Condo board capacity still unsettled after decision on notice and nullity

Where does a condominium corporation gets its ability to commence an action for damages to property it does not own?

Condo board capacity still unsettled after decision on notice and nullity

The defendants in an unusual condominium case are considering an appeal to the Supreme Court of Canada, after the judge strayed from an interpretation that stood for more than 35 years.

The Jan. 31 decision, York Region Standard Condominium Corporation No. 1206 v. 520 Steeles Developments Inc., 2020 ONCA 63, means that a condo corporation that doesn’t comply with notice provisions may not always have their action quashed by the court.

Lawyers for the defendants previously told Law Times that the Court of Appeal for Ontario’s reasons for dismissing the appeal were a win for consumer protection. Adam Wygodny, a lawyer at Berkow Youd Lev-Farrell Das LLP in Toronto and one of the lawyers who acted counsel on the motion for the plaintiffs, said that the courts have been “blindly” carrying forward the old interpretation of condo notice provisions and nullity, circa 1983.

“What this decision stands for is a warning: We should be on guard against doing that,” he told Law Times earlier this month.
But Stieber Berlach LLP lawyer Elizabeth Bowker, who acted for the defendants, says the the Court of Appeal was persuaded by the fact that, in this case, it was a defendant asking the court to find that the action was a nullity and also that the unit owners were in favour of the action (despite the late notice).  But the notice provisions would also apply if a unit owner, rather than a third party, were to declare an action without notice.
“Such a motion would pit the consumer protection provisions of the Condo Act against the recent jurisprudence regarding nullity,” she says. “That is, however, a question for another day.”
Although the facts of this case were unusual and not often litigated, Bowker noted that the Court of Appeal for Ontario took the case very seriously, appointing a five judge panel -- which ultimately overruled its previous jurisprudence. But she says the decision also leaves an aspect of the law unsettled -- the condo board’s capacity. The question is, she says, where does a condominium corporation get its ability to commence an action for damages to property it does not own, absent compliance with the notice provisions of the Condo Act?
Examples where legislatures intended to render actions null usually focus on a party’s existing rights, wrote Bowker in a factum. A condo corporation can only acquire a capacity to sue for damages to common areas of the condo through a framework set out in the law, which also involves the notice provisions, she says.
“That statute came in to change what the common law was . . . .it said, a condo corp can bring an action for damages for property it doesn't own -- but it has to give notice first,” she says. “This is not a procedural requirement only: It's not just that the condo board has to check a box. . . .rather, it's a substantive requirement.”

“This issue was not squarely dealt with by the court of appeal, at least in its written reasons.”

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