Court File and Parties
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Toronto Standard Condominium Corporation No.1930, Plaintiff/Applicant v. Cynthia Ababio, Francis Ababio and Peter Ababio, Defendants/Respondents
BEFORE: Gillian Roberts J.
COUNSEL: Jordan Cowman for the Plaintiff/Applicant
Matthew Tubie for the Defendant/Respondents
HEARD: September 10, 2020 (via zoom)
ENDORSEMENT
Overview
1The Toronto Standard Condominium Corporation No. 1930 (TSCC 1930) brings a motion for summary judgment against Cynthia Ababio, and default judgment against Francis Ababio and Peter Ababio, in order to enforce a lien that TSCC 1930 registered against the Ababio's unit (unit 29) as a result of money owed to TSCC 1930.
2Cynthia Ababio, Francis Ababio and Peter Ababio (the Ababios) own unit 29 in a condominium complex at 36 Gibson Ave, North York managed by TSCC 1930, together with an accompanying parking space and storage locker. The Ababios have been consistently paying the monthly condo fee in relation to unit 29 and the associated parking space and storage locker, however they began to fall behind in what they owed TSCC 1930 in June of 2017, when they were charged a $5000 deductible that TSCC 1930 had to pay in relation to damage caused, either directly or indirectly, by a tenant residing in unit 29. They were also charged the cost of invoices billed to TSCC 1930 by its lawyer in relation to the damage by the unit 29 tenant, and for a security assessment relating to who was using the key fob relating to unit 29. Once unit 29 began to run a balance with TSCC 1930, it began to be charged interest on the balance every month, at a rate of about 18% per annum, compounding monthly. The interest rate charged decreased markedly in September of 2018, to about .61 % per annum, the same time as TSCC 1930 began using a new accounting system. The interest rate apparently went up again in October, 2019 to about 10% per annum, again being charged monthly, and added to the outstanding balance.
3In addition to the above charges, several cheques for the monthly condo fee associated with unit 29 were returned NSF, namely cheques for the months July, August, September, November, 2017, March, May and December, 2018, August, September, November 2019, and June 2020. The unpaid fees, together with a bank charge of $25 per NSF cheque, were added to the outstanding balance. Again, TSCC 1930 was charged monthly interest on the balance, which was added to the outstanding balance.
4Apart from the NSF cheques just described, the defendant has continued to pay the monthly condo fee associated with unit 29, and its parking space and storage locker. In addition, the defendant has made a number of payments towards the outstanding balance in its account with TSCC 1930: $418.00 November 12, 2019, $437.00 December 17, 2019, $3,454.00 on July 5, 2020, and $3088.68 July 10, 2020.
5The motion was originally scheduled for January 17, 2020. At that time, Francis Ababio appeared in person on behalf of all the respondents. Mr. Ababio acknowledged that money was owed to TSCC 1930 in relation to unit 29. He explained that they were trying to re-pay it, and asked for more time to do that. I adjourned the motion to March 23, 2020 in order to give the respondents more time to pay their debt, but I cautioned the respondents that their non-payment was due, and was imposing hardship on the condominium complex as a whole. Unfortunately COVID-19 intervened and prevented the March 23, 2020 hearing from taking place.
6TSCC 1930 brought the motion back in writing, and it was scheduled to be heard the week of August 10, 2020. Unfortunately, the motion materials did not properly identify the amount of money TSCC 1930 was owed in relation to unit 29. The materials included just the last page of a ledger titled "Owner Statement" for unit 29 which appeared to include the legal costs of this action together with interest on the legal costs, without any explanation for why the costs were reasonable, or could be added to the common expenses for unit 29. Nor was it clear from the material that Cynthia Ababio, who has been the point of contact between TSCC 1930 and the Ababios, was aware of the in-writing motion. As a result, I dismissed the motion, without prejudice to TSCC 1930 bringing the motion back on for hearing before me with proper materials.
7TSCC 1930 brought the motion back on for hearing, and both sides filed additional material. The motion was heard in person via zoom on September 10, 2020. At the hearing, Mr. Tubie acknowledged that the $5000 insurance deductible that TSCC 1930 paid in relation to damage caused directly or indirectly by a tenant of unit 29 was properly added to the common expenses for unit 29. The only issue was the proper amount owed to TSCC 1930 in relation to unit 29.
8Counsel for the plaintiff relied on the indemnification provision contained in section 38 of TSCC 1930's Declaration to justify adding both the cost of the insurance deductible it paid in relation to the damage caused by the tenant in unit 29, and two initial legal bills incurred in seeking to have the defendant pay for the deductible. These legal costs were incurred before arranging for a lien on unit 29, and are reflected in two invoices which were included in the original motion materials ($1070.85 for invoice 31987 and $1186.08 for invoice 32215).
