Temedio v. Niagara North Condominium Corporation No. 6
[Indexed as: Temedio v. Niagara North Condominium Corporation No. 6]
Ontario Reports
Court of Appeal for Ontario
Paciocco, Harvison Young and Zarnett JJ.A.
September 30, 2019
148 O.R. (3d) 171 | 2019 ONCA 762
Case Summary
Professions — Barristers and solicitors — Fees — Assessment — Condominium corporation applying for order evicting applicant's daughter and her autistic grandson or order that they comply with rules of condominium — Judge refusing to order eviction on basis that it was draconian but making compliance order — Applicant applying unsuccessfully for leave to appeal — Corporation seeking its actual pre-litigation costs and actual costs of proceedings from applicant as owner of unit — Applicant applying for order for assessment of corporation's legal bills — Special circumstances existing that warranted referral of bills for assessment despite fact that some accounts were rendered more than 12 months before application was commenced and all had been paid.
The applicant was the owner of a condominium unit in which her daughter W and her autistic grandson resided. Disputes arose between W and a neighbour involving noise. The respondent condominium corporation retained a law firm to deal with the issue. It ultimately commenced proceedings for an order that W and her son permanently vacate the unit or an order that they comply with the rules of the condominium and refrain from making undue noise. The judge refused to order eviction on the basis that it was draconian, but granted a compliance order and ordered the applicant and W to pay costs in the amount of $2,500. The applicant applied unsuccessfully to extend the time to appeal. The respondent was awarded costs of that application in the amount of $5,000. The respondent sought to recover its actual costs from the applicant in the amount of $1,714.20 for its pre-litigation costs, $52,000 for its costs of the compliance proceeding and $29,588.46 for its costs of the appeal-related proceedings. The applicant applied for an order for the assessment of the respondent's legal bills. The application judge found that the applicant was required to establish special circumstances to obtain the assessment as some of the accounts were rendered more than 12 months before the application was commenced, and all had been paid. She found that the applicant had not established special circumstances with respect to the pre-litigation bills or the compliance proceeding bills, but that special circumstances existed for the appeal bills. She referred the appeal bills for assessment. The applicant appealed, and the respondent cross appealed.
Held, the appeal should be allowed; the cross appeal should be dismissed.
Although being a third party liable to pay the bill rather than the client is not in and of itself a sufficient special circumstance, a third party should be given more favourable consideration than the client who received and paid the account. The application judge failed to advert to and apply that principle. The extent to which the fees charged by the respondent's lawyers might include amounts for pursuing the failed eviction strategy which was criticized by the compliance proceedings judge raised questions about the amount of the legal bills, as did the fact that the compliance proceedings judge limited the respondent to an award of $2,500 while the fees billed for those proceedings were $52,000. There were sufficient special circumstances to warrant a review of the compliance proceeding bills at an assessment. Given the relationship between the pre-litigation steps and the compliance proceeding itself, the pre-litigation bills should be included in the assessment.
Cases Referred To
Echo Energy Canada Inc. v. Lenczner Slaght Royce Smith Griffin LLP (2010), 104 O.R. (3d) 93, [2010] O.J. No. 4560, 2010 ONCA 709, 269 O.A.C. 382, 92 C.P.C. (6th) 1, 325 D.L.R. (4th) 518, 194 A.C.W.S. (3d) 999
Niagara North Condominium Corp. No. 6 v. Temedio, [2017] O.J. No. 557, 2017 ONSC 897 (S.C.J.)
Plazavest Financial Corp. v. National Bank of Canada (2000), 47 O.R. (3d) 641, [2000] O.J. No. 1102, 185 D.L.R. (4th) 78, 133 O.A.C. 100, 44 C.P.C. (4th) 288, 96 A.C.W.S. (3d) 320 (C.A.)
Statutes Referred To
Condominium Act, 1998, S.O. 1998, c. 19, ss. 85(1) [as am.], (2), (5) [rep.], 134(1) [as am.], (5)
Solicitors Act, R.S.O. 1990, c. S.15, ss. 4(1), 9(1), (2), 11 [as am.]
