



COURT
    OF APPEAL FOR ONTARIO

CITATION:
Metropolitan
    Toronto Condominium Corporation No. 590 v. The Registered Owners and Mortgagees
    of Metropolitan Toronto Condominium Corporation No. 590, 2020 ONCA 471

DATE:

20200721

DOCKET: C67385

Juriansz, Fairburn and
    Nordheimer JJ.A.

BETWEEN

Metropolitan
    Toronto Condominium Corporation No. 590

Applicant (Appellant)

and

The
    Registered Owners and Mortgagees of Metropolitan Toronto Condominium
    Corporation No. 590

Respondents (Respondents)

Eli S. Lederman and Kelly Hayden, for
    the appellant

Mark H. Arnold, for the respondents

Heard: July 2, 2020 by video
    conference

On appeal from the judgment of Justice Andrew
    A. Sanfilippo of the Superior Court of Justice dated July 25, 2019, with
    reasons reported at 2019 ONSC 4484, 8 R.P.R. (6th) 299.

Nordheimer J.A.:




A.

Overview

[1]

Metropolitan Toronto Condominium Corporation No.
    590 appeals, in part, from the judgment of the application judge dated July 25,
    2019. In that judgment, the application judge granted the appellants application
    to amend its declaration (the "Declaration"), to specify that the
    dedicated chimney flues, which exclusively service 22 residential units in the
    condominium, are exclusive use common elements. He dismissed the balance of the
    appellants application. The appeal is from the application judges refusal to
    grant an order amending ss. 22 and 23 of the Declaration under s. 109(3) of the
Condominium Act
, 1998
, S.O. 1998, c. 19 (the 
Condominium Act
).
For the following reasons, I
    would allow the appeal, set aside paragraph two of the order below, and substitute
    an order granting an amendment to the Declaration.

B.

Background

[2]

This appeal arises out of a long-standing
    dispute among the unit owners in this condominium as to who should bear the
    costs of replacing the chimney flues that have passed the end of their useful
    life. There is no dispute that the chimney flues are currently unusable.

[3]

The appellant is the corporate entity
    responsible for operating the common elements of a high-rise condominium
    building located at 30 Wellington Street East in the City of Toronto, which was
    created on November 26, 1982 upon the Declarations registration. The building,
    which was constructed in the early 1980s, has 20 floors with 120 residential
    units.

[4]

Of the 120 residential units in the building, 23
    contain wood-burning fireplaces. The fireplaces were built at the time the building
    was constructed. Each of the units that have fireplaces are located on the top
    four floors of the building. Each fireplace is serviced by an individual flue
    and chimney which is dedicated to that fireplace. The chimney flues begin at
    the fireplace and extend through the building to the roof, where they are
    grouped in six clusters laterally supported by steel bracing and cabling.

[5]

In 2013, the appellants Board of Directors hired
    specialists to investigate the state of the fireplaces. The specialists
    determined that the chimney flues had deteriorated to the point that they were
    no longer serviceable, and needed to be replaced or removed from service. In
    order to mitigate the safety concerns, the Board advised the unit owners that
    the fireplaces should not be used, and arranged for the fireplace dampers to be
    sealed and tagged as unsafe for use.

[6]

Over the next few years, further investigations
    were undertaken to determine what could be done with respect to the chimney
    flues. It was estimated, in 2016, that it would cost approximately $1.5 million
    to remove and replace the chimney flues. It was also estimated that it would
    cost approximately $13,000 to cap and decommission all of the chimney flues.

[7]

The unit owners that have fireplaces want the
    appellant to bear the cost of removing and replacing the chimney flues. The
    appellant does not wish to incur that expense. It argues that the individual
    owners of units with fireplaces should bear the cost of removing and replacing
    the chimney flues or, alternatively, the costs of capping and decommissioning
    the chimney flues.

[8]

The appellant brought an application in which it
    sought, under s. 109(3) of the
Condominium Act
, to amend the
    Declaration in two main respects. First, it sought to amend the Declaration to
    add Schedule F that would specify that the chimney flue servicing each
    individual unit fireplace was an exclusive use common element. Second, it
    sought to amend ss. 22 and 23 of the Declaration to make it clear that the
    owners of units with fireplaces, and not the appellant, were responsible for
    the maintenance and repair of all exclusive use common elements.

[9]

In response, the respondents brought a separate
    application in which they sought, among other things, an order requiring the
    appellant to repair or replace, at its cost, the chimney flues. The hearing of
    the respondents application was ordered to await the determination of the
    appellants application. It remains outstanding.

C.

