Toronto Standard Condominium Corporation No. 1466 v. Weinstein, 2021 ONSC 3526

COURT FILE NO.: CV-20-00636863 & CV-20-00651703

DATE: 20210513

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: Toronto Standard condominium corporation no. 1466, Applicant/Respondent by Counter-Application

AND: stuart weinstein, Respondent/Applicant by Counter-Application

BEFORE: Davies J.

COUNSEL: Joseph Ryan and Francesco Deo, for the Applicant/Respondent by Counter-Application

Stuart Weinstein, acting in person

HEARD at Toronto: in writing

REASONS FOR DECISION ON COSTS

A. Overview

[1] Stuart Weinstein owns and lives in a unit in the building belonging to Toronto Standard Condominium Corporation No. 1466. The Condominium was constructed using Kitec pipes, which are known to be defective. The Condominium passed a resolution requiring unit owners to replace the Kitec pipes in their units. Mr. Weinstein refused to replace the pipes in his unit and refused to allow the Condominium’s contractors into his unit to replace the pipes.

[2] The Condominium commenced mediation proceedings in an effort to secure Mr. Weinstein’s cooperation to replace the pipes. Mr. Weinstein did not participate in the mediation. The Condominium then commenced arbitration proceedings to compel Mr. Weinstein to replace the pipes in his unit. On October 10, 2019, the Arbitrator issued an award ordering Mr. Weinstein to permit the Condominium to replace the Kitec pipes in his unit and to pay $60,559.53 in costs. Mr. Weinstein refused to comply with the Arbitrator’s award. He continued to deny the Condominium access to his unit to replace the pipes and did not pay the costs award. On December 24, 2019, the Condominium registered a lien on Mr. Weinstein’s unit for the unpaid costs award.

[3] The Condominium brought an application seeking a judgment enforcing the arbitral award. Mr. Weinstein brought a separate application for an order setting aside the arbitral award or, in the alternative, removing the lien registered on his property. I heard both applications together. On February 22, 2021, I dismissed Mr. Weinstein’s application to set aside the arbitral award and granted the Condominium’s application for judgment enforcing the arbitral award. I also found that lien registered on Mr. Weinstein’s property is valid.

[4] The Condominium now seeks costs on a full indemnity basis in the amount of $71,120.97. The Condominium argues it has a right to full indemnity costs based on its governing documents. The Condominium also argues that as a matter of policy, the other, innocent unit owners should not have to bear any of the legal costs of pursuing Mr. Weinstein. Finally, the Condominium argues that Mr. Weinstein’s conduct during the proceedings has been vexatious and abusive and is, therefore, deserving of sanction by way of an enhanced cost order.

[5] Mr. Weinstein argues that he should not be ordered to pay any costs. Mr. Weinstein continues to maintain that there is nothing wrong with the Kitec pipes and there is no need for him to replace them. He also continues to maintain that the lien on his property is invalid, despite my ruling to the contrary. He argues that the Condominium was only ‘successful’ on its application because it deceived and defrauded the Court. He also argues that the costs claimed by the Condominium are unconscionable.

[6] These applications were not about the propriety of the Board’s decision to require unit owners to replace the Kitec pipes or the validity of the legal notice issued to Mr. Weinstein back in 2018 that the Condominium would replace the pipes in his unit because he had failed to do so on his own. Those decisions were made years ago and were not subject to judicial review at the time, or now. The issues before me were whether (a) the arbitral award should be set aside or enforced, and (b) the lien registered on Mr. Weinstein’s property should be removed. The Condominium was successful on both issues and is entitled to costs. The issue now is whether costs should be awarded on a full indemnity basis.

[7] The Condominium relies on its Declaration and By-Law to justify full indemnity costs. Article V of the Condominium’s Declaration says that the Condominium shall complete any required repairs that a unit owner fails to complete and the unit owner shall reimburse the Condominium “in full for the cost of such repairs including any legal fees and collection fees incurred” by the Condominium.

