COURT OF APPEAL FOR ONTARIO

CITATION: Cheung v. York Region Condominium

Corporation No. 759, 2017 ONCA 633

DATE: 20170803

DOCKET: C62478

Weiler, Pardu and Benotto JJ.A.

BETWEEN

Yuk-Ying Cheung

Applicant (Appellant)

and

York Region Condominium Corporation No. 759

Respondent (Respondent)

Jonathan Fine, William Pepall and Julia Lurye for the
    appellant

Antoni Casalinuovo and Megan Molloy for the respondent

Heard: April 11, 2017

On appeal from the order of Justice Robert F. Goldstein
    of the Superior Court of Justice, dated July 5, 2016, with reasons reported at
    2016 ONSC 4236, 74 R.P.R. (5th) 94.

Pardu J.A.:

[1]

The respondent condominium corporation passed a
    by-law to try to deal with a parking lot dispute in the common element parking
    areas of its commercial condominium complex. The appellant, Yuk-Ying Cheung,
    appeals from the dismissal of her application for an order that the by-law was
    invalid and that the condominium corporations conduct in passing the by-law
    was oppressive.

[2]

The appellant advances four arguments:

(1)

The by-law was beyond the powers of the board conferred by the
Condominium
    Act, 1998
, S.O. 1998, c. 19 (the Act), and the
    condominium declaration.

(2)

The by-law was void for uncertainty because the leases had not yet
    been executed.

(3)

The by-law was unreasonable and the boards conduct was oppressive,
    that is to say, unfairly prejudicial to her interests.

(4)

This court should grant leave to appeal from the application judges
    award of costs in favour of the respondent, set aside those costs, strike out
    references to incivility in the applications judges reasons, and reassess
    costs or refer the amount of those costs back to the Superior Court.

[3]

There are 34 units in this complex, of which the
    appellant owns three. She has leased her units to a very popular restaurant.
    The 162 parking spaces are common elements, and she says that she needs all of
    them: I want to be able to use all the 162 shared parking spaces on [the
    respondents] property because a 230 seat restaurant requires the use of a
    sufficient number of parking spaces to accommodate its patrons. The other unit
    owners also want to use some of the parking spaces. The application judge, in
    his reasons at para. 9, described one of the unit owners evidence about the
    very toxic parking situation and conflict between the restaurant patrons and
    other users of the parking. There were altercations among restaurant
    customers, between restaurant customers and other customers, and between
    restaurant customers and business owners within the complex. The restaurant
    was very busy during its peak hours, 9:00 a.m. to 3:00 p.m. and after 5:00
    p.m.

[4]

This has been a long-standing problem. The
    respondent tried to solve the problem in 2009 by passing a by-law to allocate two
    parking lots to each unit owner, but that by-law was invalid as it had never
    been registered on title.

[5]

In 2015, the respondent adopted the by-law that
    gave rise to this litigation.  It provided that the respondent could from time
    to time grant a lease to each owner of four parking spaces in the common
    element parking spaces on such terms and conditions as may be deemed
    appropriate by the Board of Directors from time to time.

A.

Is the by-law beyond the powers of the Board?

[6]

The appellant argues that the by-law is invalid
    because it in effect creates exclusive use common elements. Section 7(2)(f)
    of the Act requires that a declaration shall contain 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 owners. Here, the declaration contains no such
    provision describing any parking spaces as exclusive use common elements.

[7]

On the other hand, s. 21(1)(a) of the
Act
provides that a
    condominium corporation may by by-law lease a part of the common elements,
    except a part that the declaration specifies is to be used only by the owners
    of one or more designated units and not by all the owners. Section 56(1) of
    the Act provides that a board of directors may make by-laws to govern the use
    and management of the assets of the Corporation.

[8]

The appellant argues that, based on the
    declaration, she expected that she could use all of the common element parking
    spaces on the property, and this expectation was integral to her decision to
    acquire her units. It is reasonable to suppose that the other unit holders had
    the same expectation.

[9]

The by-law passed by the respondent does not
    have the degree of permanence so as to amount to, in effect, the creation of
    exclusive use common elements which would pass with ownership of a unit. The board
    could repeal or vary the by-law at any time. All unit owners reasonably share
    the parking spaces.  The parking spots are not like an apartment balcony, which
    might be designated an exclusive use common area for a particular unit, such that
    there is no expectation that any other unit owner would ever use that space and
    an owner would reasonably expect that the right to use the space would pass with
    ownership of the unit. There is no such expectation here in relation to the
    parking spaces.

[10]

I therefore reject the appellants submission
    that the by-law creates exclusive use comment elements in a manner contrary to
    the Act.

B.

Is the by-law void for uncertainty?

[11]

The by-law evinces an intention to allocate, by
    lease, four parking spaces to each unit, and contains a plan for that
    allocation. The respondent, awaiting a determination of these proceedings, has
    not yet executed the leases contemplated by the by-law. More work will have to
    be done to execute the proposal in principle embodied in the by-law, as the
    terms of the leases will have to be approved by the board, but that does not
    make the by-law void for uncertainty.

C.

Was the by-law unreasonable or oppressive?

[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 Boards 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
.

[13]

Section 135(2) of the
Act
provides that if the
    conduct of an owner or a condominium corporation threatens to be oppressive or
    unfairly prejudicial to the applicant or unfairly disregards the interests of
    the applicant, the court may make an order to rectify the matter.

[14]

The application judge noted that the purpose of
    the section is to protect reasonable expectations. He adopted the views
    expressed in
Orr v. Metropolitan Toronto Condominium Corporation No.
    1056
, 2011 ONSC 4876, 111 R.P.R. (5th) 189, writing at
    para. 49 of his reasons:

In my respectful view, my colleague D.A. Wilson
    J. set out the proper approach in
Orr v. Metropolitan Toronto Corp
    No. 1056
,

2011 ONSC 4876
at para. 158:

It must be recognized that the Board is
    charged with the responsibility of balancing the private and communal interests
    of the unit owners and their behaviour must be measured against that duty. The
    court does not look at the interaction between the Board and the Plaintiff in
    isolation. Justice Juriansz (as he then was) articulated some limits to the
    oppression remedy's power and the balance of interest that must be borne in
    mind in
McKinstry v. York Condominium Corp. No. 472
,
2003 CanLII 22436 (ON SC),
[2003] O.J. No. 5006
,
2003 CarswellOnt 4948 (S.C.J.)
:

It must be remembered that the section
    protects legitimate expectations and not individual wish lists, and that the
    court must balance the objectively reasonable expectations of the owner with
    the condominium board's ability to exercise judgment and secure the safety,
    security and welfare of all owners and the condominium's property and assets

[15]

The application judge concluded that the
    appellants expectation that her tenant should be able to use all of the common
    area parking spaces was unreasonable and amounted to an allegation that the
    board acted unfairly by not giving her special parking privileges not enjoyed
    by the other owners.

[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, [2002] 2. S.C.R. 235, at para.
    36. I agree with his conclusions and see no basis to interfere.

D.

Should this court grant leave to appeal from the
    costs order?

[17]

There is no reason why costs should not follow
    the result in this matter.  Before the application judge, the appellant argued
    that each party should bear its own costs. According to the application judge,
    both sides point metaphorical fingers at the other for being unreasonable and
    dishonest. The appellants partial indemnity bill of costs totaled $65,313.01;
    the respondents amounted to $63,085.44. The appellant sought substantial
    indemnity costs because of an offer to settle it had made, which the
    application judge said was reasonable and would have left the appellant in a
    significantly better position. Its substantial indemnity costs amounted to
    $72,862.77.

[18]

The appellants concern is about the application
    judges comments about incivility. The trial judge noted:

After reading the competing emails and
    letters, one is left with the impression of hard fought litigation that
    sometimes descended to petty behavior by both parties.  That said, in the race
    to the bottom I find that the Applicant has gotten there first  by a
    significant winning margin.

[19]

The application judge saw no reason to depart
    from the usual rule that the loser pays, but concluded there should be some
    discount to the costs awarded to the respondent on the ground that its behavior
    may not have descended to the level of the Applicants but it was not pure.

