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November 13, 2012
Posted in litigation

Sarah Computer Consulting Inc. et al v. PCC 421

This case provides condominium corporations with guidance on the appropriate procedures for deactivating residents’ key FOBs and garage clickers and is a cautionary tale for those who would do so without reasonable notice.  Deactivating FOBs and clickers could be found to be oppressive conduct under section 135 of the Condominium Act, 1998

According to the rules of Peel Condominium Corporation No. 421 (PCC 421), only residents (and not necessarily owners) were permitted to use the PCC 421’s recreational facilities.  At the material time, Sarah Computer Consulting Inc. was the registered owner of suite 3411 and two individuals, Sarah and Zac, appeared to be the only residents.  The condominium corporation’s practice was to issue FOBs and clickers only to residents.  In addition, PCC 421’s By-Law restricted the use of recreational facilities to residents.  However, in this case, four FOBs and three clickers were issued to unit 3411, most in Mr.  Gonsalves’ (Sarah’s father and one of the owners, directors and shareholders of Sarah Computer Consulting Inc.) name.

Mr. Gonsalves, reserved the squash court for the evening of January 26, 2010.  He could not attend that night so asked to rebook the squash court for the next evening.  At that time, he was told that he could not book the squash court because he was not listed as a resident in the building management’s records.  Mr. Gonsalves raised a complaint with management.  The complaint was investigated and, as a result, the condominium corporation believed, based on the information in their records, that Mr.  Gonsalves was not a resident of the building. 

As a way of attracting Mr. Gonsalves’ attention, and to force him to present himself to the building’s management to clarify his residence, the PCC 421’s building management decided to deactivate the FOBs and clickers assigned to Mr. and Mrs. Gonsalves.  The building management gave no notice before the deactivation.

On January 28, 2010 Mr. Gonsalves discovered that the FOBs and clickers were deactivated.  He went to the security desk where they were reactivated.  The security desk asked that Mr. Gonsalves complete a Resident Information Form to clarify his residency for the building management’s records.  Mr. Gonsalves refused to complete the form.

The situation progressed to litigation.  The applicants sought, among other remedies, a declaration that PCC 421’s actions were oppressive, unfairly prejudicial or unfairly disregarded Mr. Gonsalves’ interests under section 135 of the Condominium Act, 1998

The Court found that Mr. Gonsalves had been treated as the owner and resident of the unit for years.  Throughout that time, he had access to the building, Sarah Computer Consulting Inc.’s unit and all of the common facilities.  Accordingly, he had a reasonable expectation to have continued uninterrupted access to his unit as owner and resident subject to reasonable demands by PCC 421.  Mr. Gonsalves was, therefore, was reasonably entitled to expect to receive reasonable notice that PCC 421 was deactivating the FOBs and clickers. 

Moreover, the Court found that the fact the FOBs and clickers were deactivated without reasonable notice was oppressive, unfairly prejudicial and unfairly disregarded Mr. Gonsalves’ interest as an owner and previously recognized resident of the building.  This met the criteria for a remedy under section 135 of the Condominium Act, 1998 and the court ordered the condominium corporation to pay damages. 

The damages in this case were only nominal – the Court only required PCC 421 to credit the applicants $500 in common expenses.  However, the key lesson from this case is that condominium corporations should be wary of deactivating FOBs and clickers without giving reasonable notice in the absence of urgent circumstances as this conduct may expose the condominium corporation to liability under section 135 of the Condominium Act, 1998

To read the Endorsement, click here.

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