Condo Law Digest - June 2013

York Condominium Corporation No. 62 v. Superior Energy Management, 2013 ONSC 2615
Decision Date:  May 6, 2013

In May 2008 a representative of the property manager for YCC 62 entered into a fixed-price contract with Superior Energy Mgm’t for the supply of natural gas.  The property manager had not been authorized to do this and the Board of Directors never ratified the contract.  (Condominium corporations cannot contract unless there is a resolution of the Board.)  In July 2009, and then several times over the next few months, a representative of the property manager contacted Superior at the Board’s request, taking the position that the contract was not valid.  Superior did not respond to any of these attempts at communication, nor to a demand letter written by the Board’s counsel in November 2010.  In Sept 2012 the Board issued an application in the court.

Counsel for both parties agreed that the hearing should be limited to the question of limitations, with reference to sections 4 & 5 of the Limitations Act.  Counsel for YCC 62 argued that the 2-year limitations period should begin in November 2010, when the demand letter was sent.  The judge disagreed and dismissed the application. He found that the limitations period began, at the latest, in fall 2009, when the property manager wrote to Superior, taking the position that the contract was not valid.

Comment: Act promptly if you have concerns about the validity of a contract.


Judge v. Baywood Homes, 2013 HRTO 727
Decision Date: May 1, 2013

In early 2009 Mr. Judge and his wife decided to move out of their home and into a condominium.  They met with the sales staff of Baywood Homes, who told them that, if they purchased a unit, they would be given two  parking spots: one in front of the building and one farther away.  Mr. Judge was keen to have a parking spot in front of the building because of a number of health problems, including severe chronic pulmonary disease and a bad back.  Although Mr. Judge mentioned his bad back to the sales staff, he did not tell them about his other health problems, nor make a connection between them and his desire for a parking spot in front of the building. Mr. Judge did not add a provision about the parking spot to the Agreement of Purchase and Sale. The Judges took possession of their unit in July. When the parking lot was completed and marked in September, they found that both parking spots were a good distance from the front door.  Their counsel sent a letter to the vendor’s counsel, requesting a parking spot next to the building, but without mentioning Mr. Judge’s disabilities. The vendor refused.  Mr. Judge filed an application with the Ontario Human Rights Tribunal, alleging discrimination with respect to housing on the basis of disability.

The Adjudicator dismissed the allegation.  While he was satisfied that Mr. Judge had a disability, Mr. Judge failed to make his disability known to Baywood Homes.  Because Mr. Judge did not do this, he did not trigger the vendor’s duty to accommodate.  While the Adjudicator was sympathetic to the Judges’ feeling that the vendor had failed to fulfill an oral promise, he found that he had no jurisdiction over the matter.

Comment: The HRTO and the courts have repeatedly found that persons seeking accommodation must makes their needs known, and it is this notice that triggers accommodation.

The Photographer, the Telephoto Lens, and the Angry Neighbours

When photographer Arne Svenson was given a telephoto lens by a bird-watching friend he was keen to try it out and hit upon what seemed to him an excellent subject:  His neighbours across the street.  Svenson lives in lower Manhattan, and the building facing his is made up of floor-to-ceiling windows.  At any time he could see three floors of urban family life and he documented a great deal of it over a year and a half.  The telephoto lens captured couples having breakfast, children squabbling, people retreating to the bathroom to talk on cellphones, someone taking a nap on the couch, and other vignettes of daily life.  The neighbours found out about Svenson’s project when some of the photographs were displayed in a gallery and the exhibit was written up in a local newspaper.  They were shocked and angry to find themselves unaware photographic subjects and some are considering legal action.

Before Svenson embarked on the project he consulted a lawyer and was apparently told that there was little expectation of privacy in a city as crowded as New York.  I find this a little surprising.  Many of the previous cases involving the rights of photographic subjects involved photos taken in public places, and I would have thought that there was a basic right to privacy within one’s own home.  Nonetheless, it is a little depressing that Svenson’s mulling over the ethics of his project seems not to have gone beyond consulting a lawyer.  Not that I have anything against lawyers.  It’s just that legality should be a minimal requirement for an action, not a signal to barge full-steam ahead.

I have read a few discussions of the case, and they are mainly of the “hand-wringing” variety.  They combine a discussion of legalistic issues with consideration of the photographs’ artistic value.  Are the photos “good enough” to justify the incursion of privacy, if indeed the neighbours’ expectation of privacy in their homes was reasonable?  (At least a few people seem to think that it was not.)  Many of the commentators find themselves torn.  They admire the photos yet empathize with the neighbours’ feelings of anger and violation.

These discussions neglect some important matters.  Recently in a few places I’ve seen the advice offered that it is better to ask forgiveness afterwards than to ask permission before.  In other words, do what you want, act now and worry later about the consequences and those whom you may have hurt.  (Not that I know whether or not Svenson has asked for forgiveness.  He is said to be “surprised and upset” by his neighbours’ response.  Really?)

For me, the ethical crux of the matter is that Svenson has treated his neighbours in a way in which they could not possibly have consented.  One cannot consent to be secretly photographed.  And Svenson did this not once or twice, but repeatedly, over about eighteen months.  Then he compounded this error by displaying the photographs publicly, again without asking permission of his subjects.  Even if some of his neighbours admire the photographs, they probably feel like they have treated as a means to an end – in other words used.  Small wonder that they are upset.