[20]

He concluded:

In my view, given the complexity of the
    issues, the behaviour of both parties (but especially the Applicant), and the
    Offer to Settle, a global amount of $60,000 in favour of the Respondent is fair
    and reasonable in the circumstances. This amount reflects a discount as well as
    the offer to settle. It also reflects the fact that the Applicant, as the loser
    in this complex and contentious litigation, must reasonably expect to pay
    significant costs.

[21]

Given the near parity of the partial indemnity
    costs claimed by each party, and taking into account the offer to settle made
    by the respondent, the $60,000 awarded by the trial judge was well within the
    range a losing party would expect to pay in costs, regardless of the conduct of
    either counsel.

[22]

An appellate court must not interfere with a
    discretionary costs award unless it is plainly wrong or the trial judge made an
    error in principle in arriving at the costs award:
Hamilton v. Open
    Window Bakery Ltd.
, 2004 SCC 9, [2004] 1 S.C.R. 303, at
    para. 27. The application judge was in the best position to assess the extent
    to which exchange of aspersions, of which there were undoubtedly a few,
    contributed to the increased temperature of this litigation.

[23]

Accordingly, for these reasons, leave to appeal
    costs is dismissed and the appeal is otherwise dismissed.

[24]

Costs of the appeal should follow the result, on
    a partial indemnity basis, in favour of the respondent, in the sum of
    $27,749.12, inclusive of all applicable taxes and disbursements.

G.
    Pardu J.A.

I
    agree M.L. Benotto J.A.

Weiler J.A. (Dissenting):

A.

Introduction

[25]

The
    respondent, York Region Condominium Corporation No. 759 (YRCC), enacted a
    by-law purporting to lease four common element parking spaces to each
    condominium unit owner (the 2015 By-law). The appellant, Yuk-Ying Cheung,
    owns three units in YRCC and leases them to a busy restaurant. Cheung
    challenges the validity of the 2015 By-law and seeks a remedy under the
    oppression provision of the
Condominium Act, 1998
, S.O. 1998, c. 19
    (the Act).

[26]

Is
    the 2015 By-law valid? Is it reasonable? Are Cheungs expectations reasonable
    and, if so, does the 2015 By-law unfairly disregard her interests? These are
    the questions raised in this appeal.

[27]

I
    would hold that although the application judge correctly held a condominiums
    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.
    The effect of the 2015 By-law is reduce the number of unreserved parking spaces
    by 80 percent. It is a further reduction of about 50 percent from the By-laws
    predecessor, passed in 2009, which allocated two parking spaces to each unit
    (the 2009 By-law). There is no evidence  expert or otherwise  that an
    increase from two reserved parking spots per unit in the 2009 By-law to four in
    the 2015 By-law is necessary to resolve YRCCs parking problems. There is also
    no evidence that rigorous enforcement of two reserved parking spots per unit
    would be insufficient.

[29]

Further,
    in holding the 2015 By-law is reasonable, the application judge relied on his
    finding that overflow parking was available on adjacent lands. In doing so, he
    committed a processing error that informed his conclusion because, practically
    speaking, there is no available alternative parking.

[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 judges
    finding that Cheungs expectations are unreasonable. In this regard, I agree
    with my colleagues.

[32]

In
    the result, I respectfully disagree with my colleagues that the 2015 By-law is
    valid and that the appeal should be dismissed. Instead, I would allow the
    appeal and grant Cheungs application for a declaration that the 2015 By-law is
    invalid.

[33]

In
    relation to costs, I would grant Cheungs request for leave to appeal costs and
    set aside the application judges costs award. Having regard to the partial
    success each party achieved, I would order that each party bear their own costs
    throughout.

[34]

Before
    discussing the issues and my conclusions, it is necessary for me to set out the
    facts, legislative background, and the application judges reasons. For ease of
    reference, the 2009 and 2015 By-laws are attached in Appendix A.

B.

Facts

[35]

YRCC
    is a condominium corporation comprised of 33 commercial-industrial units
    municipally known as 160 East Beaver Creek, Richmond Hill, Ontario. It is
    located within a larger development called the York Corporate Centre.

[36]

Cheung
    owns three units in YRCC, which she purchased from the developer in 1989 and
    has leased for the operation of a restaurant since 1990. Dragon Boat Fusion
    Cuisine has leased Cheungs restaurant space since 2007 (the restaurant). The
    restaurant can facilitate about 30 tables, which can each accommodate four to
    eight people and they are constantly full. The restaurant also has over 20
    employees.

[37]

YRCCs
    common elements include 162 parking spaces, five of which are accessible
    parking spaces for persons with disabilities.

(1)

The parking problem

[38]

For
    almost 20 years  from the creation of YRCC on October 19, 1990, until May 25,
    2009  owners and patrons of the various units used the 162 shared or open
    parking spaces on a first-come, first-use basis.

[39]

As
    a result of the restaurants popularity, the parking situation has been
    described as toxic. The restaurant is very busy during its peak hours  9:00
    a.m. to 3:00 p.m. and after 5:00 p.m.  which resulted in the shared parking
    spaces being monopolized by restaurant employees and patrons to the detriment
    of the owners and customers of the other units within YRCC.

[40]

For
    example, in affidavits sworn in response to Cheungs application, one unit
    owner who operates a window business said he has lost customers because they
    leave when they cannot find parking outside his showroom. Another owner, who
    runs a centre providing services to children with disabilities, said her
    students had difficulty navigating through the parking lot to get to her centre
    because they could not find suitable parking nearby.

[41]

There
    was also evidence before the application judge that because of the parking
    shortage, visitors to YRCC at times parked illegally by blocking fire routes,
    accessible parking spaces, or double-parking other vehicles.

[42]

The
    parking problem resulted in altercations involving restaurant patrons, unit
    owners, tenants, and customers of other businesses in YRCC.

(2)

YRCCs declaration

[43]

YRCCs
    declaration states:

Use of Common Elements:

Subject to the
    provisions of the Act, this Declaration and the By-Laws, and any Rules passed
    pursuant thereto, each owner has the full use, occupancy and enjoyment of the
    whole or any part of the common elements, except as herein otherwise provided.

[44]

The
    declaration does not otherwise provide any restrictions affecting common
    elements.

(3)

The 2009 By-law

[45]

On
    May 25, 2009, YRCCs Board of Directors passed the 2009 By-law to address the
    parking situation. The preamble to the 2009 By-law stated, in part: Problems
    exist with regards to availability of parking, in that unit owners, their
    employees, guests, clients and customers are not able to access parking spaces
    within a close proximity to their units.

[46]

The
    2009 By-Law provided as follows:

[E]ach unit owner shall be the
exclusive
lessees
of two (2) parking spaces.

Each lease shall forever run with the title to the unit it is
    attached to, notwithstanding change(s) of ownership of the unit.

The leases shall terminate with the termination of the
    Corporation. [Emphasis added.]

[47]

Thus,
    the 2009 By-law purported to forever lease two parking spaces to each unit
    owner and consequently reduce the number of open parking spaces from 162 to 96.
    A majority of the unit owners approved the 2009 By-Law at a special meeting
    held on June 11, 2009, but it was never registered on title to YRCC.

[48]

During
    the six years following the passage of the 2009 By-Law, no leases were ever
    entered into with unit owners. Unit owners did, however, act as though leases
    had been entered into and some placed private property signs on their two
    assigned parking spaces threatening to ticket or tow unauthorized vehicles.
    This signage was loosely enforced.

[49]

In
    2014, the Board discovered the 2009 By-law was not valid because it had never
    been registered on title.

(4)

The 2015 By-law

[50]

On
    January 20, 2015, about 60 percent of the unit owners approved the 2015 By-Law,
    which authorizes the lease of four common element parking spaces to each unit
    owner, thereby further reducing the number of open parking spaces to 30. The
    2015 By-Law was registered on title to YRCC on February 20, 2015.

[51]

Paragraph
    3 of the 2015 By-law provides as follows:

The Board of Directors of the Corporation may ... from time to
    time, grant a lease or license  over, upon, under or through the Common
    Element Parking Spaces assigned to the owners unit as set out in Schedule B
    attached hereto, upon the terms and conditions herein contained and any other
    such terms and conditions as may be deemed appropriate by the Board of
    Directors from time to time.

