Part 48 published on 01/11/14
Appeal dismissed. Condominium corporation not entitled to lien for “old” arrears
The owner (who owned two units) had failed to pay common expenses since January 2009. The condominium corporation did not register a lien against the units. On May 30, 2012, the condominium corporation applied, under s. 134 of the Condominium Act 1998, for an order for payment of the arrears, interest and costs. The corporation also sought an order that the condominium corporation be permitted to register a lien against the owner’s units, for recovery of those amounts, under s. 134(5) of the Act. The unit mortgagee (holding a first mortgage against the two units) opposed the application. The condominium corporation’s application was dismissed. [See Condo Cases Across Canada, Part 45, February 2014.]
The condominium corporation appealed. The appeal was dismissed. The Court of Appeal said:
In summary, I am of the view that the revival scheme proposed by (the condominium corporation) is inconsistent with the purpose of the Act and the intention of the legislature. This interpretation of the Act upsets the balancing of the rights of stakeholders, by granting an unfettered right to a priority to condominium corporations, to the detriment of mortgagees.
(The condominium corporation’s) position is also inconsistent with the scheme of the Act. If its interpretation were accepted, and a priority could be revived utilizing the s. 134 procedure for an expired lien right, s. 85(2) would be rendered meaningless. A condominium corporation could ignore its obligation to register a lien under that sub-section, safe in the knowledge that it could always assert its lien rights later and still claim priority.