Boardwalk REIT Properties Holdings Ltd v Condominium Corp No, 2017 ABQB 315

Court of Queen’s Bench of Alberta Citation: Boardwalk REIT Properties Holdings Ltd v Condominium Corp No 0822896, 2017 ABQB 315 Date: 20170509 Docket: 1703 00202 Registry: Edmonton Between: Boardwalk REIT Properties Holdings Ltd. Applicant - and - Condominium Corp. No. 0822896 Respondent _______________________________________________________ Memorandum of Decisio n of S.L. Schulz , Master, Court of Queen's Bench of Alberta _______________________________________________________ I. Introduction [ 1 ] This is an application and cross-application for a host of declarations and orders.

The primary issue before me is whether Boardwalk REIT Properties Holdings Ltd. (“Boardwalk”) is a “developer” under the Bylaws governing Condominium Corporation No. 0822896 (“Condominium Corporation”). The parties’ entitlement to much of the relief they seek depends on my determination of this issue. [ 2 ] For the reasons that follow, I find that Boardwalk is an “owner”, not a “developer” under the Condominium Property Act or the Bylaws of the Condominium Corporation, and I direct that Boardwalk comply with the Condominium Property Act and the Bylaws as an “owner”. II.

Background [ 3 ] The Condominium Corporation was constituted in April 2008 with the registration of Condominium Plan No. 082 2896 (“Condominium Plan”). The Condominium Plan identified common property and three bare land units: Unit 1 (with 3972 unit factors), Unit 2 (with 3421 unit factors), and Unit 3 (with 2607 unit factors). [ 4 ] Medican (Edmonton Terwillegar) Developments Ltd. (“Medican”) was the original owner of Units 1, 2 and 3. [ 5 ] Medican constructed a building on Unit 1. In March 2009, Medican registered Condominium Plan No. 092 2542 to effect the redivision of that unit (“Redivision Plan”).

The unit factors for Unit 1 in the original Condominium Plan were apportioned among the

residential, parking and common property units in the Redivision Plan (among Units 4 through 195). [6] In November 2009 Medican replaced the Bylaws with a new set of Bylaws (“Bylaws”). [7] Medican sold units in the Redivision Plan and began to construct buildings on Units 2 and 3. It subsequently becameinsolvent and one of its creditors, Monarch Land Ltd. (“Monarch”), became the owner of Units 2 and 3. The Condominium Corporationwas advised of this change in ownership in July 2012. [8] In July 2014, Monarch sold Units 2 and 3 to Axis by City Vibe GP Inc. (“Axis”).

Axis completed the construction of thebuildings on those units and, in August 2016, sold the units to Boardwalk. [9] Since becoming the owner of Units 2 and 3, Boardwalk has: • erected signs on those units, and the common property, advertising the availability of rental residences in the buildings on theunits; • been renting residences in the buildings and parking stalls within the units; • been operating a management office out of one of the buildings on the units; and • refused to pay condominium contributions (or fees) that have been levied on it. [10] Boardwalk states that it has no present intention to redivide Units 2 and 3.

III. Positions of the Parties [11] Boardwalk concedes that it does not fall within the definition of “developer” in the CPA. Nevertheless, it takes the positionthat it is a “developer” under the Bylaws and as such, it has certain rights and exemptions. For instance, Boardwalk says it has the right toerect advertising signs on its units and the common property, and is exempt from having to contribute to the Condominium Corporation’sadministrative (or common) expenses.

Boardwalk alleges that the Condominium Corporation has breached the Bylaws by, among otherthings, levying condominium fees on it and removing its advertising signs. Boardwalk argues that the Condominium Corporation hasengaged in “improper conduct” within the meaning of

section 67 of the CPA. [12] The Condominium Corporation takes the position that Boardwalk is not a “developer” under the CPA or the Bylaws.According to the Condominium Corporation, Boardwalk is simply an “owner” under those enactments and, consequently, it has the samerights and obligations, and is subject to the same restrictions, as the owners of units in the Redivision Plan.

The CondominiumCorporation alleges that Boardwalk has breached the Bylaws and the CPA by, among other things, failing to pay condominium fees thathave been levied on it, carrying on a business from its units, renting residences in the buildings on its units without providing theCondominium Corporation with any written notices, and erecting advertising signs on its units and the common property. IV.

