Court File and Parties

Court File No.: CV-24-98193 Date: October 16, 2025 Superior Court of Justice – Ontario

Re: George Leduc and Ronald Prefasi, Plaintiffs -and- Ottawa-Carleton Standard Condominium Corporation No. 758, Jean-Francois Dodin, Melody Lo, and Devin Froislie, Defendants

Before: Justice Flaherty

Counsel:

• Jonathan Wright and Megan Molloy, for the Applicants
• Neha Mehta, for Ottawa-Carleton Standard Condominium Corporation 758
• John Devellis, for Jean-Francois Dodin and Devin Froislie
• Matthew Morden, for Melody Lo

Heard: September 22, 2025

Reasons for Decision

Overview

[1] In essence, this application concerns a dispute between the Ottawa Carleton Standard Condominium Corporation ("Condominium") and members of its board of directors. The applicants allege that the respondents have exercised their powers in a manner that is oppressive and unfairly prejudicial.

[2] However, the main issue addressed at the September 22, 2025 hearing was Mr. Prefasi's request that an administrator and an inspector be appointed to oversee the Condominium, pursuant to sections 130 and 131 of the Condominium Act, 1998, S.O. 1998, c. 19.

[3] For the reasons that follow, the request to appoint an administrator and an inspector are both denied.

Background

[4] The co-applicant, Mr. Prefasi and his wife Suzanne are resident unitholders in the Condominium. Both Prefasis are also members of the Condominium's board of directors. The co-applicant, Mr. Leduc is a resident unit-holder; he did not file any materials or participate in the hearing.

[5] The Condominium is a non-profit condominium corporation, located in Ottawa and comprised of 87 dwelling units, 12 parking spaces, as well as common elements. The Condominium is governed by the Condominium Act and by its Declaration, By-Laws and Rules.

[6] The Condominium is adjacent to the Villagia, a retirement residence. The Condominium and Villagia share certain facilities pursuant to a shared facilities agreement.

[7] In 2024, OML purchased the Villagia from RFA Verdun Limited Partnership ("RFA"). At that time, OML also purchased some of the Condominium's residential units from RFA. Currently, OML owns approximately 70 of the Condominium's 87 units.

[8] The Condominium By-laws require a five-person board of directors. There is currently one vacancy. At present, the four board members are: Ron Prefasi; Suzanne Prefasi; Devin Froislie, OML's operations manager; and Jean-François Dodin, the vice-president of finance at Horizon Residence, which is Villagia's property manager.

[9] The respondent, Melody Lo, was a member of the Condominium's board of directors from 2019 to July 12, 2024. Ms. Lo is an employee of RFA and she resigned from the board when RFA sold the Villagia and its units in the Condominium to OML.

The Shared Facilities Agreement

[10] The shared facilities agreement ("SFA") between the Condominium and Villagia gives the residents of the Condominium access to some of Villagia's facilities, including meals, cleaning services, a wellness centre, and social and recreational programming ("Shared Facilities").

[11] The SFA requires the Condominium to pay two sets of fees to Villagia:

a. A shared facilities cost ("SFC"), which the SFA defines as the total costs involved in operating, maintaining, repairing, replacing and inspecting the Shared Facilities; and

b. An allocated cost contribution fee ("ACC Fee"), which the SFA defines as the Condominium's total, monthly aggregated cost contribution for the use of the Shared Facilities.

[12] The ACC Fee is at the heart of the dispute between the parties.

Summary of the Parties' Positions

[13] Mr. Prefasi states that the Condominium is being operated as an offshoot of Villagia, based on the interests of the RFA- or OML-affiliated directors. More specifically, Mr. Prefasi submits that an administrator and inspector should be appointed in this case because:

a. The way the Condominium charges the ACC Fee is inconsistent with its Declaration and creates inequities between certain owners. In allowing the ACC Fee to be administered in this way, the board of directors has failed to exercise the standard of care required under s.37 of the Condominium Act.

b. The board of directors cannot achieve quorum, it has reached a stalemate, and it is unable to govern the Condominium's affairs.

c. All existing board members are in a conflict of interest in respect of the present litigation.

[14] Mr. Prefasi has made other allegations, including about the Condominium's insurance and its previous property manager. However, the parties agree that these issues have now been resolved.

