



COURT OF APPEAL FOR
    ONTARIO

CITATION:
Dewan v. Burdet,
    2018 ONCA 195

DATE: 20180228

DOCKET: C62853

Hourigan, Roberts and
    Fairburn JJ.A.

BETWEEN

Patrick Dewan, Domicile Developments Inc., 1436984 Ontario
    Ltd.,

Amira Gabriel, 1496055 Ontario Inc., 117490 Canada
    Ltd.,

the Estate of Sheila Eberts, 2201894 Ontario Inc.,

BBG Equity
    Management Corporation and Powell Grifiths

Plaintiffs and Defendants by Counterclaim/

Respondents in appeal/Appellants in cross-appeal

and

Claude-Alain Burdet, in Trust, Claude-Alain Burdet,

Enterprises Ted Rubac Inc. and 1443957 Ontario Inc.

Defendants and Plaintiffs by Counterclaim/

Appellants

and

Carleton
    Condominium Corporation No. 396

Defendant/

Respondent in cross-appeal

Claude-Alain Burdet, for the
    appellants

Kenneth Radnoff, Q.C. and
    Jonathan Collings, for the respondents

Gary Boyd, for the defendant/respondent,
    Carleton Condominium Corporation No. 396

Heard: February 15,
    2018

On appeal from the judgment of
    Justice Paul B. Kane of the Superior Court of Justice, dated August 8, 2016,
    with reasons reported at 2016 ONSC 4917, and from the cost order, dated February
    2, 2017.

REASONS FOR DECISION

[1]

This case is one of a
    series of legal proceedings regarding the management of Carleton Condominium
    Corporation No. 396 (CCC396).

A.

background

[2]

Following a 35-day
    trial, the trial judge released reasons for decision that were in excess of 200
    pages. After exhaustively reviewing the complex factual background and
    considering the parties legal arguments, he ordered, among other things, the
    following relief:

(a) An order that the
    respondents/appellants in the cross-appeal (the minority owners) owe CCC396
    common expense arrears plus interest in the amounts specified in the reasons,
    which amounts shall be paid forthwith;

(b) A declaration that the
    appellant/respondent by cross-appeal, Claude-Alain Burdet, oppressed the
    minority owners;

(c) An order that CCC396 is
    terminated as a condominium corporation pursuant to s. 128 of the
Condominium
    Act, 1998
, S.O. 1998, c. 19, or, alternatively, pursuant to s. 135 of that Act;

(d) An order that Mr. Burdets claim
    for services rendered to CCC396 in 2001 is granted in the amount of $20,000,
    plus interest;

(e) An order granting the claims of
    the appellant/respondent by cross-appeal, Enterprises Ted Rubac Inc. (ETRE),
    against CCC396 for amounts owing under certain promissory notes in the total
    amount of $50,000, plus interest, and dismissing ETREs claims under other
    promissory notes; and

(f) An order dismissing all other claims in the counterclaim.

[3]

Mr. Burdet,
    Claude-Alain Burdet in Trust, and ETRE (collectively the appellants) raise a
    number of grounds of appeal, which will be considered below. The minority
    owners cross-appeal the trial judges order regarding the timing of the payment
    of their arrears. All parties, save CCC396, seek leave to appeal the cost order.
    For the reasons that follow, we dismiss the appeal, grant the minority owners
    leave to appeal the cost order, allow their cross-appeal with respect to costs,
    and dismiss the balance of the cross-appeal.

B.

Analysis

(i)

Appeal

[4]

The appellants submit
    that the trial judge erred in declaring that Mr. Burdet acted in a manner that
    was oppressive to the minority owners interests. There is no merit in this
    submission. The evidence of oppressive conduct on the part of Mr. Burdet is
    detailed, effectively unchallenged, and overwhelmingly compelling. It includes
    a long history of self-dealing, lack of financial disclosure, charging CCC396
    legal fees for personal matters, failing to declare conflicts, refusing to
    produce records despite being court-ordered to do so, and implementing an
    invalid by-law.

[5]

As noted above, the
    trial judge declared that Mr. Burdet oppressed the minority owners. He also
    found Mr. Burdet personally liable, along with ETRE and Claude-Alain Burdet in
    Trust, for the minority owners costs. Mr. Burdet submits that the trial judge
    erred in finding him personally liable. We disagree.

[6]

The very recent
    decision of the Supreme Court of Canada in
Wilson v. Alharayeri
, 2017 SCC 39, [2017] 1 S.C.R. 1037 is
    instructive. There the court found that
determining
    a directors personal liability under an oppression remedy requires a two‑pronged
    approach. First, the oppressive conduct must be properly attributable to the
    director because of his or her implication in the oppression. Second, imposing
    personal liability must be fit in all the circumstances see paras. 47-57.