9Plaintiff's counsel no longer seeks to add the costs of this action, and interest related to those costs, directly to in the "common expenses" payable by unit 29. Instead he relies on s.85(1) of the Condominium Act, which suggests that legal expenses are different from common expenses, although ultimately recoverable in a similar manner. Section 85(1) reads:
If an owner defaults in the obligation to contribute to the common expense payable for the owner's unit, the corporation has a lien against the owner's unit and its appurtenant common interest for the unpaid amount together with all interest owing and all reasonable legal costs and reasonable expenses incurred by the corporation in connection with the collection or attempted collection of the unpaid amount.
10Plaintiff's counsel removed the legal costs from the amount it claims unit 29 owes in advance of the September 10 hearing. However, plaintiff's counsel did not remove the associated interest charges, which have been compounding, together with the interest on the balance owed in relation to common expenses. Counsel for the plaintiff agreed that these interest charges related to legal fees and costs, and should be removed from common expenses. Counsel for the plaintiff further agreed that it would not charge interest on the legal fees incurred prior to registering the lien (the $1070.85 and $1186.08 charges). Counsel for the plaintiff asked for time to remove the interest charges associated with all legal costs and fees, and re-calculate the balance owed by unit 29, separate from the legal costs associated with recovering the balance.
11Plaintiff's counsel also relied on s.38 of the indemnity provision of the Declaration to add the two legal invoices ($1070.85 for invoice 31987 and $1186.08 for invoice 32215) incurred in relation to the deductible to common expenses. However, plaintiff's counsel could not point to any case law to support this interpretation of s.38. Nor could plaintiff's counsel point to any other provision in the Declaration to justify adding these legal invoices to common expenses.
12As noted, there is no issue that the $5000 deductible was properly added to the common expenses for unit 29. Counsel for the defendant also acknowledged that money was owed in relation to unit 29, but complained that it was impossible to figure out exactly how much, as the ledger provided by the plaintiff in support of its motion included the plaintiff's legal costs in relation to this action, which were simply added to the outstanding balance, for which interest was charged monthly, compounding.
13Shortly after the oral hearing, counsel for the plaintiff provided a new chart explaining what unit 29 owes when the legal costs relating to this action are removed, and all the interest charged in relation to all legal costs and fees is also removed. The new chart provided by counsel for the plaintiff also removes the two legal charges which preceded the registration of the lien (the $1070.85 and $1186.08 charges). The new chart shows that as of August 31, 2020, $4883.33 is owed in relation to unit 29. A copy of this chart is attached to this endorsement as Appendix A.
Summary Judgment
14I am mindful of the principles applicable to a motion for summary judgment, set out in cases like Hryniak v. Mauldin, 2014 SCC 7 and Butera v. Chown, Cairns LLP, 2017 ONCA 783, and I am satisfied that there is no genuine issue requiring a trial with respect to the claim being made by TSCC 1930. More specifically, I am satisfied that, in the circumstances of this case, the summary judgment process (1) allows me to make the necessary findings of fact, (2) apply the law to the facts, and (3) is a more proportionate, more expeditious and less expensive means to achieve a just result than a full trial.
15The material before me, including the additional material filed by both sides in relation to the September 10, 2020 hearing, include TSCC 1930's ledger for unit 29, and its parking spot and storage unit, from June 2017 when unit 29 began to run a negative balance, to the present time. This ledger reflects the payments made by the Ababios, which were subtracted from the outstanding balance as they were made. It is possible to remove the legal charges from that balance. It is also possible to figure out what interest resulted from the legal charges (albeit tricky to do manually with compounding interest), and remove those charges as well. Fortunately, as noted above, counsel for the plaintiff provided a revised calculation in the form of a chart showing what unit 29 owed apart from legal costs and interest in relation to legal costs, which I attach to this endorsement as Appendix A. I accept this revised calculation as accurately showing what is owed in relation to unit 29 when all legal costs and interest charged on legal costs are removed. As noted, the revised figure is $4883.33.
16In the circumstances, I satisfied that $4883.33 is owed to TSCC 1930 in relation to unit 29. I am also satisfied that this debt remains outstanding. A trial is not required to determine this issue.
Default Judgment
17With respect to default judgment, Francis Ababio and Peter Ababio have provided no defence. In considering whether it is appropriate to order default judgement, I am mindful of the principles set out in Elekta Ltd. v. Rodkin, 2012 ONSC 2062, 2012 ONSC 2052, [2012] O.J. NO.1439, at paras. 9-13, including that I must consider whether the materials establish that the plaintiff is entitled to the quantum of damages requested. For the reasons set out above, I am satisfied that $4883.33 is owed to TSCC 1930 in relation to unit 29.
