Executive Summary: Key Legal and Evidentiary Issues

• Applicant corporation sought to discharge a compliance order registered on title under the Building Code Act.

• The application was dismissed, found to be without merit and motivated by an improper purpose.

• Court concluded that the applicant’s true goal was to conceal the compliance order to facilitate a property sale or refinance.

• Applicant’s conduct, including delays and improper arguments, unnecessarily extended the proceeding.

• Elevated costs were justified due to the frivolous nature of the application and its abuse of court process.

• Court awarded $11,659.90 in costs against the applicant, payable forthwith to the City.

Facts and outcome of the case

2811230 Ontario Limited (281Ont), a corporation solely owned and directed by Alisa Chaly, brought an application against the City of Niagara Falls, along with named individuals James Diodati and Brian Sparks. The case arose after 281Ont undertook renovations at its property located at 5759 Robinson Street in Niagara Falls without first obtaining a building permit, in contravention of the Building Code Act.

In response, the City issued an Order to Comply (OTC) under section 8(1) of the Act, requiring steps to bring the property into compliance. 281Ont did not appeal or review the order and the City registered it on title on August 31, 2022. 281Ont then filed an application with the Superior Court of Justice seeking an order to discharge the OTC from title, arguing that its presence hindered the sale or refinancing of the property.

The application was dismissed on January 29, 2025. The judge found that the attempt to remove the order was improper because the order was still valid and operative. The court held that the application was brought for an improper purpose: to obscure the existence of the OTC and circumvent regulatory notice protections designed to inform potential buyers and lenders. The reasons also emphasized that the OTC served a vital consumer protection function by alerting third parties to potentially unsafe, uninspected work.

Following the dismissal, the City sought costs on a substantial indemnity basis, citing the applicant’s conduct in prolonging the proceedings, including last-minute motions, adjournment requests, and the pursuit of meritless arguments. The court agreed, finding that 281Ont’s conduct increased the length and complexity of the matter unnecessarily and that the claim was frivolous and motivated by concealment.

As a result, the court awarded costs on an elevated scale, ordering 281Ont to pay the City $11,659.90, inclusive of fees, disbursements, and HST. This award reflected the serious procedural abuses and the need to discourage similar tactics in future regulatory compliance disputes.