Court File and Parties

BARRIE COURT FILE NO.: CV-22-149 DATE: 20230627 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

SIMCOE CONDOMINIUM CORPORATION NO. 133 Applicant – and – PAUL SHARD, SHERYL ELIZABETH SHARD, SARAH YARMUS, THOMAS GEORGE CAVE, IRENE LOUISE CAVE, HERMENGARDA LEAL, EDUARDO LEAL, NANCY MARY MASON, ROMAN MASEK, TATANA MASEK, RONALD KING HOPPER, ERWIN JOHN KURTZ, DENICE ELLAINE KURTZ and JUDITH ANN MCSTRAVICK Respondents

Counsel: A. Casalinuovo for the Applicant B. Gasee for the Respondents

HEARD: June 21, 2023

Reasons on Motion

McCarthy J.

[1] The motion within the Application returns before me today on three unresolved issues:

(i) The approval of the administrator’s reports, the proposed extension of his term, and the terms and conditions which should accompany such an extension;

(ii) Whether any or all the additional expenses (“the additional expenses”) incurred by the Applicant, as a result of the remaining Respondents’ found non-compliance with the order of September 27, 2022 (the “1st order”), should be borne by those remaining Respondents;

(iii) The costs of the March 21, 2023 motion (the “urgent motion”) and the June 21, 2023 motion (the “June motion”).

[2] The background of this matter is well known to the parties and the preceding orders governing the state of affairs remain in effect (i.e., they have not been varied and are not subject to any variation order, stay or appeal that the court was made aware of).

The Administrator

[3] The extension of the administrator’s term is not opposed and is well supported by the evidentiary record. There is no evidence that there is a reasonable prospect or any formulated plan for the corporation to transition to self-governance. The accompanying terms and conditions of the proposed extension are reasonable, necessary and justified. I am satisfied that the administrator has made good faith efforts to act in the best interest of the condo corporation and the unit owners, that he has complied with court orders, and that he has properly overseen the attic restoration project. The two reports to unit owners dated November 29, 2022 and April 21, 2023 were responsive and informative and should be approved. The administrator’s proposal for two further reports is proportionate and responsible. The shadow board is no longer serving any practical consultative role and therefore should be disbanded.

[4] There shall therefore be an order to go in accordance with the proposed draft order filed.

Additional Expenses

[5] As for the additional expenses incurred by the Applicant, they are set out in the supplementary affidavit of the administrator dated June 7, 2023 (the “supplementary affidavit”) at paragraphs 8 and 9 with explanatory content found at paragraphs 10 through 17. They total $62,543.55. The conclusion that they are additional, that is that they were incurred as a direct or indirect result of the failure of the remaining Respondents to comply with the 1st order, is inescapable. The requirement for a security guard was made necessary by the hostility exhibited by certain unit owners towards the contractor and project manager; indeed, this court granted the Applicant the right to enlist such a service at sub-paragraph 24(v) of the urgent order. The consulting services invoice contains detail including “comments”, “notes regarding delay” and “delay related consulting”; while the contractor’s invoice contains a chart setting out “costs as a result of access issues”, “projected cost if done in 2021/22” and “delay related increases in costs”. None of these entries or totals were seriously challenged. They are in any event entirely compelling. I note that the project manager, contractor and security providers would each qualify as independent witnesses whose evidence I would put significant weight on. They have been or would be paid for their services regardless of whether these costs related to delays and regardless of whether the Applicant is successful in passing those extra costs on to the remaining Respondents.

[6] While I stopped short of making a finding of contempt in my reasons dated March 24, 2023, I did so by exercising restraint. It was apparent to me then, as it is now, that the delays in the attic restoration project rested at the feet of the remaining Respondents, who whatever their reasons, chose not to comply with the 1st order. Logic and fairness dictate that the additional expenses associated with those delays must also rest at their feet. Those parties sought to circumvent the 1st order through a restrictive and unreasonable interpretation of it. Courts have made it clear that a person who is subject to an order cannot be permitted to finesse the order or to hide behind a restrictive interpretation of it for the purposes of circumventing its import. To allow this would permit a mockery of the administration of justice: see Sweda Farms Ltd. et al. v. Ontario Egg Producers et al, 2011 ONSC 3650, at para. 21.

[7] Rule 60.12 of the Rules of Civil Procedure, R.R.O. 1990. Reg. 194, stipulates that where a party fails to comply with an interlocutory order, the court may, inter alia, make such order as is just.

[8] Had the remaining Respondents harbored legitimate doubts surrounding the meaning, import, practical implications of, or their respective obligations under, the 1st order, it was incumbent upon them to seek direction and clarification from the court in a timely and pro-active fashion. Instead, they chose to act on their disdain for that 1st order by obstructing its implementation, while sheltering behind an unreasonable and unsustainable interpretation of it. This was an unjustified use of a self-help remedy. Not only did this occasion delay and cause the Applicant to incur additional expenses, but it also wholly justified the Applicant bringing the urgent motion. The position advanced by the Applicant at the urgent motion was accepted by the court. The position advanced by the remaining Respondents was rejected. I found their reasoning to be perplexing and flawed. There is nothing before the court which would serve to displace that finding.

