



COURT OF APPEAL FOR ONTARIO

CITATION:
1420041
    Ontario Inc. v. 1 King West Inc., 2012 ONCA 249

DATE: 20120420

DOCKET: C53690

Cronk and Blair JJ.A. and Strathy J. (
ad hoc
)

BETWEEN

1420041 Ontario Inc.

Plaintiff (Appellant)

and

1 King West Inc.

Defendant (Respondent)

Paul D. Guy and Scott W. McGrath,
    for the appellant

Megan Mackey, for respondent

Heard: January 26, 2012

On appeal from the order of the Divisional Court (Molloy,
    Sachs and Herman JJ.) dated December 9, 2010 allowing an appeal from the order
    of Stewart J. of the Superior Court of Justice dated February 19, 2010, with
    reasons by Sachs J. at 2010 ONSC 6671.

R.A. Blair J.A.:

[1]

The issue raised on this appeal is whether  and, if so, in what
    circumstances  an individual condominium unit owner has the legal capacity to
    sue for relief relating to the common elements.

Background
    and Facts

[2]

1 King West is a high-rise condominium complex in downtown Toronto.  It
    was promoted to be of the highest quality, designed to provide the benefits
    and ambiance of a boutique hotel, a deluxe residence, and an executive office
    facility.

[3]

In 2000 and 2001, when the complex was still under construction, the
    appellant agreed to purchase eight units from the respondent developer.  Four
    of the units were to be furnished as required for participation in the
    short-term rental program offered by the condominium.  The other four were to
    be constructed in a manner that would make them suitable for use as the
    appellants head office.  This involved a custom design and finishes unique to
    the appellants units.  The design included exterior doors, windows and walls that
    were to be installed in places not otherwise called for in the condominium
    plans.  While constructed to meet the appellants specific requirements, these
    exterior doors, windows and walls form part of the common elements of the
    condominium corporation.

[4]

After the building became available for occupancy in 2005, a
    disagreement arose between the parties over the adequacy of the common elements
    for the foregoing purposes.  The appellants main complaints centre around the
    exterior doors, windows and walls contemplated by the custom design and the alleged
    inability of the buildings HVAC system to respond to the special heating and
    air conditioning demands of those configurations in the appellants four head
    office units.  The HVAC system also forms part of the condominiums common
    elements.

[5]

In November, 2005, the appellant commenced this action (the Individual
    Action), seeking specific performance of its agreement with respect to the
    custom design and finishes it claims the respondent promised or, in the alternative,
    an abatement of the purchase price or, in the further alternative, damages. 
    Much of the claim concerns matters unrelated to the common elements.

[6]

At the same time, all was not well with the construction of the common
    elements elsewhere in the development.  In March, 2007, the condominium
    corporation commenced an action (the Condominium Action) on behalf of itself
    and the individual unit owners, including the appellant, for common element
    deficiencies.  It claimed damages against the respondent developer, the
    construction manager, the general contractor, the co-developers, the
    architects, the structural engineer, the mechanical engineer, the electrical
    engineer, and the City of Toronto.  Notices were given to the individual unit
    owners under the
Condominium Act
,
1998
, S.O. 1998, c. 19, s.
    23(2) (the Act), advising that the condominium corporation intended to sue on
    its own behalf and on behalf of all unit owners for common element and
    construction deficiencies, and that the unit owners could opt out of the action
    if they wished to pursue their own action for damages to their units.  The
    appellant did not opt out.

[7]

During the course of examinations for discovery in the Individual
    Action, the respondent took the position that certain of the appellants complaints
    were in relation to the common elements and that the appellant did not have
    standing to pursue those claims because of s. 23(1) of the Act.  The respondent
    brought motions to strike the appellants claim on this basis and to stay the
    action on the basis that it duplicated the Condominium Action.  The respondent
    was unsuccessful at first instance, but on appeal the Divisional Court granted
    the relief sought, dismissed the Individual Action as it related to the common
    elements, and stayed the remainder as it related to the appellants individual
    units.

[8]

Since the appeal was launched, the Condominium Action has been settled. 
    As a result, the issue regarding the stay is moot.  Counsel agree that the only
    question for determination here is whether the appellant has standing to sue in
    relation to the common elements.