Procedural History
APPEAL AND CROSS APPEAL from the order of McArthur J., [2018] O.J. No. 6377, 2018 ONSC 7214 (S.C.J.) allowing in part an application for an assessment of legal bills.
Counsel:
Benjamin J. Rutherford, for appellant in appeal and respondent in cross appeal.
Erik Savas, for respondents in appeal and appellants in cross appeal.
Judgment
The judgment of the court was delivered by
ZARNETT J.A.:
Introduction
[1] The appellant, Jean Temedio, asked the application judge to order the assessment of legal bills rendered by the respondent lawyers, Simpson Wigle LLP (the "lawyers"), to the respondent, Niagara North Condominium Corporation No. 6 (the "Corporation"), on the basis that she was liable to pay the proper amount of those legal bills. She also sought an injunction restraining the Corporation from enforcing the lien it had registered against her condominium unit to secure payment of those legal bills, until after any assessment was concluded.
[2] The application judge referred one set of legal bills to assessment in St. Catharines, but otherwise denied the relief Ms. Temedio had sought. Ms. Temedio appeals seeking the balance of the relief she sought, including that any assessment be in Toronto. The lawyers and the Corporation cross appeal, arguing that no assessment at all should have been ordered.
[3] For the reasons which follow, I would allow the appeal, direct all of the lawyers' bills to assessment in St. Catharines, and direct that the Corporation not enforce the lien against Ms. Temedio's unit until 30 days after the assessment has been completed if at that time there are amounts owed to the Corporation which have not been paid by Ms. Temedio. I would dismiss the cross appeal.
The Facts
[4] Ms. Temedio owns a residential unit in Niagara North Condominium No. 6, a condominium building located on Scott Street in St. Catharines. She purchased the unit so that her grandson, Robert James, who is 29 years old, has autism and is unable to live independently, would have a place to live with his mother, Kimberley Watson, his sole caregiver.
[5] Disputes arose between Ms. Watson and the tenant of another unit in the building, involving complaints of noise and profanity. The Corporation retained the lawyers, who generated various correspondence. That gave rise to one set of legal bills (the "pre-litigation bills").
[6] Subsequently, proceedings were brought by the Corporation against Ms. Temedio and Ms. Watson seeking an order that Ms. Watson and her son permanently vacate the unit, or that she comply with the rules of the Condominium and refrain from causing undue noise (the "compliance proceeding"). That gave rise to a second set of legal bills from the lawyers to the Corporation (the "compliance proceeding bills").
[7] Taylor J. heard the compliance proceeding. In a decision dated February 7, 2017, he refused to order the eviction of Ms. Watson from the unit, terming such relief "draconian" and "not an appropriate remedy": Niagara North Condominium Corp. No. 6 v. Temedio, [2017] O.J. No. 557, 2017 ONSC 897 (S.C.J.), at para. 25. He instead ordered that Ms. Watson comply with the rules of the Condominium and that Ms. Temedio take reasonable steps to ensure that occurred: at para. 26.
[8] Taylor J. also dismissed Ms. Temedio's request to remove the lien the Corporation had registered against her unit on January 20, 2015 to secure the pre-litigation bills of $1,714.20: at para. 31.
[9] On the question of costs of the compliance proceeding, Taylor J. was critical of the approach the Corporation had taken. He said, at paras. 32-33 of his decision:
However, I do not approve of the action of the Condominium in continuing to seek the extreme remedy of eviction of Kimberly Watson and Robert James as tenants of unit 511. A less heavy-handed approach might very well have avoided an application to the court. It was also open to the Condominium to apply to the court for an order requiring Jean Temedio and Kimberly Watson to comply with the rules.
Therefore, although the Condominium was successful in obtaining an order in this proceeding, I have a discretion with respect costs. In fixing costs, I take into consideration the amount of the lien which has already been registered against unit 511. I therefore fix the costs of this application payable to the Condominium by Jean Temedio and the Kimberly Watson, jointly and severally, in the amount of $2,500 inclusive of disbursements and HST. This amount shall be charged to the common element expenses of unit 511.
