The importance of precedence is not understated in Canadian law. When there is disagreement regarding the interpretation of statute, parties turn their heads to case law to see how courts have determined the issue.
There have been three recent cases decided by the courts that may, respectfully, cause more confusion than they solve.
In LaFramboise v. York Condominium Corporation No. 365, the court seemingly changed the level of support required by a condominium corporation to adopt a by-law, a practice governed by the Condominium Act, 1998 (the “Act”). Section 56(10) the Act very clearly states that a by-law is not effective until the owners of a majority of the units in the corporation vote in favor of confirming it. The only exception introduced November 2017, is for bylaws relating to a specific subject matter set out in the Act, for example, electronic voting bylaws, that only require a majority vote at a meeting (assuming quorum is present) in favour of such bylaw.
Despite the unequivocal language of this provision, the court in LaFramboise held that the borrowing by-law was validly passed by the corporation with the support of the majority of the unit owners in attendance at the owners meeting, which did not equate to the majority of unit owners in the corporation – a decision, in the author’s opinion, that directly contradicts the Act.
The second case that may create a bit of a headache, released earlier last month, centers on who is entitled to receive notice when a condominium corporation initiates, and moves through, the lien process.
Briefly, the facts in Mei Ki Ching v. Carleton Condominium Corporation No. 203 are as follows: a unit owner and his spouse separated, and the unit owner remained living in the unit. Sometime after the separation, the spouse issued a designation that the unit was the matrimonial home (the “DMH”), which contained the spouse’s name and current place of residence. Years later, the unit owner fell into arrears, and the condo corporation began the process of liening the unit.
The lien process has three distinct steps: (1) notice of lien; (2) registration of the lien; and (3) the forced sale-power of sale proceedings. The Corporation, acting pursuant to the Act, provided the unit owner notice at all three stages, but only notified the spouse at stage 3, and sent this notice to the unit’s address.
The Family Law Act grants a spouse equal entitlement to the matrimonial home. The court held that as a result of this entitlement, the spouse was also entitled to notice at every step of the liening process, despite not being the registered unit owner. Furthermore, the court held that had the condo corporation made reasonable inquiries, it would have seen the DMH and been able to provide the spouse with proper notice at her current place of residence.
This case suggests that a condo corporation must make reasonable inquiries – i.e. a title search, at minimum – before issuing a notice of lien to determine any other parties who ought to be served. Management companies who are doing their own notices of lien may want to re-think their practices and get their solicitor involved to ensure that they are complying with the most recent case law.
The third and final case, also released last month, is titled 2516513 Ontario Inc. v. York Region Condominium Corporation No. 886. While there are many layers to the case, one of the issues was whether a declaration could validly impose an obligation on a condominium corporation to lease parking units in a parkade in perpetuity.
The court ultimately held that this obligation would contradict Section 50 (3) of the Planning Act, was against public policy, and ultimately unenforceable.
That being said, the court respectfully appeared to overlook an exemption to s. 50(3) that would have applied here. S. 50(9) of the Planning Act says that the rule granting the use of or right in land for a period of 21 years of more does not apply to part of a building or structure. Presumably, parking units located in a parkade would fall under this provision.
Declarations that create an obligation on the condominium corporation to lease back common elements to the developer for a period exceeding 21 years are quite common. How this decision will affect these provisions going forward remains unclear.
If you are unsure as to how a statute should be interpreted, be sure to consult with your lawyer to ensure that you’re following the most recent, and accurate, precedent.
