Part 23 published on 01/09/08
Dispute relating to a proposed mezzanine
This is a commercial condominium. Maverick owns 1 of the 132 units in the condominium. A number of the owners had constructed mezzanine floors within their units, and Maverick wanted to do the same.
The by-laws of the condominium corporation required the Board’s consent for certain changes (including the installation of a mezzanine floor). The condominium corporation had also adopted rules which included various terms for the approval of renovations, including mezzanines. The rules were adopted by a simple majority of the members. However, they were not enacted by special resolution (a 75% majority) or registered at the land titles office in accordance with section 32 (3) of the Condominium Property Act [as is required for amendments to by-laws].
The Chambers Judge held that the rules were not enforceable and that Maverick was accordingly entitled to proceed with the installation of the mezzanine provided it complied with the condominium’s registered by-law and the development requirements of the City of Edmonton. [See Condo Cases Across Canada, Part 19, September 2007]
The Court of Appeal set aside the ruling of the Chambers Judge. The Court of Appeal said that the rules, if reasonable, were properly enforceable as policies of the Board (relating to the granting of the Board’s consent). The Court of Appeal said:
“The Board is entitled to some considerable scope as to how it will exercise his (sic) discretion in granting or withholding consent, and there is nothing objectionable to the Board setting down rules and regulations as to how its discretion will be exercised in the normal course. Writing down the rules and regulations has many advantages. It gives unit owners a clear idea of what will be expected of them. Having the rules approved by the unit owners gives them added legitimacy. It brings greater transparency and equality to the process, because the provision of consent on the basis of the established rules will have a known source.”
The Court of Appeal said that the only question was whether or not the policies listed in the rules were reasonable. The Court of Appeal accordingly returned the matter to another judge of the Court of Queens Bench “for an adjudication of the allegation that the Board has unreasonably withheld its consent”.