



COURT OF APPEAL FOR ONTARIO

CITATION: Metropolitan Toronto Condominium Corporation No.
    723 v. Reino, 2018 ONCA 223

DATE: 20180307

DOCKET: C63859

Doherty, MacFarland and Paciocco JJ.A.

BETWEEN

Metropolitan Toronto Condominium Corporation No.
    723

Applicant (Appellant)

and

Dante Reino

Respondent (Respondent in Appeal)

DOCKET: C63860

AND BETWEEN

Dante Reino

Applicant (Respondent in Appeal)

and

Metropolitan Toronto Condominium Corporation No.
    723

Respondent (Appellant)

Derek J. Bell and Brendan Clancy, for the appellant

Mark H. Arnold, for the respondent

Heard and released orally: February 23, 2018

On appeal from the judgment of Justice Jane Ferguson of
    the Superior Court of Justice, dated April 26, 2017.

REASONS FOR DECISION

[1]

The issue raised on this appeal is whether a condominium corporation
    having issued a prior clean status certificate in relation to a unit will, in
    the event it subsequently discovers matters it believes should be disclosed, be
    estopped from noting such matters in a subsequent status certificate requested
    by the owners of the unit.

[2]

The facts are not much in dispute. The respondent Dante Reino purchased
    the condominium unit from his mother in 2013. He requested a status certificate
    at that time and was issued a clean certificate.

[3]

When Mr. Reino decided to sell his unit in 2016 he requested a status
    certificate from the condominium corporation which he intended to use to market
    his condominium. The certificate he received noted at s. 12 thereof:

The Corporation has no knowledge of any circumstances that may
    result in an increase in the common expenses for the unit except: (1) the unit
    is in breach of s. 18(6) of corporations declaration amended, which provides
    that no dwelling unit owner shall make any change or alteration to the layout
    or configuration of any dwelling unit without the prior written consent of the
    Board of Directors. In this regard the unit configuration has been altered so
    as to add a second bedroom and the kitchen has been relocated without the
    consent of the Board of Directors. The policy of the Board of Directors is
    generally not to approve any changes that tend to add to the occupant load
    factor within the building. This circumstance may result in the corporation
    taking steps to remove the alteration and restore the unit to its original
    layout and the costs of the corporations actions in this regard being added to
    the common expenses attributable to the unit.

[4]

The appellant acquired his unit in 2013 from his mother who had owned
    the unit from 2004. At the time of her purchase she had received a clean
    certificate from the Condominium Corporation as her son did in 2013. The
    respondents evidence, accepted by the application judge, was that neither he
    nor his mother had carried out any alteration to the unit as described in para.
    12. The configuration of their unit was unchanged during their occupancy. If
    the configuration was changed from the original layout it must have been
    carried out prior to their occupancy. Despite the fact that representatives of
    the condominium corporation had been in the unit numerous times over the course
    of the Reinos occupancy  no one ever mentioned that the layout had been
    altered.

[5]

Section 18 (b) of the amended declaration provides:

Subject to the provisions of Section 17 and Section
    19 hereof, no dwelling unit owner shall make any change or alteration to the
    layout or configuration of any dwelling unit without the prior written consent
    of the Board of Directors.

[6]

Relying on s. 76(6) of the Act which provides:

The status certificate binds the corporation, as of the date it
    is given or deemed to have been given with respect to the information that it
    contains or is deemed to contain as against a purchaser or mortgagee of a unit
    who relies on the certificate.

[7]

The application judge concluded that the Act was clear and unequivocal
    and that the condominium corporation

·

is bound to its clean and clear status certificates dated August
    20, 2004 and October 13, 2013. It cannot rely on the alleged breach in its
    November 7, 2016 status certificate.

·

and is estopped from its November 7, 2016 status certificate as
    it is currently written.

[8]

She then granted the respondent the relief sought in his Notice of
    Application including:

·

a declaration that neither sections 12.1 nor 23 of the status
    certificate issued November 7, 2016 binds the applicant nor Unit 16, level 17
    which is the unit owned by the applicant;

·

an order directing the respondent to remove Sections 12.1 of the
    November 17, 2016 status certificate;

·

an order to amend s. 23.1 of that certificate by removing the
    words:

However, the unit
    layout has been altered without the prior consent of the Board of Directors of
    the corporation contrary to the declaration of the corporation. Please see
    Paragraph 12 for details.

·

an order directing that the condominium corporation issue a clear
    status certificate pursuant to s. 76 of the
Condominium Act
in
    relation to the subject unit.

[9]

The
Condominium Act
is among other things consumer protection
    legislation. The purpose of a status certificate is obvious  it is to bring to
    the attention of a prospective purchaser or mortgagee matters which may be of
    concern to them when contemplating the purchase of a unit.

[10]

The
    certificate is by s. 76(6):

 binding on the corporation as of the date it is given  as
    against a purchaser or mortgagee of a unit who relies on the certificate.

[11]

We
    agree that the condominium corporation is bound vis-à-vis the respondent Mr.
    Reino by the clean certificate it provided to him when he acquired the unit
    from his mother in 2013. That said, it does not follow that the condominium
    corporation is thereafter estopped from issuing anything but a clean
    certificate in relation to a unit where it has previously provided a clean
    certificate.

[12]

If
    a condominium corporation becomes aware, after issuing a clean certificate, of
    a circumstance that is required to be disclosed by virtue of s. 76 or the
    regulations, it must when it next issues a certificate include such information
    on it.

[13]

This
    does not change the fact that it will still be bound by its earlier certificate
    vis-à-vis the purchaser at the time or his mortgagee.

[14]

Here,
    where the condominium corporation discovered that the unit layout had been
    switched between the time it issued its 2013 certificate and when it issued its
    2016 certificate  it was obliged to include that information in the
    certificate. To do otherwise would be misleading to a prospective purchaser.

[15]

The
    respondent has a remedy if the condominium corporation negligently issued the
    clean status certificate to him, to his detriment. He can sue the condominium
    corporation for any diminution in the value of his unit by reason of any
    improper disclosure that may have occurred  provided he does so before the
    limitation expires in November of this year. In this sense, he is entitled to
    rely on the Certificate issued to him in 2013 and the condominium corporation
    is bound by it. If there was, in fact, negligence on the part of the condominium
    corporation it would be determined in such action.

[16]

It
    makes no difference that the respondent rather than a prospective purchaser asked
    for the certificate. The purpose for which the respondent asked for the
    certificate was to market his unit for sale. A clean certificate in these
    circumstances would be misleading to a prospective purchaser.

[17]

The
    application judge erred in concluding that the condominium corporation was in
    effect estopped from issuing anything other than a clean certificate in the
    circumstances of this case.

[18]

Whether
    or not there are other proceedings as a result of this and the issue arises
    with respect to whether or not the condominium corporation was negligent, is a
    matter for another day and it is not decided by this court.

[19]

The
    appeal is allowed and the orders of the application judge dated April 26, 2017
    are set aside.

[20]

We
    see no reason why costs should not follow the result as it the usual order.

[21]

Costs
    of the appeal to the appellant fixed in the sum of $17,500 inclusive of
    disbursements and HST.

[22]

The
    application judge fixed the costs below in the sum of $14,125 inclusive of
    disbursements and HST. In view of the result in this court, those costs are
    also awarded to the appellant for a total award to the appellant in the sum of
    $31,625.

Doherty
    J.A.

J.
    MacFarland J.A.

David
    M. Paciocco J.A.


