Brandon Condominium Corporation No 68 v TJR Investment Holdings Ltd, 2022 MBCA 13

Citation: Brandon Condominium Corporation No 68 v TJR Investment Holdings Ltd, 2022 MBCA 13 Date: 20220203 Docket: AI21-30-09595 IN THE COURT OF APPEAL OF MANITOBA Coram: Madam Justice Freda M. Steel Madam Justice Holly C. Beard Mr. Justice Christopher J. Mainella BETWEEN : brandon condominium corporation ) R. I. Holloway no. 68 ) for the Appellant ) (Applicant) Appellant ) J. A.

Kagan ) for the Respondent - and - ) ) Appeal heard: tjr investment holdings ltd. ) September 10, 2021 ) (Respondent) Respondent ) Judgment delivered: ) February 3, 2022 On appeal from 2020 MBQB 176 steel JA [ 1 ] This is an appeal as to the rights and obligations of residential owners of condominium units, as opposed to owners of commercial units, in a mixed-use condominium complex located in Brandon, Manitoba. It involves the

interpretation and application of sections of The Condominium Act , CCSM c C170 (the Act ). [ 2 ] The key issue is whether the Act allows for an unequal allocation of expenses for the common elements and the reserve funds among the owners of the units. I have found that it does allow for such unequal allocation and would dismiss that portion of the appeal.

However, the appropriation of portions of the surface parking area by the respondent, TJR Investment Holdings Ltd. (TJR), is contrary to the condominium declaration (the declaration) and should be returned to the control of the applicant, Brandon Condominium Corporation No. 68 (BCC 68). FACTS [ 3 ] BCC 68 is a condominium corporation for a project in Brandon called the Renaissance Station. The condominium development consists of 10 commercial units and 66 residential units.

With respect to the residential units, 48 are owned by different individuals and 18 are owned by Wendot Limited (Wendot), a corporation related to TJR. TJR is a successor in title to Renaissance Station Inc., which initially filed the declaration in 2008. TJR is the owner of all 10 commercial units in the Renaissance Station.

For all intents and purposes, there is no legal distinction between TJR and Renaissance Station Inc. [ 4 ] The declaration, the site plan (the plan) and the by-laws were registered in the Brandon Land Titles Office in 2008, and are the originating documents for BCC 68 and the Renaissance Station.

The declaration provides that, while each of the residential units, including those owned by Wendot, contribute a certain percentage to the common expenses for the common areas, the commercial units have zero percentage attributed to them and do not contribute to the common expenses or to the reserve fund of the corporation. [ 5 ]

Schedule C of the declaration sets out the percentages for contribution to common expenses and the reserve fund of the corporation for each specific unit. All of the residential units are allocated a portion of the common elements in percentages between 1.2988% and 1.9191%. All of the commercial units are allocated “[z]ero” percentage of the common elements. “[C]ommon elements” is defined by the Act as “all the property except for the units.” Informally, BCC 68 and TJR have agreed, and continue to agree, to cost share certain ongoing expenses; however, this arrangement does not cover reserve fund obligations. Only residential unit owners

contribute to the reserve fund. [ 6 ] The declaration provides, “For clarity, it is acknowledged that the [o]wners of the [c]ommercial [u]nits have no voting rights, have no interest in the [c]ommon [e]lements, do not share in the [c]ommon [e]xpenses, do not contribute to the [c]ommon [e]xpenses, and do not contribute to the [r]eserve [f]und or [r]eserve [f]unds of the [c]orporation.” [ 7 ] BCC 68 applied for declarations that certain provisions of the declaration be found void as being contrary to the Act and, as well, a declaration that TJR had engaged in improper conduct contrary to section 225(2) of the Act .

In response, TJR denied that the declaration was faulty or contrary to the Act , and denied any improper conduct and raised the issue of whether the claims were statute-barred. [ 8 ] In addition, issues have arisen with respect to parking. The plan sets out areas known as “commercial surface parking” and “visitor surface parking”.

The declaration provides that the commercial unit holders are only entitled to the use of the surface parking designated as “commercial parking area.” [ 9 ] However, in 2014, TJR took over all surface parking, both the area designated as commercial parking and the area designated as visitor parking, and has rented spots to third parties. TJR concedes that BCC 68 may have formed a reasonable expectation that all unit owners would have been entitled to use these stalls for temporary visitor parking.

However, once this issue arose, TJR purchased additional surface parking for the use of residential unit owners and their temporary visitors. TJR submits that residents now have more parking available to them than before. [ 10 ] BCC 68 argues that this behaviour constitutes oppressive conduct since these areas are part of the common elements and, as such, their upkeep is being funded by residential unit owners who are not receiving rent for their use, and are also being denied use of these spots.

THE APPLICATION JUDGE [ 11 ] The application judge found that section 36(1) of the Act , while providing that the ownership of a unit could not be separated from the ownership of the share in the common elements, did not prevent a zero allocation of expenses. The application judge interpreted this

section “not as disallowing [a] zero allocation, but as not allowing a condominium unit owner to sell off his or her share in the common interests” (at para 19). She also found that the zero allocation provision was not done for an improper purpose and was properly disclosed to purchasers of the residential units. [ 12 ] As to the parking, she concluded that, as no residential unit owner had contended that they were prejudiced by the situation and looking at the situation overall, there was no unfair or oppressive conduct.

