



COURT OF APPEAL FOR ONTARIO

CITATION: Siemon v. Perth Standard Condominium Corporation,
    2020 ONCA 503

DATE: 20200810

DOCKET: C67585

Strathy C.J.O., Lauwers and van Rensburg JJ.A.

BETWEEN

Laurie
    Siemon and Mary Siemon, Yanna McIntosh and

Yanna
    McIntosh as Litigation Guardian for Icil Morgan
, Ralph Wagner,

Betty
    Mullin, Lorna Inman,
Douglas Ahrens as Litigation Guardian for Mae

Ahrens
, Allan
    Mielke, Debra Hemstock and Beverley Armstrong

Plaintiffs (Respondents)

and

Perth Standard Condominium Corporation No.
    39, Cedarcroft 2

Facility Inc., Cedarcroft
    2 Facility Limited Partnership and All

Seniors Care Living Centres Ltd.

Defendants (Appellants)

Gavin J. Tighe and Anna Husa, for the appellants

A. Paul Parlee, for the respondents

Heard: in writing, with limited submissions on June
    5, 2020 by teleconference

On appeal of the judgment of Justice Pamela L. Hebner of
    the Superior Court of Justice, dated September 27, 2019, reported at 2019 ONSC
    5576, and of the costs order dated January 10, 2020, reported at 2020 ONSC 187.

van Rensburg J.A.:

A.

OVERVIEW

[1]

This appeal arises out of a dispute between certain unit owners in Perth
    Standard Condominium Corporation No. 39 (Condo 39) that operates as a
    retirement residence known as McCarthy Place, and the appellants, which are
    related corporations that own, manage and rent out the majority (91 per cent) of
    the units in the building.

[2]

The respondents are individuals who own one or more units in the
    building, several of which are rented out. The respondents brought an action
    alleging, among other things, that the appellants, in renting their units, had
    not complied with Condo 39s Condominium Declaration (the Declaration) and By-laws
    (the By-laws) by failing to require their tenants to sign the standard
    Services Operation Agreement providing for certain monthly basic and optional
    fees for care and services. This practice has provided an advantage to the appellants
    in renting out their units, because they can offer discounts on services that
    the respondents are unable to offer.

[3]

The respondents moved for summary judgment. The motion judge granted a
    declaration that the appellants had engaged in conduct towards the respondents
    that was unfairly prejudicial and unfairly disregarded their interests within
    the meaning of s. 135 of the
Condominium Act
,
1998
, S.O.
    1990, c. 19 (the 
Condominium Act
). The judgment also requires the Declaration
    and By-laws to be enforced such that all occupants of McCarthy Place shall be
    required to enter into the same services agreement with the services manager,
    separate and apart from the rental agreement. She awarded the respondents partial
    indemnity costs of the action in the sum of $54,000 plus HST and disbursements.

[4]

The appellants ask that the judgment be set aside and that the action be
    remitted to trial, or in the alternative, that this court grant summary
    judgment in their favour and dismiss the action entirely. They also seek an
    order setting aside the motion judges costs award.

[5]

For the following reasons, while I would make a change to the judgment to
    ensure that it does not affect the rights of current occupants of McCarthy
    Place who were not before the court, I would otherwise dismiss the appeal and
    the costs appeal.

B.

FACTS

[6]

McCarthy Place is a 124-unit condominium building located in Stratford,
    Ontario. It is a retirement home as defined in s. 2 of the
Retirement Homes
    Act
,
2010
, S.O. 2010, c. 11 (the 
Retirement Homes Act
).
    The appellant Cedarcroft 2 Facility Inc. (Cedarcroft) acquired the original
    owner/developers 106 units in 2015 and has since acquired an additional seven units.
    The appellant Cedarcroft 2 Facility Limited Partnership (Cedarcroft LP)
    took over from the original Services Manager as the provider of food and other
    services to the retiree residents of McCarthy Place. The appellant All Seniors
    Care Living Centres Ltd. (All Seniors) is the board-appointed manager for
    Condo 39. Cedarcroft, Cedarcroft LP and All Seniors are related corporations
    with common ownership. Two of Condo 39s three-person board of directors are
    employees of Cedarcroft LP and All Seniors.

[7]

Cedarcroft rents out all of its 113 units. The remaining 11 units are
    owned by individuals. The respondents are the owners of eight of these units.

[8]

The Declaration and By-laws require each unit owner, in addition to
    paying common expenses, to participate in a Services Program (consisting of Standard
    Services and Optional Services), and to enter into a Services Operation
    Agreement with the Services Manager in the form then in use by the Services
    Manager. An owner is not entitled to opt out of the Services Program or the fees
    to be paid for the program. No owner may convey or lease a unit unless the
    purchaser or lessee enters into the then current form of the Services Operation
    Agreement with the Services Manager.