Interpreting the CPA and the Bylaws [13] In order to resolve the parties’ dispute, I must interpret provisions of the CPA and the Bylaws. [14] In Rizzo & Rizzo Shoes Ltd (Re), (SCC), [1998] 1 SCR 27 at para 21, the Supreme Court endorsed thefollowing approach to statutory

interpretation (from Elmer Driedger’s Construction of Statutes, 2d ed (Toronto: Butterworths, 1983) at87): [T]he words of

an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme ofthe Act, the object of the Act, and the intention of Parliament [or the Legislature]. [15] This approach, which is often referred to as the “Modern Approach” to statutory

interpretation, has been confirmed by theSupreme Court on numerous occasions and is well entrenched in the case law: Ostiguy v Allie, 2017 SCC 22, [2017] SCJ No 22 (QL) atpara 73; Canada (Information Commissioner) v Canada (Minister of National Defence), 2011 SCC 25, [2011] 2 SCR 306 at para 27;and Bell ExpressVu Limited Partnership v Rex, 2002 SCC 42, [2002] 2 SCR 559 at para 26. [16] The Modern Approach to statutory

interpretation should also be used to interpret the bylaws of a condominium corporation:Bank of Montreal v Bala, 2017 ABQB 38 at para 40, 45 Alta LR (6th) 397; and Condominium Corp No 0312235 v Scott, 2015 ABQB171 at para 41, 27 Alta LR (6th) 36. [17] Accordingly, the CPA and the Bylaws will be interpreted using the Modern Approach as well as the following provisions ofthe

Interpretation Act, RSA 2000, c I-8: 1(1) In this Act, (a) “enact” includes issue, make, establish or prescribe; … (c) “regulation” means a … bylaw … enacted (

i) in the execution of a power conferred by or under the authority of

an Act, …

… 3(1) This Act applies to the

interpretation of every enactment except to the extent that a contrary intention appears in this Act or the enactment. ... 10 An enactment shall be construed as being remedial, and shall be given the fair, large and liberal construction and

interpretation that best ensures the attainment of its objects. … 12(1) The

preamble of an enactment is a part of the enactment intended to assist in explaining the enactment. … 13

Definitions and other

interpretation provisions in an enactment (

a) are applicable to the whole enactment, including the

section containing the

definitions or

interpretation provisions, except to the extent that a contrary intention appears in the enactment, and (

b) apply to regulations made under the enactment except to the extent that a contrary intention appears in the enactment or in the regulations. … 28(1) In an enactment, … (m) “enactment” means

an Act or a regulation or any portion of

an Act or regulation; V. Is Boardwalk a “developer” under the Bylaws? A. Relevant provisions of the CPA [ 18 ] The CPA provides that: 1(1) In this Act, … (j) “developer” means a person who, alone or in conjunction with other persons, sells or offers for sale to the public units or proposed units that have not previously been sold to the public by means of an arm’s length transaction; … 32(7) If there is a conflict between the [condominium corporation’s] bylaws and this Act, this Act prevails. B. Relevant provisions of the Bylaws [ 19 ]

Article 1 of the Bylaws provides that: In these by-laws unless the context or subject matter requires a different meaning: … (m) “Developer” means: i. With respect to those lands previously described as Condominium Plan 082 2896, Unit 1 that were subject to Redivision Plan 092 2542: Medican (Edmonton Terwillegar) Developments Ltd. or any other person or entity which may acquire a fee simple interest in the Unit prior to the registration of a Redivision Plan thereon; ii.

With respect to those lands described as Condominium Plan 082 2896, Unit 2 and Condominium Plan 082 2896, Unit 3: Monarch Land Ltd. or any person who may acquire a fee simple interest in one or both of those Units prior to the registration of a Redivision Plan thereon; … Words and expressions which have a special meaning assigned to them in the [ CPA ] have the same meaning in these by-laws … Emphasis added

C. Analysis 1. The CPA’s definition of “developer” [20] The definition of “developer” in section 1(1)(

j) of the CPA is an exhaustive definition. It is “introduced by the word ‘means’followed by a definition that comprises the sole meaning the word may bear throughout the statute and throughout any regulations[including bylaws] made under it”: Ruth Sullivan, Statutory

Interpretation, 3d ed (Toronto: Irwin Law, 2016) at 79; Mattabi Mines Ltd vOntario (Minister of Revenue), (SCC), [1988] 2 SCR 175 at 194; Yellow Cab Ltd v Alberta (Industrial RelationsBoard), (SCC), [1980] 2 SCR 761 at 768-769;

Interpretation Act, ss 1(1)(c), 13 and 28(1)(m); and CPA, s 37(2).

Article 1(

m) of the Bylaws [21] Prior to May 2014, paragraph (

m) of

Article 1 of the Bylaws provided that “‘Developer’ means MEDICAN (EDMONTONTERWILLEGAR) DEVELOPMENTS LTD.”. It simply identified the “developer” for the purposes of the Bylaws. The statement at theend of

Article 1 read as it does now (reproduced above). It specified that the words defined in the CPA had the same meaning in theBylaws. Accordingly, it seems clear that the old paragraph (

m) simply identified the entity that fell within the CPA’s definition of“developer” and was, therefore, the “developer” for the purposes of the Bylaws. It did not vary, or purport to vary, the CPA’s definitionof “developer”. [22] In May 2014, the Condominium Corporation amended the Bylaws to replace the old paragraph (

m) with the current one(reproduced above). [23] The

preamble to the special resolution effecting the amendment to paragraph (

m) indicates that the amendment (

i) was madebecause Monarch replaced Medican as the owner of Units 2 and 3, and (ii) was intended to facilitate the completion of the developmentof Units 2 and 3. Moreover, the Condominium Corporation’s evidence indicates that it amended paragraph (

m) because it was advisedthat the old paragraph (

m) was impeding Monarch’s ability to construct the buildings on, and redivide, Units 2 and 3. [24] This history, when combined with the statement at the end of