[52]

The
    2015 By-law does not state that it repeals or amends the 2009 By-law. (Perhaps
    because the Board realized the 2009 By-law had never been registered, it was
    thought unnecessary to do so.)

[53]

Two
    communications, one from YRCCs Board and one from its lawyers, advised that
    the 2015 By-Law grants each unit
exclusive
use of four parking
    spaces (emphasis added). Neither communication made reference to any leases.

[54]

By
    virtue of being the owner of three units, Cheung was assigned 12 parking
    spaces. Cheungs 12 spaces, together with the 30 open parking spaces (including
    the five reserved for accessible parking), result in 42 spaces being
    potentially available for restaurant customers.

[55]

On
    or about September 8, 2015, other unit owners began installing additional
    reserved parking signs throughout the common element parking lot.

[56]

No
    leases were ever entered into with owners.

[57]

Cheungs
    application was heard on April 19, 2016 and dismissed on July 5, 2016.

C.

The governing legislative background

[58]

A
    condominium corporation is governed by the Act, its declaration, by-laws, and
    rules.

(1)

The Act and the declaration

[59]

The
    Act sets out what must be contained in a corporations 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. Any exclusive use space specified under this section
    must be described in a schedule attached to the declaration for the purpose of
    allowing someone to determine whether the parking, storage, balcony or patio
    areas are exclusive use space and, if so, to which unit they are exclusively
    assigned: Audrey Loeb,
Condominium Law and Administration
, loose-leaf
    (2016- Rel. 9), (Toronto: Thomson Reuters Canada Ltd., 1995), at p. 3-16.

[60]

Section
    56(1) of the Act contains a list of the matters over which a condominium
    corporation has the power to pass by-laws. These matters include by-laws to
    govern the management of the property (s. 56(1)(l)); or to govern the conduct
    generally of the affairs of the corporation (s. 56(1)(p)). Section 56(6)
    further states, The by-laws shall be reasonable and consistent with this Act
    and the declaration. A by-law is not effective until a copy of it is
    registered in accordance with the Act: s. 56(10).
[1]

[61]

Section
    21 of the Act gives a corporation power to pass a by-law to lease a part of the
    common elements, unless the declaration has specified that part of the common
    elements is to be used only by the owners of certain designated units
    (exclusive use common elements). I address s. 21 in more detail below.

[62]

Although
    we are not concerned with rules in this case, for the sake of completeness, I
    note that a corporation may also pass rules respecting the use of common
    elements and units to promote the safety, security or welfare of the owners
    and of the property and assets of the corporation (s. 58(1)(a)); or to
    prevent unreasonable interference with the use and enjoyment of the common
    elements, the units or the assets of the corporation (s. 58(1)(b)).

[63]

Overall,
    the Act creates a hierarchy. After the provisions of the Act, the declaration
    is to have priority. The declaration is subject to the Act, and s. 7(5)
    provides the Act prevails over any provision in a declaration that is
    inconsistent with the Act and the declaration is deemed to be amended
    accordingly. The declaration is considered to be akin to the corporations
    constitution and, therefore, it is difficult to amend.

(2)

By-laws

[64]

By-laws
    are subject to the declaration and the Act. The validity of any by-law, and
    therefore of the 2015 By-law, must be examined in the light of the priority
    given to the provisions of the Act and the declaration. Such an interpretation
    of the interplay between these provisions provides coherence to the statutory
    scheme. Ruth Sullivan states, in
Sullivan on the Construction of Statutes
,
    6th ed. (Markham: LexisNexis Canada Inc., 2014), at p. 337:

It is presumed that the provisions of legislation are meant to
    work together, both logically and teleologically, as parts of a functioning
    whole. The parts are presumed to fit together logically to form a rational,
    internally consistent framework; and because the framework has a purpose, the
    parts are also presumed to work together dynamically, each contributing
    something toward accomplishing the intended goal.

[65]

This
    approach is supported by the decision in
Rosen v. Grey Condominium
    Corporation No. 31
(12 July 2012),
    Toronto, 11-164 (Ont. S.C.).
Tulloch J. (as he then was) was asked
    to reconcile the by-law making power under s. 56 of the Act with the
    requirements of s. 7 in interpreting a by-law which purported to place
    restrictions on unit owners ability to rent out their units on a short-term
    basis.

[66]

Pursuant
    to s. 7(4)(c) of the Act, the declaration may contain conditions or
    restrictions on the occupation and use of units and leases of units. In
Rosen
,

the condominium corporations declaration provided each unit was to be
    occupied and used for no purpose other than living accommodation. The
    corporation sought to justify the by-law under ss. 56(1)(l) and (m), which
    grant a board the power to govern the management of the property and the use
    and management of the assets of the corporation.

[67]

In
    considering whether the corporation could impose short-term rental restrictions
    through a by-law, Tulloch J. stated, at para. 48:

From these subsections, it is clear that according to the
Condominium
    Act
, if a condominium corporation wants to put a restriction on the
    occupation or leasing of a unit, then the provision must be placed within the
    declaration. There is no doubt that condominium corporations do have the right
    to restrict leasing of the units within the condominiums; what is clear is that
    if these restrictions are going to be imposed, they must be contained within
    the declaration and must be registered so that prospective owners are aware of
    those restrictions.

[68]

Essentially,
    Tulloch J. treated a restriction on the occupation and leasing of units as
    falling exclusively within s. 7 of the Act and accordingly he held the by-law
    was invalid.

[69]

Like
    restrictions that relate to the occupation and use of a unit, the designation
    of exclusive use common element space is also a matter specifically enumerated
    in s. 7.

(3)

Common elements and exclusive use common elements

[70]

The
    Act treats common elements and exclusive use common elements differently.
    Common elements are defined in s. 1(1) of the Act as all property except the
    units. Section 11(2) provides the owners are tenants in common of the common
    elements. Thus, it is the owners and not the corporation who own the common
    elements. Section 11(4) provides the ownership of a unit cannot be separated
    from the ownership of the common interest. Section 11(5) prevents partitioning
    or dividing common elements, except as provided by the Act.

[71]

Exclusive
    use common elements are not specifically defined in the Act. Section 7(2)(f)
    refers to space that is exclusively reserved for the use of the owners of one
    or more designated units and not by all the owners. Exclusive use common
    elements are created where the declaration reserves common element space to
    designated unit owners. Even though the word permanent is not used, it is the
    allocation of common element space on a permanent basis which creates exclusive
    use: Loeb, at p. 6-9.

[72]

In
    her book,
Condominium Law and Administration
,

Audrey Loeb
    refers to the difference between common elements and exclusive use common
    elements as follows:

It is important to distinguish the allocation of common element
    parking and/or locker spaces from exclusive use common element spaces, which
    are allocated to a particular unit for all time. They can only be changed by an
    amendment to the declaration and description: at p. 6-9.

[73]

The
    net effect is this. If parking spaces are exclusive use common elements, they
    must be designated as such in the declaration. The units and the exclusive use
    parking spaces which are allocated to each unit must be listed in a schedule to
    the declaration. When a unit is transferred, the exclusive use parking space is
    tied to it. The only way to sever the exclusive use common element parking
    space from the unit would be by an amendment to the declaration, which requires
    90 percent of the owners written consent, or an application to the court to
    amend the declaration where there is an error or inconsistency:
Condominium
    Act
, ss. 107-109.

[74]

Loebs
    commentary suggests, however, that a condominium board can allocate common
    element parking spaces by by-law: Audrey Loeb,
The Condominium Act: A
    Users Manual
, 4th ed. (Toronto: Carswell, 2013), at pp. 179-180. Such
    allocations are not permanent. The by-law can be changed by an amendment, which
    requires 50 percent plus one of the units to vote in favour of the amendment:
Condominium
    Act
, s. 56(10).

[75]

Section
    21 of the Act, which deals with leasing common elements, is central to this
    appeal. For this reason, I will quote it in full:

21(1) The corporation may by by-law

(a)lease
    a part of the common elements, except a part that the declaration specifies is
    to be used only by the owners of one or more designated units and not by all
    the owners;

(2) A lease, grant, transfer or release mentioned in
    subsection (1), signed by the authorized officers of the corporation, affects
    the interest of every owner in the common element as if the lease, grant,
    transfer or release had been executed by that owner.