[8] Article 14.01 of the Condominium’s By-Law says that each unit owner shall indemnify the Condominium against any cost incurred by the Condominium as a result of the unit owner’s act or omission that breach the declaration, by-laws or rules. Legal fees incurred by the Condominium in relation to any such are expressly listed as recoverable under Article 14. Any costs covered by the indemnification provision in Article 14 are deemed to be common expenses payable by the owner, which can be recovered in accordance with the Condominium’s governing documents and the Condominium Act, 1998, S.O. 1998, c. 19. Section 85 of the Act allows a Condominium to register a lien against a unit if the owner defaults on the common expenses.

[9] The Condominium’s argument seems to be that it is entitled to treat all its legal fees on this application as a common expense payable by Mr. Weinstein and would be entitled to register a further lien on Mr. Weinstein’s unit for its full legal fees if Mr. Weinstein defaults on his common expenses, so it only makes sense for me to order Mr. Weinstein to pay costs on a full indemnity basis. In my view, this argument conflates the Court’s obligation to determine what costs are reasonable with the Condominium’s authority to recover its costs beyond those ordered by the Court. The availability of another mechanism for the Condominium to recover legal costs (in this case under s. 85 of the Condominium Act) does not derogate from the Court’s jurisdiction and obligation to determine the appropriate award of costs as between the parties: Metropolitan Toronto Condominium Corp No. 1385 v. Skyline Executive Properties Inc., (2005) 2005 CanLII 13778 (ON CA), 253 D.L.R. (4th) 656, at para. 50.

[10] The Condominium also argues that it would be inequitable for the unit owners who have replaced their pipes to bear any of the legal costs of pursuing a judgment to enforce the arbitral award requiring Mr. Weinstein to cooperate. The Condominium argues that if Mr. Weinstein is not required to pay the full costs of this litigation, the other unit owners would have to cover the remaining legal fees through their common expenses, which would be unfair: Chan v. Toronto Standard Condominium Corporation No. 1834, 2011 ONSC 108, at paras. 36-38. This policy argument is compelling but is fully addressed by the Condominium’s Declaration, By-Law and the Condominium Act, which create a mechanism for recovering legal costs as common expenses.

[11] In my view, there is an equally compelling policy argument against routinely granting full indemnity costs in condominium cases. The risk of an adverse cost order can provide a powerful incentive for parties to take reasonable positions and pursue their case efficiently. Unreasonable positions and reprehensible behaviour can be condoned and penalized by the Court through enhanced cost awards. If condominium corporations are granted full indemnity costs as a matter of course, the Court loses its ability to discourage unreasonable, abusive conduct in these cases through adverse costs awards.

[12] In my view, the ordinary principles for assessing costs between the parties should apply in this case: Skyline, at para. 50. The issue, therefore, is whether there are circumstances in this case that justify an enhanced costs order. Ordinarily, costs are awarded to the successful party on a partial indemnity scale. Costs can be awarded on a substantial or full indemnity basis if the conduct of a party is so reprehensible, scandalous or outrageous to be worthy of sanction by the Court through an enhanced cost award: Young v. Young, 1993 CanLII 34 (SCC), [1993] 4 S.C.R. 3, at para. 251. For example, if one party makes unproven allegations of misconduct that impugn the integrity of opposing counsel or makes unsubstantiated allegations of dishonesty or fraud against another party, that might justify an enhanced costs award. Similarly, a costs award on a higher scale might be justified if one party brought proceedings wholly devoid of merit or unnecessarily increased the costs of the litigating: see Standard Life Assurance Co. v. Elliott (2007) 86 O.R. (3d) 221, 2007 CanLII 18579 (Ont. S.C.), at para. 9; Best v. Ranking, 2015 ONSC 6269, at para. 142. In my view, Mr. Weinstein’s conduct both leading up to and during the litigation warrants sanction by the Court in the form of an enhanced costs award.

[13] Mr. Weinstein refused to comply with the Condominium’s resolution requiring him to replace his pipes. He also refused to allow the Condominium’s contractors to complete the work when he refused to do it himself. Mr. Weinstein then refused to participate in the mediation, a process designed to avoid litigation. While Mr. Weinstein participated in the arbitration to the extent that he objected to the jurisdiction of the arbitrator, once the arbitrator dismissed his objections and ordered the arbitration would proceed, Mr. Weinstein refused to participate further. Mr. Weinstein then refused to comply with the arbitral award, which lead to the Condominium’s application for a judgment to enforce the arbitral award.