THE DECISION BELOW

[10]

The application judge granted the first remedy
    sought by the appellant but denied the second. The application judge determined
    that it was clear, from reading the Declaration as a whole, that there was an
    intention to distinguish between common elements enjoyed by all unit owners and
    those common elements that were enjoyed by only specific unit owners. He said,
    at para. 80:

I find that these nine references in the
    Declaration and By-Laws to exclusive use common elements show a recognition
    that certain of the common elements would be used permanently and exclusively
    by some unit owners but not all, and an intention that the Declaration would
    distinguish between the rights and duties attaching to all common elements as
    distinct from the rights and duties attaching to exclusive use common elements.
    I conclude, then, that the failure on the part of [
sic
] Declaration to
    specify any parts of the common elements that are used by the owners of one or
    more designated units and not by all the owners, as required by section
    3(1)(f) of the
1980 Condominium Act
, if there are such elements within
    the Building, would be an error or inconsistency in the Declaration.

[11]

The application judge refused to grant the
    relief respecting amendments to ss. 22 and 23 of the Declaration. On this
    issue, he found that there was no error or inconsistency in those sections that
    would give jurisdiction under the
Condominium Act
to amend the
    Declaration. Rather, the application judge concluded that these sections
    created a mutual obligation to maintain the exclusive use common elements as
    between the appellant and the unit owners. He rejected the appellants argument
    that a mutual obligation to maintain was inconsistent and contradictory. He
    said, in part, at para. 119:

When section 22(a) and section 23(a) are read
    together, they impose on the unit owner a duty to maintain the common elements
    of which the owner has exclusive use and a corresponding duty on the
    condominium corporation to maintain and repair after damage these common
    elements. There is no ambiguity. I acknowledge that this creates a mutual
    obligation to maintain, shared on the part of both the unit owner and the
    condominium corporation but do not see how this constitutes an "error or
    inconsistency". No case authority was provided that supports MTCC 590's
    submission that it is.

[12]

No appeal is taken from the first conclusion. It
    is the second conclusion that is in issue on this appeal.

D.

Analysis

(1)

Standard of review

[13]

The respondents contend that the application
    judges decision is a fact-based decision that should attract a high degree of
    deference. I disagree. The issue whether there is an error or inconsistency
    between the two sections of the Declaration, thus invoking the courts
    authority under s. 109(3) of the
Condominium Act
, is a question of
    law. Section 109(3) reads:

The court may make an order to amend the
    declaration or description if satisfied that the amendment is necessary or
    desirable to correct an error or inconsistency that appears in the declaration
    or description or that arises out of the carrying out of the intent and purpose
    of the declaration or description.

[14]

This is not a factually driven issue. To the
    contrary, the issue turns on the words used in these two sections of the
    Declaration, the proper interpretation of those words, and whether that proper
    interpretation demonstrates an error or inconsistency. These are questions of
    law. Questions of law attract a standard of review of correctness:
Housen
    v. Nikolaisen
, 2002 SCC 33, [2002] 2 S.C.R. 235, at para. 8.

[15]

In reaching that conclusion, I am aware of the
    caution expressed in
Sattva Capital Corp. v. Creston Moly Corp.
, 2014
    SCC 53, [2014] 2 S.C.R. 633, at para. 54, against courts too readily finding
    extricable questions of law when engaged in contractual interpretation. Here, though,
    while a declaration under the
Condominium Act
could be characterized
    as a contract, is not the type of private contract negotiated between two
    parties, to which the comments in
Sattva
were directed. A declaration
    is a special form of contract, the structure of which is prescribed by statute.
    It must adhere to certain statutory requirements. Indeed, the
Condominium
    Act
provides, in s. 7(5), that, if there is any conflict between the
    statute and the declaration, the statute prevails.

(2)

There is an inconsistency in the Declaration

[16]

In my view, the application judge erred in his
    conclusion that there was no inconsistency between the two sections of the
    Declaration. Indeed, the application judges conclusion that the sections
    create a mutual obligation to maintain exclusive use common elements demonstrates
    that inconsistency. I begin by setting out the relevant parts of the two
    sections:

Section 22 - Maintenance and Repairs to Units

(a) Each owner shall maintain and repair his
    unit, including the maintenance and repair of the air conditioning and heating
    units from the shut off valve, and all ducts and services within the unit as
    well as maintaining any part of the common elements which he has exclusive use
    of, at his own expense.

Section 23 - Maintenance and Repairs to Common
    Elements

(a) The Corporation shall maintain and repair
    the common elements after damage. This duty to maintain and repair shall extend
    to all doors which provide access to the units, all windows (except maintenance
    to the interior surface thereof, the responsibility for which shall be left to
    the affected unit owner), and all exclusive use portions of the common elements.

[17]

Section 22 requires unit owners to maintain and
    repair their units including the air conditioning and heating units within
    their units, but only to maintain any part of the common elements which they
    have exclusive use of, at their own expense. Section 22 says nothing about
    repair with respect to those exclusive use common elements.