She further held that, in the event she was wrong in the above analysis of the relevant sections of the Act , BCC 68’s claims were in any case statute-barred. [ 13 ] On appeal, BCC 68 argues that the application judge erred in law and ignored material evidence in so doing; particularly, the supplementary affidavit of Ronald Funk (Funk). It submits that the application judge erred in failing to find that the provisions of the declaration violated

section 36, and the zero allocation provision was included in the declaration for a devious purpose, which would render it void. BCC 68 also contends that the application judge erred in failing to find that TJR’s conduct constituted oppression under the Act , or that TJR had discharged its obligation of disclosure. Further, BCC 68 submits that the application judge failed to properly order relief with respect to the surface parking issue by applying the wrong legal test and ignoring material evidence.

BCC 68 further contends that the application judge erred in holding that the claims for relief were statute-barred pursuant to The Limitation of Actions Act , CCSM c L150 (the LAA ), on the grounds that it was an equitable claim and was only discovered once it changed property managers. RELEVANT LEGISLATIVE PROVISIONS [ 14 ] The following provisions of the Act are relevant to this matter (at sections 1(1) , 3(2) , 13(1) , 35 - 38 , 44 , 223(1) - 223(2) , 224 - 225 ):

Definitions 1(1) The following

definitions apply in this Act . . . . “ common assets” means (

a) personal property held by or on behalf of a condominium corporation; (

b) real property held in the name of or on behalf of a condominium corporation that is not included in the corporation’s plan; and

(

c) any other property specified as a common asset by this Act . “common elements” means all the property except for the units. . . . “declaration” means a declaration registered under

Part 2 (Condominium Registrations), as amended from time to time, and includes a proposed declaration. . . . “unit” means a part of the land designated as a unit on a plan and includes the space enclosed by its boundaries and all the land, buildings, structures and fixtures within that space. . . . Application 3(2) Subject to

Part 19 (Transitional Provisions), this Act applies to a declaration and plan registered, and a corporation created, under The Condominium Act , R.S.M. 1987, c. C170 . Content of declaration 13(1) A condominium corporation’s declaration must contain the following information: . . . (

g) a statement of the proportions in which the unit owners are to share in the common elements, expressed in percentages allocated to each unit; (

h) a statement of the proportions in which the unit owners are to contribute to the common expenses, expressed in percentages allocated to each unit; (

i) a statement of the proportions in which the unit owners are required to contribute to the reserve fund, expressed in percentages allocated to each unit; . . . Ownership of common elements 35 The unit owners are tenants in common of the common elements, and each of them owns an undivided share in the common elements in the proportions specified in the declaration. No separation 36(1) The ownership of a unit may not be separated from the ownership of the share in the common elements.

Instrument of separation void 36(2) Any instrument, agreement, document or transaction that purports to separate the ownership of a unit from its share in the common elements is void. No division of common elements 37 Except as provided for by this Act , the common elements may not be divided. Reference to unit includes interest in common elements 38 A reference in an instrument, agreement or document to a unit is to be considered a reference to the unit and the interest in the common elements that is appurtenant to that unit, unless the document otherwise provides.

Unit owners share in common assets 44 As members of a condominium corporation, the unit owners share in the common assets in the same proportions as the proportions of their shares in the common elements as set out in the declaration. Order — compliance or contravention 223(1) A unit owner, a condominium corporation, a declarant, an owner-developer, an occupant of a proposed unit or a holder of a registered instrument in respect of a unit may apply to the court for an order under this

section to remedy a contravention of any provision of this Act or the corporation’s declaration, by-laws, or rules. Contents of orders 223(2) The court may make one or more of the following orders: (

a) an order requiring compliance with any applicable provision of this Act or the condominium corporation’s declaration, by-laws or rules; (

b) an order requiring the amendment of the condominium corporation’s declaration or plan as specified in the order; (

c) an order requiring damages to be paid if the applicant has suffered a loss or damage because of a contravention of this Act or the condominium corporation’s declaration, by-laws or rules; (

d) an order requiring performance of a duty that is required to be performed under this Act or the condominium corporation’s declaration or by-laws; (

e) an order directing that a contravention cease; (

f) an order appointing an administrator; (

g) an order requiring the payment of costs; (

h) any other order the court considers appropriate

Declaratory order 224 A unit owner, a condominium corporation, or any other person affected or likely to be affected by this Act or the corporation’s declaration or by-laws may apply to the court for an order declaring the rights and obligations of the owner, corporation or affected person. Order — improper conduct 225(1) A unit owner, condominium corporation, buyer of a proposed unit, holder of a registered instrument in respect of a unit, declarant or owner-developer who reasonably believes that improper conduct has taken place may apply to the court for an order under this section. Meaning of “improper conduct” 225(2) In this section, “improper conduct” means (

a) the conduct of the condominium corporation’s business affairs in a manner that is oppressive or unfairly prejudicial to the applicant or that unfairly disregards the applicant’s interests; (

b) the exercise of the board’s power in a manner that is oppressive or unfairly prejudicial to the applicant or that unfairly disregards the applicant's interests; or (