[9]

When the respondents purchased their units, they entered into identical Services
    Operation Agreements with the original owner/developer and Services Manager of
    McCarthy Place. Their Services Operation Agreements have remained in place
    without change since they acquired their units. The Services Operation
    Agreement, consistent with the By-laws, sets out the Services Program. The monthly
    fee was $500 plus $385 per additional occupant for the Standard Services, consisting
    of the use of amenities such as the indoor spa-wellness centre and a movie
    theatre, access to social, recreational and cultural programs, eight meals per
    month in the dining room and 24-hour emergency response. Optional Services,
    such as additional meal packages, housekeeping and personal care, were
    available on a user-pay basis for an additional fee set out in the Services Operation
    Agreement. Each unit occupant was required by the By‑laws to subscribe to
    a minimum level of Optional Services for a monthly fee of at least $125 per
    occupant. There have been annual increases in the service fees since Cedarcroft
    LP took over as Services Manager.

[10]

The
    tenants of Cedarcrofts units have not entered into Services Operation
    Agreements with the Services Manager. Rather, Cedarcroft requires its tenants
    to enter into a Residency Agreement that includes both rent and services. The
    Residency Agreement provides for a Total Basic Fee which is broken down
    between Basic Rent, Primary Basic Care Services and Meals, Second Person Occupancy
    Fee and Secondary Person Basic Care Services and Meals. Schedule A to the
    Residency Agreement, entitled Included Facilities, Services and Meals, sets
    out a list of Residential Facilities and a list of Care Services and Meals.
    Also attached is a Care Package Agreement, setting out fees for meals and
    various services, with applicable fees. Each Cedarcroft tenant receives a Care
    Home Information Package (CHIP), a form of disclosure that is required by
    the
Retirement Homes Act.
The CHIP
sets out what is included in the Accommodation Component and a Care and
    Service Component, and, for each type of rental suite in the building, sets
    out the maximum charges for each of the two components. A Schedule of
    Additional Services is included in the CHIP, which corresponds with the Care
    Package Agreement attached to the Residency Agreement.

[11]

The
    respondents commenced an action in April 2017. They claimed, among other
    things, that the appellants were enforcing certain provisions of the By-laws in
    a discriminatory manner, specifically by requiring them to pay a higher monthly
    service fee than the Cedarcroft tenants were required to pay.

[12]

The
    respondents sought various forms of relief, including: (1) a mandatory
    injunction requiring an accounting for all service fees paid under their
    Services Operation Agreements and the fees due and owing by all owners, tenants
    and occupants of each condominium unit but not paid; (2) a mandatory injunction
    requiring the owner of any unit to pay all service fees determined to be due
    and owing but unpaid; (3) a declaration that the appellants had enforced the By-laws
    in a discriminatory manner against only some of the unit owners while exempting
    others, which conduct was oppressive; and (4) a declaration that any sale,
    transfer or assignment of any condominium unit without the transferee having
    entered into a Services Operation Agreement be deemed null and void.

[13]

In
    the course of the proceedings, the respondents brought a motion (which was
    opposed by the appellants) for production of all of the Residency Agreements
    between Cedarcroft and each of its tenants. Raikes J. determined that the existence
    and terms of the agreements were at the core of the respondents claims. To
    this point, he stated: How can the plaintiffs ensure that residents of
    [Cedarcroft] units are not given service expense holidays or discounted rates
    as inducements to rent a [Cedarcroft] unit? His endorsement, dated October 24,
    2017, ordered production of the Residency Agreements, with measures to protect
    the privacy of the individual tenants.

[14]

The
    respondents counsel provided an affidavit (the Vandersleen Affidavit) attaching
    a spreadsheet that anonymized and summarized the charges shown in the Residency
    Agreements. Ms. Vandersleen stated that the summary of charges showed that the
    tenants of 49 of the Cedarcroft units paid either nothing or less than the
    minimum fee of $870 for primary care and meals, and that Cedarcroft had
    waived or did not charge the second person occupancy fee for 21 units where
    more than one tenant occupied the unit.

[15]

Ms.
    Vohra, the Vice-President of Finance for All Seniors, filed a responding
    affidavit in which she stated that Ms. Vandersleen appears to have equated a
    strike-through in Primary Basic Care Services and Meals in certain Residency
    Agreements with no charge being levied on the tenants of those units for
    standard services. She stated that Basic Rent in the Residency Agreements
    includes an accommodation fee and a fee for standard services such as access to
    all amenity spaces and 24-hour emergency response, consistent with the list of
    standard services received by the Plaintiffs, while Primary Basic Care Services
    and Meals is similar to the Optional Services in the Services Operation
    Agreement. She also stated that the $870 amount referred to in the CHIP
    schedule reflects a maximum charge for the Care and Service Component (not a
    minimum charge), and that the second-person occupancy fee had been waived only in
    respect of ten units.

[16]

The
    respondents moved for summary judgment in December 2018. Their notice of motion
    sought the following relief:

1.

A mandatory injunction requiring the Defendants to account for all
    service fees actually paid under the Services Operation Agreement and fees that
    were due and owing by all owners, tenants and occupants of each condominium
    unit but not paid.

2.

A mandatory injunction requiring the owner of any paid unit to pay all
    service fees determined to be due and owing but unpaid.

3.

Damages arising from the Defendants enforcing the Condominium By-laws in
    a discriminatory manner against only some of the owners of the units (including
    the Plaintiffs) while exempting other owners including Cedarcroft Facility
    Inc., which conduct was oppressive.

