Specific Legal Issues

August, 2 2022 Published by Toronto and Area Chapter - By Bharat Kapoor, Julia Lurye

Case Law Update

From the Summer 2022 issue of CCI Toronto Condovoice Magazine, Volume 26, Issue Number 4

Decisions From the Courts

Recent decisions released by the Condominium Authority Tribunal ("CAT") suggest that CAT's willingness to award adverse cost awards to owners depends on the owner's conduct in response to the compliance letters issued by the condominium corporation, and the owner's efforts to resolve complaints and participate in the CAT process.

York Condominium Corporation No. 229 v. Rockson, 2022 ONCAT 46

In York Condominium Corporation No. 229 v. Rockson, York Condominium Corporation No. 229 ("YCC 229") had rules that restricted making or permitting any noise or nuisance which, in the opinion of the board of directors or the manager, disturbs other persons (the "Noise Rules").

Between August 17, 2019 and March 20, 2022, YCC 229 received at least 94 complaints (as documented by security incident reports) that loud music was blasting from the unit of the respondent owner, Chris Rockson.

The condominium manager served Mr. Rockson with four compliance letters over the course of 2019 and 2020, setting out the Noise Rules and requesting the owner's voluntary compliance. The letters also advised the owner that if he failed to comply with the Noise Rules, then enforcement would be escalated to YCC 229's legal counsel and that the owner would be held responsible for any legal costs incurred by YCC 229.

Despite repeated warning letters from the condominium manager, YCC 229 continued to receive complaints about loud music blasting from Mr. Rockson's unit.

YCC 229 engaged its lawyers to communicate with Mr. Rockson and require his compliance with the Noise Rules. However, Mr. Rockson continued to disregard the Noise Rules, as YCC 229 received at least 40 noise complaints after letters were sent by YCC 229's lawyers to the owner.

YCC 229 was forced to commence a CAT proceeding to enforce compliance with its Noise Rules and requested that CAT order Mr. Rockson to indemnify YCC 229 in the amount of $9,848.51 for the legal costs and expenses YCC 229 incurred to obtain compliance. YCC 229 also requested that CAT order soundproofing of Mr. Rockson's unit and the neighbouring units if he continued to violate the Noise Rules.

Mr. Rockson chose not to participate in the online hearing, despite CAT contacting him twice at the onset of the proceeding. As such, CAT's decision in this case is based solely on the undisputed evidence and submissions of YCC 229.

CAT found Mr. Rockson's conduct contrary to the Noise Rules.

However, despite being sympathetic to YCC 229, CAT refused to make an order to soundproof Mr. Rockson's unit and the neighbouring units if Mr. Rockson continued to violate YCC 229's Noise Rules. CAT was concerned that YCC 229 provided no criteria to determine noncompliance and which neighbouring units would require soundproofing (if any), among other things.

Given YCC 229's success at the proceeding, CAT also ordered that Mr. Rockson pay $200 to YCC 229 for its filing fees.

With respect to the amount of $9,648.51 requested by YCC 229 for legal fees, in making its decision on whether to award such costs, CAT considered whether the parties attempted to resolve the issues before the application was commenced, and the provisions of the governing documents and whether the parties understood the potential consequences for contravening them.

Despite receiving numerous compliance letters from YCC 229's condominium manager and lawyers, Mr. Rockson willfully refused to comply with YCC 229's Noise Rules. In addition, he failed to participate in the hearing.

CAT noted that any legal fees not awarded as costs would ultimately be paid by the owners of YCC 229, and in this case, it would not be reasonable nor fair if the owners whose quiet enjoyment was disrupted were to be liable for YCC 229's costs of obtaining Mr. Rockson's compliance. As such, CAT ordered that Mr. Rockson pay costs of $9,648.51 to YCC 229.

This is the second CAT decision were CAT awarded 100% of corporation's requested legal fees. It appears that the owner's deliberate conduct in failing to comply with the Noise Rules and refusing to participate in the hearing may have contributed to the outcome.

Toronto Standard Condominium Corporation No. 1767 v. Isa Ahmed et al., 2022 ONCAT 35

In Toronto Standard Condominium Corporation No. 1767 v. Isa Ahmed et al., CAT was asked to determine whether the unit owner and/or the tenants should be held responsible for the costs of cleaning the waste left by a dog which was permitted to repeatedly urinate and defecate on a balcony, the costs of enforcing compliance with the governing documents and the costs of the proceeding.

The dog belonged to the tenants residing in a unit in Toronto Standard Condominium Corporation No. 1767 ("TSCC 1767").

Following receipt of numerous complaints from various residents regarding the dog's bathroom habits, in April 2021, the board of directors of TSCC 1767 deemed the dog a nuisance and required the dog to be permanently removed from TSCC 1767's property.

Meanwhile, the unit owner initiated a Landlord and Tenant Board ("LTB") proceeding to evict the tenants from the unit, among taking other steps to proactively deal with the issue.

