communication

Cases spotlight cost of poor communication

Recent Ontario court decisions result in unnecessary expenditures for corporations, owners
Wednesday, June 9, 2021
By Sonja Hodis

Condos are communities. In order for them to operate efficiently and effectively, good communication is key and, in most cases, economically resolves issues. However, in other condos, communication channels break down or don’t exist in the first place, causing unnecessary expenditures that corporations and owners must incur.

Judges, arbitrators and various decision makers who are called upon to resolve condo disputes have clearly sent messages through their decisions that inappropriate communication will subsequently cost the condo and owners money.

Lack of good faith communication with owners

One recent example is Amlani v. York Condo Corporation No. 473 (Amlani). This case from 2020 may look familiar as many have spoken about the indemnification provisions in declarations and the ability to chargeback costs to a unit owner. Yet another important message is that condo boards will face severe cost consequences if they do not communicate with owners appropriately.

In Amlani, the court made a point of highlighting the condo’s own bylaws that require both the corporation and the owner to use best efforts to resolve disputes through good faith negotiations before resorting to mediation, arbitration or legal proceedings. The court found that the corporation did not behave in accordance with the bylaw; rather, the corporation refused to meet with the owner despite the owner’s attempts to communicate with the board to reach a resolution. The corporation failed to engage in communication that would be considered “good faith” negotiations. As the court stated:

“Instead of meeting with Mr. Amlani to discuss solutions, however, the Corporation got its lawyers involved and demanded that Mr. Amlani stop smoking immediately and warned him of enforcement costs. Its position became intractable. For whatever reason, it appears to have become rigid and motivated by animus towards Mr. Amlani that blinded the Corporation to simple practical solutions.”

At the end of the day, the corporation’s lack of good faith communication with the owner cost the corporation over $100,000 in legal fees, s. 135 oppression damages paid to the owner, and its own legal fees. Had the corporation been willing to communicate in good faith instead of taking a hardline position, the owners of York Condominium Corporation No. 473 would likely not have been saddled with such an economic liability.

Handling noise complaints

Another important case from 2020 that reinforces the importance for corporations to communicate effectively with all parties involved in a dispute is the MTCC No. 933 v. Lyn case (Lyn), which involved a noise complaint regarding Ms. Lyn’s unit. The corporation was successful in obtaining an order that the tenant breached the rules by creating excessive noise. The tenant was ordered to comply with the rules and pay $23,250 in costs. The corporation requested costs in the amount of $31,000 even though its actual costs were $34,469.73. The unit owner argued that she should not be responsible for any costs of the corporation in relation to this compliance application, of which the court ordered in her favour.

The court held that the corporation did not properly communicate with the owner regarding the complaints of the neighbour. The corporation failed to send any notice on two occasions and imposed arbitrary and unreasonable deadlines when it demanded the owner take steps to evict the tenant. Meanwhile, it failed to provide information that would have facilitated the owner in taking steps to end the tenancy appropriately.

While the corporation was successful in getting a costs award, the success was a hollow victory. First, they did not recover 100 per cent of their costs. As such, the amount not awarded by the court, but incurred by the corporation, is a cost all owners will bear. Second, the costs award was against the tenant and specifically not the owner of the unit, which means that the corporation will likely not be able to add these costs to the common expenses of the unit and collect such costs through the lien procedures in the Condominium Act, which gives condos a super priority over amounts owed to them.

It is unknown from the decision whether the corporation will be able to collect the costs awarded by way of garnishment or seizure of personal or real property of the tenant, and it is possible that the corporation will not be able to collect those amounts owing at all. As such, Lyn is a good reminder to property managers and boards to make sure that communication always includes both the owner and tenant. If you fail to do so, the corporation will pay the price.

Owners’ communication style

There has also been an increase in the number of cases where owners are harassing condo managers, boards, contractors or other owners. An owner’s failure to communicate effectively also results in costs being borne by the owner and puts their unit in jeopardy of being sold if costs are not paid.

