Condominium Plan No., 2022 ABKB 745

Court of King’s Bench of Alberta Citation: Condominium Plan No.7822583 v Asiedu, 2022 ABKB 745 Date: 20221109 Docket: 1703 17712 Registry: Edmonton Between: The Owners: Condominium Plan No.7822583 0/A Cedarwoods Respondents (Plaintiffs) - and - Yaw Asiedu Appellant (Defendant) _______________________________________________________ Memorandum of Decision of the Honourable Justice Donald Lee _______________________________________________________ Introduction [ 1 ] This is an appeal by Mr.Yaw Asiedu [“the Appellant”] from a decision of the Applications Judge (Master) granting the Condominium Corporation

Summary Judgment and a Redemption Order. This appeal was heard by me in morning chambers at the insistence of both the Condominium Corporation counsel and the Appellant, even though counsel certainly was aware that these appeals

are not heard normally in morning chambers. Both counsel and Mr. Asiedu believe that the issue was straight forward and could be dealt without another significant delay involving scheduling a Special chambers hearing and filing briefs.

The primary issue turned out to have two very different perspectives, and the facts covered events that occurred over several years. [ 2 ] After hearing both parties’ oral arguments in morning chambers, however, I decided that I would deal with this matter based on letter submissions from both parties in order to avoid the additional costs of going to a Special chambers hearing which would also cause further delay in a matter which started with the May 2016 Fort McMurray wildfires. [ 3 ] The Appellant owned a unit in a condominium complex that was destroyed in the Fort McMurray May 2016 wildfires, along with several other units in the condominium complex.

After the Appellant’s condominium unit was destroyed in the wildfires, he essentially stopped making all his monthly condominium payments for the years it took for the unit to be repaired and inhabitable again.

He believed that as the units that were destroyed were being rebuilt by the condo board under the Condominium’s Master Insurance policy, and that same Condominium Master Insurance Policy contained coverage that indemnified the Condominium Corporation and him from loss arising out of common expenses, that is condominium fees, if he could not occupy his property as a result of fire. [ 4 ] The Condominium Corporation initially seemingly had no concerns with the Appellant’s position, but it eventually insisted he continue to make his monthly condominium fee payments, after the Condominium Corporation discussed the matter with representatives of the insurers pursuant to the Condominium’s Master Insurance Policy.

The Appellant disagreed with this conclusion and position and took the matter up with the insurance adjusters himself and the Insurance Ombudsperson. The insurance adjuster continued to refuse to acknowledge the Appellant’s claims in this matter, although the Insurance Ombudsperson seemingly supported the Appellant. [ 5 ] After the Appellant continued in his refusal to pay condominium fees, the Condominium Corporation proceeded before the Master and recently obtained

Summary Judgment and the Redemption Order, both of which are the subject of the current appeal by Mr. Asiedu, even though he resumed making his condo payments after the unit could again be habitable. Issue 1. Does the Condominium Corporation’s Insurance policy insure the owner’s condominium’s contributions, that is, monthly condominium fees? 2. Are there any defences available to the Appellant for what he submits was the Condominium Corporation’s unfair and unreasonable behaviour towards him, and its ineptitude in purchasing insurance with unit holder’s monies that no unit holder could ever benefit from?

Analysis [ 6 ] The Condominium Corporation’s position is that Mr. Asiedu must pay condominium contributions and that his obligation as a condominium unit owner is absolute, as it is prescribed by the Condominium Property Act , RSA 2000, c C-22 , as well as by the Condominium Bylaws.

The fact that the Appellant’s unit was uninhabitable for any reason including because it was destroyed in the wildfires does not excuse him from his obligation to pay his monthly condominium contributions. [ 7 ] The Appellant takes the position that he was not required to pay condominium contributions to the corporation during the period between 2016 and 2019 when his unit was rendered uninhabitable due to no fault of his because of the wildfires.

