Eglinton Place Inc. v. Her Majesty the Queen in Right of Ontario (as represented by the Ministry of Consumer and Commercial Relations) et al.
[Indexed as: Eglinton Place Inc. v. Ontario (Ministry of Consumer and Commercial Relations)]
47 O.R. (3d) 344
[2000] O.J. No. 498
Court File No. 99-CV-180938
Ontario Superior Court of Justice
Rivard J.
February 21, 2000
Real property — Condominiums — Powers of condominium corporation — Common elements — Release of easement — Condominium corporation has power to release easement that forms part of common elements — Condominium Act, R.S.O. 1990, c. C.26, ss. 12, 13.
A condominium corporation has the authority to release an easement that forms part of the common elements.
Cases referred to
Metropolitan Toronto Condominium Corp. No. 539 v. Chapters Inc. (1999), 24 R.P.R. (3d) 319, [1999] O.J. No. 2806 (S.C.J.);
York Condominium Corp. No. 104 v. Supreme Automatic Working Machine Co. (1978), 18 O.R. (2d) 596 (H.C.J.)
Statutes referred to
Condominium Act, R.S.O. 1990, c. C.26, ss. 1(1) “common elements”, “property”, 12, 13, 38
Rules and regulations referred to
Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 1.05, 2.03, 14.05(3)(d), 14.06
APPLICATION for the determination of an issue pursuant to rule 14.05(3)(d) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.
Harry Herskowitz, Robert M. Freedman and Richard P. Hoffman, for applicant.
Jean C.H. Iu, for respondent, Her Majesty the Queen in Right of Ontario.
RIVARD J.: — This is an application brought under rule 14.05(3)(d) for the determination of the following issue:
Does the Condominium Act, R.S.O. 1990, c. C.26, provide the necessary authority for a condominium corporation to release an easement?
The facts are not in dispute.
The applicant, Eglinton Place Inc. owns lands situated at 123 Eglinton Avenue East, in Toronto (“the 123 Lands”). These lands are being developed by the applicant as a multi- residential condominium project.
A neighbouring condominium development owns the lands abutting the southerly boundary of the 123 Lands. I will refer to this property as the “MTCC 1128 Lands”.
The MTCC 128 Lands enjoy an easement over part of the 123 Lands for the purpose of facilitating access of garbage vehicles removing garbage from MTCC 1128. This easement is registered on title.
Correspondingly, the 123 Lands have an easement for access over portions of the common elements of the MTCC 1128 Lands, to facilitate entry into the parking area on the 123 Lands. The easement is also registered on title.
MTCC 1128 does not require or use the easement over the 123 Lands because it has its own garbage storage and removal area entirely within its own boundaries. MTCC 1128 has agreed to formally release the easement to and in favour of the applicant.
Eglinton does not and will not require the easement over the MTCC 1128 Lands because its development plans for the 123 Lands provide for a separate and independent underground parking garage, with access to this parking located entirely within the boundaries of the 123 Lands. Eglinton has agreed to formally release the easement to and in favour of MTCC 1128.
In pursuance of these agreements, Eglinton’s solicitor submitted to the Land Registrar of the Land Titles Office in Toronto, for pre-approval, two forms of release of easement. One form was prepared pursuant to s. 13 of the Condominium Act and the second was prepared pursuant to s. 38 of the Act.
The Land Registrar rejected both forms on the basis there exists no express statutory authority under the Condominium Act permitting a condominium corporation to release an easement.
Eglinton then brought this application. The notice of application was served by ordinary mail upon all the condominium unit owners. The five major banks and Canada Trust were also served as the mortgagees of the lands in question.
It was my view as well as the opinion of counsel that service in this manner was appropriate in light of the very large numbers of unit owners.
I therefore granted an order permitting substituted service of the notice of application as set out in para. (d) of p. 4 of the notice of application. Pursuant to rules 1.05 and 2.03, I also allowed the applicant to describe the respondent unit owners and mortgagees of MTCC 1128 in the title of proceeding as appears in the notice of application, thereby dispensing with compliance with rule 14.06.
Counsel for the applicant informs me that his law firm did receive calls from some unit owners who indicated they are not opposing this application. He also spoke to a legal representative of Canada Trust and of the Bank of Montreal who also stated they were not opposing the application. The only opposition to this application is from the Ministry.
I must now consider whether the Condominium Act provides the authority to a condominium corporation to release an easement, or, whether, the consent of all unit owners is required. Counsel for the applicant submits it would be impossible to get 100 per cent of the unit owners to sign the release.