[9]

In the particular circumstances of this case, I would allow the appeal
    and reinstate the Individual Action.

Analysis

The
    Applicable Standard of Review and Principles of Statutory Interpretation

[10]

Whether
    s. 23(1) gives the condominium corporation exclusive standing to commence an
    action in relation to the common elements is a question of law.  Counsel agree
    that the standard of review is correctness.

[11]

Nor is there any disagreement as to the applicable
    principles of statutory interpretation.  In Canada today, the words of a
    statute are to be read in their entire context, and in their grammatical and
    ordinary sense harmonious with the scheme of the Act, the object of the Act,
    and the intention of the legislature:
Rizzo & Rizzo Shoes Ltd. (Re)
,
    [1998] 1 S.C.R. 27, at para. 21;
Bell ExpressVu Limited Partnership v. Rex
,
    2002 SCC 42, [2002] 2 S.C.R. 559, at para. 26.

Section 23(1
)

[12]

Section
    23(1) of the Act empowers the condominium corporation to bring an action on its
    own behalf and on behalf of the unit owners in certain circumstances, including
    in relation to the common elements.  Section 23(1) states:

Subject to subsection (2)
[1]
,
    in addition to any other remedies that a corporation may have, a corporation
    may, on its own behalf and on behalf of an owner,

(a) commence, maintain or settle an
    action for damages and costs in respect of any damage to common elements, the
    assets of the corporation or individual units; and

(b) commence, maintain or settle an
    action with respect to a contract involving the common elements or a unit, even
    though the corporation was not a party to the contract in respect of which the
    action is brought.

The Issue

[13]

The
    central issue on the appeal revolves around the use of the word may in
    subsection (1).  Is may mandatory, in the sense that it grants a condominium
    corporation the exclusive authority to pursue an action in relation to the
    common elements of that condominium?  Or is it simply permissive, in the sense
    that it grants the corporation standing to bring such an action  a right that
    it would not otherwise have on behalf of individual unit owners at common law 
    without taking away the right of a unit owner to bring such a proceeding in
    appropriate circumstances?

Discussion

[14]

As
    the issue arises on this appeal, I am satisfied that s. 23(1) does not preclude
    the appellant from advancing its claim under the agreement of purchase and sale
    in relation to the common elements.

History and Purpose of s. 23(1)

[15]

Section
    23(1)(a) of the Act gives a condominium corporation a broad power to sue on its
    own behalf and on behalf of the unit owners, not just with respect to common
    elements, but also with respect to the assets of the corporation and individual
    units.  This power is broadened even further by s. 23(1)(b) which extends the
    right to sue even to contractual situations where the condominium corporation
    is not a party to the contract in question.

[16]

In
Condominium Law and Administration
, 2d ed., looseleaf (Toronto: Thomson
    Reuters, 1998) Vol. 2, at para. 22-1(c)(i), Audrey Loeb suggests that s. 23(1)
    and its predecessor, s. 14 of the
Condominium Act
, R.S.O. 1990, c.
    C.26, were enacted to overcome problems arising under the Act prior to 1978
    where unit owners attempts to bring representative actions against developers
    for construction deficiencies in units and/or the common elements had
    floundered.  This was because of a line of jurisprudence holding that unit
    owners could not bring a class action in respect of damage to common elements:
    see, for example,
Loader v. Rose Park Wellesley Investments Ltd.
(1980), 29 O.R. (2d) 381 (H.C.J.).

[17]

The
    rationale underpinning that jurisprudence  in the era preceding the
    introduction of class action legislation in Ontario  was that a representative
    action could not be brought under former Rule 75 because s. 9(18) of the
Condominium
    Act
as it then existed already contained a statutory mechanism for a class
    action-like proceeding to be brought by the corporation.  The problem was that
    s. 9(18) was somewhat limited, providing as it did for an action with respect
    to the common elements only.  Because the ownership of condominium units
    changes frequently, privity of contract problems frequently arose; and because
    the nature of construction and other condominium problems are not always
    confined solely to the common elements  as this case illustrates  this remedy
    could not always satisfy the full needs of unit owners.