[76]

Section
    21(1) prohibits common elements that are designated in the declaration for
    exclusive use from being leased by a condominium corporation. Subject to that
    exception, a condominium corporation can lease any part of the common elements,
    or grant a licence over the common elements; it must do so by by-law. However,
    pursuant to s. 21(2), only when the lease or grant of licence is signed by the
    authorized officers of the corporation is there a deemed lease or licence by an
    owner of the owners interest (as tenant in common) in the common elements.

(4)

Oppression remedy

[77]

Section
    135 of the Act sets out the oppression remedy. A unit owner may make an
    application to the court on the basis that the conduct of an owner,
    corporation, declarant or mortgagee of a unit is or threatens to be oppressive
    or unfairly prejudicial to the applicant or unfairly disregards the applicants
    interests. Where the court is satisfied that a remedy under s. 135 is
    justified, it may make any order the judge deems proper, including an order
    prohibiting the impugned conduct or awarding the applicant compensation.

D.

The application judges reasons

[78]

The
    application judge described the 2009 By-law and observed although the parties
    acted as if the 2009 By-law was valid, it was agreed it was not because it was
    not registered on title. As a result, the Board passed the 2015 By-law. The
    application judge found, The 2015 By-law essentially did the same things as
    the 2009 By-law, except that it authorized the lease of four common element
    parking spaces to each condominium unit.

[79]

The
    application judge then turned to the two issues before him: (1) whether the
    2015 By-law is valid, and (2) whether Cheung was entitled to relief under the
    oppression remedy.

(1)

The validity of the 2015 By-law

[80]

The
    application judge held the 2015 By-law is valid. He rejected Cheungs
    submission that YRCC can only lease common element parking spaces if the
    declaration provides for it. He concluded a plain reading of s. 21(1) of the
    Act permits YRCC to lease part of the common elements. Section 56(1), which
    sets out a boards by-law making authority more specifically, does not curtail
    the power given in s. 21(1) to lease part of the common elements. Further, he
    held the 2015 By-law is consistent with YRCCs declaration.

[81]

The
    application judge also held the 2015 By-law is not discriminatory. The 2015
    By-law is aimed at the parking situation and imposes a solution that treats all
    unit owners equally. The application judge noted a by-law is not
    discriminatory simply because it aims at a problem caused by one unit holder.

[82]

In
    addition, the application judge considered whether the 2015 By-law is
    reasonable. He found the restaurant is very popular, especially during its peak
    hours, from 9:00 a.m. to 3:00 p.m. and after 5:00 p.m. He found the restaurant
    monopolized the parking, which was to the detriment of other unit owners. He
    noted YRCCs evidence that altercations over parking spaces would occur and
    other obnoxious behaviour was displayed by some of the restaurant patrons. He
    accepted Cheungs evidence that the 2015 By-law (and to a lesser extent the
    2009 By-law) has had a detrimental effect on the restaurant, and some of the
    other businesses often have empty parking spaces when the restaurant is at peak
    capacity.

[83]

As
    an aspect of reasonableness, the application judge considered whether the
    restaurants customers were able to park elsewhere in the York Corporate
    Centre. He relied on the evidence of both parties experts, who commented on
    the effect of the Town of Richmond Hill Zoning By-Law No. 150-80, as amended,
    on parking at the York Corporate Centre (the Zoning By-law). Based on this
    expert evidence, the application judge concluded the restaurants customers
    have the ability to park in other parts of the York Corporate Centre. At
    para. 42 of his reasons, he stated:

As Mr. Mannett, [Cheungs] expert concedes, the zoning by-law
    on its face contemplates that parking will be available throughout the York
    Corporate Centre. Furthermore, as Mr. Rodger [YRCCs expert] mentioned in his
    analysis, whether over-flow parking is required depends on the time of day.
    [Cheung] concedes that on its face the 2015 By-law does not contravene the
    zoning by-law. I also note that if Mr. Mannett is correct that, historically,
    parking has not been available in other parts of the York Corporate Centre,
    then it strikes me as entirely reasonable that the Board would be required to
    manage the available parking for the benefit of all unit holders.

[84]

Ultimately,
    the application judge held the 2015 By-law is reasonable. The Board was faced
    with a parking problem and it crafted a solution that treats the unit owners equally.
    The application judge then proceeded to consider whether Cheung was entitled to
    relief under the oppression remedy.

(2)

The oppression remedy

[85]

The
    application judge disagreed that the Boards conduct was oppressive. If
    anything, he noted, it was Cheungs conduct in monopolizing the parking that
    was oppressive.

[86]

The
    application judge noted the authority under s. 135(2) of the Act to remedy
    conduct that is oppressive or unfairly prejudicial to a unit owner. He set out
    the two-step approach to the oppression remedy articulated in
BCE Inc. v.
    1976 Debenture Holders
, 2008 SCC 69, [2008] 3 S.C.R. 560, at para. 56:

One should look first to the principles underlying the
    oppression remedy, and in particular the concept of reasonable expectations. If
    a breach of a reasonable expectation is established, one must go on to consider
    whether the conduct complained of amounts to oppression, unfair prejudice
    or unfair disregard.

[87]

Under
    the first branch of the test, the application judge considered Cheungs
    expectations. He noted the oppression remedy is limited by the Boards
    obligation to balance the private and communal interests of the unit owners
    s. 135 protects reasonable expectations and not individual wish lists:
Orr
    v. Metropolitan Toronto Corp. No. 1056
, 2011 ONSC 4876, 11 R.P.R. (5th)
    189, at para. 158, varied on other grounds, 2014 ONCA 855, 62 R.P.R. (5th) 1.

[88]

The
    application judge reviewed Cheungs evidence and referred to her expectation
    that her tenant would be able to use all 162 of the parking spaces, as had been
    the situation prior to 2009. He concluded, at para. 52:

First come, first served appears to mean, in practice (and in
    Ms. Cheungs expectation) that the patrons of the restaurant could use every
    single un-allocated parking spot. That, of course, is not a legitimate or
    reasonable expectation.

[89]

Having
    concluded Cheungs expectation was unreasonable, the application judge held
    there was no need to consider the second branch of the oppression test. He
    dismissed Cheungs application.

(3)

Costs

[90]

The
    application judge received costs submissions in writing from each party. YRCC
    sought costs on a substantial indemnity basis. Cheung submitted each party
    should bear their own costs.

[91]

The
    application judge held there was no basis to depart from the usual rule that
    costs are awarded to the winner. He found, however, both parties should bear
    some responsibility for driving up costs and prolonging the proceedings.
    Although YRCCs conduct did not descend to the same level as Cheungs, it was
    not pure, and therefore some discount should apply.

[92]

He
    also noted YRCC served an offer to settle, which Cheung did not accept. The
    offer provided two of each units four allocated parking spaces would only be
    reserved between 8:00 a.m. and 5:00 p.m. each day. That would have significantly
    increased the amount of parking available after 5:00 p.m. The application judge
    held the offer was reasonable. It would have resolved many of Cheungs parking
    issues. Accordingly, YRCC was entitled to enhanced costs.

[93]

In
    the result, the application judge noted but for YRCCs contribution to the bad
    temper between the parties, he would have ordered substantial indemnity costs
    against Cheung from the date of YRCCs offer. Instead, he ordered a global
    award of $60,000 in favour of YRCC, which reflected a discount as well as the
    offer to settle.

E.

Standard of review

[94]

The
    decision of the application judge is subject to appellate review in accordance
    with the principles set out in
Housen v. Nikolaisen
, 2002 SCC 33,
    [2002] 2 S.C.R. 235. A
trial judges primary findings of fact
    and inferences of fact are subject to review on a standard of palpable and
    overriding error.

A palpable error
    is one that is obvious, plain to see or clear. Examples of palpable factual
    errors include findings made in the complete absence of evidence, findings made
    in conflict with accepted evidence, findings based on a misapprehension of
    evidence and findings of fact drawn from primary facts that are the result of
    speculation rather than inference.
An overriding error
    is an error that is sufficiently significant to vitiate the challenged finding
    of fact.
An appellate court must also defer to a trial
    judges findings on questions of mixed fact and law. Questions of law are
    reviewable on a standard of correctness.

