COURT FILE NO.: 09-45430 DATE: August 31, 2020
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
CARLETON CONDOMINIUM CORPORATION NO. 396 Plaintiff/Defendant by counterclaim
– and –
CLAUDE-ALAIN BURDET, et al. Defendants/Plaintiffs by counterclaim
COUNSEL: Gary G. Boyd for the Plaintiff/Defendant by counterclaim Claude-Alain Burdet for the Defendants/Plaintiffs by counterclaim
HEARD: March 4, 2020
ENDORSEMENT ON MOTION FOR SECURITY FOR COSTS AND MOTION FOR SCHEDULING ORDER AND OTHER RELIEF
Justice Sally Gomery
[1] This is the latest chapter in lengthy litigation with respect to a highly dysfunctional commercial condominium development in Ottawa. The defendants/plaintiffs by counterclaim (the “Burdet Group”) seek a timetable order with a view to obtaining a trial date for their counterclaim in this action. They also seek an order to give effect to an earlier decision by the court in a companion action (the “Dewan action”). The plaintiff/defendant by counterclaim (“CCC396” or the “condominium corporation”) contests the motion and brings a cross-motion for an order requiring the Burdet Group to post security for costs.
Background
[2] CCC396 is a condominium corporation created in 1987. Within a decade, various members of the Burdet Group — Claude-Alain Burdet, his personal trust, his wife Janet Burdet, and 1457563 Ontario Corporation, a company owned by their son Luc Burdet — had acquired the majority of the 33 units in the building. The Burdets used their majority control to constitute themselves as the sole directors of CCC396.
[3] Other parties in the Burdet Group include a trust associated with Luc Burdet’s numbered company and Entreprises Ted Rubac Inc. (“ETRE”), a company created by Claude-Alain Burdet in 1993.
[4] Litigation between CCC396, the Burdet Group and other unitholders (the “Minority”) has been ongoing for over twenty years. It has resulted in a dizzying number of decisions, orders and appeals in this Action and the Dewan action. A simplified and non-exhaustive chronology of events is required to understand what is now at issue in the motions before me.
[5] In 2001, the Minority commenced the Dewan action against Claude-Alain Burdet in trust. Other members of the Burdet Group and CCC396 were later added as parties. The Minority alleged that Mr. Burdet had used the Burdet Group’s control of CCC396 for their profit at the expense of the Minority. The Burdet Group denied these allegations and counterclaimed for common expenses allegedly owed by the Minority as well as other relief.
[6] After commencing the Dewan action, the Minority obtained an order prohibiting Claude-Alain Burdet from taking steps, by virtue of his control of CCC396, to recover alleged unpaid common expenses from Minority unitholders. In 2002, Lalonde J. held that Mr. Burdet had repeatedly breached this order. The judge appointed an interim administrator to take over the management of the condominium corporation and ordered a forensic audit.[^1] This decision was upheld on an appeal to the Divisional Court, and a motion for leave for a further appeal to the Court of Appeal was denied.[^2] Mr. Burdet attempted again in 2011 to have Lalonde J.’s 2002 order appointing an interim administrator set aside; this motion was also dismissed.[^3]
[7] In 2009, CCC396 began this action for unpaid arrears of common expenses allegedly owed by the Burdet Group. The Burdet Group denied any indebtedness and counterclaimed, alleging that they had been oppressed by the condominium corporation and were entitled to damages and control of CCC396.
[8] In 2011, Kane J. granted partial summary judgment to CCC396 in this action. He concluded that the Burdet Group owed the corporation at least $109,441.[^4] He directed that the remaining relief claimed by CCC396 in its claim be tried by way of a mini-trial, which took place in 2014.
[9] Following the mini-trial in this action in 2014, Kane J. granted judgment to CCC396 on the balance of the claim. He ordered members of the Burdet Group to collectively pay a further $380,970 in arrears of common expenses and interest owed to CCC396 as of August 31, 2014. [^5] He also upheld liens registered against almost all of the units. The Burdet Group’s appeal of this decision to the Court of Appeal was unsuccessful, and its application for leave to appeal to the Supreme Court was dismissed.[^6] In its appeal, the Burdet Group argued, amongst other things, that the 2002 order appointing an administrator ought never to have been made, an argument that the Court of Appeal dismissed as a collateral attack on a final order.[^7]
[10] The trial in the Dewan action took place intermittently over 30 days in 2014 and 2015. In 2016, Kane J. issued a 219-page decision on the claim and counterclaim. [^8] He held that the Burdet Group had oppressed the Minority and terminated the condominium corporation. He ordered the Minority to pay arrears of common expenses and interest (which they conceded owing prior to trial) and ordered CCC396 to pay a total of $70,000 plus interest to Mr. Burdet and ETRE. Kane J. dismissed all other claims made by the Burdet Group in their counterclaim.
