CITATION: Metropolitan Toronto Condominium Corporation No. 673 v. St. George Property Management Inc., 2016 ONSC 2156
COURT FILE NO.: CV-14-516468
DATE: 20160330
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
METROPOLITAN TORONTO CONDOMINIUM CORPORATION NO. 673
Plaintiff
– and –
ST. GEORGE PROPERTY MANAGEMENT INC.
Defendant
Matthew Morden for the Plaintiff
Rovena Hajdëri for the Defendant
HEARD: In writing
PERELL, J.
REASONS FOR DECISION - COSTS
[1] To string the clichés, hindsight is 20:20 and, to make a long story short, had St. George Property Management Inc. (“the Property Manager”) worn its mistake and taken its medicine, it would not have made a bad situation worse, and it would have saved itself from the following bitter pill of a costs award.
[2] In this action, which was originally a proceeding by application, Metropolitan Toronto Condominium Corporation No. 673 (“the Condominium Corporation”), sued the Property Manager for professional negligence, breach of contract, and to enforce the indemnity clause in the Condominium Management Agreement. I granted the Condominium Corporation a summary judgment for $97,182.68 plus prejudgment interest. See Metropolitan Toronto Condominium Corporation No. 673 v. St. George Property Management Inc., 2016 ONSC 1148.
[3] The making the long story short part of this decision is that the Property Manager made a mistake when it issued a status certificate to the purchaser of Unit 13 (the “Unit 13 Purchaser”). The Unit 13 Purchaser tried to take advantage of the mistake, and litigation followed between the Condominium Corporation and the Unit 13 Purchaser. Justice Lederman dismissed the Unit 13 Purchaser’s application. But, this decision was reversed by the Divisional Court; see 673830 Ontario Ltd. v. MTCC No. 673, 2013 ONSC 6267 and 673830 Ontario Ltd. v. MTCC No. 673, 2014 ONSC 1720 (Div. Ct.). The Divisional Court decision cost the Condominium Corporation $97,182.68 plus prejudgment interest, and it decided to sue the Property Manager because it had made the mistake and it had promised to indemnify the Condominium Corporation for its mistake.
[4] The Condominium Corporation was successful in its lawsuit against the Property Manager, and it now seeks its costs. More particularly, it seeks full indemnity costs of $57,816 on the basis of the indemnity provision in the Condominium Management Agreement, or it seeks substantial indemnity costs of $47,683 on the basis that its success on the summary judgment motion ($97,182.68 plus prejudgment interest) exceeded a Rule 49 offer ($65,000) served on April 13, 2015, or it seeks partial indemnity costs of $38,073.
[5] The Condominium Corporation originally proceeded by application, but the Property Manager, rather than taking responsibility for its mistake and honouring its indemnity Agreement, resisted the application as being an abuse of process, as a matter of procedure, and as a matter of substance. It sought the dismissal of the application and it challenged the court’s jurisdiction to deal with the matter by the procedure of an application, and in the alternative, it sought that the proceedings be converted into an action.
[6] I did not dismiss that action as an abuse of process (it wasn’t), but I made that change of procedure, and I made the first order of business in the action to be a motion for summary judgment, which the Property Manager lost on its merits.
[7] The Property Manager argues that its success in having the application converted into an action deserves an offsetting costs order. That, however, does not work because its motion to convert the proceeding was not a genuine success, and I simply ordered costs in the cause.
[8] The action is now completely over, and the Condominium Corporation was the successful party. There is no reason not to apply the normal rule that costs follow the event. As for the scale, because of the indemnification provision in its Agreement, the Condominium Corporation is entitled to full indemnity of its reasonable costs.
[9] I emphasize the word reasonable because it is still the court that is awarding costs, and one of the guiding principles about awarding costs regardless of scale is that the costs be reasonable in the context of the particular case.
[10] In the immediate case, costs of $57,816 are excessive, but part of the excess is attributable to the fact that the Property Manager put up very stiff resistance and refused to concede that it was responsible for the mistake and in resolutely refusing to honour its agreement to indemnify. That said, $57,816 is too high and having regard to the usual factors that guide a court in the exercise of discretion with respect to costs, I award the Condominium Corporation $42,000, all inclusive.
[11] Order accordingly.
Perell, J.
Released: March 30, 2016
CITATION: Metropolitan Toronto Condominium Corporation No. 673 v. St. George Property Management Inc., 2016 ONSC 2156
COURT FILE NO.: CV-14-516468
DATE: 20160330
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
METROPOLITAN TORONTO CONDOMINIUM CORPORATION NO. 673
Plaintiff
– and –
ST. GEORGE PROPERTY MANAGEMENT INC.
Defendant
REASONS FOR DECISION – COSTS
PERELL J.
Released: March 30, 2016