[95]

An
    appellate court may also intervene where there has been a processing error. In
Waxman
    v. Waxman
(2004),
186 O.A.C. 201, at para. 334, this
    Court defined the term processing error as follows:

The phrase "processing errors" is borrowed from
Keljanovic
    Estate v. Sanseverino
, where O'Connor J.A., for the majority, said:

The second kind of error that may warrant appellate
          interference is what might be called a "processing error", that is
          an error in processing the evidence that leads to a finding of fact. This
          type of error arises when a trial judge fails to appreciate the evidence
          relevant to a factual issue, either by disregarding or misapprehending that
          evidence. When the appellate court finds such an error it must first
          determine the effect of that error on the trial judge's reasoning. It may
          interfere with the trial judge's finding if it concludes that the part of the
          trial judge's reasoning process that was tainted by the error was essential
          to the challenged finding of fact. [Citations omitted.]

F.

Issues on appeal

1.

Did the application judge err in holding the 2015
    By-Law is valid?

2.

Did the application judge err in concluding the 2015
    By-law is reasonable?

3.

Did the application judge err in concluding the 2015
    By-law does not violate s. 135 of the Act?

4.

Did the application judge err in awarding $60,000 in
    costs to YRCC?

G.

Discussion

(1)

Did the application judge err in holding the 2015 By-Law is valid?

[96]

In
    principle, I agree with my colleagues that YRCC can pass a by-law to lease
    common element parking spaces to individual owners. The application judge did
    not err in concluding YRCCs ability to lease common elements did not have to
    be provided for in the declaration. As he pointed out, s. 21 of the Act
    specifically authorizes a condominium corporation to enact a by-law to lease
    common elements or to grant a licence over them.

[97]

Section
    21(2) of the Act states, A lease  signed by the authorized officers of the
    corporation, affects the interest of every owner in the common elements as if
    the lease  had been granted by the owner. Reading s. 21 as a whole,
    therefore, the passing of a by-law to lease does not affect the interest of an
    owner in the common elements. When there is an actual lease signed by the
    authorized officers of the corporation, then the interest of an owner in the
    common elements is affected because then every owner is deemed to grant a lease
    of his or her interest in the common elements.

[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 Cheungs 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, YRCCs actions have not conformed to the requirements
    of the Act respecting leasing.

[99]

Inherently,
    the leases must also be valid to affect Cheungs interest in the common element
    parking. The requirements for a valid lease are set out in this courts
    decision in
Canada Square Corp. et al. v. VS Services Ltd. et al.
(1982),
    34 O.R. (2d) 250 (C.A.), at p. 258, in which

this court quoted the
    following passage from Eston Kenneth Williams & F. W. Rhodes,
Williams
    Canadian Law of Landlord and Tenant
, 4th ed. (Toronto: Carswell, 1973), at
    p. 75:

To be valid, an agreement for a lease must show (1) the
    parties, (2) a description of the premises to be demised, (3) the commencement
    and (4) duration of the term, (5) the rent, if any, and (6) all the material
    terms of the contract not being matters incident to the relation of landlord
    and tenant, including any covenants or conditions, exceptions or reservations.

The court further commented, at p. 259, It may be
    said now that conditions (1) to (5) are invariable requirements.

[100]

Further, one
    cannot grant a valid lease in perpetuity: see Christopher A.W. Bentley et al.,
Williams
    & Rhodes Canadian Law of Landlord and Tenant
, loose-leaf (2016-Rel.
    8), 6th ed. (Toronto: Thomson Reuters Canada Ltd., 1988), at para. 3:3:7; Anne
    Warner La Forest,
Anger & Honsberger Law of Real Property
,
    loose-leaf (2016-Rel. 17), 3d ed. (Toronto: Thomson Reuters Canada Ltd., 2006),
    at p. 7-10; and Bruce Ziff,
Principles of Property Law
, 5th ed.
    (Toronto: Thomson Reuters Canada Ltd., 2010), at p. 290.

[101]

Having regard to
    these requirements, it seems obvious that the 2009 By-law, which purported to
    authorize entering into leases that forever run with the title to the unit it
    is attached to, notwithstanding change(s) of ownership of the unit, is
    illegal. Inasmuch as a lease in perpetuity is illegal, a by-law purporting to
    authorize a lease in perpetuity would also be illegal and invalid. It is a By-law
    that purports to create permanent exclusive use of the common element parking
    spaces and it contravenes s. 7 of the Act because that can only be done through
    an amendment to the declaration.

[102]

This brings me
    to the 2015 By-law. For ease of reference, I restate the relevant portion of
    para. 3:

The Board of Directors of the Corporation may, on behalf of the
    Corporation from time to time, grant a lease or license to each owner of a unit
    listed in Schedule B attached hereto  upon the terms and conditions herein
    contained and any other such terms and conditions as may be deemed appropriate
    by the Board of Directors from time to time.

[103]

YRCC submits
    because the Board may from time to time grant a lease or licence to each
    owner, no lease or licence would be permanent. I disagree. The words from time
    to time modify the action of the Board. The words From time to time mean
    what the Board is doing is done sometimes, not regularly. The Board could
    grant a lease to each owner permanently allocating four parking spaces and
    then, at another time, grant a lease permanently allocating an additional
    parking space. The words from time to time do not modify or restrict the nature
    of the lease. Meaning must still be given to the By-laws words upon the terms
    and conditions herein contained.

[104]

YRCC also argues
    the effect of the 2015 By-law is not to eliminate parking spaces, but to assign
    them. In this case, however, that assignment is tied to a by-law providing for
    leases. If the by-law providing for leases is invalid, then so is the
    assignment.

[105]

One of Cheungs
    submissions is the 2015 By-law is invalid for uncertainty because it does not
    contain any lease terms. The 2015 By-law provides for the granting of a lease
    upon the terms and conditions herein contained, but no terms and conditions
    are set out in the 2015 By-law. In addition, leases may be granted upon any
    other such terms and conditions as may be deemed appropriate by the Board of
    Directors from time to time. These are vague, imprecise terms. This does not
    mean, however, that the 2015 By-law is invalid for uncertainty.

[106]

By-laws are akin
    to legislation and thus statutory principles of interpretation apply; by-laws
    are created in the execution of a power conferred by the Act:
Condominium
    Corp. No. 021235 v. Scott,
2015 ABQB 171, 27 Alta. L.R. (6th) 36, at para.
    41.
[2]
Thus, the grammatical and ordinary sense of the words employed in the by-law is
    not determinative. Instead, the words must be read in their entire context.
    This inquiry involves examining the history of the paragraph at issue, its
    place in the overall scheme of the condominiums by-laws, the object of the
    by-law, and the boards intent  both in enacting the by-law as a whole and in
    enacting the particular wording at issue: see
Chieu v. Canada (Minister of
    Citizenship and Immigration),
2002 SCC 3, [2002] 1 S.C.R. 84, at paras.
    27-28.

[107]

In
Sullivan on the
    Construction of Statutes
, the author states
    under the heading,

When
    ordinary meaning is not binding:

Ordinary meaning is apt to be unhelpful when the language in
    which the legislation is drafted is vague, abstract or requires the interpreter
    to apply a standard rather than a rule: at p. 51.

The author notes, in order to determine the intended
    meaning, In such cases the courts have no choice but to look elsewhere for
    assistance: Sullivan, at p. 51. Thus, to give meaning to the words, upon the
    terms and conditions contained herein in the 2015 By-law, I must look
    elsewhere by considering the evidence.

[108]

The evidence consists
    of the following:

·

The 2009 By-law created two permanent, exclusive use parking
    spots per unit and purported to authorize leases that forever run with the
    title to the unit for so long as the Corporation was in existence.

·

The application judge found the 2015 By-Law, essentially did the
    same things as the 2009 By-law, except it allocates four parking spaces to
    each unit instead of two.

·

Two communications, one from
    YRCCs Board and one from its lawyers, advised that the 2015 By-Law grants
    each unit exclusive use of four parking spaces. Neither communication
    referenced leases or any requirement to enter into a lease as a precondition to
    the assignment of the parking spaces.

·

Oshin Chobanian, a director and
    the president of YRCCs Board, was examined under oath and agreed the Boards
    intention was to create four permanent exclusive use parking spaces per unit.
    He also admitted he was aware the only way to create exclusive use common
    element parking was to amend the declaration.

