*Since the writing of this blog the decision has been overturned.
The Ontario Court of Appeal overturned its longstanding decision from 1983, Corp. No. 46 v. Medhurst, Hogg & Associates Ltd. et al., which held that an action is rendered a nullity if a condominium corporation fails to comply with the notice provision in section 23(2) of the Condominium Act. In other words, an action commenced by a condominium corporation on behalf of its owners is not rendered a nullity if the corporation fails to send a written notice to its owners as required by section 23(2) of the Condominium Act.
This decision has two significant implications:
- Condominium corporation owners will no longer be prejudiced, inconvenienced or experience injustice based on a procedural defect with section 23(2) which was in fact legislated with the intent to protect the owners.
- The modern principles of statutory interpretation continue to be implemented by the high courts along with the important principles of justice, fairness and convenience.
Action is rendered null for failing to comply with notice requirement
Section 23(2) of the Condominium Act allows the condominium corporation to commence a claim on behalf of an owner as long as it serves a written notice to the owners before to commencing an action outlining the general nature of the action.
In this case the condominium corporation did not serve a notice prior to issuing the claim. The defendant property management company brought Summary Judgment motion arguing that the action is a nullity due to the corporation’s failure to comply with the notice provision. The motion Judge, Justice Faieta, held that the notice provisions were inapplicable, and dismissed the motion.
Summary Judgment Upheld on Appeal – Overturned Longstanding ONCA Decision
The decision of Justice Faieta was upheld on appeal, however for different and significant reasons.
The ONCA held that modern principles of statutory interpretation must be applied to section 23(2) and the Condominium Act generally. The court found that there is nothing in the text of the Act that suggests that breach of the notice requirement carried the consequence of nullity.
The court further held that third parties should not be able to escape liability because the condominium corporation failed to properly notify its owners; that it is overly harsh, section 23(2) of the act is meant to regulate the relationship between the corporation and its owners, not the corporation and third parties. The ONCA also held that it is perverse to allow third parties to use the provision to prejudice the owners when the provision in fact meant to protect the owners. Allowing such a provision to be used against the owners results in a significant injustice and inconvenience to the owners.
Evan Argentino is author of this blog, and a member of the ZTGH property group. He also assisted on this file. If you have a question about this decision or a similar file, please contact Evan at 416-777-5208