c) the conduct of the declarant or owner-developer with respect to the applicant or a purchaser or prospective purchaser in a manner that is oppressive or unfairly prejudicial or that unfairly disregards the interests of any of them. Contents of orders 225(3) If the court is satisfied that improper conduct has taken place, the court may make one or more of the following orders: (

a) an order prohibiting the conduct referred to in the application; (

b) an order requiring the amendment of the condominium corporation’s declaration or plan as specified in the order; (

c) an order giving directions as to how matters are to be carried out so that the improper conduct will not continue or re-occur; (

d) an order requiring the payment of compensation to the applicant, if he or she suffered a loss or damage due to the conduct; (

e) an order requiring the payment of costs; (

f) any other order the court considers appropriate. ANALYSIS [ 15 ] The Act came into force in 2015 and specifically indicates that declarations filed before the new legislation came into effect must comply with the present Act (see sections 3(1) , 14 ). TJR takes no issue with this.

[16] There is also no debate that the individual sections are to be interpreted within a consideration of the Act as a whole. Words in a statute are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of theAct and the intention of the legislature (see Rizzo & Rizzo Shoes Ltd (Re), (SCC), [1998] 1 SCR 27). Thecondominium scheme (that is, the Act, declaration and by-laws) is to be interpreted in a fair and equitable way (see WinnipegCondominium Corp No 12 v Edwardian Estates Ltd (1995), (MB CA), 123 DLR (4th) 16 at 20 (Man CA)).

At itscore, the Act is consumer protection legislation and should be interpreted with that in mind (see Harvey v Talon International Inc, 2017ONCA 267 at paras 61-66). [17] There are several methods of obtaining relief under the Act depending on the circumstances. The application judgereferred to

section 225 in her decision and bases her decision on that section. She does not refer to

section 223. I prefer to separate thetwo sections since they have different elements, as I shall explain. [18] If there has been a contravention of the provisions of the Act, a court may order compliance pursuant to

section 223. Normally, the standard of review of a decision under

section 223 is a question of mixed fact and law unless there is an extricable legalissue. In this case, there is such a legal issue. The question of whether the allocation of zero common expenses to TJR is contrary to theAct is a question of statutory

interpretation and reviewable on the standard of correctness (see Housen v Nikolaisen, 2002 SCC 33 atpara 8). [19] On the other hand, if there has been compliance with the Act, but improper conduct, the court may make orders thatremedy this conduct pursuant to

section 225 of the Act. The question of whether there has been improper conduct is a discretionarydecision and appellate intervention is warranted only if there has been an error in principle or palpable and overriding error of fact, orunless the decision is so clearly wrong as to yield an unjust result (see CIBC v Ahmed, 2021 MBCA 25 at para 4). [20] As this Court explained in Winnipeg Condominium Corporation 479 v 520 Portage Avenue Ltd et al, 2020 MBCA 66(at paras 77-78):

Section 223 provides for a remedy in the event of a breach of the current Act . . . The language of

section 225 allows for a remedy where there has been “oppressive” conduct. . . . [21] In this way,

section 223 is focused on ensuring compliance with the Act, the corporation’s declaration, by-laws or rules.

Section 225 is intended to provide a remedy for improper conduct, whether in the corporation’s business affairs (see section 225(2)(a)),the exercise of a board’s power (see section 225(2)(b)), or the actions of a declarant or owner-developer (see section 225(2)(c)). [22] While there are some similarities between the remedies available under these two sections, there are some importantdifferences. Under

section 223, there is no need to prove improper conduct; merely a contravention of any provision of the Act, or thecorporation’s declaration, by-laws or rules. On the other hand,

section 225 provides a remedy once improper conduct is proven, so anapplicant under that

section must satisfy the court that the improper conduct (as defined in section 225(2)) has taken place. Zero Allocation of Common Elements to Commercial Units [23] Does the zero allocation contravene

section 36 of the Act in such a way as to require a remedy pursuant to sections 223or 225? [24] As indicated above,

section 36 of the Act provides that the ownership of a unit cannot be separated from the ownershipof the common elements and any attempt to do so will be considered void. [25] Although the applicable

section was worded slightly different at the time the declaration was registered in 2008, TJRacknowledges that the declaration must comply with the current version of the Act (see

section 14). [26]

Section 36 of the Act has not yet received any judicial consideration in Manitoba. However, it is similar to section 11(4)of Ontario’s Condominium Act, 1998, SO 1998, c 19 (Ontario’s Condominium Act), which states: No separation 11(4) The ownership of a unit shall not be separated from the ownership of the common interest and an instrument that purports toseparate the ownership of a unit from a common interest is void. [27] Sections 7(2)(

c) and 7(2)(

d) of Ontario’s Condominium Act provide as follows: Contents 7(2) A declaration shall contain,

(

c) a statement of the proportions, expressed in percentages, of the common interests appurtenant to the units; (

d) a statement of the proportions, expressed in percentages allocated to the units, in which the owners are to contribute to thecommon expenses. [28] Other provinces with similar statutory provisions include New Brunswick[1], Nova Scotia[2], Prince Edward Island[3]and Newfoundland[4]. [29] Ontario’s condominium legislation has been dealt with in several cases. In Peel Condominium Corp No 417 v TedleyHomes Ltd, 1997 CarswellOnt 2998 (CA), the Court dealt with six units in a condominium development which were part of the commonelements of the condominium and title would be transferred after the purchase price was paid. The Court held that a zero allocation didnot offend the equivalent

section of Ontario’s condominium legislation and was not inconsistent with the spirit and intent of the Act. [30] Similarly, in York Region Vacant Land Condominium Corp No 968 v Schickedanz Bros Ltd, (ONCA), 2006 CarswellOnt 5724 (CA), the Court upheld an uneven common element allocation, concluding (at paras 9, 12): The purpose of the latter subsection is not to prevent a 0% allocation in the declaration, but rather to prevent a unit owner . . . fromresiling from his or her obligation to contribute to common expenses as apportioned by the declaration. . . .

