Court File and Parties
COURT FILE NO.: 14-60973 DATE: 2016/05/02
ONTARIO SUPERIOR COURT OF JUSTICE
B E T W E E N:
3716724 CANADA INC. Nadia J. Authier, for the Applicant Applicant
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CARLETON CONDOMINIUM CORPORATION NO. 375 Christy Allen, for the Respondent Respondent
HEARD: In writing ellies j.
Reasons for Decision on Costs
[1] These reasons address the issue of costs relating to an application commenced by 3716724 Canada Inc. (“371”) against Carleton Condominium Corporation No. 375 (“CCC 375”) under s. 135 of the Condominium Act, S.O. 1998, c.19 (the “Act”). In reasons released on December 8, 2015 (2015 ONSC 6626), I held that CCC 375 had unfairly disregarded the interests of 371 with respect to 371’s planned change of use of a parking lot in the condominium building.
[2] These reasons also relate to a decision in which I held that 371 could undertake the changes necessary to implement the pay and display parking lot without the need for a vote of the unit owners under s. 97(4) of the Act (2016 ONSC 1296).
[3] Lastly, these reasons relate to costs that 371 alleges were thrown away when my colleague, Hackland J., granted a request by CCC 375 for an adjournment of the application on June 18, 2015. Without fixing the costs of that day, Hackland J. held that they ought to be treated as costs in the cause, to be dealt with by the judge hearing the application on its merits.
[4] I have now received and reviewed the parties’ written submissions with respect to the issue of costs, for which I wish to thank counsel.
[5] 371 seeks costs on a substantial indemnity basis in the amount of $42,367.50, exclusive of taxes and disbursements. In the alternative, 371 seeks costs on a partial indemnity basis in the amount of $28,245.00, also exclusive of taxes and disbursements. In addition, 371 seeks fees relating to the June 18, 2015 appearance before Hackland J. in the amount of $14,380.50 on a substantial indemnity basis or $9,587.00 on a partial indemnity basis as costs thrown away, both amounts exclusive of taxes and disbursements.
[6] I will deal with the costs of the June 18 appearance first.
[7] I accept 371’s submission that it was not unreasonable to oppose CCC 375’s request for an adjournment. The application had previously been adjourned on three occasions. In the meanwhile, 371 was losing money. CCC 375 had been in possession of 371’s initial expert report since July, 2013. It received 371’s supplementary expert report in early February, 2015. Notwithstanding these facts, it was not until April or May, 2015 that CCC 375 decided to retain its own expert. In these circumstances, it was not unreasonable for 371 to seek to proceed.
[8] I also accept 371’s submission that it was not until May 14, 2015 that CCC 375 advised that it would seek an adjournment in order to retain an expert and that counsel for 371 began preparing for the June 18 appearance approximately one month before. However, I am unable to accept 371’s submission that all the costs they incurred in preparing for the appearance on June 18, 2015 were thrown away. CCC 375’s expert report did not substantially alter the litigation landscape. 371 was aware throughout that CCC 375 wanted a full-time security guard and it was likely that CCC 375 would only use an expert report that supported that position, which it ultimately did. Therefore, the time spent by counsel for 371 preparing for June 18 was time that should have been helpful in preparing for the hearing that ultimately proceeded before me on October 15, 2015.
[9] While I accept that some duplication of effort might have been necessary to retrace counsel’s steps in preparation for the October 15 appearance, I presume that this duplication is reflected in the costs I have referred to in paragraph 5, above.
[10] Even if I am wrong in my assessment of the usefulness of counsel’s preparation for the appearance on June 18, I would not award 371 its preparation time for that appearance. I view the time spent by counsel for 371 preparing for the June 18 appearance after being advised that CCC 375 would seek an adjournment as being time associated with a calculated risk on 371’s part. Rather than agreeing to adjourn the hearing on that date, 371 took a risk that it would succeed in opposing the adjournment. It was unsuccessful in doing so. In any event, the matter could not proceed on June 18 through no fault of CCC 375. I see no reason to award 371 its costs of a failed attempt and certainly no reason to do so on a substantial indemnity basis in these circumstances.
[11] Notwithstanding the foregoing, as a result of the procedural direction of the Local Administrative Judge in Ottawa, it would have been necessary for counsel for 371 to appear on June 18 even if her client was prepared to consent to the adjournment. For that reason, I would allow a counsel fee of $500 to 371.
[12] I turn now to the costs requested for the balance of the proceedings.
[13] Counsel for 371 seeks substantial indemnity costs on the basis that CCC 375 prolonged the proceedings by refusing to participate in attempts to resolve the dispute without proceeding to court, including a mediation. I do not believe that it can be said that CCC 375’s refusal to meet on one occasion or participate in a mediation on another had the effect of prolonging the proceedings. It is clear that neither of these things would have resulted in an earlier resolution of the matter, which is the real reason why I believe 371 should be awarded increased costs.
[14] In my reasons of December 8, 2015 I held that the proposals made by 371 to enhance security in the parking garage were sufficient to address the reasonable concerns of CCC 375. Those proposals were made well in advance of the matter proceeding before me and followed a consultative process between the parties. However, CCC 375 continued to insist on hiring a full-time security guard even after it received the further opinion of 371’s expert that such a measure was not the only option, which opinion had been provided in response to a question posed jointly by the parties. Instead, CCC 375 relied on its own expert, whose report, as I pointed out in my reasons, failed to make any reference to most of the increased security measures proposed by 371 (para. 45). In those circumstances, I believe that 371 should be awarded increased costs.
[15] I would not award 371 all of its substantial indemnity costs, however. As counsel for CCC 375 points out, 371 raised additional issues, such as whether the changes necessary to operate the pay and display parking lot were alterations, additions or improvements under the Act, upon which it was not successful. While I accept that these issues might not have been raised if CCC 375 had not unfairly insisted on a full-time security guard, they did increase 371’s costs. In my view, CCC 375 ought not to be made to pay those increased costs.
[16] Unfortunately, I do not have enough information to break 371’s costs down enough to precisely identify the costs incurred with respect to the different issues addressed in the application. For that reason, and bearing in mind the principle set out in Boucher v. Public Accountants Counsel for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A.) that the overall objective of fixing costs is to fix an amount that is fair and reasonable rather than an amount fixed by the actual costs incurred by the successful litigant, I have arrived at the conclusion that costs for the application should be fixed in the amount of $35,000, together with HST and disbursements, which disbursements total $5,216.68, including HST.
[17] The total costs payable, therefore, taking into account the counsel fee for appearing on June 18, 2015 are $35,500, plus HST, plus disbursements and HST on disbursements in the amount of $5,216.68.
Ellies J. Released: May 2, 2016