Section 67 allows the
Court, on application by an "interested party", to impose
certain remedies if improper conduct has taken place. Interested
parties include condo owners, condo corporations, members of the
condo board, or any other persons with a registered interest in a
condo unit. Sometimes referred to as the 'oppression
section', section 67 seeks to restrain unfair conduct.
Oppression remedies are also available under the Alberta
Business Corporations Act, but the degree of conduct
required under section 67 of the CPA may be less onerous
than its counterpart, at least for the moment.
Remedies under
section 67 include:
· Directing an
investigator to be appointed to review the improper conduct and
report to the Court;
· Directing improper
conduct to cease;
· Giving directions on
how matters are to be carried out to avoid recurring
issues;
· Awarding compensation
in respect of any losses resulting from improper
conduct;
· Awarding costs;
or
· Providing any other
directions that the Court considers appropriate.
Improper Conduct Warranting a Section 67 Remedy
Improper conduct can
mean a number of things including non-compliance with the
CPA, its regulations or the condo's bylaws, as well as
conducting business affairs of a condo corporation or exercising
condo board powers in an oppressive or unfair manner.
In The Owners
Condominium Corporation No. 0211096 v Clayton, 2019 ABQB 877,
the Court granted a section 67 remedy to a condo corporation who
claimed that an owner was not complying with the bylaws. The owners
had a dog and the condo corporation subsequently enacted a bylaw
prohibiting dogs, which was to be grandfathered in. Despite the
enactment of the new bylaw prohibiting dogs, the owners decided to
get another dog.
While the Court was
sympathetic to the owner's situation, it held that permitting
the owners to keep the dog in these circumstances would be unfair
to other residents who follow the bylaws and policies and are
entitled and expect the condominium corporation to enforce the
bylaws as required under the CPA. Finding otherwise may
impair or limit a condo corporation's ability to enforce their
rules in the future. The Court made an order under section 67 for
an order to relocate the dog.
In Condominium
Corporation No. 0613837 v Tien Ngoc Ho, 2019 ABQB 967, a condo
corporation applied for declaratory relief under section 67 that
they were absolved from all responsibility and liability with
respect to the repairs of a unit. The owner's unit was damaged
as a result of a leak in another owner's unit. The condo
corporation maintained proper insurance but hired a contractor
themselves to complete the repairs because the deductible exceeded
the cost of repairs. The owners disputed the repairs claiming that
their unit was unlawfully entered and the repairs were poor
quality.
While the Court held
that a trial was necessary to determine the issues (namely the
quality of workmanship), it did not dismiss the application
suggesting that this situation may properly warrant a section 67
remedy. However, the Court interestingly noted that section 67 is
often used as a catch-all to enforce reasonable behavior, which is
not its intended purpose.
Improper Use of Section 67
While section 67 is
available to ensure enforcement of bylaws and proper exercise of
powers by a condo corporation and board, the Court has notably
dismissed a number of applications that improperly rely on section
67. For instance, in The
Owners Condominium Corporation No. 1710419 v Condominium
Corporation No. 1710627, 2019 ABQB 655, a residential condo
corporation sought relief against a commercial condo corporation
under section 67 after a dispute over shared expenses and nuisances
in a mixed development.
The two condo
corporations had entered into a prior agreement, and the Court
therefore questioned whether section 67 was an appropriate vehicle
for resolution. It appeared that this dispute was contractual and
section 67 would not apply. The Court noted that section 67 was
designed to deal with issues arising within the administration of a
condominium corporation and its relationship with
owners.
In Owners: Condominium Plan No
7921815 (Pepperwood Village) v MacMillan, 2019 ABQB 642, a
condominium corporation attempted to use section 67 to order an
owner to cease and desist from making harassing statements to and
about the condo corporation, managers, and legal service providers
unless she was on the Board of Directors or had written
authorization.
The Court refused to
grant a remedy under section 67 since the owner's
communications were not in any sense a "use of her unit in the
condominium development" and did not amount to improper
conduct under the CPA.
Conclusion
Section 67 remains a
useful tool as it is designed to govern the behavior between condo
corporations and owners, as well as condo corporations and third
parties. Condo corporations may rely on section 67 to ensure
enforcement of bylaws, payment of condo fees, and compliance with
special assessments. Similarly, unit owners may rely on section 67
to ensure that the condo corporation and board members are adhering
to bylaws and ensure that bylaws accord with the
CPA.
While section 67 is
an important provision in the CPA, there appears to be
increased reliance on the provision to enforce any reasonable
behavior. Parties should not rely on section 67 as a
"catch-all" section for any dispute and should still seek
to resolve disputes by applying ordinary principles of contract and
tort law where possible.
In instances
involving true improper conduct in the context of the CPA,
parties should seek to ensure that the evidentiary record allows a
court to award the remedy sought under section 67 by way of
Originating Application. Complicated findings of fact may require a
full trial and further pleadings to be filed.
With a strong
reputation in commercial litigation, McLennan Ross LLP is
well-positioned to provide you with exceptional advice and
representation. If you have any questions or concerns with respect
to the Condominium Property Act, or any other litigation
matter, please do not hesitate to contact
Madyson Dietrich or
Peter Major, Q.C., or any member of our Commercial
Litigation Team.
Article orignally published on 24 April 2020
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.