[11] The Dewan trial judgment was upheld on appeal to the Court of Appeal, which held that there was ample evidence that Claude-Alain Burdet had oppressed the Minority through his control of CCC396:
The evidence of oppressive conduct on the part of Mr. Burdet is detailed, effectively unchallenged, and overwhelmingly compelling. It includes a long history of self-dealing, lack of financial disclosure, charging CCC396 legal fees for personal matters, failing to declare conflicts, refusing to produce records despite being court-ordered to do so, and implementing an invalid by-law.[^9]
[12] The Burdet Group’s application for leave to appeal to the Supreme Court of Canada was dismissed.[^10]
[13] Having exhausted all possible appeals in the Dewan action, the Burdet Group brought a motion in this action in 2018 asking that all previous proceedings be set aside. This motion was summarily dismissed pursuant to rule 2.1.02(1) of the Rules of Civil Procedure.[^11] That dismissal was again upheld by the Court of Appeal.[^12]
[14] Notwithstanding this history, the Burdet Group now takes the position that we have only reached “half-time” in its litigation with CCC396, because the counterclaim in this action has still not been tried. It seeks a timetable order for the prosecution of the counterclaim as well as an order “to accurately implement” the Dewan trial judgment.
[15] CCC396 opposes the motion and brings a cross-motion. It contends that the findings and conclusions in the Dewan action disposed of the counterclaims in this action as well. In the alternative, on the cross-motion, CCC396 seeks an order requiring the Burdet Group to post security for costs before taking any further steps in the counterclaim.
[16] I will address the issues on the motion in the following order:
(i) Should the Burdet Group be required to post security for costs?
(ii) Should I make a timetable order with respect to the counterclaim?
(iii) Is the Burdet Group entitled to an order regarding the implementation of the order arising from the Dewan judgment?
(i) Should the Burdet Group be required to post security for costs?
[17] Although it was framed as alternative relief in CCC396’s motion, I am dealing with the motion for security for costs first because it was the focus of oral submissions and my conclusion on this relief may affect the Burdet Group’s entitlement to a timetable order.
[18] In Yaiguaje v. Chevron Corporation, 2017 ONCA 827, at para. 22, the Court of Appeal held that, in deciding motions for security for costs, “judges are obliged to first consider the specific provisions of the Rules governing those motions and then effectively to take a step back and consider the justness of the order sought in all the circumstances of the case, with the interests of justice at the forefront”.
[19] I must therefore consider, first, if CCC396 has established grounds for an order under r. 56.01(1) and, second, whether an order would be just.
Have grounds for an order been established?
[20] R. 56.01(1) allows the court to order a plaintiff to post security for costs in certain circumstances. If ordered to post security, a plaintiff may not take any further steps in the litigation, aside from appealing the order, until the order has been complied with; r. 56.05. If a plaintiff defaults on giving security as required by an order, the court may, on motion, dismiss the proceeding against the defendant who obtained the order, pursuant to r. 56.06.
[21] CCC396 contends that the Burdet Group, in its capacity as plaintiff by counterclaim, should be ordered to post security under subparagraph (c) of r. 56.06(1). It provides that the court may on motion “make such order for security for costs as is just where it appears that … the defendant or respondent has an order against the plaintiff or applicant for costs in the same or another proceeding that remains unpaid in whole or in part”.
[22] In this action, the Burdet Group has been ordered to pay CCC396 the following costs since March 2015:
- On March 17, 2015, Kane J. ordered the Burdet Group to pay costs of $790,915 on the trial of CCC396’s claim.[^13]
- On May 25, 2016, the Court of Appeal awarded CCC396 an additional $27,000 in costs when it dismissed the Burdet Group’s appeal.[^14]
- On September 30, 2016, Robert J. dismissed the Burdet Group’s motion to stay the Court of Appeal’s May 2016 decision and ordered it to pay a further $2000 in costs on the unsuccessful motion.[^15]
- On August 18, 2017, I awarded costs of $500 to CCC396 when I dismissed the Burdet Group’s motion under r. 2.1.02.[^16]
- On April 9, 2018, the Ontario Court of Appeal ordered the Burdet Group to pay a further $16,000 in costs to CCC396 on when they dismissed the appeal of this order.[^17] The Burdet Group was also ordered to pay costs when the Supreme Court of Canada denied their application for leave to appeal.
