Toronto Standard Condominium Corp. No. 1908 v. Stefco Plumbing & Mechanical Contracting Inc., (2014) 325 O.A.C. 231 (CA)

• Judge: Blair, Pepall and Hourigan, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: August 22, 2014
• Jurisdiction: Ontario
• Citations: (2014), 325 O.A.C. 231 (CA);2014 ONCA 696

Standard Condo. v. Stefco Plumbing (2014), 325 O.A.C. 231 (CA)

MLB headnote and full text

Temp. Cite: [2014] O.A.C. TBEd. OC.006

Toronto Standard Condominium Corporation No. 1908 also known as Toronto Condominium Corporation No. 1908 (applicant/appellant) v. Stefco Plumbing & Mechanical Contracting Inc. (respondent/respondent)

(C58192; 2014 ONCA 696)

Indexed As: Toronto Standard Condominium Corp. No. 1908 v. Stefco Plumbing & Mechanical Contracting Inc.

Ontario Court of Appeal

Blair, Pepall and Hourigan, JJ.A.

October 10, 2014.

Summary:

This was a priority dispute between the plaintiff condominium corporation and the Business Development Bank (BDC), the mortgagee of two units owned by the defendant Stefco. Under s. 134(5) of the Condominium Act, damages awarded against a condominium unit owner could be added to the unit's common expenses. Stefco owed arrears of common expenses from January 2009. The plaintiff failed to register a lien regarding Stefco's units until September 2012. That lien only covered arrears from July 2012. The plaintiff attempted to use s. 134 to claim the arrears from January 2009 as damages and have the damages added to Stefco's common expenses. If successful, the plaintiff could have then registered a lien for the full amount which would have stood in priority to BDC's mortgage.

The Ontario Superior Court, in a decision reported at [2013] O.T.C. Uned. 7709, declined to declare that common expenses arrears constituted damages. The plaintiff appealed.

The Ontario Court of Appeal dismissed the appeal.

Mortgages - Topic 808

Priorities - General - Statutory liens versus mortgage - This was a priority dispute between the plaintiff condominium corporation and the Business Development Bank (BDC), the mortgagee of two units owned by the defendant Stefco - Under s. 134(5) of the Condominium Act, damages awarded against a condominium unit owner could be added to the unit's common expenses - Stefco owed arrears of common expenses from January 2009 - The plaintiff failed to register a lien regarding Stefco's units until September 2012 - That lien only covered arrears from July 2012 - The plaintiff attempted to use s. 134 to claim the arrears from January 2009 as damages and have the damages added to Stefco's common expenses - If successful, the plaintiff could have then registered a lien for the full amount which would have stood in priority to BDC's mortgage - The application judge declined to declare that common expenses arrears constituted damages - The Ontario Court of Appeal dismissed the plaintiff's appeal - Nothing in s. 134's language evidenced any intention by the legislature to permit common expenses to be classified as damages so that they could be reclassified back to being common expenses - The plaintiff's proposed strategy would grant an unfettered right to a priority for condominium corporations to the detriment of mortgagees - This ignored the fair balance that the legislature had struck between the rights of mortgagees and condominium corporations - As such, the plaintiff's interpretation was inconsistent with the Act's scheme - Further, it was inconsistent with the language of s. 134, which, in plain language, drew a distinction between damages and common expenses - See paragraphs 37 to 51.

Real Property - Topic 8806

Condominiums - General - Interpretation of statutes - [See Mortgages - Topic 808 ].

Real Property - Topic 8883

Condominiums - Corporation - Liens - Amounts included in liens - [See Mortgages - Topic 808 ].

Real Property - Topic 8946

Condominiums - Liability of unit holders - For common areas or expenses - [See Mortgages - Topic 808 ].

Real Property - Topic 9052

Condominiums - Judicial review or appeal - Standard of review - This was a priority dispute between the plaintiff condominium corporation and the Business Development Bank (BDC), the mortgagee of two units owned by the defendant Stefco - Under s. 134(5) of the Condominium Act, damages awarded against a condominium unit owner could be added to the unit's common expenses - Stefco owed arrears of common expenses - The plaintiff attempted to use s. 134 to claim the arrears as damages and have the damages added to Stefco's common expenses - If successful, the plaintiff could have then registered a lien for the full amount which would have stood in priority to BDC's mortgage - The application judge declined to declare that common expenses arrears constituted damages - The plaintiff appealed - The Ontario Court of Appeal discussed the standard of review - A remedy under s. 134(3) was within the discretion of the application judge - The decision attracted considerable deference - However, here, the application judge made a legal error in her implicit finding that unpaid common expenses could constitute damages under s. 134 - This legal error adversely impacted on her exercise of discretion - Appellate interference was warranted - See paragraphs 31 to 36.

Statutes - Topic 501

Interpretation - General principles - Purpose of legislation - Duty to promote object of statute - [See Mortgages - Topic 808 ].

Statutes - Topic 516

Interpretation - General principles - Ordinary meaning of words - [See Mortgages - Topic 808 ].

Cases Noticed:

Metropolitan Toronto Condominium Corp. No. 545 v. Stein et al. (2006), 212 O.A.C. 100 (C.A.), refd to. [para. 31].

Gordon v. York Region Condominium Corp. No. 818 et al., [2014] O.A.C. Uned. 496; 2014 ONCA 549, refd to. [para. 31].

Wasauksing First Nation et al. v. Wasausink Lands Inc. et al., [2004] 2 C.N.L.R. 355; 184 O.A.C. 84 (C.A.), refd to. [para. 32].

Chapters Inc. v. Davies, Ward & Beck LLP (2001), 141 O.A.C. 380; 52 O.R.(3d) 566 (C.A.), refd to. [para. 32].

Maracle et al. v. Brant et al. (2014), 322 O.A.C. 105; 2014 ONCA 565, refd to. [para. 37].

Tyendinaga Mohawk Council v. Brant - see Maracle et al. v. Brant et al.

Montreal (City) v. 2952-1366 Québec Inc., [2005] 3 S.C.R. 141; 340 N.R. 305; 2005 SCC 62, refd to. [para. 37].

Rizzo & Rizzo Shoes Ltd. (Bankrupt), Re, [1998] 1 S.C.R. 27; 221 N.R. 241; 106 O.A.C. 1, refd to. [para. 37].

York Condominium Corp. No. 482 v. Christiansen, [2003] O.T.C. 76; 64 O.R.(3d) 65 (Sup. Ct.), refd to. [para. 41].

Metropolitan Toronto Condominium Corp. No. 1385 et al. v. Skyline Executive Properties Inc. et al. (2005), 197 O.A.C. 144; 2005 CarswellOnt 1576 (C.A.), refd to. [para. 43].

Statutes Noticed:

Condominium Act, S.O. 1998, c. 19, sect. 134(1), sect. 134(3) sect. 134(5) [para. 30].

Authors and Works Noticed:

Dunn, William G. and Gray, Wayne S., Marriott and Dunn: Practice in Mortgage Remedies in Ontario (5th Ed. 1995), p. 56-8.2 [para. 20].

Counsel:

Jonathan H. Fine and Yadvinder S. Toor, for the appellant;

No one appearing for the respondent, Stefco Plumbing & Mechanical Contracting Inc.;

Doug A. Bourassa, for the intervening party, Business Development Bank of Canada.

This appeal was heard on August 22, 2014, by Blair, Pepall and Hourigan, JJ.A., of the Ontario Court of Appeal. On October 10, 2014, Hourigan, J.A., delivered the following judgment for the court.