TSCC 1633 v. Baghai Development Limited and Rabba Fine Foods Inc. (Ontario Superior Court of Justice)

The respondent Rabba Fine Foods Inc. (Rabba) was the tenant of certain retail units owned by the declarant, Baghai Development Limited (Baghai).  Rabba was using part of the common elements (a sidewalk) to display its merchandise.   The condominium corporation sought an order requiring that Rabba cease its use of the sidewalk.  Rabba claimed that there was an agreement between the condominium corporation and Rabba, giving Rabba the right to use the sidewalk. 

The Court held in favour of the condominium corporation and ordered Rabba to cease its use of the sidewalk.  The Court’s reasons included the following: 

• Even if there had been an agreement between the corporation and Rabba, it could not be binding and enforceable without the requisite involvement of all owners pursuant to s. 98 of the Condominium Act, 1998 (respecting common element modifications) or s. 21 of the Condominium Act, 1998 (respecting leases or licenses of the common elements).
• In addition, the purported agreement was not in compliance with the corporation’s Declaration, By-laws and Rules.  Therefore, amendments to those documents would also be required.
• In any event, there was no permanent or continuing agreement between the corporation and Rabba.  Any agreements or accommodations were only temporary in nature.  Furthermore, Rabba had not fully complied with these temporary agreements.  Therefore, the corporation was not under any obligation to seek the requisite approvals (from owners) or the requisite amendments to its governing documents, as described above.  The corporation’s failure to take such steps did not amount to oppression under s. 135 of the Act.
• The terms of the lease between Baghai and Rabba did purport to give Rabba the right to use the sidewalk.  However:  “Private arrangements between a declarant and an owner or tenant which are not reflected in the declaration, are not binding on a condominium corporation or its unit holders.”
• The limitation period (for the corporation’s application) had not expired, because Rabba’s contravention was “not an isolated act but a series of different and separate uses of the sidewalk for the purposes of displaying its merchandise in various ways, each of which constitutes fresh breaches of the rules, thus giving rise to separate causes of action by the condominium corporation”.