[23] These awards total $836,415. This does not include the costs of the Burdet Group’s unsuccessful application for leave to appeal to the Supreme Court of Canada, the amount of which were not specified in CCC396’s motion materials, or the interest that CCC396 would be entitled to on the awards.
[24] Members of the Burdet Group have also been ordered to pay total costs of $183,500 to the Minority in the Dewan action.[^18]
[25] Although it acknowledges that it has not paid the costs it has been ordered to pay, the Burdet Group contests CCC396’s entitlement to security for costs on several grounds.
[26] First, it argues that a court cannot order security for costs based on the non-payment of costs awarded in the same proceeding or in proceedings arising from the same facts, particularly while some of the issues in the litigation have not yet been adjudicated.
[27] This argument is clearly wrong based on the plain wording of r. 56.01(1)(c). Subparagraph (c) unambiguously provides that security for costs may be ordered where the plaintiff has not paid costs it has already been ordered to pay in the same proceeding. The rule therefore explicitly contemplates that a defendant may move under r. 56.03 for costs arising from the same action. This necessarily implies that some issues in the litigation will not have been adjudicated when the motion for security for costs is argued.
[28] The Burdet Group argues that this interpretation of r. 56.01(1)(c) does not apply in the context of a counterclaim. On this point, it relies on r. 27.09(3) and caselaw dealing with motions for security for costs in the context of counterclaims.
[29] None of the cases cited say that a plaintiff by counterclaim cannot be ordered to post security for costs; on the contrary, as we will see in considering the second part of the test, they say the opposite. A defendant who is a plaintiff by counterclaim may be captured by the language of r. 56.01 and required to post security.
[30] With respect to r. 27.09, it reads in its entirety as follows:
Where Claim in Main Action not Disputed
27.09 (1) Where a defendant does not dispute the claim of the plaintiff in the main action, but asserts a counterclaim, the court may stay the main action or grant judgment, with or without a stay of execution, until the counterclaim is disposed of.
Where Counterclaim not Disputed
(2) Where the plaintiff does not dispute the counterclaim of a defendant, the court may stay the counterclaim or grant judgment, with or without a stay of execution, until the main action is disposed of.
Where Both Claim and Counterclaim Succeed
(3) Where both the plaintiff in the main action and the plaintiff by counterclaim succeed, either in whole or in part, and there is a resulting balance in favour of one of them, the court may in a proper case give judgment for the balance and dismiss the smaller claim and may make such order for costs of the claim and counterclaim as is just.
[31] None of the situations contemplated in r. 27.09 arise in this case.
[32] With respect to subrule (1), the Burdet Group contested CCC396’s claim when CCC396 moved for summary judgment and during the mini-trial that followed Even had the Burdet Group not disputed the claim, the subrule would not apply; when Kane J. granted judgment to CCC396, he did not issue a stay of execution either with respect to relief on the merits or with respect to the costs he subsequently awarded to CCC396.
[33] Subrule (2) likewise does not apply. CCC396 contests the Burdet Group’s counterclaim.
[34] Subrule (3) addresses the situation where a judge will enter a single judgment disposing of both a claim and a counterclaim. It does not apply to a situation like this one, where the judge has ordered that the claim and counterclaim be tried separately. Moreover, in his endorsement on September 30, 2011, Kane J. held that any amount that CCC396 might owe to the Burdet Group on the counterclaim would not constitute a defence or set-off to the condominium corporation’s claim, and that the Burdet Group’s complaints “as to the actions taken or not taken by the Administrator, independent of the issues for trial as stated herein, shall not constitute issues or relevant evidence for trial” of the main claim.
[35] I conclude that CCC396 has established its entitlement to security for costs, if I conclude that ordering the Burdet Group to post security would be just.
Would an order for security for costs be just?
[36] At para. 23 of Yaiguaje, the Court of Appeal emphasized the need to consider the overall fairness of a proposed cost order:
The Rules explicitly provide that an order for security for costs should only be made where the justness of the case demands it. Courts must be vigilant to ensure an order that is designed to be protective in nature is not used as a litigation tactic to prevent a case from being heard on its merits, even in circumstances where the other provisions of rr. 56 or 61 have been met.
[37] In determining whether an order for security for costs would be just, courts consider such factors as the merits of the claim, any delay in bringing the motion, the impact of the defendant’s impugned conduct on the plaintiff’s available assets, concerns about access to justice, and the public importance of the litigation. In Yaiguaje, however, the Court held that there is no set, universally applicable list of relevant factors. Each case must be considered on its own facts. The court must view the situation holistically and be guided by “the overriding interests of justice to determine whether it is just that the order be made”; Yaiguaje, at para. 25.
