COURT FILE NO.: CV-18-590302

DATE: 20181203

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Jean Temedio, Applicant

AND:

Niagara North Condominium Corporation No. 6 and Simpson Wigle Law LLP, Respondents

BEFORE: H. McArthur J.

COUNSEL: B. Rutherford, for the Applicant

E. Savas, for the Respondents

HEARD: November 30, 2018

ENDORSEMENT

H. MCARTHUR J.:

Introduction

[1] The applicant, Jean Temedio, brings an application pursuant to s. 9 of the Solicitors Act, R.S.O. 1990, c. S. 15, for an assessment of legal bills paid by the respondent, Niagara North Condominium Corporation No. 6 (NNCC), to the respondent, Simpson Wigle Law LLP (SW).

[2] The fees Ms. Temedio wishes to have assessed all relate to legal steps taken by NNCC in respect of a compliance issue. Pursuant to s. 134(5) of the Condominium Act, 1998, S.O. 1998, c. 19, NNCC is seeking the actual legal costs it incurred.

[3] The legal fees fall into three groups. First, legal fees associated with letters sent to Ms. Temedio trying to deal with compliance issues. Second, legal fees from a successful compliance application brought by NNCC against Ms. Temedio under the Condominium Act. Third, legal fees from an unsuccessful motion brought by Ms. Temedio for leave to appeal the ruling on the compliance application to the Court of Appeal.

[4] Ms. Temedio argues that she is entitled to an assessment. Further, she seeks an interlocutory injunction preventing NNCC 6 from enforcing a lien it has placed on her condominium in respect of the legal fees pending the assessment. Ms. Temedio also seeks to have the assessment conducted in Toronto, rather than St. Catherines.

[5] NNCC counters that Ms. Temedio must establish special circumstances to justify an assessment, and she has failed to do so. It also argues that that an injunction is not warranted. Finally, it argues that I should reject the request to have an assessment take place in Toronto, as the request is simply a tactic by Ms. Temedio to delay the matter.

[6] For the reasons set out below, I have determined Ms. Temedio is not entitled to an assessment; rather, she must establish special circumstances. I have further determined that Ms. Temedio has established special circumstances only as it relates to the legal fees associated with the motion for leave to appeal. Both Ms. Temedio’s motion for an injunction and to have the assessment transferred to Toronto are dismissed.

[7] I do not intend to outline the facts at the outset and instead will refer to them only as necessary in my analysis. I propose to briefly set out some of the applicable legislation, before turning to my analysis of the issues raised.

Brief Outline of Applicable Legislation

[8] The Condominium Act requires that a condominium corporation (through its board of directors) take reasonable steps to ensure that all owners and occupants comply with the Condominium Act, the condominium corporation’s declarations, by laws and rules: s. 17. In the event an occupant of a unit fails to comply with the Condominium Act, an application may be made to a judge of the Superior Court of Justice for an order for compliance: s. 134.

[9] Section 134(5) of the Condominium Act provides that in the event the court makes an order for compliance, the corporation may add the actual legal costs that the corporation spent in pursuing the order of compliance to the common expenses of the unit: Metropolitan Toronto Condo. Corp. No. 1385 v. Skyline Executive Properties Inc., 2005 13778 (ON CA), [2005] O.J. No. 1604 (C.A.), at paras. 38-40.

[10] Since Ms. Temedio is liable to pay the legal fees incurred by NNCC in relation to compliance issues, she may apply for an assessment of the legal fees pursuant to s. 9(1) of the Solicitors Act, which provides as follows:

Where a person, not being chargeable as the principal party, is liable to pay or has paid a bill either to the solicitor, his or her assignee, or personal representative, or to the principal party entitled thereto, the person so liable to pay or paying, the person’s assignee or personal representative, may apply to the court for an order referring to assessment as the party chargeable therewith might have done, and the same proceedings shall be had thereupon as if the application had been made by the party so chargeable.

[11] Pursuant to the Solicitors Act, a client (or the person liable to pay) may apply for the assessment of delivered accounts in the following circumstances:

• upon requisition from the registrar, within 30 days of delivery (provided that there are no special circumstances and the retainer is not disputed). There is no distinction between paid and unpaid accounts (s. 3(b));

• after 12 months of delivery, if special circumstances are shown. Again, there is no distinction between paid and unpaid accounts (s. 4);

• within 12 months after payment on showing "special circumstances" (s. 11).

