Dunn v Condominium Corporation No. 042, 2024 ABCA 38

In the Court of Appeal of Alberta Citation: Dunn v Condominium Corporation No. 042 0105, 2024 ABCA 38 Date: 20240131 Docket: 2203-0167AC Registry: Edmonton Between: Trevor Dunn Respondent (Plaintiff) - and - Condominium Corporation No. 042 0105 Appellant (Defendant) - and - Celtic Management Services Inc. Not a Party to the Appeal (Defendant) _______________________________________________________ The Court: The Honourable Justice Patricia Rowbotham The Honourable Justice Jane A. Fagnan The Honourable Justice Kevin Feth _______________________________________________________ Memorandum of Judgment

Appeal of the Judgment by The Honourable Justice S.L. Bercov Dated and filed the 28th day of July, 2022 ( 2022 ABQB 516 , Docket: 1703-03574) _______________________________________________________ Memorandum of Judgment _______________________________________________________ The Court: I. Introduction [ 1 ] The appellant, Condominium Corporation No. 042 0105, appeals the trial justice’s finding that Bylaw 4.11.1 of the appellant’s Condominium Bylaws does not shield it from a claim in nuisance. II.

Background [ 2 ] In 2014, the appellant's Board of Directors decided to replace the condominium roof due to water ingress threatening the structural integrity of the building. The appellant hired a contractor. Construction began around October 2014 and finished in November 2015. [ 3 ] Prior to October 2014, the respondent rented his condominium unit to a tenant for $5,500 per month. After construction started, the tenant complained to the respondent about noise, windows being boarded up, inability to access his balcony, heat, and other matters.

The respondent agreed to reduce the rent during the period of construction. [ 4 ] The respondent subsequently filed a claim in nuisance against the appellant, the contractor and the property manager, Celtic Management Services Inc., seeking damages for rent lost during construction.

The claim against the contractor was settled by way of a Pierringer Agreement. [ 5 ] At trial, the appellant relied on Bylaw 4.11.1 which provides: 4.11.1 Neither the Corporation nor its Board Members, shall be responsible to any Owner, Tenant or occupier of a Unit, for any damage or loss whatsoever caused […] to the person or property of any Owner, Tenant or occupier of a Unit. [ 6 ] The justice found that a claim in nuisance, which is a claim for interference with the owner’s use or enjoyment of land, differs from a claim of damage to property or the person and that Bylaw 4.11.1 does not protect the appellant from a claim in nuisance.

She awarded damages against the appellant and dismissed the action against Celtic. A single judge of this Court granted permission to appeal: 2023 ABCA 69 . III. Abuse of Process [ 7 ] The respondent argues that the action has been settled and therefore the appeal is an abuse of process. The respondent requests that new evidence be admitted at the appeal under r 14.45, being a Satisfaction of Judgment and related emails between counsel.

The appellant does not object to admission of the new evidence for the purposes of the abuse of process argument. [ 8 ] As noted in United States of America v Shulman , 2001 SCC 21 , para 45 , the Palmer test for new evidence is modified when the evidence is being offered as a basis for requesting an original remedy on appeal, such as a remedy flowing from abuse of process. The evidence in question here meets the modified test as it is relevant to the remedy sought before this Court. The appellant takes no issue with the credibility or reliability of the hearsay evidence.

Therefore, the evidence is credible, uncontradicted and sufficient to justify the Court granting permission to admit it. [ 9 ] The Notice of Appeal was filed on August 18, 2022. The following Satisfaction of Judgment was drafted and filed by

counsel for the respondent on December 19, 2022: TAKE NOTICE that the Plaintiff/Creditor, Trevor Dunn hereby acknowledges that the Judgment or Order, dated November 24, 2022,against the Defendant/Debtor, Condominium Corporation No. 042 0105 in this action has been satisfied in full. [10] On a plain reading, this does not purport to constitute a release or settlement. It is an acknowledgment by the judgment holderthat he received sufficient funds to satisfy the judgment.

It says nothing about releasing any claims or waiving any appeal. [11] In Beers v Olney (1970), 17 DLR (3d) 741, , para 5 (BCCA), a satisfaction piece containing similar wordingwas entered prior to the filing and serving of the notice of appeal. The Court held that the satisfaction piece was simply a receipt, not ageneral release of rights, benefits, claims or advantages. The Court in Heitman Financial Services Ltd v Towncliff Properties Ltd et al(1982), 35 OR (2d) 189, (ONSC) followed Beers, holding that a satisfaction piece is merely a specialized form ofreceipt which does not bar an appeal.

