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.

Condo Law Digest – May 2013

Welcome to the first of what I intend to be a monthly feature - a digest of some condo law cases from the previous month or so.

Harvey v. Elgin Condominium Corporation No. 3, 2013 ONSC 1273
Decision Date:  March 4, 2013

Each unit in this townhouse complex has a garage with a rooftop deck.  Several unit owners complained of water leakage in and around the decks.  The corporation commissioned an engineer’s report which detailed extensive structural flaws in the design of the decks and the need for repair. Mr. Harvey, one of the unit owners, charged that the repairs were not necessary in the first place, that they constituted “substantial changes” (and so required approval by 2/3 of the unit owners), and finally that the special assessments levied against owners to pay for the repairs were “oppressive”.  He sought to have the work stopped and the levies returned, and he sought punitive damages for the harm allegedly done to his credit rating when the corporation placed a lien on his unit to enforce the levy. Mr. Harvey was not represented at the trial.

Justice Leach dismissed Mr. Harvey’s action and his claim for punitive damages.  He found that the board’s decision to repair all of the decks had been well-founded.  The repairs did not constitute substantial changes, but rather fell within the definition of remedial work under s. 97(1) of the Condominium Act.  He rejected Mr. Harvey’s request for an oppression remedy, noting that the meanings of “oppressive,” “unfair” and “prejudicial” in the legal context differ from their ordinary language meanings. (Justice Leach referred here to Walia Properties Ltd. v. York Condominium Corporation No. 478).  He did not make any decision regarding costs.

Comment: Owners are well-advised to consult with a lawyer before commencing any action against a condominium corporation.



Kong v. Toronto Standard Condominium Corporation No. 1959, 2013 HRTO 687
Decision Date: April 24, 2013

On August 31, 2011 Ms. Kong and the corporation reached an agreement with respect to an application with the Human Rights Tribunal of Ontario.  The corporation agreed to caulk and seal the outside of the window of Ms. Kong’s suite, and to reimburse her for up to $3500 for the cost of repairs and other changes to her unit to improve air quality.  Ms. Kong filed an Application for Contravention of Settlement, charging that the window repairs had not been done to her satisfaction because she continued to be bothered by the presence of second-hand smoke in her unit. Furthermore, she had not been reimbursed for the repairs to her unit.  The corporation argued that no timeline for reimbursement had been set out in the original agreement.

The Adjudicator dismissed the Application for Contravention of Settlement, but directed the corporation to reimburse Ms. Kong immediately.  Although no timetable for reimbursement was specified, a standard of reasonableness was implied. The Adjudicator found that the corporation had fulfilled the agreement by caulking and sealing the window.  The written settlement did not assure or guarantee that the presence of all second-hand smoke would be eliminated.

Investigations Gone Wrong!

What do these situations have in common:

• Sally, one of your employees, accuses her co-worker Bob of sexual harassment.
• A warehouse inventory reveals that supplies are missing.  You review footage from the security camera, and it looks like Mike has been removing company property without permission.
• Jessica and her boss Mary never hit it off.  Now Jessica comes to you in tears, with a doctor’s note, requesting a leave of absence for stress.  She attributes her ill-health to Mary’s persistent harassment.

In each situation, the employer must undertake an investigation, and bungling the investigation could have serious legal and likely financial consequences.

A couple of recent decisions highlight the need for a fair investigation carried out by a neutral party.  (Please note that I am not a lawyer and none of this is intended as legal advice.)

Here are some things to keep in mind:

You must inform the respondent (i.e. the person who is accused of harassment, etc.) of the accusations against him or her.

In Elgert vs. Home Hardware Stores, Elgert was accused of sexual harassment by a young woman he supervised.  The investigator (more about him later) interviewed the alleged victim and some of her associates, and on that basis, fired Elgert, without ever telling Elgert what he was accused of doing.  Instead, the investigator repeatedly told Elgert, “You know what you did.”  Elgert was escorted off the premises and not allowed to return to collect his belongings.

If the investigator had done a little more digging, he might have found that the complainant (the woman who made the accusation against Elgert) had been heard to say that she would “get even” with him after he gave her a negative performance review and moved her to a work area away from a young man in whom she had a romantic interest.  I can’t provide every detail of Home Hardware’s bungling of this case, but suffice it to say that an Alberta jury awarded Elgert two years’ pay in lieu of notice and substantial damages.


After informing the respondent, you must give him or her a chance to tell their side of the story.

Home Hardware is not the only employer who failed to realize that there might be another side to what looked like a clear case.  Allied, a maintenance company, terminated five employees after a surveillance video seemed to show the men removing cans of soda from a vending machine on a client’s property by reaching up into the dispenser.  Allied argued that its policy of zero tolerance for theft justified the firings. 