[7]

We recognize that
Wilson
was decided under the
Canada Business
    Corporations Act
, R.S.C. 1985, c. C-44 (
CBCA
).
    However, the holding in
Wilson
is apt
    in the
Condominium Act
context. Like
    the oppression remedy provision in s. 241(3) of the
CBCA
,

s. 135(3) of the
Condominium Act
grants a judge broad discretion in crafting an appropriate
    remedy.
That subsection permits a judge to make any order the judge
    deems proper and lists two non-exhaustive examples. In
Wilson
, the
    Supreme Court noted that one of the remedial examples listed in s. 241(3) of
    the
CBCA
contemplated an order compensating an aggrieved person
    without specifying against whom such an order may lie: see para. 29. Similarly,
    s. 135(3)(b) of the
Condominium Act

contemplates an order
    requiring the payment of compensation without further specification. As the
Condominium
    Act

itself does not indicate when it would be proper to hold a
    director personally liable for oppression, guidance can be sought from
Wilson
.

[8]

Where, as here, it is clear that a
    director is the motivating force behind the oppressive conduct, he or she
    should be held personally liable. To hold otherwise in the present case would
    result in the oppressed minority owners being denied their costs or making
    CCC396 liable for those costs. The latter result would be particularly inequitable,
    as it would perpetuate Mr. Burdets practice of having CCC396 pay the legal
    costs associated with defending his oppressive conduct.

[9]

The appellants submit
    that the trial judge erred in terminating CCC396. We disagree. The trial judge
    was well aware that a termination order was a remedy of last resort. However,
    there was an ample record to support that order in this case. Indeed, it is
    difficult to imagine a more dysfunctional condominium corporation. It is clear
    from the evidence, including from the independent court-appointed property manager,
    that the corporation could not continue. In these circumstances, termination
    was the most just and equitable order. It was consistent with the scheme and
    intent of the
Condominium Act
, was in the best interests of all owners, and protected against
    unfairness to the minority owners.

[10]

The appellants submit
    that the oppression claims and other related relief are statute-barred. This
    submission is based on the argument that these claims were raised for the first
    time in the statement of claim. That is incorrect. The impugned claims were
    asserted in an application in 2001 and were not statute-barred at that time.
    The application was later converted by court order to an action. The claims
    asserted in the statement of claim are essentially the same as those made in
    the application. We therefore conclude that they are not statute-barred.

[11]

We see no error in the
    trial judges conclusion that the appellants did not satisfy their onus of
    establishing that the minority owners acted in an oppressive manner, either by
    reason of their non-payment of arrears or their conduct in this litigation.

[12]

The trial judges
    decision to dismiss the balance of the counterclaim was well-grounded in the
    evidence and free of legal error. We note that Mr. Burdet elected not to
    testify in support of the claims made in the counterclaim.

(ii)

Cross-Appeal: Payment of Arrears

[13]

With respect to the
    cross-appeal, the minority owners acknowledged the existence and quantum of the
    common expense arrears owing to CCC396. However, they submit that the trial
    judge erred in ordering that the arrears be paid forthwith and not after Mr.
    Burdet has paid his arrears.

[14]

The trial judge had
    discretion to determine when the arrears should be paid. We see no basis for
    appellate interference with the exercise of that discretion. CCC396 is in dire
    need of funds and there is no reason why it should be forced to wait to collect
    the arrears that the minority owners admit to be owing.

(iii)

Costs

[15]

We see no error in
    principle in the cost order made against the appellants. Accordingly, we
    decline to grant leave to appeal the cost order made against those parties.

[16]

We grant the minority
    owners leave to appeal the cost order made against them because we are of the
    view that the trial judge erred in principle in making that order.

[17]

Pursuant to s. 85 of
    the
Condominium Act
,
    where an owner defaults on an obligation to contribute to the common expenses
    payable, a condominium corporation has a lien, a
gainst the owners unit and its appurtenant
    common interest for the unpaid amount together with all interest owing and all
    reasonable legal costs and reasonable expenses incurred by the corporation in
    connection with the collection or attempted collection of the unpaid amount.

[18]

At
    trial, the minority owners conceded that they owed arrears and agreed to pay
    same. Consequently, very little trial time was dedicated to the issue of collecting
    the arrears. In his cost endorsement, the trial judge recognized that the
    lengthy trial largely related to other issues, not the determination of this
    common expense arrears award against the Plaintiffs.

[19]

We
    are of the view that the trial judge erred in principle in awarding costs that
    were disproportionate to the cost of collecting the common expense arrears. He
    should not have ordered the minority owners to pay legal costs unrelated to the
    collection of arrears. We therefore set aside the cost award made against the
    minority owners. In its place, we order that the minority owners are liable for
    20 percent of CCC396s costs below. We further order that
the appellants, as the unsuccessful
    parties at trial,
are jointly and severally liable for 80 percent of CCC396s costs below.
    We fix CCC396s all-inclusive costs of the proceedings below at $220,000.

C.

Disposition

[20]

For the foregoing
    reasons, we dismiss the appeal, grant the minority owners leave to appeal the cost
    order, allow their cross-appeal with respect to costs, and dismiss the balance
    of the cross-appeal.

[21]

The appellants are
    jointly and severally liable for the minority owners costs of the appeal and
    cross-appeal, which we fix in the all-inclusive amount of $25,000. CCC396s
    costs of the appeal and cross-appeal, in the all-inclusive amount of $15,000,
    shall be borne 50 percent by the appellants jointly and severally, and 50
    percent by the minority owners.

C.W. Hourigan J.A.

L.B. Roberts J.A.

Fairburn J.A.