[15] The respondent Condominium corporation attended the hearing, but it did not make submissions or file materials.

[16] The individual respondents, Mr. Dodin and Mr. Froislie, dispute that the ACC Fee is administered in contravention of the Declaration. In any event, they submit that there is no prejudice to the applicants and certainly no basis to appoint an administrator. According to these respondents, the parties' disagreement involves a discrete issue that should be resolved by the court in the context of this application, not by an administrator. To the extent there is a stalemate at the board, these respondents state that responsibility lies with the Prefasis, who have refused to make themselves available to attend a board meeting since early 2025.

[17] As noted, the respondent Melody Lo is no longer a member of the Condominium's board of directors. She submits that she should be removed as a party. Ms. Lo provided evidence about how the fees were administered when she was a member of the board, but she took no position as to whether an administrator or inspector should be appointed.

Issues

[18] At this stage, the parties have raised the following issues:

a. Do the individual respondents have standing to oppose Mr. Prefasi's request for the appointment of an administrator and inspector?

b. Should an administrator be appointed?

c. Should an inspector be appointed?

d. Should Melody Lo be removed as a party?

Analysis

A. Standing

[19] At the hearing, counsel for Mr. Prefasi argued that the individual respondents have no authority to challenge the appointment of an administrator or inspector. His position is based on the language of ss. 130 and 131 of the Condominium Act, which set out who may apply to the court for an order appointing an inspector or administrator. Under these provisions, a board member who is not also an owner is not eligible to apply for such an order. According to counsel for Mr. Prefasi, it follows that Mr. Dodin and Mr. Froislie have no standing to object to a request for the appointment of an administrator or inspector, even though his client served them with the notice of application.

[20] I am not prepared to draw that conclusion. The language of the Condominium Act does not explicitly prevent board members (who are not owners) from responding to an application seeking the appointment of an inspector and/or administrator. This issue was raised at the hearing and counsel for Mr. Prefasi did not identify any jurisprudence in which the Condominium Act was interpreted in this way. I am not satisfied that the individual respondents should be denied the opportunity to respond to the request to appoint an administrator and an inspector.

B. Should an Administrator be Appointed?

[21] The Condominium Act vests in the unit owners the power to manage the affairs of the corporation through an elected board. Self-governance is the norm: Bahadoor v. York Condominium Corporation No. 82 (2006), 53 R.P.R. (4th) 281 (Ont. S.C.), at para. 26; and Laxmi Real Estates Inc. v. TSCC No. 2470, 2024 ONSC 5143 at para. 9.

[22] However, as the court explained in Laxmi, the Condominium Act recognizes that there are circumstances where a condominium corporation must be overseen by an outside party, at least for a time. Section 131 of the Condominium Act permits the court to appoint an administrator, if the appointment would be just or convenient in regard to the scheme and intent of the Act, and if determined to be in the best interests of the unit owners.

[23] In considering whether an administrator should be appointed, courts take a number of factors into account, including:

• whether there is a demonstrated inability of the board to manage the corporation
• the existence of substantial misconduct or mismanagement or both
• the necessity of bringing order to the affairs of the corporation
• whether the board has formulated an operating and project expenditure plan that presents a reasonable prospect of achieving the orderly management of the affairs of the corporation
• the existence of a struggle within the corporation amongst competing groups which impedes or prevents proper governance of the corporation
• whether only the appointment of an administrator has any reasonable prospect of bringing order to the affairs of the corporation

See York Condominium Corporation No. 42 v. Hashmi, 2011 ONSC 2478, at para. 6; Skyline Executive Properties Inc. v. Metropolitan Toronto Condominium Corporation No. 1385 (2002), 17 R.P.R. (4th) 152 (Ont. S.C.), at para. 26, aff'd , 253 D.L.R. (4th) 656 (Ont. C.A); Bahadoor, at para. 28; and Laxmi at para. 10.

[24] The above factors must be balanced against the cost of appointing an administrator: Bahadoor, at para. 28.

[25] Importantly, courts have also held that the power to appoint an administrator under s. 131 should only be invoked as a last resort. There must be a good reason for why the unit owners should not manage their corporation's affairs through an elected board: York, at para. 7; Bahadoor, at para. 26; Laxmi, at para. 12.

