[Quagmire]

City by-laws cover public areas such as the hallways and party rooms,weightrooms etc.Not the private area of the home itself.
If she owns the condo,the condo society can't legally dictate what she does in her own property.I had a friend in the same situation,who hired a lawyer and that was the result.But that doesn't mean they wont make life difficult.
If she is renting,and the lease says no pets,then she would need to get rid of the cat or move.But as far as the fine is concerned,they don't have the authority to issue a fine.They can say "We are fining you,you have to pay"but its only lip service unless backed by a officer of the court (law).In this case she should hire a lawyer to clear it up,because the company may send the fine to collections,ruining her credit even though they have no legal right the payment.