2011 QCCQ 6978, 2011 QCCQ 6978

Syndicat des copropriétaires de Château Bickerdike c. Amoriggi 2011 QCCQ 6978 COURT OF QUEBEC Small Claims Division CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL Civil Division No: 500-32-114924-097 DATE: June 7, 2011 ______________________________________________________________________ PRESIDED BY THE HONOURABLE DAVID L. CAMERON, J.C.Q. ______________________________________________________________________ SYNDICAT DES COPROPRIÉTAIRES DE CHÂTEAU BICKERDIKE, phase I 4666 Richard Hewton, Apt. 1 Lachine, Quebec H8T 1P3 Plaintiff vs.

HELEN AMORIGGI […] Lachine, Quebec […] Defendant ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] Syndicat des Copropriétaires de Château Bickerdike, phase 1 ("the Syndicate") sues one of the divided co-owners, Helen Amoriggi, to recover $5,741.23 due May 31, 2008, representing her share of common charges related to the repair of exterior walls of the immovable which are part of the common portions. [ 2 ] The Syndicate claims an additional amount for legal costs and trouble and inconvenience, as well as interest for a total of $6,3114.11.

These amounts were amended at trial to the monetary limit of $7,000. [ 3 ] Ms Amoriggi contests the payment of her contribution to the common expenses computed according to her fraction alleging: 1. that the work was not done according to the contract between the Syndicate and the entrepreneur; 2. that she did not approve the final contract, 3. that the English and French versions of the contract are not the same; 4. that the administrators did not have the mandate or authority to change the scope of work of the contractor or to change the price, 5. that the Board of directors of the Syndicate acted unilaterally and without authorisation of all the co-owners in paying the contractor 100% of the contract price when only half the work was done and by refusing to hire a professional engineer. [ 4 ] Generally, she asserts that the Board of directors and the Syndicate mismanaged and incompetently handled the issue, made decisions unilaterally, changed the terms of the contract, failed the carry out due diligence and withheld information, which was misleading, dishonest and attempted deceit. [ 5 ] She presents a cross-demand for the maximum permitted in a Small claim division, $7,000.

ISSUES [ 6 ] The Court must decide: 1) Whether the amounts claimed by the Syndicate validly constitute the Defendant's share of the common expenses; 2) and, it so, whether the Syndicate is entitled the charge interest, legal expenses and damages for inconvenience; 3) in the event that the charges are not validly claimed, whether the Defendant is entitled to an award of damages arising from the illegality of acts or omissions of the Syndicate. FACTUAL MATERIAL [ 7 ] Château Bickerdike, phase I has a stone façade.

In the period leading up to this dispute, the Board of directors of the Syndicate, with the unanimous support of all the co-owners, decided to hire a mason, Entreprise Mario Bourque Inc. ("Bourque"), to carry out repairs to the stonework on the façades of the building pursuant to a quote. [ 8 ] This is documented in Minutes (P-4) recording a meeting referred to as a "Special co-owners' meeting held October 23, 2007". [ 9 ] The legality of this decision and the contract eventually entered into with Bourque is not questioned by Ms Amoriggi in form or in substance, in fact, her position is that this contract should have been carried out according to the price and the scope of work agreed to and that any variance from that required unanimous consent of the co-owners. [ 10 ] The dispute arises from a situation once the work began when, on May 27, 2008, at a meeting described in the Minutes as a "co-owner's special general meeting" (P-6), two of the Board members explain to the other co-owners that the mason, Mr Bourque, has encountered defects in the walls such that re-pointing, the original object of the contract, cannot be done unless the walls are previously restored. [ 11 ] As recorded in the Minutes: Mr Bourque had initially planned 4 weeks to do the work – June 6 deadline.

Since the scope of the work has considerably increased only a percentage of the building can be completed

a) in this timeframe and

b) for the value of Mr. Bourque's quote/contract. [ 12 ] A motion is put to a vote: Motion to vote: There has been a change of scope in the existing contract with Mario Bourque which will terminate on June 6, 2008 with the knowledge of the administrators and the contractor and with the approval of the owners. The change of scope occurred during the re-pointing of the walls following the discovery of many defects.

To the knowledge and recommendation of the contractor, the administrators decided to carry on and approve the necessary repairs, thus changing the repairs and replacement of stones within the limit of the original budget. [ 13 ] The Motion is seconded and accepted by seven co-owners, one co-owner is absent and one "abstains until further review of the written motion". [ 14 ] A note to the Minutes signed by Lise Lajoie, Secretary and President, indicates that: PS – The written motion was forward by e-mail to all co-owners.