Is the Board Unable to Manage the Condominium's Affairs?

[26] In this case, the board of directors has not met for almost ten months, since December 17, 2024. As a result, the board has not been able to call an annual general meeting, fill the vacant position on the board, review or approve the audited financial statement and updated reserve fund study. Both of those documents have already been provided to the members of the board.

[27] The evidence shows that the Prefasis are the reason the board has been unable to meet and achieve quorum. Specifically:

a. On January 18, 2025, Mr. Prefasi attempted to schedule a meeting, but Mr. Dodin and Mr. Froislie were not available. Mr. Prefasi did not make any further attempts to schedule a meeting.

b. Through April, May and June, the property manager corresponded with the board members to schedule a meeting. The Prefasis indicated they were unavailable on all suggested dates. They did not offer any alternative dates.

c. On July 29, 2025, counsel for Mr. Dodin and Froislie wrote to counsel for Mr. Prefasi and asked to be provided with any dates when the Prefasis were available for a board meeting. There was no response.

d. During his cross-examination in August 2025, Mr. Prefasi declined to provide his availability to attend a board meeting. He indicated that a meeting would "be undercutting the process of law."

[28] In sum, the Prefasis did not make themselves available for a board meeting at any time over the last nine months. Mr. Prefasi's explanations for this were inadequate. He said he and his wife were travelling, including to Europe between June 24 and August 7. However, the Prefasis did not provide any alternative meeting dates, including before or after their trips. Mr. Prefasi's evidence was that he did not have time to respond to requests for his availability.

[29] In these circumstances, it is disingenuous for Mr. Prefasi to assert that an administrator should be appointed because the board cannot meet or manage the Condominium's affairs. The board's inability to meet is due to Mr. Prefasi's own behaviour. In effect, he has ground the work of the Condominium to a halt in an attempt to get his way in this legal proceeding. Moreover, he seems to have deliberately delayed any meeting of the board until after this hearing before the court. This behaviour is not in good faith, and it is not a legitimate basis for appointing an administrator.

[30] In addition to being unable to meet, the board of directors is in a 2-2 stalemate, as between the Prefasis and the OML-affiliated board members. The respondents, Dodin and Froislie, state that to the extent the stalemate is impeding the board's ability to govern, this can be resolved by filling the vacant position on the board.

[31] Counsel for Mr. Prefasi stated that, if the court declines to appoint an administrator, his client undertakes to participate in a meeting to address filling the vacancy on the board. However, Mr. Prefasi's position is that filling the vacant position will not resolve the issues raised in this application. Because OML is the owner of more than 50% of the voting units, the fifth board member will be affiliated with OML. According to Mr. Prefasi, any input from individual unit owners will become redundant, as they will not be able to oppose any course of action decided by OML.

[32] Importantly, the Condominium Act vests in the unit owners the power to manage the affairs of the corporation through an elected board. The fact that a majority of the board members may not share Mr. Prefasi's views is not a reason to appoint an administrator. The relevant inquiry is whether the board has demonstrated an inability to manage the Condominium's affairs, not whether the board's management is to the satisfaction of any individual member.

[33] While the board has been unable to manage the Condominium's affairs, this may well be resolved when the board meets and the vacant position is filled. An administrator should not be appointed before the board has this opportunity. In sum, this factor does not support the appointment of an administrator, particularly as a measure of last resort.

Has there been Substantial Misconduct?

[34] Mr. Prefasi's allegations of misconduct relate primarily to the Condominium's administration of the ACC Fee and the SFC.

The ACC Fee

[35] Under the SFA, the total ACC Fee that the Condominium must pay is established by Villagia. It is a fixed amount per unit, payable regardless of whether or how much the unit-holder uses the Shared Facilities. Mr. Prefasi's evidence is that his primary complaint is not the amount of the ACC Fee, but the fact that it is not charged to all units.

[36] There is no dispute that the Condominium does not charge the ACC Fee to OML-owned units. It only collects the ACC Fee from the resident unit-holders, on a pro-rated basis. This has been the Condominium's practice since its inception in 2007.

