Condo Year in Review: Top Five Decisions of 2018

Well, we’ve done it! Congratulations to all on making it through another year. As we approach the end of 2018, there can only be one thing on your minds: the countdown. No, not the New Years countdown, the countdown of some of our favorite 2018 condo decisions of course!

1. Lessons from the CAT

Okay, so this one isn’t strictly “a decision” but we feel like the CAT deserves a shout-out for its 2018 contributions to condo law. Without focusing on any one of the Tribunal’s decisions, we can highlight the following lessons we have learned from them:

• corporations can charge fees for the labour and cost of disclosing records, but they must be reasonable and in line with the applicable regulation;
• a corporation can refuse access to records related to actual or contemplated litigation;
• the tribunal is able to order (and has done so twice so far) the corporation to pay a penalty for having refused to grant access or copies of records without a valid reason; and
• the tribunal will, only in exceptional circumstances, order the defeated party to pay the legal fees of the victorious party. Don’t count on it.

To look up and read any CAT decisions, we invite you to check out this link.

In addition, we have already posted a blog on this very topic!

2. MTCC 932 v Lahrkamp, 2018 ONSC 286

The name of the owner involved in this case may sound familiar.  In this case, an owner who brought a myriad of claims against the condo, was told by the court that enough is enough (obviously, not in those words).  Over the course of more than ten years, this owner commenced a variety of proceedings against the corporation, made a large number of enormous records requests, and was defeated while running for the board of directors numerous times. Indeed, the Court called it a “long, tortuous, labyrinthine and costly litigation saga.”

The owner was declared to be a vexatious litigant, meaning he is barred from bringing any further claims against the corporation, its directors, or its property manager without first obtaining permission from the Court. He was also required to pay a portion of the corporation’s legal fees.

Of course, in law, you won’t be awarded something if you don’t claim it. However, this case may act as a cautionary tale on the dangers of throwing all the spaghetti at the wall to see what sticks.

As a side note, despite having been found a vexatious litigant, Mr. Lahrkamp made an additional request for condo records, which led to a sequel before the Condo Tribunal, where he was, once more, defeated.

3. MTCC 723 v Reino, 2018 ONCA 223

We picked this case, because it provides some good, practical guidance for a situation that can easily arise.

In this case, a “clean” status certificate was issued in relation to a unit. However, as it turned out, there was information that should have been included on it. More specifically, it should have indicated that the unit was in breach of the Declaration because of alterations that were made to it without the Board’s consent.

The question before the Court was, was the corporation now stopped from including this information on a subsequent status certificate?

The answer is no. The status certificate can been updated. If a condominium corporation becomes aware, after issuing a clean certificate, of a circumstance that is required to be disclosed, it must d0 s0 when it next issues a certificate. This is important as it may have an impact on owners who bought a unit on a clean certificate only to find themselves stuck with different wording, through no fault of theirs, when they try to sell.

The Court found that the Condo Act, amoung other things, is consumer protection legislation. The purpose of a status certificate is to bring to light anything that might concern a prospective buyer or mortgagee to their attention.

4. Patterson v YCC 70, 2018 ONSC 3735

In this case, the Court confirmed that the Business Judgment Rule applies to decisions made by a condominium board.

What this means, is that because the Board is elected to manage the affairs of the corporation, courts should be reluctant to substitute their own judgment for that of the Board. This is because, according to the Court, the Board, which has been elected by owners, is simply in a better position than the court to make decisions affecting the Corporation.

Of course, Boards must still act fairly, reasonably and in good faith. In addition, they must exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.  Oh! And let’s not forget, they must comply with their governing documents and the applicable legislation (give me a call, it’s complicated). But absent a breach of any of these things, their business decisions are unlikely to be substituted by the opinion of a Court.

5. YRCC 818 v Prysuski, 2018 ONSC 2382

This case provides us with some insight into the conduct of meetings, especially with respect to the role of a chairperson and scrutineers.

Essentially, this case was about a potential miscount of ballots by scrutineers for an election to the Board.

There was an allegation that there was a commercial proxy present at the AGM, which was missed. In addition, this supposed proxy did not have a signature.

The Court pointed out that the Condo Act does not contain any guidelines for conduct of owners’ meetings or the duties of the participants such as the chairperson.

However, the general understanding is that it is the duty of the chairperson of the condominium owners’ meetings to enforce the rules of order, including instructing scrutineers.  The chairperson has the authority to decide questions of validity when they arise, including with respect to the validity of ballots and proxies.

Ultimately, the chairperson has the responsibility to examine all ballots, decide on their validity, count the votes, cast and declare the result.  If there is any uncertainty, it should be referred to the chairperson for him or her to decide. Once the chairperson makes a declaration as to the result of the vote, it is final and binding unless a court says otherwise.

In this case, the chairperson properly fulfilled his duty to advise and instruct the scrutineers about the requirements of a valid proxy. These instructions were clear, and required a signature. Accordingly, even if the missing proxy did exist, it was not valid.

That about wraps it up! We are always interested in hearing your take on any of the above. Or, if you feel like we have missed something important, please let us know.

Thank you all for following, reading and commenting on our blog. It means the world to us. We look forward to providing more for you in 2019!

Happy holidays!