SUPREME COURT OF Nova Scotia
Citation: United Gulf Developments v. Nova Scotia (Registrar of Condominiums)
2019 NSSC 194
Date: 20190621
Docket: Hfx No. 477962
Registry: Halifax
Between:
United Gulf Developments and 3218738 Nova Scotia Limited
Applicants
v.
Registrar of Condominiums
Respondent
Decision
|
Judge: |
The Honourable Justice Gerald R.P. Moir |
|
Heard: |
February 7, 2019 in Halifax |
|
Decided: |
June 21, 2019 |
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Counsel: |
Jason Cooke and Leon Tovey, for the Applicants Adam Norton and Ashley Hamp-Gonsalves, for the Respondent |
Moir, J.:
Introduction
[1] United Gulf and the numbered company have a large “phased development” condominium. In phased developments, each phase is separately accepted for registration. The general terms and the first phase are set by acceptance of a declaration. It generally describes the future phases. They are added to the declaration by amendments accepted by the Registrar of Condominiums.
[2] The developers sought to add phase nine after having developed phase one and added phases two to eight. The plans had altered from the original declaration substantially. The developers had to get approvals from owners of units in the previous phases. Ninety-seven percent approved.
[3] The two dissenters were in litigation with United Gulf over property in potential phases further on. They offered little reason for withholding approval. The developers asked the Registrar of Condominiums to find the two approvals were unreasonably withheld, and to accept the phase nine amendment for registration. He decided he had no power to make a finding about reasonable or unreasonable withholding.
[4] The developers sought judicial review. The dissenters were notified, but they did not participate. The registrar filed a notice of participation and defended his position.
Facts
[5] In 2011, the developers filed a declaration for a condominium at Schmidt Lake in Hammonds Plains. The plan was for many phases of lot developments, and in 2011 the first phase got registered.
[6] The 2011 declaration was successfully amended several times in 2012 to 2014, and phases two to eight got added. This case is about the attempt to add the ninth phase. The proposed amendment included ten “bare-land lots”, large lots that could be used for separate development. The process began in September of 2017 with communications between officials with the Registrar of Condominiums and officers of, and counsel for, the developers.
[7] The developers submitted a draft amendment and new survey plans in December of 2017. Officials with the registrar observed that these effected changes beyond phase nine and commented that an article of the original declaration should be amended to also reflect these changes. The changes were significant. So, the officials referred to s. 76 of the regulations and wrote:
Due to the significant number of changes being proposed to the development, the declarant is required to provide the corporation and all unit owners at least 60 days notice of the intention to register the phase. Please advise when your client is going to notify the corporation and units owners with the location and time at which the plans may be viewed. We will also require proof of the approval of all units owners.
[8] By May of 2018, the developers had responded satisfactorily to comments on behalf of the registrar except for consent of condominium unit owners. At that time, the developers advised the registrar that they were acting on proxies from all unit holders except two. They had been signed back in September, 2017. The registrar appears to have accepted those as sufficient for approval by the signing owners.
[9] As for the two dissenters, the developers requested that the Registrar of Condominiums determine, under s. 76(2a) of the regulations, that they were withholding consent unreasonably. Ninety-seven percent of the owners had signed proxies in favour of the developers and the dissenters constituted only three percent. The developers represented that the three percent had been given notice of the meeting for which all other owners delivered proxies. They represented that attempts had been made since September of 2017 to get the approval of the dissenters.
[10] The developers also represented to officials with the registrar that the holdouts were the owners of units forty-five and forty-six, were related to each other, owed arrears of condominium fees, and were parties, or were related to parties, in litigation with the developer, United Gulf.
[11] The developers again requested approvals by the two unit holders. They were not forthcoming. Counsel for those owners pointed out that the litigation concerned mortgages on property in what could become phase ten. He represented that dispensing with approval on the phase nine amendment “might prejudice our client and/or [its mortgagee] Royal Bank of Canada”. The developers’ counsel submitted that it was unreasonable to withhold consent to gain an advantage in unrelated litigation.
[12] On June 18, 2018 the Deputy Registrar of Condominiums wrote to developers’ counsel:
With respect, I do not agree that the regulatory provisions give the Registrar/Deputy Registrar the authority to adjudicate whether consent is withheld [u]nreasonably.
Subsection (2) makes clear that it is the registrar’s determination whether the amendment is significantly different and that the form of consent is to the satisfaction of the registrar.