[37] The following hypothetical example illustrates the Condominium's practice:

• The Condominium calculates the ACC Fee for each residential unit based on the total ACC fee set by Villagia, divided by all 87 units of the Condominium.

• Therefore, if Villagia set the total ACC Fee at $87 per month, each of the 87 Condominium units' share of the ACC Fee would be $1.

• The Condominium only collects the ACC Fee from the 17 resident-unit holders. In this example, each of these 17 resident-unit holders would be required to pay an ACC Fee of $1, which represents its proportionate share of the ACC.

• The Condominium does not collect the ACC fee from OML-owned units.

[38] Using the above example, Mr. Prefasi's position is that the Condominium must also collect $1 from each of the OML-owned units. In the alternative, if the Condominium only collects $17 in ACC Fees, Mr. Prefasi believes this amount should be divided proportionately between all 87 owners, so that every unitholder would pay approximately $0.15.

[39] There was some debate about whether the Condominium's practice benefits OML, in that it avoids paying HST on ACC Fees. There was also some dispute about whether the Declaration requires the Condominium to collect the ACC Fee from all unit owners. Mr. Prefasi points to section 2.2 of the Declaration, which states that "each owner shall pay to the Corporation his proportionate share of the common expenses of the Corporation." In addition, section 4.1 of the SFA states:

Each Residential Owner shall pay to the Corporation as part of his/her common expense obligations his/her share of the Allocated Costs Contribution in the amount of set out in Article 1.2(e) hereof for the period commencing on occupancy of his/her Residential (12") month following the registration of the Corporation. [Emphasis added.]

[40] The respondents, Dodin and Froislie, submit that other provisions of the Declaration are more ambiguous about what is required. For example, they rely on a provision of the Declaration only requires that the ACC Fee be collected "if so requested by [Villagia] from time to time for the use and enjoyment of the retirement facilities."

[41] It is not necessary for me to decide either of these issues. Even if I assume (without finding) that the Condominium's administration of the ACC Fee is inconsistent with the Declaration and raises issues about OML's tax obligations, I would not conclude that this is substantial mismanagement or misconduct that warrants the appointment of an administrator.

[42] The evidence shows that the ACC Fee flows through the Condominium to Villagia, without any withholdings. Because OML is the owner of Villagia, if it collected the ACC Free from OML-owned units, it would simply be paying itself. There is no change in revenue to OML, whether it charges itself the ACC Fee or not. Similarly, the collection and remittance of ACC Fee have no financial impact on the Condominium.

[43] In this respect, the court's decision in Laxmi Realestates Inc. v. TSCC No. 2470, 2024 ONSC 5143 is instructive. In that case, Justice Papageorgiou identified significant concerns with the management of a condominium, including failing to provide audited financial statements, underfunding the reserve fund, failing to conduct a reserve fund study, failing to pay its bills, and a failing to maintain and repair the property. She also held that board members had preferred their own interests and had failed to recognize legitimate concerns raised by the owners. Despite these significant concerns, the court declined to appoint an administrator. Justice Papageorgiou was not satisfied that the appointment of an administrator was the only reasonable prospect of bringing order to the affairs of the Corporation. In reaching this conclusion, she considered the cost and the relatively small size of the condominium (which had 23 units).

[44] In the case at bar, the allegations of mismanagement are far less serious than in Laxmi. Moreover, there is no evidence that the Condominium's practices are prejudicial to the Condominium or to residential unit-owners, as Mr. Prefasi alleges.

[45] First, Mr. Prefasi alleges that the administration of the ACC Fee has impacted the market value of the resident-owned units. However, this is not borne out in the evidence. Mr. Prefasi's position is based on his undisclosed online research using artificial intelligence and his search of an unidentified real estate sales database. On this point, Ms. Lo's evidence was much more concrete. She summarized Condominium transactions between July 2016 and June 2024. During this time, 15 transactions closed with RFA as the owner; 16 closed with other parties as the owner. Ms. Lo's evidence is that, over the last five years, the average price per square foot RFA paid was $322 while the average price per square foot others paid was $323. This was not disputed by Mr. Prefasi. Based on Ms. Lo's evidence, I find that the administration of the ACC Fee has not impacted the market-value of the Condominium's units.

