BARRIE

COURT FILE NO.: 14-0132

DATE: 20140707

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Simcoe Condominium Corporation No. 12, Applicant

AND:

Cindy Sue Walker and Jane and John Doe Occupiers, Respondents

BEFORE: THE HON. MR. JUSTICE P.H. HOWDEN

COUNSEL:
S. Hodis, Counsel for the Applicant

E. Durant, Counsel for the Respondent, Walker

HEARD: June 20, 2014

ENDORSEMENT

[1] The parties and counsel were able to resolve this matter on all issues except costs. The executed Minutes of Settlement were filed at the opening of the hearing. Counsel proceeded to make their submissions on entitlement and quantum of costs.

[2] For the Applicant Simcoe Condominium Corporation No. 12 (“SCC No. 12”), Ms. Hodis presented her draft bill of costs totalling $59,057.02 on the basis of full indemnity. Of the three scales of costs, full indemnity is the one that is ordered least because in most cases the expectation is that, win or lose, each party is going to bear some portion of their lawyer’s fees and disbursements and, as a matter of policy, probably should because litigation has a social as well as an individual cost. The next scale down from full indemnity is substantial indemnity which is approximately 10% lower, the lowest and most common scale of costs is partial indemnity which is approximately one-third less than substantial indemnity. To put it a different way, substantial indemnity scale is 1.5 times the partial indemnity rate (Rule 1.03).

[3] One of the factors in setting the scale and deciding which party should bear the costs at least partially of the other is which party has been successful in the litigation. As these parties were able to settle all issues other than costs in this case, no trial was necessary. However I have reviewed the allegations in the application of SCC No. 12 involving the many times that the respondent Cindy Sue Walker has failed to abide by the Declaration and rules of the Corporation despite requests and warnings. I have read the lengthy judgment consented to by her ordering her to restore her unit to what it was planned for and to live within the rules and by-laws and Declaration of the SCC No. 12 for a set period by the end of which she must sell her unit. It is clear that Ms. Hodis is correct in saying the applicant has succeeded on every issue in this case.

[4] This sorry saga of one person’s refusal to live peaceably and cooperatively within a condominium community where all know the restrictions before they enter goes back to June 2, 2005 when the first notice was sent to her to leash her dog. Since then, the application covers serious use violations, building violations and continuous refusals to control her dog. She even furnished, changed the configuration of the interior and rented out a fully serviced unit within her own unit. The condominium apartments are all restricted to and built for only single family use, and for insurance purposes, that kind of change could amount to a material change in the risk, thus putting all at risk of loss in the case of fire or other peril happening.

[5] As the president of the Corporation stated in her affidavit in the application record compiled by Ms. Hodis:

Mrs. Walker is the only owner, in my years on the Board of Directors, that SCC #12 has consistently over the years had to enforce various sections of the Rules, Bylaws and Declaration as she continually disregards them to further her own benefit.

Mrs. Walker has lied to the Board about her actions and is blatantly deceitful. She asks people to lie for her and she conceals what is actually happening in her unit. This has been confirmed by the various tenants in her unit who have approached me.

It appears to the Board that Mrs. Walker does not understand or want to understand that she has decided to live in a condominium community which has rules which restrict what an individual can do so that all unit owners and residents can live together as a community.

(Wither aff., Jan. 29, 2014)

[6] The total bill of costs for the applicant is broken down as follows:

Fees $54,773.93

Disbursements $ 4,283.09

$59,057.02

[7] There is precedent for a condominium corporation to be granted costs on a full recovery (full indemnity) basis in the circumstances following: (i) where the respondent has been warned of the costs consequences of enforcement proceedings on more than one occasion; (ii) she failed or refused to comply with the Board’s directions repeatedly: and (iii) her fellow unit owners must bear the cost through no fault of their own unless the respondent is required to do so. Metro Toronto v. Skyline Executive, 2005 13778 (ON CA), [2005] O.J. No. 1604 (Ont. C.A.) Muskoka Condominium Corp. No. 39 v. Kreutzweiser, 2010 ONSC 2463 (SCJ); Chan v. Toronto Condominium Corp. No. 1834, 2011 ONSC 108 (SCJ).