However, in the presentcase, it is not the appellants’ non-usage of the common element (the ring road) that is the source of their refusal to contribute, but ratherthe absence of any obligation pursuant to the declaration. . . . . . . As noted, in this case, each purchaser in this development had the option of deciding whether or not to purchase based upon theterms disclosed in the declaration.

It is not oppressive for a developer declarant to register and implement a properly discloseddeclaration so long as it is in compliance with the Act and its regulations. . . . [31] Disproportionate allocations between residential and commercial units that did not have any direct correlation with theactual cost of maintaining and repairing the common element areas of the condominium were upheld in both Walia Properties Ltd v YorkCondominium Corp No 478, 2007 CarswellOnt 5001 (Sup Ct J); and White Snow and Sunshine Holdings Inc v Metropolitan TorontoCondominium Corporation No 561, 2017 ONSC 4558, aff’d 2018 ONCA 196. [32] In White Snow, the most recent of the two cases, Lederer J stated (at para 23): . . .

While section 7(2)(

d) of [Ontario’s Condominium Act] provides that the Declaration must contain a statement, expressed in percentagesallocated to each unit, of the proportions in which the unit owners are required to contribute towards the common expenses, it sets noguideline as to how the percentage contributions towards common expenses are to be determined, nor is there any requirement under theAct that such percentages have any direct correlation with the actual cost of maintaining and repairing the common element areas of thecondominium [footnote omitted]. [33] While BCC 68 argued the cases were distinguishable, I disagree.

There is no general discretion for a court to impose byjudicial fiat an allocation that it considers fairer than that set out in the declarations and accepted by the unit owners at the time theypurchased their units. The intention of the

section is to prevent the separate disposition of a unit from its declared share in the commonelements. Nothing in the declaration in this case separates the ownership of the commercial units from their respective share in thecommon elements. The declaration simply specifies that the commercial units have a zero allocation in the common elements. [34]

Section 13 of the Act provides strong support for the position that unequal allocations, including zero allocations, arepermissible. If the proportions in which unit owners were to share in the common elements contribute to the common expenses andcontribute to the reserve fund were intended to be exactly the same (determined solely based on the ownership of units), there wouldhave been no reason for the Legislature to include sections 13(1)(g), 13(1)(

h) and 13(1)(

i) in the Act. The fact that each of these itemswas addressed in a separate subsection indicates that the Legislature was open to the possibility that each proportion might be different. The presumption against tautology supports this

interpretation (see Ruth Sullivan, Sullivan on the Construction of Statutes, 6th ed(Markham: LexisNexis, 2014) at

section 8.23). [35] Support for this conclusion may also be found in Audrey Loeb’s Condominium Law and Administration, 2nd ed(Toronto: Thomson Reuters, 2020) (loose-leaf updated 2021, release 9) (online: WLNext Can (date accessed 26 January 2022)) (atsection 4.5):

. . . As a rule, the percentages of ownership interests and contributions to common expenses are the same, but they need not be and should not be in all cases. . . . . . . The only requirement when all the unit percentages are added is that the total equal 100 per cent [citation omitted]. [ 36 ] She goes on to write (at

section 9.19): While section 7(2)(

d) of [ Ontario’s Condominium Act ] provides that the declaration must contain a statement, expressed in percentages allocated to each unit, of the proportions in which the unit owners are required to contribute towards the common expenses, it sets out no guideline as to how the percentage contributions towards common expenses are to be determined, nor is there any requirement under the Act that such percentages have any direct correlation with the actual cost of maintaining and repairing the common element areas of the condominium. . . . . . . [ 37 ] Accordingly, unequal allocations, including zero allocations, are permissible under the Act .

I agree with the application judge that a zero allocation of the common expenses in this case is not a contravention of

section 36 of the Act . [ 38 ] Not only does the declaration conform with the Act but, contrary to the argument of BCC 68, there was adequate disclosure of the zero allocation issue to prospective residential unit purchasers. All prospective purchasers at the Renaissance Station were provided with a disclosure document, which included copies of the declaration, the plan and the by-laws (the disclosure document).

In accordance with the disclosure requirements set out in the Act , all current and former unit owners of the Renaissance Station had the opportunity to review and consider the disclosure document, with the benefit of independent legal advice if they wished, before purchasing their units. At the time they entered into their transaction, they had seven days to evaluate the transaction before it became legally binding and to make the decision that was appropriate for them.

