COURT FILE NO. CV-18-78035
DATE: 20220104
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Ottawa-Carleton Standard Condominium Corporation No. 671, Plaintiff
AND
Anthony Marcus Friend and Henriette Suzanne Friend, Defendants
BEFORE: The Honourable Justice C.T. Hackland
COUNSEL: Cheryll Wood and David Lu, for the Plaintiff
Samuel F. Zakhour and Alana L. Guy, for the Defendants
HEARD: In writing
ENDORSEMENT (Costs)
[1] Pursuant to section 69 of my Reasons for Decision in this proceeding, see Ottawa Carleton Standard Condominium Corp. No. 671 v. Friend et al, 2021 ONSC 7379, I invited the parties to file their respective costs submissions pertaining to the costs of the trial herein, including trial preparation, incurred on or after June 1, 2021. I have now received and considered those submissions.
Parties’ Positions
[2] The plaintiff Condominium Corporation seeks costs and disbursements for the trial in this matter, including trial preparation, in the amount of $58,448.97 inclusive of HST. The defendants request an order fixing trial costs on a partial indemnity basis in an amount not exceeding $32,000 inclusive of fees, disbursements, and applicable taxes. This court previously determined in its trial reasons that the Condominium Corporation was entitled to its trial costs, having been substantially successful in the matters before the Court. It remains to fix the quantum of such costs.
Analysis
[3] Section 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43 confirms that, subject to the provisions of an Act or Rules of the Court, awarding costs is a discretionary matter for the Court. Furthermore, in this case, Section 85 of the Condominium Act, 1998, S.O. 1998, c. 19 (the “Act”) and Rule 57 of the Rules of Civil Procedure, R.R.O 1990, Reg. 194, are applicable to the determination of costs.
[4] It has been held that section 85(1) of the Act confirms a condominium corporation’s entitlement to a costs award at the level of full indemnity for all reasonable costs related to collecting common expense arrears, see Carleton Condominium Corporation v. Burdet, 2015 ONSC 1361, at para 45.
[5] Moreover, the Court of Appeal in Metropolitan Toronto Condominium Corporation No. 1385 v. Skyline Executive Properties Inc 2005 13778, held that, when considering “additional actual costs”, section 85(1) of the Act is confirming that the condominium corporation is entitled to the costs awarded under the standard party and party costs awarded by the court and all additional actual costs incurred as between the condominium corporation and its own solicitor, provided that those costs are reasonable. The policy of the Act, which also underlies these cases, is to protect innocent unit holders and to shift the burden of legal costs to the wrongdoer.
[6] I am satisfied that the trial preparation and hearing costs claimed by the Condominium Corporation in this matter are directly related to collecting common expense arrears and other debts owed by the defendants to the condominium. At trial, it was determined that the common expense arrears owed by the defendants amounted to $14,321.79 and court ordered legal costs totalled $102,966.96, which was inclusive of collection costs of $63,575 already incurred by the Condominium Corporation in pursuing this lien action prior to the trial. The total found to be owing by the defendants, prior to adding interest and without trial costs, was $117,287.
Offers to Settle
[7] Twelve days prior to the commencement of the Hearing, the Plaintiff served an offer to settle in accordance with Rule 49 of the Rules of Civil Procedure. The plaintiff offered to resolve this matter in full (including all common expense arrears, interest, legal costs, and expenses incurred from commencement of the collection action to that time) for $130,000.00.
[8] The defendants did not make any offer of payment in satisfaction of the Condominium Corporation’s claims. Instead, they served a counter-offer seeking $130,000 in payment to the defendants, even though there was no counterclaim in the proceeding. The defendants’ offer to settle was said to be based on a claim for compensation from the Condominium Corporation’s directors for breach of fiduciary duty, abuse of process and something Mr. Friend termed “ad- hominem fallacy, leading to the injunctive relief granted against him by the court”. There was no evidence led by the defendants at trial capable of supporting any of these allegations.
[9] When interest is added to the amount recovered at trial by the Condominium Corporation, in the sum of just over $10,000, for a total recovery of $127,287, and without trial costs yet being assessed, it can be seen that the Condominium Corporation’s offer should have been accepted.
[10] In terms of additional Rule 57 considerations, I will note that the issues were of some complexity from a factual perspective and were of very considerable importance to each of the parties. I do not see the necessity of reviewing the various ways in which the defendants contributed to the delay or lengthening of this trial, but in fairness, it must also be observed that the delay by the Condominium Corporation in releasing unredacted copies of their lawyer’s accounts (which Mr. Friend was being asked to pay for), also interfered with the defendants’ preparation of their defence and diminished the chances of a negotiated settlement.
Conclusion
[11] I conclude that the defendants must pay the trial costs of the plaintiff Condominium Corporation on a substantial indemnity basis and that this would constitute reasonable ‘additional actual costs’ under section 85(1) of the Act. I come to this conclusion because the Condominium Corporation succeeded in proving that the defendants wrongfully and persistently refused to pay common expense arrears properly charged to their unit as well as court ordered costs as noted above, and also because they refused a settlement offer less than their ultimate liability, delivering only a counter-offer not made in good faith. I find that the claim for costs of this trial were properly incurred to establish the amount of the liens and to collect the amounts secured by the liens.
[12] I also find the hours docketed in this matter, subject to some adjustments, and the hourly rates charged by the Condominium’s counsel to be reasonable. I fix the fees referable to this trial in the sum of $50,000 inclusive of HST and disbursements. These amounts are due under the liens currently registered on title to the defendants’ unit.
[13] In the event that all amounts due under the liens on the defendants’ unit are not paid within 30 days from the release of this endorsement, the Condominium Corporation shall be entitled to the issuance of a writ of possession to facilitate the sale of the defendants’ condominium unit.
Date: January 4, 2022
COURT FILE NO. CV-18-78035
DATE: 20220104
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: Ottawa-Carleton Standard Condominium Corporation No. 671, Plaintiff
AND
Anthony Marcus Friend and Henriette Suzanne Friend, Defendants
COUNSEL: Cheryll Wood and David Lu, for the Plaintiff
Samuel F. Zakhour and Alana L. Guy, for the Defendants
ENDORSEMENT (costs)
Justice Charles T. Hackland
Released: January 4, 2021