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CHEUNG v Y.R.C.C. # 759 PARKING ALLOCATION by-law HELD NOT OPPRESSIVE at Richmond Hill eatery 2016/07/13 11:12  
Ruled NOT OPPRESSION : Richmond Hill restaurant landlord fails in attack on commercial condo corporation's parking allocation by-law.

But also right upfront : can changing common element parking from 'first come/first served' to unit-reserved be lawfully effected by a mere By-law change ( 50 % plus one vote) ? If not so unit-dedicated in original Declaration, doesn't the Condo Act 1998 require it be done with no less than a 90 % Owner Consent process ? Yes many Boards casually do less. What's going on ?

Disputed by-laws purported to address so-called "monopolistic" or "dominating" parking by busy restaurant's customers. As with expelled multi-vehicle owner BEA ( B.C residential) scarce parking can trigger demands for conversion from first come / first serve.

Lawyer J.Fine’s client attacks parking allocation (mere) BY-LAWS introduced in 2009 & 2015. They purported to convert most of the previously ‘first come/first served’ common element parking areas' unallocated parking, into specific unit allocations.

Some un-allocated spaces still remain, but eaters dislike the walk. Plaintiff landlord Ms Cheung demands she needs those also totally available for tenant's customers in addition to those now dedicated to her units.

Justice Robert F Goldstein does not directly discuss US style ‘valid business judgement’ but comments are consistent. He tries to uphold the 2015 by-law as within lawful by-law power, consistent with a section 21 corporation LEASE-issuing power even if not shown nor platformed specifically within Declaration as objected by J Fine for applicant. Also holds the 2015 by-law not discriminatory nor unresonable.

Dictum conversely would characterize the high volume restaurant customers' alleged 'monopolistic' or 'dominating' parking as actually oppressive against the needs of other owners & their customers. Maybe they were.

Not an easy read. Legal articles will likely follow. Bet on an appeal.

Details :

Mr Justice Goldstein rejects condo oppression claim raised by landlord owner of three Toronto Richmond Hill units. Her commercial units are leased for the high volume 230 seat Dragon Boat Fusion Cuisine within 33 unit York Corporate Centre on East Beaver Creek Rd ( NW of 404 & #7 ).

Parking by restaurant customers is accused of being "monopolistic" or "dominating", impairing close access to other units which now have dedicated or unit-allocated status. Zero mention of any fulltime parking staff. Confrontations are cited.

Starting with the 'Reasonable Expectation' pre-hurdle derived from BCE Inc. v. 1976 Debenture Holders, 2008 SCC 69 (CanLII), [2008] 3 S.C.R. 560 , Mr Justice Goldstein reviews some of the Ontario condo judgments where section 135 Oppression was argued. ( He cites for the record his view that any "oppression" actually flowed the direction opposite from the Plaintiff's beef ).

Rules bottom line the landlord's Oppression claims upfront fail the pre-hurdle ( what was 'reasonable expectation' ? ) from wider corporate law.

With bucks & leading lawyers, this dispute 'may have legs'

( Not the least may be Justice Goldstein's criteria for what is "discriminatory", and his "Lease" empowerment argument. Undisputed : the predecessor 2009 new allocation by-law #1 incompetently was NOT registered onto title. But it was applied unlawfully & apparently triggered confrontations for as much as FIVE years to the detriment of customer parking ! ! )

Cheung v YRCC # 759 2016 ONSC 4236 issued July 5 2016
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appealing CHEUNG v Y.R.C.C. # 759 ? 2016/07/14 17:19  
Is the REAL issue here NOT section 135 'oppression' nor some sort of discrimination against a type of business nor its parking consequences.

