standard Improvements thereto or any other items, components or contents contained within the boundaries of the owner’s unit, or any cause of damage or loss to or failure of any Damaged Component originating from within the owner’s unit, howsoever caused, or failure by the owner to maintain or repair the owner’s Basic Unit, Standard Improvements or any other items, components or contents contained within the boundaries of the owner’s unit, if such event of damage constitutes a major peril or extended peril insured by the Corporation’s insurance policy.

(iii) The “Restricted Deductible Loss” shall be the amount that is the lesser of:

(A) The cost of repairing any damage or loss to, or any failure of any Damaged Component which originated from an Event of Damage, or

(B) The deductible limit of the insurance policy currently maintained by the Corporation.

(iv) The owner shall reimburse the Corporation for the Restricted Deductible Loss arising from each separate Event of Damage, whether or not through any act or omission of the owner or those for whom the owner is responsible, unless damage to or failure of the owner’s Unit Components is caused by an act or omission of the Corporation or its directors, officers agents or employees, in which event, the deductible amount shall be a common expense.

[21] Therefore, the Corporation has rights as against the owner of Unit 35 if any damage is caused by his act or omission, calculated as the lesser of the costs of repair or the deductible limit of the insurance policy currently held by the Corporation. This is essentially what section 105 of the Condominium Act directs.

[22] The plaintiffs have provided no evidence as to the quantity of the Special Assessment or the Corporation’s insurance. However, the draft minutes of the November 2, 2021 AGM attached to the Notice of Motion set out that the total amount paid by the insurer as at that date was $1,600,000, that the Corporation used a further $300,000 from its reserve fund, and that the Special Assessment would be approximately $1,300,000.

[23] The February 2022 financial statements attached to the Notice of Motion set out that the Special Assessment will be paid over a 24 month period and placed in a newly created “Repair and Improvement Fund”. All major repairs and replacements of the common elements damaged by the fire will be charged to the fund. Any subsequent compensation received from the insurer will be credited to the fund. The Corporation will terminate the Special Assessment if the compensation from the insurer is sufficient to fund all required repairs and return any surplus in the fund after all repairs and replacements are completed.

[24] The above mentioned minutes and financial statements make no mention of any attempt to investigate whether the owner of Unit 35 is liable to pay any amount due to any act or omission on his part or any contribution which the owner of Unit 35 must make. Therefore, the plaintiffs’ belief that no attempts have been made to obtain contribution from the owner of Unit 35 has support in these records.

[25] I am satisfied that the plaintiffs have established sufficient evidence for the purposes of this motion to establish a prima facie case that the Corporation has not addressed the issue of whether the owner of Unit 35 is liable for any costs of repair, such that the Special Assessment would either be unnecessary or would be lower.

[26] I note, however, that the defendants have not had an opportunity to file materials or make submissions; had they had that opportunity, it might be that the plaintiffs would not have been able to establish a prima facie case in this regard. Because of the urgency cited by the plaintiffs, the fact that the meeting in question is proceeding today at 4:00 pm, and the fact that the plaintiffs cannot make out their case based on the materials filed in any event, I have not required any materials or urgent attendance by the defendants and have treated this motion as an urgent ex parte motion in writing.

Prima Facie Case—Court Supervision of the Board

[27] With respect to the plaintiffs’ request that this Court supervise the conduct of the Board of Directors, there is no known legal basis for such a request, no evidence filed which would persuade me to make such an Order if there was, and there are also strong policy reasons against the Court undertaking such a role.

Irreparable Harm and Balance of Convenience—the Special Assessment

[28] In RJR MacDonald, at p. 341, the Court described irreparable harm as follows:

“Irreparable” refers to the nature of the harm suffered rather than its magnitude. It is harm which either cannot be quantified in monetary terms or which cannot be cured, usually because one party cannot collect damages from the other. Examples of the former include instances where one party will be put out of business by the court’s decision. (R.L. Crain Inc. v. Hendry (1988), 48 D.L.R. (4th) 228 (Sask. Q.B.)); where one party will suffer permanent market loss or irrevocable damage to its business reputation (American Cyanamid, supra); or where a permanent loss of natural resources will be the result when a challenged activity is not enjoined (MacMillan Bloedel Ltd. v. Mullin, [1985] 3 W.W. R. 577 (B.C.C.A.)). The fact that one party may be impecunious does not automatically determine the application in favour of the other party who will not ultimately be able to collect damages, although it may be a relevant consideration (Hubbard v. Pitt, [1976] Q.B. 142 (C.A.)).

[29] The plaintiff’s evidence as to irreparable harm must be clear and not speculative. Absent clear evidence that irreparable harm will result, an interlocutory injunction should not be granted: Stress-Crete Limited v. Harriman, 2019 ONSC 2773, at para. 58 It is well established that irreparable harm is not made out simply because damages may be difficult to quantify. The plaintiff must prove that the alleged harm cannot be quantified in monetary terms: Stress-Crete, at para. 59.

[30] The plaintiffs have not filed any evidence which would establish irreparable harm or that the balance of convenience favours them. They have filed no evidence on the quantum of the Special Assessment levied upon them in particular, or that they are unable to pay it, even temporarily pending final adjudication as to whether the Special Assessment was properly made as claimed in the Statement of Claim.

[31] Their damage claim is easily quantifiable. If they are ultimately successful, they will be compensated. Further, the financial statements filed by the plaintiffs support the inference that the Corporation will be able to pay any monetary judgment obtained by the plaintiffs.

[32] As such the motion is dismissed with respect to the relief claimed set out in paragraphs 4 a), b) and d) above.

Removal of the Owner of Unit 35 as a Director

[33] With respect to the request to remove the owner of Unit 35 as a director, due to an alleged conflict of interest, there is no basis for this Court to conclude that this matter is urgent.

[34] As noted above, the fire occurred in September 2020 and the plaintiffs appear to have commenced the litigation in September 2022. While they do not set out any evidence as to when the owner of unit 35 became a director, I am inferring that it would have been at least since the last AGM in November 2021. Indeed, the Minutes of the November 2021 Annual General Meeting show that he was already a Treasurer at that time. Therefore, the plaintiffs have had considerable time to bring this motion.

[35] While there may be grounds for this motion, it should be scheduled as a regular motion. If plaintiffs are still of the view that this motion is urgent, they must set out evidence which supports this urgency.

Justice Papageorgiou Date: March 28, 2023