In a recent Ontario Court of Appeal decision, a couple’s claim for oppression was upheld against their condominium board for imposing harsher agreement terms on them than on other unit owners.
Couple Buys Adjoining Unit with Board’s Approval
A husband and wife purchased a unit in a condominium development (the “condominium”) in Muskoka in May 2014. In February 2016 their immediate neighbour advised them that his unit, which adjoined theirs, was to be sold. The couple were interested in purchasing it, but only if they could make an opening from their unit into the adjoining unit.
The husband thus asked the condominium’s board of directors for permission to make the alterations.
His request was addressed at the board meeting on March 25, 2016. The husband was then a director and did not vote on the proposal. The board approved the proposal with several conditions.
The conditions imposed on the approval by the board were:
- that the unit owner pay all the costs;
- that the alteration not affect the use and enjoyment of other unit owners;
- that the alteration not affect the symmetry of the building;
- that the alteration not affect the condominium’s budget;
- that all the necessary engineering and town approval be given before the work commenced;
- that the wall be returned to its existing state if the unit owner (the husband) was to sell one of the units and at no cost to the condominium; and,
- that the two units “could never be sold as one unit.”
Following this, and despite the fact that s. 98 of the Condominium Act required the condominium to enter into and register on the title to the units an agreement with the couple before they made “an addition, alteration or improvement to the common elements,” the condominium did not register the agreement. The condominium’s past practice was to not register any such agreements.
Based on the board’s approval, the couple bought the adjoining unit and completed the renovations in early 2018.
However, the membership of the board of directors then changed, and the new board sought to unravel all that had gone before regarding the two units owned by the couple, largely on the basis that there was no s. 98 agreement covering the alterations.
The board created new identical s. 98 agreements for all past unit owners, with the exception of the agreement with the couple, which included a different clause stating:
“The Improvements shall be removed by the Unit Owner, at the Unit Owner’s sole expense, before the Unit is sold. Specifically, the Unit shall be restored to the condition before the Improvements were made, including but not limited to the reinstallation of the common element demising wall within the Unit and any changes that were made by the Unit Owner related thereto.”
Couple Claims Oppression Remedy
As a result, the couple brought an application under s. 135 of the Condominium Act for an oppression remedy on the basis that they were “targeted” after their relationship with members of the new board began to break down.
(2) On an application, if the court determines that the conduct of an owner, a corporation, a declarant or a mortgagee of a unit is or threatens to be oppressive or unfairly prejudicial to the applicant or unfairly disregards the interests of the applicant, it may make an order to rectify the matter.
(3) On an application, the judge may make any order the judge deems proper, including,
(a) an order prohibiting the conduct referred to in the application; and
(b) an order requiring the payment of compensation.
The application judge granted the couple’s oppression application, ordering that the additional clause in the couple’s s. 98 agreement be changed to:
“The changes to the demising wall should be removed by the Unit Owner, at the Unit Owner’s sole expense, before the unit is sold. Specifically, the Unit shall be restored to the condition before the demising wall was altered.”
Additionally, the application judge awarded the couple $10,000 in damages for oppression.
The condominium appealed.
Court of Appeal Upholds Decision
The Court of Appeal began by describing the two-part test for oppression as set out by the Supreme Court of Canada:
“First the claimant must establish that there has been a breach of reasonable expectations and second, the conduct must be oppressive, unfairly prejudicial or unfairly disregard the interests of the claimant. […]
At its heart, the oppression remedy is equitable in nature and seeks to ensure what is “just and equitable”.”
After reviewing the application judge’s conclusions, the Court of Appeal stated:
“The Condominium had provided s. 98 agreements to the other unit owners who had completed alterations but the one prepared for the [couple] to sign was both onerous and different. […] The application judge’s remedy served to rectify the Condominium’s oppressive conduct, which seeped through all its actions, including its approach to this litigation. The Condominium’s real interests were entirely protected by the s. 98 agreement ordered by the application judge, which simply incorporated the conditions imposed when the Board originally approved the [couple’s] proposal.”
As a result, the appeal was dismissed.
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