[9] The just and fair order is for the remaining Respondents to shoulder the additional expenses caused by their unreasonable conduct. To order that the innocent and compliant unit owners should share in that burden would be inequitable and unfair.

[10] It is therefore ordered that the Applicant may look to the remaining Respondents for the sum $62,543.55 in additional expenses. Those additional expenses shall be sought and collected from the remaining Respondents on a pro-rated basis as unit owners.

Cost of the Urgent Motion and the June Motion

[11] This leaves the matter of costs of the urgent motion and of the June motion.

[12] Certainly, the Applicant met with success on the urgent motion. Its position was vindicated, and it received an emphatic mandate from the court to proceed in the manner it proposed.

[13] That urgent motion was made necessary by the unreasonable position taken by the remaining Respondents. The issues were of great, even critical, importance: the attic restoration project was stalled, a municipal work order remained outstanding, third-party costs were mounting, the structural integrity of the complex continued to be at risk, a court order was being flouted and tensions between unit owners, contractors and project managers were frighteningly high.

[14] The June motion saw the Applicant prevail on the quantum of, and responsibility for, the additional expenses. That relief was resisted, if only meekly, by the remaining Respondents. It was nonetheless an important issue because the default position would have been to unfairly pass the additional expenses on to all unit owners on a pro rata basis.

[15] The extension of the administrator’s term was unopposed; but that important relief needed to be sought in a timely fashion; as well, the moving party was obliged to provide sufficient detail to allow the court to grant an informed, meaningful and comprehensive order. Applicant’s counsel is to be commended for his assistance to the court in that regard.

[16] The Applicant must certainly be entitled to costs against the remaining Respondents on all aspects of the urgent motion. Again, fairness and equity require that those whose unreasonable conduct made the bringing of the urgent motion necessary should be saddled with the costs of that motion; it should not fall upon the passive or innocent unit owners to bear any portion of such costs.

[17] I would allow costs of the urgent motion on a full indemnity basis against the remaining Respondents. I have no reason to suspect that the Applicant has not or will not pay the account rendered by its litigation counsel. While the Applicant was not successful in obtaining a finding of contempt, neither was he unsuccessful. The issue was deferred by the court; nonetheless, the findings made against the remaining Respondents were serious enough and included unwarranted non-compliance with the 1st order. The practical outcome of the urgent motion gave the Applicant the mandate to proceed that it was looking for. As well, if any portion of those fees and disbursements were assigned to the innocent or passive unit owners, such a result would be unfair and inconsistent with the reasoning which applied to the additional expenses. The costs award serves as a proper sanction on the remaining Respondents for the reasons set out above. I accept that the amount claimed for fees is proportional to the importance and complexity of the issues in dispute and the pressing need for the relief sought. I would allow costs to the Applicant of the urgent motion on a full indemnity basis in the amount of $22,540.00 plus HST of $2,930.20 plus the disbursement of $339.00 for a total for costs of the urgent motion of $25,809.20. Those costs are fixed and payable forthwith by the remaining Respondents.

[18] I would also allow costs to the Applicant on the June motion, but only on a partial indemnity basis. A motion and an appearance would have been necessary on the proposed extension of the administrator’s term in any event. The remaining Respondents did not oppose that relief. The relief sought on the June motion was not complex. The issues were not pressing and were of only moderate importance. Still, the remaining Respondents were unsuccessful in resisting the Applicant’s position as it pertains to the additional expenses. The costs of that aspect of the motion must be borne by them exclusively; it would be unfair to the other unit owners to hold otherwise. Costs of the June motion are allowed on a partial indemnity scale in the amount of $2,750.00 inclusive of HST and disbursements and payable by the remaining Respondents forthwith.

[19] Like the additional expenses, the costs of the motions awarded above are payable by the remaining Respondents on a pro-rated basis as unit owners.

Subsection 134(5) of the Condominium Act, 1998, S.O. 1998, c. 19

[20] The Applicant seeks to avail itself of this section of the Act to exercise its right of recovery for costs incurred in obtaining compliance orders. The subsection declares that an award of costs and the additional actual costs may both be added to the common expenses of a unit. In the event that the costs awarded are not paid, the Applicant would be entitled to register a claim for lien against the respective units of the unpaying remaining Respondents. I see no reason to deny that remedy to the Applicant.

Disposition

[21] For the foregoing reasons, the Applicant is entitled to recover the additional expenses of $62,543.55 from the remaining Respondents on a pro-rated basis as unit owners.

[22] In addition, the Applicant is entitled to costs of the motions against the remaining Respondents for the sum total of $28,559.20 on a pro-rated basis as unit owners.

[23] The Applicant shall be entitled to avail itself of the enforcement mechanism for the collection of those expenses and costs found in subsection 134(5) of the Condominium Act: failing payment of the expenses and costs awarded within 60 days of today’s date, the Applicant may add the pro-rated and unpaid portion to the common expenses for the unit of a non-paying remaining Respondent.

[24] There shall be an order to go in accordance with the foregoing.

McCarthy J. Released: June 27, 2023