Facts
The Unit
There was once an owner of a beautiful Toronto penthouse condo with a large, open air, exclusive-use terrace. The unit is adjacent to other similar units with each terrace guarded from others with wooden fences. One such unit had a terrace that led to a roof-top area that is available for common-use by other residents. The owner of this unit asked the board of directors to approve construction on the terrace that would replace the 6-foot wooden fence with a 10-foot cement wall and, in essence, convert the open-air terrace into an expansion of the unit’s living space.
The Construction
In April 2021, the board approved the proposal, in part because they had previously approved another unit to perform similar type of work a year earlier. However, the approval was given before the owner obtained the requisite permits from the City of Toronto and without consultation with the neighbor – to foreshadow, this was an issue. Construction began and, not to belabor the details, the work ultimately interfered with another unit owner’s use of the building amenities and enjoyment of their unit.
By November 2021, work on the terrace was stopped due to a stop-work order from the City. In January 2022, a City Zoning Examiner assessed the project and noted that certain zoning bylaws were not complied with. This led the condominium corporation to implement a new rule – don’t approve proposed alternations to units before receiving an approved permit from the City. By May 2022, the City of Toronto denied the application put forward by the unit owner, and by December 2022, an appeal of the denied application was dismissed. By May 2023, the unit owner was directed by the board to take down the partially completed structure.
The Legal Issues
This case has an interesting intersection of two provisions of the Condominium Act.
Section 98(2) – Changes Made by Owners
Section 98(2) provides that when an owner has exclusive use of a common element, the board must be satisfied that the proposed addition/alteration/improvement will not have an adverse effect on other owners, will not give rise to any expense to the corporation, will not detract from the appearance of the buildings on the property, will not affect the structural integrity of the buildings on the property, and will not contravene the declaration.
In essence, s.98(2) requires the board to assure itself that a change to an exclusive-use common element will not adversely affect the condominium and other owners.
The courts have had conflicting interpretations on this section, with some courts interpreting the provision to confer the right to make changes to common elements, provided that the requirements of s.98 are satisfied, while other courts have found that s.98 is “merely a statutory mechanism” an owner may use to acquire permission to vary a common element upon satisfaction of the s.98 requirements and subject to the discretion of the condominium corporation.
What is clear, however, is that an owner who does not satisfy the requirements of s.98 will be found to be in breach of the Act, even if the condominium corporation failed to exercise diligence in enforcing compliance with the Act.
In this case, the Court found that the condominium corporation failed to exercise diligence and ensuring that the s.98 requirements were satisfied prior to approving the proposed construction. This failure led to the next issue.
Section 135 – The Oppression Remedy
The oppression remedy was legislated to balance the interests of those claiming rights from the condominium corporation against its ability to conduct business in an efficient manner. This is to say that the remedy protects legitimate expectation and not unit owners’ wish lists.
The oppression remedy is codified at s.135 of the Condominium Act, which states that the Superior Court may make an order to rectify a situation where it finds that that “the conduct of an owner, a corporation, a declarant or a mortgagee of a unit is or threatens to be oppressive or unfairly prejudicial to the applicant or unfairly disregards the interests of the applicant”.
The onus rests with the applicant to establish that a responding party breached their reasonable expectations and that the conduct amounts to oppression, unfair prejudice, or unfair disregard of the relevant interests. These phrases have a specific legal meaning:
- Oppression had been found by the courts to be conduct that is coercive or abusive. It is conduct that is burdensome, harsh and wrongful, or an abuse of power that results in an impairment of confidence in the probity with which the company’s affairs are conducted.
- Unfair prejudice has been interpreted as a limitation on or injury to a person’s rights or interest.
- Unfair disregard has been found to be ignorance of or treatment of an individual’s interests of an individual as being of no importance.
If found, a remedy will be relative to the breach of the person’s reasonable expectations.
As you could tell, unfair prejudice and disregard are less rigorous as some level of prejudice and disregard may be tolerated given the nature of condominium living and corporation management.
To assess the reasonable expectations, the courts will consider the corporation’s governing documents (i.e. declaration and by-laws), past practices and decision-making processes, nature of the condominium and governance structure, board of directors’ duties, and the entire factual context of the claim.
In this case, the court rejected the majority of the Applicant’s allegations, but found that the Applicant had a reasonable expectation that she would be notified of and consulted regarding the proposed terrace work adjacent to her unit before the board approved the non-permitted construction was set to begin. The failure to do so as was required under s.98(2), which amounted to unfair disregard of her legitimate interests. In support, the court noted that the board approved construction before the City granted permits thereby putting the Applicant at risk of having construction, followed by demolition, followed by new construction in a unit directly adjacent to hers. Further, the replacement of a 6-foot wooden fence with a 10-foot cement wall impacted the enjoyment and use of the Applicant’s rooftop terrace. This was seen as not a simple deck renovation but amounted to an ignorance of the corporation’s own declaration regarding roof-deck units.
The Court noted that this was a preventable saga where the corporation’s decision to approve an unpermitted project was the first domino to fall in a series of events that led to additional expense for those involved, frustration, and tension among the condominium community. The corporation was found to not appreciate how approving such a structure would affect the Applicant and led to her being unable to use her terrace from May 2022 to October 2023 causing her suffer stress, concern, and a feeling that her rights were disregarded. The treatment was disrespectful and inconsistent with the duties owed to her.
When tackling damages, the court reviewed several cases with damages ranging between $10,000.00 and $75,000.00 and opined in this case that $45,000.00 was a reasonable sum.
The Takeaway
This case is a cautionary tale about what happens if a condominium corporation does not follow protocol and relies on past decisions to make future ones. Condominium corporations must exercise diligence when dealing with requests put forward by unit owners to make changes, alterations, or additions beyond what is prescribed by the by-laws. Past agreements/approvals of the corporation may inform the decision-making process, but each request must be treated on its own merits and take into account how other unit owners will be affected. Failing to make adequate investigations may lead to the finding that another unit owner was unfairly disregarded or prejudiced and invite damages awards under the oppression remedy provision of the Act.
_________________________
1Waterloo North Condominium Corp v. Silacshi, 2012 ONSC 5403.
2MTCC No. 985 v. Vanduzer, 2010 ONSC 900.
3WCC No. 21 v. Robertson, 2026 ONSC 1393.