In May 2021, TSCC 1767 commenced a CAT application against the tenants regarding their dog's bathroom habits. The unit owner was named as an intervenor instead of a respondent.

In August 2021, the tenants and the unit owner settled the LTB proceeding, and as a term of the settlement, the tenants agreed to vacate the unit by October 14, 2021. The CAT application continued solely on the issue of who should be held responsible for the costs incurred by TSCC 1767.

TSCC 1767's initially submitted that both the unit owner and the tenants are jointly and severally liable for the costs incurred by TSCC 1767; but in TSCC 1767's closing statement, this position appeared ambiguous.

The unit owner submitted that special circumstances existed to absolve him of any liability for costs. For example, he commenced an LTB eviction application as soon as legally possible to resolve the issue.

In addition, both TSCC 1767 and its lawyers advised the unit owner in writing, on several occasions, that the owner's efforts to resolve this matter were appreciated and that TSCC 1767 would not seek costs against him.

The tenants submitted that they should not be responsible for costs and that the settlement agreement reached between themselves and the unit owner should be binding against both the unit owner and TSCC 1767 under the doctrine of res judicata. CAT rejected this argument.

Ultimately, CAT held the tenants liable for $4,657.11 for the costs of cleaningup after their dog, the costs of enforcing compliance with TSCC 1767's governing documents and the costs of filing this proceeding. CAT was of the view that it would be unfair to hold the unit owner liable for the costs given the steps taken by the unit owner to resolve the matter and the assurances provided to the unit owner by TSCC 1767 and its lawyers that TSCC 1767 did not intend to seek costs against him. After all, words have meaning.

Of note, CAT applied the previous Rules of Procedure with respect to determining liability for costs, as the application was commenced when those rules were in effect. Rule 46.1 of those previous rules provided that, "The CAT will not order a User to pay to another User any fees charged by that User's lawyer or paralegal, unless there are exceptional reasons to do so." CAT found that the "exceptional reasons" test had a very high threshold, and in this case, this threshold was not met. As such, CAT refused to order the tenants to pay to TSCC 1767 100% of its requested legal costs of $12,490.31.

Sarros v. York Region Standard Condominium Corporation No. 1445, 2021 ONCAT 86

In Sarros v. York Region Standard Condominium Corporation No. 1445, CAT was tasked with interpreting the meaning of 'seasonal furniture'.

York Region Standard Condominium Corporation No. 1445 ("YRSCC 1445") had rules that prohibited the storage of any goods or materials on the exclusive use common element balconies, with the exception of seasonal furniture (the "Storage Rules").

In June of 2021, YRSCC 1445 became aware that the respondent owner, Haralambos Sarros, was storing gym equipment on the exclusive use common element balcony adjacent to his unit, contrary to the Storage Rules.

Despite repeated warning letters from the condominium manager, Mr. Sarros failed to remove the gym equipment from the balcony.

YRSCC 1445 referred the matter to its legal counsel, who wrote to Mr. Sarros requiring him to remove the gym equipment from the balcony and to indemnify YRSCC 1445 for its legal costs.

Mr. Sorros paid YRSCC 1445's legal costs under protest. However, he failed to remove the gym equipment from the balcony.

Subsequently, Mr. Sarros reconfigured the gym equipment by removing the weights and added a wooden surface so that it can be used as a table and commenced a CAT application seeking an order permitting him to store this modified structure on his balcony for the purpose of hanging flower baskets and Christmas lights. Mr. Sarros also requested a refund of the legal costs which he paid under protest.

Mr. Sarros submitted that the structure has been repurposed and is now seasonal furniture.

YRSCC 1445 submitted that although the structure was reconfigured and is no longer identifiable as gym equipment, per se, it does not follow that it is now a piece of seasonal furniture.

The term 'seasonal furniture' was not defined in YRSCC 1445's rules and could not be found in dictionaries. A Google internet search suggested that seasonal furniture would include things like chairs and tables.

CAT accepted that, in the absence of a more precise definition of 'seasonable furniture', a Google search for the term 'seasonal furniture' was of some assistance in determining an ordinary understanding of the term. CAT found that Mr. Sarros did not obtain the structure with a view to using it as a table or to hang flower baskets or lights. He obtained a piece of gym equipment. The fact that the structure was reconfigured does not substantially change the structure so that it is now easily recognizable as a table.

Accordingly, CAT ordered Mr. Sarros to remove the structure from the balcony.

With respect to an award of costs, although CAT found that YRSCC 1445 was the successful party and the legal fees charged by the YRSCC 1445's legal counsel were reasonable, CAT refused to award any costs in this case. Mr. Sarros stopped using the structure as a gym equipment and modified the structure once he was advised by YRSCC 1445 that he was not compliant with the Storage Rules. Of note, this case was decided under the previous CAT Rules of Procedure.

Note: this case is pending appeal to the Divisional Court.

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