[18]

Consistent
    with this intention, courts have given the condominium corporations power to
    sue under s. 23(1) and its predecessor, ss. 14(1) and (2), a generous scope. 
    In
York Condominium Corp. No. 420 v. Deerhaven Properties Ltd.
(1983),
    40 O.R. (2d) 106 (H.C.J.), at p. 109, Griffiths J. said:

In my view, s. 14(2) as remedial consumer legislation should
    not be rigidly or narrowly construed to the extent it confers on the
    condominium a right to sue.  On that principle, I conclude it is reasonable to
    interpret the section as conferring on the corporation an unlimited right to sue
    with respect to common elements, and further extending that right by providing
    that an action in contract may be maintained by the corporation even though it
    was not a party to the contract.

As I view s. 14 generally it seems to me that the obvious intention
    of the Legislature was not to restrict the broad power to sue previously held
    under s. 9(18) but rather to extend those powers by providing under s. 14(1) a
    right to sue and recover damages and costs in respect to not only the common
    elements but with respect to the assets and individual units of the corporation
    as well.  By s. 14(2) as I have found the Legislature intended to confer a
    right to sue on contracts to which the corporation was not a party.

[19]

It
    does not follow, however, that simply because the legislature intended to
    afford the condominium corporation a far-reaching right to sue on its own
    behalf and on behalf of the unit owners in order to enhance the effectiveness
    of remedies that might be asserted on the owners behalf, it intended at the
    same time to deprive those unit owners of rights of action they already had. 
    The condominium corporations action has a different premise.  An important
    underlying tenet of s. 23(1) is its objective of protecting the interests of
    the condominium community as a whole, not the interests of individual unit
    owners in their capacity as individual unit owners.  Rosenberg J.A. intimated
    as much in
Wellington Condominium Corp. No. 61 v. Marilyn Drive Holdings
    Ltd.
(1998), 37 O.R. (3d) 1 (C.A.), at p. 19, where he said:

The primary responsibility of the corporation is to manage the
    assets.  It also has a duty to control and administer the common elements and
    the assets and has the power to own and acquire real property for the use and
    enjoyment of the property (s. 13(1)).  Most importantly, s. 14(2) of the Act
    provides that the corporation may sue on its own behalf with respect to the
    common elements even if the corporation was not a party to the contract in
    respect of which the action is brought.
These provisions manifest a
    legislative intention that the corporation be entitled to recover damages where
    the real injury is to the owners as a group rather than to any individual.
[Emphasis added.]

[20]

With
    the foregoing principles and considerations in mind, I turn to the
    interpretation of s. 23.

Section 23 Does Not Deprive The
    Appellant Of Its Right To Sue In Respect Of The Common Elements

[21]

What
    s. 23 is designed to do, in my opinion, is to empower a condominium corporation
    to bring an action where there is a common condominium issue to be addressed
     where, as Rosenberg J.A. put it in
Wellington,
the real injury is
    to the owners
as a group rather than to any individual
 (emphasis
    added).  Such a remedy, broad as it is, is not inconsistent with the right of
    an individual unit owner to pursue contractual or other claims that are unique
    to the owners unit, including those touching on common elements that
    immediately pertain to the unit and that do not concern the owners as a group. 
    Indeed, such a right complements the class action-like remedy provided by s.
    23(1).

[22]

Respectfully,
    the Divisional Court made three errors when it concluded that s. 23(1) granted
    exclusive standing to a condominium corporation to sue in relation to the
    common elements.  First, although it acknowledged the appellant was seeking to
    have the exterior doors and windows in its units repaired and finished in
    accordance with what it says the agreement was with respect to the construction
    of those doors and windows, the Divisional Court treated the appellants claim
    primarily as a claim for damages in relation to those unfulfilled promises. 
    Secondly, it placed too much emphasis on the nature of the proprietary regime governing
    common element ownership under the
Act
,
    and on the package of responsibilities imposed on condominium corporations to
    deal with the common elements set out therein.  Thirdly, it failed to recognize
    the illogical conclusion to which its reasoning leads: an individual unit owner
    would be deprived of the right to sue even with respect to the owners
    individual unit, a long-recognized right of the owner: see Loeb, at para.
    22-1(c)(i).

