Court File and Parties

COURT FILE NO.: CV-19-00624020 DATE: 20200428 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Toronto Standard Condominium Corporation No. 1724, Applicant AND: Evgeni Evdassin, Respondent

BEFORE: Davies J.

COUNSEL: John De Vellis and Inderpreet Suri, for the Applicant Jonathan Shulman, for the Respondent

HEARD: In writing

COSTS ENDORSEMENT

A. Overview

[1] Mr. Evdassin owns and lives in a unit in the condominium building operated by Toronto Standard Corporation Company No. 1724 (“the Condominium”).

[2] In 2017, the Condominium discovered that it was built using Kitec pipes, which are known to fail, creating a risk of significant water damage. To mitigate against that risk, the Condominium came up with a plan to replace all the defective pipes. The pipes in Mr. Evdassin’s unit were scheduled to be replaced starting on January 25, 2019. Mr. Evdassin refused to let the contractors into his unit that day and the work was re-scheduled to start on March 4, 2019. The work was not completed on March 4, 2019 either.

[3] The Condominium brought an application for an order requiring Mr. Evdassin to replace his pipes or, in the alternative, requiring Mr. Evdassin to pay for the Condominium to replace his pipes. Mr. Evdassin did not dispute that the pipes in his unit should be replaced but he opposed being ordered to arrange the work himself.

[4] On March 10, 2020, I granted the Condominium’s application. [1] I ordered Mr. Evdassin to allow the Condominium’s contractors to enter his unit to complete the pipe replacement work and to not interfere with the contractors. I also ordered Mr. Evdassin to pay all costs incurred by the Condominium to complete the work.

[5] The Condominium sought various other orders that would permanently prohibit Mr. Evdassin from abusing, harassing, threatening or intimidating anyone employed by the Condominium and from interfering with any work being done by the Condominium in the future. I dismissed this part of the Condominium’s application.

[6] I did have concerns about Mr. Evdassin’s past conduct. I found that he had breached the Condominium Act and the Condominium’s Declaration by denying reasonable access to his unit. He was also rude to the property manager, contractors and a member of the Board, and he frustrated the Condominium’s efforts to complete other repairs to his unit. Nonetheless, I found that a further compliance order was not necessary because there had not been any problems since July 2019.

[7] In my reasons for judgment, I also expressed concerns about the scope of the compliance order sought by the Condominium. Many of the conditions sought were not responsive to the conduct alleged. During oral argument on the application, the Condominium abandoned its request for some of the conditions set out in its Notice of Application. Nevertheless, I found that the Condominium over-reached in respect of the conditions it did pursue. I also found that the overly broad scope of the compliance order sought likely added to the animosity between the parties.

[8] The Condominium now seeks a costs order on a full indemnity basis in the amount of $22,906.93. The Condominium argues that they were successful on the “main issue” and are, therefore, entitled to costs. The Condominium also argues that s. 134(5) of the Condominium Act and the Condominium’s Declaration support its request for full indemnity costs.

[9] Mr. Evdassin argues that no costs should be ordered. He argues that awarding costs in this case would have the effect of encouraging Condominium Corporations to seek inappropriate and broad orders against unit holders. In the alternative, he argues that costs should be ordered on a partial indemnity basis.

[10] As the successful party, I am satisfied that the Condominium is entitled to costs. The issues are whether costs should be granted on a full indemnity basis and, if not, what quantum of costs is fair and reasonable in this case. For the reasons that follow, I find that full indemnity costs are not warranted in this case and I order Mr. Evdassin to pay costs in the amount of $10,318.07 (inclusive of HST and disbursements) within 30 days.

B. Should costs be granted on a full indemnity basis?

[11] Ordinarily, costs are awarded to the successful party on a partial indemnity scale unless there is good reason for an enhanced cost award. The Condominium relies on s. 134(5) of the Condominium Act, 1998, S.O. 1998, c. 19, s. 90(1) and s. 2.2 of the Condominium’s Declaration to justify full indemnity costs in this case.