The fact that subsection (2A) does not refer to the registrar is intentional, in the context. It is not the registrar’s determination whether the consent is [u]nreasonably withheld. This is a matter which must be adjudicated by the courts.
He reiterated his decision on June 21, 2018. “With respect to 76(2A) please note that it is the position of this Office that it is not the registrar’s determination whether the consent is (u)nreasonable, rather a matter which must be adjudicated by the courts.” The registrar added the following on June 28, 2018 in response to further submissions by the developers’ counsel:
In response to your email of June 22nd, please be advised that it is my opinion that the Registrar of Condominiums does not have the authority to make determinations of “unreasonableness” in relation to subsection 76(2A) of the Condominium Regulations.
Subsection 76(2) makes clear that the registrar is entitled to determine whether an amendment is significantly different from the documents filed with the initial declaration. It also makes clear that the unit owners’ consent must be in a form satisfactory to the registrar.
In this context, it is my view that the omission of the “registrar” from subsection 76(2A) is intentional. It is not for the registrar to determine whether the consent has been unreasonably withheld. This is a matter which must be adjudicated by the courts.
Issues
[13] This case raises issues about standard of review, whether the decision withstands review at the applicable standard, and the appropriate remedy if it does not withstand review. I am of the view that correctness is the applicable standard, that the decision cannot withstand review, and that the remedy is to direct the Registrar of Condominiums to determine whether approvals were unreasonably withheld and, if so, whether to accept the amendment.
Standard of Review
[14] The developers submit that whether the Registrar of Condominiums has power to find consent is unreasonably withheld is a “true jurisdictional question” as discussed in Dunsmuir v. New Brunswick, 2008 SCC 9 at para. 59. The registrar refers to the retreat from the principle in para. 59 of Dunsmuir, most recently expressed in Canada (Human Rights Commission) v. Canada (Attorney General), 2018 SCC 31.
[15] While trial judges wait to see whether appeal judges will “euthanize the issue” (Canada v. Canada, para. 41), we have to make some sense out of “true questions of jurisdiction”. I think that unless, as here, the decision-maker says “I do not have the power to make that inquiry.” we are beyond the purposes of deference and in a place where the rule of law and legislative supremacy demand correctness. Legislated decision-makers should not be able, by reasonable misinterpretation, to expand, or limit, their legislated powers. This, notwithstanding difficulty in definition, elusiveness of concept, imprecision, and other criticisms. A principle remains a principle even though it is difficult, elusive, and imprecise.
[16] I am bound, for now, by Canadian Union of Public Employees, Local 2434 v. Port Hawkesbury, 2011 NSCA 28, para. 27 and the cases cited at para. 28. Whether the Registrar of Condominiums has power to decide whether consent is being withheld unreasonably must be answered correctly. In the present context, this is not to venture into the former habits of “decisional jurisdiction”. The registrar had to be correct when he terminated his inquiry on the ground that he did not have power to embark on it.
Registrar and Consent
[17] The Basic Principle. Of course, the guide for determining whether the registrar has power to make a determination under s. 76(2A) of the Condominium Regulations is Professor Driedger’s principle of contextualized interpretation as adopted by Rizzo & Rizzo Shoes Ltd., [1998] S.C.J. 2. I am to interpret the regulation in accordance with its words “read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act and the intention of Parliament.”
[18] The Words and Their History. The immediate text is found in Part J of the regulations, titled “Phased-Development Property”. Section 75A prescribes substantive requirements for a phased development. Subsections (1) and (3) through (7) are more procedural. They prescribe content required in the declaration for a phased development condominium and in an amendment. Subsections (2) to (2E) concern proposed amendments that would be “significantly different” from the original declaration. They provide for notice to, and approvals by, the existing unit holders.
[19] Subsections 76(2) to (2E) read:
(2) The declarant shall file with the registrar an amendment to both the declaration and description and, if the registrar determines that the amendment is significantly different from the documents filed with the initial declaration, proof of the approval of all unit owners to create a phase, in a form satisfactory to the registrar.
(2A) A unit owner may not unreasonably withhold the approval required by subsection (2).
(2B) The declarant shall provide the corporation and all owners of units at least 14 days’ notice of the intention to register a phase.
(2C) If the registrar determines that an amendment to create a proposed phase is significantly different from the documents filed with the initial declaration, the declarant shall provide the corporation and all owners of units at least 60 days’ notice of the intention to register the phase, along with
(a) copies of the amendments to the declaration and description that will be filed to register the new phase; and
(b) the location and times at which the plans for the new phase may be viewed.
