Porter v Condominium Corporation No. 042, 2024 ABKB 41

Court of King’s Bench of Alberta Citation: Porter v Condominium Corporation No. 042 5177, 2024 ABKB 41 Date: 20240123 Docket: 2203 19890 Registry: Edmonton Between: Jonah Gordon Porter Applicant - and - Condominium Corporation No. 042 5177 Respondent _______________________________________________________ Reasons for Decision of the Honourable Justice R.

Paul Belzil _______________________________________________________ Originating Application [ 1 ] On December 19, 2022 the Applicant filed an Originating Application against Condominium Corporation No. 042 5177 (Corporation). [ 2 ] In the Originating Application the Applicant requests relief as follows: 1. The Applicant, Jonah Gordon Peter, respectfully requests the Honorable court to grant the following relief:

A. Declaration, that: a. The Applicant or anyone deriving title and interest under him, is entitled to alienate his property by way of a valid and permitted lease, irrespective of the source and origin from where he finds the tenant; b. The month-to-month lease agreement executed between the Applicant and Halah El Sherbani, and that subsequently with Scott Harrison and Jordan W.M. Corazza are valid lease agreements, and are in consonance with the statutory right or alienation provided under s. 32(5) of the Act; and c.

The Respondent is in violation of the provisions of the Act, by itself and through its property management, and have engaged in improper conduct as defined under s. 67(1)(a)(i)-(iii); B. An interim injunction restraining the Respondent from interfering with any valid month to month lease by the Applicant and harassing the Applicant and his tenant(

s) from their rights arising out of such lease. 2. An Order: a. Abridging the time for service of this Application; b. Providing for permanent injunction requiring the Respondent to comply with the provisions of the Act, and permanently restrain from interfering with any valid month to month lease by the Applicant and/or any harassment under the same. c. Directing appointment of an investigator to review the improper conduct of the Respondents, and on such report, give directions to the Respondents as to how matters are to be carried out so that improper conduct may not recur in future; d.

Awarding compensation to the Applicant for the recovery of fine wrongfully collected, and for loss of revenue in the amount of $3000 per month, for the period of infringement, by the Respondent; and e.

Holding the Respondent accountable for the losses caused to the Applicant in the distress sale of the property, and awarding compensation amounting to a minimum of CAD $115,500/- (Canadian Dollars One Hundred and Fifteen Thousand Five Hundred Only) in addition to the other damages for the psychological stress and undue financial burden caused upon the Applicant due to the biased, arbitrary, prejudiced and vindictive treatment of the management and the Corporation and that due to the infringement of his right to alienation as granted under the s. 32(5) of the Act . f. awarding costs of this action to the Applicant; and 3.

Such further and other reliefs that this honorable Court deems appropriate in the circumstance. [ 3 ] In support of the application the Applicant filed an affidavit dated December 19, 2022 and an amended affidavit dated September 26, 2023. In response, the Corporation filed an affidavit dated January 11, 2023 from the president of the Board of Directors (Board). Factual Background [ 4 ] On May 1, 2013, the Applicant purchased a condominium in a condominium operating as The Ten located in Edmonton.

The condominium corporation is registered as No.042 5177 and is governed by the Condominium Property Act RSA 2000 C-22 (as amended) ( Act ) [ 5 ] Starting in 2017, the Applicant and several other unit owners started renting their units through Airbnb or similar online platforms for short term rentals.

The Corporation provided notice to all unit owners that short term rentals through Airbnb or similar platforms were prohibited by the bylaws of the Corporation. [ 6 ] On July 31, 2019, the Corporation filed an Originating Application seeking to enjoin the Applicants and other unit owners from using their units for short term online rentals. [ 7 ] On October 18, 2019, Renke J issued an interim injunction enjoining the Applicants and several other unit owners from renting their units for short term rentals. [ 8 ] On February 27 of 2020, in a written decision cited Condo Corporation No. 042 0177 v Kuzio , 2020 ABQB 152 , I held that the interim injunction granted by Renke J should be made permanent. [ 9 ] In my decision, I held that Airbnb short term rentals were not leases but rather mere licenses and also held that that bylaws of the Corporation which prohibited short term Airbnb rentals were intra vires the Corporation and did not violate s. 32(5) of the Act [ 10 ] Paragraphs 74-75 of my decision reads as follows: [74] The Applicant is entitled to a Declaration that the bylaws of the Corporation are intra vires of it and prohibit short term Airbnb style unit rentals where no lease is entered into. [75] The Interim Injunction granted by Renke J on October 21, 2019 will become a permanent Injunction.