Instead will it ultimately be fought on actually whether Ontario condo corporations can lawfully - by mere by-law ? without a specific power in the Declaration by some sort of mere lease by-law ? - convert ‘first come / first served’ unallocated common parking areas, into unit–dedicated parking spaces ?

ie 'Mere lease bylaw - 50% + one vote - is needed to convert" - Justice Goldstein

As opposed to " Conversions have to be provided or platformed directly within the Declaration or amended per the Condo Act 1998's subsection 107(2)D by 90% owner consents as to the Act's subsection 7(2)F Declaration's compulsory specification of exclusive use areas" - apparently argued by J. Fine LLB here

This appeal dialogue :

"I bought into a commercial Declaration totally without any exclusive parking being shown nor an expressed scope empowering converting the common element parking into a format that drastically impairs my business model ! "

Not a 'reasonableness' criteria irrelevant to Declarations, but a lawful scope issue that contradicts the Condo Act 1998"

Paras 19-42 are Justice Goldstein's take on the by-law validity issues. He is satisfied by “lease” by-lawing powers in which the Condo Act 1998’s section 21 does not cite any requirement more than a by-law.

Here J Fine LLB is described ( para 19 ) - hopefully accurately in the judgment - to have argued that such conversion was illegal here without such already imbedded or a platform specifically empowering such conversion within the Declaration :

ie a full (90 %) Declaration amendment needed here before even a by-law could be then enacted. ( And also that such was unreasonable, discriminatory and could not be fitted into the bylaw scopes of section 56 )

Poor ole' Mr BEA argued sort of the same in B.C. against his strata's space conversion/allocation by-law before he was ordered expelled for toxic multiplicative lawsuits.

But he ain't a J. Fine LLB. ( One B.C. commenter online about Mr Bea's expulsion : 'At least now he will be able to use the Visitor Parking legally ' )

Worth watching for the appeal issues if an appeal ensues.
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CHEUNG v YRCC #759 Lease Allocation By-law HELD neither OPPRESSIVE nor "Ultra Vires" 2017/08/06 11:15  
Aug 2017 Ontario's highest Appeal Court majority upholds 2016 trial judgment as appealed by restauranteur's landlord owner Cheung. A 2:1 ONCA decision upholds 2016 trial decision rejecting lawyer Jonathan Fine's oppression & ‘ultra vires’ attack on bylaw (instead of Declaration amendment ) objections.

The common element Lease Issuing By-law (2015) gets upheld to - at some future time - issue leases ( unit by unit ) of common element parking spaces previously Wild West / not reserved for customers of specific units.

This commercial war ain't Mr. Bea's residential underground B.C. strata parking by-law which lacked the Lease Issue overlaid in this Ontario restaurant parking war.

The legal minds adjudicating this so far, could NOT have had an easy time with Mr Fine's arguments. Some profound business upheavals on minority stakeholders in theory could be set in motion simply by a single owner's Lease Bylaw vote beyond 50% eligible.

The disputed Parking Lease Bylaw fudges whether the FUTURE, still un-issued Lease durations would be term certain or indefinite, as pounced on by the dissenter. There could be some issues.


A - Triggering MPAC assessment & municipal taxation ?

Has the corporation realized that Section 15 technically strips parcel immunity of common element parcels from assessment & municipal taxation, once such will be “leased” to each commercial unit owner ? Will each commercial unit now start paying municipal taxes on whatever is "leased" ?

B What will happen to a particular future "Lease" corresponding to a particular unit being sold ?

Leases to Tenants generally require a lease-by-lease consent or other formal assignment/transfer processing. What happens IF such starts getting seen as a revenue source for the condo corporation ?

American condo /HOA disputes have seen bitter fights over re-transfer fees - sometimes even legal under state law . Eg half a percent of the unit sale price payable to Declarant or governancers

Did the 60 % Bylaw approvers understand they might ? be stepping onto a slippery slope ? )

2 Suppose (for example) enough By-law voters started only doing internet commerce and so now saw no downside to a SINGLE LEASE of 90 % of the parking spaces for a SINGLE activity like taxis or for new vehicle sales ?

Or even for a flea market ? And then who cares about the high volume Chinese walk-in restaurant without enough parking ? That after years of growing the venture maybe it better shut down or switch to home delivery ? . . . .

The Bottom Line : With big bucks at stake, will this be further appealed if Canada's Supreme Court decides to open a narrow appeal gate ?