[23]

As
    mentioned above, it is true that the courts have given the condominium
    corporations powers to sue under s. 23 a liberal interpretation in recognition
    of the need for an effective remedy on behalf of the owners as a group and in
    recognition of the important managerial responsibilities imposed upon the
    corporation in relation to the common elements.  And, as the respondent
    submits, this approach is supported by the common-element ownership and
    common-element responsibility regime as framed in the Act.  While an owner is
    entitled to exclusive ownership of his or her unit, the owner holds an interest
    as a tenant-in-common in the common elements along with all the other unit
    owners (s. 11(1) and (2)).  The jointly-owned units may not be partitioned or
    divided (s. 11(5)), and a unit owner may only modify common elements without
    the permission of the board in limited circumstances (s. 98).  At the same time,
    primary responsibility for the common elements rests with the condominium
    corporation: the corporation is obliged to maintain the common elements (s.
    90(1)), to repair them (s. 89) and to insure them (s. 99); and it is entitled
    to make additions, alterations or improvements to the common elements in many
    cases without notice to the unit owners (s. 97).

[24]

The
    upshot of all of this is  so the respondent submits  that the unit owner has
    no right to repair the doors and windows, or the HVAC system adjacent to the
    owners unit, and therefore the only reasonable interpretation of s. 23(1)
    is that it affords a condominium corporation exclusive standing to bring an
    action regarding the common elements.  I disagree.

[25]

The
    appellant is not asserting a proprietary claim in relation to the common
    elements.  Nor is its claim essentially a claim for damages.   The appellant is
    asserting a contractual claim to compel specific performance of obligations
    pertaining uniquely to its own units and to common elements immediately
    pertaining to those units.

[26]

This
    is not immediately clear from a reading of the pleadings themselves, but, as
    counsel explained to us during argument, the big ticket items of the
    appellants claim in relation to the common elements concern the following
    issues:

(a)

the location of walls and doors
    in the design layout for the appellants suites (some of the contested
    locations concern walls and doors that form part of the common elements);

(b)

the location of exterior windows
    (all exterior windows in the building are of the same type, but the design plan
    called for windows in the appellants units to be located in different places
    than was the case for other units, e.g., one office was to have had a window
    providing access to a balcony, but there was no window or balcony  both common
    elements);

(c)

the suitability of the HVAC system
    providing air to the appellants units (because of the particular configuration
    of the appellants windows, there are contested problems concerning the
    systems capacity to work in tandem with windows that seal in air).

[27]

These
    are not claims for damage to common elements, as contemplated by s. 23(1) of
    the Act.  Indeed, there has been no damage to common elements.  They are
    claims to rectify the failure to construct common elements immediately
    pertaining to the appellants units as the developer allegedly agreed to do in
    the first place.  In this respect, the proprietary characteristics of common
    element ownership and the overall responsibilities of the condominium
    corporation towards the common elements, as formulated under the Act, are of
    limited relevance and the emphasis of the respondent and the Divisional Court
    on them is misplaced.

[28]

In
    my opinion, the word may, as employed in s. 23(1), is permissive; it is not
    mandatory.  By that I mean that it empowers the condominium corporation to sue
    on its own behalf and on behalf of all unit owners in relation, amongst other
    things, to common element deficiencies, but it does not require that
any
action touching the common elements
must
be brought by the condominium
    corporation.  Put another way, s. 23(1)
does not take away a right or deny
    standing
to individual unit owners; it
grants
a right that the
    condominium corporation would not otherwise have, namely the
standing (but
    not the exclusive standing)
to sue on behalf of the unit owners in
    relation to the common elements.

[29]

This
    interpretation is consistent with the
Rizzo Shoes
principle of
    statutory interpretation.  It corresponds with the grammatical and ordinary
    meaning of the language used: may is generally permissive; shall is
    mandatory.  It is an interpretation that is harmonious with the intent of the
    legislature and the scheme and object of the Act.  As I have explained, s. 23
    provides an effective mechanism whereby the condominium corporation and the
    unit owners may pursue a resolution of common problems affecting the
    condominium complex in an effective manner, without a multiplicity of proceedings,
    while at the same time permitting individual owners to pursue claims respecting
    the common elements immediately pertaining to their units in appropriate
    circumstances  both of which objects complement the consumer protection nature
    of the Act.