·

The fact that no leases were ever
    entered into supports the inference that the Board was attempting to
    permanently create exclusive use common element parking. Although YRCC contends
    it did not enter into leases in 2015 because the matter was proceeding to
    litigation, there is no evidence to this effect and the submission is
    undermined by the fact the communication to unit holders makes no mention of
    the requirement to enter into a lease.

·

When the 2015 By-law was passed,
    roughly 70 percent of the reserved parking signs erected in 2009 were still in
    place. Other owners subsequently installed reserved parking signs.

·

The 2015 By-law does not purport
    to repeal, revoke, amend or supersede the 2009 By-law. Although the 2009 By-law
    is not in effect, it still exists. The 2015 By-law can be said to impliedly
    replace the 2009 By-law to the extent of the allocation of the number of
    parking spaces, but, otherwise, no apparent conflict exists. Accordingly, if
    registered, the remaining provisions of the 2009 By-law would be deemed valid
    until declared otherwise.

[109]

Courts have
    noted the importance of the terms of leases purportedly authorized under a
    by-law. In
Koletar v. Peel Condominium Corp. No. 516,
[1998] O.J. No.
    1620 (Gen. Div.), Ground J. adjourned the consideration of a by-law until
    written detailed information about the proposed leases and licenses [was] made
    available to the unit owners. Thus, Ground J. was of the opinion that the
    terms of the leases were an important consideration before any by-law
    authorizing the entering into of leases was passed.

[110]

The uncertainty
    created by a by-law providing for a lease for an indeterminate period makes it
    impossible to determine the integrity of title in the common elements until a
    lease is actually entered into. This uncertainty is impermissible.

[111]

A condominium
    corporations declaration and by-laws are vital to the integrity of the title a
    unit owner acquires. Thus, the extent of a unit owners title in the common
    elements must be readily ascertainable. An indeterminate period could be permanent.
    Due to the uncertainty created by the passage of the 2015 By-law, there is
    evidence in the record that Cheung is unable to sell her units until the
    litigation over the parking spaces is resolved. The fact that the 2015 By-law
    can be repealed or amended, or that leases may, in the future, be entered into,
    cannot affect the courts assessment of the 2015 By-laws present validity,
    which is what we are asked to do.

[112]

Moreover, the
    2015 By-law has affected Cheungs interest in the common elements, but s. 21(2)
    has not been complied with since 2009. Not only is a unit owner bound by the
    declaration and by-laws, she is entitled to insist that other unit owners are
    similarly bound: see
Carleton Condominium Corporation No. 279 v. Rochon et
    al.
(1987), 21 O.A.C. 249, at para. 27.

[113]

Thus, although
    the application judge correctly held that a condominiums declaration does not
    have to specifically authorize leasing of common elements, his analysis was
    incomplete. He erred in not examining the actual wording of the 2015 By-law
    and, specifically, the meaning to be given to the words upon the terms and
    conditions herein contained, in the light of the history and circumstances
    surrounding the 2015 By-laws enactment. When properly considered, the meaning
    of upon the terms and conditions herein contained, is the 2015 By-law
    allocated four common element parking spaces to each owner for each owners
    exclusive use on a permanent basis or for an indeterminate period (as did the
    2009 By-law, which was not repealed). I would therefore hold the 2015 By-law
    contravenes the Act and is invalid.

(2)

Did the application judge err in concluding the 2015 By-law is
    reasonable?

(1)

General Principles

[114]

As indicated
    earlier, s. 56(6) of the Act provides that by-laws must be reasonable and
    consistent with the Act and the declaration. The requirement that by-laws be
    reasonable is indicative that the legislator wishes the court to adopt a
    deferential standard when reviewing a by-law passed under the Act. Thus, it is
    for a condominium corporation to interpret its own declaration and by-laws and,
    as long as that interpretation is reasonable, courts should not interfere:
London
    Condominium Corp. No. 13 v. Awaraji,
2007 ONCA 154, 221 O.A.C. 240, leave
    to appeal refused, [2007] S.C.C.A. No. 203, at paras. 6-7.

[115]

There will often
    be no single right solution to the issues a by-law purports to address. When a
    decision is taken in the context of condominium unit owners whose objectives
    are in tension with one other, there may be no particular decision that is
    apparently superior to others. Accordingly, in
3716724 Canada Inc. v.
    Carleton Condominium Corp. No. 375,
2016 ONCA 650, 77 R.P.R. (5th), at
    paras. 48-53, this court held that provided a boards decision is within a
    range of reasonable choices that it could have made in weighing conflicting
    interests, a court should not go on to determine whether the decision was the
    perfect one.

[116]

An illustration
    of a case in which this court held a boards decision was within a range of
    reasonable choices is
York Condominium Corp. No. 382 v. Dvorchik
(1997), 12 R.P.R. (3d) 148 (Ont. C.A.). Although
Dvorchik
dealt with
    the validity of a rule, s. 58 of the act similarly requires rules to be
    reasonable. This court noted, at para. 5:

[A] court should not substitute its own opinion about the
    propriety of a rule enacted by a condominium board
unless the rule is
    clearly unreasonable or contrary to the legislative scheme
. In the absence
    of such unreasonableness, deference should be paid to rules deemed appropriate
    by a board charged with responsibility for balancing the private and communal
    interests of the unit owners. [Emphasis added.]

[117]

In
Dvorchik
,
    the impugned rule prohibited pets that weighed more than 25 pounds. This court
    held that a limit on the size of pets was reasonable given the size of the
    condominium, which had over 1,000 residents. The panel noted, There are,
    undoubtedly, different approaches the board could have taken to regulate the
    keeping of pets owned by residents, and it may be that the 25 pound rule is
    not the best rule or the least arbitrary. But this does not make it an
    unreasonable one:
Dvorchik
, at para. 6.

[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:
Law Society of
    New Brunswick v. Ryan,
2003 SCC 20, [2003] 1 S.C.R. 247, at para. 55. In
    line with that reasoning, in
York Condominium Corp. No. 545 v. 602809 Ont.
    Ltd.
(1989), 4 R.P.R. (2d) 192 (Ont. Dist. Ct.), at para. 31, the court
    held reasonableness requires a proper, lawful motive intended to remedy a
    meaningful problem which cannot reasonably be dealt with in other ways.

[119]

The ultimate
    question is whether the by-law read as a whole is reasonable:
York
    Condominium Corp. No. 545.
The person challenging the by-law bears the
    onus of showing it is unreasonable:
Awaraji
, at para. 10.

[120]

With these
    general principles in mind, I turn to the application judges assessment of the
    reasonableness of the 2015 By-law.

(2)

Applying the principles

[121]

An important
    caveat to the standard of deference afforded to a condominium board in enacting
    rules or by-laws is contained in the emphasized portion of the passage quoted
    in
Dvorchik
, above. Namely, a by-law cannot be contrary to the
    legislative scheme. I have already held the 2015 By-law does not comply with
    the Act and is invalid. Thus, no deference is owed to the Boards decision to
    pass the 2015 By-law. Quite apart from my conclusion in this regard, however, I
    would hold the 2015 By-law is unreasonable.

Increasing
    the number of allocated parking spaces from two to four

[122]

Cheung submitted
    the 2015 By-law is unreasonable because it discriminates against her. The
    application judge responded to this argument by pointing out that Cheung was
    treated on an equal basis with the other unit holders. At para. 40 of his
    reasons, he commented:

I accept [Edward] Cheungs evidence that some of the other
    businesses often have empty spots when the restaurant is at peak capacity.
    That, however, does not mean that the 2015 By-law is oppressive or
    discriminatory. It means that not everyone is using the assigned parking spots
    assigned to them at all times. It is a unit holders right to not park in their
    designated space as much as it is their right to park in their designated
    space.