Will the highest price jurists be willing to kick around Ontario's condo By-law powers ? And maybe even "condo oppression" ?

The most interesting reading:

Minority dissent ( by Madam Justice Karen Weiler ) agrees with majority & lower court that Cheung’s treatment was NOT section 135 oppression. Such could also be the target of an appeal.

But she would overturn the 2015 parking lease by-law. Bylaw issues & 'vires' are well worth the read & maybe not the last word attempted.

The Issues again : Is it oppression ? Do common element parking exclusivity conversions - not already within the Declaration - require 90 % Declaration amendments or mere 50 % + 1 vote by-laws ?

Cheung v YRCC # 759 2017 ONCA 633 issued Aug 3/17
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from CHEUNG v Y.R.C.C. # 759 parking lease by-law HELD NOT OPPRESSIVE 2017/08/08 00:52  
Majority (2):

“ . . . [12] The application judge concluded that the by-law was reasonable, stating at para. 41 of his reasons:
Thus, I do not see how the Board’s actions can be called unreasonable. There was a parking problem and it had to be remedied. The Board came up with a solution that it believed would remedy the problems and treat all owners on an equal basis.
It is not my job to second-guess the Board and substitute my judgment for theirs unless the by-law is clearly unreasonable or contrary to the Condominium Act or the declaration: York Condominium Corp. No. 382 v. Dvorchik, [1997] O.J. No. 378 (C.A.) at paras. 5-6; Metropolitan Toronto Condominium Corp. No. 1170 v. Zeidan, 2001 CarswellOnt 2495, [2001] O.J. No. 2785 (Sup.Ct.) at para. 45

. . . . [16] The decision by the application judge that the by-law was reasonable and was not oppressive in relation to the appellant is a question of mixed fact and law and is owed deference: Housen v. Nikolaisen, 2002 SCC 33 (CanLII), [2002] 2. S.C.R. 235, at para. 36. I agree with his conclusions and see no basis to interfere. "

from the DISSENT :

. [27] I would hold that although the application judge correctly held a condominium’s declaration does not have to specifically authorize leasing of common elements, he erred in not examining the actual wording of the 2015 By-law to ascertain if it is valid.
Proper consideration of the wording and history of the 2015 By-law reveals it purports to lease the parking spaces on a permanent or potentially permanent basis, effectively creating “exclusive use” common element parking spaces.
Exclusive use common elements can only be designated through the declaration. Accordingly, I would hold that the 2015 By-law is invalid.

[28] The 2015 By-law is also unreasonable because there is no line of analysis that could reasonably lead the Board to lease four parking spots to each unit owner.

. . . . [30] Overall, in weighing conflicting interests, the 2015 By-law is not within a range of reasonable choices that the Board could have made to address its parking issues. Accordingly, the 2015 By-law is also invalid because it is unreasonable.
. . . .[31] Finally, in relation to the last question, I would uphold the application judge’s finding that Cheung’s expectations are unreasonable. In this regard, I agree with my colleagues. ..

. .[59] The Act sets out what must be contained in a corporation’s declaration (s. 7(2)) and what may be contained in the declaration (s. 7(4)).

Section 7(2)(f) requires the declaration to include “a specification of all parts of the common elements that are to be used by the owners of one or more designated units and not by all the owners. . .

. . . . . [98] Entering into leases is not a mere technicality. What YRCC did in this case is pass a by-law allowing it to enter into leases, skip entering into any leases, but nonetheless adversely affect Cheung’s interest in the common elements by permitting other owners to erect or maintain private parking signs in their allocated spaces.

No leases have ever been entered into under either the 2009 or 2015 By-laws. Simply put, YRCC’s actions have not conformed to the requirements of the Act respecting leasing.

. . . . .[100] Further, one cannot grant a valid lease in perpetuity:

[118] On a more abstract basis, a general principle of administrative law is that a decision will be unreasonable if there is no line of analysis that could reasonably lead the administrative body to arrive at the conclusion it did . . . .
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