COURT OF APPEAL FOR ONTARIO

CITATION: 1349425 Ontario Limited (Venice Fitness) v. Metropolitan Toronto Condominium Corporation No. 1392, 2014 ONCA 300

DATE: 20140417

DOCKET: C57600

Weiler, Lauwers and Pardu JJ.A.

BETWEEN

1349425 Ontario Limited c.o.b. as Venice Fitness, 957068 Ontario Inc., 957069 Ontario Inc., 954393 Ontario Inc. and 960841 Ontario Inc.

Plaintiffs (Appellants)

and

Metropolitan Toronto Condominium Corporation No. 1392

Defendant (Respondent)

Counsel:

F. Scott Turton, for the appellants

Michael Campbell, for the respondent

Heard: April 10, 2014

On appeal from the order of Justice Anne Mullins of the Superior Court of Justice, dated September 15, 2011.

ENDORSEMENT

[1] The Appellant 1349425 Ontario Limited, carrying on business as Venice Fitness (“Venice Fitness”) appeals from the summary dismissal of its claims that the Respondent condominium corporation (“1392”) wrongfully registered liens against condominium units which it occupied to operate its business. Venice Fitness leased those premises from the owners of the units, being the four numbered corporations which are the other Appellants.

[2] There was no dispute that payments of common expenses for the units were in arrears. While the owners of the units were legally responsible to make the payments, in practice Venice Fitness did so. The Appellant argues that the condominium corporation led it to believe, by adopting a long practice of tolerating late payments, that it would not rigidly enforce timely payment of the fees and would not charge interest; it was accordingly wrong to abruptly register liens without warning, especially after the Appellant Venice Fitness tendered payment in full in the exact amount demanded by the condominium corporation, which was refused.

[3] The condo fees in arrears have now been paid. The dispute remaining is the claim by the condo corporation for legal fees for filing and discharging the liens amounting to $30,597.58.

[4] The motion judge dismissed the Appellants’ claim for “a declaration that Metropolitan Toronto Condominium Corporation No. 1392 wrongfully registered the liens…” on this basis: “I find that the defendant’s conduct did not constitute such so as to raise a promissory estoppel nor was the defendant unjustly enriched.” She dismissed the Respondent’s motion for summary judgment: “insofar as the claim for the legal expenses paid in relation to the lien registration,” and added: “There shall be a trial of that issue.”

[5] The motion judge did not make any factual findings to support the conclusions she expressed, nor did she link any factual findings to the applicable law; it is not possible on this appeal to determine whether her decision was correct.

[6] The order dismissed the claim in para. 1(b) of the Statement of Claim, which sought a declaration that the Respondent “wrongfully registered the liens”. In the face of that language, the Appellants’ concern is that this dismissal forecloses the argument that the Respondent should not be able to recover any legal fees arising out of its conduct in registering the liens, quite apart from their clear ability to contest the reasonableness of the amount of those fees.

[7] In oral argument the Respondent agreed that the Appellants are not foreclosed from making this argument.

[8] The order made by the motion judge does not make this clear.

[9] The appeal is therefore allowed to the extent of adding to the order a proviso that, at the trial of the issue of 1392’s entitlement to reimbursement for the legal fees for registration and discharge of the liens, the Appellants shall be able to argue both entitlement and amount, and to raise the argument that because of the Respondent’s conduct the Appellants should not be obliged to pay the fees or that their obligations should be reduced.

[10] The costs order of the motion judge awarding costs to the Respondent is set aside, and those costs are reserved to the discretion of the judge ultimately hearing the trial. The only issue in dispute before the motion judge was the issue of reimbursement of the costs of registration and discharge of the liens, and the outcome of the trial of that issue will have a bearing on determination of the costs of the motion. Proportionality will likely have a substantial impact on any costs ultimately awarded.

[11] The Appellants were successful on this appeal in obtaining clarification of the order appealed from. Having regard to the manner in which this dispute arose, and having regard to proportionality between the amounts in issue and the costs, costs of the appeal awarded in favour of the Appellants fixed at $5000.00, all inclusive.

“K.M. Weiler J.A.”

“P. Lauwers J.A.”

“G. Pardu J.A.”