Ontario Court of Appeal affirms strata corporation’s plan to manage parking through bylaw allowing allocation of spaces by lease

8 August 2017

By Kevin Zakreski

In Cheung v York Region Condominium, 2017 ONCA 633, the Ontario Court of Appeal affirmed a decision from last year on a suburban Toronto condominium’s “toxic parking situation.” The facts of the case, as summarized by the court, were:

There are 34 units in this complex, of which the appellant owns three. She has leased her units to a very popular restaurant. The 162 parking spaces are common elements, and she says that she needs all of them: “I want to be able to use all the 162 shared parking spaces on [the respondent’s] property because a 230 seat restaurant requires the use of a sufficient number of parking spaces to accommodate its patrons.” The other unit owners also want to use some of the parking spaces. The application judge, in his reasons at para. 9, described one of the unit owner’s evidence about the very toxic parking situation and conflict between the restaurant patrons and other users of the parking. There were “altercations among restaurant customers, between restaurant customers and other customers, and between restaurant customers and business owners within the complex.” The restaurant was very busy during its peak hours, 9:00 a.m. to 3:00 p.m. and after 5:00 p.m.

This has been a long-standing problem. The respondent tried to solve the problem in 2009 by passing a by-law to allocate two parking lots to each unit owner, but that by-law was invalid as it had never been registered on title.

In 2015, the respondent adopted the by-law that gave rise to this litigation. It provided that the respondent could “from time to time” grant a lease to each owner of four parking spaces in the common element parking spaces on such terms and conditions as “may be deemed appropriate by the Board of Directors from time to time.”

The appellant advanced three strata-property arguments on appeal.

  • The by-law was beyond the powers of the board conferred by the Condominium Act . . . and the condominium declaration.
  • The by-law was void for uncertainty because the leases had not yet been executed.
  • The by-law was unreasonable and the board’s conduct was oppressive, that is to say, unfairly prejudicial to her interests.

A majority of the three-judge panel rejected each argument in turn.

On the first argument, the majority held that the condominium corporation’s parking bylaw didn’t rise to the level of creating exclusive-use common elements (Ontario’s equivalent to the BC concept of limited common property):

The by-law passed by the respondent does not have the degree of permanence so as to amount to, in effect, the creation of exclusive use common elements which would pass with ownership of a unit. The board could repeal or vary the by-law at any time. All unit owners reasonably share the parking spaces. The parking spots are not like an apartment balcony, which might be designated an exclusive use common area for a particular unit, such that there is no expectation that any other unit owner would ever use that space and an owner would reasonably expect that the right to use the space would pass with ownership of the unit. There is no such expectation here in relation to the parking spaces.

On the second, the majority noted that the condominium corporation “has not yet executed the leases contemplated by the by-law; this fact, however, didn’t render the bylaw void for uncertainty: “[m]ore work will have to be done to execute the proposal in principle embodied in the by-law, as the terms of the leases will have to be approved by the board, but that does not make the by-law void for uncertainty.”

Finally, on the third argument, which dealt with the Ontario act’s oppression remedy, the majority “no basis to interfere” with the judgment of the court below.

This case is also interesting for its lengthy dissenting judgment. That judgment disagreed with the majority judgment on the appellant’s first argument:

Thus, although the application judge correctly held that a condominium’s declaration does not have to specifically authorize leasing of common elements, his analysis was incomplete. He erred in not examining the actual wording of the 2015 By-law and, specifically, the meaning to be given to the words “upon the terms and conditions herein contained,” in the light of the history and circumstances surrounding the 2015 By-law’s enactment. When properly considered, the meaning of “upon the terms and conditions herein contained,” is the 2015 By-law allocated four common element parking spaces to each owner for each owner’s exclusive use on a permanent basis or for an indeterminate period (as did the 2009 By-law, which was not repealed). I would therefore hold the 2015 By-law contravenes the Act and is invalid.

The dissenting judge also parted ways with the majority on the appellant’s second argument, concluding that the bylaw shouldn’t be characterized as reasonable:

The 2015 By-law is unreasonable because there is no line of analysis that could reasonably lead the Board to assign four parking spots to each unit holder as opposed to two. Practically speaking there is no available alternative parking elsewhere in the York Corporate Centre. There is no expert evidence that an increase from two to four assigned parking spots per unit was necessary to resolve the parking problems and no evidence that rigorous enforcement of two assigned parking spots per unit would be insufficient. Nothing in the 2015 By-law speaks to the necessity to lease four spaces. Given the application judge’s finding that other businesses often have empty spots when the restaurant is at peak capacity, the 2015 By-law assigning four parking spaces per unit is not within a range of reasonable choices that the Board could have made in weighing conflicting interests. Cheung has discharged the onus on her of showing that the By-law is unreasonable.

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