The terms of the permanent Injunction will be the subject of further argument. Pending further argument, the terms of the Interim Injunction remain in place. [ 11 ] No appeal was filed following the issuance of my decision.

[ 12 ] On August 4, 2021,the Applicant purported to enter into a residential lease of his unit with Halah El Sherbani. [ 13 ] The Applicant alleges that the Corporation interfered with this agreement and harassed her. [ 14 ] On the same terms, on December 8 of 2021, the Applicant purported to enter into a residential lease of the unit with Scott Harrison and on May 23, 2022, the Applicant purported to enter into a residential lease of the unit with Jordan Corazza. [ 15 ] On June 20, 2023 the Applicant sold the unit. Did the Applicant Enter into Leases with Ms. El Sherbani, Mr. Harrison and Mr.

Corazza in Accordance with S 32(5) of the Act ? [ 16 ] A document, purporting to be an Alberta Residential Lease Agreement dated August 4, 2021 between the Applicant and Halah El Sherbani was exhibited before me. [ 17 ] The Applicant argues that this agreement and subsequent agreements with Scott Harrison and Jordan Corazza are valid leases in accordance with s. 32(5) of the Act . S. 32(5) reads as follows:

(5) No bylaw operates to prohibit or restrict the devolution of units or any transfer, lease, mortgage or other dealing with them or to destroy or modify any easement implied or created by this Act . [ 18 ] The Corporation argues that these agreements are not valid leases but rather are properly characterized as licenses which were entered into in an attempt to circumvent my order of February 27, 2020. [ 19 ] The Corporation notes that the Agreement does not provide for a fixed term of occupancy and does not automatically continue from month to month without notice.

Paragraph 23 of the Agreement reads as follows: 23 Renewal of Lease Upon giving written notice no later than five days before the expiration of the month periodic lease, the tenant may renew the lease on a monthly basis each month. All terms of the renewed lease will be the same except for this renewal clause and the amount of rent.

If the landlord and the tenant cannot agree as to the amounts of the rent, the amount of rent will be determined by mediation. [ 20 ] In addition, the Agreement does not stipulate a rental amount. [ 21 ] These provisions are indicia of a license, not a lease. [ 22 ] I do not accept that there was a bona fide intention to lease on the part of the Applicant or the tenants. I do not accept that there ever was an intention to have these tenants become domiciled in the unit. [ 23 ] It is noteworthy that prior to entering into the agreement with Ms.

El Sherbani, the Applicant advertised on Airbnb that his unit was available for short term rentals. [ 24 ] In argument before me the Applicant conceded that labelling the agreement a “Lease” is not dispositive of whether legally the agreement is a lease or something else. [ 25 ] I have concluded that in substance the agreement is not a lease but rather is a license intended for short term occupancy. [ 26 ] In the result, s. 32(5) of the Act is not engaged and the occupancy of the unit by Ms. El Sherbani, Mr. Harrison, and Mr. Corazza contravened the bylaws of the Corporation.

Has the Applicant Proven a Claim Against the Corporation Pursuant to

Section 67 of the Act ? [ 27 ] The Applicant argues that the Corporation engaged in “unilateral, biased, arbitrary, and prejudicial actions respecting Ms. El Sherbani in that the Corporation disabled her parkade fob”. The Applicant further argues that the Corporation harassed her. He seeks remedies pursuant to s. 67(2) of the Act . [ 28 ]

Section 67 reads as follows: 67

(1) In this section,

(a) “improper conduct” means (

i) non-compliance with this Act, the regulations or the bylaws by a developer, a Corporation, an employee of aCorporation, a member of a board or an owner, (ii) the conduct of the business affairs of a Corporation in a manner that is oppressive or unfairly prejudicial to or thatunfairly disregards the interests of an interested party, (iii) the exercise of the powers of the board in a manner that is oppressive or unfairly prejudicial to or that unfairlydisregards the interests of an interested party, (iii.1) the conduct of an owner that is oppressive or unfairly prejudicial to the Corporation, a member of the board oranother owner, (iv) the conduct of the business affairs of a developer in a manner that is oppressive or unfairly prejudicial to or thatunfairly disregards the interests of an interested party or a purchaser or a prospective purchaser of a unit, or (

v) the exercise of the powers of the board by a developer in a manner that is oppressive or unfairly prejudicial to or thatunfairly disregards the interests of an interested party or a purchaser or a prospective purchaser of a unit; (b) “interested party” means an owner, a Corporation, a member of the board, a registered mortgagee or any other person whohas a registered interest in a unit.