The fact that the commercial unit owners did not contribute to common expenses or the reserve fund was clearly disclosed and would have been apparent to anyone reading the declaration. [ 39 ] As well, under

section 223, there is no need to prove improper conduct; merely a contravention of any provision of the Act , or the corporation’s declaration, by-laws or rules. In her judgment, the application judge referred to case law from Ontario that used the phrase “devious purpose” (see Peel Condominium at para 30; and York Region at para 10) . She stated that BCC 68 contends that the “[d]eclaration was drafted in a manner that was for a devious purpose since there was no reasonable business purpose for not requiring commercial unit owners to contribute to common element expenses” (at para 16).

She concluded that “with disclosure there is less opportunity to suggest that the zero allocation was done on the sly or for a devious purpose” (at para 19). [ 40 ] References to “devious purposes” in this area of the law are primarily related to the two Ontario cases cited by the application judge. The language does not flow from any legislation. In fact, the phrase was used once in each judgment. In York Region , a “devious purpose” was contrasted with “a reasonable and legitimate business purpose” (at para 10). There are only a few other cases that use this type of language.

Several cases use the phrase “devious or improper purpose”. [5] Dhanna v Dhanna , 2004 CarswellOnt 6131 (Sup Ct

J) referred to a “devious or nefarious purpose” (at para 35). Board of School District No 61 (Greater Victoria) v Oak Bay (District of) , 2005 BCSC 1857 referred to “bad faith or improper purpose or devious or deceitful motive” (at para 16). [ 41 ] There is nothing in the language of

section 223 of the Act that would require proof of improper conduct or devious conduct; merely a contravention of any provision of the Act , or the corporation’s declaration, by-laws or rules. Again, if that were the case, what would be the purpose of

section 225 ? [ 42 ] The conclusion that the zero allocation of the common expenses does not contravene

section 36 of the Act does not answer the question of whether there was improper conduct, as defined in section 225(2) of the Act , that justifies a remedy.

Section 225 — The Oppression Remedy [ 43 ]

Section 225 permits unit owners and condominium corporations to apply to the court for relief when they “reasonably [believe] that improper conduct has taken place” (at section 225(1)).

Section 225(2) provides a definition of “improper conduct” which includes conduct that is “oppressive”, “unfairly prejudicial” or that “unfairly disregards the applicant’s interests”. [ 44 ] The test for oppression in the condominium context is fairly well-developed and uniform across the country (at least from Ontario west). [6] As this Court noted in Winnipeg Condominium Corporation 479 , the Supreme Court of Canada’s decision in BCE Inc v 1976 Debentureholders , 2008 SCC 69 (at para 78 ): . . . serves as the starting point for the discussion about the oppression remedy in condominium legislation because the Supreme Court of Canada’s guidance in that case has been utilised by several provincial appellate courts when interpreting and applying the oppression

remedy contained in provincial condominium legislation. . . . [ 45 ] In BCE , the Supreme Court defined “oppression”, “unfair prejudice” and “unfair disregard” as follows (at para 67): . . . “Oppression” carries the sense of conduct that is coercive and abusive, and suggests bad faith. “Unfair prejudice” may admit of a less culpable state of mind, that nevertheless has unfair consequences.

Finally, “unfair disregard” of interests extends the remedy to ignoring an interest as being of no importance, contrary to the stakeholders’ reasonable expectations . . . [ 46 ] The different types of conduct listed do not represent watertight compartments and often overlap and intermingle (see BCE at para 91). Oppression is the most serious type of conduct of the three. Unfair prejudice is generally seen as involving conduct less offensive than oppression.

Unfair disregard of the relevant interest is viewed as the least serious of the three wrongs (see BCE at paras 91-94). [ 47 ] In Shen v Winnipeg Condominium Corp No 16 , 2017 MBQB 119 , the test from BCE was applied in the context of the oppression remedy provision.

The Court noted that the oppression remedy provision (at para 61): . . . . . . protects legitimate expectations and not individual wish lists . . . the court must balance the objectively reasonable expectations of the owner with the condominium board’s ability to exercise judgment and secure the safety, security and welfare of all owners and the condominium’s property and assets. [ 48 ] The concept of reasonable expectations is objective and contextual.

The question is whether the expectation is reasonable having regard to the facts of the specific case, the relationships at issue and the entire context, including the fact that there may be conflicting claims and expectations (see Hakim v Toronto Standard Condominium 1737 , 2012 ONSC 404 at para 43 ). [ 49 ] Thus, there are two related inquiries in any claim of oppression: 1. Does the evidence support the reasonable expectation asserted by the claimant? 2.

Does the evidence establish that the reasonable expectation was violated by conduct falling within the terms “oppression”, “unfair prejudice” or “unfair disregard” of a relevant interest? [ 50 ] With respect to the zero allocation issue, I have already indicated that there is no violation of the Act .

However, if it were necessary, I would also find that there was no improper conduct, especially given the disclosure in the declaration. [ 51 ] It is true that there are common elements of the Renaissance Station that are used by both the commercial and residential unit owners that will require eventual capital replacement and/or maintenance and repair, such as the sidewalks, building foundation and structural frame. There are a number of common expenses that are the responsibility of the residential unit owners, such as insurance, that covers the whole property.

As well, as stated, the commercial unit owners do not contribute to the reserve fund, which is seriously underfunded. [ 52 ] However, the evidence discloses that, while the allocation is unequal, there are valid and reasonable explanations for why the commercial unit owners do not contribute to the named common expenses.