However at the hearing before the Labour Relations Board of Quebec a representative of the soda company testified that the machine in question was known to be faulty and that cans of soda would sometimes get stuck in the dispenser or not be released at all.  Moreover, the amount of money in the machine corresponded pretty closely to the cost of the missing cans.  The Labour Relations Board overturned the terminations.  No word yet on damages for the employees.

Hat tip:  I first read about this case in a blog post by Diana Theophilopoulos who is a lawyer with Stikeman Elliot in Montreal. 

It is not enough that the investigator is a neutral party.  The investigator must also be perceived as being neutral.

Back to Elgert vs. Home Hardware Stores:  The executive who was given the task of investigating the complaint against Elgert had no training in investigating sexual harassment complaints.  What’s worse, he turned out to be an old friend of the complainant’s father. 

Even if the executive were a thoroughly trained and highly experienced investigator of such claims, he should not have been selected for the job.  Many reasonable people would argue that, as an old friend of the complainant’s father, it would be difficult for him to remain neutral.  This is not to say that such a relationship would inevitably mean that the investigator was biased.  It is enough that the relationship raises a reasonable doubt about his neutrality.  In other words, it doesn’t pass the “smell test.” 

Think carefully about the investigator’s mandate.  Is this primarily a legal issue, or is the organization’s reputation also at stake?

You may have read about Mike Rice, the university men’s basketball coach at Rutgers who was filmed behaving in an abusive manner towards the young men on the team.  It turns out that Rice had been investigated for abusive behaviour before the video surfaced.  But the investigators’ mandate had been to discover whether Rice perpetrated a “hostile work environment.”  (The answer was no, largely because student athletes are not “employees”).  The investigation focused on a narrow, legalistic question, rather than on wider issues of whether Rice’s conduct made him appropriate as a representative of the university and a suitable role model for young athletes.  Rutgers has had legal costs in getting out of the mess; more importantly, its reputation has suffered.

The main lesson for employers:  Investigations are serious matters.  Personal reputations are at stake and the stress level – even for those not directly involved – is likely to be high.  If an investigation is warranted, do it properly to avoid future legal hassles and costs.

Related Posts:

Bill 168 – Investigating Complaints under your Policy

Workplace Sexual Harassment: A Problem for Management 

Bill 168: A Recent Arbitration Decision

Note:  I offer investigations of complaints related to workplace harassment, bullying, sexual harassment, and other matters covered under bill 168.  See my website for more information, or contact me directly to discuss the situation in your workplace.

Defining Workplace “Harassment” – Another Decision

In Ontario’s Bill 168, “harassment” is defined as a course of “vexatious” (bothersome) comment or conduct that is unwelcome, or ought reasonably to be known to be unwelcome. But what does this mean in practice and how might it apply to your workplace? I wrote last summer about an arbitrator’s ruling that provided some guidance as to the law’s scope and application. That case focused on a nurse’s harassment of her co-workers. Here I summarize another relevant case, heard by the Labour Relations Board. This time the allegations were of harassment by a supervisor.

(I should note: Patrick Kelly, the vice-chair of the Labour Relations Board, made a number of rulings regarding this case. The latest one is here. Many of them have to do with jurisdictional issues. I have focused on his reasonings regarding harassment, and I have omitted and simplified the more technical (nerdy) legal issues. As regular readers of this blog already know, I am not a lawyer and none of this is meant as legal advice! If you are concerned about your rights in the workplace, contact your union representative or an employment lawyer.)

Background:  The applicant (I will call her “Jane”) had been employed as a social worker in a nursing home for about seven months when a new Administrator took over.  (I’ll call the new boss “Mary.”)

Allegations:  Jane alleged two incidents of harassment.  Mary told Jane several times that she was to document every conversation she had with a resident’s family members, for the purposes of any legal actions that might be brought against the Home.  Jane told Mary that she was having trouble keeping up with all of the necessary paperwork (the “Resident Assessment Protocols”).  Mary told her to work harder, and to put in extra hours if necessary, in order to finish everything on time.  She also said that Jane might face a suspension if she couldn’t complete her work on time.

In another incident, Jane alleged that the Home’s Director of Care yelled at her during a meeting to discuss a resident’s treatment plan.  Two days after the meeting she was given a written warning for failure to cooperate with the Director of Care.

After these two incidents, Jane wrote an email to a number of people in the senior management team, expressing concern that Mary did not have a good understanding of the social worker’s role.  She asks for “support” in dealing with Mary.  Shortly after this, Jane’s employment was terminated.

