More about the proposed new
Condominium Authority Tribunal
As we have discussed in previous entries (see here and here), Bill 106 proposes to create a non-profit and self-financed tribunal known as the Condominium Authority Tribunal (“CAT”), to provide a more streamlined, quicker and less costly dispute resolution process for many common condominium-related issues. As noted in those previous entries, the CAT will be the responsibility of the Condominium Authority (“CA”) to administer.
While the exact mandate and functions of the CAT will be laid out more particularly in new regulations that are to be made under the Condominium Act, 1998 (the “Act”), and/or in the administrative agreement to be entered into between the CA and the government and other government directives, this entry will take you through some of the changes we do know about and what we expect to see.
Note: In this entry, whenever we refer to a “unit,” the statement also refers to parcels of tied land (POTLs) to Common Elements Condominium Corporations.
Matters will be brought before the CAT by way of an application, in a form to be approved by the CAT. Much like many other tribunals in the province, the expectation is that submitting an application to the CAT will be as simple as attaching the form and an explanation (with evidence) of one’s case to an email.
An application can only be made by a condominium corporation, an owner or a mortgagee of a condominium unit, and, in limited circumstances, a unit purchaser. Bill 106 provides that fees associated with a proceeding before the CAT may be set out by the CA. The amount of such fees is not yet known or to what kinds of applications or steps in proceedings they will apply is not known as this time. It is possible that some applications or submission of a defense will not require payment of any fee.
What type of matters will the CAT hear?
The particular types of disputes which the CAT will have jurisdiction to hear will be set out in the regulations; however the Ministry of Government and Consumer Services (the “Ministry”) has indicated that the types of disputes the CAT will hear may include:
- enforcement of declarations, by-laws and rules;
- procurement processes;
- procedures for requisitioning a meeting of owners; and
- access to records (in fact, the Bill identifies this as the only kind of dispute that may be subject of an application by a purchaser of a unit).
While we need to wait for the regulations to be drafted to get full particulars on the types of disputes the CAT will hear, the Bill does identify that disputes relating to any of the following matters cannot be submitted to the CAT:
- the determination of title to real property;
- amalgamation or termination of condominium corporations;
- easements created upon registration of the condominium; and
- occupier’s liability of the condominium corporation over the common elements.
What authority will the CAT have?
Whatever the specific types of disputes might be that the CAT will deal with, Bill 106 gives the CAT a fair amount of power in issuing orders. The Bill specifies the CAT will have authority to issue the following types of order:
- an order prohibiting a party from doing a particular thing or, requiring the party to do a particular thing;
- an order directing a party to pay damages up to a maximum of $25,000 to compensate the other party as a result of first party’s non-compliance;
- an order directing a party to pay the costs of another party to the proceeding;
- an order directing a party to the proceeding to pay the costs of the CAT;
- an order directing a condominium corporation to pay a penalty of up to $5,000 where it has refused to permit a person to examine or obtain copies of corporation records which are not excluded from examination under the Act;
- an order for any other relief the CAT considers fair in the circumstances.
Decisions of the CAT will be final and binding and may be appealed to the Divisional Court only on a question of law. This means that parties cannot use the CAT to get two kicks at the can if they are unhappy with the results, unless they feel the CAT has applied or interpreted a legal principle incorrectly. This is what we mean by “a question of law”. By way of comparison, this differs from a question of fact which involves any factual findings made by the CAT.
A Few Extra Points About the CAT's Costs, Penalties and Compensation Awards:
As noted, the CAT will have authority similar to a court’s to order damages to be paid by one party to another as compensation for non-compliance, as well as awards for costs and penalties. There are a few points of interest about these awards – including some new twists on existing rules – that are worth pointing out.
First, with respect to damages/compensation awards, as currently proposed, the CAT will only have the power to award up to a maximum of $25,000, which is currently the maximum amount that can be awarded in Small Claims Court. Therefore, a party seeking damages above $25,000, will still only be able to do so by way of an application to the Superior Court. Given that limitation, it is unclear at this point what will happen if a party has a reasonable basis for claiming damages above $25,000, but the subject matter of the claim is something required to be taken to the CAT. Will parties be forced to reduce their claim as a result? Likely not. It is more likely that the Tribunal will be optional in those circumstances. We will need to stay tuned for the regulations to find out.
Second, Bill 106 strives to establish a more balanced playing field between condominium corporations and unit owners with respect the enforcement of payment obligations.
Currently, under the Act, when a court awards costs or damages in favour of a condominium corporation against a unit owner in a compliance application, the corporation has the power to add those amounts and all its actual costs incurred in obtaining a court order for damages and/or costs to that owner’s common expense account. This gives the corporation the ability to rely on its lien powers to enforce collection of those amounts. Under Bill 106, a similar power is to be granted to condominium corporations in relation to orders by the CAT whereby a unit owner must pay compensation or costs: The owner will have 30 days to pay, unless the CAT states otherwise, and the amounts ordered may be added to the common expenses payable for the owner’s unit. In addition, Bill 106 proposes to extend this kind of power to unit owners who obtain awards for costs, compensation or penalties against a condominium corporation. In such cases, if the corporation does not pay within the time limit specified in the order, the owner is entitled to “set off” the amount owed against his, her or its common expense obligations. In fact, under Bill 106, both the condominium’s “charge back” powers and the proposed new “set off” powers of the unit owners are to extend to awards granted by arbitration as well to orders made by a court or the CAT. We intend to produce a further blog entry that covers these new provisions in more detail.
Third, a further new twist in Bill 106 is that it proposes to significantly increase the penalty that can be claimed from a condominium corporation that improperly refuses to allow an owner to examine the corporation’s records under section 55 of the Act. The Act currently provides for a penalty of up to $500 (which a unit owner may seek in the Small Claims Court), but due to the relatively small amount of the penalty in comparison to the time and cost required to engage in such legal proceedings, many unit owners forego this opportunity. Bill 106 proposes to increase this penalty to a maximum of $5,000, which a unit owner can obtain through the CAT, which is granted full discretion to determine what is appropriate in the circumstances. The option of obtaining this result through the CAT rather than through court will likely make this process substantially simpler and less costly for unit owners, and the extent of the risk to condominium corporations should be an effective disincentive against deliberate non-compliance with reasonable records requests.
The main goal of the CAT will be to successfully and expeditiously resolve matters between condominium corporations and unit owners. This may mean using methods other than in-person hearings, such as proceeding in writing, by telephone or video conference. In addition to its adjudication powers, the CAT will also have the power to direct that the parties to a proceeding participate in alternative dispute resolution to resolve a proceeding or an issue arising in a proceeding. Bill 106 defines “alternative dispute resolution” as including mediation, conciliation, negotiation or any other means of facilitating the resolution of issues in dispute. Whether or not these services will be offered by the CAT itself remains to be seen.