(2) Where on an application by an interested party the Court is satisfied that improper conduct has taken place, the Court may doone or more of the following: (

a) direct that an investigator be appointed to review the improper conduct and report to the Court; (

b) direct that the person carrying on the improper conduct cease carrying on the improper conduct; (

c) give directions as to how matters are to be carried out so that the improper conduct will not reoccur or continue; (

d) if the Applicant suffered loss due to the improper conduct, award compensation to the Applicant in respect of that loss; (

e) award costs; (

f) give any other directions or make any other order that the Court considers appropriate in the circumstances.

(3) The Court may grant interim relief under subsection (2) pending the final determination of the matter by the Court. [29]

Section 67 gives the court broad authority to grant remedies and it is well established that s. 67 is similar to corporateoppression remedies. [30] At the root of the dispute between the Applicant and the Corporation was the decision of the Applicant to rent his unit forshort term occupancy, using the Airbnb platform. [31] As noted, my decision of February 27, 2020 definitively concluded that the bylaws of the Corporation prohibited short termrentals, where no lease was entered into. [32] I have already concluded that the Applicant did not enter into “leases” of his unit rather he granted licenses for short termoccupancy. [33] It is well established in the case authorities that courts will accord significant deference to condominium corporations in theimplementation and enforcement of bylaws. [34] In 934859 Alberta Inc v Condominium Corporation No. 0312180 2000 ABQB 640, the following passages appear at paras54 and 55 Should a Court Defer to elected Boards? [54] A review of the cases submitted indicates that a court should defer to elected Boards as a matter of general application.

In a numberof the cases, from the various provinces, the decisions related to situations where there is a provision similar to s. 67 of the CondominiumProperty Act. The authorities cited, by Condo Corp, in support of the proposition that a Court should not lightly interfere in the decisionof the democratically elected board of directors, acting within its jurisdiction and substitute its opinion about the propriety of the board ofdirectors’ opinion unless the board's decision is clearly oppressive, unreasonable and contrary to legislation are: Maple Leaf Foods Inc. v.

Schneider Corp. (1998) (ON CA), 42 O.R. (3d) 177, per Weiler, J.A. at pp. 191 and 192; Desjardins v. Winnipeg Cond. Corp. 75 (MB KB), [1991] 2 W.W.R. 193, per Krindle, J. at p.195; York Condominium Corp. No. 382 v. Dvorchik [1997] O.J. No. 378 per the Court at para.S; Schaper-Kotter, et al v. The Owners, Strata Plan 148 2006 BCSC 634 per Brooke, J. At paras 10 to 12 inclusive Condominium Plan No. 932 2887 v. Redweik [1994] A.J. No. 1020 per Master Quinn at paras 10 and 12.

[55] In my view, as a matter of general application, Courts do defer to duly elected condominium boards. However if improper conduct is alleged and a Court is satisfied that improper conduct has taken place, the Court, pursuant to s. 67(2) of the Condominium Act , may then direct and/or grant any of the remedies set out therein. [ 35 ] In Condominium Plan 0221347 v N.Y. 2003, ABQB 790 . paras 60 and 61 read as follows: [60] Condominium Plan No. 932 2887 v. Redweik [1994] A.I.

No. 1020 [M.C.] decided that the Court should not become involved in adjudicating on the reasonableness of the bylaws, nor on questions of how the board enforces the bylaws. [61] This is a correct proposition in law assuming that the Condominium Corporation is acting strictly within its bylaws, as I discussed in Reilly v.