4.

Damages arising from:


i.

the two members of the Board of Directors of the Condominium Corporation
    having a conflict of interest; and


ii.

their failure to comply with section 40 of the
Condominium Act
.

5.

Punitive and exemplary damages against all Defendants in the sum of
    $100,000.

6.

Costs against the Defendants in favour of the Plaintiffs on a full
    indemnification basis.

7.

Such further and other relief as the Honourable Court deems just.

C.

THE MOTION JUDGES REASONS

[17]

The
    thrust of the respondents argument on the summary judgment motion was that the
    appellants failure to require the Cedarcroft tenants to enter into a Services
    Operation Agreement, contrary to the Declaration and By-laws, created an uneven
    playing field between the unit owners, which gave the appellants an unfair
    marketing advantage in renting out their units. The motion judge set out the
    nub of the respondents concern at para. 23 of her reasons:

The plaintiffs assert that the defendants are applying
    different rules to the plaintiffs than to their own tenants. The defendants are
    charging the plaintiffs a certain amount for services, as set out in the
    services agreement and the bylaws, whereas many of the tenants renting from
    Cedarcroft are charged something less. The plaintiffs assert that these actions
    put the plaintiffs on a different playing field when they try to rent their units.
    The plaintiffs assert that they are unable to remedy the problem internally as
    the defendants ensure that two of the three directors on the board of directors
    are designates of the defendants. The plaintiffs assert that the defendants
    have acted oppressively or unfairly such that s. 135 ought to be used to make
    the appropriate order.

[18]

Although
    the appellants had pleaded in their statement of defence that each of the
    Cedarcroft tenants was subject to a Services Operation Agreement, and therefore
    that they had complied with the Declaration and By-laws, their argument on the
    summary judgment motion, as summarized at paras. 24 to 26 of the motion judges
    reasons, was that: (1) there was no oppression because the respondents were
    paying the same price for services as they were five years ago with the
    original Services Manager (with the exception of annual increases) and there
    was no evidence the respondents were not receiving the services they pay for;
    (2) nothing prevented two members of the board of directors from being nominees
    of the appellant corporations, or from having effective control of the board as
    majority shareholders; and (3) the respondents failed to prove bad faith. They
    also argued that technical non-compliance with the Declaration and By-laws
    did not amount to unfair treatment or oppression.

[19]

The
    motion judge noted that it was apparent, from a comparison of the information
    in the spreadsheet attached to the Vandersleen Affidavit, the blank Cedarcroft Residency
    Agreement and the CHIP, that Cedarcroft has provided incentives in order to
    attract tenants for its units by not charging the care and service component or
    by reducing the charge substantially: at para. 19. At para. 21, she stated:

What is clear, then, is that Cedarcroft does not require its
    tenants to enter into the same, or a comparable, services agreement that the
    plaintiffs were required to enter into. In doing so, Cedarcroft has not
    complied with the condominium declaration and bylaws. Cedarcroft is able to
    manipulate the services fee because it, the manager of condo 39 and the
    services provider are all related corporations with a common ownership.

[20]

The
    motion judge declared that the appellants had engaged in conduct that is
    unfairly prejudicial to the respondents and unfairly disregards the
    respondents interests within the meaning of s. 135 of the
Condominium Act
by essentially failing to ensure that all occupants are charged the same amount
    for services. Her conclusion is stated at para. 37:

In my view, the plaintiffs reasonably expected that all
    occupants of McCarthy Place would be treated equally and charged the same
    amount for services. The defendants have not complied with the declaration and
    bylaw. They have not ensured that all occupants be treated equally. They have
    not ensured that all occupants are charged the same amount for services. In
    doing so, the defendants have received an unfair advantage in renting their
    units, in that they have been able to offer incentives not available to the
    plaintiffs.

[21]

Accordingly,
    the motion judge ordered that all occupants of McCarthy Place shall be
    required to enter into the same services agreement with the services manager,
    separate and apart from the rental agreement. She was of the view that this
    was the least intrusive remedy. She declined, however, to make any order
    respecting the makeup of the board of directors or the choice of Services
    Manager, and she dismissed the claim for damages, after concluding that there
    was no proof of a specific loss: at paras. 40-45.

[22]

In
    a separate decision, after receiving written submissions from the parties, the
    motion judge awarded costs of the action to the respondents in the sum of
    $54,000 plus HST and $13,395.14 in disbursements.

D.

ISSUES

[23]

The
    appellants submit that the motion judge made a number of errors, in:

1.

granting relief that was different from the relief the respondents
    sought in their statement of claim and notice of motion;

2.

failing to deal with a number of issues in the litigation, thereby
    granting what amounted to partial summary judgment;

3.

concluding that the appellants conduct was unfairly prejudicial and
    unfairly disregarded the respondents interests;

4.

granting relief against persons who were not before the court; and

5.

awarding costs against the appellants, when some of the issues were
    decided in their favour and other issues were abandoned.

E.