[12] Section 134(5) of the Act states as follows:

If a corporation obtains an award of damages or costs in an order made against an owner or occupier of a unit, the damages or costs, together with any additional actual costs to the corporation in obtaining the order, shall be added to the common expenses for the unit and the corporation may specify a time for payment by the owner of the unit.

[13] In my view, s. 134(5) of the Condominium Act creates an enforcement mechanism only. It gives the Condominium authority to recover the actual costs incurred in obtaining a compliance order against a unit owner in addition to any cost order made by the Court through the common expenses of their unit. It does not speak to how the Court should assess costs in any given case. Section 134(5) does not interfere with the Court’s jurisdiction to fix costs in an amount that is fair and reasonable in the circumstances of a particular case. [2] Nor does the Act suggest that the Court should assess costs in Condominium cases on a full indemnity basis as a matter of course.

[14] Section 2.2 of the Condominium’s Declaration says that any “loss, costs or damages” incurred by the Corporation by reason of any breach of the By-laws or Rules of the Condominium by an Owner “shall be borne and paid by such Owner and may be recovered by the Corporation against such Owner in the same manner as Common Expenses.” In this case, this provision has the same effect as s. 134(5) of the Condominium Act. It authorizes the Condominium to recover the costs incurred by the Condominium as a result of Mr. Evdassin’s breach of its By-laws as a common expense. Again, the Condominium’s Declaration does not alter the Court’s jurisdiction to determine the appropriate costs. Nor does it require me to grant costs on a full indemnity basis.

[15] The Condominium’s argument seems to be that it intends to register the actual costs incurred against Mr. Evdassin’s common expenses under s. 134(5) of the Condominium Act and the Declaration, so it only makes sense for my order to reflect the full amount as well. In my view, this argument conflates the Court’s obligation to determine what costs are reasonable and just with the Condominium’s authority to enforce a costs order and recover additional actual costs beyond those ordered by the Court. As Doherty J.A. held in Skyline, the availability of this enforcement mechanism in s. 134(5) of the Act does not in any way derogate from the Court’s jurisdiction to determine the appropriate award of costs as between the parties. [3]

[16] Cost awards on a full indemnity scale have been granted in some cases where a Condominium corporation obtained a compliance order against a unit owner who had breached the Act or rules. The rationale for granting costs on a full indemnity basis in those cases is that it would not be fair or equitable for innocent unit owners to bear the costs of the Condominium corporation pursuing a compliance order against a unit owner for their breach of the rules. In other words, if Mr. Evdassin is not required to pay the full costs of the litigation, the innocent, compliant unit owners would have to bear the burden of the remaining legal fees incurred by the Board, which would be unfair. [4] This argument is compelling but is fully addressed by s. 134(5) of the Condominium Act which provides a mechanism for the Condominium to recover its actual costs for obtaining a compliance order should it choose to do so.

[17] There is also an argument against granting full indemnity as a matter of course in condominium cases. The risk of an adverse costs awards can provide a powerful incentive for parties to take reasonable positions, pursue their case efficiently and minimize their own costs. Unreasonable positions and reprehensible behaviour can be condoned and penalized by the Court through cost awards. If Condominium corporations are granted full indemnity costs as a matter of course, the Court loses its ability to encourage parties to take reasonable positions, incur reasonable fees and conduct the proceedings in a professional, efficient manner, or to condone unprofessional or unreasonable conduct.

[18] In my view, the ordinary principles of assessing costs should apply in this case. If the Condominium wishes to recover its actual costs, and thereby protect the other unit holders, it can do so through s. 134(5) of the Act or s. 2.2 of its Declaration. I am, therefore, not persuaded that costs should be granted on a full indemnity basis. There is nothing in Mr. Evdassin’s conduct or his approach to these proceedings that would justify an enhanced cost award.

C. What costs are reasonable in this case?

[19] The costs awarded in any given case must be a fair and reasonable amount for the unsuccessful party to pay, not any exact measure of the actual costs to the successful litigant. [5] The costs award must also be proportionate in all the circumstances. [6] R. 57.01 sets out a number of other factors the Court may consider in exercising its discretion to award costs, including the time spent, the experience of counsel, the results achieved, the complexity of the matter, and the conduct of the parties.