Heitman in turn was cited with approval on this point in Bank of Nova Scotia v Kostuchuk, 2003MBCA 66, para 15 . [12] In Karaha Bodas Co v Negara, 2010 ABQB 172, para 17, the Court recognized a discretion to allow an action to continueeven after a discontinuance or satisfaction piece has been filed. The Court reasoned that a right of appeal may otherwise be foreclosedwhere satisfaction does not represent an acknowledgment of liability. [13] The respondent submits that the emails between counsel entered in evidence establish that the Satisfaction of Judgmentreflects an intention to settle.

However, the email exchange does not suggest that the appellant intended to abandon its appeal. In fact,appellant’s counsel confirmed in his December 14, 2022 email that the appellant intended to continue with the appeal notwithstandingthe payment of funds. The appellant’s request to file a satisfaction piece was expressly “in addition to the trust conditions in the previousemail”. There was no settlement contemplated, discussed, or agreed to by the parties.

It bears noting that the respondent provides nodirect evidence suggesting that he entered into or intended to enter into an agreement to extinguish the appeal. [14] In the circumstances, the Satisfaction of Judgment does not constitute a release or settlement so as to render this appeal anabuse of process. IV.

Interpretation of Bylaw 4.11.1 A. Standard of Review and Interpretive Approach [15] The

interpretation of a bylaw is a question of law and the standard of review is correctness: Maverick Equities Inc v Owners:Condominium Plan 942 2336, 2008 ABCA 221, para 10; Sarnia (City) v River City Vineyard Christian Fellowship of Sarnia, 2015ONCA 494, para 22. [16] Condominium bylaws are created pursuant to the Condominium Property Act, RSA 2000, c C-22 (CPA).

Section 32(1) setsout the nature, purpose and effect of condominium bylaws and the manner in which they are amended, repealed and replaced. [17] Condominium bylaws are more akin to laws and regulations passed by a legislative body than contractual provisions, andcourts have interpreted them accordingly: Condominium Corp No 0312235 v Scott, 2015 ABQB 171, paras 40-41; Boardwalk REITProperties Holdings Ltd v Condominium Corp No 0822896, 2017 ABQB 315, paras 14-16, reversed in part but not on this point 2019Carswell Alta 70 (QB), additional reasons 2019 CarswellAlta 678 (QB); Condominium Plan No 7721985 v Breakwell, 2019 ABQB674, paras 51-56, and cases cited therein including Bank of Montreal v Bala, 2017 ABQB 38, para 40; Condominium Corp No 0840294v Oakley, 2023 ABKB 668, para 72.

See also “Interpretation of Condominium Bylaws” in M Gibson, R Noce, Condominium Law inAlberta (Toronto, Ontario: Thomson Reuters, 2022), §3.4. [18] Therefore, the standard of review applicable to

interpretation of Bylaw 4.11.1 is correctness. The words of Bylaw 4.11.1 mustbe read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme and object of the CPA andbylaws, and the intention of the drafters: Breakwell, paras 54-56 and cases cited therein. B. Analysis [19] This appeal turns on the

interpretation of the phrase: “any damage or loss whatsoever caused […] to the person or property ofany Owner, Tenant or occupier of a Unit”. [20]

Section 32 of the CPA provides very broad authority to a condominium corporation to establish bylaws relating tomanagement of the real and personal property of the corporation, the common property, and managed property. Under s 37, acondominium corporation is responsible for the enforcement of its bylaws and the control, management and administration of its real andpersonal property, the common property and managed property.

It is required to repair and maintain the real and personal property of thecorporation, the common property and managed property. [21] Bylaw 4.11.1 is clearly a measure intended to arrange the affairs of the condominium corporation and its relationship withowners, tenants, and occupiers of units, specifically by allocating risk. [22] The appellant contends that the exclusion of liability contemplated in Bylaw 4.11.1 is limited in scope by its heading:“Personal Property and Injury.” However, Bylaw 1.2.2 states expressly that all headings form no part of the bylaws and were inserted forconvenience only.

Accordingly, the heading does not assist. [23] Bylaw 4.11.1 is contained within a grouping of provisions in a

section dealing with common property under the appellant’s

responsibility, management and control. There is no dispute that the construction work which caused the nuisance was undertaken at theappellant’s direction with a view to repairing part of the common property. [24] The appellant conceded at trial that Bylaw 4.11.1 would not protect the appellant in the event of “improper conduct” unders 67 of the CPA. However, there was no allegation or finding at trial of improper conduct as defined under s 67. [25] The respondent suggests that the trial justice’s reasoning may be informed by her concerns expressed during argumentregarding the implications of the appellant’s

interpretation of Bylaw 4.11.1 upon the right to pursue the condominium board for commonlaw causes of action in negligence or gross negligence. [26] In St Lawrence Cement Inc v Barrette, 2008 SCC 64, para 77, the Supreme Court observed that nuisance is an unreasonableinterference with the use of land, and that a claim in nuisance focuses on the harm suffered whether the interference results fromintentional, negligent, or non-faulty conduct.