[123]

Equality does
    not mean merely equal treatment. Substantive equality, or in other words, the
    effect of the by-law, must also be considered. For example, in
York
    Condominium Corp. No. 545
, the condominium board in a corporate
    development attempted to enforce a by-law prohibiting owners from parking
    vehicles weighing over 17,500 pounds on the common element parking area
    overnight. One of the stated purposes of the by-law was to reduce future
    asphalt repairs because owners were of the view that heavy trucks resulted in
    damage to the parking area. The applicant was a commercial unit owner operating
    a gravel trucking business. Although he was treated equally with the other
    owners, the application judge held, at para. 28, the by-law was not reasonable,
    in part because there was no evidence to establish the actual cause of any
    asphalt damage. A second reason why the application judge held the by-law was
    invalid was because the board had not identified a proper lawful motive to
    address a meaningful problem. The latter is not the situation in this case.

[124]

In this case,
    YRCC had a proper lawful motive in passing the 2009 By-law. A by-law was
    necessary to address the parking problem created by the popularity of the
    restaurant and Cheungs indifference to the effect her restaurants
    monopolization of the parking had on other unit owners. In 2015, a by-law to
    govern parking continued to be necessary. However, YRCCs submission that the
    2015 By-law is reasonable in providing for the leasing of four parking spaces
    to each unit owner is weakened by the fact the 2009 By-law provided for the
    leasing of only two parking spaces per owner. There is a dearth of evidence
    respecting the rationale for the increase from two spaces to four. On the other
    hand, Cheungs evidence, which the application judge accepted, was that other
    businesses often have empty spots when the restaurant is at peak capacity.

[125]

Ordinarily, the
    number of parking spaces leased to each unit owner under by-law would be but a
    single aspect of the by-law that would not affect its validity as a whole. In
    this case, however, increasing the number of leased parking spaces from two to
    four is a major aspect of whether the 2015 By-law is reasonable. The effect of
    the 2015 By-law is to reduce the amount of open parking by approximately 80
    percent overall, and about 50 percent from the 2009 By-law.

[126]

Unlike the 2009
    By-law, the 2015 By-law contains nothing in the preamble or elsewhere
    referencing a parking problem. There is no issue the 2009 By-law was loosely
    enforced. The sole rationale for enacting the 2015 By-law appears to be in
    paras. 35-37 of Chobanians affidavit, sworn March 11, 2016, which states:

In spite of the 2009 By-law and the reserved parking signs
    erected at the Property, the Restaurant continued to monopolize the parking
    spaces at the Property since the Restaurants employees and patrons/clients
    frequently disregarded the 2009 By-law and the reserved parking signs erected
    on the Property.

Accordingly, on December 23, 2014, the Board, which included
    Mr. Lau, passed By-Law no. 6, which granted to each unit owner the use of four
    (4) common element parking spaces at the Property by way of a lease or licence.

[127]

There is no
    evidence that rigorous enforcement of two parking spaces allocated per unit
    would be insufficient to resolve the parking problem.

[128]

Neither of the
    two expert reports filed on the application address the need to further reduce
    the number of open parking spaces from those available under the 2009 By-law.
    Although expert evidence is not necessary in every case, such evidence is,
    nevertheless, important.

[129]

For example, in
371624
    Canada Inc.
, a case involving converting an area of a parking lot into
    hourly rented public parking spaces, this court relied on expert evidence from
    two security firms in analyzing the security implications of such a proposal.
    Based in part on the security issues raised in those reports, this court upheld
    the boards decision to prevent the public parking from taking place. In
York
    Condominium Corp. No. 545,
as already noted, the absence of any expert
    evidence concerning the effect of heavy trucks on the parking area was a
    significant factor in the application judges conclusion that the by-law was
    unreasonable.

[130]

Although YRCCs
    factum makes reference to a deteriorating parking situation and refers to the
    Chobanian affidavit in this regard, the application judge made no finding that between
    2009 and 2015 the parking situation deteriorated. Instead, at para. 9 of his
    reasons, he stated:

According to the Respondents evidence, the restaurants
    patrons and employees monopolized the parking until the passage of the 2015
    By-law.

[131]

The application
    judge then referenced the parking difficulties Chobanian described and
    concluded, He states in his affidavit that the parking situation led the Board
    to pass the 2009 By-law, and ultimately the 2015 By-law. The application judge
    did not find the parking situation worsened after 2009 such that a greater
    number of assigned parking spaces per unit was justified.

The
    availability of overflow parking on adjacent lands

[132]

Further, it
    would appear the Board and the application judge were under the misapprehension
    that overflow parking was available elsewhere in the York Corporate Centre. In
    coming to his decision that the 2015 By-law is reasonable, the application
    judge relied on the expert evidence about the applicability of the Zoning
    By-law and observed, at para. 42:

An aspect of reasonableness is whether patrons of the
    restaurant have the ability to park in other parts of the York Corporate
    Centre. In my view, they do.

[133]

As I indicate
    below, the record does not support the application judges finding that parking
    is available elsewhere in the York Corporate Centre. Although there was expert
    evidence that the Zoning By-law provides for a shared parking formula across
    the entirety of the York Corporate Centre, the evidence demonstrates
    practically speaking  that the Zoning By-law does not have the effect of
    creating available parking for restaurant patrons. The application judge
    accordingly committed a processing error in this regard. This error affected
    the application judges assessment of the reasonableness of the 2015 By-law as
    a whole.

[134]

Both experts
    opined on the interaction between the 2015 By-law and the  Zoning By-law. The
    Zoning By-law provides for a shared parking formula to determine the minimum
    number of parking spaces required in a development. Both experts addressed
    whether the minimum parking spaces calculated under the shared parking formula
    are site-specific (i.e. specific to a particular property within the York
    Corporate Centre), or whether that calculation takes into account parking located
    anywhere within the York Corporate Centre.

[135]

Both experts
    reports concluded the shared parking formula applied to the York Corporate
    Centre as a whole. The application judge concluded, at para. 16 of his reasons,
    that meant parking for individual developments (such as the Respondent) may be
    accommodated by other developments within York Corporate Centre. Although in
    theory the application judges conclusion may hold true, the evidence before
    him was that, in practice, parking was not available elsewhere in the York
    Corporate Centre.

[136]

In particular,
    Cheungs expert, Michael Mannett, concluded the Zoning By-law contemplates
    shared parking for the Area but noted there is no mechanism (easement,
    parking agreement, etc.) to enforce the shared parking formula as intended in
    the [Zoning] By-law.

[137]

YRCCs expert, Jonathan Rodger,
    also
stated he was not aware of any easements or parking agreements
    applicable to shared parking throughout the York Corporate Centre. He
acknowledged in cross-examination that in the absence
    of any easements or parking agreements, the ability of customers to park
    elsewhere in the York Corporate Centre requires good faith on the part of the
    other property owners.

[138]

The application
    judge did not reference the fact that the availability of overflow parking
    elsewhere in the York Corporate Centre essentially depends on the adjacent
    landowners good faith.

[139]

Cheung tendered
    evidence that, in practice, the restaurants patrons have not been able to use
    parking spots elsewhere in the York Corporate Centre. This evidence included
    affidavit evidence and photographs depicting private parking signs erected on
    parking spaces on adjacent lands; evidence that restaurant patrons had been
    ticketed for parking elsewhere in the York Corporate Centre; and correspondence
    between Cheungs counsel and counsel for adjacent landowners, where the
    adjacent owners took the position that they reserve the right to deny
    [Cheungs] patrons access to, egress from, and use of the parking lot.

[140]

Although the
    application judge noted Cheungs evidence that some of the restaurant patrons
    have received parking tickets, he did not reference any of the other evidence
    summarized above. The application judge seems to have grounded his finding in
    the experts opinions that the Zoning By-law provides for shared parking across
    the York Corporate Centre. The evidence, however, demonstrates that even if the
    Zoning By-law in theory prescribes shared parking, in practice this is not the
    case.

[141]

Further, the
    application judge noted the zoning by-law
on its face
contemplates
    that parking will be available throughout the York Corporate Centre (emphasis
    added), but then added, if Mr. Mannett is correct that, historically, parking
    has not been available throughout the York Corporate Centre, then it strikes me
    as entirely reasonable that the Board would be required to manage the available
    parking for the benefit of all unit holders. The application judges
    conclusion that it is entirely reasonable for the Board to manage its
    available parking because historically parking has not been available elsewhere
    in the York Corporate Centre undermines his finding  made in the same
    paragraph  that patrons of the restaurant
have the ability
to park
    in other parts of the York Corporate Centre (emphasis added). If parking has
    not been available elsewhere in the York Corporate Centre  for whatever
    reason  then patrons of the restaurant do not really have the ability to
    park on those adjacent lands.