With respect to accounts which have been rendered within 12 months but remain unpaid, there is a gap in the legislation. However, it has been held that the court has inherent jurisdiction to order an assessment: Enterprise Rent-a-Car Co. v. Shapiro, Cohen, Andrews, Finlayson, 1998 1043 (ON CA), [1998] O.J. No. 727 (C.A.), at para. 11.

Analysis

1) Is Ms. Temedio entitled to an assessment?

[12] Ms. Temedio argues that she is entitled to an assessment of the legal fees paid by NNCC. In support of this position, she does not rely on any provisions of the Solicitors Act. Instead, she notes that NNCC has placed a lien on her condominium and that pursuant to s. 85(6) of the Condominium Act, a condominium lien can be enforced in the same manner as a mortgage.

[13] Ms. Temedio thus argues that by analogy, she is akin to a mortgagor, while NNCC is akin to a mortgagee. Since a mortgagor has a right to an assessment of the mortgagee’s legal costs that the mortgagor is responsible to pay, she argues that she should also be entitled to an assessment. She also argues that she is not obligated to pay until such assessment is completed. I disagree.

[14] In my view the position of Ms. Temedio is inconsistent with the purpose and intent of s. 134(5) of the Condominium Act. As noted in Skyline Executive at para. 40, s. 134(5) was intended to shift the financial burden of obtaining compliance orders from the condominium corporation and innocent unit owners, to the unit owners whose conduct necessitated the obtaining of the order. This legislative framework makes the situation faced by Ms. Temedio highly distinct from that of a mortgagor seeking an assessment of costs.

[15] I agree with NNCC that Ms. Temedio is not entitled to an assessment; rather, she must establish special circumstances before an assessment will be ordered. There are three sets of legal accounts in issue. In my view, a different analysis applies to each set. I propose to address each in turn.

2) Has Ms. Temedio established special circumstances with respect to the legal fees associated with letters sent to her trying to deal with the compliance issues?

[16] Between October 2015 and January 2015, SW, on behalf of NNCC, corresponded numerous times with Ms. Temedio concerning compliance issues. SW rendered accounts, which were paid by NNCC. NNCC then charged them to the common expenses for Ms. Temedio’s unit. Ms. Temedio refused to pay these charges and as a result in January 2015, NNCC registered a lien against Ms. Temedio’s unit to secure payment. At that time, the lien secured the sum of $3,284.87.

[17] Since Ms. Temedio is seeking the assessment of these accounts more than 12 months after delivery, pursuant to s. 4 of the Solicitors Act she must establish special circumstances. In my view, she has failed to do so.

[18] In 2015, Ms. Temedio brought an application against NNCC with respect to the lien, arguing in part that the fees were unreasonable. Despite her claim in that application that the fees were unreasonable, she failed to take steps to have the accounts assessed. Ultimately, her application was dismissed.

[19] Ms. Temedio chose not to seek to have the accounts assessed in 2015 and instead sought to attack the propriety of the fees in an application. Given this history, in my view she has not established special circumstances that would warrant assessing these accounts at this stage.

3) Has Ms. Temedio established special circumstances with respect to the legal fees associated with the successful compliance application brought by NNCC?

[20] The legal accounts associated with the compliance application were delivered more than 12 months before Ms. Temedio sought an assessment. Thus, pursuant to s. 4 of the Solicitors Act she must establish special circumstances. In my view, she has failed to do so.

[21] NNCC claims $52,000 for these fees. Ms. Temedio’s sole argument in support of special circumstances is that the accounts appear excessive and thus an assessment is required. In assessing this submission, I keep in mind that the application took place over the course of almost two days. Almost 1,000 pages of materials were put before the Court. Before that, five deponents were cross-examined over the course of an entire day.

[22] Given the above, in my view the fees on their face do not seem excessive to the point of raising special circumstances. Moreover, this is not a situation where Ms. Temedio could not be reasonably expected to have had knowledge of the time spent by counsel for the chargeable party. Here, as an active participant in the litigation, Ms. Temedio would be very aware of the steps taken by counsel and the corresponding costs. Indeed, her counsel urged the applications judge to decline to issue a compliance order against Ms. Temedio because it would open the door to full recovery of costs by the condominium corporation under s. 134(5). In making that submission, counsel for Ms. Temedio noted that the record before the court was voluminous and speculated that the condominium corporation’s costs might be approximately $50,000. As it turns out, counsel anticipated the fees spent by NNCC in the compliance application with remarkable accuracy. It seems reasonable to conclude that counsel for Ms. Temedio was able to estimate the legal costs of NNCC with such precision because Ms. Temedio had somewhat equivalent costs.

