Legal

November 3, 2023 Published by Toronto and Area Chapter - By Tony Bui

The CAT’s Cradle and How the Ontario Condo Authority Tribunal is Missing its Mark

From the Fall 2023 issue of CCI Toronto Condovoice Magazine.

Cases Involving an Owner and a Condominium Highlight Expose CAT's Failure

The Condominium Authority Tribunal (CAT) was established to help people resolve their disputes conveniently, quickly, and affordably. Unfortunately, the latest CAT decision in a series of cases involving an owner (Ms.Wong) and a condominium (YCC43) highlights the CAT's struggles to meet its objective.

The Wong Saga
In Wong I (2023 ONCAT 71), Ms.Wong filed a CAT application to enforce a settlement agreement with YCC 43 and sought a penalty; the settlement agreement arose from a previous CAT application. In this decision, YCC 43 provided Wong with her requested records albeit with missing pages. YCC 43 only discovered it was missing pages during the Wong I application. YCC 43 rectified the situation by providing the missing pages.

The CAT declined to award Ms. Wong a penalty. It held that since a settlement agreement was obtained in a previous application where the issue of a records refusal and penalty first arose, the issue was resolved it no longer had jurisdiction to impose a penalty for a refusal originating from that application. It appeared that Ms. Wong argued that when YCC 43 breached the settlement agreement, was a fresh refusal to provide her with the records she requested and this was the main issue in Wong I. The CAT’s disagreed and held that Wong I was strictly related to “enforcing a settlement agreement”.

Unfortunately, the same scenario came up in Wong II (2023 ONCAT 85) just two months later: Ms. Wong requested records; YCC 43 did not provide the records she was entitled to; Ms. Wong brought a CAT application; the matter was resolved with a settlement agreement; and YCC 43 breached the settlement agreement. This time, Ms. Wong advised YCC 43 of its breaches before commencing the application, but her email went unanswered. The outcome here mirrored Wong I: YCC 43 was ordered to provide the records and reimburse Ms. Wong’s filing fee, but no penalty was awarded.

The CAT’s Cradle
Is the CAT “helping people resolve their disputes conveniently, quickly and affordably”? In the Wong saga, the parties appeared before the CAT on at least four separate applications with the same general problem: YCC 43 was not providing Wong with the records she requested under the Condo Act.

It does not appear that the CAT has resolved the underlying dispute between Ms. Wong and YCC 43. If Ms. Wong makes a new records request, the CAT for all of its efforts, cannot prevent YCC 43 from refusing to provide Ms. Wong with the records she is entitled to. Ms. Wong’s recourse would be the same as it has been: she will have commence another CAT application; and assuming the parties come to a settlement agreement that YCC 43 breaches, she will have to go through the extra step of commencing yet another CAT application.

In the Wong decisions, the CAT’s issued legally-binding orders that YCC 43 must comply with. However, those Orders only pertain to the records at issue in those decisions. If YCC 43 refused to comply with a CAT order, what recourse does Ms. Wong have? The author believes there are two main options, both of which are
problematic:

1. Ms. Wong could spend a significant amount of time and money to enforce the CAT orders before the Superior Court of Justice. This is a Herculean effort to simply obtain copies of basic records and recover a $125 filing fee. While the Court could award significant costs against YCC 43 for letting the matter get that far and wasting the Court’s time, it begs the question as to what the CAT can do to effectively deal with the issue as the court of first instance.
2. Ms. Wong decides she does not want to spend any more time and effort fighting YCC 43. A Superior Court of Justice proceeding is expensive, time consuming and stressful. Her efforts in Wong I and II are fruitless.

A pervasive criticism of the CAT is its reluctance to award penalties and costs to successful parties. Financial deterrence is often an effective method of achieving compliance and regulating behaviour in a conventional court proceeding. In other decisions, the CAT’s reluctance appears to be tied to the strict wording of the Condo Act as penalties are only awardable where there is refusal to provide records. This position is, respectfully, unconvincing when considering the overall framework of the Condo Act.

First, Section 1.44 (3) of the Condo Act states that any penalties “pertaining to denied records requests” is limited to $5,000. The language does not preclude the Tribunal from awarding penalties in other circumstances: it simply sets a maximum penalty for denied records requests.

Secondly, Section 1.44 (1), para 7 of the Condo Act grants the CAT discretion to “direct whatever other relief it considers fair in the circumstances”. With this broad power, it is argued that the CAT should be more inclined to award “monetary deterrence” to deter unreasonable behaviour or frivolous/vexatious proceedings. Whatever label or term the CAT it wishes to use – fines, penalties, punitive awards, etc. – we have not seen it use exercise its discretion to do so in furtherance of its mandate to resolve disputes conveniently, quickly and affordably.

Similarly, in terms of costs, the CAT’s default position is that will “generally not award costs”. The CAT has statutory power to direct its own procedures but has opted to codify this restrictive approach in its Rules of Practice.

The Wong decisions highlight how the CAT’s practices can be inconsistent with its mission. There are opportunities for owners and condos alike to exploit this CAT’s shortcomings. On one hand, difficult condo owners can force condos to respond to nuisance applications without significant concern of adverse sanctions. On the other, unreasonable condo boards can rely on the pooled resources of the community to force owners to respond to unnecessary legal proceedings where they could be disadvantaged as a self represented party or required to spend money on legal fees with slim prospects of recovery even if they are successful; here, the “process is the point”.

The CAT is in dire need of a culture shift. It must be more assertive with its powers if it wants to achieve its goals. The courts and other tribunals have teeth but we need to see the CAT bare its fangs.

Tony Bui
Associate Lawyer Gardiner Miller Arnold LLP