COURT FILE NO.: DC 330/06

DATE: 20070622

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

B E T W E E N:

VIRAF and MARY BALIWALLA,

Plaintiffs (Respondents)

• and -

YORK CONDOMINIUM CORPORATION NO. 438,

Defendant (Appellant)

Stephen R. Cameron, Counsel for the Respondents

Joseph W. Ryan, Counsel for the Appellant

WRITTEN SUBMISSIONS ON COSTS

REASONS: GREER J.:

1On April 19, 2007, I allowed the Appeal by York Condominium Corporation No. 438 (“YCC 438”) of the Decision of Deputy Small Claims Court Judge Genova dated May 31, 2004, wherein he awarded the Respondent (Plaintiff), Mary Baliwalla, the former owner of a unit in YCC 438, damages of $5,350.29 plus Costs of $242.67 in her claim against YCC 438. The claim arose out of the payment by Baliwalla and other unit owners of a special assessment fee for repairs to common elements. Baliwalla had claimed that there was an overpayment by her, as the full amount of the assessment was found not to be required for the repairs in question. She and her husband sold the unit shortly after the full payment had been made. I set aside the Order of the Deputy Small Claims Court Judge and dismissed Baliwalla’s Action and that of her husband (who had originally claimed though not a unit owner) since his name was never removed from the style of cause.

2At the end of my Reasons, I said that if the parties could not agree on Costs, I would receive brief written submissions on the same. I have now received them.

3The Appellant, YCC 438, asks for Costs of $52,943.48, inclusive of disbursements and GST, on a substantial indemnity basis or $46,830.98 on a partial indemnity basis for the time period November 25, 2003 to November 8, 2006. The Costs being requested cover not only the Appeal but all of the time expended by counsel since the Action was begun by Baliwalla. Counsel has provided detailed time dockets to support this sum, as well as a detailed Costs Outline for the two appearances. Each outline includes a separate charge for the 2-day trial of $4,700 for the Small Claims Court appearance and $1,650 for the appearance at the Divisional Court on the Appeal, plus time billed, plus disbursements and GST.

4The Appellant asks for substantial indemnity Costs based on the wording of YCC 438’s declaration, by-laws and rules. The Appellant says that these documents and the “underlying consumer protection policy underpinnings of the Condominium Act, 1998 (“the Act”)” support its position that, where a unit owner’s actions cause the condominium corporation to incur costs, that unit owner, not his or her neighbouring unit owners, should be responsible for those costs pursuant to Article X of its Declaration.

5While the Appellant wants me to treat Baliwalla as a unit owner, the fact is she had sold the unit and the closing of the sale had taken place before the Small Claims Court Claim was brought on by her against YCC 438. I find that Baliwalla was not a unit owner for purposes of the Act, when she made her claim. I therefore decline to interpret Article X of YCC 438’s Declaration as it applies to the Act.

6Further, while YCC 438 would like to see any award for Costs to be made against Baliwalla and her husband personally, and perhaps jointly and severally, I do not have the jurisdiction to do so. While Baliwalla’s husband was originally listed as a co-plaintiff her in the style of cause of the Claim, he was not a unit owner and had no status to be a plaintiff in the Small Claims Court Action. The fact that he was on the Board of Directors of YCC 438 when the special assessment was passed by vote of the unit-owners, does not make him either an owner or a plaintiff.

7The Respondent takes the position that she had the right to make the Claim she did and that she should not have to take into account any effect such Claim may have on the unit owners of YCC 438, despite the Appellant’s position to the contrary.

8The Respondent relies on rule 1.02(1) of the Rules of Civil Procedure, which state that these Rules do not apply to Small Claims Court matters. The Small Claims Court is governed by its own set of Rules. Rule 14 governs Offers to Settle and Rule 19 governs Costs. Subrule 19.01(1) covers a successful party’s disbursements, and subrule (3) limits the amount to be awarded for effecting service. Subrule 19(2) states that any power under this rule to award costs is subject to section 29 of the Courts of Justice Act, which limits the amount of costs that may be awarded. There is a limit fixed under subrule 19.03 of $50 for the preparation and filing of pleadings, and a reasonable counsel fee may be awarded under subrule 19.04 for trial. If the Court is satisfied that a party has unduly complicated or prolonged an action or has otherwise acted unreasonable, the court may order the party to pay an amount as compensation to another party under subrule 19.06.