DISCUSSION

(1)

The motion judge did not err in granting relief that was different from the
    relief sought by the respondents

[24]

The
    appellants assert that the motion judge erred in granting relief other than
    what was claimed by the respondents in their notice of motion and statement of
    claim.

[25]

First,
    they assert that the statement of claim does not specifically plead s. 135
    of the
Condominium Act
or the provisions of the
Retirement Homes
    Act
. As such, the motion judge ought not to have granted relief under s.
    135 or considered the provisions of the
Retirement Homes Act
in
    arriving at her decision.

[26]

There
    is no merit to this argument. It is only when a statutory provision would take
    the opposing party by surprise that it must be specifically pleaded before it
    can be relied on:
Ontario Hydro-Electric Power Commission of Ontario v. City
    of St. Catharines et al.
(1971), 21 D.L.R. (3d) 410 (Ont. H.C.), at pp.
    417-19, affd on other grounds [1972] 1 O.R. 806 (C.A.), affd (1973) 36 D.L.R.
    (3d) 160 (S.C.C.).

[27]

Here,
    the statement of claim clearly advanced a claim for oppressive conduct, even
    though it did not expressly plead s. 135 of the
Condominium Act
. The
    respondents sought a declaration that the appellants enforced the By-laws in a
    discriminatory manner against only some unit owners, including the appellants,
    while exempting other owners, including Cedarcroft, which conduct was
    oppressive. In their statement of defence, the appellants joined issue on whether
    they had allowed the Declaration and By-laws to be applied in a discriminatory
    manner, whether they enforced the Services Operation Agreement only against the
    respondents, and whether this constituted oppressive conduct.

[28]

As
    for the provisions of the
Retirement Homes Act
,

there is no
    question that McCarthy Place, as a retirement home, operates under that
    legislation and is subject to the requirement that a CHIP be provided to
    retirement home residents which clearly sets out an itemized list of the
    different types of accommodation and care services provided in the retirement
    home and their prices: see s. 54(k). This statute was therefore relevant to the
    context underlying the respondents claim and was properly considered by the
    motion judge.

[29]

Second,
    the appellants contend that [t]he relief granted was not the case the Respondents
    brought or the Appellants could have expected to meet on the Motion, and that,
    as in
Rodaro v. Royal Bank of Canada

(2002), 59 O.R. (3d) 74
    (C.A.), this court should allow the appeal on that basis.

[30]

I
    disagree. The reliance on
Rodaro

is misplaced. The motion judge
    did not step outside of the pleadings or the case developed by the parties to
    find liability, as was the case in
Rodaro
: see
Rodaro
, at
    para. 61. As I have already observed, the issue that the motion judge
    determined was joined in the parties pleadings. The wrong alleged  the
    appellants failure to comply with the Declaration and By‑laws by not
    requiring the Cedarcroft tenants to enter into the prescribed form of Services
    Operation Agreement  was always at the heart of the proceeding.

[31]

As
    the motion judge observed at para. 17 of her costs decision, the respondents
    brought a motion requesting the production of the Residency Agreements, in the
    course of which it was clear that the primary issue was the difference in treatment
    between the tenants of the defendants and the plaintiffs with respect to
    required services. She stated: In my view, the defendants were aware that was
    the primary issue throughout. Certainly, over time, the failure to treat all
    occupants equally in the payment for services became the predominant issue: at
    para. 17.

[32]

The
    arguments the appellants advance on this issue are premised on a concern for
    procedural fairness. However, this concern is unfounded: the appellants were
    not taken by surprise by the issues raised on the motion, how they were determined,
    or the relief that was granted. All were squarely raised and addressed in the
    motion. While the notice of motion requested relief that was broader than what was
    granted, the motion judge had broad remedial power to make any order [she]
    deem[ed] proper upon a finding that the conduct complained of [was] oppressive:
Walia Properties Ltd. v. York Condominium Corporation No. 478
(2007)
, 60 R.P.R. (4th) 203 (Ont. S.C.),
    at para. 31, revd in part 2008 ONCA 461, 67 R.P.R. (4th) 161. See also
Noguera
    v. Condominium Corporation No. 22
, 2020 ONCA 46, 10 R.P.R. (6th) 1, at
    paras. 18, 21. Ultimately, the declaratory relief granted by the motion judge,
    and the order requiring enforcement of the Declaration and By-laws with respect
    to the services agreement for all occupants of McCarthy Place was, as in
Walia
,
    the least intrusive remedy.

[33]

Accordingly,
    I would not give effect to this ground of appeal.

(2)

The motion judge granted judgment in full, not partial summary judgment

[34]

The
    appellants second argument is that, because the motion judge did not address a
    number of issues pleaded in their statement of claim and raised in the notice
    of motion, there is considerable doubt about the status of the action and the
    issues that remain, if any, to be litigated between the parties. They contend
    that the motion judge erred in effectively granting partial summary judgment.

[35]

The
    appellants point to various claims raised in the statement of claim that were
    not determined by the motion judge and were not expressly abandoned. For
    example, the respondents sought an order deeming By-laws 1 and 2 void
ab
    initio
, an accounting of fees due and owing and not received, and a
    declaration that any transfer of a unit without the transferee having entered
    into a Services Operation Agreement be deemed null and void. The respondents
    also asserted that the 15 per cent finders fee for assisting with renting
    their units was unfair and oppressive. The appellants contend that the motion
    judges reasons were deficient because they did not dispose of or address these
    claims

[36]

This
    argument can be addressed briefly.

