A Motion and Proceeding That Should Never Have Happened

At the close of proceedings, especially contentious ones, parties often experience a form of buyer’s remorse, especially when they realize the discounted costs they may be entitled to, and the remainder they are still responsible for. Litigation can also be time-consuming, exhausting, and emotionally draining.

Responsible counsel often provide these warnings up-front, to set realistic client expectations, and sure that a mutual understanding around services are agreed upon, and hopefully reduced in writing. Some proceedings especially stand out as particularly futile, especially when characterized as such by the presiding judge.

Justice Dunphy recently released a decision in TSCC 2204 v. Panagiotou, illustrating this point. The dispute emerged from a condominium corporation, and an owner and resident of unit who had a number of noise complaints against her.

Due to an inability to resolve the dispute, and the defendant’s refusal to pay $1,000 in legal fees for a single cease and desist letter, the condominium sought immediate vacant possession of the unit in order to sell it. Justice Dunphy stated,

[11] What is plain and obvious to me is that these disputes have been escalated almost on autopilot instead of being sensibly de-escalated and resolved. The plaintiff moved from lawyer’s letters with demands for payment of the resulting invoices to filing a lien to bringing this law suit to evict the defendant from her unit to sell the unit to satisfy the lien with barely a pause to consider whether this was in any way the most efficient and proportional way of defusing the situation. Each step was taken on a unilateral basis and it is hard to step back and describe any of this as being in any way preferable or more efficient than following the agreement that the law mandates and submitting the dispute to mediation instead. Arguments that there are no “disputes” here are nothing but the purest of sophistry.

[13] This fiasco has gone on long enough. The root of the problem is the ill-advised decision to escalate this dispute to an “on the meter” legal level with an ever-increasing conveyer belt of demands for legal fees instead of deescalating it through mediation as the Legislature plainly intended to occur.

[14] [The Defendant] was unaware of her right to mediation prior to the hearing today. That is not surprising. She is not a lawyer and nobody ever pointed this out to her. She readily agreed that the mediation route is eminently sensible and re-iterated her willingness to work things out but for what she felt were entirely unreasonable demands being loaded upon unreasonable demands. She also requested a stay of these proceedings in favour of pursuing that dispute resolution procedure.

Justice Dunphy found that the lawyer’s letters inflamed the situation rather than helping to resolve it, and pointed to s. 132(1) of the Condominium Act as to how these disputes are intended to be resolved,

Mediation and arbitration

132 (1) Every agreement mentioned in subsection (2) shall be deemed to contain a provision to submit a disagreement between the parties with respect to the agreement to,

(a) mediation by a person selected by the parties unless the parties have previously submitted the disagreement to mediation; and

(b) unless a mediator has obtained a settlement between the parties with respect to the disagreement, arbitration under the Arbitration Act, 1991,

(i) 60 days after the parties submit the disagreement to mediation, if the parties have not selected a mediator under clause (a), or

(ii) 30 days after the mediator selected under clause (a) delivers a notice stating that the mediation has failed.

[emphasis added]

The dispute resolution mechanisms under this Act are further enhanced by provisions awaiting proclamation regarding arbitration, and further reliance on the new Condominium Authority of Ontario (“CAO”) created under Bill 106.

The summary judgement was dismissed, and Justice Dunphy sent the parties to mediation, but made clear his feelings about the matter at the very outset,

[1] This motion and proceeding should never have happened.

No costs were awarded to either side.

On Jan. 1, 2022, the jurisdiction of the CAO will be expanded under Ontario Regulation 48/01 to include disputes around unreasonable nuisances, annoyances, or disruptions under s. 117(2) of the Act.

Although “unreasonable noise” is not explicitly included under s. 26 of the regulation, it is included in the definitions of the new s. 117(2), and will therefore fall under CAO’s jurisdiction.

What this means is that this might be the last motion and proceeding of this nature in the province before the courts. The courts, residents, condominium boards, and probably anyone else involved, will likely be very happy about that development.