Condo boards should not be bullies

A few words of caution for condo boards from Justice Myers.

In Couture v. TSCC No. 2187, (2015), Myers J. states:
[27] Life would be much neater if all disputes could be terminated unilaterally. The board somehow satisfied itself that it did not need to comply with the condominium’s mediation and arbitration bylaw or the provisions of section 132 of the Condominium Act, 1998 concerning mediation and arbitration. Rather than following the statutory prescription to attempt to resolve matters without resort to formal litigation and within the body of the condominium, the board was inviting a lawsuit against the condominium corporation.

[57]   The condominium corporation offers no good faith explanation for its refusal to engage in mediation and arbitration as required by its bylaws and the statute. This matter could have been resolved before the end of 2012 had the parties sat down in good faith to work out their issues.  So much of the escalated hostilities could have been avoided had the condominium corporation engaged in mediation I response to the applicant’s notices. If mediation did not yield a settlement, arbitration could have quickly ensued. As with the administration fees/fines issue, this issue may be relevant to an assessment of the oppression remedy below.

In a footnote, Justice Myers notes:
Perhaps the board had an eye toward subsection 134 (5) of the statute that entitles a condominium corporation to full indemnity costs in litigation against a unit owner in which the condominium corporation obtains any award of damages or costs.  This subsection performs an important role to protect innocent unit owners from paying the price of unmeritorious litigation. However, it also provides a skewed incentive to boards of directors and their advisors who can wield a heavy sword over the heads of unit owners. In this case, for example, by rejecting the applicant’s common area expense cheques, the board could have a high degree of certainty that it would be entitled to obtain a judgment at least in the amount of outstanding common expenses. Were that the case, it would then attach a lien to the applicant’s unit for its full indemnity costs. This section unfortunately incentivizes recalcitrant, litigious behaviour by condominium boards of directors and their advisors whom may be so inclined.


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