contents
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Condos vs management
EcoConcepts Management Services Inc. and
PCC No. 260 and PCC No. 257 and
Lorraine Tremblay, Neil Dixon, Gloria Duguay, Gerry Pickering and Agnes Oakley
Ontario Superior Court of Justice
CV-14 518666
I got interested in this court
application after reading a status certificate for this Brampton condo
tower. A condo being sued for an eye-popping $568,114 by the
ex-management company deserves a close look. A contractor walking
away with a $196,200 deposit is equally unusual.
EcoConcepts Management Services Inc Statement of claim
Claims against PCC No. 260
• $493,113.61 in damages.
• $75,000 in punitive and exemplary damages.
• interest from 19 August 2014 to date of payment or judgment.
• costs on a substantial basis.
• such further and other relief that the honourable court deems just.
Claims against PCC No. 260 and PCC No. 257
• $1,695.00 in damages.
• interest from 19 August 2014 to date of payment or judgment.
• costs of this action.
• such further and other relief that the honourable court deems just.
History
• EcoConcepts was the property manager for PCC No. 260 since the summer
of 2004.
• Most recent contract was renewed starting 01 Dec 2013.
• It was unanimously approved and duly authorized by PCC No. 260's Board
of Directors at a meeting on 03 Dec 2013 as evidenced by the minutes.
• The term was from 01 Dec 2013 to 30 Nov 2018. (Five years.)
• Compensation
"The manager [EcoConcepts] shall be
paid...an annual fee of $100,000 for 01 Dec 2013–30 Nov 2014 and a 2
percent increase for years 2015, 2016, 2017 and 2018, excluding the
HST."
• The termination clause
"In the event that the corporation [PCC
No. 260] wishes to terminate the [Management] Agreement, it shall
provide the Manager with sixty (60) days written notice and all
payments in full of Manager's compensation for the remaining months of
the term of this Agreement."
Termination clause was specifically discussed at the Board Meeting held
on 03 Dec 2013, and referenced in the Minutes as follows:
"Discussion with the Corporation's
lawyer agreed that the Board would guarantee cost savings over the
course of 4 years...we agreed to continue with Eco Condo Management
Services [sic] for 5 years no termination clause with cash out to be
implemented."
On or about August 19, 2014 PCC No. 260 unilaterally and without
advance notice or warning advised EcoConcepts that it was terminating
the Management Agreement, effective immediately. There was four years and
one month remaining under the term.
PCC No. 257
• EcoConcepts managed the shared facilities since the summer of 2004.
• The term of the Shared Facilities Agreement was extended from 01 Dec 2013
to 30 Nov 2018.
• The Shared Facilities Agreement stated"
"The Manager [EcoConcepts] shall be paid...an annual fee of $10,170.00, including the HST for year 2014..."
• The Termination Clause states:
"In the event the Corporation [PCC 260]
wishes to terminate the [Management] Agreement, it shall provide the
manager with sixty (60) days written notice or payment in lieu of."
• on 19 August 2014 PCC No. 257 and PCC No. 260 terminated the Shared
Facilities Agreement effective immediately.
• 60 days notice $1,695.00
The application was filed on 22 Dec 2014.
Defence and counterclaim
The most recent renewal of with which PCC No. 260 has no difficulty 01
Dec 2010 till 30 Nov 2013 continuing on month to month basis unless
terminated. This agreement had a 60 day termination clause.
At the AGM 03 July 2014, several new members were elected to the board.
On 19 August 2014, the newly elected board resolved to terminate the
plaintiff's services and gave 60 days written notice on or about that
day. By letter, on 22 Aug 2014, counsel for the plaintiff demanded PCC
No. 260 pay $499,000.
The new management agreement signed by the old board on Dec 2013 is
substantially different than the 2010 agreement. It has a five-year
term instead of three years. The new termination provision is
extraordinary and is far beyond the 60 or 90 day industry standard. It
is oppressive, unconscionable and improvident.