(2D) If the statements required by clause (1)(d) for any two phases are the same, and all other requirements for registration are satisfied, the declarant may substitute one phase for the other in the order in which they are created.
(2E) Despite subsection (2C), where the requirements of subsections (2) and (2A) have been fulfilled, the amendment to the declaration may be filed with the registrar before the 60-day notice period has elapsed.
[20] The legislative history of these subsections may assist interpretation. The Condominium Act was amended in 1996 to allow for phased development condominiums: SNS 1996, c. 33, s. 1. The statute was amended in 1998 and 2009 to provide further for this kind of condominium. The 1996 provisions included authority for the Governor in Council to make regulations about phased development condominiums and other speciality condominiums. Paragraphs 46(1) (ba) and (be) authorize regulations:
(ba) respecting phased-development condominiums, bareland condominiums, mixed-use condominiums and recreational condominiums, including
(i) the information to be contained in the declaration and description,
(ii) the disclosure of information, and
(iii) exemptions from specific provisions of the Act;
(be) prescribing the conditions a phased-development condominium must meet, and prescribing the information or documents to be provided to the registrar, in order to be exempt from the subdivision-approval requirements of the Municipal Government Act.
[21] N.S. Reg. 6/97 was the first of five that amended the Condominium Regulations to incorporate phased development condominiums or to refine the subordinate legislation on this subject. The definition of “phase” and the provisions for phased development condominiums in the Condominium Regulations, as amended, helps us to understand what constitutes a phased development condominium and what policy issues it gives rise to.
[22] The regulations were amended in 1997 to bring in a definition of “phase” and to add phased development condominiums to various parts of the regulatory scheme. The definition of phase is “the additional units and common elements in a phased-development property that are created in accordance with these regulations upon registration of an amendment to both the declaration and description”: s. 1(2)(i) and see N.S. Reg. 6/97.
[23] From the definition, Part J, and s. 4A, 54(1)(ba), 70(f), 75(2), and 77(2) of the regulations, I take it that a phased development condominium has an initial condominium similar to an ordinary condominium. However, prospective related condominiums may be developed in phases. These could have various uses including commercial, retail, residential. They could include land for someone else to purchase and develop. They could have attached structures, structures standing apart, or high rises.
[24] The phases get an approval, as part of the initial condominium, although they are described in more general terms than is the initial phase. The developer is not obligated to develop the prospective phases. They are incorporated by approved amendment to the initial condominium declaration and description. Once an amendment is made, and the phase fully becomes a condominium, more phases may be added by similar amendment.
[25] What information should be given to initial consumers, and those who take an interest in phases incorporated after amendment? What makes for fair treatment of existing owners when an amendment is sought? These are among the subjects of s. 75(2), s.75A(1), and 76(1). Let us see how these provisions got into the Condominium Regulations.
[26] A condominium is created upon the acceptance for registration of various documents by the Registrar of Condominiums. The central documents are a declaration and a description. The statute provides for these in s. 11. Section 54 of the Condominium Regulations provides further for the declaration of an ordinary condominium.
[27] Section 11 of the statute applies generally to all declarations. Section 76 of the regulations applies separately to phased development condominium declarations.
[28] Subsection 75(2) and s. 76 were created in 1997, shortly after the amendments to the Condominium Act permitting phased development condominiums: N.S. Reg. 6/97, s. 7 and s. 8. Section 75A was created in 2011: N.S. Reg. 230/2011, s. 51.
[29] Section 75 was substantially revised in 2011: N.S. Reg. 230/2011, s. 50. Section 76 underwent a number of revisions: N.S. Reg. 77/97, s. 2; N.S. Reg. 21/2000, s. 18; and N.S. Reg. 230/2011, s. 52.
[30] The 1997 version of s. 75(1) continued and revised requirements for agreements of purchase and sale for ordinary condominiums when they are sold by the developer. The developer had to deliver copies of the plans, approved declaration, by-laws, and common element rules and regulations: s. 75(1)(a) and (b). The purchaser would have the right to stipulate objections within five days, and the agreement would be void if there was an impasse: s. 75(1)(c).