[8] In this case, Mrs. Walker was specifically warned on June 28, July 9, and November 22, 2013 that unless she removed the dog, after it was deemed a nuisance by the Board for cause, and unless she demonstrated that she could comply with her obligations within the condominium community, a court application would be commenced and all costs of such action would be her responsibility under s. 134(5) of the Condominium Act, R.S.O. Much of the work preparing the application occurred in January 2014 and the thick application record going back in history some nine years was served in the respondent in early February 2014. By April 25, 2014, the second return date, the parties had entered Minutes of Settlement and Justice Healey made the order in accordance with the settlement document. Most of the time was put in by Ms. Hodis preparing the application, preparing for the hearing and in settlement discussions and sessions with SCC No.12’s Board of Directors advising and obtaining instructions. The bulk of the costs were incurred after at least two of the formal warnings were given to Ms. Walker of her responsibility for costs if she failed to live within the Declaration and Rules that all other owners had to. And she failed or refused to comply again, twice more.

[9] On Ms. Walker’s behalf, Ms. Durant submitted that the amount of the bill of costs was excessive, that time preparing the factum of seven to ten hours, and the time on work a clerk could do should have been billed at a clerk’s hourly rate. Ms. Durant included her own time dockets. They show total time by Ms. Durant and her law clerk as 56 hours since February 11, 2014. Ms. Durant relied on the legitimate expectations of the opposing party as to the amount of costs she would be facing as well as the need for a hard look at the items of Ms. Hodis’s costs. Ms. Durant submitted that a bill in the range of $30,000 would be reasonable for the work of a solicitor and counsel for the applicant.

[10] Ms. Walker’s affidavit filed at the costs hearing, contained a number of requests based on her “poor financial position”. They all added up to a request for more time for her to stay put in the condominium community while she is allowed to complete all the renovations required by the judgment her counsel, no doubt on her instructions, agreed to. Her requests included the importance to her of her dog. It was her continuous ignoring of requests and Board orders to leash the dog and to restore outdoor and indoor areas to what was planned and restricted to, which have been a constant theme throughout this sad saga of Ms. Walker’s revolt against the Rules and Board stipulations with statutory authority which living in a community means. They were all rules and by-laws that she had agreed to abide by on entering this corporation.

[11] In response to Ms. Walker’s requests for more time and less monetary relief against her, the reply affidavit of the property manager of SCC No.12 states that SCC No.12 is also in a poorer financial position because of her obstinate and mendacious behaviour which hid much of the structural changes that she made and now is required to be undone by her. Common area fees will have to be supplemented by a $6,800 special assessment on each owner. Some owners will find it a hardship which they in no way caused. This will be necessary unless Ms. Walker pays all the costs, or they are added to her common expenses fees, if not paid, and to the common expense lien against her unit.

[12] While the parties put forward a number of cases for me to consider, the ideas in most of the cases in the books of authorities, apart from the cases on condominium costs, can be summed up still in the now classic terms set out by Armstrong J.A. as the purpose of the court’s discretion and rules on costs in Boucher v. Public Accountants Council (Ontario), 2004 14579 (ON CA), [2004] O.J. No. 2634:

It is important to bear in mind that rule 57.01(3), .... provides:

When the court awards costs, it shall fix them in accordance with subrule (1) and the Tariffs.

[13] Subrule (1) lists a broad range of factors that the court may consider in exercising its discretion to award costs under s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43. The express language of rule 57.01(3) makes it clear that the fixing of costs is not simply a mechanical exercise. In particular, the rule makes clear that the fixing of costs does not begin and end with a calculation of hours times rates. The introduction of a costs grid (since revoked) was not meant to produce that result, but rather to signal that this is one factor in the assessment process, together with the other factors in rule 57.01. Overall, as this court has said, the objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding, rather than an amount fixed by the actual costs incurred by the successful litigant.

[14] In this case I have reviewed all of the material as well as the bill of costs carefully. Apart from the pre-January 2014 period when much of the work was more in the nature of phone calls, the odd formal letter requested by the Board and some clerical work, the bulk of the time is spent on solicitor’s and counsel work preparing the Application, preparing for the hearing when it appeared not to be settled, and the settlement discussions, drafting, advice to and obtaining instructions from a lay Board of Directors on the most serious of subjects in a condominium community, compliance and enforcement and ultimate compelled sale.

[15] I find that the fees for the time during the period March 2013 to January 17, 2014 are beyond what is fair and reasonable for what was required and what was done and should be adjusted downward by approximately 50%. Much of the work did not require the time at counsel’s rates that are being claimed.