[18]

Section 23 requires the appellant to maintain
    and repair the common elements after damage. It then goes on to provide that
    this duty extends to all exclusive use portions of the common elements. This
    provision would, at first blush, appear to overlap with the requirements of s.
    22. However, the use of the words after damage suggest that the duty under s.
    23 is only triggered by the occurrence of an event that then leads to the need
    to repair. It does not appear to contemplate repairing common elements that
    have simply worn out or are otherwise inoperative simply through the passage of
    time. If that is so, and one looks only at the two sections, a gap then
    appears, because neither section addresses the duty to repair (as opposed to
    maintain) the exclusive use common elements in the normal course.

[19]

Two provisions of the
Condominium Act

reinforce my view of the two sections of the Declaration. Section 89(1)
    requires the corporation to repair the units and common elements after damage.
    Section 89(2) reads, in part:

The obligation to repair after damage includes
    the obligation to repair and replace after damage or failure

Section 90(1) says that the
    corporation shall maintain the common elements and each owner shall maintain
    the owners unit. It does not specifically address exclusive use common
    elements. Section 90(2) goes on to read:

The obligation to maintain includes the
    obligation to repair after normal wear and tear but does not include the
    obligation to repair after damage.

[20]

These sections create two separate repair obligations.
    Under s. 90(1), the corporation maintains common elements and the unit owner maintains
    their individual unit. In doing so, s. 90(2) defines the general duty to
    maintain, which includes the duty to repair after normal wear and tear.

[21]

Separate and apart from this general duty to
    maintain is the duty to repair after damage, which is necessary in situations where
    there is an unanticipated event that causes damage, for example, a severe storm.
    In that situation, s. 89 requires that the corporation repair the resulting
    damage, both to the common elements and to the units. A separate duty to repair
    after damage makes sense, since it will likely involve work that needs to be
    undertaken on an urgent basis. For the benefit of all unit owners, there should
    be no delay in undertaking the needed repair work.

[22]

One further aspect of the
Condominium Act
needs to be considered. The
Condominium

Act
allows for
    the Declaration to alter the obligations to maintain and to repair after damage
    and, in this regard, specific mention is made of exclusive use common elements.
    Section 91 states:

The declaration may alter the obligation to maintain
    or to repair after damage as set out in this Act by providing that,

(a)  subject to section 123, each owner shall
    repair the owners unit after damage;

(b)  the owners shall maintain the common
    elements or any part of them;

(c)  each owner shall maintain and repair
    after damage those parts of the common elements of which the owner has the
    exclusive use; and

(d)  the corporation shall maintain the units
    or any part of them.

[23]

The wording of s. 91 suggests that the
    legislature anticipated that a condominium might choose, in its declaration, to
    deal differently with the obligation to maintain and repair when it comes to common
    elements generally, or exclusive use common elements in particular, and, in the
    case of the latter, to impose that obligation on the unit owners who have that
    exclusive use.

[24]

In this case, there was no independent event
    that caused damage to the chimney flues. The chimney flues became inoperable as
    a result of the passage of time, in other words, through normal wear and tear
    as that term is used in s. 90.

[25]

On its face, s. 23 requires the appellant to
    maintain and repair the common elements after damage. Section 22 requires the
    unit owners to maintain the exclusive use common elements but it does not expressly
    require them to repair those elements, unless one reads the obligation to
    repair into the obligation to maintain. I accept that one could use s. 90(2) of
    the
Condominium

Act
to accomplish that reading-in. The
    resulting interpretation of s. 22 would be that the unit owners duty to
    maintain any part of the common elements which he has exclusive use of, at his
    own expense includes the duty to repair the chimney flues after normal wear
    and tear. However, such a reading-in does not result in the section, on its
    face, clearly delineating what the unit owners obligation is.

[26]

I return to the application judges conclusion that
    sections imposed a mutual obligation to maintain and repair the exclusive use
    common elements. That conclusion is not consistent with the language of the two
    sections, for the reasons that I have already pointed out. It is also an unsatisfactory
    result. Finding that there is a mutual obligation immediately raises the
    question as to which of the two parties has the positive duty to fulfill the
    obligation. Each side can point to the other as being the one that needs to
    take the first step. It also does not allow for either party to know what their
    respective financial responsibilities are, and to plan accordingly. There is
    also the practical reality that it may not be possible for the necessary work
    to be divided between the parties, or to permit different contractors to
    undertake different parts of it. The bottom line is that it is an unworkable
    result. It is also inconsistent with the clear demarcation made in the
Condominium

Act
,
as between condominium corporations and unit owners, when it
    comes to maintenance and repair responsibilities.