This unequal allocation was clearly disclosed to the unit owners in the declaration back in 2008, which was provided to all prospective purchasers and formed the basis of the reasonable expectations of all parties. [ 53 ] TJR states that the Renaissance Station was designed and constructed with the intention that the commercial units and residential units would be kept separate. The commercial units occupy the entire main floor of the building, with the exception of common areas. The top three floors consist entirely of residential units and common areas accessible only to the residential units.

The commercial units do not have access to, or use of, the shared interior space of the building or a number of interior common areas and amenities. Garbage is handled separately between the two, and the residential units and the commercial units have separate electrical systems and HVAC systems. Each of the commercial units has its own hydro meter and is responsible for paying its own hydro bill.

The commercial units pay their own property taxes. [ 54 ] The commercial unit owners contribute financially to the aspects of the Renaissance Station that have a nexus to the operation of commercial spaces, such as snow clearing of the back lane access to the underground parkade, the water bill and the building insurance. [ 55 ] This situation is similar to Metropolitan Toronto Condominium Corporation No 1272 v Beach Development (Phase II) Corporation , 2011 ONCA 667 . The Court stated (at para 13):

. . . This is not a case of an oppressor utilizing a superior bargaining position to coerce unfavourable terms from a weaker party or acting behind the weaker parties’ back. Rather, it is a case in which the appellants voluntarily purchased their condominium units in the full knowledge and disclosure of the rights and obligations associated with their transaction. [ 56 ] Taking all of this into account, I find that the evidence does not support the reasonable expectations asserted by BCC 68 nor was there oppressive or improper conduct. [ 57 ] One last point in this area.

BCC 68’s position on many issues is that the application judge ignored relevant and material evidence; in particular, the evidence contained in Funk’s supplementary affidavit. [ 58 ] With respect to issues of evidence, the application judge was not required to address every inconsistency in the evidence in her decision but, rather, address in a general way arguments made by the defence. Lack of reference to evidence in a decision does not imply that it was not considered by the application judge (see FH v McDougall , 2008 SCC 53 at para 99 ).

A s McLachlin CJC noted in R v REM , 2008 SCC 51 , “a trial judge is not obliged to discuss all of the evidence on any given point, provided the reasons show that he or she grappled with the substance of the live issues on the trial” (at para 64; see also AM v Ministry of Social Services , 2020 SKCA 114 at para 81 ). [ 59 ] Appellate courts must begin from the presumption that a judge has considered and reviewed all of the evidence, unless there is reason to believe that the judge has forgotten, ignored or misconceived the evidence in a way that affected the conclusion in the case (see Sharbern Holding Inc v Vancouver Airport Centre Ltd , 2011 SCC 23 at para 71 ).

The mere fact a judge has not discussed certain evidence in depth is not sufficient grounds for appellate interference (see Van de Perre v Edwards , 2001 SCC 60 at para 15 ; and Housen at para 72 ). [ 60 ] This is not a case where affidavit evidence was filed on the eve of the hearing and the application judge did not have time to read it. [7] In this case, Funk’s supplementary affidavit was filed on August 22, 2019 — over a year before the application was heard on October 28, 2020, and the decision was rendered on December 9, 2020.

The supplementary affidavit was cited by both parties in the application briefs submitted to the application judge. Though the application judge did not specifically refer to Funk’s supplementary affidavit, her decision does appear to incorporate some of its contents. There is no indication that she did not receive or review Funk’s supplementary affidavit. In fact, the supplementary affidavit is referenced in the order. [ 61 ] Consequently, there is no reason to believe that the application judge forgot, ignored or misconceived Funk’s evidence.

She cited extensively from Tyler Rice’s (Rice) affidavit and found that “the position put forward by TJR [was] persuasive” (at para 19). In doing so, she noted that Rice was not cross-examined on his affidavit. This appears to be a case where the application judge found one party’s position to be more persuasive and not a situation where appellate intervention would be warranted solely on the basis that the application judge failed to explicitly address Funk’s supplementary affidavit. The Parking Issue [ 62 ] As is clear from BCC 68’s documents, all surface parking forms part of the common elements.

The plan denotes “commercial surface parking”, “visitor surface parking” and an area that is ambiguous as to whether it is commercial or visitor parking. The declaration explicitly provides that the commercial unit holders are entitled to use the surface parking designated as “commercial parking area.” The declaration does not refer explicitly to the other areas of surface parking. [ 63 ] According to Rice’s affidavit: . . . Prior to approximately 2013 or 2014, residents of Renaissance Station and their visitors were permitted to use the stalls designated as “Visitor Surface Parking” without charge.

After 2014, the 32 surface parking stalls visible on the Plan have been used as commercial parking stalls and considered to be the commercial parking area. The commercial unit owner does not charge for their use. The commercial parking area is simply available for the use of the commercial tenants and their visitors. The two handicap spaces are available to anyone requiring handicap parking. . . . [ 64 ] Consequently, notwithstanding that the commercial units do not own the visitor surface parking area and have no rights to use same, TJR has occupied them and are renting them out to third parties.