18Finally I am satisfied that the lien securing the debt owed in relation to unit 29 was properly registered. There is no dispute about this. Accordingly, a trial is not required for TSCC 1930 to enforce the lien and obtain vacant possession of suite 29 if the debt of $4883.33 is not satisfied.
19For these reasons, the motion for summary judgment and default judgment is granted.
Costs
20It remains to decide costs. Counsel for the plaintiff presented me with a costs outline totaling $39,535.53, based on an actual rate. Counsel explained that the number was high because the defendants were not cooperative, initially refusing to accept service, and then dragging the proceedings out. The plaintiff urged me to award the full amount of costs, otherwise innocent unit holders, who cooperate and pay their common expenses on time, will have to bear the costs of this action.
21Counsel for the defendant, who was retained in the summer of 2020, presented me with a costs outline totaling $4,054.50 based on a substantial indemnity rate. Counsel for the defendant points out that I dismissed the plaintiff's motion in August, 2020 because the materials did not permit me to determine what was owed in relation to unit 29.
22It is well-established that the fixing of costs is discretionary under s.131 of the Courts of Justice Act, R.S.O. 1990 c. C-43. This discretion is generally to be exercised in accordance with the factors listed in Rule 57.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. These factors include: the principle of indemnity for the successful party, the amount of costs an unsuccessful party could reasonably expect to pay, the amount claimed and recovered, the apportionment of liability, the complexity of the proceedings, the importance of the issues, conduct that tends to shorten or lengthen the proceedings, and whether any step or conduct was improper. Ultimately, in fixing costs, I must assess what is “fair and reasonable” in the circumstances, bearing in mind that compensation of the successful party must be balanced with the goal of fostering access to justice: Boucher v. Public Accountants Council (Ontario), 2004 4579 (QC CQ), 2004 4579, 71 O.R. (3d) 291 (C.A.) at paras.26 and 37.
23It is also well-established that elevated costs are only warranted in two broad circumstances: first, where there is an offer to settle under Rule 49.10 of the Rules of Civil Procedure; second, where there is clear finding, based on evidence, of reprehensible, scandalous or outrageous conduct on the part of the party against which the cost award is being made: Davis v. Clarington (Municipality), 2009 ONCA 72.
24Arguably a third category exists in the context of legal costs incurred by a condominium corporation in connection with unpaid common expenses payable for an owner's unit. As noted above, section 85(1) of the Condominium Act provides that "all reasonable legal costs and reasonable expenses incurred by the corporation in connection with the collection or attempted collection of the unpaid amount" may be added to the lien. Courts have been mindful that legal costs in this context should not be imposed on other innocent owners who pay their share of common expenses, and have tended to award substantial indemnity costs in this context. But the costs must still be reasonable in all the circumstances, including the factors set out in Rule 57: York Condominium Corp. No. 482 v. Christiansen, [2003] O.J. No. 1371;
25In this case, TSCC 1930 succeeded on its motion and is entitled to costs, but I do not think the amount claimed is fair and reasonable in the circumstances. This is a routine action, relating to a relatively small amount of money. Similarly, taking steps to arrange for substituted service, while adding to the cost of proceedings, is also a routine proceeding, and is not complex or difficult in the context of the owners of a condominium unit. Throughout the litigation the defendants have acknowledged they owed money in relation to unit 29, though at various points they have disputed how much and in relation to what. They have also continued to make payments. In fairness to the defendants, the amount owed in relation to unit 29, apart from the legal costs and fees in relation to this action, has not been clear in the plaintiff's material. For the August in writing proceeding, for example, the amount claimed by the plaintiff included the full amount of the legal costs of this action, plus interest on those legal costs, compounding together with the interest related to common expenses, without breaking these amounts out, or explaining why the legal costs were reasonable. As noted above, for this hearing, counsel for the plaintiff removed the legal costs of this action from the amount it claimed was owed. But interest charged in relation to the legal costs of this action remained part of the amount requested until counsel for the plaintiff agreed to remove the interest charges associated with legal costs and fees in the course of oral argument. Counsel for the plaintiff then sent the revised calculation, referred to above and attached as Appendix A, removing all legal fees and the interest charged on the legal costs and fees. In these circumstances, the defendants cannot be criticized for "dragging things out". Only through litigation did they obtain a transparent accounting of what they owed in relation to unit 29.
26In all the circumstances, I fix the plaintiff's costs for the action at $10,000.
