Condos Should Not Ignore the CAT
The Condominium Authority Tribunal (the “CAT”) recently published a Stage 3 Decision which not only awarded a $3,000 penalty against a condominium corporation, but also ordered the condominium to produce certain records about a unit owner to that unit owner which might otherwise have been precluded from disclosure if the condominium had participated in the CAT proceeding.
In Bukuroshi v. Toronto Standard Condominium Corporation No. 1749, 2022 ONCAT 134 (“Bukuroshi”), the CAT found that the unit owner had validly submitted a Request for Records to the condominium, and the Condominium Manager acknowledged receiving the Request, but they did not respond to the Request in the required format and they did not actually provide the requested records to the unit owner.
Unit Owner was Seeking Condo’s Records About Water Leak from Her Unit
The unit owner in Bukuroshi was seeking records relating to an alleged plumbing leak from her unit into the unit below. She was sent 4 invoices totaling $6,918.39 for the cost of repairing the plumbing leak that purportedly originated from her unit, and she paid those invoices under protest in order to avoid a condominium lien being registered on title to her unit.
She then emailed a Request for Records to the Condominium Manager, which sought:
- the report of the active leak into the unit below,
- the record of the plumber entering her unit and any communication advising her about the source of the leak,
- the notice or email informing her about the leak in the unit below and the plumber’s finding,
- any record of the condominium allowing her to conduct the repairs herself prior to the condominium conducting the repairs,
- the work order for the repair work conducted in the unit below, and
- the emails or notices to her unit about the leak in the unit below and identifying her responsibility for the repairs.
The Manager replied to the owner’s emailed Request for Records 2 days later, stating: “The Board is not obligated to provide reasons. Requested documents will be forwarded some time next week.” However, the Manager did not provide the mandatory Board’s Response form, and ultimately the Manager did not forward the requested documents to the unit owner whatsoever.
Accordingly, the unit owner filed an Application to the CAT. Despite multiple attempts by the CAT staff to have the condominium corporation participate in the CAT proceeding, the condominium did not participate whatsoever – and because the Manager did not provide a mandatory Board’s Response form to the Request, there was no evidence whatsoever about what the reasoning or basis was for the condominium corporation’s failure to provide the requested records to the unit owner.
The CAT ultimately ordered the condominium to produce the requested records to the owner, pay a monetary penalty of $3,000, and reimburse the owner for her CAT filing fees of $200, all within 30 days.
Condo’s Records May Have Been Exempt from Disclosure under Section 55(4)(b)
From the list of records that the unit owner was seeking, it seems obvious that the unit owner may be contemplating challenging the validity and/or the quantum of the condominium’s chargeback of the repair costs to her unit. There may also have been an ongoing insurance investigation into the water leak involving the condominium.
Section 55(4)(b) of the Condominium Act, 1998, S.O. 1998, c. 19 (the “Act”) stipulates:
“The right to examine or obtain copies of records under subsection (3) does not apply to, […]
(b) records relating to actual or contemplated litigation, as determined by the regulations, or insurance investigations involving the corporation”.
This author does not act for the condominium corporation at issue in Bukuroshi, and we have no insight into what those requested records actually contained or whether there was indeed “actual or contemplated litigation” or “insurance investigations” occurring.
However, if the disclosure exemption in Section 55(4)(b) of the Act did apply to the requested records, then the condominium corporation ought to have participated in the CAT proceeding and advised the CAT Member adjudicating the dispute of that reasoning. The CAT has repeatedly held that the exemption under Section 55(4)(b) is quite wide and should be broadly interpreted to exclude any records that are caught within its umbrella.
Perhaps because the CAT has so clearly upheld the Section 55(4)(b) exemption, the condominium might have believed that the presiding CAT Member would simply deny the unit owner’s Application and therefore it did not need to participate in the CAT proceeding at all. The condominium might have thought that it would be so obviously self-evident to the CAT that the Section 55(4)(b) exemption applied to the records that were requested, that the Board decided not to bother responding to the CAT Application by this particular unit owner.
In view of the CAT’s overall default presumption against awarding legal costs (an issue that I have written about previously here, here, here, here, and here), it is entirely understandable that a condominium corporation might decide not to participate in a CAT records dispute where the maximum financial penalty is only $5,000 (an issue that I raised in my article here) but it would have likely cost the condominium more than $5,000 to hire a lawyer or a paralegal to represent it in the CAT.
Of course, since we do not act for the condominium corporation and we have no special insight into the workings of the condominium corporation in Bukuroshi, this might all be wild speculation. But this case nevertheless serves as a useful example of a debate that many condominium corporations in Ontario must grapple with when faced with a CAT Application by a unit owner, in view of the CAT’s default no-costs regime – do you ignore the CAT Application, or do you deal with it head on?
CAT Cannot Read Minds
Even if it was obviously self-evident that the unit owner’s requested records are caught within the Section 55(4)(b) exemption, the condominium should have at least issued a Board’s Response form to explicitly claim the Section 55(4)(b) exemption, and the condominium should have participated in the CAT Stage 3 Hearing to provide at least some evidence to the CAT Member adjudicating the dispute that the requested records related to “actual or contemplated litigation” or an “insurance investigation involving the corporation”. The CAT is only supposed to hear and decide the issues and arguments that are brought before it by the parties – if one side does not show up at all, then the CAT is not supposed to step into their empty shoes and make their arguments for them.
By not participating in the CAT proceeding whatsoever, the condominium now has a public CAT Order against it, which compels it to produce certain records to the unit owner that might have otherwise been exempted from disclosure.
Yes, the $3,000 monetary penalty that the CAT ordered in Bukuroshi might be less than what the condominium would have spent on a lawyer or a paralegal, but now the condominium may be exposed to even greater litigation risk and the risk of further monetary damages, due to having to disclose records to the unit owner about a water leak incident that the condominium is trying to charge her back for. Plus, this unit owner might feel even more emboldened by this “win” in the CAT, in her overall case against the condominium corporation regarding the water leak incident.
CAT Members cannot read minds, and cannot simply guess as to why a condominium might have refused or failed to produce the requested records to a unit owner. CAT Members might surprise us sometimes by noting things in a Stage 3 Decision that were not raised during the Stage 3 Hearing (e.g. by inferring an “implied threat” from a single paragraph in an enforcement letter even though the issue was not raised in the Hearing), but the CAT will not try to make up a reason for a condominium’s refusal to provide records to a requesting owner.
Instead, a condominium corporation should participate in the CAT proceeding when notified of a CAT Notice of Case, so that its position is properly advocated for. To do less – or nothing at all – exposes the condominium to even greater risk and potentially even greater monetary consequences down the road.
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