[10] Following the decision of Taylor J., on March 13, 2017, the Corporation advised Ms. Temedio that she was responsible for the Corporation's actual costs in pursing the compliance proceeding, that those actual costs were $52,000, and that amount would be added to the amounts secured by the lien against her unit. The Corporation relied on s. 134(5) of the Condominium Act, 1998, S.O. 1998, c. 19.
[11] Ms. Temedio sought to appeal the decision of Taylor J. to this court but did so beyond the applicable time limit. Her motion to extend the time to appeal was opposed by the Corporation, and this generated a third set of legal bills from the lawyers (the "appeal bills"). Ms. Temedio's request for an extension of time was dismissed by Nordheimer J.A. on December 19, 2017, and the Corporation was awarded costs of $5,000.
[12] On February 1, 2018, Ms. Temedio was notified that the Corporation's actual costs of the appeal related proceedings were $29,588.46, that the Corporation claimed the appeal bills from her pursuant to s. 134(5) of the Condominium Act and that this amount would also be added to the costs secured by the lien.
[13] On January 18, 2018, Ms. Temedio commenced the application which resulted in the orders which are the subject of this appeal and cross appeal. Ms. Temedio sought an order for the assessment of all of the legal bills which the Corporation was claiming Ms. Temedio was responsible to pay and were secured by the lien. After the Corporation issued a notice of sale on April 25, 2018, claiming $85,290.17 as payable under the lien and giving notice of intention to sell her unit to realize that amount, Ms. Temedio amended her notice of application to also claim an injunction restraining the enforcement of the lien until after any assessment had taken place.
[14] Ms. Temedio paid the $2,500 costs award of Taylor J., and the $5,000 costs award of Nordheimer J.A. The balance of the amounts claimed by the corporation arising from the pre-litigation bills, the compliance proceeding bills and the appeal bills remain unpaid.
The Decision of the Application Judge
[15] The application judge held that since s. 134(5) of the Condominium Act made Ms. Temedio liable to pay the legal bills incurred by the Corporation, Ms. Temedio was entitled to apply for an assessment of the lawyers' bills in the same way as the Corporation might have, under s. 9(1) of the Solicitors Act, R.S.O. 1990 c. S.15. She further held that Ms. Temedio was required to establish special circumstances to obtain an assessment, as the Corporation would have had to if it were applying to assess the accounts, due to the fact that some of the accounts were rendered more than 12 months before Ms. Temedio's application was commenced, and all had been paid: Solicitors Act, s. 4 and 11; at paras. 8-15.
[16] The application judge held that Ms. Temedio had not established special circumstances with respect to the pre-litigation bills, because she had not taken steps to have the accounts assessed earlier but had unsuccessfully sought, before Taylor J. to obtain a ruling that the Corporation was not entitled to a lien for these costs: at paras. 16-19.
[17] The application judge also held that Ms. Temedio had not established special circumstances with respect to the compliance proceeding bills of $52,000, because the only ground of special circumstances she advanced was that the fees were excessive. She held that the fees did not appear excessive for a two-day application given the number of pages of material filed. She also observed that Ms. Temedio was an active party to the compliance proceeding whose counsel anticipated that the Corporation would claim fees in approximately that amount; therefore Ms. Temedio's own legal fees must have been the equivalent: at paras. 20-23.
[18] The application judge found that special circumstances existed for the appeal bills ($29,588.48). The special circumstances arose from a comparison of the appeal bills with the compliance proceeding bills, given the less extensive work required for the appeal related proceedings. Accordingly, the application judge referred the appeal bills to assessment: at paras. 24-31.