He bases his position in part on the following provision of the Condominium Corporation’s policy of insurance in force at the time of the 2016 wildfires, specifically s. 7(

d) of the policy which reads as follows: 7. EXTENSIONS OF COVERAGE The following extensions of coverage shall not increase the amounts of insurance applying under this form and are subject to all conditions of this form: ... (

d) Common Expense: The Insurer agrees to indemnify the "Condominium Corporation" for the loss of such obligatory contribution toward common expense as may be assessed from time to time by the "Condominium Corporation" against all "unit" owners.

The Insurer shall be liable under this extension for not more than the pro-rata share of such expense during the time the "unit(s)" remain unoccupied and untenantable following a loss caused by an insured peril. [ 8 ] The insurer’s position with this clause was that there was no loss suffered because the Condominium Corporation has the absolute obligation to assess fees to unit holders in accordance with the Condominium Property Act , and the Condominium Corporation’s Bylaws.

Since there is no provision in the Bylaws, or in the Act , to assess on other than on the basis of unit factors, the Corporation has the ability under the Act and the Bylaws to secure payment through a caveat against title to the Appellant’s unit which they could obtain judgment for, and for which it had a super priority in the Act which would allow it to obtain title. As such, the insurers took the position that the Condo Corp could not and did not any loss.

Accordingly, there was no loss that would be covered. [ 9 ] The Appellant argues that even if his monthly Condominium Corporation contributions are obligatory, when the Condominium Corporation gave up its right to claim compensation under the insurance, the Condominium Corporation could not then turn to the unit holder(

s) to make the Condominium Corporation whole. This is a legal principle the Appellant says that has been codified in the Civil Code of Quebec , s 1074.1.

[ 10 ] Furthermore, the Appellant argues that even if the insurer and the Condominium Corporation are correct in their position, the Condominium Corporation is guilty of a lack of due diligence on its

part in buying insurance coverage which the unit holders were obligated to pay for, which insurance neither the owners nor the corporation could ever derive any coverage or benefit.

According to the Appellant, the Insurance premiums represented a significant portion of every unit holder’s monthly condominium fees. [ 11 ] Also, the Condominium Corporation can be held accountable if it is negligent or unreasonable in its actions, which the Appellant says is the case here. [ 12 ] The Appellant also argues that the Act did allow for the reallocation of unit factors at the time of the fire, and even permitted the assessment of contributions on the basis other then unit factors.

As such, the Appellant argues that the Condominium Corporation could have reallocated unit factors to reflect the true status of the destroyed units as bare land. Conclusion [ 13 ] The informal non-binding opinion of the Insurance Bureau Ombudsperson supporting the Appellant’s position is not a binding one, and in my conclusion, is incorrect. The Condominium’s Master Insurance Policy provisions contained in specifically s 7(

d) regarding indemnification of the Condominium Corporation with the loss of obligatory contributions towards common expenses does not protect the Appellant.

This is because under the Condominium Property Act , and the Condominium Corporation’s Bylaws, the Condo Corp can only assess monthly condominium contributions on the basis only of “unit” factors, and not on the basis of the other factors raised by the Appellant such as fairness and equitable legal remedies. [ 14 ] There is also no ability in the Act or in the Bylaws that allows the Condominium Corporation to reallocate unit factors to reflect the true status of the destroyed units as bare land, without a special resolution amending the unit factors: See 1597130 Alberta Ltd v Condominium Corporation No. 1023241 , 2016 ABQB 195 for the process.

Either the Condominium Corporation or the Appellant could have initiated this process under s. 32(3) of the Act , but the fact that neither did does not make the Condominium Corporation liable to the Appellant since this was not an obligation it had.

Since the majority of the units were not destroyed, it may have been difficult for any 75% approved special resolution to be passed by unit holders, because most were not directly affected by the fire yet they would have had to pay the destroyed unit holders monthly fees. [ 15 ] I do agree that the Appellant will never receive any benefit from the Condominium Corporation insurance because given the Act and the Bylaws, no loss will ever be suffered by the Condominium Corporation because it has not only the obligation, but the right to assess fees to unit holders in accordance with the unit factors.