The motion was accepted by eight (8) and rejected by one (1). [ 15 ] Obviously, the person against the Motion is the Defendant, Ms Amoriggi. [ 16 ] A change to the contract is arranged between a representative of the Syndicate and Bourque and the work is carried out to the Board's satisfaction and funds are used from the Syndicate's account to pay the contractor. [ 17 ] All of the other co-owners pay their portion of the cost as a contribution to the common expenses. [ 18 ] Through numerous communications the Board attempts to obtain Ms Amoriggi's adherence to the decision it took, with the support of all the other co-owners and at one point, a settlement is close to being achieved but it is not, for reasons that do not need to be mentioned.

ANALYSIS [ 19 ] The structure set out in the Civil Code for the management of a divided co-ownership with respect to day-to-day business, the incurring of expenses for maintenance and repair and more extraordinary matters such as alteration, enlargement or improvement of common portions is really quite simple. [ 20 ] The Code provides that: 1071. The syndicate establishes, according to the estimated cost of major repairs and the cost of replacement of common portions, a contingency fund to provide cash funds on a short-term basis allocated exclusively to such repairs and replacement.

The syndicate is the owner of the fund.

1072. Each year, the board of directors, after consultation with the general meeting of the co-owners, fixes their contribution for common expenses, after determining the sums required to meet the expenses arising from the co-ownership and the operation of the immovable, and the amounts to be paid into the contingency fund. The contribution of the co-owners to the contingency fund is at least 5% of their contribution for common expenses. In fixing the contribution, the rights of any co-owner in the common portions for restricted use may be taken into account.

The syndicate, without delay, notifies each co-owner of the amount of his contribution and the date when it is payable. [1] [ 21 ] The Code also provides that each co-ownership elaborates through its declaration of co-ownership the powers and duties of the board of directors of the Syndicate and of the general meeting of the co-owners: 1053. A constituting act of co-ownership defines the destination of the immovable, of the exclusive parts and of the common parts.

The act also specifies the relative value of each fraction, indicating how that value was determined, the share of the expenses and the number of votes attached to each fraction and provides any other agreement regarding the immovable or its private or common portions. In addition, it specifies the powers and duties of the board of directors of the syndicate and of the general meeting of the co-owners. and the declaration provides for by-laws which should contain, among other things, the procedure of assessment and collection of contributions to the common expenses 1054.

The by-laws of an immovable contain the rules on the enjoyment, use and upkeep of the private and common portions, and those on the operation and administration of the co-ownership.

The by-laws also deal with the procedure of assessment and collection of contributions to the common expenses. [ 22 ] The Syndicate is the moral person that represents the interests of the co-owners and the Board of directors is charged with the day-to-day administration. [ 23 ] Raising funds depends upon following the procedure set out in the Declaration of co-ownership or the by-laws for assessment and collection. [ 24 ] The direct involvement of special majorities are provided for in the Civil Code of Quebec in

article 1097 : a majority vote of the co-owners representing three quarter of the voting rights of all the co-owners in some cases, including work for the alteration, enlargement or improvement of the common portions, and the apportionment of its cost and, in

article 1098 [2] , a special majority vote of three quarter of the co-owners representing 90% of the voting rights of all the co-owners for extraordinary matters such as change of destination to the immovable, alienation, etc. [ 25 ] While

article 1072 C.C.Q. gives the Board of directors the power to fix the contribution of the co-owners for common expenses, so long as it consults with the general meeting of the co-owners, the declaration of co-ownership of the Château Bickerdike phase I provides that the annual budget must be approved by the co-owners by resolution at the annual meeting. [ 26 ] Once approved, the budget permits the collection from each co-owner of his or her share. [ 27 ] The declaration of co-ownership provides at

article "11.3.3 Budgets spéciaux" : Si au cours d'un exercice financier, les administrateurs jugent que les prévisions budgétaires adoptées pour cet exercice sont insuffisantes pour couvrir les dépenses anticipées, alors les administrateurs peuvent préparer un budget spécial qui devra immédiatement être soumis à une assemblée générale spéciale des copropriétaires.

Les administrateurs doivent préparer et faire parvenir aux copropriétaires ainsi qu'aux créanciers hypothécaires qui ont dûment dénoncé leur intérêt, une copie du budget revisé approuvé par l'assemblée spéciale des copropriétaires, auquel est annexé un avis de la nouvelle contribution.

