Cheung v. York Region Condominium Corporation No. 759

September 2017

Cheung v. York Region Condominium Corporation No. 759

 Overview

Cheung v. York Region Condo Corp No.759 discusses the balancing act Board’s must take in protecting the interests of unit owners as a whole and the reasonable expectations of individual owners when it comes to governing the property and assets of the Corporation. This decision supports the proposition that reasonableness must govern not just the actions and decisions of Boards, but also those of individual unit owners. Unreasonableness and uncivil conduct on the part of unit owner in the litigation process will have consequences. 

Facts

This case revolves around a dispute over common element parking spaces in a commercial condominium complex. The Appellant, Yuk—Ying Cheung, is the owner of three of the condominium’s thirty-four units which she leases to a popular restaurant which seats two hundred and thirty guests. There are one hundred and sixty-two common element parking spaces to be shared by all unit owners. The restaurant was particularly busy, especially between the hours of 9:00am to 3:00pm, and after 5:00pm. For the past twenty years the owners and patrons of the various units had used the spaces on a first-come, first-use basis. This changed when the Appellant leased her units to the restaurant. The shared parking spaces quickly became monopolized by the restaurant employees and diners, to the detriment of the other owners and their customers. 

The parking situation was described as “very toxic” and resulted in conflicts between diners, customers, and unit owners. In an attempt to resolve the situation, the Board passed a by-law that would allow the Board to grant leases of four parking spaces to each unit owner in the common element parking area. 

Ms. Cheung challenged the by-law on the basis that she wished to use “all” of the shared spaces, despite that other unit owners wished to use the parking as well. Ms. Cheung claimed the by-law was (a) beyond the powers of the Board under the Act and the declaration, (b) it was void for uncertainty, and (c) it was unreasonable and that the Board’s conduct was oppressive and unfairly prejudicial to her interests. 

At trial the judge found that the Board’s actions cannot be considered unreasonable. The Board is tasked with the duty to balance the private and communal interests of unit owners against the objective reasonable expectations of individual owners and the safety, security and welfare of all owners and the Corporation’s property and assets; that is what they did. The Court of Appeal agreed. 

The Court of Appeal agreed that the by-law did not have the degree of permanence required to turn the parking spaces into exclusive use common elements and therefore beyond the Board’s powers; the intention to allocate the spaces is not uncertain; and the Board’s actions are not unreasonable or oppressive. 

As to costs, the Court takes into account the conduct of the parties. Although both sides pointed their finger at the other for being unreasonable and dishonest, the trial judge found, and the Court of Appeal agreed, the conduct of the Appellant was particularly uncivil. In the “race to the bottom” the Appellant got there first. As a result of the Appellant’s conduct and unreasonableness, the trial judge found that the Respondents should get some discount on the grounds that their conduct, although not pure, was not as bad; the Court of Appeal stated that the trial judge was in the best position to assess this and dismissed the appeal on costs. 

Bottom Line:

The Condominium Act is intended to protect the legitimate expectations of unit owners, not individual wish lists. Not only must Boards be reasonable in balancing the interests of unit owners as a whole and individually, but unit owners’ expectations must also be reasonable. Condo litigation is not meant to be a race to the bottom, or a winner-takes-all, scorched-earth affair. If a litigant is unreasonable or uncivil the Courts will take notice and can apportion costs accordingly. There are cost consequences for inappropriate and unreasonable conduct – all involved need to be aware of reasonable and legitimate expectations and cool the temperature of litigation accordingly.

Written by Christopher Mendes, edited by Robert Mullin and Erica Gerstheimer.