[30]

A
    statute should not be interpreted as taking away a right of action unless it is
    explicit in doing so.  The interpretation I favour is also consistent with this
    principle.  It is well-established that in cases of ambiguity, where a statute
    is capable of more than one reasonable interpretation but one of those
    interpretations would serve to restrict a citizens right of action, the court
    should give effect to the interpretation that least restricts that right: see
Berardinelli
    v. Ontario Housing Corporation,
[1979] 1 S.C.R. 275, at p. 280;
Ukrainian
    (Fort William) Credit Union Ltd (In Liquidation) v. Nesbitt, Burns. Ltd
. (1998),
    36 O.R. (3d) 311 (C.A.), at p. 320, leave to appeal to S.C.C granted, [1997]
    S.C.C.A. No. 672, declared moot January 18, 1999;
Telecommunication
    Employees Association of Manitoba Inc. v. Manitoba Telecom Services Inc.
,
    2007 MBCA 85, 214 Man. R. (2d) 284, at para. 97; and
Campbell Estate v.
    Fang (
1994), 155 A.R. 270 (C.A.), at para.10.

[31]

Section
    23(1) does not explicitly deprive a unit owner of the right to sue in respect
    of the common elements affecting the owners unit.

[32]

The
    respondent contends that the strict construction approach is no longer
    appropriate, given the decision of the Supreme Court of Canada in
Canada
    3000 Inc. (Re)
, 2006 SCC 24, [2006] 1 S.C.R. 865.  I disagree.
Canada
    3000
does not change the principle that, where there is ambiguity as to
    the meaning of a provision, courts may resort to presumptions such as strict
    construction.  As Binnie J. clarified, at para. 84, it is only where there is
    an ambiguity that such additional techniques of statutory construction apply.

[33]

Here,
    ambiguity abounds in s. 23(1).  It is not clear whether the legislature
    intended the word may to grant a condominium corporation the exclusive right
    to sue with respect to the matters delineated in s. 23(1), or whether it merely
    granted the condominium corporation the standing to do so without limiting the
    right of the unit owner to sue in respect of those matters as well.  The
    well-argued positions of both counsel here attest to that tension and, as we
    shall see, courts have expressed differing opinions as well.  It is therefore
    appropriate in these circumstances to apply the strict construction approach
    to the interpretation of a provision that affects the individual unit owners
    right of action.

[34]

It
    makes sense for a condominium corporation to be empowered to bring an action
    where there is a common condominium issue to be addressed, rather than leaving
    it to individual unit owners, alone or collectively, to pursue their remedies
    as owners of an undivided interest in the common elements  with the
    potentially unwieldy consequences of such an option.  The power minimizes the
    risk of a multiplicity of proceedings and furnishes a mechanism whereby the condominium
    corporation and the unit owners can effectively pursue claims relating to the
    common elements through one vehicle.  The third party contract provision in s.
    23(1)(b) makes it clear that such an action cannot be defeated on privity of
    contract grounds by an argument that the action concerning the common problem
    may have aspects to it that relate to individual units or that arise out of a
    contract in respect of the common elements or a unit to which the condominium
    corporation was not a party.

[35]

For
    the reasons I have articulated, however, it does not follow that, if what is at
    issue is a contractually unique problem or other unit-specific wrong raising a
    discrete issue relating to common elements immediately pertaining to the unit,
    the unit owner is precluded from pursuing such a claim by reason of s. 23(1).

[36]

This
    interpretation is reinforced by a consideration of the logical consequences of
    the respondents argument.  If a condominium corporation has the exclusive
    right under s. 23 to pursue all claims for damages and costs in relation to the
    common elements (s. 23(1)(a)), and to pursue all contractual claims respecting
    the common elements, whether a party to the contract or not (s. 23(1)(b)), it
    must also by the same provisions have the exclusive right to do the same thing
    with respect to individual units, to the exclusion of the unit owners no matter
    what the claim.  This is because the condominium corporations standing to sue
    under s. 23 is not limited to the common elements; it extends to actions concerning
    the assets of the corporation, the individual units, and third party contracts
    involving  a unit (s. 23(1)(b)).

[37]

Put
    in the context of this case, the appellant would not have standing even to sue
    the respondent developer for the damages it says it has sustained with respect
    to the interior of its exclusively owned individual units because only the
    condominium corporation may pursue an action for damages  in respect of 
    individual units (s. 23(1)(a)).  In addition, the appellants action would be
    blocked because only the condominium corporation could commence, maintain or
    settle an action with respect to a contract involving  [the appellants]
    unit, even though the corporation was not a party [to the contract] (s. 23(1)
    (b)).