[38] CCC396 contends that, once a party moving for security for costs has established grounds for an order, the burden shifts to the respondent to show that the proposed order would be unjust. It relies on Brown v. Regional Municipality of York, 2016 ONSC 1604, at para. 5. The court in that case cites Brown v. Hudson’s Bay Co., 2014 ONSC 1065, at paras. 33-52 for the proposition that the respondent bears the burden of showing that posting security for costs would be unjust.
[39] Both of these decisions pre-date Yaiguaje. There is no reference to a shifting persuasive burden in the Court of Appeal’s reasons. The Court instead emphasizes how, in properly exercising its discretion, the court must assess the overall justness of the proposed order. It is this guidance that I must follow on the second part of the test under r. 56.01.
[40] The Burdet Group argues that it would be unjust to order it to post security, for two reasons.
[41] First, it contends that CCC396’s request for costs was not made in a timely way. I do not agree.
[42] In my view, it was reasonable for CCC396 to bring this motion only in response to the motion by Burdet Group to schedule a trial of its counterclaim in this action. Had CCC396 sought security for costs while the Dewan action was not fully resolved, the Burdet Group would undoubtedly have argued that the motion was a tactical manoeuvre to frustrate its ability to defend that action. The situation is different now that all appeals in the Dewan action have been exhausted. Based on the history of the litigation between these parties, the prosecution of the Burdet Group’s counterclaim will be long and expensive. Given the history of unpaid cost orders in CCC396’s favour, it makes sense that it would now seek security for costs. That it might theoretically have done so earlier is not relevant, in the circumstances.
[43] Second, the Burdet Group argues that the presence of common elements in its counterclaim and defence of CCC396’s claim precludes an order for security for costs.
[44] In Toronto-Dominion Bank v. Szilagyi Farms Ltd., 1988 CanLII 4745 (ON CA), 65 O.R. 433, [1988] O.J. No. 1223 (C.A.), the Court of Appeal held that a defendant cannot be obliged to post security for costs. This same principle may argue against an order requiring a plaintiff by counterclaim to post security “for damages arising out of the same transaction” as the main claim; TD Bank v. Szilagyi, citing Mapleson v. Masini (1879), 5 Q.B.D. 144 (Div. Ct.), at pp. 147-48.
[45] After reviewing TD Bank v. Szilagyi and other caselaw on the issue, the Divisional Court in Wilkings v. The Velocity Group Inc., 2008 CanLII 12500 (ON SCDC), 89 O.R. (3d) 751 (Div. Ct.), summarized the guiding principles on a motion for security for costs against a plaintiff by counterclaim as follows, at para. 29:
A plaintiff by counterclaim can be required to post security. It is a relevant factor in exercising discretion as to whether a plaintiff by counterclaim is required to post security to consider whether or not the counterclaim is in substance a reiteration of the plaintiff by counterclaim’s defence to the main claim. If it is, the court may exercise its discretion to deny the motion by the defendant … or qualify the amount of security to otherwise be posted.
[46] The Burdet Group contends that its counterclaim “is in substance a reiteration” of its defence to the main claim because the claim and the counterclaim arise from the same transaction, that is, “monies allegedly owed to CCC396”. It contends that the counterclaim “was and is in substance a defence”. As a result, the Burdet Group says that ordering it to post security would be the equivalent of requiring it to pay as a condition of defending itself, and would therefore be clearly unjust.
[47] The Burdet Group’s position is at odds with the procedural history of this actionIn January 2012, Kane J. ordered that CCC396’s claim and the Burdet Group’s counterclaim in this action were to be tried separately. The judge could not have made this order if, in his view, there was a risk of inconsistent factual or legal determinations on the claim and counterclaim, or if trying the claim and counterclaim separately would be procedurally or substantively unfair to any party. This procedural order was furthermore not appealed.[^19]
[48] I therefore cannot accept the Burdet Group’s argument that the counterclaim is in substance a reiteration of its defence of the claim. If it were, the trial judge would not have made the procedural order that he did or, if he had, the Burdet Group surely would have appealed it.
[49] The fact that CCC396’s claim has already been tried undermines the Burdet Group’s position in a more fundamental way. An order requiring the Burdet Group to post security cannot prejudice its ability to defend the claim by CCC396 because that claim, and the Burdet Group’s defences to it, have already been fully adjudicated.