An example of such a case is Ottawa Carleton Standard Condominium Corporation No. 671 v. Friend (Friend). The court was asked to prohibit the owner from using rude, demeaning and inappropriate comments while engaging with directors. This form of inappropriate communication spanned several years. Friend’s communication involved repetitive, lengthy and insulting emails, telephone calls or knocking on the door to speak to someone directly.

The court found Friend to be verbally assaulting, confrontational and aggressive and severely limited Friend’s ability to communicate with the condominium corporation, its staff, contractors and other residents. The corporation sought full indemnity costs in the amount of $14,321 and the court awarded these costs against the owner and ordered they be added to the common expenses of the unit. This allows the corporation to collect these costs by way of the lien procedures available under s. 85 of the Condominium Act and power of sale proceedings if the owner does not pay.

Cost decision of recent case an important reminder to owners

In a recent similar example from 2021, MTCC No. 580 v. Mills (Mills), the court was asked to determine how an owner can communicate with the condo corporation and third-party contractors. The situation between the owner and the condo corporation had persisted for years, with the corporation seeking many orders to restrict the owner’s ability to communicate with the board, its agents and contractors. Another order was sought to prohibit direct threats to the board and their legal counsel, and from posting unauthorized notices on the property and common elements and playing recordings on the common elements at any time.

The court recognized that the owner’s communication style, which consisted mainly of a vast number of emails, was oppressive despite the owner’s claim that his style of communication was required to accommodate his disability. The court stated:

“Reading, analysing, and responding to Mr. Mills’ emails represents the vast bulk of the work of the applicant’s staff and volunteers. Counsel frequently is required to become involved. Mr. Mills’ emails exceed any reasonable expectation for the sheer volume of communication without even considering the tone or content. They are prejudicial in that they have had a negative and costly effect on the applicant and its personnel. I have no hesitation finding the email communication oppressive under the Condominium Act, 1998 and granting the relief sought subject only to the exception referred in para. 31 for Mr. Mills real estate counsel.

As noted previously, I have no doubt that Mr. Mills finds his manner of communication driven by his disabilities. But it is oppressive and undue hardship to force others to endure harassment and oppression by him.”

In May 2021, the court released its decision on costs. The corporation sought costs in the amount of $155,000 and the court ordered Mr. Mills to pay $75,000. While the costs award is significant against an owner and a signal from the courts to owners that there are serious consequences for inappropriate communication within a condo setting, the court also took into account the consequences of s. 134(5).

The result in Mills is not the same as in Friend, where the court ordered all the costs incurred to be paid; however, the court in Mills acknowledged that despite any costs award, the condominium would still have the benefits of s. 134(5) to collect any amounts the court did not award.

When a court decides the issue of costs, it must follow specific principles. Most times, that does not lead to a costs award that provides full indemnity to the winner. However, because the condominium in Mills obtained a s. 134 compliance order against the owner, they still have the opportunity to add to the unit the reasonable costs incurred, but not awarded by the court. Under s. 134(5), if a condo obtains a compliance order under s. 134, plus an order for costs or damages, the condo can add the actual reasonable costs incurred to the common expenses of the unit, regardless of the wording in their declaration’s indemnification provisions

Unlike the Lyn case, the condominium in Mills will likely be able to recover all reasonable costs incurred and add them to the common expenses of the unit. The court did not find the hours billed unreasonable. The Mills and Friend cases are an important reminder to owners that inappropriate communication within a condo setting will cost you money and put your unit at risk.

Sonja Hodis is a condominium lawyer based in Barrie who practices condominium law in Ontario. She advises condominium boards and owners on their rights and responsibilities under the Condominium Act, 1998 and other legislation that affects condominiums and represents her clients at all levels of court, various Tribunals and in mediation/arbitration proceedings. Sonja can be reached at (705) 737-4403, sonja@hodislaw.com or you can visit her website at www.hodislaw.com.

 

 

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