Part 5 published on 01/02/04
Mandatory mediation and arbitration (in Ontario) does not apply to oppression applications.
Former owners asserted claims against the condominium corporation for the corporation’s refusal to approve certain renovations to the unit. The corporation’s rules required written consent of the Board for such renovations. The former owners asserted that these rules had been ignored and, accordingly, should not apply. They also asserted that “informal” consent had been provided by an officer of the corporation. Alternatively, they asserted that the corporation’s refusal to provide consent was oppressive in that it was unfairly prejudicial to them or unfairly disregarded their interests.
The former owners alleged that they had suffered damages, primarily in the form of reduced value of their unit (which they had sold).
The corporation raised a preliminary issue: Since the claims included a disagreement with respect to the rules, did mandatory mediation and arbitration apply pursuant to Section 132 of the Condominium Act, 1998?
The court’s answer was “no”. The court’s reasons were as follows:
- The oppression remedy is contained in Section 135 of the Act. That section makes no reference to mediation or arbitration (as does Section 134 of the Act, which deals generally with enforcement).
- An oppression application can include complaints about “a broad pattern of conduct, only a part of which” may fall within Section 132 of the Act. “Making one part of such a broad application subject to mediation and arbitration would result in multiple proceedings.”
- Oppression applications can be brought with respect to threatened conduct. “Such an application must be brought with dispatch … The time required to schedule and proceed with mediation and arbitration are not compatible with the dispatch that many Section 135 applications would require.”
[Note: In its reasons, the court also noted that mandatory mediation and arbitration does not apply to disagreements with respect to the ACT. We saw this previously in Carleton Condominium Corporation No. 291 v. Weeks (see Condo Cases Across Canada – Issue No. 4)]
The court accordingly proceeded to decide the claims. The court dismissed the claims, and gave the following reasons:
- No informal consent to the renovations had been provided.
- The corporation’s rule was proper and the Board had genuine reasons for refusing its consent.
- There was no unfairness and accordingly no oppression.
- The claimants had no proper reason to believe that the rule would not be enforced.