Brandon Condominium Corporation No 68 v TJR Investment Holdings Ltd, 2022 MBCA 87

Citation: Brandon Condominium Corporation No 68 v TJR Investment Holdings Ltd, 2022 MBCA 87 Date: 20221021 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 : ) R. I. Holloway ) for the Appellant brandon condominium corporation ) no. 68 ) J. A.

Kagan ) for the Respondent (Applicant) Appellant ) ) Appeal heard: ) September 10, 2021 - and - ) ) Judgment delivered: ) February 3, 2022 tjr investment holdings ltd. ) ) Motion under Court of (Respondent) Respondent ) Appeal Rule 46.2 ) ) Decision pronounced: ) October 21 , 2022 PER CURIAM [ 1 ] In February 2022, this Court issued a decision in this case— Brandon Condominium Corporation No 68 v TJR Investment Holdings Ltd , 2022 MBCA 13 .

The respondent, TJR Investment Holdings Ltd. (TJR), has filed a motion for a rehearing under r 46.2 of the MB, Court of Appeal Rules , MR 555/88R (the rules) on the basis that there was a misapprehension of the evidence. After reviewing the parties’ written submissions, we are of the view that an oral hearing on the motion is not required (see r 46.2(9)). [ 2 ] The appeal focused on two issues. The first issue was a dispute between competing

interpretations of The Condominium Act , CCSM c C170 (the Act ) regarding an unequal allocation of expenses for the common elements and the reserve funds among owners of the condominium units. The second issue related to a dispute regarding the entitlement of parking areas at the condominium building; more specifically, the entitlement of commercial unit owners to the exclusive use of specific parking stalls.

This Court held that Brandon Condominium Corporation No. 68’s appeal (BCC 68) with respect to the validity of the allocation of a 0% interest in the declaration of the common elements to the commercial units was dismissed. With respect to BCC 68’s appeal regarding use and control of common elements surface parking stalls (the parking issue), the appeal was allowed. [ 3 ] Regarding the parking issue, the Court found that the commercial unit owners were only entitled to exclusive access to the parking areas designated as “commercial surface parking” on the condominium’s site plan.

It further ordered TJR to account to BCC 68 for parking revenue from the lease of visitor parking spots to third parties since 2014 and that the condominium declaration be amended to reflect these findings. [ 4 ] TJR brings a motion for a rehearing under r 46.2 in relation to the parking issue and costs, and seeks an order under r 42 to extend the time to file the motion. Separate and apart from TJR’s concerns with respect to the parking issue, BCC 68 seeks clarification from the Court on three matters that flow from the Court’s decision. They are: 1.

Whether interest is to be awarded to BCC 68 for parking revenue and, if so, at what rate?

2. If the parties are unable to agree on the accounting of parking revenue, how should the dispute be resolved? 3. Who is responsible for paying the costs of amending the declaration? Motion for Extension of Time and Rehearing [ 5 ] Rules 42 and 46.2 of the rules provide for a rehearing of a case in certain conditions.

They state: Extension or abridgement of time 42 Except where these rules otherwise provide, where an application is made, the court or a judge may, by order, extend or abridge the time limits set out in these rules for doing any act or taking any proceeding, and that power may be exercised whether the application is made before or after the expiration of the prescribed time limit.

Rehearing 46.2(1) There shall be no rehearing of an appeal except by order of the court or at the instance of the court. 46.2(2) A rehearing of an appeal may be ordered before the certificate of decision has been entered. 46.2(3) A motion requesting a rehearing shall be in writing stating the grounds for the motion, supported by a memorandum of argument. 46.2(4) If the reasons for judgment have been delivered, the motion requesting a rehearing under subrule (3) shall be made within 30 days after the reasons for judgment have been delivered, or such further time as the court may order, but in any event before the certificate of decision has been entered. . . . 46.2(9) There shall be no oral argument on the motion requesting a rehearing unless by direction of the court. 46.2(10) Unless otherwise ordered by the court, costs awarded on a motion requesting a rehearing shall be taxed as for a motion before the court. [ 6 ] TJR submits that a certificate of decision has not been entered in relation to the decision; that there is a patent error on a material point on the face of the decision as it relates to the parking issue; that the decision overlooks and/or misapprehends the evidence in a significant respect and there is a consequential serious risk of a miscarriage of justice; and that it is in the interests of justice to rehear the part of the appeal relating to the parking issue. [ 7 ] According to the rules, the motion for a rehearing should be filed within 30 days.

