Winnipeg Condominium Corp No 666 et al v, 2022 MBCA 89

Citation: Winnipeg Condominium Corp No 666 et al v 6045732 Manitoba Inc, 2022 MBCA 89 Date: 20221103 Docket: AI22-30-09719 IN THE COURT OF APPEAL OF MANITOBA Coram: Madam Justice Freda M. Steel Madam Justice Diana M. Cameron Madam Justice Jennifer A. Pfuetzner BETWEEN : ) T. J. Fry and WINNIPEG CONDOMINIUM CORPORATION ) T. D. Reimer NO. 666 AND 5177597 MANITOBA LTD. ) for the Appellants ) (Applicants ) Appellants ) M. D.

Grayson ) for the Respondent - and - ) ) Appeal heard and ) Decision pronounced: 6045732 MANITOBA INC. ) October 19, 2022 ) (Respondent) Respondent ) Written reasons: ) November 3, 2022 Steel JA ( for the Court) : [ 1 ] The applicants, Winnipeg Condominium Corporation No. 666 (WCC 666) and 5177597 Manitoba Ltd. (517) appeal the judgment and the costs order made by the application judge. At the hearing, we dismissed the appeal with reasons to follow.

These are those reasons. [ 2 ] WCC 666 manages a commercial condominium complex comprised of seven units in Winnipeg. 517 owns six of the units and is the controlling mind of WCC 666. The respondent, 6045732 Manitoba Inc. (604) is the minority unit owner, owning the final unit in the complex. [ 3 ] The dispute between these parties relates primarily to the use of the parking spaces that are allocated to the various units. 604 does not have adequate parking spots, with the result that people attending 604’s building park in spots that belong to the 517 units.

WCC decided to hire Impark parking attendants to patrol 517’s parking lot at the complex to prevent 604’s tenants and their clients from using 517 stalls, and billed 604 for the costs related to the hiring of those attendants. 604 proposed a pay-by-phone program intended to eventually ease the cost for the attendants, which WCC refused to consider. [ 4 ] The application judge issued two endorsements in this matter. The first related to the costs of the Impark attendants and other fees claimed by WCC 666 and 517 against 604.

The second related exclusively to the recovery of legal costs by WCC 666 and 517. [ 5 ] In the first endorsement, the primary issue before the application judge, under the applicable provisions of The Condominium Act , CCSM c C170 (the Act ), was whether the actions taken by WCC 666 and the resulting costs were reasonably necessary in order to resolve 604’s breach of the condominium declaration. [ 6 ] In both endorsements, the application judge held that, while some of the actions taken and costs incurred by WCC 666 were reasonable, others were not.

In the result, she awarded WCC 666 and 517 approximately 74% of the costs of the Impark attendants and 60% of the total legal costs claimed. She dismissed their claims for the recovery of property management fees and landscaping charges. [ 7 ] WCC 666 appeals, arguing that in the first endorsement the application judge erred in substituting her decision for

that of the condominium board when the board properly exercised its decision-making authority and there was no evidence of bad faith on its part. In the alternative, it maintains that the application judge erred in finding that the steps taken by WCC 666 were not reasonable. With respect to the issue of legal costs, WCC 666 submitted that the application judge erred by failing to order full indemnity costs in accordance with

section 162 of the Act . [ 8 ] On appeal, questions of law are reviewable for correctness. Questions of fact, and questions of mixed fact and law (absent an extricable legal error) are reviewable for palpable and overriding error. The question of whether the application judge applied the wrong legal test to assess the reasonableness of WCC 666’s actions is a question of law and reviewable for correctness (see Housen v Nikolaisen , 2002 SCC 33 ). [ 9 ] The question of whether the application judge erred in finding that the steps taken by WCC 666 were not reasonable is a question of mixed fact and law, as it involves the application of

section 215 of the Act to the facts of this case, so the standard of palpable and overriding error applies. To rise to the level of a palpable and overriding error, a finding or an inference must be clearly wrong and plainly seen. The same analysis applies with respect to the costs award. Did she use the wrong legal principles? If not, then the appellate court must defer unless the award is plainly wrong. [ 10 ] We do not agree with WCC 666’s submission that, in the absence of bad faith, the decisions of a condominium corporation ought never to be interfered with by a court. Certainly, a decision made under

section 215 of the Act must be made honestly and in good faith, but it must also be “reasonably necessary” to remedy the contravention of the declaration. Section 215(1) states: Condominium Corporation may remedy contravention 215(1) A condominium corporation may do what is reasonably necessary to remedy a contravention of this Act or its declaration, by- laws or rules including (

a) doing work to or in a unit or the common elements; and (

b) removing items from the common elements. [ 11 ] In each case, what will be reasonable will depend upon the context and all the circumstances and there will be a range of reasonable options open to the condominium corporation to which the court should defer.

That is the test that the application judge applied (see Metropolitan Toronto Condominium Corp No 545 v Stein , 2006 CarswellOnt 3768 at paras 26-36 (CA) ; 3716724 Canada Inc v Carleton Condominium Corporation No 375 , 2016 ONCA 650 at para 53 ; and Metropolitan Toronto Condominium Corporation No 933 v Lyn, 2020 ONSC 196 at para 33 ). [ 12 ] As the application judge stated: “There is no dispute . . . that WCC [666] has the right to do what is ‘reasonably necessary’ to remedy the situation . . . .

The only issue is whether the steps taken by WCC [666]—the hiring of parking attendants—was reasonable” (at para 6). [ 13 ] While she agreed that WCC 666 acted reasonably for part of the time, she also concluded that it was no longer reasonable for WCC 666 to continue to utilize the parking attendants once an alternative, less costly option was proposed by 604. The pay-by-phone program was proposed by Impark with the intention that it would reduce or eliminate the need for full-time parking attendants over time.

Impark senior operations manager wrote: “Over time and with increased compliance from the general public, I am of the opinion that the labour needs of the site will be reduced in the future providing savings to the owner.” The application judge accepted that evidence as she was entitled to do, and held that it was unreasonable to refuse the pay-by-phone program without first trying it when 604 was willing to pay all the costs related to that program. That is a finding of mixed fact and law that is entitled to deference and can only be set aside based on the finding of a palpable and overriding error.

We see no such error here that would justify appellate intervention. Costs [ 14 ] WCC 666’s right to recover legal costs arises under section 162(1) (

c) of the Act , which states: Lien upon default 162(1) If a unit owner fails to contribute to the common expenses or reserve fund, the condominium corporation has a lien against the owners unit and its share in the common elements for (

c) the reasonable legal costs and expenses incurred by the corporation in collecting or attempting to collect the unpaid amount, including the costs of preparing and registering the lien and its discharge.

[ 15 ] The

section creates a rebuttable presumption that the condominium corporation is entitled to all its reasonable legal costs and expenses (see Metropolitan Toronto Condominium Corporation No 933 v Lyn , 2020 ONSC 3853 at para 16 ). However, once again, the emphasis lies in the word “reasonable”. When awarding costs to a condominium corporation, a court may still take into account extenuating circumstances. The court may consider a number of discretionary factors when awarding costs to a condominium corporation.

These include, but are not limited to, the relative success of the parties; the conduct of the parties and whether one party extended, delayed or unnecessarily complicated the proceeding; the complexity of the proceedings; and the principle of proportionality (see paras 33-37). The application judge committed no legal error in her costs endorsement and her award is entitled to deference. [ 16 ] The appeal is dismissed with costs to 604. JA JA JA