The authors of Canadian Tort Law, 12th ed (Toronto, Ontario: LexisNexis Canada, 2022),607-08 observe that there is no requirement that damages caused by nuisance be reasonably foreseeable, opining that the addition of sucha requirement would blur the distinction between nuisance and negligence and compromise the utility of the nuisance action. [27] It follows that a claimant in nuisance is not required to establish the equivalent of negligent conduct.

In this case, there was noallegation or finding of negligence or gross negligence at trial. [28] Proof of actual, substantial damage or loss is a necessary component of the cause of action in nuisance: Windsor v CanadianPacific Railway Ltd, 2014 ABCA 108, para 25, citing Antrim Truck Centre Ltd v Ontario (Transportation), 2013 SCC 13, para 19. [29] The trial justice described a nuisance claim as a claim for interference with the owner’s use or enjoyment of land and foundthere had been substantial injury to the complainant's property interest, citing the test in Antrim. [30] The trial justice reasoned that a claim in nuisance “is different than damage to property of an owner or tenant”, adding“[n]uisance is a claim for interference with the owner’s use or enjoyment of land”.

However, as substantial damage or loss is a necessaryelement of the cause of action in nuisance, damage or loss is always part of a successful claim of “interference” rising to the level ofnuisance. [31] The trial justice referred to the respondent’s claim throughout the decision as a claim in nuisance for “loss”, ultimatelyawarding the respondent damages for “rental loss”. [32] The law recognizes that “loss” or “damage” in the context of a nuisance claim may arise as a result of tangible and non-tangible forms of interference: see for example Medomist Farms Ltd v Surrey (District of), (BC CA), [1992] 2 WWR303 (BCCA), 309 (“[A]n occupier of land can recover damages for physical injury caused to the land by a nuisance … [or] for loss ofenjoyment of the land as a result of the nuisance”); Smed v Priddis Greens Golf & Country Club, 2011 ABQB 5, para 115 (damageswere awarded in nuisance for “the loss of enjoyment of the use of … land”); Fearn and others v Board of Trustees of the Tate Gallery,[2023] UKSC 4, para 11 (“[T]he harm from which the law protects a claimant is diminution in the utility and amenity value of theclaimant’s land”); AM Linden et al, Canadian Tort Law, 606 (“[C]ompensation in nuisance is not dependent upon proof of physicalinjury.

Damages will be awarded for substantial interference with profits”); GS Pun et al in The Law of Nuisance in Canada (Markham,Ontario: LexisNexis Canada, 2015), §6.70 (“As both tangible (physical) harm and intangible (non-physical) interference with use andenjoyment give rise to liability, both give rise to damages awards”). [33] Rental loss is one of the many types of loss or damage that may result from nuisance.

The respondent has advanced noreasoned basis for excepting this type of loss from the reach of Bylaw 4.11.1. [34] The respondent submits that Bylaw 4.11.1 is a complete outlier to the scheme of the CPA and is entirely inconsistent with theCPA, arguing for the first time on appeal that the appellant’s

interpretation would render Bylaw 4.11.1 ultra vires. Generally, anappellate court should not entertain an issue raised for the first time on appeal unless it is clear that no further light could have been shedupon the question had it been raised at the proper time. Nevertheless, we are of the view that the ultra vires argument is not persuasive inthis case. [35] The respondent cites Condominium Corp No 0312235 v Scott, paras 26-38. However, the Court found that the impugnedbylaw in that case specifically contravened s 32(5) of the CPA.

The respondent has identified no particular provision in the CPA which iscontravened by Bylaw 4.11.1. [36] As noted above, the Statement of Claim in this case contained no allegations of “misconduct” under s 67 of the CPA,negligence or gross negligence. Therefore, this Court need not address whether the scope of Bylaw 4.11.1 might be limited in those, orother, circumstances.

The respondent has not pointed to any statutory authority, case authority or public policy that would prohibit resortto such a bylaw in defending against the claim of nuisance in this case. [37] Therefore, Bylaw 4.11.1 bars the respondent’s claim against the appellant for rental loss. V. Conclusion [38] The appeal is allowed. VI. Costs [39] As was recognized by the judge who granted permission to appeal, the material before the Court indicates that the language of

Bylaw 4.11.1 is not uncommon in condominium bylaws and therefore this appeal raised a novel issue of importance to the public. [ 40 ] Consequently, each party shall bear its own costs of the appeal. Appeal heard on January 12, 2024 Memorandum filed at Edmonton, Alberta this 31st day of January, 2024 Authorized to sign for Rowbotham J.A. Fagnan J.A. Feth J.A. Appearances: R.O. Langley for the Respondent S.M. Stepchuk for the Appellant