9The amount of the Costs, other than disbursements, in Small Claims Court is limited by section 29 of the Courts of Justice Act, which reads:

An award of costs in the Small Claims Court, other than disbursements, shall not exceed 15 per cent of the amount claimed or the value of the property sought to be recovered unless the court considers it necessary in the interests of justice to penalize a party or a party’s representative for unreasonable behaviour in the proceeding.

10In my view, the Appellant is only entitled to its Costs for the first appearance in Small Claims Court as fixed by the above Rules. There was nothing unreasonable about Baliwalla bringing on a claim for a refund, even though I found she was not entitled to it at law, even though damages awarded to her by the Small Claims Court Deputy Judge was not correct. See: Stacey v. Barrie Yacht Club, [2003] O.J. NO. 5278.

11The Appellant expended $2,695.52 for disbursements inclusive of GST for its first appearance in Small Claims Court. Under these Rules, the Appellant is entitled to be reimbursed for those disbursements. The Appellant is only entitled under the section 29 to Costs of 15% of the amount claimed, which is $803 plus GST as a counsel fee on the first appearance. Order to go that the Respondent Baliwalla pay to YCC 438 the sum of $3,438.52 for its appearance at the Small Claims Court hearing.

12With respect to the Costs of the Appeal before me, the Appellant says it tried to settle the matter by letter dated November 10, 2006, wherein YCC 438 agreed to pay to both Baliwallas the sum of $2,500 in exchange for their consent to set aside the Judgment of the Small Claims Court Deputy Judge. It further agreed not to seek costs of the appeal if the appeal would go on a without cost basis, in exchange for an executed release by the Baliwallas. The Offer was made under Rule 49 of the Rules of Civil Procedure. It remained open until 1 minute after the appeal hearing commenced. Baliwalla declined to accept that Offer.

13It is the position of the Respondent that rule 49.10 does not apply to offers to settle made pending an appeal, relying on the Court of Appeal decision in Niagara Structural Steel (St. Catharines) Ltd. v. W.D. Laflamme Ltd. (1987), O.R. (2d) 773, [1987] O.J. No. 2239 (C.A.). I adopt the analysis made by the Court in paragraphs 17, 18 and 20 of that decision, noting that the Rule speaks to obtaining “a Judgment” by a “plaintiff” in the operation of the Rule, and these terms do not apply to appeals. There are therefore no consequences with respect to Costs for the Appellant having made such an Offer to Settle.

14What then are reasonable Costs to award the Appellant on this Appeal from a Small Claims Court matter? In Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 29;, [2004] O.J. No. 2634 (C.A.), the Court said one must look at the result produced and question whether, in all the circumstances, the result is fair and reasonable. On the Appeal, the Appellant expended disbursements inclusive of GST of $1,014.21 and is entitled to those. I agree with the Appellant that the matters involved were very important to YYC 438 and other condominium owners in general, who may face the same problem.

15On the other hand, far too much time was expended by counsel, on both the initial Action in Small Claims Court and on the Appeal, given the amount in question. YYC 438 is only a 16- unit condominium and, in my view, the quantum of Costs it is now facing is large. The key factor in this case is that the amount of money in issue was small, namely $5,350.29. Counsel must always keep in mind what the value of the issue at stake is, in determining the steps to be taken in either bringing on a Claim or defending a Claim like this.

16While counsel fees, awarded on Divisional Court matters, vary in quantum depending on time spent preparing for the Appeal and time spent before the Court, the Court of Appeal has said that one must first look at the amount in question in the Claim before the Court. It also emphasizes that costs must be commensurate with the value of the lawsuit to the parties. See: Amherst Crane Rentals Ltd. v. Perring, [2004] O.J. No. 2558 Docket No. C38627 (C.A.), where the amount in question on an Application was $82,000, and the Costs awarded were $53,679.28. There, the Court saw fit to reduce the Costs to $15,000, which is approximately 19% of the value of the Claim. The Court held this to be a reasonable amount in the circumstances of the case.

17In the case before me, the amount in question fell within the jurisdiction of the Small Claims Court. I have said that the Appellant is entitled to the full amount of disbursements and GTS of $1,014.21 expended on the Appeal. Weighing the factors in this case and applying the principles set down by the Court of Appeal, I award the Appellant the sum of $3,000 for the Appeal, being a reasonable sum awarded by the Divisional Court on such an appearance. The Appellant is therefore entitled to $4,014.21 Costs on the Appeal.

18The total sum of Costs for both appearances by the Appellant, is fixed at $7,452.73 inclusive of all disbursements and GST on the disbursements, plus GST on the fees, to be payable forthwith by the Respondent Baliwalla. Order to go accordingly.

Greer J.