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ARBITRATION COST BOMBSHELL : T.S.C.C. # 2256 v Paluszkiewicz ALTERATIONS 2018/04/24 11:24  
Was it too sloppy ? Too casual ?

Was it a brazen attempt by a ( now ex- ) President to slam-dunk some major unit & common element changes past his ( ? too-trusting ? ) mere three sets of owners of other units at a converted Rosedale mansion ?

Ontario Superior Court Justice Paul Perell effectively refuses to overthrow arbitrator’s award of $ 216,643.49 in arbitration costs IN FAVOUR OF alleged section 98 breacher / ex-President in a dispute over sufficiency of detailed approval for his now-completed unit & common element changes.

Door opener attempted for judicial appeal from arbitration, had been allegation of perjured testimony to the arbitral process by the section 98 Agreed architect owner & also alleged "unreasonability" of the arbitral outcome.

With the upheld arbitral award apparently lacking any successful internal arbitral barrier to downloading unilateral punitive/condo charges & liens onto the judicial winner, the WIDER TOTAL BURDEN of the TWO YEAR arbitration costs - and of this failed appeal - will presumably by sucked up by winner & loser owners alike.

( At least one disputed Ontario prior arbitral order had purported to shield a winner from expenses generated by unlawful Board sanctions overthrown by the arbitration. Let's see now : unlawfully liened . . . win arbitration . . . . now have to share costs of being unlawfully sanctioned & lawful remedy . . . Does this pass the smell test ? )

That's because effectively ruled ultra vires is the Arbitrator’s order that undetailed condo LIENS be struck down. Those presumably - one unfortunately has to guess - had been liened predicated on those same hereagain unsustained accusations of violated section 98 Agreement.


Why should condo punishment / priority-asserting LIEN(S) - as now confirmed unsustainable but beyond the arbitrator's reach - continue to impair the winner's title ?

That's actually an issue separate from having to also suck up the Declaration-formula'd costs of being LIENED & subjected to a treatment struck down by an arbitration also itself ruled judicially reasonable in outcome except for trying to remove the LIEN(s).

Yes - maybe the arbitrator instead could have reasonably decided against the accused violator. Was there sufficiency of Board approval for the actual changes ? Don't drivers need to produce proof of licensing ? Doesn't a valid title record need to back a property sale ? But they ain't the condo universe.

Whatever, the upheld analysis is that the alterer / ex-President’s initial conceptual drawing gets arbitrated ( & upheld on appeal ) to have adequately captured the condo corporation’s express approval in principle. Held that it was properly and correspondingly followed by validly held, live & emailed Boards' approvals of details.

Despite lack of express further hardcopy recorded approvals in detail, the alleged "details" here get held to have been face-to-face reviewed and e-mailed onside in exchanges with departed Declarant & Declarant’s First Board.

Late & dubious from California are the First Board members' affidavits : “We don’t remember approving !”

Mr Justice Perell is able to apply - as the review standard for arbitrator’s award - primarily reasonableness except law breach of a “general law” which might trigger correctness. No palpable overriding errors in such reasonableness despite the lien issue treated as "incorrect". Cogently & interestingly discussed by highly respected Mr Justice Perell.

( Not his words, but privative-fortressed adjudication is entitled to deference if it produces a merely "reasonable" outcome that may NOT BE THE BEST but is NOT palpably overriding error. Respectfully, that may protect some shaky outcomes, as my Property Assessment Adjudicator demonstrated. )


BUT bottom line ruled ultra vires of arbitrator is arbitral order that the dispute-generated, unit-specific punishments / title damage / condo liens etc must be stripped from title.


As to unit-specific punishments & still-liened coercion, it’s unclear what the next step will be for the winning owner ruled NOT in violation of s 98 for his alterations especially external. His unit is still liened.

No discussion by appeal court participants ( ? are they right ? ) that unit-targetted lien for alleged section 98 breach would be invalid if anyone now tried to impose them on the basis of the as-held facts & law here. Has this judicial approach really been "correct" as to the limit of arbitrator's lawful powers under the Arbitration Act 1991 S.O. 1991 ch 17 & not always clear jurisprudence from other outcomes ?

Voodoo Behave Yourself letters might get ruled unit-expenseable & LIENABLE ; so why not a valid A.D.R. process to go the opposite way ? Was there not some sort of general order - unquoted - at least trying to wider segregate an A.D.R. winner from unlawful lien misuse & downloading back onto winner's unit ?

Unless appealed, looks like ultimately the winner will share burdening the huge ? $ 300 K or more costs following the Declaration’s expense distributing formula.

Will this be appealed ? Appeals have been attempted with financially less at stake . . .


This A.D.R. took more than two years but at least didn't initially start out open to the universe. With construction expert testimony etc there must have been formality at the arbitration stage.

Is A.D.R. always cheaper ?

From B.C. bird feeding arbitration bombshell (2004) : Approx $ 150,000 arbitration award mostly over alleged scofflaw feeding of seagulls on petitioner’s Vancouver balcony & some minor plumbing - ordered recalculated into party-party (outcome unknown). From Blackmore et al. v. Owners, Strata Plan VR-274,, 2004 BCSC 97 issued Jan 15 2004

" . . . [12] So much for the proposition that arbitration is less expensive than proceedings in court or the proposition that arbitration provides a reasonable means of resolving disputes of this kind. . . "

Still want to buy into the condo / strata / Building Scheme universes ?

T.S.C.C. # 2256 v Paluszkiewicz, 2018 ONSC 2329 issued April 12/18
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articles start to appear : T.S.C.C. # 2256 v Paluszkiewicz ALTERATIONS 2018/04/30 23:27  
Michelle Kelly LLB April 27/18 :

“Setting Aside An Arbitration Award for Fraud”

at Robson Carpenter LLP
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