[31] Subsection 75(2) applied the requirements of s. 75(1), and the right created by it, to the newly allowed phase development condominiums. It also added extensively to the information the developer had to deliver to the purchaser:
(a) a statement whether the declarant intends to create an additional phase or phases after the creation of the phase containing the unit or proposed unit;
(b) a statement that the declarant is not required to create a phase after the creation of the unit or the proposed unit;
(c) a statement that sets out the estimated registration dates of the amendments to the declaration and description for creating each phase that the declarant intends to create after the creation of the unit or proposed unit;
(d) a statement sets out, for each phase that the declarant intends to create after the creation of the unit or proposed unit;
(i) the approximate location of the buildings and structures,
(ii) the approximate number of the units,
(iii) a statement of the proportions of the common interests and common expenses, expressed in percentages, attributable to the units after the creation of the phase, and
(iv) a list of the facilities and services that the owners will share after the creation of the phase,
[32] The 2011 amendments to s. 75(1) clarified some of its language, changed the right of a dissatisfied purchaser to simple cancellation of the agreement of purchase and sale, and expanded the information the developer was required to give to the purchaser:
(d) that the declarant has a duty to complete the common elements and provide for holdbacks if the common elements are not completed at the time of closing on a unit;
(e) the details of any amenities not yet completed and the date they will be completed by;
(f) the details of the amount of occupancy fees which can be charged and when they are payable; and
(g) disclosure of any services that are not contained within the boundaries of the property or are not owned by the condominium corporation, and any agreements respecting the terms and conditions associated with those services.
It also resolved the inconsistency between the former s. 75(1)(a) and (b) by repealing (a) and re-lettering the rest.
[33] The original s. 76(1) required a phased development declaration to give descriptions of each phase, an estimate of the number of units, information about the approximate location of buildings and structures in each phase, percentages of common interests and common expenses, and information about shared facilities.
[34] The amendment in late 1997 added several requirements for the declaration. They covered forecasting when amendments enabling new phases, surveys and plans, footprint drawings, shape and location of units, and common elements. A new clause 72(1)(f) required “a statement that the declarant is not required to create a phase after creation of the present phase”. The requirements for a phased development declaration were expanded by the 2011 amendments to impose a duty to complete common elements, disclose amenities not yet completed and a duty to meet a completion date, to disclose information about occupancy fees, and to disclose information about services from outside the condominium or services to be supplied by others.
[35] The original provisions for creating a new phase after approved developments become condominiums contained no requirement for approval by owners of those condominiums. Subsection 76(2) required filing with the registrar of “an amendment to both the declaration and the description to create a phase”. Subsections 76(3) and (4) adopted various requirements for an amendment by incorporating requirements for ordinary condominiums and creating others. Subsection 76(5) required the construction of buildings and structures and the installation of services before registration of the amendment.
[36] Originally, s. 76(2) read simply, “The declarant shall file with the registrar an amendment to both the declaration and description to create a phase.” The amendment at the end of 1997 caused the subsection to read:
The declarant shall file with the registrar an amendment to both the declaration and description and, where the amendment is significantly different from the documents filed with the initial declaration, proof of the approval of all unit owners.
At that time, s. 76(2A) required the proof to be in a form satisfactory to the registrar. Subsections (2B) to (2E) were added. These included a requirement for notice to all unit owners and, in the case of a phase “significantly different” from the initial declaration, copies of the amending documents and access to plans for the unit owners.
[37] So, as of the end of 1997 after phased development condominiums had been added to, and substantially revised in, the regulations, there were requirements for notice to, and approval by, unit owners when a “significantly different” new phase was to be created by amendment. At that time, there was no provision about unreasonably withheld approvals.
[38] The problem of unreasonably withheld approval was the main subject of N.S. Reg. 21/2000, s. 18. It moved the requirement for the registrar’s satisfaction with forms of approval up from s. 96(2A) into s. 96(2), and substituted this text in (2A): “A unit holder may not unreasonably withhold the approval required by subsection (2).”
[39] The 2011 amendments clarified numerous provisions in s. 76(1), (2D) and (5), and they added s. 75A. Of greater importance for the present discussion are amendments to s. 76(2) and (2C). The text of s. 76(2) required approval of existing unit owners on an apparently objective basis, “where the amendment is significantly different” (see para. 36 above). N.S. Reg. 230/2011, s. 52(2) changed that to “if the registrar determines that the amendment is significantly different.”
[40] The addition of s. 75A in 2011 completes our review of the legislative history on the subject of phased development and condominium regulations. While the regulations before 2011 concerned mostly information and relations with interested parties, s. 75A regulates the actual design and layout of phased development condominiums. It also provides requirements for service contracts.
