Court File and Parties

Court File No.: CV-12-454835
Date: 20140109
Superior Court of Justice – Ontario

Re: TORONTO STANDARD CONDOMINIUM CORPORATION NO. 1908 also known as Toronto Condominium Corporation No. 1908, Applicants

And:
STEFCO PLUMBING & MECHANICAL CONTRACTING INC., Respondent

Before: Low J.

Counsel:
Yadvinder Singh Toor, for the Applicant

Brandon Jaffe, for Stefco Plumbing & Mechanical Contracting Inc.

Doug Bourassa, for the Interested Party, Business Development Bank of Canada

Heard: In writing

Costs Endorsement

[1] Two sets of costs are to be determined.

[2] The first is costs of the applicant as against the respondent Stefco Plumbing & Mechanical Contracting Inc. The applicant claims total costs of $13,734.85 comprising $11,387.00 in fees, the balance being disbursements and HST.

[3] The second is costs claimed by Business Development Bank of Canada (BDC), the interested party, following its success on the priority issue as against the applicant.

[4] Dealing first with the applicant’s costs as against Stefco Plumbing, it appears to me that the most significant factors in fixing costs are the absence of opposition and the total amount at stake, approximately $50,000. The application was uncomplicated.

[5] In my view, the costs claimed are significantly disproportionate to the amount of effort reasonably and necessarily expended on the application given that it was undefended. The fact that the applicant had difficulty quantifying its claim was attributable to misconduct by the condominium declarant which was not a party to this proceeding. The applicant’s costs as against the declarant are or were the subject matter of other proceedings in this court and are appropriately dealt with there.

[6] In my view, a reasonable amount for costs of the application as against Stefco Plumbing, on a substantial indemnity basis, is $5,000 plus HST of $650. I would allow the disbursements of $867.54. Costs as against Stefco Plumbing in favour of the applicant are fixed at $6,517.54.

[7] The interested party, BDC, was successful as against the applicant on the question of priority and seeks its costs of the application on a full indemnity basis of $23,656.45 of which $19,005.00 is for fees.

[8] In my view, this is a case where it is appropriate to depart from the general rule that costs follow the event.

[9] It should be made clear at the outset that there was no misconduct on the part of BDC or its solicitors. This was an important issue of general application in both the lending industry and in the administration of condominium affairs, and it was reasonable that a significant amount of effort be expended on the application.

[10] The issue was, however, for all practical purposes, one of first impression. There was no prior reasoned judicial consideration of the issue which could have given guidance to the parties. The argument advanced by the applicant for revival of lien rights was a novel one which, if acceded to, would have had a significant impact on the balancing of rights as between mortgage lenders and other encumbrancers on one hand and condominium corporations on the other.

[11] This is therefore an appropriate case for no costs. There is, however, one aspect of the matter for which BDC ought to be awarded costs: the service of notice of the application upon BDC a mere 4 days prior to the hearing date and the attendance for purposes of argument for adjournment and terms. Given that BDC was in effect the only party with a monetary stake in the outcome other than the applicant, it ought to have been joined as a proper and necessary party at the outset. The applicant failed to do this. Had the applicant proceeded in proper fashion the attendance and argument on August 27, 2012 would have been avoided.

[12] For that reason, I would award costs to BCD only for that attendance which I fix at $2,000 all inclusive.

Low J.

Date: January 9, 2014