The Ministry submits that these easements were not conveyed to the condominium corporation, but are part of the common elements, and are owned by the unit owners as tenants in common. The Ministry further submits the rights of real property owners should not be altered without clear statutory authority or without the express consent of the owners, neither of which exists or has been obtained.
Section 1(1) of the Condominium Act defines the term “property” as constituting the land and interests appurtenant to the land described in the description, and includes any land and interests appurtenant to land that are added to the common elements.
“Common elements” are defined at s. 1(1) of the Act as all the property except the units.
The parties to this application agree that an easement is a real property interest and forms part of the common elements.
There is some dispute as to whether or not an easement is an asset under the Condominium Act. Although the terms “property” and “common elements” are defined in the Act, no definition is provided for the term “asset”. The Act does however distinguish “assets” from “property” and “common elements”.
Under s. 12(1) of the Condominium Act, the objects of the condominium corporation are to manage the property and any assets of the corporation.
Under s. 12(2) of the Act, the corporation has a duty to control, manage and administer the common elements and the assets of the condominium corporation.
Section 13(1) of the Act provides as follows:
13(1) The corporation may own, acquire, encumber and dispose of real and personal property for the use and enjoyment of the property.
In York Condominium Corp. No. 104 v. Supreme Automatic Working Machine Co. (1978), 18 O.R. (2d) 596 (H.C.J.) (“the Supreme case”) the applicant was in the same position under the Condominium Act, as it read then, as the applicant in this proceeding finds itself under the current legislation.
In the Supreme case, the Condominium Act did not give a condominium corporation the power to lease the common elements.
In this proceeding, the Condominium Act does not deal with the manner of releasing an easement.
In the Supreme case, the condominium corporation purported to enter into a lease of the common elements. There was nothing in the Condominium Act to outline how this could be achieved. The court had to consider whether the Act empowered the condominium corporation to act as agent for the unit owners in leasing the common elements.
In dealing with this issue, Mr. Justice Reid started from the proposition that there is no provision in the Condominium Act preventing the corporation from acting as agent. In fact, he was of the view that the tenor of the Act was to the contrary. He said at pp. 598-99:
For example, the corporation is made generally responsible for the performance functions of common concern. In carrying out these functions it is, in essence, acting on behalf of all the unit holders. The corporation may bring actions with respect to the common elements. In doing so, it is really acting as agent for the owners. The Act therefore contemplates the corporation acting as agent of the unit holders.
Reid J. went on to say at p. 3:
Section 9(4) [now s. 12] states that the objects of the corporation are to manage the property and any assets of the corporation. While the applicant submits that the property and assets of the corporation do not include the common elements because they are owned by the members and not the corporation, in my opinion, “property” in s. 9(4) is not confined to what is owned by the corporation. A primary function of the corporation is the management of the undertaking. It could hardly carry out this function if it were restricted to property owned by the corporation. It thus appears to me that “property” in s. 9(4) should be construed as the term is defined in the Act [s. 1(1)(n)] . . .
I agree with the comments of Reid J. in the Supreme case. The condominium corporation, in releasing and in obtaining a release of the easements in question, was “managing” the property and the assets of the corporation.
In my view, the term “assets” in s. 12 of the Act, if given its plain and ordinary meaning, includes the easement.
I agree with the opinion of Mark F. Freedman, an expert in the area of condominium law, to the effect that condominium corporations are in no different position today with respect to releasing an easement than condominium corporations were in prior to 1978 with respect to the issue of leasing common elements dealt with in the Supreme case. Mr. Freedman said at p. 6 of his report, found at tab 7 of the applicant’s authorities:
The board of directors has the authority to manage the property consistent with the objects of the corporation, and accordingly, in my opinion, the board would (and should) have the authority to release and abandon easements, if the ratio of the Supreme case is to be followed.
I add that s. 12(1) of the Condominium Act should not be given a narrow interpretation. It should be read as an empowering section, conferring broad powers on the condominium corporation. This was the approach taken by the court in Metropolitan Toronto Condominium Corporation No. 539 v. Chapters Inc. (1999), 24 R.P.R. (3d) 319, [1999] O.J. No. 2806 (S.C.J.), where the court recognized and accepted that the Condominium Act is remedial legislation and should not be rigidly or narrowly construed.
For these reasons, there will be an order declaring that s. 13(1) of the Condominium Act, as amended, enables a condominium corporation to release an easement which is part of the common elements.
It is further ordered that the Land Registrar for the Land Titles Division of Metropolitan Toronto (No. 66) forthwith register the applicant’s form of release of easement as appended to the notice of application as schedule “A”.
Order accordingly.