[50] I therefore conclude that, even though the claim and the counterclaim arise from the same series of transactions — the interactions of the Burdet Group and CCC396 — this is not a factor that argues against an order requiring the plaintiff by counterclaim to post security.
[51] I turn now to the factors that, in my view, are relevant to the question of whether the Burdet Group should be required to post security for costs:
- The vast majority of these costs — $790.915 out of a total of $836,415 — were awarded on March 17, 2015, more than five years ago. Further to the order, these costs were payable within 30 days.
- The Burdet Group has had many opportunities, when making submissions on costs in the context of motions, trial and appeals, to argue that execution of any order made should be suspended pending the outcome of their counterclaim in this action. Either they have not made these arguments, or those arguments have been rejected.
- The Burdet Group has repeatedly argued that amounts that it claims from CCC396 should be a set-off of the amounts that it has been ordered to pay to CCC396. This argument has been systematically rejected by Kane J. and the Court of Appeal.[^20]
- Given the findings by Kane J. and the Court of Appeal with respect to the conduct of the Burdet Group in the administration of the condominium, the Burdet Group’s counterclaim alleging oppression has questionable merit.
- In 2018, the Burdet Group served a motion to set aside all previous proceedings. The motion was summarily dismissed under r. 2.1.02 as frivolous, vexatious and otherwise an abuse of the process of the court. This dismissal was upheld by the Court of Appeal and leave to appeal to the Supreme Court of Canada was denied. This is a recent example of the Burdet Group prolonging its litigation by persistent unsuccessful appeals and motions, thereby forcing CCC396 to incur ongoing costs. Cost awards are designed to relieve this burden to some extent. They have not served this purpose in this litigation because the Burdet Group has not paid the costs as ordered.
- In its February 2018 decision rejecting the Burdet Group’s appeal of the trial judgment in the Dewan action, the Court of Appeal also dismissed a cross-appeal by the Minority. The Minority challenged Kane J.’s order that they pay arrears owed to the corporation “forthwith”. The Court of Appeal found no basis to interfere with the trial judge’s order and noted that “CCC396 is in dire need of funds”.[^21] Despite the Burdet Group’s assertion in its argument that the condominium corporation “already has sufficient security in the form of its control of millions worth of real estate assets and revenues, belonging to the plaintiffs by counterclaim”, there is no evidence on this motion that the Court of Appeal’s observation was incorrect. Based on the findings made in the litigation to date, there is furthermore no air of reality to the assertion that CCC396 owes the Burdet Group millions of dollars.
[52] In sum, CCC396, a party in serious financial difficulty, is owed over $836,000 in costs (as well as interest on this amount over up to five years) by the Burdet Group, which is pursuing a counterclaim of questionable merit. The Burdet Group also owes costs of $183,500 to the Minority in the Dewan action. None of the cost awards made against the Burdet Group has been stayed pending the outcome of the counterclaim in this action. These costs have arisen, in part, because the Burdet Group has unsuccessfully appealed or otherwise attempted to challenge virtually every decision made by the courts in this litigation. Its last attempt to re-litigate issues that have already been adjudicated, a motion to set aside, was determined to be so manifestly unmeritorious as to be an abuse of the court.
[53] Over the past twenty years, the parties have cumulatively had weeks and weeks of time in court. Although the Burdet Group’s counterclaim in this action has not yet been formally tried, little if any of the history between the parties remains unexplored as a result of the trial and appeals in the Dewan action and this action. There is nothing to indicate that, in seeking security for costs, CCC396 is attempting to exploit a power imbalance or is engaged in a tactical manoeuvre with the intent of preventing the Burdet Group’s counterclaim from being heard. There is also no public interest component to this litigation.
[54] Viewing the situation holistically, I conclude that ordering the Burdet Group to post security is just.
[55] With respect to the amount of security that should reasonably be required, the court should not impose a security requirement that is “excessive and disproportionate, having regard to the scope of the counterclaim and the scope of the litigation as a whole”; Crossover Health Care Fund, LLC v. Pivotal Therapeutics Inc., 2018 ONSC 5961, at para. 43.
[56] It is hard to assess how much money is at stake in the counterclaim. In the motion currently before the court, however, the Burdet Group takes the position that its recovery on the counterclaim will likely exceed its debt to CCC396. Further to Kane J.’s March 20, 2015 order, as of that date members of the Burdet Group collectively owed CCC396 a total of $378,166 plus pre-judgment interest at a rate of 12% per year compounded monthly. By my rough calculation, the total amount of interest that has accumulated, to date, amounts to almost $310,000. Based on the Burdet Group’s own assessment, therefore, the amount at issue in the counterclaim exceeds $687,000, or over $1.5 million if the unpaid costs awards to CCC396 to date are factored in
[57] The future costs that CCC396 may bear in this litigation are another relevant factor. CCC396 has to date incurred costs in excess of the amounts awarded. Based on the history of the litigation between the parties, if the counterclaim proceeds to trial the costs of defending the counterclaim will continue to be significant.