[19] Applying the test for an interlocutory injunction, the application judge refused to enjoin the Corporation from enforcing its lien: at paras. 34 and 37. She held that there was an absence of "real details or expert information about her grandson's condition" so no irreparable harm was shown: at para. 35. The balance of convenience favoured the Corporation because even though some bills were to be assessed, Ms. Temedio would still be responsible for significant costs, and the Corporation's ability to function was negatively impacted by the failure of Ms. Temedio to pay the legal bills: at para. 36.
Statutory Provisions
[20] Section 4(1) of the Solicitors Act provides that a lawyer's bill shall not be ordered assessed more than 12 months after the date the bill was delivered unless special circumstances are shown. Section 11 of the Solicitors Act provides that payment of a bill does not preclude the ordering of an assessment, if special circumstances are shown.
[21] Section 9 of the Solicitors Act permits a person other than the client to obtain an order referring a bill for assessment if that person is liable to pay the bill, and expands the range of circumstances that justify ordering the assessment. Sections 9(1) and (2) of the Solicitors Act provide as follows:
9(1) Where a person, not being chargeable as the principal party, is liable to pay or has paid a bill either to the solicitor, his or her assignee, or personal representative, or to the principal party entitled thereto, the person so liable to pay or paying, the person's assignee or personal representative, may apply to the court for an order referring to assessment as the party chargeable therewith might have done, and the same proceedings shall be had thereupon as if the application had been made by the party so chargeable.
(2) If such application is made where, under the provisions hereinbefore contained, a reference is not authorized to be made except under special circumstances, the court may take into consideration any additional special circumstances applicable to the person making it, although such circumstances might not be applicable to the party chargeable with the bill if he, she or it was the party making the application.
[22] Subsections 134(1) and (5) of the Condominium Act provide that a condominium corporation may apply to the court to enforce its by-laws or rules against a unit owner and may add any costs awarded together with "additional actual costs" incurred in obtaining the order to the common expenses of the unit.
[23] Subsections 85(1), (2) and (5) of the Condominium Act permit a condominium corporation to register a lien for amounts owing by an owner for common expenses, and to enforce the lien in the same manner as a mortgage.
Analysis
[24] Ms. Temedio argues that the application judge erred in finding that special circumstances were required to be shown. She argues that the application judge erroneously approached the matter as though the date of the delivery of the bills by the lawyers to the Corporation was what mattered, when Ms. Temedio's assessment application was commenced within 12 months of her receipt of the compliance proceeding bills. She also argues that because the lien may be enforced in the same way as a mortgage, she should be treated in a manner analogous to a mortgager. Alternatively, she argues that the application judge erred in not finding special circumstances for both the pre-litigation and compliance proceeding bills.
[25] I do not find it necessary to decide whether Ms. Temedio is right that no special circumstances needed to be shown. In my view, even if the application judge was right in requiring Ms. Temedio to show special circumstances, she erred in failing to find that special circumstances were present, sufficient to warrant assessment of all of the bills.
[26] A judge's finding about the existence of special circumstances warranting the referral of a bill for assessment may be interfered with on appeal if the judge made an error in principle or arrived at a clearly unreasonable result: Echo Energy Canada Inc. v. Lenczner Slaght Royce Smith Griffin LLP (2010), 104 O.R. (3d) 93, [2010] O.J. No. 4560, 2010 ONCA 709, at para. 29.
[27] In my view, the application judge made an error in principle.
[28] When a person other than the client is liable to pay a lawyer's bill, not all of the same incentives that may exist between the lawyer and the client to ensure the bill is reasonable may be present. Thus, in considering whether special circumstances have been shown, a more generous approach is to be taken when the person applying for the assessment is a person liable to pay the bill but is not the client. Section 9(2) of the Solicitors Act allows the court to consider extra circumstances applicable to such a person which would not pertain to the client itself. Although being a third party liable to pay the bill is not in and of itself a sufficient special circumstance, this court has endorsed the concept that a third party should be given more favorable consideration than the client who received and paid the account: Plazavest Financial Corp. v. National Bank of Canada (2000), 47 O.R. (3d) 641, [2000] O.J. No. 1102 (C.A.), at p. 651 O.R. The application judge failed to advert to and apply this principle.