In this case, the motion was filed after the expiry of the 30 days. Rule 42 permits the Court to extend the time limit even though the request for an extension is made after the expiration of the prescribed time limit. [ 8 ] The Court commented on the proper

interpretation of r 42 in its decision in Winnipeg Condominium Corporation 479 v 520 Portage Avenue Ltd et al , 2019 MBCA 83 , as follows (at paras 16-17): The ability of the Court to order an extension of time is provided by r 42 of the Court of Appeal Rules . Consideration of a request for an extension of time involves three main criteria: (

i) a continuous intention to complete the application or appeal from a time before the expiration of the filing period; (ii) a reasonable explanation for the delay; and (iii) arguable grounds. See Bohemier v Bohemier , 2001 MBCA 161 at para 2 . . . and Lughas v Manitoba Public Insurance Corp , 2014 MBCA 63 at para 3 . . .. In addition, the Court has an overriding discretion to grant or refuse an extension if it is right and just in the circumstances ( see Singh v Pierpont , 2015 MBCA 18 at para 41 . . .. [ 9 ] TJR explains that, following the release of the decision, counsel for the parties attempted to resolve their concerns

regarding the apparent misapprehensions and alleged ambiguities in the decision relating to the relief ordered. When this proved unsuccessful, they wrote to the Court requesting direction and, subsequently, filed this motion within 30 days of the Court’s response. The certificate of decision has not yet been entered.

BCC 68 is not opposed to the extension of time. [ 10 ] We agree that it is desirable for parties to attempt to negotiate a resolution—providing that they act without undue delay—before proceeding to a further hearing, and that it is now fair and just, in the circumstances of this case, to grant the extension so as not to penalize TJR for having done so. For this reason, we are granting the motion for an extension of time to file the motion for a rehearing. [ 11 ] A rehearing will only be granted in very exceptional circumstances.

Finality of litigation is an important principle of the justice system and would be undermined by a low threshold for rehearings.

In its decision in Willman v Ducks Unlimited (Canada) , 2005 MBCA 13 , this Court identified the circumstances in which a rehearing of an appeal would be permitted, including where (at para 10): . . . 1) there is a patent error on a material point on the face of the reasons; 2) the appeal was decided on a point of law that counsel had no opportunity to address, and which point could not have reasonably been foreseen and dealt with at the hearing; or 3) the court clearly overlooked or misapprehended the evidence or the law in a significant respect and there is a consequential serious risk of miscarriage of justice.

The Parking Issue Misapprehension of the Site Plan [ 12 ] In the decision, this Court ordered, pursuant to

section 223 of the Act , that TJR violated the declaration by controlling the surface parking area listed as “visitor surface parking” on the site plan. That is not at issue in this rehearing. [ 13 ] The dispute relates to the Court’s ruling that TJR return all surface parking areas, except for the area “designated as the commercial surface parking area” (at para 71) to BCC 68. TJR argues that there was a misapprehension as to what constitutes the commercial surface parking area. We agree. [ 14 ] Pursuant to

section 13 of the declaration, the commercial unit owners have an exclusive right to use the designated commercial parking area. The alleged misapprehension of the evidence relates to the question as to what areas are designated as commercial parking areas in the site plan. [ 15 ] In their memorandum of argument as to a rehearing, TJR has attached an enlarged version of the site plan with the stall numbers circled and highlighted. That site plan shows: 1. A lot running parallel to the new public lane and marked as “visitor surface parking” with stalls numbered 1 through 10 (when viewed right to left); 2.

An L-shaped lot, the longer portion of which runs parallel to the existing public lane and the shorter portion of which runs parallel to the new public lane. This lot has stalls numbered 1 through 24 (when viewed from the bottom right hand side to the top left and as circled on the enlarged version of the plan).

At the top of the L, the lot is identified as commercial surface parking. [ 16 ] The dispute and the misapprehension relate to the shorter portion of the lot that runs parallel to the new public lane. [ 17 ] At the appeal hearing, BCC 68 referred to this portion (consisting of stalls numbered 1 through 7 as labelled in the enlarged version of the plan) as “a third area of surface parking that is not clearly specified.” Again, in its application brief, BCC 68 states, “The Site Plan surface parking east/west (left/right on the page) next to the condominium building is unspecified as to whether it is ‘commercial’ or ‘visitor’.” BCC 68 further argues: . . . . . .

This parking area has been referred to in the Affidavit [of] Ronald Funk affirmed February 8, 2019, as the “undesignated parking area”. The undesignated parking area is physically separated from the commercial surface parking area by the entrance to the parkade. The undesignated parking area is also physically separated from the visitor surface parking by the “new public lane”.

It is therefore ambiguous as to whether it was the intent of the drafters of the Site Plan to have the undesignated area included in the “visitor surface parking” or the “commercial surface parking”. . . . . . . [ 18 ] TJR, on the other hand, argued that stalls numbered 1 through 7 were part of the commercial surface parking. In his affidavit, Tyler Rice, the director of TJR (Rice), indicated that there were 22 commercial parking stalls and two handicap parking stalls (stalls numbered 8 and 9) within the commercial surface parking area.

