Legal

February 10, 2023 Published by Eastern Ontario Chapter - By Katya Ukrainetz

A Look Back at CAT Cost Awards in 2022

From the Volume 33 issue of the CCI Eastern Ontario Condo Contact Magazine

JANUARY 1, 2022, SAW AN AMENDMENT TO THE CAT’S RULES OF PRACTICE (THE “RULES”) REGARDING THE AWARD OF COSTS

Previously, the CAT would not order a party to pay another party’s legal fees unless there were exceptional reasons to do so. An award of costs was rare and could only be found in a handful of cases. For example, the CAT had found there to be exceptional circumstances where a party has wilfully ignored several attempts at compliance, disregarded an agreement they entered into1, or where a party engaged in vexatious conduct.² However, in Lahrkamp, the CAT only awarded a fraction of the costs claimed, being $2,500.00 awarded out of the $21,299.94 requested.

The current costs Rule reads as follows:
Reimbursement of Legal Costs and Disbursements at any stage

48.2 The CAT generally will not order one Party to reimburse another Party for legal fees or disbursements (“costs”) incurred in the course of the proceeding. However, where appropriate, the CAT may order a Party to pay to another Party all or part of their costs, including costs that were directly related to a Party’s behaviour that was unreasonable, undertaken for an improper purpose, or that caused a delay or additional expense.

This amendment provides more clarity and opportunity to those looking to recover costs against the opposing party. However, the first line stating that the CAT will generally not order one party to reimburse another party for legal fees or disbursements remains in place and cannot be ignored.

Looking back at 2022, after the changes to the Rules, it is apparent that there is much more flexibility given and opportunity for the CAT to award costs.

The decisions below make it clear that the CAT is still hesitant to award full legal costs, even when it has determined the party bears responsibility. However, with the further potential of costs being awarded, there are steps that condominium corporations can take to better position themselves when involved in (or prior to becoming involved in) a CAT dispute.

These would include:

(1) Ensuring that your condominium corporation’s Declaration contains the appropriate indemnification provisions:

In York Region Standard Condominium Corporation No. 1201 v. Us, the CAT awarded $450.00 in costs incurred prior to the CAT proceeding (“pre-CAT costs”) and $1,200.00 in costs incurred during the CAT proceeding (“in-CAT costs”) against Mr. Us. Despite commenting that the Declaration did not clearly address compliance costs, the CAT nevertheless recognised the underlying intent of the provisions and awarded the cost of the compliance letter. The CAT also found that the in-CAT costs claimed ($7,824.00) were disproportionate to the hearing but determined that Mr. Us bore some responsibility for the costs of securing compliance considering the indemnification provisions in the declaration and rule.³

In Durham Condominium Corporation No. 80 v. Occleston, the CAT awarded $2,500.00 in pre-CAT costs against the Respondent and $2,200.00 in in-CAT legal costs. DCC 80 had requested $3,709.00 in pre-CAT costs and $9,014.72 for in-CAT costs. In coming to this, the CAT weighed the wording of the indemnification provision, the impact of costs on the Respondent, and the proportionality of the costs claimed.⁴

In Carleton Condominium Corporation No. 111 v. Lega, the CAT awarded $450.00 in pre-CAT costs against Mr. Lega and $3,350.00 in legal fees. CCC 111 had requested $550.00 in pre-CAT costs and $5,586.02 for in-CAT costs. The CAT found that the indemnification provisions were clear, and that Mr. Lega had been duly warned that he would be responsible for the costs CCC 111 incurred.⁵

(2) Ensuring that the condominium corporation will be able to show that attempts were made to resolve the matter before commencing an application with the CAT (i.e. warning letters or mediation):

In Toronto Standard Condominium Corporation No. 1791 v. Franklin, the CAT awarded $3,500.00 in legal costs against Mr. Franklin. TSCC 1791 had requested $17,796.38 for legal costs. The CAT found that it would not be fair to require all owners to pay for the costs of Mr. Franklin’s non-compliance. TSCC 1791 had communicated with Mr. Franklin multiple times to request his compliance. The CAT further stated that Mr. Franklin’s behaviour resulted in additional work.⁶

In Toronto Standard Condominium Corporation No. 2208 v. Kaissi et al., the CAT awarded legal costs against the condominium corporation in the amount of $5,000.00. The Respondents had requested $14,893.40 in costs. The CAT stated that TSCC 2208’s conduct warranted an order of costs. The CAT found that the TSCC 2208 had made no effort to resolve the issue before filing its application and had not asked several witnesses to provide their accounts.⁷

In York Condominium Corporation No. 229 v. Rockson, the CAT awarded $9,101.02 in legal costs against Mr. Rockson, representing 100% of the legal fees and expenses incurred. The CAT considered the condominium corporation’s multiple requests to effect Mr. Rockson’s compliance, the rules, Mr. Rockson’s lack of participation in the proceeding, and his wilful refusal to comply.⁸

