



COURT OF APPEAL FOR ONTARIO

CITATION:
LMC 477R Corp. v. Metropolitan Toronto Condominium
    Corporation No. 1046, 2021 ONCA 677

DATE: 20211001

DOCKET: C68540

Strathy C.J.O., Pepall and Pardu
    JJ.A.

BETWEEN

LMC 477R Corp.
and Newstead Inc.

Applicants (
Appellant
)

and

Metropolitan Toronto Condominium
    Corporation No. 1046

Respondent (Respondent)

Allan Sternberg and Emily Hives, for
    the appellant LMC 477R Corp.

Mark H. Arnold, for the respondent

Heard: September 13, 2021 by
    videoconference

On appeal from the judgment of Justice Janet
    Leiper of the Superior Court of Justice, dated July 7, 2020, with reasons
    reported at 2020 ONSC 4165.

REASONS FOR DECISION

Introduction

[1]

This appeal involves a dismissal of an application for
    oppression under the
Condominium Act
,
    1998, S.O. 1998, c. 19.

Factual Background

[2]

The appellant, LMC 477R Corp. (LMC), operates a commercial parking
    facility in a condominium building located in the entertainment district on
    Richmond Street West in Toronto. It owns 131 of 136 parking units and 16 of 94 commercial/residential
    units in the building. The respondent, Metropolitan Toronto Condominium
    Corporation No. 1046 (MTCC), is a condominium corporation and manages and
    administers the complex, including the garage.

[3]

The parties entered into a lease for the parking garage in 2000. Monthly
    parking lot users had access to the building all hours of the day, every day,
    while community hourly parking lot users only had access during business hours
    on weekdays.

[4]

In May 2017, after the lease had expired, the appellant proposed a new
    agreement to expand the hours of parking for community customers from business
    hours weekdays to 24 hours a day, seven days a week.

[5]

The parties entered into negotiations.

[6]

On June 6, 2018, the appellant commenced an application under s. 135 of
    the
Condominium Act
,
seeking a declaration that the respondent acted oppressively in interfering
    with the appellants ability to operate the parking facility and in refusing to
    engage in good faith negotiations for a new parking agreement. It also sought
    oppression relief relating to roof and garage repairs, but this relief is not
    in issue on the appeal.

[7]

On July 31, 2018, the respondent sent the appellant a letter containing
    what it described as preconditions to facilitating the appellants commercial
    exploitation of its parking units. The so-called preconditions included payment
    of the respondents legal costs. The appellant did not respond to that letter. In
    November 2018, the appellant unilaterally installed a parking booth in the
    garage while negotiations were ongoing and asked the City of Toronto to ticket
    unitholders parking in the garage. In December 2018, the respondent approved an
    extension to the opening hours of the parking facility, although not to the
    extent requested by the appellant. The respondent cited security concerns
    surrounding 24/7 access to the parking garage. By correspondence dated February
    25, 2019, the respondent expanded its preconditions to include priority for
    residents parking.

[8]

The application came on for hearing on January 31, 2020.

Application Judges Reasons

[9]

The application judge gave detailed reasons for decision.

[10]

In
    first addressing the claim for oppression relating to the roof repairs, the
    application judge identified the components required to anchor a claim for
    oppression under the
Condominium Act
: (i) a breach of the appellants
    reasonable expectations, and (ii) conduct that amounted to oppression, unfair
    prejudice, or unfair disregard of the appellants interests. In addressing
    whether the respondent was oppressive in its conduct of the parking garage
    negotiations, she described the background facts and the parties positions,
    noting the appellants position that the respondent had not acted reasonably
    and had unreasonably delayed negotiations. She also noted the appellants
    argument that granting priority and preferred rates for residents parking amounted
    to unfair enrichment for the other unitholders. She applied this courts
    decision in
3716724 Canada Inc. v. Carleton Condominium Corporation No. 375
,
    2016 ONCA 650, 61 B.L.R. (5th) 173, noting that she was guided by deference to
    the decisions of boards and the law around the business judgment rule.

[11]

She
    concluded that the respondent had not acted oppressively in its negotiations.
    It had engaged counsel, communicated with the appellant, made adjustments to
    the parking hours, consulted with unitholders, proposed mediation and a final
    decision had not been taken. She described the July 31, 2018 letter as putting
    issues on the table. Although the respondent had conducted assertive
    negotiations, there was no evidence of bad faith or oppressive conduct. She
    accordingly dismissed the oppression application.

Analysis of Grounds of Appeal

[12]

The
    appellant raises three grounds of appeal.

(a)

Application of the Test for Oppression

[13]

First,
    the appellant asserts that the application judge applied the wrong legal test
    for the oppression remedy under the
Condominium Act
by focusing on
    whether the respondents conduct was reasonable and whether the business
    judgment rule applied.

[14]

We
    do not accept that the application judge applied the wrong test. As conceded by
    the appellant, she correctly identified the appropriate two-pronged test for
    oppression earlier in her reasons. In that regard, see
Metropolitan Toronto
    Condominium Corporation No. 1272 v. Beach Development

(Phase II)
    Corporation
, 2011 ONCA 667, 285 O.A.C. 372, at para. 6. She headed her
    analysis of the parking garage negotiations: Was MTCC Oppressive in Its
    Conduct of the Parking Garage Negotiations with LMC? indicating that she knew
    to apply the same oppression analysis to the issue of the negotiations.