At the same time, residential units are obligated to maintain, repair and (when required) replace these common element surface parking areas. In her decision, the application judge agreed, finding that “TJR has admittedly monopolized control of both parking areas and has rented spots to commercial tenants” (at para 20). [ 65 ] She decided this issue pursuant to

section 225 , finding that no prejudice resulted to BCC 68 , citing the availability of additional parking on other land that TJR had purchased. BCC 68 submits that the application judge erred in failing to apply or consider

section 223 in relation to the issue of the visitor surface parking area. I agree. As noted above, section 223(1) enables a condominium corporation to apply to the court for an order to remedy a contravention of any provision of the Act , the corporation’s declaration, by- laws or rules. [ 66 ] BCC 68’s position is that the visitor surface parking, as well as some additional undesignated parking areas, form part of the common elements of the condominium corporation. Therefore, the current parking situation does not comply with the declaration. Clause 13 of the declaration provides as follows: 13.

USE OF COMMON ELEMENTS The whole or any part of the Common Elements may, except as herein provided, be used by all of the owners of Residential Units, from time to time, subject to the provisions of the [ Act ], this Declaration, the By-laws and the Common Element Rules except as hereinafter stated, and such rights shall be extended to the owner and the members of the immediate family and guests and other authorized occupants and visitors of the Owner . . . . . .

Notwithstanding the foregoing, the Commercial Unit Holders shall be entitled to use of that portion of the common elements designated as commercial parking area. [ 67 ] All surface parking areas are considered to be part of the common elements, but the declaration only specifically awards use of the commercial parking area to the commercial unit holders.

The remaining surface parking area remains part of the common elements and, thus, its use by and for the commercial unit holders constituted an infringement of the property rights of BCC 68. [ 68 ] It is true that, in 2014, TJR purchased additional parcels of land, and has paid all of the costs associated with their development and allows residents to park there. It did so to satisfy the City of Brandon’s zoning requirements for the Renaissance Station.

That does not change the fact that the visitor surface parking was a common element property, entirely owned by the residents, which was taken over by TJR and rented out for a profit. The residents did not consent to giving up their rights to the visitor surface parking in exchange for the additional lots developed by TJR. [ 69 ] The fact that TJR has chosen to purchase additional parcels of land for its own purpose is irrelevant to this issue.

The issue pertains to the parties’ respective rights to the common element surface parking, not their respective rights to unrelated, separate, private and personal land holdings. [ 70 ] The evidence establishes that TJR is in breach of the declaration by monopolizing and profiting from certain parking spaces that ought to have been treated as common elements. This is a violation of the Act , in that TJR has violated the terms of the declaration and infringed the property rights of BCC 68.

I agree with BCC 68; the issue is not about whether the residential unit owners have enough, or do not have enough, surface parking for themselves and their visitors, or whether additional parking has been made available otherwise. The issue is to what extent, if any, the residential unit owners can exercise rights with respect to surface parking areas of which they are the legal owners. [ 71 ] Pursuant to

section 223 , I would order this violation of the declaration to cease and TJR to return all surface parking areas, except that designated as the commercial surface parking area, to the control of BCC 68. I would also order TJR to account to BCC 68 for any revenue from the lease of these visitor parking spots to third parties since 2014. I would further order the declaration be amended (in accordance with para 1(b)(ii) of BCC 68’s notice of application) as follows: . . .

Page 15, Provision 13, the following sentence be amended: “ Notwithstanding the foregoing, the Commercial Unit Holders shall be entitled to use of that portion of the common elements designated as commercial parking area 10 parking stalls in the outdoor area designated as the commercial parking area .” [ 72 ] There seems to be some discrepancy and ambiguity as to the number of outdoor parking stalls. BCC 68 states that there are a total of 37 outdoor parking stalls.

Of these 37 outdoor parking stalls, two stalls are reserved for physically disabled parking and 10 are reserved for the commercial units (one for each commercial unit). Accordingly, there are 25 outdoor parking stalls that form part of the common elements. TJR indicates that the area labelled as visitor surface parking consists of 10 stalls. BCC 68 alleges that the area labelled as visitor surface parking consists of 11 stalls and that the discrepancy from the number denoted on the plan arises from the fact that TJR made the width of each stall slightly smaller, thus permitting more stalls.

[73] As well, there is some ambiguity with respect to the status of an area of surface parking known as the “undesignatedsurface parking” area. BCC 68 alleges that there are currently seven unspecified parking stalls in the undesignated surface parking areaand that all of those form part of the common elements of BCC 68. One of those stalls is reserved for physically disabled parking. Itdoes not appear that the application judge turned her mind to this issue and BCC 68 seeks clarification of the ambiguity regarding theundesignated surface parking area.

TJR makes no reference to this undesignated surface parking area in its factum. [74] Regardless of the number of stalls, reference should be made to the plan. The commercial units are only entitled toexclusive access to that area labelled “commercial surface parking” in the plan. It was only that area specifically ceded to them in thedeclaration. Consequently, it follows that the remaining surface parking is part of the common elements. BCC 68 is entitled to use of allof the remaining surface parking as temporary visitor parking.