PCC No. 260 says that the Dec 2013 agreement was not approved at a
duly-constituted meeting of its board and is consequently invalid. The
Dec 2010 agreement therefore remains the operative agreement.
If the court finds that the board meeting held on 03 Dec 2013 was
valid, PCC No. 260 states that the directors who approved or executed
the Dec 2013 agreement were misled, poorly advised, negligent,
improperly colluding with the plaintiff, or some combination thereof,
in regard to the following points and others:
a.) That the revised termination clause was "industry standard";
b.) That the agreement would result in cost savings;
c.) That the five year term was prudent, justified or industry standard;
d.) That the deletion of the protective provisions in clause XIV(3) was prudent
or justified, or even that such provisions were proposed to be deleted; and
e) That the revised agreement was recommended or approved by counsel.
The plaintiff and its principals owed and breached a duty to act in
good faith towards PCC No. 260 by misrepresenting to PCC No. 260's
directors the nature and effect of the proposed changes in the
management agreement.
PCC No. 257
PCC No. 260 board did not have the authority to bind PCC No. 257.
Request the court dismiss the plaintiff's action with costs:
a.) Rescission of the contracts referred to in the Statement of Claim;
b.) Damages for breach of contract and negligence in the sum of $500,000;
c.) Interest;
d.) Costs;
e.) Such further and other relief that the court finds...
Counterclaim
Throughout its tenure as PCC No. 260's Manager plaintiff and its
principal, Leonora Frangella, actively managed other condo corporations
often from PCC No. 260 management office and using equipment and
materials belonging to or paid by PCC No. 260. Work done during hours
that were suppose to be devoted to PCC No. 260's business.
List of complaints.
There was a long shopping list which included:
• issued a cheque for $196,200 to a contractor as a deposit on hallway
renovations.
• Performed many services in a negligent manner.
• Poor bookkeeping and accounting.
• improper crediting common expenses.
• poor customer service.
• loss of priority over common expense arrears
Costs and economic damage all estimated to be over $500,000.
Filed: 06 Feb 2015
Plaintiff's counterclaim
•
|
The Management Agreement was
executed on or about 01 Dec 2013 unanimously approved and duly
authorized by PCC No. 260's board at a properly convened meeting and
evidenced by minutes. |
•
|
The management Agreement was not drafted by EcoConcepts. |
•
|
Other contractors received similar contracts: "ie upon termination payments are to continue for the balance of the term." |
•
|
EcoConcepts never got written notice of termination. |
•
|
EcoConcepts denies colluding with any members of the board and cannot be held liable for the alleged bad decisions of the board. |
•
|
Despite best efforts neither EcoConcepts nor Frangella have found comparable employment. |
Plaintiff denies counterclaim and requests it be dismissed with costs on a substantial indemnity basis.
Filed 02 March 2015
3rd parties
On 31 August 2016, the third parties (old board) advised the other parties that they have changed law firms.
This application was heard on 02 February 2017.
—CondoMadness
Court File No: CV-14-518666
Heard: February 2, 2017
Date: 05 April 2017
Justice W. Matheson
The court decision was released on 05 April 2017. The judge included the following in his judgment.
In short, these proceedings arise from discord within the condominium
giving rise to a change in the board membership, the termination of the
plaintiff’s management contract and related disputes. Serious
allegations are made, including the alleged fabrication of documents.
By 2013, the plaintiff’s management of PCC260 had become a source of
significant discord. Some owners were very unhappy with Ms. Frangella.
Opponents of the old board formed an advocacy organization called The
Home Owners’ Association in order to mobilize support among the owners
and effect change. An attempt to remove the old board in mid-2013 did
not succeed.
At the end of 2013, the management contract was due to expire. Ms.
Frangella was concerned that a new board might terminate her contract.
In late 2013, Ms. Frangella approached the old board, expressed her
concerns, and requested a new, longer-term contract.
