Summer Case Law Reading
Who doesn't enjoy a little case law reading by the pool or beach? Oh, that's just me? Oh well. I hope you enjoy reading these brief summaries anyway. MTCC No. 1067 v. 1388020 Ontario Corp. This is an action by a condo to enforce a lien. The condo brought a motion for summary judgment. There were three issues: interest on the arrears of monthly fees; additional expenses claimed by the condo; and legal costs. The condo claimed interest at a whopping 30% above the prime rate charged by TD to its best risk commercial accounts per annum, compounded monthly. The defendant argued that the condo was not entitled to such a high rate of interest because it could not provide precise, consistent statements to show it was entitled to the full amount. The judge disagreed. The by-law was a contractual arrangement between the owner and the condo and there was no reason not to enforce it. The judge did not award any of the additional expenses claimed. There was no details on the additional expenses claimed. This is unfortunate as it would have been useful to know the type of expenses that were rejected by the court. On the issue of costs, the judge reviewed recent case law about costs:
Costs must [be] demonstrably reasonable. Further Sections 134(5) and 85(1) do not give counsel the licence to spend the client's money with impunity. (This includes monies spent as legal fees).The judge awarded the condominium legal costs of $30,000.00 inclusive of fees, disbursements and taxes. White Snow and Sunshine Holdings Inc. v. MTCC No. 561 White Snow and Sunshine owned two commercial units in a mixed use condo. The owner applied to the court for an order amending the declaration because it believed that prohibiting the two commercial unit owners (or their employees) from using the amenities was inconsistent with the Act. The amenities included a pool, gym, library, terrace, and squash court. The owner felt that it was unfair that they contribute to the condo's common expenses when they are prohibited from using the amenities. The court disagreed. The court found that the owner's "logic [was] flawed". The arguments presented by the owner were not consistent with the provisions of the Act. It is clear that a declaration may restrict the use of common elements by owners; the restriction need not be described in Schedule "F" as an exclusive use common element. The court awarded costs to the condo on a substantial indemnity basis, which is interesting given some of the conduct described in the case. For instance, the board refused to participate in mediation when asked by the owner. The board also refused to propose an amendment to the declaration to allow the commercial unit owners to use the amenities. In other cases these behaviours might have resulted in no costs or even costs to the owner. Interestingly, the decision does not refer to section 84(3) which states that an owner is not exempt from the obligation to contribute to the common expenses even if the declaration, by-laws or rules restrict the owner from using the common elements. This section makes it clear that a condo can restrict the use of the property by an owner and the owner must continue to pay their share of the expenses. Cheung v. YRCC No. 759 This was an appeal by an owner from a decision of the Superior Court dismissing her application for an order that the condo's by-law (that permitted the condo's board to lease each owner four parking spaces) was invalid. She also claimed passing the by-law was oppressive. She claimed that her tenant's restaurant needed to use all of the parking spaces. A majority of the court disagreed and dismissed her appeal. The by-law did not create exclusive use common elements, contrary to the owner's argument. The by-law could be amended at any time by the board with the approval of a majority of the units. Passing the by-law was not oppressive since the owner could not satisfy the first part of the test - a reasonable expectation. The owner's expectation that her tenants could use all of the parking spaces was not reasonable. On the issue of costs, the appeal court upheld the application judge's award of $60,000.00 for the application and awarded another $27,000 for the appeal. There were some interesting comments in the application judge's decision about the parties "race to the bottom" and petty behaviour. Finally, there was a very lengthy dissent with a thorough review of the facts and the applicable law. If you have the time, I'd give it a read.