[58] Taking all relevant factors into consideration, I conclude that it is reasonable to require the Burdet Group to post security in the full amount of the costs it has already been ordered to pay. This amount is not excessive or unreasonable in the circumstances.
[59] CCC396’s motion for security for costs is therefore granted and the Burdet Group are ordered to post $836,415 within 30 days of this decision, failing which the counterclaim may not be listed for trial and CCC396 may move for its dismissal.
(ii) Should I make a timetable order with respect to the counterclaim?
[60] A two-week trial of the counterclaim was scheduled to proceed in November 2014 but was adjourned in early October 2014. According to an email sent by the trial coordinator to the parties at the time, Kane J. directed that the counterclaim be rescheduled for hearing after the trial in the Dewan action.[^22] Now that all appeals in the Dewan action have been exhausted, the Burdet Group seeks to set a new date for the trial of its counterclaim.
[61] CCC396 takes the position that all claims made by the Burdet Group in the counterclaim have already been disposed of in the judgment on the merits in the Dewan action.
[62] CCC396 relies, first of all, on Kane J.’s statement at paragraph 975 of his reasons in Dewan that “All other counterclaims are dismissed”. In my view, the trial judge’s referral to counterclaims in the plural cannot be taken to infer that he was dismissing the Burdet Group’s counterclaim in this action. Although the lawsuits overlap factually and CCC396 and the Burdet Group are parties in both actions, the two actions were never consolidated. The order implementing Kane J.’s decision in Dewan does not refer to this action. It moreover refers to the counterclaim in the singular. I conclude that the reference to “counterclaims” in Kane J.’s reasons was meant to refer solely to the claims for relief made by the Burdet Group in its counterclaim in the Dewan action.
[63] CCC396 also relies on findings of fact and law by Kane J. in the Dewan action and the claim in this action that, in its submission, preclude the Burdet Group from succeeding in its counterclaim.
[64] This submission is not entirely without merit. At para. 44 of its Statement of Defence and Counterclaim dated July 2009 in this action, the Burdet Group seeks the following substantive relief:
- A declaration that CCC396, “through its non-compliant conduct and enforcement of liens registered against the units of the defendants”, “is or threatens to be oppressive and unfairly prejudicial” to them, and “unfairly disregards” their interests, contrary to s. 135(2) of the Condominium Act, 1998, S.O. 1998, c. 19;
- A declaration that the liens are invalid or, alternatively, should be stayed;
- Orders requiring CCC396 to deliver audited financial statements and other records to the defendants;
- Orders requiring an election of a new Board that would take over the management of the condominium corporation and call an annual general meeting;
- A declaration that promissory notes issued by CCC396 prior to the appointment of an administration could be set off against monies owed by the defendants to CCC396;
- $25,000 for “loss of rent, interest and economic opportunity”, $5000 to the owner of each affected unit “in compensation for inconvenience, uncertainty and risk of eviction caused by this action” and $10,000 in special damages, the details of which were to be provided before trial.
[65] The claims for relief based on the invalidity of liens are doubtful because all but one of those liens has already been upheld. Orders with respect to the board cannot be made, as Kane J. terminated the corporation in his 2016 judgment in the Dewan action. The Burdet Group’s arguments about set-off have been repeatedly rejected by the courts. Kane J. held that the Minority had not oppressed members of the Burdet Group. His findings regarding the misconduct of Claude-Alain Burdet, which findings were endorsed by the Court of Appeal in the passage I cited above, make it improbable that the Burdet Group will be able to prove that its members are entitled to any damages as a result of misconduct by the condominium corporation or the court-appointed administrator.
[66] In light of this, a judge tasked with the case management or trial management of this action might well conclude that various claims made in the counterclaim are now moot and advise the Burdet Group that it must abandon some or even most of the relief sought or face serious cost consequences at the end of trial.
[67] I am however being asked to go well beyond this. CCC396 is effectively asking me to decline to allow the counterclaim to proceed at all.
[68] A submission that a lawsuit should not proceed based on res judicata or issue estoppel should be made in the context of a motion that puts the viability of the causes of action squarely before the court.
[69] For this reason, I reject CCC396’s argument that no timetable order should made with respect to the counterclaim.