[41] Legislative Purpose. The registrar referred me to para. 3 to 5 of Justice Cromwell’s decision in 24758136 Nova Scotia Ltd. v. Rodgers, 2001 NSCA 12. He describes the legal framework in which we find the statute:
[3] The term “condominium” refers to a system of ownership and administration of property with three main features. A portion of the property divided into individually owned units, the balance of the property is owned in common by all the individual owners and a vehicle for managing the property, known as the condominium corporation, is established: see A.H. Oosterhoff and W.B. Rayner, Anger and Honsberger Law of Real Property (1985), Vol II, s. 3801 and Alvin B. Rosenberg, Condominium in Canada (1969). The condominium may be seen, therefore, as a vehicle for holding land which combines the advantages of individual ownership with those of multi-unit development: Oosterhoof and Rainer at s. 3802. In a sense, the unit owners make up a democratic society in which each has many of the rights associated with sole ownership of real property, but in which, having regard to their co-ownership with others, some of those rights are subordinated to the will of the majority: See Robert J. Owens et al. (eds), Corpus Juris Secundum (1996), Estates § 195, Vol. 31, p. 260.
[4] As Oosterhoof and Rayner wisely observed, the success of a condominium depends in large measure on an equitable balance being struck between the independence of the individual owners and the independence of them all in a co-operative community. It follows, they note, that common features of all condominiums are the need for balance and the possibility of tension between individual and collective interests: at s. 3802.
[5] From a purely legal perspective, a modern condominium is created pursuant to detailed legislative provisions such as, in Nova Scotia, the Condominium Act, R.S.N.S. 1989, c. 85 (the “Act”). The condominium is therefore, a creature of statute. But condominium legislation reflects the combination of several legal concepts and relies on, and to a degree incorporates by reference, principles drawn from several areas of law… While the Condominium Act enables and, to a degree regulates the legal aspects of condominium ownership, it does so against a vast background of general legal principles which will frequently be relevant to the interpretation and application of the Act.
[42] The statute prescribes its own purpose in s. 2:
The purpose of this Act is to facilitate the division of land into parts that are to be owned individually, and parts that are to be owned in common, to provide for the use and management of such properties and to expedite dealings therewith, and this Act shall be construed in a manner to give the greatest effect to these objects. R.S., c. 85, s. 2.
[43] Some authorities suggest that consumer protection is also a purpose of the statute. See, Railside Developments Ltd., 2010 NSSC 13 at para. 23. We saw examples of measures to protect potential purchasers by providing for disclosure and a right of cancellation, to protect existing owners when a proposed new phase is seen by the registrar to be substantially different from that in the initial declaration, and to protect both with planning restrictions on building design and other subjects when we reviewed the provisions on phased development condominiums.
[44] However, those provisions include some that tend to encourage development of condominiums. For example, a developer is not bound to create new phases although they are part of the declaration. For another example, the threshold “substantially different” is now left to the registrar’s judgment, rather than an objective standard enforceable by the unit owners.
[45] Therefore, a legislative purpose of consumer protection cannot stand alone for the Condominium Act and the Condominium Regulations. It is better to understand provisions that protect consumers and other provisions in the statute and regulations in light of the legislated purpose to facilitate division of land into individually and commonly owned parts in s. 2 of the statute and Justice Cromwell’s comments at para. 4 of Rodgers about the need for an equitable balance between independence of unit owners as such and the independence of a democratically controlled co-operative community.
[46] Legislated Scheme. The scheme of the Condominium Act and the Condominium Regulations is regulatory. The legislation regulates the formation of condominiums and the administration of them after units are sold. The provisions we have to consider fall within both aspects of the scheme. They concern formation through amendments to create a new phase of condominiums. They concern the rights of existing unit owners when a proposed amendment would produce a phase that is significantly different from that depicted in the declaration.
[47] As part of this scheme the statute creates powers of the Registrar of Condominiums. Some are technical, almost clerical. Other statutory powers of the registrar created by the Condominium Act are broad and discretionary. See, s. 6(3A)(c) about information the registrar thinks necessary in a declaration, s. 12D about documents the registrar deems necessary for the provision of water and sewage services, proof of votes of unit owners in a form satisfactory to the registrar under s. 40(2), appointment of an arbitrator under s. 33A, and the power to waive a penalty under s. 45A(4).