At PCC260’s annual general meeting in July 2014, several
members of the board were replaced and a new board took over at PCC260. The new board discovered the 2013
Agreement. It was terminated, and PCC260 has refused to
pay the almost half million dollar termination fee.
There is considerable dispute about the events surrounding the entering
into of the new agreement. The new agreement, dated December 1, 2013
was for a five-year term and a similar annual fee, although now
increasing annually. Most significantly, the agreement had a different
termination clause. The clause that is the focus of this litigation
provided that on terminating the agreement, PCC260 was required to pay
out the remainder of the five-year term.
There are significant factual disputes regarding the events surrounding
the entering into of the 2013 Agreement, especially the old board’s
process, including the following:
(i)
|
why the termination clause requiring payment for the balance of the
term was included in the 2013 Agreement (without being requested by the
plaintiff) and, in that regard, whether the payment was inserted to
make it difficult for a new board to remove the plaintiff as the
property manager; |
| (ii) |
whether the 2013 Agreement was properly authorized at a meeting of the old board, including: |
|
(a) |
whether there was a meeting at all, given that the document put forward
as the minutes is in a different [sic] from the prior forms of minutes and
was purportedly not stored with the other minutes, among other things; |
|
(b) |
why the minutes contain more detail and are potentially inconsistent
with the handwritten notes put forward as the notes of the meeting,
especially given that the person who was said to have prepared the
minutes was not at the meeting; |
|
(c) |
why the handwritten notes of the meeting were apparently altered with liquid paper; |
|
(d) |
why the minutes were apparently not approved at a subsequent board meeting; |
|
(e) |
if there was a meeting, what transpired, given the differences between
the minutes, the document put forward as the notes of the meeting and
the recollection of various board members; |
|
(f) |
whether the old board obtained competitive quotes for property management services and whether they were discussed; |
|
(g) |
whether the old board obtained and relied on legal advice about the above termination clause; |
| (iii) |
the extent to which Ms. Frangella was personally involved in the old
board’s process, which it appears she may have been, and with what
effect; |
| (iv) |
why the 2013 Agreement was not disclosed to unit holders in the ordinary course; and, |
| (v) |
whether the old board acted honestly and in good faith and is therefore
entitled to indemnification for whatever they did or did not do. |
There is evidence on all of these issues, sometimes conflicting
evidence, sometimes evidence with significant gaps and sometimes
evidence from which one party or another asks for significant
inferences to be drawn.
PCC260 delivered an expert report from Dean McCabe. In short, he opines
that the termination provisions in the 2013 Agreement are “well outside
of the norm in the condominium management industry in the GTA.” He
further notes that the clause at issue is the most restrictive contract
termination provision that he has ever seen in his long experience.
The statement of defence alleges that the 2013 Agreement was not
properly authorized by the old board. Further, it challenges the new
termination provision, seeking relief against penalties under s. 98 of
the Courts of Justice Act. The statement of defence allows for the
possibility that the plaintiff is owed a small sum for notice, but
seeks equitable set-off of that sum as against amounts claimed in the
counterclaim.
The counterclaim seeks rescission of the 2013 Agreement and the shared
facilities agreement, as well as damages for breach of contract and
negligence, setting out numerous allegations against the plaintiff with
respect to the manner in which services had been provided to PCC260.
There is also a dispute about an agreement with Bristol Contracting to
update the corridors at PCC260, entered into shortly before the change
of governance at PCC260. There are issues regarding when the contract
was signed, when the deposit of almost $200,000 was paid and what
transpired at the board meeting including with respect to competitive
bids. PCC260 seeks return of its deposit, but has commenced separate
proceedings in that regard.
In the third party claim, PCC260 names five members of the old board as
third parties and seeks contribution and indemnity from them in regard
to the plaintiff’s claim, among other things.
The third parties submit that they were acting honestly and in good
faith in respect of all relevant steps taken by them and, therefore,
the claim for contribution and indemnity against them should be
dismissed.
