21/10/2019 – Jurisdiction Alberta
68 published on 01/12/2019
Court grants interim injunction to prohibit short-term occupancies
The by-laws or the condominium corporation said that the residential units could be used only as single-family residences and not for commercial purposes. The Respondents were permitting members of the public to occupy their units on a short-term basis. The condominium corporation claimed that this contravened the by-laws, and applied for an order prohibiting these occupancies.
In the meantime, the corporation applied for an interim injunction (to prohibit short-term occupancies), pending the hearing on the main application. The Court granted the interim injunction.
The Court held that the condominium corporation had “very strong arguments” and therefore would likely succeed on the main application. The Court also held that failing to enforce the corporation’s by-laws, even on a temporary basis, would cause irreparable harm.
Among other things, the Court said:
In my opinion, the Corporation has a strong argument that Customers are not Tenants within the meaning of the Bylaws. Under s. 32(7) of (the Condominium Property Act), the Act prevails over the Bylaws and therefore must be read with the Bylaws. The Act contains elaborate provisions respecting the rental of units (s. 53) and corporation remedies respecting tenants (ss. 54 -56). Because of the fleeting duration of Customers’ stays, the remedial provisions of the Act could not practically apply respecting Customers’ occupancy. Moreover, the evidence did not disclose that the Respondents complied with s. 53(1) (notice to the Corporation).
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If the Bylaws had the effect of prohibiting or restricting “leases” or “dealings” with units as contemplated by s. 32(5) (of the Condominium Property Act), those bylaws would be ineffective.
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The nature of the occupancy of units by Customers, in my view, strongly supports the characterization of the arrangement with the Respondents as being a licence only. Customers occupy the premises only briefly. They do not take on the trappings of tenants under the Act or Bylaws. Their occupation is like that of a person who stays in a hotel room. Rather than understanding the relationship as being a very short lease, the relationship is better understood as being a very short stay in the functional equivalent of a very small hotel.
I find that the Corporation has a strong argument that the Respondents’ arrangements with Customers result in licences, not leases.
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Subsection 32(5) precludes a bylaw from prohibiting or restricting not only devolution, transfer, lease, or mortgage of units, but also “other dealing” with units. Do short-term licences fall within “other dealing” in s. 32(5)?
The Respondents do have an argument that a licence relating to a unit is a “dealing” relating to a unit, and so is protected from bylaw interference under s. 32(5). The term “other dealing” is very broad. If that term were found alone in s. 32(5), its extension to the licencing of units would be difficult to resist.
However, the words “other dealing” do not exist alone in s. 32(5). These words follow a list of terms – devolution, transfer, lease, mortgage. As a matter of statutory interpretation, the broad words “other dealing” must be understood in light of the words that precede it. This is an example of the “limited class” or ejusdem generis maxim of interpretation.
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In my opinion, the Corporation has a strong argument that the limited class rule applies and “other dealing” must be interpreted to refer to a real property transaction, not contractual arrangements that may have a bearing on the use of property. Hence, licencing arrangements are not included in “other dealing.”
And hence, the Corporation has a strong argument that s. 32(5) does not invalidate the pertinent bylaws.
In my opinion, the Corporation’s case for the Respondents being in violation of valid bylaws is strong. The Corporation is likely to prevail in subsequent proceedings.