[37]

The
    respondents claims and the relief they were seeking became more focused as the
    litigation progressed. By the time they moved for summary judgment, the Residency
    Agreements had been produced, enabling the respondents to confirm that the Cedarcroft
    tenants were, in certain cases, paying less in service fees than required under
    the Services Operation Agreement. There was also evidence to satisfy the
    respondents that they were paying their proportionate share of the cost of
    services, and not subsidizing the Cedarcroft unit owners. Armed with this
    evidence (which they did not have at the commencement of the action), the
    respondents reasonably decided to pursue some claims and not to pursue others
    when they brought their summary judgment motion.

[38]

Contrary
    to the appellants argument, the respondents expressly abandoned their claims
    for other relief claimed in the statement of claim at the hearing of the
    summary judgment motion. This was made plain in the following exchange between
    the motion judge and the respondents counsel at the outset of his submissions:

Mr. Parlee: I am aware of the Ontario Court of Appeal decisions
    and the Superior Court decisions that motions for partial summary judgment
    leaving some issues unresolved, or undetermined should be avoided and
    therefore, on behalf of the plaintiffs, I am limiting the issues to be decided
    by Your Honour to the plaintiffs claims based on conflict of interest by the
    defendants, breaches of the Condominium Corporations Declaration by the
    defendants.



The Court: What are you leaving for trial then?

Mr. Parlee: Nothing. Those are it. What I am saying is, I dont
    want your Honour to say, well all these matters should go to trial because
    these are unresolved issues. Those are the issues. Nothing else will be proceeded
    with.



Mr. Parlee: I submit that all of the limited issues, which are
    the subject matter of this hearing, are the proper subject matter of a summary
    judgment motion with no other issues being left to be determined. The ones
    indicated, Your Honour, are the only ones on the basis of which relief is being
    sought.

[39]

There
    is no uncertainty regarding the status of the balance of the claims. The motion
    judges judgment specifically dismissed the balance of the relief sought by the
    respondents on the motion. The motion judge awarded costs for the summary
    judgment motion and the action. This was not a case of partial summary judgment
    and the motion judges reasons were not deficient.

[40]

To
    the extent that the appellants require an order dismissing the balance of the
    respondents claims in the action, the respondents have confirmed that they
    were and remain prepared to consent to such an order.

[41]

This
    ground of appeal therefore fails.

(3)

The motion judge did not err in concluding that the appellants conduct
    was unfairly prejudicial and unfairly disregarded the respondents interests

[42]

The appellants third argument is that
the motion judge erred in finding conduct justifying
    a remedy under s. 135 of the
Condominium Act
. First, they assert that the motion judge
    misapprehended the evidence about what services are provided to and paid for by
    the Cedarcroft tenants relative to those of the respondent unit owners. Second,
    they take issue with the conclusion that their conduct was unfairly prejudicial
    and unfairly disregarded the respondents interests.

(a)

The alleged misapprehension of evidence

[43]

On
    the first point, the appellants submit that the motion judges conclusion, at
    para. 21, that Cedarcroft failed to require its tenants to enter into the same
    or a comparable services agreement that the Plaintiffs were required to enter
    into, was based on a misapprehension of the evidence. They submit that, contrary
    to the motion judges finding, the respondent unit owners and the Cedarcroft
    tenants pay for and receive the same or similar services. The appellants also
    contend that any discounts provided to the Cedarcroft tenants were only in
    respect of rent, not service fees.

[44]

Essentially,
    the appellants assert that the motion judge misunderstood the evidence because
    she did not accept their argument about how the Cedarcroft tenants receive and
    pay for services. Simply put, their position was and is as follows: while the
    Cedarcroft tenants do not sign a Services Operation Agreement, they pay the
    same amount as the respondents for the same services. The fact that their
    Residency Agreement may show them paying nothing (or a reduced amount) under
    Primary Basic Care Services and Meals does not mean that they are receiving
    Standard Services without charge. Rather, the term Primary Basic Care
    Services and Meals corresponds with Optional Services under the Services
    Operation Agreement, such that these Cedarcroft tenants are not paying for or
    receiving Optional Services. The Cedarcroft tenants pay for their Standard
    Services as part of their Basic Rent, which is a blended amount. Although
    Basic Rent is not defined, the appellants point to the CHIP disclosure which
    lists 24 Hour Security and Emergency Response and Access to All Amenity
    Space as part of the Accommodation Component. The appellants contend that
    the motion judge must have equated no amount or a small amount being charged to
    a Cedarcroft tenant for Primary Basic Care Services and Meals in a Residency
    Agreement to that tenant receiving Standard Services for little or no charge.