The physically disabled spots shall remain designated as reserved forphysically disabled temporary visitors. [75] If it were necessary, and by way of obiter comment, I would also find that the conduct of TJR is contrary to thereasonable expectations of BCC 68 and is unjust, resulting in prejudice to BCC 68 pursuant to

section 225. TJR conceded in the Courtbelow and in this Court that, as a result of the plan and the practice of the parties prior to 2014, BCC 68 may have formed a reasonableexpectation that both the residential unit owners and the commercial unit owners would be entitled to use these stalls for temporaryvisitor parking. Accordingly, TJR concedes that BCC 68 has satisfied the first prong of the test for oppression. [76] However, TJR argues that a breach of a reasonable expectation, without more, does not provide the basis for reliefunder

section 225. It further argues that BCC 68 has failed to demonstrate that its conduct constitutes oppression, unfair prejudice orunfair disregard of a relevant interest. TJR also argues that, when the entire context is considered, there is no oppressive conduct. Thatentire context includes the fact that TJR purchased additional surface parking and has made this surface parking available for the use ofthe residential unit owners and their visitors without charge. There is actually more visitor parking than originally called for under theplan.

Thus, it argues that, to the extent that the current practice is inconsistent with the plan, the variation is reasonable and minimal innature. [77] However, most of this additional surface parking is not actually suitable for parking. Most of it is over-grown,undeveloped land. The one area that can be fairly characterized as additional surface parking is not, in fact, being made gratuitouslyaccessible to residential unit owners for their use.

Rather, except for temporary usage for short durations, it is being rented out by TJR tothird parties, including the residential unit owners and their visitors. [78] It seems clear to me that this is an unfair disregard of the interests of BCC 68 and, if it were necessary to so find, acontravention of section 225(2) of the Act. Limitation Issues [79] There do not appear to be any limitation issues regarding the parking situation, as the circumstances changed in 2014and the application was made in 2019. In fact, TJR expressly concedes that the parking issue is not statute-barred.

Whether the claim ischaracterized as one of trespass to real property, an action for the recovery of money or an action based on equitable grounds, theapplicable limitation period would be six years. [80] I have held that the zero allocation of the common expenses to the commercial units is not contrary to the Act nor doesit amount to oppression or improper conduct. In any case, even if it were not contrary to the Act, it would be statute-barred in this case. [81] There appears to be limited jurisprudence regarding the applicability of limitation periods to Condominium Act cases.

However, the oppression jurisprudence from this Court indicates that the LAA applies to all proceedings, including applications seekingstatutory remedies[8]. In Hughes et al v Tallman (Bob) Investments Inc et al, 2005 MBCA 16, Huband JA, for the Court, held that“oppression proceedings may be said to be an action based upon equitable grounds under s. 2(1)(

k) of the LAA” (at para 24). As well,both parties agree that the applicable limitation period is six years from the discovery of the cause of action pursuant to section 2(1)(

k) ofthe LAA. Thus, the six-year limitation period prescribed by section 2(1)(

k) applies to cases like the one at bar. [82] BCC 68 argues that the cause of action was not discovered, and therefore commencement of the limitation period didnot begin, until 2016, when it retained new building managers. It is unclear why this change would justify an extension of the limitationperiod, as the zero allocation was clearly disclosed and discoverable upon reading the declaration. It did not discover that thecommercial units were not contributing to the reserve fund suddenly upon the new building managers taking control. Were it necessaryto do so, I would have found that BCC 68 has not made a case for an extension of the limitation period under

Part II of the LAA.[9] [83] BCC 68 also submits that TJR’s conduct constitutes a continuous, oppressive string of conduct, the legal effect of whichis to extend the limitation period (see Incorporated Broadcasters Limited et al v CanWest Global Communications Corp et al, 2008MBQB 296).

It argues that the zero allocation provisions in the declaration are just as operative and oppressive today as they were in2008. [84] There are condominium disputes where the impugned conduct is characterized as an ongoing pattern, such that theaction is not statute-barred.[10] Similar reasoning has been applied to oppression remedy cases.[11] However, in Maurice, HouriganJA, writing for the Court, cautioned that “[c]ourts must be careful not to convert singular oppressive acts into ongoing oppression claimsin an effort to extend limitation periods.

To do so would create a special rule for oppression remedy claims” (at para 49). Generallyspeaking, in light of their equitable nature, “[o]ppression remedies are meant to be sought in a timely way to correct continuingunfairness” (Switzer v Greenland, 2002 ABQB 38 at para 15; see also Jaska). Parties should not be permitted to “sleep on their rights”(M(

K) v M(H), (SCC), [1992] 3 SCR 6 at 30). [85] In my view, the zero allocation issue is not a case of continuing damage. Again, the percentages were determined anddisclosed in the declaration at the outset in 2008. CONCLUSION

[ 86 ] The zero allocation contained in the declaration does not contravene the Act . I agree with the application judge’s

interpretation of

section

Section 13 of the Act provides strong support for her conclusion. [ 87 ] The current parking situation does not comply with the declaration and the plan. Pursuant to

section 223 , all surface parking, except that specifically noted to be for the use of the commercial units, should be returned to the control of BCC 68 to be used in accordance with the declaration and the plan. TJR should account for any revenue from the lease of those spaces since 2014. The spaces currently designated for the physically disabled should remain so. [ 88 ] The parking-related issues are not statute-barred, as the application was commenced within the six-year limitation period.

The claim regarding the zero allocation appears to be statute-barred, as the allocation was plainly disclosed in the declaration. This is not a case of continuing damage. COSTS [ 89 ] Given the divided success on this appeal, each party will bear their own costs. JA I agree: JA I agree: JA