Justice Gillian Roberts
Date: September 14, 2020
Appendix A
Appendix A: Plaintiff's re-calculation of amount owing apart from legal costs and related interest
Date
Explanation
Other Charges
Interest
Payments
Balance on Account
Interest Rate Applied
2017-06-30
Chargeback - Invoice #17-009 U.S.R.L
5,000.00
5,000.00
2017-06-30
Chargeback - Invoice # 158374 SMS
118.65
5,118.65
2017-07-01
Unpaid Common Expenses
386.32
5,504.97
2017-07-07
NSF Charge
25.00
5,529.97
2017-07-31
Interest
82.95
5,612.92
18.00%
2017-08-01
Unpaid Common Expenses
386.32
5,999.24
2017-08-04
NSF Charge
25.00
6,024.24
2017-08-31
Interest
90.36
6,114.60
18.00%
2017-09-01
Unpaid Common Expenses
386.32
6,500.92
2017-09-07
NSF Charge
25.00
6,525.92
2017-09-18
Collection Charge - Form 14
169.50
6,695.42
2017-09-30
Interest
100.43
6,795.85
18.00%
2017-10-31
Interest
101.94
6,897.79
18.00%
2017-11-01
Unpaid Common Expenses
386.32
7,284.11
2017-11-07
NSF Charge
25.00
7,309.11
2017-11-30
Interest
109.64
7,418.75
18.00%
2018-01-31
Interest
111.28
7,530.03
18.00%
2018-02-28
Interest
112.95
7,642.98
18.00%
2018-03-01
Unpaid Common Expenses
386.32
8,029.30
2018-03-06
NSF Charge
25.00
8,054.30
2018-03-30
Interest
120.81
8,175.12
18.00%
2018-04-30
Interest
122.63
8,297.74
18.00%
2018-05-01
Unpaid Common Expenses
405.62
8,703.36
18.00%
2018-05-04
NSF Charge
25.00
8,728.36
2018-05-31
Interest
130.93
8,859.29
18.00%
2018-06-29
Interest
132.89
8,992.18
18.00%
2018-07-31
Interest
134.88
9,127.06
18.00%
2018-09-30
Interest
4.64
9,131.70
0.61%
2018-10-31
Interest
4.64
9,136.34
0.61%
2018-11-30
Interest
4.64
9,140.99
0.61%
2018-12-01
Unpaid Common Expenses
405.62
9,546.61
2018-12-06
NSF Charge
25.00
9,571.61
2019-01-31
Interest
4.87
9,576.47
0.61%
2019-02-28
Interest
4.87
9,581.34
0.61%
2019-03-31
Interest
4.87
9,586.21
0.61%
2019-04-30
Interest
4.87
9,591.08
0.61%
2019-05-31
Interest
4.88
9,595.96
0.61%
2019-06-30
Interest
4.88
9,600.84
0.61%
2019-07-31
Interest
4.88
9,605.72
0.61%
2019-08-08
Unpaid Common Expenses
418.39
10,024.11
2019-08-08
NSF Charge
25.00
10,049.11
2019-08-31
Interest
5.11
10,054.21
0.61%
2019-09-01
Unpaid Common Expenses
418.39
10,472.60
2019-09-06
NSF Charge
25.00
10,497.60
2019-09-30
Interest
5.34
10,502.94
0.61%
2019-10-31
Interest
87.52
10,590.47
10.00%
2019-11-06
Unpaid Common Expenses
418.39
11,008.86
2019-11-06
NSF Charge
25.00
11,033.86
2019-11-30
Interest
91.95
11,125.80
10.00%
2019-12-31
Interest
92.72
11,218.52
10.00%
2020-01-07
chk# 14816 Partial Payment
855.00
10,363.52
2019-01-31
Interest
86.36
10,449.88
10.00%
2020-02-29
Interest
87.08
10,536.96
10.00%
2020-03-31
Interest
87.81
10,624.77
10.00%
2020-04-30
Interest
88.54
10,713.31
10.00%
2020-05-31
Interest
89.28
10,802.59
10.00%
2020-06-06
Unpaid Common Expenses
424.27
11,226.86
2020-06-06
NSF Charge
25.00
11,251.86
2020-06-30
Interest
93.77
11,345.62
10.00%
2020-07-06
chk# 15480 Partial Payment
3,454.00
7,891.62
2020-07-21
chk# 015524 Partial Payment
3,088.68
4,802.94
2020-07-31
Interest
40.02
4,842.97
10.00%
2020-08-31
Interest
40.36
4,883.33
10.00%
TOTALS:
9,985.43
2,295.58
7,397.68