[46] Second, Mr. Prefasi submits that OML has an unfair advantage: it can rent its units at a lower cost, because it does not pay the ACC Fee. Again, this is not substantiated in the evidence. Mr. Prefasi would have grounds for concerns if Villagia was owned by an entity other than OML. However, because the ACC Fee is a flow through cost (from OML to OML) and because it is calculated on a proportionate basis, I can identify no unfair advantage.

[47] Ms. Lo's evidence was that RFA did not charge the ACC Fee to its tenants because it was unable to rent the units at rates that would include rent, common expense fees and the ACC Fee. Rather than leave the unit vacant, RFA rented some units at below cost and then provided for the operation, repair, and maintenance of the Shared Facilities at a loss to itself.

[48] In this respect, OML's losses parallel those of resident unit-holders who rent their units at a loss. The resident unit-holder would pay out-of-pocket to cover any difference between the rent collected and the ACC Fee. OML would not pay out-of-pocket, because the ACC Fee is not collected from it. However, OML (as both the owner of Villagia and the owner of the unit) has incurred the expense of providing the Shared Facilities, and it would not be fully compensated for this in the rent it collects.

[49] The facts of this case are different from Siemon v. Perth Standard Condominium Corporation, 2019 ONSC 5576, where the court concluded that some condominium residents received an unfair advantage in renting their units because they could offer incentives not available to others. Importantly, in Siemon, the condominium's declaration and by-law required that all occupants be treated equally and that each occupant enter into the same services agreement, regardless of whether they were an owner or a tenant. The defendants failed to charge all occupants (including tenants) the same amount for services.

[50] In the case at hand, however, the Condominium's Declaration and By-laws do not require that the ACC Fee be charged to tenants. Moreover, I find there is no unequal treatment or disadvantage. While OML is not paying itself the ACC Fee, neither OML nor the resident unit-holders avoid losing money if the rent they charge does not cover the ACC Fee.

The SFC

[51] Unlike the ACC Fee, the SFC is charged to all unit holders, regardless of ownership. In the Condominium's budgets from 2016 to 2024, the SFC has been treated as a regular common expense payment of every unit holder. In cross-examination, Mr. Prefasi acknowledged that the SFC are included in the Condominium's budget and that they are paid by all owners.

Finding: No Substantial Mismanagement

[52] Mr. Prefasi has identified reasonable concerns about whether the ACC Fee is being administered in compliance with the Declaration. He has also raised concerns about HST obligations. However, the evidence does not establish substantial mismanagement or reach the threshold courts require to appoint an administrator.

[53] Although he said this was not his primary concern, Mr. Prefasi submits that the board should ask Villagia about the make-up of the SFC and the ACC Fees to ensure the Condominium unit owners are not subsidizing Villagia. Particularly given the nature of OML's role, transparency is important. However, there is no evidence that Mr. Prefasi took the preliminary step of asking the board to make these inquiries before seeking the appointment of an administrator. Moreover, Mr. Prefasi has obtained some disclosure about fee administration through this litigation. The evidence presented does not show that the Condominium's practices disadvantage the resident unit owners or force them to pay fees that subsidize Villagia. In these circumstances, the board's failure to make inquiries does not constitute substantial mismanagement. At this stage of the proceeding, I am not prepared to conclude that the respondents have breached the standard of care under s.37 of the Condominium Act.

[54] This is not to say that the Condominium is absolved of its obligations, as set out in the Act, the Declaration and SFA. Issues of compliance may be addressed as this litigation proceeds. At this stage, my finding is simply that the Condominium's handling of the SFC and ACC Fee does not amount to substantial misconduct and does not weigh in favour of appointing an administrator.

Is an Administrator Necessary to Bring Order to the Affairs of the Condominium?

[55] It was not disputed that the Condominium is in a healthy financial position. In this case, the appointment of the administrator is not needed to bring order to the affairs of the Condominium. Moreover, once the vacancy on the board has been filled, there is no reason to believe that it will be unable to formulate an operating and project expenditure plan that presents a reasonable prospect of achieving the orderly management of the affairs of the corporation.

Is there a Struggle Among Competing Groups that Impedes Proper Governance?