The Condo Corporation can proceed to secure payment through a caveat against title to the individual condominium units, and it can obtain judgment in priority to most other charges against the property, such as in this case, the Scotia Bank mortgage that the Appellant had taken out.

Accordingly, the Condominium Corporation could never suffer a loss as it could as in this case seek to sell the property, in priority to all over caveats and interests. [ 16 ] It does not follow however that (as the Appellant argued), the Condominium Corporation Insurance Policy that was purchased according to the Appellant for a significant amount of money was worthless as it relates to all claims under Clause 7(d).

For example, the CRA’s priority to the Condominium Corporation under s. 227 of the Income Tax Act could trigger coverage under the clause. [ 17 ] Furthermore, the Condominium Corporation was clearly paying for other aspects of the Condominium Corporation’s Master Insurance Policy that did benefit all owners. The Condominium Corporation is not the Appellant’s insurer in any event, and whether or not the Condominium Corporation’s actions in this matter constituted negligence or just bad condominium governance are not issues presently before me.

The only issues presently before me are whether the Condominium Corporation’s Insurance Policy insures the owner’s condominium contributions, which I have decided it does not, and whether the Appellant has any other defences available to him to resist or appeal the

Summary Judgment and Redemption Order granted by the Master below. [ 18 ] Whatever provisions exist in the Quebec Civil Code alluded to by the Appellant, or whatever other equitable principles in common law that exist, simply do not assist the Appellant given the specific provisions of the Condominium Property Act , the Condominium Bylaws, and the super-priority that is awarded to Condominium Corporations generally in Alberta. [ 19 ] While the Appellant’s situation is unique based on the Fort McMurray wildfires, these principles extend to all condominium fees plus special assessments fines, penalties, and interest charges.

All condominium owners in Alberta can have their property taken away from them by the Condominium Corporation because of their non-payment of monthly condominium fees, special assessments fines and interest charges irrespective of the existence of the Condominium Corporation’s Master Insurance Policy and irrespective of questionable or unfair Condominium Corporation governance issues. [ 20 ] Condominium Corporations in Alberta simply do not have the ability to help out condominium property owners and relieve hardship from condominium fees and special assessments even if they wanted to because Condominium Corporations can only assess on the basis of unit factors, not on the basis of what is fair and equitable.

Ultimately, Condominium Corporations pursuant to the Act and the Condominium Bylaws are largely insulated from complaints such as the ones brought forward by condo unit owners such as the Appellant in this matter. [ 21 ] The other side of the argument is that Condominium Corporation unit owners, can be relatively certain of their specific obligation to pay condominium fees when they are assessed only on the basis of unit factors.

Even significant groups of minority owners must continue to pay condominium fees so that the majority of owners are protected because ultimately any fees not paid by the dissenting or unhappy owners would have to be paid by the remaining owners on their behalf. [ 22 ] I also understand that the Appellant rented his condominium unit to third parties and therefore did not have his own insurance. It is likely his own insurance might have covered this situation. Perhaps the tenant would have also needed to have been insured through a tenant’s policy.

Undoubtedly, it seems inefficient and prohibitively expensive for the Condominium Corporation, the owner of the unit, and for the tenant of the unit to all have had separate insurance policies, however that may have been the case in this matter and in other

matters involving damage to individual units within a condominium. Disposition [ 23 ] I have determined that notwithstanding the many efforts that the Appellant has made in this matter, both with respect to the Condominium Corporation and with respect to its insurers to resolve the matter fairly and quickly, the Application Judge’s granting of

Summary Judgment and Redemption Order in favour of the Condominium Corporation is correct in law. Accordingly, I must with some regret, dismiss Mr. Asiedu’s appeal, particularly since he may lose his unit and/or suffer significant court costs while only missing approximately three years of condo fee payments while his unit was destroyed by the Fort McMurray wildfires. Heard on the 29 th day of September, 2022. Dated at the City of Edmonton, Alberta this 9 th day of November, 2022. Donald Lee J.C.K.B.A. Appearances: Yaw Asiedu Self Represented, Appellant Hugh Willis, Willis Law for The Owners: Condominium Plan No.7822583, Respondent