They also claim that if PCC260 does show fraud and succeeds in
obtaining rescission of the 2013 Agreement, there would be no claim for
contribution and indemnity.
(This is quite an argument. If Ms.
Frangella wins, it's not their fault as they acted honestly and in good
faith. If fraud is shown, (it's a civil case afterall) then Ms.
Frangella loses, there is no payout so they're off the hook. I'm not
sure about the court costs.
—CondoMadness)
Move for summary judgment
Both the plaintiff and the third parties have moved for summary
judgment. In the substantial record before me, in addition to
documentary evidence and affidavits from numerous people, there are
examinations/cross-examinations of ten parties/witnesses, as well as
the expert report filed by PCC260 with industry evidence regarding the
cost of management services for condos.
These motions
The plaintiff’s claim requires that two main issues be addressed:
| (1) |
whether the 2013 Agreement was properly authorized by the old board,
including the extent and nature of the involvement of Ms. Frangella in
that process; and |
| (2) |
whether the termination provision is an unenforceable penalty in any
event, and whether PCC260 should be relieved from it under s. 98 of the
Courts of Justice Act. |
The second motion, brought by the third parties, has as its central
issue whether or not these former board members acted honestly and in
good faith in the course of the events at issue, especially in entering
into the 2013 Agreement.
The above issues require a determination of what transpired in the
course of entering into the 2013 Agreement and why, among other things.
The relevance of the disputed facts is amply demonstrated by the
submissions made by the moving parties in their factums. The plaintiff
relies on submissions that the old board “duly authorized” the 2013
Agreement. The third party members of the old board accept that the
allegations of fabrication of documents, if proved, “clearly amount to
dishonesty and bad faith” but strongly submit that the allegations are
unfounded.
“indoor management rule”
Under the Condominium Act, 1998, S.O. 1998, c. 19, s. 32, a condominium
board cannot transact any business of the condominium except at a
meeting of the board where a quorum is present. Further, the “indoor
management rule” does not apply to condominium corporations because the
Condominium Act is consumer protection legislation. The plaintiff is
therefore not entitled to assume that the 2013 Agreement was properly
authorized by the old board of PCC260.
There is considerable evidence before me regarding the relevant course
of events, focusing mainly on the 2013 Agreement and the board process.
Not surprisingly, some of the witnesses do not fully recollect what
happened. And some of the alleged issues and inconsistencies put
forward by PCC260 are, at best, trivial. However, the issues arising
from the allegedly fabricated documentation about a board meeting
regarding the 2013 Agreement, including the minutes and notes that have
been produced, do give rise to significant factual issues.
The third parties submit that there are innocent explanations for the
various issues with this documentation. There may well be. However,
considering all the evidence before me, I conclude that the necessary
factual findings cannot fairly and justly be made on the written record
on these motions. These factual findings are required not only for the
rescission claim but also for the determination under s. 98 of the
Courts of Justice Act.
PCC260 submits that if anything could be determined on these motions,
it is that the termination clause in the 2013 Agreement is an
unenforceable penalty. Certainly, the sum of almost half a million
dollars does appear to be out of all proportion to any damages actually
suffered by the plaintiff due to early termination of the 2013
Agreement.
There is also a potential issue about whether or not the termination
clause in the 2013 Agreement is a penalty clause at all, rather than a
forfeiture clause. If it is a forfeiture situation, there must be
a consideration of unconscionability and fairness. Again, this leads
back to the disputed facts surrounding the allegedly misconduct,
including the alleged fabricated documents.
There is also what appears to be an unusual situation in this case
inasmuch as it was PCC260 (under the governance of the old board) that
inserted the new payment obligation into the termination clause, not
the plaintiff. Under its new board, PCC260 is now seeking discretionary
relief under s. 98 of the Courts of Justice Act and must show why it
should not honour its own clause. PCC260 points to the same alleged
misconduct of the old board in this regard.
Bearing everything in mind, I conclude that the issues in these
proceedings cannot fairly and justly be decided on the record before me.