[38]

Such
    a result would be absurd.

[39]

For
    that reason, the jurisprudence has correctly characterized the condominium
    corporations power under s. 23 as one that is triggered by a problem common to
    the condominium as a whole and to the owners as a group, rather than by a
    problem that is primarily related to a particular unit.  The appellants
    concerns are primarily related to its particular units.

[40]

In
    this respect as well, I think it is noteworthy that the power of the
    condominium corporation to commence, maintain or settle an action is not a
    power to do so only on behalf of an owner (or owners); it is a power to take
    steps on its own behalf and on behalf of an owner.  This bolsters my view
    that, whatever the action is, it must be an action with broader implications
    for the condominium community as a whole.

[41]

The
    respondent argues that to interpret s. 23(1) to permit individual unit owners
    to pursue their own claims respecting the common elements will lead to a
    multiplicity of proceedings and create the prospect of double recovery on the
    part of the unit owner.  I am not persuaded these possibilities pose a
    sufficiently serious problem to justify barring a unit owner from a right of
    action.

[42]

One
    of the purposes of the s. 23(1) proceeding is to minimize a multiplicity of
    proceedings and, for practical purposes, it will do so where the nature of the
    common element claim involves a problem that affects the condominium community as
    a whole. Nor is there likely to be an explosion of proceedings where a unit
    owner is seeking  as here  to pursue a remedy that is contractually unique to
    the unit or that deals with some other unit-specific wrong raising a discrete
    issue relating to common elements immediately pertaining to the unit.

[43]

The
    respondent contends that, if the appellant is permitted to pursue its claim
    with respect to the common elements and recovers damages, it will have
    recovered those damages twice, since the Condominium Action has settled and the
    damages recovered are deemed by s. 23(4) to be assets of the corporation  a
    corporation of which the appellant is a member.  Section 23(4) states:

A judgment for payment in favour of the corporation in an
    action that the corporation commences or maintains on its own behalf is an
    asset of the corporation.

[44]

I
    disagree.  First, it is too broad to say that assets recovered by the
    condominium corporation for damages to the common elements are deemed to be
    assets of the corporation.  Section 23(4) only deems a judgment for payment in
    favour of the corporation to be an asset of the corporation to the extent that
    the action is
on its own behalf
.  It does not say that is the case
    where the action is brought
on behalf of an owner
.  Thus, there may
    well be a difference between corporate damages recovered in relation to the
    common elements and individual damages.  It follows that the deemed corporate
    asset contemplated in s. 23(4) may not be the duplicate of any damages
    recovered by the individual unit owner regarding the common elements. 
    Secondly, to the extent there is a risk of such double recovery for the same
    damages in the case of competing proceedings, the remedy of a stay of
    proceedings is available to guard against such an eventuality.

[45]

Finally,
    in support of its position that the condominium corporation has the exclusive
    right to pursue any action in relation to the common elements, the respondent
    argues that a unit owner precluded from bringing an action with respect to the
    common elements is not without a remedy.  It points to the availability of both
    an action against the condominium corporation for failure to maintain the
    common elements, and the oppression remedy.  Neither of these options provides
    a suitable alternative, in my view.

[46]

In
    the circumstances here, there has been no failure to maintain the common
    elements; the complaint is that the relevant common element features were not
    constructed as agreed in the first place.  Nor is an oppression remedy claim an
    alternative to the type of wrong being asserted in this type of case.  An
    oppression remedy calls for certain, often onerous, criteria to be met  quite
    different from the threshold a claimant must meet when asserting a contractual
    or other unit-specific wrong based claim.

[47]

I
    would not give effect to these arguments raised on behalf of the respondent.

Existing
    Jurisprudence

[48]

There
    is no authority in Ontario bearing directly on this issue.  Counsel referred us
    to three cases, however:
Hamilton v. Ball
, 2006 BCCA 243;
Kelly v.
    Reardon
(2004), 234 Nfld. & P.E.I.R. 358 (N.L. Prov. Ct. (Sm. Cl.
    Div.)); and
Loader v. Rose Park Wellesley Investments Ltd
.  None is
    binding or directly on point.