Freedom Gardens 2001 ABQB 1002 and ABQB 1018. [ 36 ] Given my decision, which remains in full force and effect, the Corporation was legally entitled to use reasonable measures to thwart the Applicant’s continued efforts to use his unit for short term rentals which was a flagrant attempt to circumvent my decision. The Corporation imposed a monetary fine against the Applicant of $3,000 and disabled Ms. El Sherbani’s parkade fob. All of the Applicant’s parkade fobs were reinstated once Ms.

El Sherbani vacated the unit. [ 37 ] On this evidentiary record the actions of the Corporation were not abusive or excessive and did not amount to harassment. The actions of the Corporation are properly characterized as rigorous enforcement of the bylaws in the face of ongoing contraventions of them. [ 38 ] It bears noting that the Corporation communicated to the Applicant on numerous occasions that short term rentals were prohibited.

The Corporation made every effort to avoid conflict with the Applicant. [ 39 ] From February 27, 2020 onward the Applicant was fully aware that the Corporation was on solid legal ground in prohibiting short term rentals. [ 40 ] There was ample opportunity for the Applicant to comply with my decision and indeed several other unit owners who were using their units for short term rentals did comply. [ 41 ] In the result, I do not accept that the Applicant has established any breach of s. 67. [ 42 ] Specifically, I do not accept that the Applicant has established a claim for psychological stress or the alleged undue financial burden incurred by him. [ 43 ] On this evidentiary record there is no basis for the appointment of an Investigator to investigate the conduct of the Board. [ 44 ] In coming to this conclusion, I accept that the Applicant and the Board had a strained relationship after the Applicant started using his unit for short term rentals using Airbnb, but nonetheless the Applicant has not established that the Board acted improperly.

Given that the Applicant Sold His Unit on June 20, 2023, Does He Have Any Standing to Seek Relief by Way of an Interim Injunction, Permanent Injunction, and/or the Appointment of an Investigator to Review the Conduct of the Board After That Date? [ 45 ] On the sale of his unit on June 20, 2023, the Applicant lost any right to make any claims respecting the unit after that date. Similirly, he lost any right to question the conduct of the Board after that date.

Simply put, he no longer had any legal connection to the unit he formerly owned or the Board. [ 46 ] In the result, the claims for an interim injunction, permanent injunction, and the appointment of an investigator to investigate the conduct of the Board after June 20, 2023 are dismissed. Has the Applicant Established a Legal Basis for Claiming Against the Corporation a Shortfall in the Sale of his Unit? [ 47 ] The Applicant purchased his unit on May 15, 2013 for the sum of $355,000. He sold the unit on May 31, 2023 for sum of $259,000 resulting in a loss of $96,000.

The Applicant describes the sale as a “distress sale”. [ 48 ] There is no evidence that anything done or not done by the Corporation had any impact on the sale of the unit. Condominium units, similar to other real property, are subject to market fluctuations. There is no guarantee that anyone purchasing a condominium unit will be able to sell the unit for no less than the purchase price. [ 49 ] In argument the Applicant acknowledged that he purchased the unit for investment purposes. Unfortunately, his investment was not successful but this cannot be attributed to the conduct of the Board in enforcing the bylaws.

[ 50 ] On this evidentiary record, the unit sold for market value at the time and I do not accept that there is any legal basis for the Applicant to claim any shortfall from the Corporation. Conclusion and Order [ 51 ] The Applicant’s request for a Declaration that: (

a) The Applicant is entitled to alienate his property is dismissed as he no longer owns the unit; (

b) The agreement between the Applicant and Ms. El Sherbani subsequently Mr. Harrison and Mr. Corazza are valid lease agreements is dismissed; and (

c) That the respondent is in violation of s. 67 of the Act is dismissed. [ 52 ] The Applicant’s request for an Interim Injunction is dismissed. [ 53 ] The Applicant’s request for an Order granting a Permanent Injunction is dismissed. [ 54 ] The application for the appointment of an Investigator is dismissed. [ 55 ] The Applicant’s claim for compensation and loss of revenue is dismissed. [ 56 ] The Applicant’s claim relating to the sale of his unit is dismissed. [ 57 ] Costs are to be spoken to within 30 days. Heard on the 16 th day of January, 2024.

Dated at the City of Edmonton, Alberta this 23 rd day of January, 2024. R. Paul Belzil J.C.K.B.A. Appearances: Jonah Gordon Porter Self-Represented for the Applicant Erin Berney and Sarah Denholm Field Law LLP for the Respondent