I am not persuaded that it would be fair and just to evaluate
credibility or draw inferences from the evidence in the written record
that are necessary to decide this matter on the record before me,
especially in the face of allegations of fabrication of documents and
other dishonesty. I conclude that there are genuine issues that require
a trial.
Disposition
These motions are therefore dismissed.
top
Maple Ridge Community Management
vs PCC No. 231
Court of Appeal—Ontario
Docket: C59661
Date: 10 April 2015
This hearing was an appeal of a Divisional Court decision that would
have had a small claims case that was lost by Maple Ridge sent back for a
new small claims hearing.
Background Facts
The
condo appointed Maple Ridge as the property management company for a
term of three years, commencing 30 November 2012. Under the terms of
the Agreement either party could terminate the contract upon 60 days
written notice or pay in lieu of notice or, alternatively, immediately
for cause.
The contract said that the condo could terminate Maple Ridge if the
company was "insubordinate, reckless or grossly negligent in performing
its duties".
In a Small Claims Court action, Maple Ridge sought damages from the
condo corporation, alleging a breach of
contract and contending that the condo
corporation did not have cause to terminate so they were entitled to $8,303.24, the pay in lieu of notice .
The Trial Judge concluded:
[n]otwithstanding that the grounds relied upon by the defendant in
terminating the agreement, may not have been sufficient individually to
meet the tests outlined above, although in some cases I believe they
were, I am satisfied that when taken together they are sufficient to
constitute insubordination, recklessness and/or gross negligence
entitling the defendants to terminate the agreement without notice
pursuant to paragraph 16.5 (c).
He dismissed Maple Ridge’s claim.
Appeal to Divisional Court
Court File No: CV-13-39-00
Maple Ridge appealed to Divisional court in June of 2014.
Justice David L. Edwards ruled that the small claims judge states that
a number of actions or omissions could amount to insubordination,
reckless or gross negligence, namely: continuing to issue incorrect
status certificates; delays in preparing banking documents for
signature, coupled with late payment of payables and late payment
charges being incurred; and failure to provide reports on the roofing
contract to the board of directors.
However, nowhere does he find that any act or omission constituted
insubordination, recklessness or gross negligence. On that issue, we do
not know “what” was decided.
It is unclear as to what acts or omissions the Small Claims judge found
collectively rise to the level of insubordination, recklessness and/or
gross negligence. Further, the judge does not provide an answer as to
“why” he made that finding.
Justice Edwards found that the reasons were not sufficient. He allowed
the appeal, set aside the judgment and returned this matter to the
Small Claims Court for a new trial before a deputy judge other than the
trial judge.
Costs
Court File No: CV-13-39-00
01 August 2014
Justice Edwards awarded Maple Ridge $10,000 in costs.
Court of Appeal
PCC #231 then appealed the Divisional Court decision.
The Appeals court ruled that after several pages of analysis, the small
claims trial judge concluded that although the grounds relied on by PCC
231 may not have been sufficient to constitute insubordination,
recklessness and/or gross negligence when considered on an individual
basis, collectively they were sufficient. The “what” and “why” are
clear in the trial judge’s seven pages of reasons, which comprised of a
thorough analysis of the relevant evidence, legal definitions, and
legal authorities.
Further, there is nothing on the record that suggests that the trial
judge made any palpable and overriding error in any of the findings.
The factual determinations are supported by legal conclusion that the
actions of Maple Ridge constituted insubordination, recklessness and/or
gross negligence. Accordingly, the case will not be remitted back to
Divisional Court.
Decision
I would allow the appeal, set aside the order of the justice of the
Divisional Court and reinstate the judgment of the Small Claims Court.
Costs
With respect to the costs of the appeal in the Divisional Court, I
would reverse the order of the Divisional Court and award $10,000 to
PCC 231 as the successful party. PCC 231 is also entitled to its costs
in this court, which I would fix at $7,500.
Was it all worth it?