Article 1 (“Words and expressions which have a specialmeaning assigned to them in the [CPA] have the same meaning in these by-laws … “) and the fact that amended paragraph (m)references alternative entities, demonstrates that amended paragraph (

m) simply identifies the various entities that might fall within theCPA’s definition of “developer” and therefore be a “developer” for the purposes of the Bylaws. Amended paragraph (

m) does not vary,or purport to vary, the CPA’s definition of “developer”. [25] This

interpretation of amended paragraph (

m) is consistent with its larger context. It is consistent with the exhaustivedefinition of “developer” in section 1(1)(

j) of the CPA. It is consistent with

section 13 of the

Interpretation Act, which provides thatdefinitions in the CPA “apply to [bylaws] made under [it] except to the extent that a contrary intention appears in the [CPA] or in the[bylaws].” It is consistent with section 32(7) of the CPA, which makes it clear that, in order to be effective, bylaws must not conflict withthe CPA.

And, finally, it is consistent with at least one of the CPA’s objectives: “to provide predictability and sufficient certainty to thoseinvolved in condominium projects, including developers and unit purchasers, to enable them to make informed decisions about theirinvestments”: Halsbury’s Laws of Canada (online), Condominiums (2015 Reissue), “The Balance between Consumer Protection andCommercial Realities” at HCD-3 “Interpretation and application of condominium legislation”. [26] Moreover, the

interpretation does not conflict with the purpose of the Bylaws. It does not detract from the ability of theBylaws to “regulate the [Condominium Corporation] and provide for the control, management and administration of the units, the realand personal property of the [Condominium Corporation] and the common property”: CPA, s 32(1). 3. Boardwalk’s Argument [27] Boardwalk concedes that it does not fall within the definition of “developer” in the CPA.

It therefore concedes that it is not “aperson who, alone or in conjunction with other persons, sells or offers for sale to the public units or proposed units that have notpreviously been sold to the public by means of an arm’s length transaction”: CPA, s 1(1)(j). Nevertheless, Boardwalk argues that,because it acquired a fee simple interest in Units 2 and 3 and no redivision plan has been registered for those units, Boardwalk fallswithin the definition of “developer” in

Article 1(m)(ii) of the Bylaws. [28] This argument must fail. [29] As set out above,

Article 1(m)(ii) of the Bylaws simply identifies the entities that might fall within the CPA’s definition of“developer” and therefore be a “developer” for the purposes of the Bylaws. It does not vary, or purport to vary, the CPA’s definition of“developer”. Accordingly, in order to be a “developer” under the Bylaws, an entity must be a “developer” under the CPA. [30] Boardwalk concedes that it is not a “developer” under the CPA. As the Condominium Corporation’s counsel put it during theapplication hearing, “that ends the matter.”

Article 1(m)(ii) of the Bylaws merely identifies Boardwalk as a potential “developer” underthe CPA and the Bylaws. It does not make Boardwalk a “developer” under either enactment. [31] Even if

Article 1(m)(ii) of the Bylaws did vary the CPA’s definition of “developer” and make Boardwalk a “developer” underthe Bylaws, that

article would conflict with the CPA. The CPA’s definition of “developer” would prevail, and Boardwalk would still notbe a “developer” under the CPA or the Bylaws: CPA, s 32(7). 4. Conclusion [32] Boardwalk is not a “developer” under the CPA or the Bylaws. It is therefore unnecessary for me to interpret, or make anyrulings regarding those Articles in the Bylaws that grant certain rights and exemptions to a "developer". Boardwalk is not entitled to any

of those rights or exemptions. [ 33 ] Based on the evidence, I am satisfied that, as a result of its misassumption that it is a “developer” under the Bylaws, Boardwalk has been breaching the CPA and the Bylaws by, among other things, erecting advertising signs on its units and the common property, and failing to pay condominium fees that have been levied on it. Accordingly, I am satisfied that “improper conduct” has taken place: CPA , s 67.

Result [ 34 ] I declare that Boardwalk is not a “developer” under the CPA or the Bylaws; and direct Boardwalk to comply with the CPA and the Bylaws as an “owner” under those enactments. [ 35 ] Boardwalk’s application is dismissed, and the Condominium Corporation’s application is allowed, to the extent indicated above. [ 36 ] If the parties wish to speak to any outstanding issues, they may do so within 45 days. [ 37 ] The parties may speak to costs if they are unable to agree on them within 45 days. Dated at Edmonton, Alberta this 8 th day of May, 2017. S.L. Schulz M.C.Q.B.A.

Appearances: Christopher Young and Sean Curran Brownlee LLP for the Applicant Jonathan McCully Sharek Logan & van Leenen LLP for the Respondent