The Decision:  Mr. Kelly found that the two incidents Jane described did not constitute workplace harassment.  The second incident – where the Director of Care yelled at Jane in a meeting – was “rude” but not an example of harassment.  (If you remember from the definition, harassment is a “course” of vexatious conduct or comment, rather than a single incident.) 

What about Mary’s requests to Jane to document conversations with residents’ families and her threat that Jane would face termination if she could not finish her work on time?  Again, this does not fall under the definition of harassment, and Mary’s expectations of Jane were not unreasonable.  As Mr. Kelly put it, Mary “made a blunt, unflattering assessment of [Jane’s]  performance and demanded in no uncertain terms that she fulfill management’s work expectations or risk discipline.”  While acknowledging that Mary could have shown “greater tact and sensitivity,” Mr. Kelly stressed that sometimes the exercise of management has negative consequences for workers, but that does not make it harassment.

Lessons for Employees:  Try to work things out with your boss before going over his or her head.  If you do go over your boss’s head, don’t be surprised if senior management sees things differently than you do.

Lessons for Employers:  While the actions I have described here may not fall under the legal definition of harassment, they are not good management practices either.  I suspect that these incidents and the resulting appeal to the Labour Relations Board were bad for morale and an irritation for management.

Note:  I offer investigations of complaints related to workplace harassment, bullying, sexual harassment, and other matters covered under bill 168.  See my website for more information, or contact me directly to discuss the situation in your workplace.

Review of Who Gets What: Fair Compensation after Tragedy and Financial Upheaval by Kenneth R. Feinberg

Money is the medium of exchange, and it is the means by which victims in the civil justice system are made “whole.”  Even those who everyday speak of the “value” of injuries and cases (including lawyers, mediators, arbitrators and adjustors) must pause sometimes and find this strange.  Pain and loss seem incommensurable such that any monetary “value” put on them can only be arbitrary.  And yet how else might victims be made whole, if not with money?

Kenneth Feinberg has probably had more opportunities to ponder these questions than any of us.  He has had a remarkable career as an arbitrator in the aftermath of terrible and large-scale crises.  In 1984 he was appointed special master of the settlement that ended the class action suit of 250,000 Vietnam veterans against the manufacturers of the defoliant Agent Orange.  Years later he acted as head of the September 11th Victim Compensation Fund and was the target of considerable anger and frustration, when, as was certainly inevitable, there was disagreement over whom should be compensated and what compensation would be fair.  Either of these positions would have given Feinberg a abundance of experience and material for reflection.  Yet these two positions do not exhaust his experience.  He also managed the Hokie Spirit Memorial Fund (for victims of the mass shooting at Virginia Tech in 2007); he was appointed by Treasury Secretary Timothy Geithner to determine executive pay for companies that benefited from the Troubled Asset Relief Program (TARP); and he administered BP’s Gulf Coast Claims Fund in the aftermath of the 2010 Deepwater Horizon explosion and oil spill.

In Who Gets What Feinberg tells us how he came to be seen as the go-to person for resolving complex public legal disputes.  Then he reflects on his major appointments: The legal framework in which he worked and how that framework constrained him, how he arrived at decisions, and what he learned from each assignment.  (I have not read his earlier book, What is Life Worth? devoted to his tenure as special master of the September 11th Fund).  Although Feinberg has no formal training in alternative dispute resolution, his methods will be familiar to those who do.  He values his neutrality and the public perception of that neutrality.  A former aid to Senator Edward Kennedy, Feinberg was appointed to the September 11th Fund by the Bush administration, and then to the TARP assignment and the Gulf Coast Fund by the Obama administration.  He stresses the importance of listening and of making disputants feel heard.  In each assignment, Feinberg made considerable efforts to ensure that anyone who would be effected by his decisions had an opportunity to meet with him and plead their case. And when disputants are reluctant to settle their claims, Feinberg knows the issues well enough to be effective reality tester.  (He asks the lawyer of a retiring CEO if he wants his client “dragged before Congress to justify his salary as he departs?” when the lawyer has balked at accepting Feinberg’s recommendations.)  Feinberg also recognizes, as do all good mediators, that money also has symbolic value and that financial compensation is about more than a number of dollars.  This lesson is impressed upon him a number of times in his career, whether he is dealing with relatively poor Vietnam war veterans, or with wealthy Wall Street Executives (who, not surprisingly, give him his biggest headaches.)

Although Feinberg tells us something of his early life and career, I found that gained little sense of his personality though the book.  He writes well and clearly, if with little pizzazz.  Feinberg has had a unique and fascinating career as a mediator and arbitrator, and I think that anyone interested in public conflict or in alternative dispute resolution, or even in recent American history, will find the book of interest.