Maple Ridge Community Management was
the big loser. Not only did it pay a portion of the condo's court
costs, it had to pay its own legal bills.
Plus its reputation took a hit, even
if just very slightly as very few people will hunt through the Internet and
read the judgment. So in my opinion, it would have been better off for Maple Ridge to have written off the two months fees.
PCC 231 went through two years of
court battles and although it was awarded $17,500 in costs, it
certainly paid far, far more than that in legal fees. (An owner told me
that the condo paid $52,000 in legal fees so I can't say they came out
ahead. In my opinion they would have done better if they had given Maple Ridge two months notice before hiring their replacement.
However, one of the directors wrote a letter
to the owners claiming that the condo corporation won a victory and
"There are some things that are simply worth fighting for" so not
everyone agrees with CondoMadness.
In my opinion both sides lost. The real winners? Both law firms of course.
(I have been informed that a couple of owners have been adding up the
costs of PCC 231's legal costs and costs of settlements over the last few years and they figure
that they are approaching $500,000.) —editor
top
Page v Maple Ridge Community Management Ltd
Small Claims Court
Court File No: SC-16-00110059-0000
Before: Deputy Judge L. Olivo
Date: 21 March 2017
Ms. Page did not receive notice of a $767.70 Special Assessment in time so Maple Ridge put a lien on her townhouse unit.
Ms. Page paid the entire sum of $1,586.95 demanded by Maple Ridge on 06 May 2016 by cheque “under protest”.
Maple Ridge does their liens in house using paralegals. Ms. Page is a
paralegal so she understood that paralegals are not authorized to to
lien properties. She made a complaint to the law society.
Ms. Page, put in this claim for the return of legal
fees of $819.25 charged to her in connection with the registration and
discharge of the lien. She also claimed $25,000 in punitive damages and
$25,000 in special damages for “the unauthorized practice of law.”
Judgment
The plaintiff’s action was dismissed.
Losing side gets costs
This is where this case gets really interesting.
"Ordinarily, costs follow the event, and the defendant would
be entitled to recover costs as set out in Rule 19. However, s. 131 of
The Courts of Justice Act makes it clear that cost awards are
discretionary. On this foundation, Rule 19.06 gives the court authority
to order one party to pay an amount to another where a party has unduly
complicated or prolonged an action or has otherwise acted
unreasonably. Rule 1.03(1) directs that the rules shall be liberally
construed to secure the just…determination of every proceeding on the
merits.
Winning side gets nothing
"In this case, there were two factors that have caused me to depart from ordering costs to the defendant.
First, the plaintiff having identified a case of unauthorized practice,
promptly reported it to the Law Society. While it was in her interest
to do this, it was also in the public interest to prevent unauthorized
practice, and to discourage Maple Ridge from continuing its practice of
using paralegals for work they are not authorized to do. Ms Page
obviously put time and effort into this and did so at her own expense.
Her efforts should have some recognition.
Secondly, it was clear from the position taken by the defendant, and
from the evidence of Ms. Payne, (a Maple Ridge employee) that the
defendant was less than forthcoming in acknowledging that using a
paralegal was unlawful.
Ms. Payne provided very little information about what Maple Ridge did
following the events of May 2016. To the extent it could, the defendant
suppressed and avoided revealing a full and clear picture of their
handling of this matter to the court, and I find this unreasonable.
As well, as Ms Page noted, when she raised the issue of unauthorized
practice, she was given, as she put it “the brush off” as is
apparent from the email exchanges and subsequent communications. This
“circling of the wagons” is not a surprising response coming from a
corporate bureaucracy targeted for inappropriate behaviour, but it is
not behaviour that should be encouraged.
Accordingly I award the plaintiff costs fixed at $500."
Note:
I found it interesting that Maple Ridge was represented in this case by a paralegal. —CondoMadness
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A
Win2 Management Inc. v MTCC No 1049
Small Claims Court
Court File No: SC–16–00002481–0000
Deputy Judge Marr
29 September 2016
In this case, the property management company, self-represented, won.