[49]

Kelly
    v. Reardon
is readily distinguishable.  Unlike Ontarios Act, Newfoundland
    and Labradors comparable legislation at the time contained mandatory language,
    stating in s. 12(6) that:

An action with respect to, arising from, or relating to a
    common element shall be brought by or against the corporation in its own name

[50]

Loader
is referred to earlier in these reasons.  It is also distinguishable.  The
    issue before the court was different than the issue concerning us here.
Loader
determined that individual purchasers of condominium units could not bring a
    representative action for construction deficiencies against the builders of a
    condominium complex under former Rule 75 because the
Condominium Act
in force at the time already contained a statutory mechanism for a class
    action-like proceeding to be brought.  Section 9(18) of that Act provided that
    [a]ny action with respect to the common elements may be brought by the
    corporation and a judgment for the payment of money in favour of the
    corporation in such an action is an asset of the corporation.

[51]

Loader
did not deal with, and did not decide, that an individual unit owner could not
    bring an independent action regarding common elements.  It was decided under an
    earlier incarnation of Ontarios condominium legislation and at a time when
    there was no class action legislation in place in Ontario.  It was a decision
    particular to its time and to the procedural landscape that existed at that
    time.

[52]

Hamilton
    v. Ball
is more helpful.  It arose in the context of condominium
    legislation similar to Ontarios.  In British Columbia the condominium
    corporation is known as a strata corporation.  Section 171(1) of the
Strata
    Property Act,
S.B.C. 1998, c. 43, Part II contains the type of permissive
    language found in the Ontario Act:

The strata corporation may sue as representative of all owners,
    except any who are being sued, about any matter affecting the strata
    corporation, including any of the following matters:



(b) the common property or common assets; ...

[53]

The
    British Columbia Court of Appeal held that the words may sue did not give a strata
    corporation exclusive authority to pursue claims involving common elements.  In
    this regard, Newbury J.A. said, at para. 27:

As for the notion that individual owners should not be
    permitted to circumvent s. 171 and sue directly for injury or damage to their
    interest in common property, I see nothing in the Act taking away that right,
    which I view not as statutorily created, but as a common law incident of the
    ownership of property, albeit a type of property unknown to the common law. 
    Section 171 creates a mechanism by which a three-fourths majority of owners may
    use the strata corporation as their vehicle for suing and spread the expenses
    thereof.  But in the words of Seaton J.A. in
Strata Plan No. VR 368 v.
    Marathon Realty Co
.
(1982) 41 B.C.L.R. 155 at para. 14, that is as
    far as the legislation goes.  It would take much clearer language, in my
    respectful view, to remove the right of individual owners to enforce their
    rights on their own hook.

[54]

These
    comments can be applied comfortably to the language of s. 23(1) of the Ontario
    legislation, in my opinion.  I would simply add that here the appellants claim
    is asserted not so much as a common law incident of the ownership of
    property, but as an exercise of its contractual rights
vis-à-vis
the
    respondent.

Disposition

[55]

Section
    23(1) of the
Condominium Act
grants a condominium corporation standing
    (but not exclusive standing) to commence, maintain or settle the types of
    action referred to therein. Properly interpreted, it does not preclude an
    individual condominium unit owner from pursuing a claim relating to common
    elements where what is at issue is a contractually uni
que
    problem or other unit-specific wrong raising a discrete issue relating to
    common elements immediately pertaining to the owners unit.

[56]

I
    would, accordingly, allow the appeal, set aside the order of the Divisional
    Court and reinstate the appellants action in Court File No. 05-CV-300372PD3 as
    it relates to the common elements.

[57]

The
    appellant is entitled to its costs before the Divisional Court, fixed in the
    amount of $13,000.00 including HST, and to its costs of the motion before
    Stewart J., fixed in the amount of $4,500.00 including HST.  By agreement, the
    costs of this appeal are fixed in the amount of $15,000.00 inclusive of all
    applicable taxes, payable by the respondent to the appellant.

R.A. Blair J.A.

I agree E.A. Cronk
    J.A.

I agree G.R. Strathy
    J. (ad hoc)

Released: April 20, 2012





[1]
Subsection (2) is not relevant to these proceedings.