[70] Having said this, given my conclusion on CCC396’s motion for security for costs, I conclude that it is premature to set a timetable. If the Burdet Group fails to post security as ordered, no scheduling order will be required. Alternatively, the Burdet Group may seek to appeal this decision, just as it has appealed many past decisions. This would render pointless any timetable order I might issue now.
[71] I therefore decline to make a timetable order, without prejudice to the Burdet Group’s right to seek such an order if it either posts security or successfully challenges the order requiring it to do so.
(iii) Should any order be issued with respect to the implementation of the Dewan trial decision?
[72] The Burdet Group seeks an order “to accurately implement paragraphs [5], [6], [7], and [8] of the 8 August 2016 Judgment, for all units of CCC396 during the relevant period”.
[73] The August 2016 judgment is the judgment issued by Kane J. following the trial in the Dewan action. In paragraphs 5 to 8, he ordered:
- Payment to CCC396 by each Minority unitholder of a fixed amount representing arrears owing as of December 31st, 2014 and interest calculated to August 8, 2016;
- Payment by CCC396 to ETRE on a promissory note as well as interest on the principal from October 1st, 2002 on;
- Payment by CCC396 of a further $30,000 to ETRE on another promissory note, together with interest on the principal from October 1st, 2002 on; and
- Payment by CCC396 to Claude-Alain Burdet of $20,000 for services performed in 2001, along with pre-judgment interest from January 1st, 2002 to August 8, 2016.
[74] In his June 24, 2019 affidavit in support of the Burdet Group’s motion, Luc Burdet argues that the August 2016 judgment modifies CCC396’s financial situation and the monthly balance of all unit holders as far back as 2001. He contends that spreadsheets that were produced prior to the judgment must be recalculated to present an accurate picture of arrears per unit at any given time, for two reasons. First, the condominium cannot be terminated without this recalculation because the equity in each unit cannot be determined. Second, the Burdet Group is entitled to obtain evidence from the corporation proving that, when CCC396 registered liens against its units and took other steps to enforce the collective of unpaid common expenses, this was unreasonable because CCC396 owed more money to these unitholders than the unpaid arrears.
[75] This argument has no merit. It is in fact astonishing, given the history of this case, that the Burdet Group is advancing it.
[76] It is absurd to suggest that the condominium cannot be terminated without a further order “implementing” the August 2016 judgment. The order to terminate is contained in that very same judgment. The order to terminate is not premised on a recalculation of past arrears per unit once the amounts awarded to members of the Burdet Group are taken into account, nor does it in any way suggest that such accounting is necessary.
[77] The premise of the argument is furthermore wrong in law. Unitholders do not have the right to set-off amounts that they claim from a condominium corporation from the amounts they owe for common expenses. Section 84(3)(b) of the Condominium Act, 1998 states that the owner of a condominium unit “is not exempt from the obligation to contribute to the common expenses even if … the owner is making a claim against the corporation”.
[78] The Burdet Group knows that its argument is unfounded in law because its claim for set-off in this action has been repeatedly rejected by both this court and the Court of Appeal based on s. 84(3).[^23] Most recently, the Burdet Group raised the set-off argument in its motion to set aside in 2018. This was the motion that was struck under r. 2.1.02. In upholding the decision to strike, the Court of Appeal specifically identified the set-off argument as one that had already been adjudicated and that was furthermore precluded statutorily:
There were no new facts, as the very set-off issue argument made by the appellant now was made below before the trial judge. In any event, s. 84(3) of the Condominium Act provides that an owner is not exempt from the obligation to contribute to common expenses even if the owner is making a claim against the corporation.[^24]
[79] In summary, the Burdet Group is seeking to re-litigate a point that they have repeatedly lost, despite a decision by the Court of Appeal qualifying its last attempt to do so as frivolous, vexatious and an abuse of the court.
[80] The Burdet Group’s motion for an order requiring a recalculation of the account balance for each unit in the condominium from 2002 forward is therefore denied.
Disposition
[81] CCC396’s motion for security for costs is granted. The plaintiffs by counterclaim are ordered to post security in the amount of $836,415 within 30 days of this decision, failing which the counterclaim may not be listed for trial and CCC396 may move for its dismissal.
[82] The motion by the plaintiffs by counterclaim for a timetable order is dismissed as premature, without prejudice to the Burdet Group’s right to seek such an order if it either posts security or successfully appeals the order requiring it to do so.
[83] The motion by the plaintiffs by counterclaim for an order requiring CCC396 to recalculate past arrears owed by individual unitholders since 2002 is dismissed.