In Carleton Condominium Corporation No. 132 v. Evans, the CAT awarded legal costs of $621.50 for a compliance letter and $1,100.00 plus the filing fee of $150.00 against Mr. Evans. CCC 132 had requested $3,390.00 in pre-CAT costs and $7,145.32 for in-CAT costs. The CAT found that CCC 132 had attempted to resolve the issue prior to the commencement of the CAT proceeding, but also considered the personal circumstances of Mr. Evans when deciding on the amount of in-CAT costs to order. Ultimately, the CAT weighed the clear indemnification provisions, the interests of all the owners, and the impact on the Respondent to reach the amount of $1,100.00.⁹

In Toronto Standard Condominium Corporation No. 2138 v. Palmer et al., the CAT awarded $4,310.42 in pre-CAT costs and $4,000.00 in in-CAT costs against the Respondents. TSCC 2138 had requested $4,310.42 in pre-CAT costs and $8,984.45 for in-CAT costs. The CAT found that, pursuant to the TSCC 2138’s indemnification provisions, the pre-CAT costs were necessary and reasonably incurred. The CAT further found that it would not be fair for the other unit owners to bear the in-CAT costs, considering the many attempts TSCC 2138 made to affect the Respondents’ compliance.¹⁰

(3) Ensuring that all communications are clear and concise. Avoid fear mongering and make it clear that you are looking to find a suitable resolution.

In Sava v. York Condominium Corporation No. 386, the CAT awarded $871.50 in legal costs against the condominium corporation for being “directly related to a Party’s behaviour.” The CAT found that the explanation the condominium corporation offered to properly read the records was confusing and led directly to Mr. Sava hiring legal counsel to prepare an opinion.¹¹

In Jones v. Toronto Standard Condominium Corporation No. 2017, the CAT awarded $500.00 in legal costs plus the $200.00 filing fee against the condominium corporation. The CAT found that the condominium corporation had acted unreasonably in delaying sound testing and had not taken action until Ms. Jones’ legal representative sent a letter.¹²

In Gale v. Halton Condominium Corporation No. 61, the CAT awarded $2,000.00 in legal costs against Mr. Gale. HCC 61 had requested $6,713.00 in legal fees. In considering the impact of a cost award on the parties, the CAT found that Mr. Gale had undertaken the proceeding partly on an improper basis and had a history of doing so.¹³

In Toronto Standard Condominium Corporation No. 1978 v. Hackman, the CAT awarded $7,726.00 in legal costs against Mr. Hackman. TSCC 1978 had requested $15,453.00 in legal costs. The CAT concluded that the application had been filed in contravention of a settlement agreement resolving an earlier application and that Mr. Hackman had contravened the settlement. However, the condominium corporation was only awarded half of the legal costs claimed, with the CAT stating that it still had a duty to investigate the complaints.¹⁴

Additionally, condominium corporations should consider streamlining the process for a record request. Knowing that the CAT will award penalties against a non-compliant condominium corporation, condominium corporations should consider having an easily accessible owner platform to store and access core records. This would avoid being needlessly brought into CAT proceedings and having penalties or cost awards awarded against the condominium corporation.

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Katya has been called to the bar in both Québec and Ontario and is fluent in both French and English. Her bijural background brings a unique perspective to solving the variety of issues that arise in the practice of Post-Development Condominium Law.

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1 Peel Condominium Corporation No. 96 v. Psofimis, 2021 ONCAT 48
2 Lahrkamp v Metropolitan Toronto Condominium Corporation No. 932, 2019 ONCAT 4
3 York Region Standard Condominium Corporation No. 1201 v. Us, 2022 ONCAT 133
4 Durham Condominium Corporation No. 80 v. Occleston, 2022 ONCAT 103
5 Carleton Condominium Corporation No. 111 v. Lega, 2022 ONCAT 123
6 Toronto Standard Condominium Corporation No. 1791 v. Franklin, 2022 ONCAT 96
7 Toronto Standard Condominium Corporation No. 2208 v. Kaissi et al., 2022 ONCAT 92
8 York Condominium Corporation No. 229 v. Rockson, 2022 ONCAT 46
9 Carleton Condominium Corporation No.132 v. Evans, 2022 ONCAT 97
10 Toronto Standard Condominium Corporation No. 2138 v. Palmer et al. 2022 ONCAT 104
11 Sava v. York Condominium Corporation No. 386, 2022 ONCAT 52
12 Jones v. Toronto Standard Condominium Corporation No. 2017, 2022 ONCAT 139
13 Gale v. Halton Condominium Corporation No. 61, 2022 ONCAT 85
14 Toronto Standard Condominium Corporation No. 1978 v. Hackman, 2022 ONCAT 143