Condominium corporations are uniquely placed to encounter collective action problems. Each condo unit is individually owned, but they share much of the same infrastructure and that infrastructure connects with collectively owned infrastructure.
TSCC 1696 encountered one of these situations when it found out that it needed to replace its pipes. The decision of Justice O'Brien is in Hawkins v. TSCC 1696, 2019 ONSC 2560.
In 2016, the corporation became aware that the building, including individual units, had been constructed using Kitec pipes, which were known to fail. The board determined that it was necessary to replace the pipes to avoid water damage. It negotiated a single contract for replacement of the pipes and then sent notice to owners allowing them to opt out.
This notice attracted the ire of Ms. Hawkins, who owned and lived in one of the units in the building. She had already found and replaced the Kitec plumbing in her unit by the time the notice came out.
Unfortunately, she had not obtained a permit for the work. After some acrimonious letters back and forth, the corporation had the city come out to inspect the work. This led to the corporation's own contractors being contracted to test the work done. The contractors installed a few additional valves and certified that the work had passed their tests.
Ms. Hawkins brought an oppression claim against the corporation for its conduct. She claimed that the corporation had: (1) ignored other options that were less coercive than the centralized Kitec replacement program; (2) instituted a campaign of harassment/questionable conduct for which they penalized her; and (3) wrongly charged back the legal costs of this 'campaign' to her unit.
The court found no oppression in the corporation's conduct. Its choice to use a single contractor to replace the damaged pipes was reasonable, especially where it permitted unit owners to opt out of the contractor. The fact that Ms. Hawkins was uniquely opposed to the program was not proof that she was oppressed.
While the court had critical words for the corporation's conduct, it found that, on balance, the corporation tried to de-escalate tensions and introduce neutral third parties (such as the city) in order to resolve the matter. This was proper conduct and did not constitute oppression.
Similarly, the corporation's decision to charge back the costs of the litigation to Ms. Hawkins – even though they reached over $11,000.00 – was not oppressive. It had proceeded as permitted in its Rules and Declaration. Interestingly, however, the court did note with approval that the corporation had not charged all the fees to Ms. Hawkins (approximately $2,000.00 in additional fees were outstanding).
The single, obstinate unit owner is a character that many property managers and boards will recognize. Hawkins should be contrasted with the recent Amlani decision (Amlani v. YCC 473, 2020 ONSC 194), where the court found in favour of the obstinate owner. In Hawkins, the corporation was carrying out a program for the benefit of the whole building and still allowed Ms. Hawkins to opt out, provided she met minimum standards. In Amlani, the corporation appeared to be carrying out an overly punitive campaign against a unit owner at the behest of immediate neighbours. Both cases involved acrimonious clashes between the corporation and the unit owner, but in Hawkins, the board beat the oppression claim and was able to charge back most of its fees. In Amlani, the corporation ended up paying significant fees to the victorious unit owner. Corporations and their boards should be wary of this distinction and make sure that their enforcement actions can be characterized as even-handed and universal.
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