[48] In one instance, the Condominium Act gives the court, defined in s. 3(1)(k) as the Supreme Court of Nova Scotia, a broad discretion in relation to formation of a condominium. Subsection 11(1) prohibits registration of a declaration that fails to include various statements and s. 11(1)(b) requires the consent of encumbrancers, holders of appurtenances, and holders of easements “which consent may not unreasonably be withheld”. Alternatively, the developers can file “a court order dispensing with consent”.
[49] Other references to the court in the Condominium Act concern corporate subjects, such as winding-up in s. 22, appointment of an auditor in s. 25(9), substitute voters in s. 37(4), and termination of corporate government in s. 43 and enforcement, such as payment of insurance proceeds into court in s. 36A(3) and directing performance of a duty under s. 38(1).
[50] Subsection 46(1) of the Condominium Act authorizes the Governor in Council to make regulations described in numerous classes. The descriptions frequently refer to the registrar. They do not refer to the court.
[51] The registrar figures prominently in the regulations. The court does not. In fact, the only mention of the court is in s. 82B(4) about enforcement of an order made by a condominium dispute officer. As with the statute, the regulations give the registrar broad discretion. For example, he may allow deviations from the specifications in the Act and regulations for survey plans: s. 14. And, the same for survey monuments: s. 15(4). He can expand the requirements for structural plans: s. 40A(4).
[52] For another example, the registrar decides who is qualified to be an arbitrator, maintains a list of approved arbitrators, and creates protocols for arbitration: s. 82.
[53] The registrar is a condominium dispute officer: s. 82A(1)(b). As such, he conducts hearings about disputes on the application of a unit holder: s. 82B(1). He must “consider the evidence and submissions of the parties and provide a written order and reasons within a reasonable time.”: s. 82B(2). The order may be appealed “on the basis of an error of law or jurisdiction”.
[54] In conclusion, the Condominium Act and the Condominium Regulations create a scheme for formation of condominiums and for ownership of units with common area rights, a scheme that is largely regulatory and administrative but “against a vast background of general legal principles”. The powers of the registrar are prominent in the scheme. The powers of the court are not.
[55] Submissions on Interpretation. The developers submit that the registrar’s duties to determine substantial difference and form of proof under s. 76(2) imply that it is his duty to determine unreasonableness under s. 76(2A).
The Applicants are aware of no judicial decisions considering s. 5(b) of the Act or Regulations 76(2) and 76(2A). However, the Applicants submit that Regulations 76(2) and 76(2A) together impose a duty on the Registrar to determine the degree of difference between the initial declaration and the amendment as well as if approval of unit owners is required at all. These Regulations therefore give the Registrar discretion over the necessity of approval by the unit owners and the form thereof.
Given that the Registrar can determine whether or not approval by unit owners is required at all, it follows that the Registrar must also determine if approval is withheld unreasonably. The necessity of approval is born out of a determination of difference made by the Registrar in the first place. Correspondingly, the Registrar, having decided that the degree of difference warrants a higher threshold of owner approval than is generally required for amendments, should also decide if the withholding of approval is reasonable in light of those differences.
[56] The developers submit that this interpretation of s. 76(2) follows the modern principle of statutory interpretation. As will be seen, I agree.
[57] The Registrar of Condominiums submits that s. 11 of the Condominium Act is helpful for interpreting s. 76 of the Condominium Regulations “[b]ecause Section 76 of the regulations is connected with Section 11 of the Act”. Section 11 deals with registration of declarations and amendments. As discussed when we reviewed the legislative scheme, s. 11(b)(iii) is one of the few, if not the only, provision that gives the court power in respect of the formation of a condominium. Among other things, a developer must submit consents for registration of a declaration or an amendment: s. 11(1)(b) and s. 11(4)(c). For the declaration, the statute provides for “the consent of [encumbrancers, holders of appurtenances, and holders of easements] which consent may not unreasonably be withheld, or a court order dispensing with consent”. For the amendment, the developer must provide “proof of consent of owners representing at least eighty percent of the common elements”.
[58] Section 76(1) begins “In addition to the requirements set out in Section 11 of the Act”. The registrar relies on that phrase for the proposition that s. 76 of the regulations is connected to s. 11 of the Act.
