Executive Summary: Key Legal and Evidentiary Issues

• The dispute centers on whether a 2024 lease renewal for a condominium's parking facility, allegedly signed by a now-deceased board president, is valid and enforceable.
   
• Compliance with the Condominium Act, 1998 raised a central issue, since the condominium corporation argued that leasing common elements requires a governing by-law and owner approval that were never obtained.
   
• Evidentiary contradictions emerged from cross-examination of the plaintiff's operations manager and the property manager regarding who negotiated the verbal lease and subsequent rent changes.
   
• Whether the plaintiff had unclean hands was considered but ultimately rejected due to insufficient evidence of deceit or fraud.
   
• Irreparable harm was assessed separately for the claimed loss of a property right versus alleged financial harm to the plaintiff's business.
   
• The balance of convenience became decisive, turning on the underlying strength of the plaintiff's lease claim rather than competing financial hardships.
   

Facts of the case

Parking Specialists Inc. ("PS") operated a parking business on the surface lot of a condominium complex at 600 Sherbourne Street for more than 25 years, dealing with the property's owner, York Condominium Corporation No. 194 ("YCC"). PS claimed it held a valid lease renewal running from July 1, 2024, to June 30, 2029, purportedly signed by Dr. Anton Kacicnik ("Dr. K."), the board's long-time president, who died in February 2025. A new YCC board member began reviewing the corporation's finances in January 2025, at which point the board says it first learned of the 2024 renewal. YCC subsequently took the position that neither the renewal nor the underlying arrangement complied with the Condominium Act, 1998. On July 16, 2025, YCC told PS the renewal was void, and on May 27, 2026, it sent a letter requiring PS to vacate the parking facility by June 30, 2026, while inviting PS to submit a proposal for a new five-year lease at fair market value. PS commenced an action on June 5, 2026, seeking a declaration that the renewal was valid and an interlocutory injunction preventing eviction pending trial.

Policy and legislative provisions at issue

Several statutory and governance provisions figured in the analysis. Section 21(1) of the Condominium Act was cited by YCC as requiring the corporation to proceed by by-law before leasing any part of the common elements, such as the parking facility. YCC also pointed to section 97(4) of the Act, which requires a two-thirds vote of unit owners before a substantial change to corporate assets, alongside Article III, paragraph 3(a) of YCC's Declaration, which sets an 80% ownership vote threshold for the same purpose. The Statute of Frauds, RSO 1990, c S.19, was raised for the proposition that only written agreements can create an interest in real property. The interlocutory injunction test itself arose under section 101 of the Courts of Justice Act and Rule 40 of the Rules of Civil Procedure, drawing on the framework in RJR-MacDonald Inc. v. Canada (Attorney General).

Reasoning and analysis

Justice Mathen first rejected YCC's argument that PS came to the motion with unclean hands, finding the record insufficient to conclude that PS's witnesses had been untruthful, despite inconsistencies in their evidence about who negotiated the verbal lease and the 2024 renewal. Turning to the injunction test, the court held that the lower "serious issue to be tried" threshold applied rather than the more demanding "strong prima facie case" standard, since none of the circumstances that would elevate the threshold—such as a restrictive covenant or a largely settled factual record—were present. PS met that lower threshold given its written renewal document apparently signed by YCC's board president. On irreparable harm, the court was not persuaded that PS's business would be destroyed by eviction or that YCC would be unable to satisfy a damages award, finding PS's financial evidence too general to support those claims; the court accepted only that the potential loss of a genuine property right constituted irreparable harm. The balance of convenience ultimately favoured YCC. The court found the evidence of a valid verbal lease between 2016 and 2024 to be weak, and concluded that PS had not shown persuasive reasons why the Condominium Act's statutory requirements—including the absence of an authorizing by-law—did not present a significant hurdle to the relief PS sought.

Ruling and overall outcome

Because the only irreparable harm identified rested on a property right the court considered weakly supported, Justice Mathen held that the balance of convenience did not favour granting the injunction and dismissed PS's motion, with YCC prevailing. The endorsement does not fix a monetary award; instead, the parties were urged to reach agreement on costs, and if unable to do so, each may submit written submissions on costs within 45 days, meaning the amount owed, if any, was not specified in this decision.