Condominium Corporation Failed to Maintain Statutorily Required Records

The case of Sidhu v Peel Condominium Corporation No. 426 involved a unit owner’s application to the Condominium Authority Tribunal (CAT) for certain records of the Corporation that the owner claimed PCC 426 refused to provide without reasonable excuse. Mr. Sidhu sought the following remedies at the Tribunal hearing:

• Copies of the records requested;
• Compensation for “financial loss and huge mental stress & agony”;
• Legal costs;
• A penalty against PCC 426 and;
• Compensation for “personal expenses”.

The Tribunal reviewed the four (4) records requests in question and found that all requested records were provided prior to or during the CAT process, with the exception of Board meeting minutes and the Record of Notices of Leases required under Section 83 of the Condominium Act 1998 (the “Act).

Board Meeting Minutes

On the issue of the Board meeting minutes, the Corporation stated that the records did not exist because PCC 426 did not maintain minutes for Board meetings. The Tribunal found the failure to maintain such minutes was a significant breach of the Act and ordered that the Corporation immediately start keeping proper and appropriate minutes of all board meetings, and also that the Corporation make a “concerted, honest, and good faith effort to generate a record…” for all Board meetings that took place since September 2019 (for a period of 3 years before the date of this decision, which was in October 2022).

Record of Notices of Leases Required Under s.83 of the Act

On the issue of the Record of Notices of Leases, the Tribunal found that while PCC 426 provided Mr. Sidhu with a list of units indicating which units were “owner-occupied” or “tenanted”, the document was insufficient as it did not indicate whether any notices required under Section 83 of the Act were received with respect to the “tenanted” units. As such, the Tribunal ordered the Corporation to create the appropriate record required under Section 83 of the Act.

The Tribunal then went on to determine the issues of compensation and penalty, making the following orders:

Penalty

The Tribunal ordered a penalty of $3,000 against the Corporation under subsection 1.44(1)6 of the Act. In doing so, the Tribunal noted PCC 426’s delay in providing Mr. Sidhu with the requested records, finding that it was not until the CAT process was commenced that the Corporation produced a majority of the records requested.

When asked why the requested records that exist were not all provided to Mr. Sidhu prior to this case commencing, the Corporation relied on its property manager’s conduct (i.e. the manager’s inexperience with the CAT platform and the manager’s belief that that records requests had been satisfied). The Tribunal refused to accept this explanation, finding that it was not reasonable for the board to “wash its hands of its duties by abdicating them to its manager” as the Corporation, represented by its board “is the party responsible for satisfying records requests and is accountable for failing to ensure that the manager is adequately equipped, informed and instructed” to properly fulfil the request.

In setting out its reasons for ordering the penalty, the Tribunal also emphasized PCC 426’s failure to fulfill its statutory obligation to maintain Board meeting minutes, stating that this failure:

“[i]ntroduces uncertainty as to the authority of the condominium’s transactions and affairs, impacting fundamental rights of unit owners to have access to a record of the condominium’s key decisions, including decisions relating to budgets, enforcement actions, banking arrangements, and contracts for services. The lack of board meeting minutes cannot be considered either acceptable or reasonable.”

In response to the Corporation’s position that the minutes did not exist because the Corporation did not maintain minutes for Board meetings, the Tribunal went on to say:

“This answer, while probably a complete statement of the facts, also constitutes evidence of what seems to be a long-standing, unashamed, and unmitigated disregard for a very important and fundamental statutory duty, resulting in an effective refusal to provide the requested records to the Applicant. Contrary to the Respondent’s submissions, this certainly appears to be “wilful … highhanded, intransigent or egregious,” and should attract a substantial penalty.”

Compensation

In terms of compensation, the Tribunal awarded Mr. Sidhu $200 for his Tribunal fees.  However, the Tribunal refused to award any compensation for “pain and suffering”, finding that this was outside the scope of the Tribunal’s jurisdiction. Similarly, the Tribunal refused to award Mr. Sidhu any compensation for “personal expenses”, finding no basis for the amount claimed.

With respect to Mr. Sidhu’s claim for legal expenses, the Tribunal also refused to award this amount noting that this case did not include the kind of “extraordinary circumstances” that would normally give rise to such a reimbursement, as required by the Tribunal’s Rules.

Beyond the above, the Tribunal went further to find that due to the Corporation’s conduct in this matter, it was apparent that the PCC 426 directors required a “refresher” of the mandatory training courses provided by the Condominium Authority of Ontario. Under Section 1.44(1)7 of the Act, the Tribunal ordered each current Board member to take or re-take the CAO director training. This case is a strong reminder for condominium corporation Directors to be aware of and properly carry out their statutory duties. In particular when it comes to records, condominium corporation Boards have a duty to ensure the corporation’s records are properly maintained and that requests for records are responded to in a timely manner (as set out in the Regulations under the Act).

Stay tuned to Condo Law News to keep up to date on the latest developments in condominium law!