[14] I appreciate that Mr. Weinstein vehemently disagrees with the Condominium’s decision to replace the Kitec pipes. He did his own research and concluded that Kitec pipes are not faulty and do not pose a risk in his unit. He also learned that other condominium corporations in Toronto have taken different, less costly remedial steps to deal with the potential risks posed by Kitec pipes. Mr. Weinstein’s personal views on the risks associated with Kitec pipes are not relevant at this point in time. Relying on two expert reports, the Condominium passed a resolution requiring unit owners to replace the Kitec pipes in their units. The time has long passed for Mr. Weinstein to object to the Condominium’s resolution. Everyone who move into a condominium, including Mr. Weinstein, are required to comply by the rules of the community they have joined, including resolutions passed by the Board: Toronto Standard Condominium Corp. No. 2395 v. Wong, 2016 ONSC 8000 at para. 36. Nonetheless, Mr. Weinstein persistently refuses to cooperate with the Condominium’s efforts to give effect to its resolution. Mr. Weinstein’s position that he should not be required to replace the pipes in his unit is wholly unreasonably. His obstinance throughout this entire process has significantly and unnecessarily increased the legal costs to the Condominium.

[15] Mr. Weinstein’s conduct during these proceedings is also worthy of sanction for several reasons. First, Mr. Weinstein made numerous unfounded allegations against the Condominium and its counsel. For example, he accused the Condominium and counsel of colluding with the Arbitrator, deliberately misleading the Court and intentionally using the mediation and arbitration process to “steal” his home. He also alleges that the Condominium and its counsel deliberately exaggerated the risk posed by the Kitec pipes and forced the unit owners to do unnecessary repairs in order to increase counsel’s profits. Mr. Weinstein failed to prove any of his allegations of fraud or misconduct against either the Condominium or counsel. Nonetheless, he repeated many of these same, unsubstantiated allegations in his cost submissions.

[16] Second, Mr. Weinstein abused the Court’s process by making repeated requests to schedule urgent motions, often without notice to the Condominium, to remove the lien on his property. On May 19, 2020, Justice Myers refused to schedule Mr. Weinstein’s motion to set aside the lien. At that time, court operations were limited in response to the COVID-19 pandemic and only short civil motions and urgent motions were being scheduled. Justice Myers held that the matter was too complex to be dealt with as a short motion. Justice Myers also held that if there was some urgency to the matter, Mr. Weinstein could request a motion to resolve only the urgent issue(s). On May 20, 2020, Mr. Weinstein emailed the court asking for an urgent motion to remove the lien on his property. Mr. Weinstein did not copy counsel for the Condominium on his correspondence to the Court. On May 25, 2020, Justice Schabas convened a case conference to determine whether any issue was truly urgent. The Condominium undertook not to enforce the lien on Mr. Weinstein’s property while the application was outstanding. On the basis of that undertaking, Justice Schabas ruled that Mr. Weinstein’s request to schedule a motion was not urgent.

[17] Despite Justice Schabas’s order and the Condominium’s undertaking, on June 2, 2020, Mr. Weinstein asked that his motion to set aside the lien be heard on an urgent basis in writing. Justice Myers held that the motion was too complex to be heard in writing. Justice Myers ruled that Mr. Weinstein could renew his application to set aside the lien when the Court started scheduling long motions. Justice Myers added, “Until such time, Mr. Weinstein is to stop submitting the same proposed proceedings or similar ones.”

[18] Despite Justice Myers’s clear decision, on August 18, 2020, Mr. Weinstein submitted another request for an urgent motion date. On August 31, 2020, Justice Schabas convened another case conference and again ruled that Mr. Weinstein’s request was not urgent. Justice Schabas scheduled a date for the hearing on a non-urgent basis and set a timetable for the exchange of materials.

[19] On August 31, 2020, Mr. Weinstein submitted a motion asking that the Condominium’s application to enforce the arbitral award be dismissed under rule 2.1 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. Justice Myers dismissed his motion on September 2, 2020.