[29] Viewing the matter through the lens of the favourable consideration to be given to Ms. Temedio's request, the dates when the bills were delivered to the Corporation, and the payment of them by the Corporation have less significance than they would if the Corporation were seeking the assessment. The circumstances that justify an assessment of the bills do not need to overcome the inference of propriety and reasonableness of the bills that arises from delay in seeking assessment, or payment, by the client.
[30] Similarly, a consideration of the length of time spent arguing the application, the number of pages of materials filed, or whether Ms. Temedio's counsel correctly predicted how large the Corporation's claim for legal fees would be, are not determinative of whether special circumstances exist for Ms. Temedio to assess the bills. This is especially so given that Taylor J. made a finding about why the Corporation's legal bills may have risen to what they were, which raise questions about the fees charged. The application judge failed to take this into account.
[31] Taylor J. voiced his disapproval of the conduct of the Corporation in seeking the extreme remedy of eviction (which the Corporation did not obtain) and observed that a less heavy-handed approach on its part might have avoided litigation altogether. Ms. Temedio was on the receiving end of that unsuccessful strategy and approach, yet to the extent the legal bills to the Corporation included time spent on it, Ms. Temedio is being asked to pay for it. The extent to which the fees charged may include amounts for pursuing the failed eviction strategy and the heavy-handed approach raise questions about the amount of the legal bills. So too does the fact that Taylor J. limited the Corporation to an award of $2,500 in costs for the compliance proceeding; this also raises a question about the total fees of $52,000 charged for that proceeding.
[32] Taken together and viewed in light of the correct principle, there were sufficient special circumstances to warrant a review of the compliance proceeding bills at an assessment at the request of a third party like Ms. Temedio given that her request is entitled in law to favourable consideration.
[33] Given the relationship between the pre-litigation steps and the compliance proceeding itself, I would also include the pre-litigation bills in the assessment. I do not view Taylor J.'s ruling about the ability of the Corporation to register a lien for those bills to be a ruling on their quantum or to preclude assessment to determine their appropriate amount.
[34] It follows from my conclusions that the cross appeal of the Corporation must fail. I see no error in the application judge's determination that the appeal bills proceed to assessment; indeed, that conclusion is fortified by a determination that the pre-litigation and compliance proceeding bills should proceed to assessment.
[35] I would not interfere with the order of the application judge as to the place of assessment. She did not err in exercising her discretion to order that the assessment take place in St. Catharines.
[36] Given that all of the bills will now proceed to assessment, I would set aside the dismissal of the request for an injunction and substitute an order enjoining the Corporation from enforcing its lien until the assessment has been completed. In my view, the application judge erred in finding that there was no irreparable harm due to an absence of evidence about Ms. Temedio's grandson's condition. There was uncontradicted evidence in the affidavit of Ms. Temedio that her grandson "has autism and is unable to live independently", that the unit was purchased so that he would have a place to live with his sole caregiver, and that requiring that the unit be sold would result in dislocation of her grandson "from the home he has grown accustomed to living in [which] would likely lead to severe emotional and mental complications, the extent of which [Ms. Temedio has] not, at this juncture, been able to fully ascertain". As well, the application judge's finding that the balance of convenience favoured the Corporation was premised on the limited assessment she ordered. Since all of the bills are to be assessed, and since according to the Corporation's counsel an assessment in St. Catharines will not involve significant delay, the balance of convenience favours the granting of an injunction.
Conclusion
[37] I would allow the appeal and vary the judgment of the application judge to refer all the legal bills to assessment in St. Catharines, and to direct that the Corporation not enforce its lien until 30 days after the completion of the assessment and then only for such amounts found due on the assessment to the extent that such amounts remain unpaid. I would dismiss the cross appeal.
[38] The parties may make written submissions on costs, not exceeding two pages. Those of Ms. Temedio should be delivered within ten days of this date. Those of the respondents should be delivered five days thereafter.
Appeal allowed; cross appeal dismissed.
End of Document