[56] Mr. Prefasi provided the only evidence of discord among competing groups of Condominium unit owners. He testified that other resident unit-holders have spoken to him about their concerns, but none have filed an affidavit. There is also no affidavit from the co-applicant Mr. Leduc.

[57] It is very clear that Mr. Prefasi is concerned about the operation of the Condominium and what he describes as a lack of transparency. It is also clear there are factions on the board of directors and some discord between members. However, without more, Mr. Prefasi's evidence does not show that the conflict extends beyond Mr. Prefasi. As a result, this factor offers limited justification for the appointment of an administrator.

The Cost of Appointing an Administrator

[58] There was limited evidence in this case about the cost of appointing an administrator and how this should be balanced against the other factors. I have interpreted this as a neutral factor in my analysis.

Is the Administrator an Appropriate Last Resort?

[59] This factor weighs heavily against the appointment of an administrator in this case. This is not the only reasonable way of resolving the concerns Mr. Prefasi has raised. In my view, the vacancy on the board needs to be filled. Once a fifth member has been added, the board should be given a chance to meet and do its work. To appoint an administrator at this stage would condone Mr. Prefasi's bad faith behaviour in blocking the board from meeting and preventing the vacancy from being filled.

[60] I have considered whether the appointment of an administrator is appropriate to manage this litigation considering the current board members' conflicts of interest. The board has been unable to instruct counsel, and the Condominium has not actively participated in this litigation.

[61] While concerns about the board's ability to manage the litigation are legitimate, I am mindful that the appointment of an administrator is a last resort. As a next step, the vacancy on the board must be filled. Once a fifth member has been added, the board should have an opportunity to consider how the litigation can be managed. Once this has occurred, the parties may return to the court to seek the appointment of an administrator for the litigation, as a last resort, if this step is necessary.

C. Should an Inspector be Appointed?

[62] Section 130 of the Condominium Act permits the court to appoint an investigator, if the application is made in good faith and the order would be in the best interests of the applicant.

[63] The appointment of an inspector is a rare occurrence. According to some courts, this is only appropriate where there are specific findings of financial or other impropriety or negligence in causing harm to the condominium corporation: see, for example, Tharani Holdings Inc. v. Metro. Toronto Condo. Corp. No. 812, 2021 ONSC 1125, at para. 29. However, other courts have appointed an inspector based on the "honest and reasonable" concerns of a significant minority of unit holders, without specific findings of impropriety or negligence: Rohoman v. York Condominium Corporation No. 141, [2001] O.J. No 4927, (Ont. S.C), at paras. 35–36.

[64] Regardless of which legal test is applied, I find that it is not appropriate to appoint an inspector. First, the application has not been brought in good faith. As discussed, Mr. Prefasi has prevented the board from meeting. Second, although the Condominium's compliance with the Declaration remains a live issue, there is no basis to conclude that the Condominium or its unit holders have suffered harm because of any non-compliance. Finally, unlike Rohoman, this is not a case where a significant minority of unit holders have raised concerns.

D. Should Melody Lo be Removed as a Party?

[65] Counsel for Ms. Lo submitted that the parties have not agreed to bifurcate the application. Based on the record before the court, her counsel urged me to conclude that Ms. Lo is not a proper party to the proceeding. He submits that there is no evidence to show that Ms. Lo is personally liable for the acts or omissions of the Condominium or that she oppressed the applicant, as alleged.

[66] There was some debate about whether the parties agreed to bifurcate and whether the full record is now before the court. Notably, other than counsel for Ms. Lo, none of the other parties made arguments on the merits of the application and the allegations of oppression. At this stage of the proceeding, I decline to dismiss the application against Ms. Lo. It would be premature to do so.

Disposition

[67] The request to appoint an administrator and an inspector are denied. Ms. Lo's request to be removed as a party is also denied at this stage.

[68] The parties are encouraged to reach an agreement regarding legal costs. If an agreement cannot be reached, they may make brief written submissions of no more than three pages, double spaced, 12-point font, exclusive of cost outlines. The respondents' costs submissions are to be served and filed within 14 days. The applicants' submissions are to be served and filed within 30 days. There will be no reply submissions without leave.

Justice Flaherty

Date: October 16, 2025