Court File and Parties
COURT FILE NO.: 18-77930
DATE: 20200131
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: SADIYA ALI MOHAMOUD, Applicant
AND
CARLETON CONDOMINIUM CORPORATION NO. 25, Respondent
BEFORE: Madam Justice Heather J. Williams
COUNSEL: Rodrigue Escayola and David Plotkin, Counsel for the Applicant
Melinda Andrews, for the Respondent
HEARD: In writing
costs endorsement
Background
[1] The applicant, Sadiya Ali Mohamoud, is a unit owner in the respondent condominium corporation, Carleton Condominium Corporation No. 25.
[2] In her application, Ms. Mohamoud had alleged that CCC25 had failed to meet its statutory obligation to maintain and repair the condominium’s common elements and that it had acted toward her in a manner that was oppressive or unfairly prejudicial or that unfairly disregarded her interests.
[3] Ms. Mohamoud’s allegations against CCC25 related to a noise complaint.
[4] I found that CCC25 had acted reasonably and I dismissed Ms. Mohamoud’s application.
The Parties’ Positions
[5] CCC25 is asking for full indemnity costs of $89,580.36. In support of its request for costs on a full indemnity scale, CCC25 relies on s. 134(5) of the Condominium Act and an indemnity provision in its declaration.
[6] Ms. Mohamoud argues that she had no option but to retain counsel and to start an application in order to force CCC25 to address her noise complaint.
[7] Ms. Mohamoud argues that CCC25 has no basis to request costs on a full indemnity scale. She also argues that CCC25 should be penalized for refusing to produce its dockets.
[8] Ms. Mohamoud argues that CCC25’s claimed costs should be reduced and that some of the costs she incurred should be set off against the costs claimed by CCC25.
[9] Ms. Mohamoud says that an appropriate award of costs to CCC25 would be $14,461.00.
Scale of Costs
[10] I do not accept CCC25’s argument that it is entitled, under s. 134(5) of the Condominium Act, to full indemnity costs added to Ms. Mohamoud’s common expenses.
[11] CCC25 argues that it is entitled to rely on s. 134(5) because Ms. Mohamoud’s application was commenced, in part, under s. 134 of the Act. CCC25 also argues that the costs sanctions in s. 134(5) were intended to encourage parties involved in condominium-related disputes to resolve their differences without litigation.
[12] Section 134(5) reads as follows:
If a corporation obtains an award for 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 specific a time for payment by the owner of the unit.
[13] Ontario’s Court of Appeal considered this section of the Condominium Act in Metropolitan Toronto Condominium Corporation No. 1385 v. Skyline Executive Properties Inc., 2005 13778 (ON CA), [2005] O.J. No. 1604 (C.A.) At para. 34, Doherty J.A. noted that s. 134(1) allows for an application for an order enforcing compliance with the Condominium Act, a condominium’s declaration or the rules of the condominium. The order may be requested by the condominium corporation or an owner, occupier or tenant of a unit. If the court makes a compliance order, it may then direct, under s. 134(3)(b)(ii), that the offending party pay “the costs incurred by the applicant in obtaining the order.” At para. 35 of the case, Doherty J.A. observed that s. 134(5) applies only to condominium corporations “and only where the condominium corporation has obtained an award of damages or costs under s. 134(3).”
[14] The available awards for damages and costs under s. 134(3) are, respectively, awards for “the damages incurred by the applicant as a result of the acts of non-compliance” and “the costs incurred by the applicant in obtaining the order.”
[15] In the case before me, CCC25 was a respondent, not an applicant. It did not obtain an award of damages or costs under s. 134(3). The costs provisions of s. 134(5) do not, therefore, apply.
[16] I also do not accept CCC25’s argument that an indemnification clause in its declaration obliges Ms. Mohamoud to pay full indemnity costs which would be deemed to be additional contributions toward common expenses. I do not read the clause as having any application to this situation.
[17] For these reasons, I reject CCC25’s request for full indemnity costs.
[18] If it were not for an offer to settle CCC25 made on August 29, 2019, I would award CCC25 costs on a partial indemnity scale; CCC25’s August 29, 2019 offer is a significant factor in my assessment of the appropriate scale of costs in this case.
[19] In July 2019, CCC25 replaced fans above Ms. Mohamoud’s unit. Although Ms. Mohamoud said that this was not a complete fix, she said that as a result of the replacement of these fans, the noise situation in her unit had become tolerable.
[20] In August and September 2019, Ms. Mohamoud’s lawyer made offers to settle the application that would have required CCC25 to pay Ms. Mohamoud general damages and a percentage of her legal costs.
[21] On August 29, 2019, CCC25 gave Ms. Mohamoud the opportunity to dismiss her application on a without-costs basis. CCC25’s offer was in writing. It remained open until the commencement of the hearing of the application.
[22] Ms. Mohamoud could have accepted CCC25’s offer right up until the hearing began. All the evidence and arguments that were available to the court on the application were available to Ms. Mohamoud at a time when the offer was open for acceptance.