[ 19 ] Given the dispute between the parties at the appeal hearing and the differing evidence in the affidavits of Ronald Funk, general manager for the property management company retained by BCC 68 (Funk) and Rice, the Court reviewed the site plans provided by each party. The site plan provided by BCC 68, attached to the Funk affidavit, did not show any visible numbering or designation regarding parking stalls numbered 1 through 7. Neither is any numbering clearly evident on the site plan provided by TJR, attached to the Rice affidavit.

While there was no evident numbering, one set of parking stalls, now identified as numbers 8 through 24, was labelled “commercial surface parking”, while the stalls now identified as numbers 1 through 7 had no label. [ 20 ] Based on these plans, we found that the parking stalls now identified as 1 through 7 were undesignated and, as such, were part of the surface parking rights to which BCC 68 was entitled. It is only upon reviewing the enlarged site plan that was provided for the rehearing that any parking stall numbering can readily be seen.

The version filed on the rehearing now shows that the shorter portion which runs parallel to the new public lane, is marked with numbers that clearly indicate that they are the beginning of a continuation from stalls 1 to 7 through to stall 24, on the longer portion of the L-shaped lot.

That portion is designated as a commercial surface parking area. [ 21 ] After reviewing the enlarged site plan, we agree with TJR that the parking stalls numbered 1 through 7, as depicted on that plan, were intended to be designated as “commercial surface parking”, together with parking stalls 10 through 24 (parking stalls 8 and 9 being handicap parking for both TJR and BCC 68).

This arises from the fact that the numbering system from the bottom lot continues, uninterrupted, to the side lot (which was expressly marked as “commercial surface parking”) whereas the numbering restarts for the top lot, which is expressly marked as “visitor surface parking”. This is an error on the face of the record. Accordingly, the stalls in the shorter portion of the L-shaped lot (numbered 1 through 7) are excluded from the scope of the ruling pertaining to the parking areas to be returned to BCC 68, and the decision should be varied accordingly.

Other Issues Process to Determine Revenue [ 22 ] In its decision, the Court ordered TJR to account for parking revenue with respect to that portion of the surface parking stalls, which it monopolized after 2014. The parties are unable to agree on a process by which TJR may account for such revenue. BCC 68 seeks clarification and/or direction as to the process to which it can avail itself to resolve this issue.

The problem between the parties stems from the fact that at least some of the revenue that TJR received from parking appears to have been embedded in its lease rates/agreements with commercial tenants. [ 23 ] It would be inappropriate for this Court to simply attribute a value to each of the parking stalls without receiving evidence of such value. There are too many factual controversies for this Court to decide the matter.

A more appropriate method for such a proceeding would be before a master, and therefore, pursuant to section 26(2) of The Court of Appeal Act , CCSM c C240 , we would direct a reference to a master to undertake such an accounting. Interest [ 24 ] In the decision, this Court ordered that TJR account for revenue that it earned from parking from 2014 to present.

It did not specify the payment of interest or the rate of interest. [ 25 ] BCC 68 submits that both pre- and post-judgment interest ought to be awarded in the instant circumstances. [ 26 ] With respect to the rate of interest, BCC 68’s notice of application seeks: . . . . . . [A]n order requiring [TJR] to pay interest on all amounts determined owing at the rate of 6% per annum in excess of the interest rate per annum designated by the Westoba Credit Union Ltd. as its prime rate from time to time at its main branch in the City of Brandon, Manitoba, or at such other rate as may be ordered by the Court . . .. [ 27 ] In the context of performing maintenance and making repairs, the declaration provides for interest at a rate of 6% per annum plus the Westoba Credit Union Ltd.’s prime rate. [ 28 ] In the alternative, BCC 68 seeks interest at the Court of King’s Bench prescribed rate. [ 29 ] TJR argues that there is no basis for ordering interest at the rate sought by BCC

Section 12.2(

d) of the declaration pertains to maintenance of certain items and relates to a situation where a unit owner has knowingly failed to comply with its obligations under the declaration thus requiring BCC 68 to step in to remedy the situation. [ 30 ] We would order pre- and post-judgment interest payable on the basis of the rate prescribed in The Court of King’s Bench Act , CCSM c C280 . Cost of Preparing and Registering the Amendment to the Declaration [ 31 ] BCC 68 requested an order that the declaration be amended to accord with the decision of the Court. Given the rehearing, we do not see that any amendment is necessary.

Section 13 of the declaration states that the commercial unit owners are “entitled to use that portion of the common elements designated as commercial parking area.” [ 32 ] There will be no costs of this motion.

JA JA JA