[23] The application was not a simple or straightforward matter. I agree with the position of NNCC set out in para. 16 of their factum that there is no basis for the court to conclude that SW spent the condominium corporation’s money with impunity. Apart from asserting that the costs are excessive, Ms. Temedio has not advanced any other argument in support of a finding of special circumstances. In my view, Ms. Temedio has failed to establish any special circumstances warranting an assessment of these accounts

4) Has Ms. Temedio established special circumstances in relation to the legal fees paid for the motion for leave to appeal?

[24] On February 1, 2018, NNCC sent Ms. Temedio a letter advising her that she was responsible for the legal fees it had paid for the motion for leave to appeal, in the amount of $29,588.48.

[25] These accounts were paid within 12 months of the application for assessment. As a result, NNCC argues that s. 11 of the Solicitors Act applies and Ms. Temedio must establish special circumstances. In Plazavest Financial Corp. v. National Bank of Canada, 2000 5704 (ON CA), [2000] O.J. No. 1102 (C.A.), the court explained that for the purposes of s. 9 of the Solicitors Act, if the party liable to pay the account authorized payment, then pursuant to s. 11 special circumstances must be established before an assessment will be ordered. In Plazavest, the party liable to pay objected to the payment being made. Despite that, the court found that the party liable to pay had authorized the payment because the contract specified that it would cover the legal expenses of the party chargeable and that such expenses could be deducted from its bank account.

[26] Similarly, in Ms. Temedio’s case Article XIV of the condominium corporation’s by laws provides that the unit owner shall indemnify the corporation against any legal costs that the corporation incurred because of a breach of the Condominium Act, the declaration, by laws or rules of the corporation. Rule 34 of the condominium’s rules and regulations contains a virtually identical clause. Moreover, s. 134(5) of the Condominium Act, mandates that the condominium charge back to a unit owner’s common expenses an award of costs together with any additional costs incurred by the condominium in obtaining the compliance order. In my view, following the reasoning in Plazavest, these provisions establish that that Ms. Temedio authorized payment of the fees such that s. 11 of the Solicitors Act applies and she must establish special circumstances to warrant an assessment.

[27] As with the fees for the application, the sole ground advanced by Ms. Temedio in support of special circumstances is that the fees seem excessive on their face. NNCC counters that since Ms. Temedio failed to disclose the fees she spent on the motion for leave that she has failed to establish special circumstances. I disagree.

[28] As set out above, the compliance application was not straightforward and involved a number of days in court and voluminous materials. That led to costs of just over $50,000. It seems that a motion for leave to appeal would be far less complicated. The fees charged for the motion, when compared to the fees charged for the application, do raise some concerns.

[29] In light of those concerns, it is important to keep in mind that public confidence in the administration of justice requires the court to intervene where necessary to protect the client’s right to a fair procedure for the assessment of a solicitor’s bill: Price v. Sonsini, 2002 41996 (ON CA), [2002] O.J. No. 2607 (C.A.), at para. 19. Such considerations also apply to assessments sought under s. 9 by a party liable to pay.

[30] Given the concerns that have been raised by the comparison between the fees charged for the compliance application versus the motion for leave, I am satisfied that Ms. Temedio has established special circumstances with respect to the latter.

[31] Thus, I order an assessment with respect to the legal fees associated with the motion for leave to appeal.

5) Should Ms. Temedio be granted an injunction prohibiting NNCC from taking steps to enforce the lien against her condominium pending the assessment?

[32] Ms. Temedio’s argues that she should be granted an injunction as of right. Her position is based on her earlier argument that she should be viewed as akin to a mortgagor and thus she has a right to have the accounts assessed before she is obligated to make any payments. As noted above, I do not accept this argument as it would be inconsistent with the purpose of s. 134(5) of the Condominium Act.