[45]

I
    am not persuaded that the motion judge misapprehended the evidence. Even if it
    is accepted that the Cedarcroft tenants pay for their Standard Services as
    part of their Basic Rent, it is a blended amount. The evidence was clear that
    some Cedarcroft tenants were offered discounts and incentives in the form of a
    reduced amount for Basic Rent. Although the appellants position is that only
    the actual rent portion was discounted, and that there was no discount for
    services, there was no clear evidence before the motion judge that demonstrated
    this was the case. Under cross-examination, although Ms. Vohra confirmed that
    all tenants have access to and use the basic services, she was unable to say
    what minimum service fees were paid by the Cedarcroft tenants, because the
    service fee is never set out. Without evidence of the apportionment between
    rent and service fees it is impossible to conclude that the discounts the
    appellants admitted they were providing to their tenants applied only to rent,
    and not to services. It was reasonable for the judge to conclude, based on the
    evidence, that the appellants were charging a discounted or no amount for some
    services provided to the Cedarcroft tenants.

[46]

Even
    if the motion judge misapprehended the evidence in the way the appellants
    suggest, or put another way, even if the motion judge ought to have accepted
    their contention that the Cedarcroft tenants were paying for Standard Services
    as part of their Basic Rent, her conclusions, at para. 21 of her reasons,
    that Cedarcroft does not require its tenants to enter into the same, or a
    comparable, services agreement that the plaintiffs were required to enter into
    and that [i]n doing so, Cedarcroft has not complied with the condominium
    declaration and bylaws, are unimpeachable.

[47]

There
    is no question that the Cedarcroft tenants were not required to enter into the
    standard Services Operation Agreement anticipated by the Declaration and By-laws,
    or an agreement that was the same as or comparable to the Services Operation
    Agreement. Cedarcrofts tenants were offered discounts or promotional pricing. In
    her cross-examination, Ms. Vohra confirmed that as service managers, we have
    the option of offering discounts, promotions, whatever the case may be and
    that any discounts or losses that we are incurring from [those discounts and
    promotions] is our cost to bear as service manager. Although the appellants
    asserted there was no discount to the fee for Standard Services, it was
    conceded that in at least ten cases, Cedarcroft tenants were not charged a
    second person occupancy fee (a charge of $385 per month under the Services
    Operation Agreement). And, even if the appellants interpretation is accepted, Cedarcrofts
    tenants were not obliged to subscribe to a monthly minimum of $125 per occupant
    in Optional Services. These are mandatory charges under the By-laws and the Services
    Operation Agreement.

[48]

Finally,
    the Declaration and By-laws contemplate that all residents will have access to the
    same services and will be paying the same rates for those services. The appellants
    use of a Residency Agreement that does not set out the Services Program in a
    manner consistent with the Declaration and By-laws, together with the common
    ownership of Cedarcroft, the Service Manager and the services provider enabled the
    appellants, in the words of the motion judge, to manipulate the services fee.
    The current arrangements lack transparency and provide no assurance to the
    residents of McCarthy Place that they are all in fact paying the same rates for
    the services they receive.

[49]

Accordingly,
    whether or not the motion judge misapprehended the evidence with respect to
    what services may have been included in the Cedarcroft tenants Basic Rent,
    her overall conclusions were soundly based on the evidence before her.

(b)

The finding of unfair prejudice and unfair disregard

[50]

The appellants contend that the motion judge erred in concluding
    that their conduct was unfairly prejudicial to the respondents and unfairly
    disregarded their interests. They assert that there was no evidence that the respondents
    were subsidizing the services received by the Cedarcroft tenants, and that,
once the motion judge concluded that the respondents
    were not entitled to damages, it followed that there was no oppression.
Moreover,
    they submit that in concluding that the appellants were acting unfairly by not
    requiring the Cedarcroft tenants to enter into a Services Operation Agreement,
    the motion judge ignored the evidence that the respondents do not require their
    own tenants to do so.

[51]

An
    oppression remedy is provided for in s. 135 of the
Condominium Act
as
    follows:

135. (1) An owner, a corporation, a declarant or a mortgagee of
    a unit may make an application to the Superior Court of Justice for an order
    under this section.

(2) On an application, if the court determines that the conduct
    of an owner, a corporation, a declarant or a mortgagee of a unit is or
    threatens to be oppressive or unfairly prejudicial to the applicant or unfairly
    disregards the interests of the applicant, it may make an order to rectify the
    matter.

(3) On an application, the judge may make any order the judge
    deems proper including,

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

(b) an order requiring the
    payment of compensation.

[52]

The
    motion judge properly identified the relevant principles for oppression under
    s. 135 of the
Condominium Act
,
    referring to the case cited by the appellants as authoritative,
Walia
.
    She also considered and applied the framework for the oppression remedy set out
    in
BCE Inc. v. 1976 Debentureholders
, 2008 SCC 69, [2008] 3 S.C.R. 560.

