In a case released this week, an Ontario court concluded that it is sometimes insufficient for condominiums to simply investigate and passively attempt to resolve problems with common elements. In Wu v. Peel Condominium Corporation No. 245 the court concluded that the condominium’s delays and failure to address the source of excessive noise and vibration emanating from the common element mechanical penthouse constituted oppression.
Facts of this Case
It all started in February 2008 when Ms. Wu purchased a penthouse unit on the highest floor. The mechanical room containing the mechanical elevator and HVAC equipment was located on the level above her unit. For the first six months, the unit was very quiet but for unknown reasons, starting in September 2008, noise and vibration began to affect the unit and the occupants.
Ms. Wu rapidly reported the problem to the Corporation, but it initially denied that there was a problem. Over the years, she frequently followed up with the Corporation. Between November 2008 and August 2012, she communicated 17 times with the Corporation, asking to investigate and repair the problem but to no avail. The corporation took the position that investigations and repairs had been ongoing since 2009 and that 33 steps were undertaken to investigate and repair the source of the problem. One of these steps was the modernization of the elevators in 2010.
Ms. Wu brought a court application against her condominium corporation for oppression under section 135 of the Condominium Act, 1998 (the “Act“). She alleged that the Corporation failed to maintain the common elements which were causing excessive noise and vibrations in her unit. The Court concluded that Ms. Wu had been oppressed by the Corporation and that her interests had been unfairly prejudiced and unfairly disregarded.
Obligation to Repair and Maintain
A condominium corporation has a statutory obligation to repair and maintain common elements:
- Section 89 of the Act provides that a corporation must repair the units and common elements after damage.
- Section 90 of the Act provides that a corporation must maintain the common elements whereas each owner must maintain their unit.
In this case, the corporation argued that it took steps to detect and alleviate the source of noise and vibration and that it acted reasonably in attempting to address the problems through professional engineers and contractors. It took the position that, when there are multiple solutions available, choosing one over another does not necessarily render the decision unreasonable. The corporation also argued that in carrying out its duty, it must act in the best interests of all the owners and must attempt to achieve the greatest good for the greatest number.
The judge concluded that the Corporation breached its obligations by failing to maintain and repair the elevators. The judge wrote:
Peel has done a lot of investigation but it has done little to no work to solve the problem. There are not even any quotes for me to consider if the work is appropriate. There are no financial statements to consider balancing the interests of Ms. Wu with those of the rest of the residents. All I have is a promise to do work that is needed. Since Peel has done virtually nothing since 2011, I am not considering “good, better, best” solutions; I am considering no solution at all. Peel has failed to maintain and repair the elevators. It is in breach of its obligations.
The Court found that the Corporation treated Ms. Wu unfairly when it attempted to put the blame on her, both before and during the legal proceeding, despite the existence of reports indicating that there was indeed a problem. The Court also found that the Corporation did not do anything unless pushed or prodded or if Ms. Wu acquiesced to their demands.
Given the elevator modernization planned for 2010, it was reasonable for Peel to wait to see if that would fix the problem. I find no fault to that point. However, since 2011, Peel has been dragging its feet. There is no reasonable explanation given as to why this took so much time. Having been prodded by counsel and this application, Peel got underway again. It now promises to take further steps that it should have taken long before. I find that Ms. Wu has been oppressed, unfairly prejudiced and unfairly disregarded.
The court accepted the reports indicating that there was a problem, but rejected Ms. Wu’s dramatic description of life in her unit. The Court acknowledged that Ms. Wu had been left in a difficult situation for almost five years since the elevator modernization project and awarded her $30,000 in damages.
In this case, the Corporation tried to rely on its own advisers to support its actions and defend this case, but the evidentiary record appeared to show that the Corporation did not necessarily follow such advice. Corporations and directors will normally not be accountable for their actions and decisions if they relied in good faith on professional advice. That being said, expert recommendations must be strictly followed. When owners complain of a problem and the corporation receives a report confirming that such a problem exists, corporations cannot simply decide to ignore it. A reasonable action plan should be put in place to alleviate or resolve the problem in a timely manner.