Win2 Management Inc sought $24,916.50 in damages. It was to be paid
$6,300 a month for its services. The contract could be terminated with
60 days notice. Without any notice, on January 14, 2016 Mr. Ma, the
owner of Win2, was told that he was to stop working for MTCC No 1049,
thus terminating the written management contract
In its Statement of Defence MTCC No 1049 stated that the termination was for cause and breach of contract.
MTCC No 1049 only called one witness a security guard working for MTCC
No. 1049. He testified that contrary to MTCC No. 1049’s policy, Mr. Ma
allowed contractors to come into the premises after hours to do work
and while contractors stated they had licenses and insurance, they did
not have them with them. Mr. Ma testified that the contractors were
licensed.
Based on the evidence lead at trial, MTCC No 1049 did not
establish that the Plaintiff’s management was flawed or that there was
a fundamental breach of the written management contract or that the
agreement was terminated for cause. Accordingly MTCC No 1049 must
pay the Plaintiff the monies owing for 60 days it would have to pay the
Plaintiff under the written management agreement during this 60 day
notice period.
The Plaintiff billed for monies it would have earned if it had been
given 60 days notice of termination of the written management contract
before it was “fired” on January 14, 2016: $6,300 for January 2016,
$6,300 for February 2016, and for half a month up to March 15, 2016,
$3,150, plus HST for a grand total of $17,797.50. I conclude the
Defendant MTCC No 1049 must pay Win2 Management Inc $17,797.50 for this
invoice.
Additionally, there is an invoice for October 15, 2016 for $6,300, plus HST for a grand total of $7,119.00.
Mr. Ma admitted when testifying that he had verbally discussed before
signing the written management contract not charging MTCC No. 1049 for
October 2015, the first month of the written management contract.
However, Mr. Ma in his testimony and argument pointed out this free
month was not a term of the written management contract drafted by MTCC
No 1049. Accordingly, although he had never invoiced previously for
October 2015, when the written management contract was terminated, he
charged for the month of October 2015 the first month of the contract
under the written management contract.
In light of the language of section 20 of the written management
contract, I conclude that even if there was verbal agreement not to
charge for management in October 2015, such an agreement is not
enforceable as the written agreement is “the entire agreement between
the parties”. Accordingly, I conclude MTCC No 1049 must pay Win2
$7,119 for this invoice.
Accordingly, I grant the Plaintiff judgment on both invoices. The
Defendant shall pay to the Plaintiff the sum of $24,916.50 for the two
unpaid invoices.
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A
Orr vs MTCC 1056
Ontario Superior Court of Justice
Docket: 01-CV-206672CM
Madam Justice D.A. Wilson
Heard: 09 November 2016
Background
This decision comes after a very long legal dispute that included a 43
day trial and then an appeal to the Court of Appeal that remitted two
issues back to the Superior Court judge. They were:
(1)
|
the valuation of the damages of the Plaintiff for the loss of the third floor of her condo unit; and |
(2)
|
a determination of whether the condo corporation can claim indemnity from the property manager for costs paid and owed. |
In 1998, Kelly-Jean Orr bought a three-story condo townhouse. However,
the Declaration states that it is a two-storey townhouse. The third
storey was illegally built in the attic which is a common element.
When she became aware of this, Orr sued the law firm that handled the
sale, the condo corporation, the vendor and Brookfield, the property
management company.
In her original judgment, the judge ruled that the vendor and the lawyer were liable for Orr's damages.
Orr appealed that decision and the Appeals Court decided that
Brookfield prepared the estoppel (status) certificate so they were
negligent. The dismissal of Orr’s claims against Brookfield was upheld
on the basis that the property management did not owe Orr a duty of
care; rather, it was acting on behalf of the condo corporation, MTCC
1056.
