Part 57 published on 01/03/17
Court determines collection rights of condominium corporation
The bank had a first mortgage on a residential unit, and took steps to enforce the mortgage. The condominium corporation registered a caveat against the unit. The lower court determined the collection rights of the condominium corporation, including amounts covered by the caveat, in priority to the mortgage. [See Condo Cases Across Canada, Part 50, May 2015.]
The bank and the condominium corporation both appealed. On appeal, the decision of the lower court was largely upheld. The Appeal Court held as follows:
(a) Based upon the by-laws of the condominium corporation, the insurance and repair costs in relation to two water losses – including the $20,000 insurance deductible – were “contributions”, and were properly included in the caveat, taking priority over the mortgage. [Bank’s appeal dismissed]
(b) Interest on the insurance and repair costs was also included in the caveat, taking priority over the mortgage. [Bank’s appeal dismissed]
(c) The condominium corporation’s reasonable expenses incurred with respect to the preparation, registration, enforcement and discharge of the caveat do not constitute a statutory charge and accordingly cannot be included in the caveat. However, those charges can be collected in personam against the owner of the unit. [Bank’s appeal allowed]
(d) The solicitor-client costs awarded to the condominium corporation (in the Court proceeding) are not included in the caveat, but are payable by the bank as an in personam debt. [condominium corporation’s appeal dismissed]