[27]

Whether confusion about maintenance and repair
    would constitute an inconsistency was addressed in one of the authorities that
    was provided to the application judge. In
Carleton Condominium Corp. No. 26
    v. Nicholson
, [2009] O.J. No. 1831, 2009 CarswellOnt 2640 (S.C.J.), affd 2010
    ONCA 80, Power J. concluded that apparent conflict or confusion regarding the
    obligations to maintain and repair as between the condominium corporation and
    the unit owners was an error or inconsistency as those terms are used in the
Condominium

Act
.

[28]

The purpose of the Declaration is to clearly delineate
    the responsibilities of the condominium corporation, on the one hand, and the
    unit owners, on the other. Here that purpose is not achieved. Sections 22 and
    23 are inconsistent, or at the very least unclear, in the obligations that they
    impose.

(3)

The appropriate amendments to the Declaration

[29]

The appellant suggested extensive amendments to
    both sections to correct the problem. Alternatively, the appellant suggested a narrower
    amendment to s. 23. In my view, the extensive amendments suggested are
    overbroad. They go beyond that which is necessary to fix the inconsistency. At
    the same time, I find that the narrower amendment does not address the problem
    as I see it. The narrower amendment was to add the words the duty to repair
    after damage into s. 23. However, that solution does not address the gap that
    I referred to above. It only makes clear what the appellants duty is regarding
    the maintenance and repair of exclusive use common elements after damage,
    something that I view as already being clear in s. 23. The narrower amendment
    does not deal with where the normal wear and tear obligation rests.

[30]

In the end result, the intention was clearly to
    place on the unit owners the duty to maintain and repair their unit, and to
    maintain and repair any part of the common elements over which they have
    exclusive use, after normal wear and tear or the effluxion of time, and to do
    so at their own expense. In reaching that conclusion, I stress the use of the words
    any part of the exclusive use common elements that are used in s. 22. Those
    words would clearly embrace the entirety of the chimney flues.

[31]

It is equally clear that the appellant was to
    bear the responsibility of maintaining and repairing all of the common elements,
    save and except for the common elements over which a unit owner had exclusive
    use. With respect to those, the appellants obligation was restricted to
    maintain and repair after damage only.

[32]

One way to achieve what was intended would be to
    amend s. 22 to read:

Each owner shall maintain and repair his unit,
    including the maintenance and repair of the air conditioning and heating units
    from the shut off valve, and all ducts and services within the unit as well as
    maintaining
and repairing
any part of the common elements which he has
    exclusive use of, at his own expense.
For greater certainty, this duty to
    maintain and repair includes the obligation to repair after normal wear and
    tear
.

[33]

This wording is different than what the
    appellant proposed. The respondents have not had an opportunity to make any
    submissions as to its efficacy. Consequently, I would allow the parties the
    opportunity to consider this, or any other wording, to address the problem. If
    the parties can agree on the wording, they can so advise the court, and it can
    be included in the courts order. If the parties cannot agree, then they can arrange
    for a case conference with me for the purpose of discussing what next steps
    ought to be taken.

[34]

Before concluding, I will address one other
    contention advanced by the respondents, which was that this issue ought to be
    determined with reference to the
Condominium

Act
,
R.S.O. 1980, c. 84 (the 
1980

Act
). That was the
    statute in effect in 1982 when the condominium was created. In advancing their
    argument on this point, the respondents also reference certain amendments that
    have been made to the
Condominium

Act
but which have
    not, as yet, been proclaimed into force.

[35]

In my view, for the purpose of determining the
    issue raised, nothing turns on whether one applies the
1980 Act or the Condominium
    Act
. The issue here turns on the wording of the Declaration: on which
    party does it place the duty to replace the chimney flues? I note, in that
    regard, that both the
1980 Act
and the
Condominium

Act

contain a provision that permits the declaration to alter the obligation to
    maintain or to repair exclusive use common elements after damage that is set
    out in the statute. I have set out s. 91(c) of the
Condominium

Act
above. The
1980

Act
contains essentially the same
    language in s. 41(5)(d).

[36]

Therefore, regardless of which statute is
    applied, the issue returns to the wording of the Declaration for resolution. I
    will conclude on this point by saying that I am not prepared to rely on
    amendments that have not been proclaimed into force to assist in resolving this
    issue nor did I understand the respondents to be suggesting this.

E.

Conclusion

[37]

The appeal is allowed, the order below is set
    aside, and in its place, an order is granted amending the Declaration in a manner
    to be agreed upon by the parties, consistent with these reasons, or further
    order of this court.

[38]

The appellant is entitled to its costs of the
    appeal fixed in the agreed amount of $15
,000
inclusive of disbursements and HST.

Released: JUL 21, 2020 RGJ

I.V.B.
    Nordheimer J.A.

I
    agree. R.G. Juriansz J.A.

I
    agree. Fairburn J.A.


