Syed Ali Ahmed

Following a successful application by a condominium corporation to enforce compliance with the Condominium Act, 1998 and the corporation’s declaration regarding exclusive use rights to sell fresh meat and poultry, the court addressed the issue of costs.

The corporation sought recovery of its legal costs pursuant to s. 134(5) of the Act, which allows a condominium corporation to recover both court-awarded costs and additional actual costs incurred in obtaining a compliance order.

The respondents argued that they should not bear responsibility for the costs or that liability should fall on the other respondent.

The court held that the policy behind s. 134(5) shifts the financial burden of obtaining compliance orders to the offending unit owner or occupier.

The full amount of the claimed legal costs was found reasonable and awarded, with the owner liable for the total amount but entitled to recover half from the tenant.

The applicant condominium corporation sought an order to enforce compliance with its declaration against a commercial unit owner and its tenant, who were selling fresh meat and poultry in violation of another unit's exclusive use rights.

The respondents argued that the application was premature because the dispute had not been mediated pursuant to s. 132 of the Condominium Act, 1998, and claimed a settlement had been reached at a prior meeting.

The court found that no settlement was reached and held that the mandatory mediation provisions under s. 132 do not apply to disputes involving tenants or occupants.

The court ordered the respondents to comply with the declaration and cease selling fresh meat and poultry.

The defendant moved for security for costs under Rule 56.01(1)(c) of the Rules of Civil Procedure on the basis that a prior costs order contained in a consent judgment remained partially unpaid.

The court held that even where the technical requirements of the rule are met, the court retains discretion to refuse security for costs after considering all relevant circumstances, including the merits of the claim.

The court clarified that the role of the merits under Rule 56.01(1)(c) falls on a continuum between the standards applicable under Rule 56.01(1)(a) and Rule 56.01(1)(e).

On the evidence, the plaintiffs demonstrated a good likelihood of success in their action to set aside a consent judgment based on alleged undisclosed liabilities in a share purchase transaction.

In light of the strength of the plaintiffs’ case and the absence of responding evidence from the defendant, ordering security for costs would be unjust.