À compter de la réception de cet avis de nouvelle contribution, chaque copropriétaire doit verser aux administrateurs les redevances mensuelles revisées. [sic] [ 28 ] 10.6.7 provides that, except for extraordinary decisions, any decisions submitted to an assembly are decided: […] à la majorité des votes détenus par les copropriétaires, créanciers hypothécaires et/ou mandataires de ceux-ci qui sont présents à cette assemblée. [ 29 ] When one reads the definition in 10.7 of "décision extraordinaire" it becomes clear that the work performed in order to maintain and repair the façade was not work requiring any special majority. [ 30 ] This is clear from articles 10.7.3 and 10.7.4 which are examples of extraordinary decisions: 10.7.3 Les travaux comportant transformation, agrandissement ou amélioration des parties communes ainsi que la répartition des coûts de ces travaux. 10.7.4 La reconstruction ou la réparation en cas de sinistre; sujet aux dispositions des titres XV des présentes intitulé "DOMMAGE" et VXI des présentes intitulé "FIN DE LA COPROPRIÉTÉ". [ 31 ] In the present case, the work can be described as repair and, to some extent, reconstruction required due to the age of the immovable.

It was not related to an unforeseen act (sinistre). It was the type of upkeep that, according to the Civil Code of Quebec , the Board of directors of the Syndicate have as their responsibility to perform and, according to the Declaration of Co-ownership, must budget for, having first obtained a general resolution of an ordinary majority. [ 32 ] The breakdown of the apportionment of the charges totalling $42,654 (P-19) shows that Helen Amoriggi, the owner of lot

202 has 13.6% of the common portions. There are a total of nine co-owners. [ 33 ] Because the actions of the Board were endorsed and then ratified by the other eight co-owners holding collectively 86.54% of the units, the special majority provisions of

article 1097, as well as the special majority defined in 10.7 of the Declaration of Co- ownership [3] would have been met even if the matter could have been considered to be a special or extraordinary resolution. [ 34 ] The overwhelming acceptance of 88.8% of the co-owners (eight of nine) representing more than 85% of the voting rights before, during and after the actions taken by the Board legalises and ratifies these actions of the Board whether or not any formality was not observed. [ 35 ] What's more, the process by which this money was spent was not only transparent, it was the direct result of a democratic process at least as rigorous as if not more rigorous than the process contemplated by the Civil Code and by the Declaration of Co- ownership. [ 36 ] In substance, the Board and the co-owners were faced with the choice of entering into a conflict with the contractor they had hired.

This could have led to the contractor being dismissed, the necessity for other delays to the project and financial and practical consequences that the Court and the parties themselves are not in a position to predict with accuracy. They chose a conciliatory and pragmatic approach. [ 37 ] The wisdom of collective decision making is that, though it may not be perfect, it is the best possible outcome provided the parties are acting in good faith. [ 38 ] There is a recourse to the competent court under

article 1103 to annul a decision of the general meeting: 1103. Any co-owner may apply to the court to annul a decision of the general meeting if the decision is biased, if it was taken with intent to injure the co-owners or in contempt of their rights, or if an error was made in counting the votes. The action is forfeited unless instituted within 60 days after the meeting. If the action is futile or vexatious, the court may condemn the plaintiff to pay damages. [ 39 ] There is, of course, no suggestion of either bias or bad faith in connection with the present case.

The decisions of the co- owners are valid, were not challenged legally and bind the Syndicate. [ 40 ] While some of the criticisms the Defendant made of the manner in which the facts unfolded may have merit, this cannot be discussed in the context of a claim for the recovery of common expenses that have been imposed by the Syndicate through its Board with overwhelming support of a vast majority of the co-owners both in number and in fractions. [ 41 ] The Syndicate is entitled to interest at a rate of 3% over the bank of Canada rate charged to chartered banks pursuant to

article 11.3.6.6 of the declaration.

The Syndicate also, extraordinarily, has the right to extrajudicial legal costs associated with the recovery of amounts owed by a co-owner (11.3.6.7). [ 42 ] The Syndicate justified legal costs of $2,568.60 as constituted by its attorney's invoices (P-25 en liasse). [ 43 ] The total including interest at the date of the hearing ($9,756,82) exceeds the maximum that can be claimed in this division of $7,000 and the Court permitted an amendment at the hearing increasing the claim to this maximum, it being understood that the Syndicate reduces the total amount of its claim. [ 44 ] It goes without saying that the cross-demand is without legal foundation, the Syndicate acted with legal authority.

FOR THESE REASONS, THE COURT: CONDEMNS the Defendant to pay, to the Plaintiff, the sum of $7,000, together with interest at the legal rate of 5% per annum and the additional indemnity provided at

article 1619 of the Civil Code of Quebec , calculated from May 31, 2008; CONDEMNS the Defendant to pay, to the Plaintiff, judicial costs in the amount of $155; DISMISSES the Defendant's cross-demand. __________________________________ DAVID L. CAMERON, J.C.Q. Date of hearing: February 7, 2011