[59] There is no operative connection between s. 11 and the amendment provisions in s. 76. The phrase relied upon by the registrar modifies only the provisions of s. 76(1), which adds requirements to those for declarations in ordinary condominiums. The additional requirements provide for the special case of a phased development condominium. The phrase does not apply to s. 76(2) or (2A), about approvals and unreasonable withholding.
[60] Subsections 76(2) and (2A) require approvals in a context that is substantially different from amendments to an ordinary condominium declaration. Subsections 76(2) and (2A) respond to the interests of an existing unit holder who has been given information about future neighbouring condominiums that may, or may not, get developed.
[61] In my respectful assessment, s. 11 of the statute is not helpful for interpreting s. 76(2) and (2A) of the regulations except to the extent that s. 11 is one part of the legislative scheme. The scheme supports the interpretation of s. 76(2A) that the registrar, not the court, decides the reasonableness of a withheld approval.
[62] The registrar also submits that the regulations “do not set out a role for the registrar in any disputes surrounding the nature of any withheld consent”. The same may be said of the court. The legislation does not expressly tell us who determines the reasonableness of a withheld consent. Hence, the necessary exercise in statutory interpretation.
[63] Conclusion on Interpretation. There are two challenges for interpreting s. 76(2) and (2A) of the Condominium Regulations. There is the question of who decides whether approval has unreasonably been withheld, to which the regulations offer no express answer and which the registrar determined in favour of this court. However, equally unanswered is the question of what remedy is available for an unreasonable disapproval. The second will shed light on the first.
[64] Read in isolation, s. 76(2A) tells us nothing about the consequence of a violation. “A unit owner may not unreasonably withhold the approval required by subsection (2).” Nor, do we find an express answer anywhere else in the regulations.
[65] However, the immediate context does suggest an answer. Subsections 76(2) to (2E) are all about informing existing unit holders when a phase is sought to be added by amendment and giving them a remedy when the information is unexpected. The prohibition against unreasonably withholding approval cannot relate to anything in the immediate text except the requirement for obtaining approval. The consequence of unreasonable disapproval must be that the unit owner’s approval is no longer required. The disapproval is unlawful and, therefore, to be ignored.
[66] This is the only interpretation that is consistent with the purpose and the scheme of the Condominium Regulations. Requiring approval of existing owners for a phase substantially different from what was shown to them respects the independence of individual owners, and creating an exception for unreasonable disapproval addresses “the need for balance and the possibility of tension between individual and collective interests”. Together the requirement and the exception facilitate the division of land into individual and common parts because a reasonably disapproved new phase is stopped but a reasonably approved new phase goes forward.
[67] This interpretation is consistent with the legislative scheme because it recognizes that s. 76(2) and s. 76(2A) are integrated within the administrative scheme. Also, by tracing the legislative history of the phased development regulations, we saw that they underwent evolution and refinement. Subsections 76(2) and 76(2A) are very much evolutionary. The requirement for approval was originally premised on an objectively determined “significantly different” basis without an exception for unreasonable disapproval. The new s. 96(2A) created the exception in 2000 and the subjective determination by the registrar was introduced in 2011. This evaluation suggests refinements within the scheme for phased development condominiums, not implied consequences outside the scheme.
[68] Furthermore, the alternatives to interpreting s. 76(2A) as an exception to s. 76(2) are not acceptable under modern principles of statutory interpretation. To treat it as creating a statutory cause of action for the developer against the unreasonable owner does nothing to advance the purpose of the Condominium Act and it would not fit the legislative scheme. To treat it as having no consequence would serve no purpose.
[69] Once one sees that s. 76(2A) is an exception to s. 76(2), the answer to the first question becomes clear. The registrar, not the court, has the statutory power to accept an amendment for registration. It is for him to decide whether there is “proof of the approval of all unit owners to create a phase.”
[70] As interpreted, s. 76(2A) provides an exception to the approval requirement. Therefore, the registrar must assess approval by ignoring owners who unreasonably withhold approval. This will require the Registrar of Condominiums to make a finding of fact about reasonableness. However, our review of the legislative scheme shows that Governor in Council did not hesitate to provide him with statutory discretions requiring fact-finding.
[71] I reiterate that the Condominium Regulations assign many functions to the registrar, and none to the court.
[72] Result. I will set aside the decisions of the Registrar of Condominiums dated June 18, 21, and 28, 2018, declare that the registrar, and not the court, decides whether a withheld approval is unreasonable under s. 76(2A) of the Condominium Act, and remit that question to him for determination in this case.
J.