Positions of the Parties
MTCC 1056 submits that there was no finding of independent negligence
on behalf of the condo corporation and the only reason it had to pay
damages and costs to the Plaintiff was because Brookfield was negligent
when it prepared the the estoppel (status) certificate.
Brookfield's position was that the Plaintiff’s claims arose as a result
of actions of the other defendants, particularly Weldon who was on the
Board of Directors of MTCC 1056 and who was aware of the illegality of
the third floor of unit 113 when he sold it to the Plaintiff and that
it’s role was small and insignificant in the larger picture.
"MTCC 1056 has a statutory duty to provide an estoppel certificate to a
prospective purchaser and it cannot download that duty onto Brookfield."
"Furthermore, the provision in the Agreement that requires MTCC 1056 to
provide insurance for Brookfield is clear evidence that it was never
intended under the Agreement that Brookfield would be responsible for
its own negligence."
Ruling
The Court of Appeal found that Brookfield was negligent in the
performance of a duty it had contracted with MTCC 1056 to carry out..
Conclusion
MTCC 1056 is entitled to indemnification from Brookfield for the costs
it was ordered to pay to the Plaintiff in the amount of $201,670.81.
MTCC 1056 is not required to pay the trial and appeal costs of Brookfield in the amount of $63,825.62.
Brookfield shall pay to MTCC 1056 its costs of the trial fixed in the
amount of $525,000, to be paid in equal amounts to the insured and
uninsured interests.
MTCC 1056 is entitled to indemnification from Brookfield for the appeal
costs it was ordered to pay to the Plaintiff in the amount of
$44,170.81.
MTCC 1056 was successful on the trial of the indemnification issue. As
such it is entitled to its costs from Brookfield, which I fix in the
sum of $25,000.
The costs listed here comes to $859,667.24. The total costs must be far higher. That was one expensive status certificate.
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1238235 ONTARIO Ltd o/a Distinct Management Group and TCECC No. 1702
Ontario Superior Court of Justice
Toronto Small Claims Court
Court File No: SC-16-5457-00
Before : J Prattas DJ
Released: 14 July 2017
Endorsement on a Motion
Distinct Management Group (DMG) was looking for:
$12,430 for two unpaid invoices
$04,123.01 for legal fees
$05,000 punitive damages
History
DMG and the condo corporation entered into a property management
agreement commencing 01 Dec 2010, which was renewed and ultimately
ended on 31 May 2014.
The condo corporation was defrauded by its former property manager,
Chatsworth, and its books and records were in disarray for several
years from 2005 to 30 November 2010. No audited statements had been
prepared for this period. DMG claimed to have provided bookkeeping
services to reconstruct the accounting records from 05 Sept 2005 to 30
Nov 2010 related to the Chatsworth fraud.
What I found interesting
Besides the condo being defrauded by the previous management company, there are three important issues.
The claim for the invoices is statute barred.
A claim is discovered a reasonable time between the time that the
account should have been delivered—not necessarily when actually
delivered as submitted by the defendant. A contractor submits a bill,
waits 30 days for payment and that is when the two years starts to file
an application. These two claims were over two years late.
Confict of interests
DMG”) is owned by Susanne Gilbert. Tony Flynn is her husband and is an
employee of DMG. While the Management Agreement was in force with the
condo corporation, Tony Flynn was employed by DMG and was also a
director and president of the condo.
Inside Management rule
DMG submitted minutes from two board meetings, an Owners Meeting and
from an AGM alleging that their work was requested, authorized and
approved by the Board and the unit owners.
Yet, the minutes doesn't show a resolution of the Board or of the
owners requesting, authorizing or approving any of the alleged DMG's
work or approving compensation for the management company over and
above its regular monthly compensation.
Susanne Gilbert, Tony Flynn and a former director submitted affidavits
supporting DMGs claims but the judge ruled that the affidavits were
self-serving and attempts to reconstruct the facts long after the
events.
Disposition & costs
Distinct Management Group failed to win and as a result they were ordered to pay TCECC #1702 their costs of $750.
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