[84] CCC396 has prevailed in its motion and to a large extent on the motion by the Burdet Group. It is therefore entitled to its costs. If the parties are unable to agree on costs, CCC396 shall serve and file submissions on costs by no later than September 15, 2020 and the Burdet Group shall serve and file responding submissions by no later than September 30, 2020. Each set of submissions shall not exceed three pages in length but may be accompanied by a bill of costs and any relevant evidence. No book of authorities shall be filed but the parties may refer to caselaw and authority by including a hyperlink to an electronically published database in their submissions. All submissions shall be filed electronically to ottawa.scj.courts@ontario with an email stating that I remain seized for the purpose of costs.
Justice Sally Gomery
Released: August 31, 2020
COURT FILE NO.: 09-45430 DATE: August 31, 2020
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
CARLETON CONDOMINIUM CORPORATION NO. 396 Plaintiff/Defendant by counterclaim
– and –
CLAUDE-ALAIN BURDET, et al. Defendants/Plaintiffs by counterclaim
ENDORSEMENT ON MOTION FOR SECURITY FOR COSTS AND MOTION FOR SCHEDULING ORDER AND OTHER RELIEF
Justice Sally Gomery
Released: August 31, 2020
[^1]: Dewan v. CCC396, Court file no. 01-CV-18977, unreported interlocutory order and reasons of Lalonde J. on April 2, 2002. [^2]: As noted in Dewan v. Burdet, 2011 5749, at paras. 25 to 27. [^3]: Dewan v. Burdet, 2011 ONSC 5749. [^4]: CCC No. 396 v. Burdet, 2011 ONSC 5807, aff’d by the Court of Appeal on April 13, 2012. All money amounts referred to herein are rounded to the nearest dollar. [^5]: CCC No. 396 v. Burdet, 2014 ONSC 7411. [^6]: CCC No. 396 v. Burdet, 2016 ONCA 394; leave to appeal to the Supreme Court of Canada denied on Dec. 22, 2016 in SCC file no. 37158 [^7]: CCC396 v. Burdet, 2016 ONCA 394, at paras. 3 to 5. [^8]: Dewan v. Burdet, 2016 ONSC 4917, with supplementary reasons issued Sept. 30, 2016. [^9]: CCC No. 396 v. Burdet 2018 ONCA 195, at para. 4. [^10]: ; leave to appeal to SCC denied May 2, 2019 in SCC file no. 38088. [^11]: CCC No. 396 v. Burdet, 2017 ONSC 4950. [^12]: CCC No. 396 v. Burdet, 2018 ONCA 342. [^13]: CCC No. 396 v. Burdet, 2015 ONSC 1361. Kane J. calculated lesser costs amounts that would alternatively be payable on a full, substantial or partial indemnity basis. I understand that these amounts were calculated so that, if the Court of Appeal allowed the Burdet Group’s appeal in part, the Court of Appeal could modify the cost order below accordingly. Since the Court of Appeal did not grant the appeal and denied any leave to appeal Kane J.’s cost order, I conclude that the amount of costs that the Burdet Group is liable to pay on the trial of CCC396’s claim is $790,914.63 plus interest as of April 16, 2015. [^14]: CCC No. 396 v. Burdet, 2016 ONCA 394. [^15]: Endorsement dated Sept. 30, 2016 in CCC No. 396 v. Burdet, Ontario C.A. file no. M46873/C59930. [^16]: CCC No. 396 v. Burdet, 2017 ONSC 4950. [^17]: CCC No. 396 v. Burdet, 2018 ONCA 342. [^18]: On February 28, 2018, the Court of Appeal fixed the trial costs for which they were liable at $176,000 and the appeal costs at $7500. [^19]: CCC396 v. Burdet, 2016 ONCA 394, at para. 8. [^20]: Dewan v. Burdet, 2018 ONCA 195, at para. 5. [^21]: Dewan v. Burdet, 2018 ONCA 195, at para. 13. [^22]: The scheduling was noted in a case conference endorsement in CCC396 v. Burdet, 2014 ONSC 3805, at para. 3. The request for adjournment and the rescheduling direction were recorded in an email exchange produced as exhibit to the affidavit of Luc Burdet sworn June 24, 2019 in support of the motion currently before the court. [^23]: CCC396 v. Burdet, 2011 ONSC 5807, at paras. 44 to 61; CCC396 v. Burdet, 2012 ONSC 1724, at para. 39; CCC396 v. Burdet, 2012 ONCA 234, at paras. 6 to 9. [^24]: CCC396 v. Burdet, 2018 ONCA 342, at para. 5.