[20] On a substantial indemnity basis, the Condominium seeks $14,308.53 in costs: $12,897.59 in fees and $1,410.94 in disbursements. I am satisfied that the rates claimed by counsel for the Condominium are reasonable given their years of experience and the distribution of the work among counsel. The real issue is whether the number of hours claimed by the Condominium is reasonable. The Condominium spent a total of 76.8 hours on this matter.

[21] The Condominium was successful on the main issue on the Application, which was whether Mr. Evdassin was required to replace or cooperate with efforts to replace the pipes in his unit. However, that issue was essentially resolved on consent. Mr. Evdassin agreed the pipes had to be replaced and, by the time of the hearing, was prepared to pay the related costs.

[22] The hearing focused almost entirely on whether a further compliance order was appropriate given Mr. Evdassin’s past conduct. There were affidavits filed on the applicant that dealt solely with this issue. I ruled against the Condominium on that issue. The Condominium was, therefore, only partially successful on its application.

[23] In addition, I found that the Condominium over-reached in its application. The Condominium sought a number of very broad orders ostensibly with a view to ensuring that Mr. Evdassin complies with the Rules, by-law and legislation going forward. I ruled that the order sought was overly broad and not responsive to the issues raised by Mr. Evdassin’s conduct.

[24] Given Mr. Evdassin’s lack of cooperation with the Condominium around the replacement of the pipes in his unit, I am satisfied that an application likely would have been required even if that was the only issue raised. However, if the Condominium did not over-reach in its request for a further compliance order, the application would have been much more focused. I am, therefore, not prepared to award costs to the Condominium for all the hours claimed.

[25] Most of the 76.8 hours spent by counsel for the Condominium likely related to the compliance order granted in relation to the replacement of the pipes. The majority of the application record and factum addressed that issue. However, some time was devoted to preparing the affidavits in support of the general compliance order requested and researching that issue. The Bill of Costs submitted by counsel for the Condominium is not sufficiently detailed to allow me to determine how much time was spent on each issue. Nonetheless, I am of the view that it would be reasonable and fair for Mr. Evdassin to pay 80% of the fees and disbursements claimed by the Condominium on a partial indemnity basis. This would amount to $10,318.07, which is close to the amount claimed in the costs outline submitted by Mr. Evdassin’s counsel. [7]

[26] I, therefore, order Mr. Evdassin to pay the Condominium $11,719.00 in costs (inclusive of HST and disbursements) within 30 days.

Davies, J. Date: April 28, 2020

[1] TSCC No. 1724 v. Evdassin, 2020 ONSC 1520 [2] Boucher v. Public Accountants Council for the Province of Ontario, [2004] O.J. No. 2634 (C.A.) at paras 26, 37 and 38; MTCC No. 1385 v. Skyline Executive Properties, [2005] O.J. No. 1604 (C.A.) at paras. 38 – 39 and 48 - 50 [3] Skyline, supra at para. 50 [4] Chan v. TSCC No. 1834, 2011 ONSC 108 at paras. 36 - 38 [5] Zesta Engineering Ltd. v. Cloutier, [2002] O.J. No. 4495 (C.A.) at para. 4, Boucher v. Public Accountants Council for the Province of Ontario, (2004), 71 O.R. (3rd) 291 (C.A.) [6] Rule 1.04(1) [7] In his Costs Outline, counsel for Mr. Evdassin lists his actual rate as $375 per hour. His partial indemnity rate is $325 per hour or 86% of his actual rate. This is a much higher rate than normal for the partial indemnity scale. A more appropriate rate on a partial indemnity scale for a lawyer with an actual rate of $375 would be $225 per hour. Counsel for Mr. Evdassin spent 34 hours on this matter. If his fees were calculated at a rate of $225 per hour, that would be $8644.50, inclusive of HST. Counsel for Mr. Evdassin did not include any figures for disbursements in his Costs Outline.