[33] Moreover, to obtain an injunction Ms. Temedio must meet the test in RJR-MacDonald v. Canada (Attorney General), 1994 117 (SCC), [1994] 1 S.C.R. 311. To meet this test Ms. Temedio must show that (i) there is a serious question to be tried; (ii) that she will suffer irreparable harm if the injunction is not granted; and (iii) the balance of convenience favours her. In my view she has failed to establish that latter two aspects of the test.

[34] Ms. Temedio argues that if the injunction is not granted, that she will have to sell her condominium unit. This, she argues, will harm her daughter-in-law and autistic grandson who live in the unit. She argues that this would lead to severe emotional and mental complications for her grandson. Despite this claim, however, Ms. Temedio did not file an affidavit from her daughter-in-law. Nor did she provide any real details or expert information about her grandson’s condition. Based on the record before me, I am unable to find irreparable harm.

[35] In terms of the balance of convenience, I have ordered an assessment only in relation to the fees associated with the motion for leave to appeal. It is clear that no matter what flows from that assessment that Ms. Temedio is going to be responsible for significant costs. The affidavit of Nina Gyosheva establishes that the condominium’s ability to function has been negatively impacted by Ms. Temedio’s failure to pay the charges. Moreover, as noted above, s. 134(5) was intended to shift the financial burden onto the wrongdoers who caused unnecessary costs and expenses to be incurred by a condominium corporation. I agree with NNCC that allowing Ms. Temedio to hold off payment indefinitely while the accounts are assessed would undermine the intent of this provision and prejudice the condominium corporation and innocent unit owners. While I am sympathetic to the position of Ms. Temedio, in my view she has failed to establish that the balance of convenience favours her.

[36] As a result, the motion for an injunction is dismissed.

[37] I turn now to the final issue, which is whether Ms. Temedio should be allowed to transfer the assessment from St. Catherines to Toronto.

6) Should Ms. Temedio be allowed to transfer the assessment to Toronto?

[38] Although the condominium at issue is in St. Catherines, Ms. Temedio seeks to have the assessment take place in Toronto. She submits that she is “adamant” that the assessment take place in Toronto because she “ran into substantial difficulties with respect to conflicts of interest arising out of relations between NNCC and its property management company.” She notes that the appeal took place in Toronto, that the witnesses are from Hamilton (not St. Catherines) and that her lawyer is based in Toronto. Thus, she argues that there is no reason for her not to have her assessment in Toronto.

[39] NNCC counters that an assessment in St. Catherines could be conducted within a month or two, whereas an assessment in Toronto will not be obtained until the summer or fall of 2019. It argues that Ms. Temedio is seeking to delay the matter by having her assessment in Toronto.

[40] Rule 13.1.02(b) provides that the court may transfer a proceeding to another county, if the transfer is desirable in the interests of justice, having regard to a number of enumerated factors. These factors include whether there are any advantages or disadvantages of a particular place with respect to securing the just, most expeditious and least expensive determination of the proceeding on its merits, whether judges and court facilities are available at the other county, and any other relevant matter.

[41] Looking at all of the factors, in my view the requested transfer is not in the interest of justice and should be denied. Mr. Temedio asserts that she is concerned about conflicts of interest, but did not really articulate how those concerns would arise in the context of an assessment. The legal fees all stem from compliance issues in relation to the unit in St. Catherines. The witnesses are from Hamilton, which is slightly closer to St. Catherines than to Toronto.

[42] More importantly, an assessment in St. Catherines would proceed far more expeditiously than in Toronto. Again, s. 134(5) is meant to shift the costs from the innocent, blameless owners in the condominium onto the owner or occupant responsible for the wrongdoing. Transferring the assessment to Toronto would undermine the purpose of the section.

[43] Further, I keep in mind that if the assessment is transferred to Toronto, that will add to the weight of a system that is already overburdened. If Ms. Temedio’s assessment is moved to Toronto, it will impact on others waiting for their assessments in Toronto. In the absence of a good reason put forward by Ms. Temedio as to why her assessment should be moved, in my view it is contrary to the interests of justice to allow the transfer.

[44] Thus, the request to have the assessment transferred to Toronto is denied.

Costs

[45] The parties achieved mixed success before me and I encourage them to see if they can agree on costs. If the parties are unable to agree on costs, they can serve and file with my office written costs submissions within 15 days, setting out their position on costs in light of this mixed success. The written submission shall not exceed three pages in length, excluding the Costs Outline.

Justice Heather McArthur

Date: December 3, 2018