[53]

In
Walia
, Harvison Young J. (as she then was), observed that unfair
    prejudice has been described as a limitation on or injury to a complainants
    rights or interests that is unfair or inequitable and that unfair disregard has
    been described as unjustly ignor[ing] or treat[ing] the interests of the
    complainant as being of no importance: at para. 23. She also noted that s. 135
    is meant to protect the reasonable expectations of shareholders and unit owners:
    at para. 24. On the facts in

Walia
, Harvison Young J. concluded
    that the failure to use the weighted voting procedures set out in a condominium
    corporations by-laws and the removal of commercial unit owners from the board
    of directors was unfairly prejudicial to and unfairly disregarded the interests
    of such owners. The condominium declaration contemplated a relatively level
    playing field between commercial and residential owners. The change in the
    weighted vote, along with the removal of the commercial owners from the board,
    eliminated an important part of the balance. Her remedy called for the by-laws
    to be enforced, as this was the least intrusive and most appropriate remedy in
    the circumstances: at para. 31.

[54]

After
    considering the relevant legal principles and the approach taken in
Walia
,
    the motion judge found, at para. 36 of her reasons, that the Declaration and By-laws
    contemplated that all occupants of McCarthy Place are to be treated equally,
    that they are required to have the same services agreement with the Services Manager,
    and that they are to pay the same amount for required services. Based on these
    findings, she concluded that the respondents reasonably expected that all
    occupants of McCarthy Place would be treated equally and charged the same
    amount for services, and that by not ensuring that all occupants be charged
    the same amount for their services, the appellants have received an unfair
    advantage in renting out their units, in that they have been able to offer
    incentives not available to the plaintiffs: at para. 37.

[55]

This
    was the basis for the finding of unfairness. Simply put, as in
Walia
,
    the failure to comply with the Declaration and By-laws had resulted in
    unfairness: while the respondents, in renting their units, were bound by the
    terms of the Services Operation Agreement, Cedarcrofts tenants signed
    alternative Residency Agreements that enabled the appellants to manipulate the
    fees, and to obtain an advantage not available to the respondents in renting
    out their units.

[56]

The
    fact that the motion judge, in considering the appropriate remedy, did not
    award damages does not undermine her finding that the appellants failure to comply
    with the Declaration and By-laws was unfairly prejudicial to the respondents
    and unfairly disregarded their interests. The remedy she fashioned was intended
    to address the unfairness that she found, and to level the playing field between
    the parties on a prospective basis by requiring compliance with the Declaration
    and By-laws. While the motion judge declined to award damages for past
    contraventions in the absence of any proof of a specific loss, her remedy
    upholds the respondents rights as unit owners and provides an appropriate
    remedy to prevent ongoing harm to their interests.

[57]

Finally,
    I reject the appellants argument that they did not treat the respondents
    unequally because five of the respondents who were landlords in their own right
    did not require their tenants to sign a separate Services Operation Agreement
    with the Services Manager, and that the motion judge ignored this fact in
    arriving at her decision. This was addressed in oral argument on the motion and
    raised again in the appellants costs submissions. At para. 15 of the costs
    decision, the motion judge noted that the respondents were following the
    direction of the appellants in not having their tenants sign their own Services
    Operation Agreements, referring to the evidence of one of the respondents to
    that effect.

[58]

For
    these reasons, this ground of appeal cannot succeed.

(4)

The judgment can be amended to address the concern that it affects the
    rights of persons who were not before the court

[59]

The
    judgment requires that the Declaration and By-laws shall be enforced such that
    all occupants of McCarthy Place shall be required to enter into the same
    services agreement with the services manager, separate and apart from the
    rental agreement. The appellants assert that the motion judge erred in
    granting relief against persons who were not parties to the action and were not
    before her at the motion. The appellants also contend that, because the judgment
    does not prescribe a particular form of services agreement, it is uncertain
    and performance of the judgment is impossible.

[60]

Although
    this appeal was heard in writing (with additional written submissions filed by
    the parties), the panel requested oral submissions by teleconference on this
    issue.

[61]

It
    is important to note that the prospect that the rights of parties not before
    the court would be affected was specifically raised by the motion judge. She
    asked the respondents counsel how she could grant an order remedying the
    contract between the appellants and the Cedarcroft tenants, when the other
    residents were not parties. The respondents counsel made it clear that he was
    only seeking a prospective remedy. He stated:

Your Honour cant retrospectively fix this situation. Its
    prospective. And I suggest the purpose of the oppression remedy is to make sure
    the conduct does not continue into the future. So, any future agreement. These
    will presumably expire at some time, each one. Any future agreement should
    contain those terms. Im not for a second suggesting Your Honour could go back
    and retroactively impose that term on the existing agreements. That would be
    unreasonable.

[62]

The
    relief that was ultimately granted by the motion judge did not make it clear
    that the appellants would be required to ensure that all occupants of McCarthy
    Place would enter into the same services agreement with the services manager,
    separate and apart from the rental agreement, only on a go-forward basis.

[63]

I
    agree that this provision of the judgment is problematic because it could be
    interpreted as affecting the interests of persons that were not before the
    court, that is, the tenants of both the appellants and the respondents who have
    existing agreements in respect of the services they receive and the fees they
    are required to pay. In the course of their oral submissions before this court,
    the parties proposed changes to the wording of para. 2 of the judgment to meet
    this concern.