[16] For the time and fees following this initial period, I have adjusted some of the amounts requested either because it was not work requiring a solicitor working at the full hourly rate charged (such as driving time and such things as binding the record) or because the amount and time was out of proportion to the fair value of the work required (including over 23 hours for preparing the application record where 16 to 17 hours would be adequate, supplementary record preparation also required some adjustment downward, and 12.5 hours for preparing a factum by counsel who is well aware of and experienced in condominium law, reduced to eight).

[17] I have considered the matters in rule 57.01 as I carry out and exercise my discretion under s.131(1) of the Courts of Justice Act, R.S.O. 1990 c.C.43 including what is fair and reasonable as charges to the applicant and what is a reasonable expectation of the unsuccessful party, in this case given that party’s conduct which brought this all upon herself. This denouement probably should have happened much sooner, in view of Ms. Walker’s obvious duplicity, the risk that her change of use in her unit caused the whole community in possible loss of insurance coverage if damage had occurred, and the wholesale changes she made to her unit done without any authorization and illegally. However the timing of the application is not a factor that is relevant to my job of fixing costs for the work that was done, what reasonably was required, and the fair value for that work. It is an indication of the many chances this respondent was given to make a new start.

[18] Since the hearing, two questions occurred to me which I asked my secretary to relay to Ms. Hodis and to write both lawyers in case there were opposing submissions to be made. Unfortunately I was instructing her from outside the office without the costs rule in front of me, from my memory of a square figure in grey under Rule 57.01 containing maximum hourly rates; hence the description of “the box”. My concern was the old maximum hourly rates which keep appearing in the editions of the Rules of Civil Procedure within that “box” and on what basis Ms. Hodis’s rates was exceeding them. The other was to request a draft bill of costs based on hours spent and the rates applied, without including HST until the final totals are reached.

[19] Instead of the concise answer I expected, I received a rather lengthy lecture from Ms. Hodis on the revocation of the costs grid of which I am well aware as I have been fixing costs for the past 22 years, including even cases during the immediate past decade. Embedded within it was the simple answer to my concern over the so-called maximum counsel rates based on year of call.

[20] While I suggest that the practise is to continue to recognize the rough gradation of fees in accordance with years of experience, the so-called maximum rates are no longer part of the rules but remain as part of the history of where Rule 57 came from. They are guidelines that are out of date and have not been adjusted for the passage of 9 years since they were compiled. Furthermore, I do not find Ms. Hodis’s rates as a lawyer of some 14 years’ experience out of line. They are well within an acceptable range in relation to the rates set nine years ago, adjusted for time. I have read the cases sent to me by Ms. Durant. I do not agree with the approach in Crisante v. DePuy Orthopaedics, 2013 ONSC 6351, at para. 15. The rates set out are not maximum rates to be applied strictly as if they are part of a statute. By the terms of s. 131(1) of the Courts of Justice Act and rule 57.01 and stated within the accompanying text to the so-called maximum hourly rates, costs are to be fixed in accordance with the factors in rule 57.01 and the rates in the Information to the Profession are guidelines only, compiled almost ten years ago and lacking any adjustment to today. The court’s discretion in fixing costs is not limited by the amounts though they assist regarding the gradation or rates in relation to counsel’s experience and they have relevance as base maximum rates collated nine years ago.

[21] In conclusion, I fix the costs on the full indemnity scale at:

For fees:

Pre-January17, 2014 $ 3,500

Preparation and issuing application and correspondence

January 17 to March 27, 2014 (40 @ $375) $17,000

Preparing for hearing, settlement discussions and negotiations,

and advising and receiving instructions from the Board,

and drafting settlement documents - 48 @375 $18,000

1/2 day in court ­$ 800

$39,300

HST on fees $ 5,109

Disbursements $ 4,283.09

Total $48,692.09

[22] It is ordered that the respondent shall pay the sum of $48,692.09 to the Applicant in costs within 30 days of release of this decision. An order is made pursuant to s. 85 and 134(5) of the Condominium Act that the costs so fixed and unpaid by the respondent within that time shall be added to the common expense charges for the subject unit and shall be a lien and charge upon the subject unit owned by the respondent.

HOWDEN J.

Date: July 7, 2014