Still, I hope that Svenson and his neighbours will find a resolution outside of a courtroom.  I hear that there are some great mediators in New York City.

Hat tip: I first read about Arne Svenson and his neighbours in Raffi Khatchadourian’s “Talk of the Town” piece titled “Stakeout” in the May 27, 2013 issue of The New Yorker.  I have decided not to provide a link to the photographs.

"Bad Faith" - What it Means for Condo Board Members

 My earlier post on Mediation and Bad Faith Bargaining is one of the most-read on this site, so when a couple of recent legal decisions relevant for condominiums invoked "bad faith," I knew I had to write about it again.

Section 37 (1) of the Condominium Act specifies that every director and officer shall act “in good faith.”  What does this mean and how might it apply?  “Bad faith” is a slippery concept and is difficult to define precisely.  Basically, a person acts in bad faith when he or she intentionally infringes upon another’s rights, or intentionally fails to honour legal or contractual obligations.  The role of “intention” is key.  Acting in bad faith is different from failing to understand that you have obligations or being mistaken about them.

“Bad faith” is more than an abstract legal issue, as a number of condo board members have found out to their cost.  In two recent decisions judges have held condo board members personally responsible for court costs because they failed to act in good faith.  A look at these cases helps clarify condo board members’ legal responsibilities, as well as their obligations to unit owners.

The first case (Boily vs. Carleton Condominium Corporation 145) began innocently enough, with modifications to a courtyard.  The Board took the position that the changes were “simple repairs” and so required approval of a simple majority (50%) of unit owners.  A group of owners took a different view when they saw the proposed changes.  To them, the modifications looked like “substantial changes” that would require the approval of 2/3 of the owners, and so they attempted to organize a special owners’ meeting to present their concerns to the Board.  The special meeting would be held at the same time as the meeting the Board had already scheduled to vote on the courtyard modifications.

Here is when the Board’s shenanigans began: They refused to recognize that the owners’ had the correct number of signatures to requisition the meeting, and they initially refused to hand over the list of registered owners.  They did not move from their position that the approval of 50% of owners would be enough for the changes to go through, and advised that demolition would begin the day after the meeting.  The group of owners who opposed the changes sought an injunction to stop the demolition.  This was granted by a judge on June 22, 2011, with a promise to decide on the rest of the application on June 29, 2011.

It would seem that cooler heads prevailed after the injunction was granted.  The Board and the group of owners, together with their lawyers, reached an agreement, formalized in “Minutes of Settlement.”  The Board agreed not to proceed with the modifications unless they received the approval of 2/3 of the owners.

But the story does not end here.  When the Board failed to receive the 2/3 majority that it needed, they took the position that the “Minutes of Settlement” was not binding, and that they would wait for the judge’s decision on June 29.  The group of owners brought a motion to enforce the Minutes of Settlement, which the judge granted.  He also decided that the costs incurred to enforce the settlement ($13 560) were to be paid by the board members personally because they had acted in bad faith.  The two main factors in his decision were the Board’s actions regarding the special meeting (their refusal to recognize its legitimacy and their delay in providing the list of owners) and their attempt to wriggle out of the agreement that their own solicitor had negotiated on their behalf.

The second case (Middlesex Condominium Corporation 232 vs. Owners) is similar to the first.  Again, problems arose out of proposed repairs to the condominium – repairs that everyone agreed were necessary.  The Board had decided on a repair plan that would cost $750 000 and require the corporation to borrow $600 000.  A group of owners asked to see the relevant documents, to have time to study them, to post notices about the proposed repairs, and to have the Board suspend negotiations with their chosen contractors.  While the Board’s lawyer provided supervised access to the documents, the other requests were denied.  At the Annual General Meeting, the Board’s bylaw to authorize the $600 000 loan was defeated.  Then the owners held a specially requisitioned meeting where a new board was voted in.

Can you guess what happened next?  The old Board refused to recognize the legitimacy of the new Board.  In an attempt to get around the inconvenient fact that they had been voted out, the old Board filed an injunction with the court to have an administrator appointed.  The judge refused.  He said that the owners’ attempts to get a Board more responsive to their concerns was “entirely understandable and reasonable,” and that the injunction was brought with the sole purpose of preventing the owners from exercising their rights.  Because the application for the injunction was “tenuous and without merit,” he found the five members of the old Board personally responsible for $15 000 in costs.

What are the lessons here?  Probably the members of both Boards (Carleton 145 and Middlesex 232) thought they were doing the right thing and acting in the best interests of owners.  But this is not the point.  Condo Boards serve at the behest of owners.  Acting without the support of owners, or (worse) attempting legal maneuvers to thwart the will of owners, will not be looked upon favourably by the courts.  Board members must understand that, if they appeal to the courts without a legal basis for their actions they may be held personally responsible for costs if their actions be unsuccessful.  Obtaining reliable legal advice is absolutely crucial, as is keeping an open mind.  Any group of people that work together can develop a tendency to group-think, such that it is difficult to see the flaws in a plan that the group has adopted.  Being “certain” that you are doing the right thing is not enough.  And acting on that feeling of certainty, despite owners’ clear lack of support, is a very bad idea.



A slightly different version of the article appeared in the April 2013 issue of Condo Business magazine.