[23] I cannot accept Ms. Mohamoud’s argument that the offer was not capable of acceptance because she had incurred significant costs in order to force CCC25 to address her noise complaint. Even if Ms. Mohamoud believed that CCC25 would not have continued to take the complaint seriously if she had not retained counsel, when CCC25 made its August 29, 2019 offer, Ms. Mohamoud should have taken a good, hard look at whether starting the application had been necessary and the likelihood that the application would be successful. If Ms. Mohamoud was in debt to her lawyers and had launched an application that she was unlikely to win, the answer was not to close her eyes and forge ahead.
[24] I note also that after Ms. Mohamoud retained counsel and before she began her application, CCC25 disclosed its complete file, so that Ms. Mohamoud’s lawyers would have an opportunity to review and assess the efforts CCC25 had made to resolve Ms. Mohamoud’s noise complaint before they were retained. This level of disclosure typically would not have been available to an applicant and her lawyers before they made the decision to start a proceeding.
[25] CCC25 spent approximately $50,000.00 to investigate and address Ms. Mohamoud’s noise complaint, even though it struggled to gather objective evidence of a consistent and identifiable problem. By August 29, 2019, CCC25’s legal fees for defending Ms. Mohamoud’s application were close to $40,000.00.
[26] I consider CCC25’s August 29, 2019 without-costs dismissal offer to have been generous. By that time, Ms. Mohamoud had accepted CCC25’s solution to the noise problem and she and her lawyers had had an opportunity to consider the steps CCC25 had taken to solve the problem for her. Ms. Mohamoud was one of many unit owners whose interests CCC25 was required to balance. By failing to accept the litigation off-ramp CCC25 had offered, Ms. Mohamoud forced both parties to continue their march toward the hearing date, while the legal fees on both sides continued to mount.
[27] Ms. Mohamoud was represented by lawyers. I infer that she was made aware of CCC25’s August 29, 2019 offer and the risks of rejecting it, including the risk of a costs award against her.
[28] Rule 49.13 and Rule 57.01(1) of the Rules of Civil Procedure invite me to consider any written offers to settle in exercising my discretion with respect to costs. I conclude that it would be appropriate to award CCC25 costs on a partial indemnity basis to the date of its August 29, 2019 offer and on a substantial indemnity basis after that date.
Amount of Costs
[29] Ms. Mohamoud argued that any costs awarded in favour of CCC25 should be discounted because of the refusal of CCC25’s lawyers to disclose their dockets. CCC25’s lawyers took the position that their dockets were protected by lawyer-client privilege. I see no reason why CCC25 could not have produced redacted dockets and, where appropriate, substituted generic descriptions of tasks to make redacted docket entries meaningful.
[30] That said, I would be more concerned by CCC25’s refusal to produce dockets if Ms. Mohamoud’s legal fees in this application had not exceeded the claimed fees of CCC25.
[31] The bills of costs filed at the hearing of the application showed that Ms. Mohamoud’s full indemnity legal fees (before HST and disbursements) were $66,353.50. CCC25’s claimed full indemnity fees were $55,204.20. (I specify “claimed” because CCC25’s lawyers applied a discount of $15,835.80 to their actual full indemnity fees of $71,040.00.)
[32] I have considered the factors relevant to the exercise of my discretion in respect of costs set out in Rule 57.01(1) of the Rules of Civil Procedure. The hourly rates and hours of the lawyers who worked on behalf of CCC25 appear reasonable. The proceeding was of moderate complexity. It was important to both parties. With respect to whether either of the parties acted unreasonably, I accept CCC25’s observation about the expert’s opinion Ms. Mohamoud obtained but did not disclose that was not supportive of her position. Ms. Mohamoud was under no obligation to disclose the opinion, but having obtained such an opinion herself, it was unreasonable for her then to have been critical of CCC25 when it had difficulty substantiating her complaints. I have already discussed in some detail, the written offers to settle.
[33] I am mindful of Ms. Mohamoud’s evidence that she does not work and that her condominium unit is her only significant asset.
[34] I take no joy in making a costs order against Ms. Mohamoud. However, she was not the only party affected by her decision to begin and then continue to pursue her application. I see no principled approach to the exercise of my discretion in respect of costs in this case that does not involve an award against her.
[35] CCC25’s partial indemnity fees to August 29, 2019 were $23,969.78, inclusive of HST. Its substantial indemnity fees after that date were $20,665.99, inclusive of HST. Disbursements, inclusive of HST totaled $27,199.61. The total is just over $70,000.00.
Conclusion
[36] Ms. Mohamoud shall pay CCC25 costs in the all-inclusive amount of $70,000.00. I consider this to be a fair and reasonable amount for her to pay in the circumstances of this case.
Date: January 31, 2020
COURT FILE NO.: 18-77930
DATE: 20200131
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: SADIYA ALI MOHAMOUD, Applicant
AND
CARLETON CONDOMINIUM CORPORATION NO. 25, Respondent
BEFORE: Madam Justice H.J. Williams
COUNSEL: Rodrigue Escayola and David Plotkin, Counsel for the Applicant
Melinda Andrews, Counsel for the Respondent
Costs ENDORSEMENT
Madam Justice H.J. Williams
Released: January 31, 2020