[15]

We
    are satisfied that the application judge clearly understood and applied the
    correct test. Although it would have been preferable for her to have used the
    term reasonable expectations in her discussion of the parking negotiations,
    she was responding to the terminology used by the parties and to the arguments
    as framed by them. In addition, in relying on the business judgment rule, she correctly
    applied this courts decision in
3716724 Canada Inc.
    v. Carleton Condominium Corporation No. 375
and examined the context
    of the respondents decision-making. As stated by Hoy A.C.J.O (as she then was)
    at para. 53 of that decision:

Therefore, to summarize, the first question
    for a court reviewing a condominium boards decision is whether the directors
    acted honestly and in good faith and exercised the care, diligence and skill
    that a reasonably prudent person would exercise in comparable circumstances. If
    they did, then the boards balancing of the interests of a complainant under s.
    135 of the
Act
against competing concerns should be accorded
    deference. The question in such circumstances is not whether a reviewing court
    would have reached the same decision as the board. Rather, it is whether the
    board reached a decision that was within a range of reasonable choices. If it
    did, then it cannot be said to have unfairly disregarded the interests of a
    complainant.

[16]

In
    this case, the application judge concluded that there was no evidence of bad
    faith or oppressive conduct and that the respondent had acted reasonably. She
    accordingly applied deference to the respondents balancing of the interests of
    the appellant with those of the other unitholders. We see no error.

(b)

Allegation of Palpable and Overriding Errors

[17]

Second,
    the appellant challenges the application judges conclusion that the
    respondents conduct did not amount to oppression, unfair prejudice or unfair
    disregard. In this regard, the appellant argues that the application judge
    erred by finding that the negotiations between the parties were ongoing, as the
    negotiations had ceased in the fall of 2017. In addition, the appellant
    complains that the application judge failed to consider relevant evidence and make
    essential findings of fact relating to the establishment of the preconditions
    to negotiations, the respondents inconsistent conduct of locking the garage
    doors when the building itself was unlocked, and of maintaining a higher
    security standard for the appellant than for other unit holders who offered
    their premises for rental to Airbnb.

[18]

The
    application judge found that at the time of the hearing before her, the parties
    had not yet arrived at a final decision, and the respondents July 31, 2018
    letter was still on the table. At para. 90 of her reasons, the application
    judge stated:

LMC seeks a finding of oppression for conduct
    by MTCC in the middle of ongoing negotiations. I conclude that restraint should
    be shown in such circumstances. A final decision has not been taken. The offers
    of mediation are reasonable. Counsels letter of July 31, 2018 put issues on
    the table. There have been assertive negotiations conducted by MTCC, but no
    evidence of bad faith or oppressive conduct. The fact that LMC does not like
    the positions taken by MTCC does not render the conduct oppressive.

[19]

There
    was evidence before the application judge that the appellant had never
    responded to the July 31, 2018 letter. Moreover, the parties continued to have
    discussions and to exchange communications well after the July 31, 2018 letter.
    This included correspondence from the respondent in which it suggested
    mediation to resolve the parties dispute. In addition, in its affidavit filed
    in the proceeding, the respondent noted that it remained willing and able to
    talk with the appellant about its parking proposal. The evidence supported the
    application judges finding that a final decision had not been taken. There was
    no palpable and overriding error.

[20]

We
    do acknowledge that some of the pre-conditions appear to be overreaching. One
    would not expect that, prior to negotiations, the appellant would be obliged to
    provide the respondent with a blank cheque for legal fees or that it would be
    required to provide the unitholders with a proprietary interest in parking
    facilities that they did not otherwise have as a condition precedent to
    negotiations. However, as counsel for the respondent candidly conceded, the
    preconditions represented the respondents position, and all were open to
    negotiation.

[21]

As
    for the appellants submissions that the application judge failed to make
    certain factual findings, she was not obliged to address every argument raised:
Welton v. United Lands Corporation Limited
, 2020 ONCA 322, 64 C.C.E.L.
    (4th) 265, at para. 60;
Manastersky v. Royal Bank of Canada
, 2019 ONCA
    609, 146 O.R. (3d) 647, at para. 125;
R. v. R.E.M.
, 2008 SCC 51, [2008]
    3 S.C.R. 3, at para. 18. Most fundamentally, she considered the competing
    interests of the parties, recognized that the negotiations were ongoing, and
    found that as of the date of the hearing, the appellant had not established
    oppression under the Act. We would not give effect to this ground of appeal.

(c)

Insufficiency of Reasons

[22]

Third,
    the appellant submits that the application judges reasons were insufficient
    and appellate intervention is therefore justified.

[23]

We
    disagree. The application judge gave detailed reasons for decision. She
    identified the key issues, made the necessary findings of fact, and set out her
    chain of reasoning:
Welton v. United Lands Corporation Limited
, at
    paras. 57-58. Read as a whole, it is clear how and why the application judge
    decided as she did. We see no basis on which to interfere.

Conclusion

[24]

For
    these reasons, the appeal is dismissed. We agree with the application judge that
    the proposal to attend mediation is a reasonable one and the parties should
    seriously consider that alternative. Even though the respondent has been
    successful on the appeal, there was obvious confusion relating to its position
    as it related to the preconditions. In the circumstances, there will be no
    order of costs of the appeal.

G.R. Strathy
    C.J.O.

S.E. Pepall
    J.A.

G. Pardu J.A.