[20] On September 7, 2020, Mr. Weinstein submitted another request for an urgent hearing to set aside the lien. Justice Myers again dismissed Mr. Weinstein’s request.

[21] On September 8, 2020, Mr. Weinstein requested another urgent motion to vary the timetable set by Justice Schabas on August 31, 2020. Justice Myers dismissed Mr. Weinstein’s request because he failed to follow the proper procedure that had been explained to him.

[22] Mr. Weinstein was told on June 2, 2020 to stop submitting the same or similar requests for a hearing on his motion to set aside the lien. Nonetheless, he unilaterally persisted. Mr. Weinstein’s repeated requests for an urgent hearing date to set aside the lien that the Condominium had undertaken not to enforce unnecessarily added to the complexity and cost of this application. The Condominium was required to respond to each of Mr. Weinstein’s request, including attending several case conferences.

[23] Third, despite the directions given by Justices Myers and Schabas, Mr. Weinstein repeatedly failed to comply with the Rules of Civil Procedure and with their case management orders. On more than one occasion, Mr. Weinstein’s conduct has been found to be abusive. In his first endorsement on September 8, 2020, Justice Myers wrote as follows:

Mr. Weinstein has persisted in abusive conduct despite a clear order and warning. He should not test the Court’s resolve to enforce its orders. Mr. Weinstein is to stop emailing Judges and staff.

[24] Justice Myers issued a second endorsement on September 8, 2020 in which he wrote the following:

Mr. Weinstein has emailed communication to me in violation of Rule 1.09 of the Rules of Civil Procedure. He has ignored my explicit direction to copy the Applicant on all communication to the court as well.

Justice Myers also noted that Mr. Weinstein had engaged in an improper “email campaign to numerous judges and staff.” Ultimately, Justice Myers found that Mr. Weinstein’s repeated demands on the Court while ignoring the Court’s process and direction “have become abusive.”

[25] In his cost submissions, Mr. Weinstein apologized for his behavior. He argues his conduct during the proceedings was “eager”, “overzealous” and “passionate” but not abusive. I agree with Justice Myers that Mr. Weinstein’s conduct during these proceedings was indeed abusive. He repeatedly ignored clear direction from the Court and persisted in a pattern of abusive communications with the Court. He repeatedly ignored the Rules of Civil Procedure even after they were explained to him. He repeatedly violated orders and directions given by the case managements judges. This is precisely the sort of misconduct that the risk of an enhanced cost award is designed to discourage.

[26] Mr. Weinstein’s unreasonable, abusive and persistent conduct both before and during these proceedings is worthy of sanction in the form of an enhanced cost order. I find that this is one of those rare cases where a full indemnity cost award is appropriate.

[27] I note that the Condominium served a Rule 49 offer to settle on Mr. Weinstein on December 8, 2020. The Condominium offered to have its application dismissed if Mr. Weinstein agreed to comply with terms of the arbitral order dealing with the replacement of the Kitec pipes in his unit and if he agreed to pay $35,000 of the $60,000 in costs ordered by the Arbitrator plus $40,000 in costs on the Application. The Condominium argues that it obtained a more favourable result on the application than its offer to settle and is, therefore, entitled to costs on a higher scale from the date of the offer. Given my finding that Mr. Weinstein’s conduct justifies full indemnity costs in this matter, I need not deal with the effect of the Condominium’s offer to settle.

[28] The final issue is whether the hours claimed by counsel are reasonable. Mr. Weinstein argues that the costs claimed are unconscionable. Counsel for the Condominium claims they spent 161.1 hours on this matter. While the hours claimed might seem high for a half-day application, they include all the additional time consumed by Mr. Weinstein’s repeated requests for an urgent hearing detailed above. Mr. Weinstein also filed a very large record in support of his application. In reality, this proceeding involved two discrete applications with different factual and legal issues: one to set aside the arbitral award under the Arbitration Act and one for an order enforcing the arbitral award. In all the circumstances, I find that the hours spent by counsel for the Condominium are reasonable. I am also satisfied that the hourly rate claimed by counsel are reasonable given their years of experience.

[29] Mr. Weinstein is ordered to pay $71,120.97 in costs to the Condominium.

Davies J.

Date: May 13, 2021