[64]

As
    for the form and content of the services agreement, the appellants counsel
    confirmed that, if the appeal were otherwise dismissed, the intention was to
    promulgate within six weeks a new services agreement, separate and apart from
    its residency agreement, that would be used for all future residents. The
    respondents counsel acknowledged that the appellants are entitled to
    promulgate new and different services agreements (that is, it is not essential
    that the same
form
of Services Operation Agreement be used for all
    residents), provided that the services and fees set out in such agreements are
    consistent with the By-laws and the services and fees they and their tenants are
    required to pay.

[65]

The
    terms of the judgment must be changed to ensure that the existing rights of
    persons not before the court, including the current Cedarcroft tenants, are not
    affected, while ensuring that all future residents are provided with the same
    services at the same rates that the respondents receive and are required to pay
    for. To this end, I would amend and replace para. 2 of the judgment by the
    following:

THIS COURT DECLARES AND ADJUDGES that the Declaration and
    By-Laws of Perth Standard Condominium Corporation No. 39 shall be enforced such
    that (a) on the expiry of any existing agreement with a current occupant of
    McCarthy Place and (b) on the execution of any agreement with a future occupant
    of McCarthy Place, the occupant shall be required to enter into a services
    agreement with the services manager, separate and apart from any rental
    agreement, that provides for the same services that are available to the respondents
    as unit owners of McCarthy Place, and at the same rates.

(5)

There is no reversible error in the motion judges costs decision

[66]

The
    motion judge awarded costs of the action, including the summary judgment motion,
    fixed at $54,000 plus HST and $13,395.14 in disbursements, payable by the
    appellants other than Condo 39. She denied the respondents claim for
    substantial indemnity costs and reduced their partial indemnity claim by
    approximately $20,000 for time spent on unsuccessful claims. She set off
    against the amount of $60,000 the sum of $6,000 that she awarded to the
    appellants for costs thrown away as a result of an adjournment of the summary
    judgment motion, and for time spent arguing about the respondents unsuccessful
    attempt to rely on affidavits of documents as part of the evidentiary record.

[67]

The
    appellants contend that the motion judge erred in awarding costs to the respondents
    because success on the motion was divided and almost half of the hearing time
    was spent on an issue that the respondents lost completely (the admissibility
    of the affidavits of documents). They submit that the respondents achieved
    minimal success on the issues argued on the balance of the hearing and that they
    were forced to respond to issues that were abandoned. In their view, no costs
    should have been awarded.

[68]

A
    costs order should only be interfered with on appeal if the judge below erred in
    principle or if the costs award is plainly wrong:
Hamilton v. Open Window
    Bakery Ltd.
, 2004 SCC 9, [2004] 1 S.C.R. 303, at para. 27. There was no
    such error here.

[69]

The
    motion judge concluded that the respondents were successful on the primary
    issue before the court and were thus presumptively entitled to costs. She
    rejected the appellants attempt to characterize their conduct as a technical
    lack of adherence to the wording of the condo Declaration. Rather, at para.
    14, she described their conduct as a stubborn and persistent lack of
    adherence to the wording of the Declaration and a stubborn refusal to
    acknowledge that the practice they were engaging in was unfair. The motion
    judge rejected the argument that the respondents claim was a moving target,
    and she concluded that there was no conduct on their part to disentitle them
    from costs. I see no basis to interfere with these findings and conclusions.

[70]

The
    motion judge took into consideration the fact that the respondents spent time
    in the action on claims that were not successful, when she reduced the
    respondents costs by $20,000. She also considered the appellants claim for
    costs of two steps in the litigation: the adjournment of the summary judgment
    motion and the respondents attempt, in the course of the hearing of the
    motion, to rely on affidavits of documents (which entailed argument and
    resulted in a ruling against them). She awarded the appellants $6,000 for these
    two steps (including almost the entire amount they sought in respect of the
    ruling concerning the admissibility of the affidavits of documents).

[71]

The
    appellants continue to characterize their wrongdoing as an administrative
    failure, understating the implications and importance of the relief obtained
    by the respondents. The respondents were successful in the litigation. They
    established that the appellants conduct was unfairly prejudicial and unfairly
    disregarded their interests, and that they were entitled to a remedy under s.
    135 of the
Condominium Act
. The relief granted by the motion judge
    means that the appellants must cease their non-compliance with the Declaration
    and By-laws and can no longer use their positions as the owner of the majority
    of units in McCarthy Place and as Service Manager to unfairly prejudice the
    individual unit owners who wish to rent out their units. In this way, as the
    motion judge pointed out, the respondents were successful on the primary issue
    before her and were thus entitled to costs.

[72]

I
    see no reason to interfere with the costs order in this case. The order was
    proportionate and reasonable and reflects no error in principle.

F.

DISPOSITION

[73]

For
    these reasons, I would vary the judgment as set out above, but would otherwise
    dismiss the appeal. I would dismiss the costs appeal. I would order costs of
    the appeal to the respondents in the agreed amount of $35,000, inclusive of HST
    and disbursements, payable by the appellants other than Condo 39.

Released: August 10, 2020 (G.R.S.)

K. van Rensburg J.A.

I agree. G.R. Strathy
    C.J.O.

I agree. P. Lauwers J.A.