[142]

In any event, I
    am of the opinion that YRCC cannot offload its responsibility to manage its
    parking onto other unit owners in the York Corporate Centre. None of those
    owners are parties to this proceeding. Presumably, the various condominium
    corporations that govern the York Corporate Centre can also pass by-laws to
    address parking issues. The state of the parking in the York Corporate Centre
    as a whole is therefore subject to change. Similarly, the Town of Richmond Hill
    is not a party to this proceeding. Regardless of the experts interpretations
    of the Zoning By-law, the evidence is the municipality is not enforcing the
    Zoning By-law and, in reality, it does not have the effect of creating an
    alternative parking solution for the restaurants patrons and employees.

[143]

I therefore
    conclude the application judge committed a processing error in that he
    misapprehended the evidence with respect to alternative parking and ignored
    evidence that, practically speaking, alternative parking was unavailable. These
    errors were an essential aspect of his finding that the 2015 By-law is
    reasonable.

(3)

Conclusion on the reasonableness of the 2015 By-law

[144]

The 2015 By-law
    is unreasonable because there is no line of analysis that could reasonably lead
    the Board to assign four parking spots to each unit holder as opposed to two.
    Practically speaking there is no available alternative parking elsewhere in the
    York Corporate Centre. There is no expert evidence that an increase from two to
    four assigned parking spots per unit was necessary to resolve the parking
    problems and no evidence that rigorous enforcement of two assigned parking
    spots per unit would be insufficient. Nothing in the 2015 By-law speaks to the
    necessity to lease four spaces. Given the application judges finding that other
    businesses often have empty spots when the restaurant is at peak capacity, the
    2015 By-law assigning four parking spaces per unit is not within a range of
    reasonable choices that the Board could have made in weighing conflicting
    interests. Cheung has discharged the onus on her of showing that the By-law is
    unreasonable.

(3)

Does the 2015 By-law contravene s. 135 of the Act?

[145]

As outlined
    above, s. 135 of the Act enables Cheung, an owner, to make an application to
    the Superior Court of Justice for an order that YRCCs conduct, is or
    threatens to be oppressive or unfairly prejudicial to the applicant or unfairly
    disregards the interests of the applicant.

[146]

In
BCE
,
    the Supreme Court commented on the approach to the oppression remedy under the
Canada
    Business Corporations Act
, R.S.C. 1985, c. C-44. The Court defined
    oppression, unfair prejudice and unfair disregard as follows, at para.
    67:

Oppression carries the sense of conduct that is coercive and
    abusive, and suggests bad faith. Unfair prejudice may admit of a less
    culpable state of mind, that nevertheless has unfair consequences. Finally,
    unfair disregard of interests extends the remedy to ignoring an interest as
    being of no importance, contrary to the stakeholders reasonable expectations.
    The phrases describe, in adjectival terms, ways in which corporate actors may
    fail to meet the reasonable expectations of stakeholders. [Citations omitted.]

[147]

The application
    judge found, at para. 52 of his reasons, that Cheung had an expectation that
    her tenant would be able to use all of the shared parking spots. He held that
    was not a legitimate or reasonable expectation: Indeed, it is what led to the
    parking problems in the first place. As Cheungs expectation was unreasonable,
    the application judge held she was not entitled to a remedy under s. 135 on the
    basis that the Board had unfairly disregarded that expectation.

[148]

Cheung submits
    the application judge erred in considering only her subjective expectations, as
    opposed to a unit owners objective ones. Cheungs counsel submits we should
    first decide on an objective basis what a unit owners reasonable expectations
    would be and, having ascertained them, go on to address whether they were
    unfairly disregarded.

[149]

In support of
    her position, Cheung relies on
BCE
, at para. 62, as follows:

The concept of reasonable expectations is objective and
    contextual. The actual expectation of a particular stakeholder is not
    conclusive. In the context of whether it would be just and equitable to grant
    a remedy, the question is whether the expectation is reasonable having regard
    to the facts of the specific case, the relationships at issue, and the entire
    context, including the fact that there may be conflicting claims and
    expectations.

[150]

Relying on the
    courts comments that it is the objectively reasonable expectations that are to
    be considered and that the actual expectation of a particular stakeholder is
    not conclusive, Cheung submits the application judge ought to have gone on to
    determine a unit owners objectively reasonable expectations and whether a
    breach of them had been established.

[151]

While I can
    appreciate counsel making this argument, I would not give effect to it.
BCE
sets out a two-step approach to applications under the oppression remedy,
    which the court summarized at para. 68:

(1) Does the evidence support the reasonable expectation
    asserted by the claimant? and (2) Does the evidence establish that the
    reasonable expectation was violated by conduct falling within the terms
    oppression, unfair prejudice or unfair disregard of a relevant interest?

[152]

I read this
    paragraph as requiring a court to first determine whether or not an applicants
    expectation is reasonable on an objective basis. If the evidence supports the
    expectation asserted as being objectively reasonable, then the court goes on to
    consider whether the applicants reasonable expectation has been violated. It
    is in the context of determining whether the applicants expectation is
    reasonable that the Supreme Court made its comments about subjective intentions
    not being conclusive and the necessity to consider them on an objective basis.
    Thus, an applicant must first establish that her expectations are reasonable
    before she is entitled to any relief under the oppression remedy. The
    application judge did not err in his approach to s. 135.

[153]

Given the
    application judge did not err in his approach to s. 135, I agree with my colleagues
    that his finding that Cheungs expectation is unreasonable is a finding of
    mixed fact and law and is owed deference. There was ample support in the
    evidence for his conclusion that her expectation is unreasonable. Some of that
    evidence includes that although the restaurants customers had access to the
    open parking for almost 19 years, that open access eventually created great
    problems for the other condominium owners. It was and is unreasonable for
    Cheung to ignore her fellow unit owners interests and to insist they return to
    the practice that existed more than eight years ago (before the passage of the
    2009 By-law). As Cheung did not meet the requirements of the first step of the
    test under s. 135, the application judge correctly held there was no need to
    consider the second step.

[154]

Accordingly, I
    would hold the application judge did not err in refusing to grant Cheung a
    remedy under s. 135 of the Act.

(4)

Did the application judge err in awarding $60,000 in costs to YRCC?

[155]

Cheung created
    and exacerbated the parking problem because of her intransigence and
    insistence, which she has maintained on appeal, that she is entitled to access
    all of the common element parking. YRCC set about fixing the problem but, on
    the view I take of this appeal, after two attempts YRCC has not passed a valid
    by-law. Further steps must be taken and, possibly, further litigation will
    ensue before the parking problem is resolved. Viewed objectively, Cheungs
    expectations are unreasonable. As a result, I have concluded she is not entitled
    to a remedy under s. 135 of the Act.

[156]

I would hold
    both parties have achieved partial success. Accordingly, I would grant leave to
    appeal costs, set aside the application judges award of costs and order that
    each party bear their own costs throughout.

[157]

In relation to
    costs that YRCC must pay to its counsel, Cheung submits she should not have to
    pay her share of the costs of the litigation for which she, as a unit owner, is
    liable. I would reject this submission. As provided for in the Act, Cheung is required
    to bear her share of the common expenses, of which this litigation is one such
    expense. I see no reason to hold otherwise.

H.

Disposition

[158]

For the reasons
    given above, I would hold that although the Condominium Board may pass a by-law
    to lease common element parking, the 2015 By-law passed by this Board is invalid
    and unreasonable and the application judge erred in holding otherwise.
    Accordingly, I would allow the appeal and declare the 2015 By-Law invalid and
    unreasonable. I would also grant leave to appeal costs, set aside the costs
    ordered on the application and order each party to bear their own costs
    throughout.

K.M. Weiler J.A.

Released: August 03, 2017

[1]
Section 78 of the
Land Titles Act
, 1990, c. L.5, provides that once a
    by-law is registered on title, it is deemed to have been validly passed.

[2]
Although the courts determination in
Scott
was based on the Alberta
Interpretation
    Act
, R.S.A. 2000, c. I-8, Ontarios
Legislation Act, 2006
, S.O.
    2006, c. 21, contains parallel wording in s. 17.