Legal

July 24, 2024 Published by London and Area Chapter - By Laura Gurr

Key Insights on Securing Full Indemnity Costs from the CAT

From the CCI Review 2023/2024-4 June 2024 issue of the CCI London Chapter

Recent cases at the Condominium Authority Tribunal (CAT) have seen full indemnity costs awarded to condominium corporations. These successes were largely due to strong, specific wording in the condominium’s Declaration and the respondents' willful non-compliance with governing documents.

In January 2022, CAT issued Rules of Practice and a Practice Direction on Ordering Costs. Section “G” of the Practice Direction highlights the importance of the condominium corporation’s governing documents, including declarations, by-laws, and rules. CAT considers whether the parties understood their obligations and the potential consequences of contravention when making cost decisions. However, governing documents are not the sole factor in cost awards.

PCC 96 v. Psofimis (2021 ONCAT 48):

Costs were awarded based on the respondent’s repeated non-compliance and clear provisions in the corporation’s rules.

PCC 203 v. Lam et al. (2024 ONCAT 58):

Full indemnity costs were awarded due to the explicit wording in the declaration and multiple warnings to the respondent before legal proceedings.

Roumy v. York Condominium Corporation No. 50 (2022 ONCAT 109):

The request for costs was denied as the legal advice sought did not fit the By-law’s parameters, and the legal costs were considered part of the condo corporation’s ordinary administrative activities.

Peel Standard Condominium Corporation No. 954 v. Skoczylas (2024 ONCAT 9):

Costs were awarded based on the indemnification provision in the Declaration. The decision emphasized the discretionary nature of cost awards and the need for costs to be proportional to the dispute's complexity.

To secure a cost award at the CAT, a condominium corporation must demonstrate efforts to avoid litigation and have robust indemnity provisions and rules.

The CAT is cautious in ordering costs, considering numerous factors from the Rules and Practice Direction. To improve chances of a successful cost award, governing documents must be clear and comprehensive, addressing compliance and pre-CAT costs. Routine matters or ordinary administrative costs are unlikely to result in a cost award.

Given the discretionary nature of costs awards, condo corporations and managers should remain cautious. Specific legal advice may be prudent before charging back legal costs without a Court Order, an Arbitration Award, or a CAT Order declaring that the owner is required to pay a portion of the condo corporation’s legal costs.

Laura Gurr, JD, LCCI is a partner with Cohen Highley LLP in London, Ont. Cohen Highley has offices in London, Kitchener, Chatham, Sarnia, Stratford and Strathroy.

Laura provides risk management and regulatory compliance advice to condominium corporations, property management companies and nonprofit housing providers.

She regularly writes and speaks about legal issues affecting the industry.

Laura has been on the CCI London Board of Directors since 2016. She brought her expertise, enthusiasm and an intense willingness to share in her contributions as a writer, presenter and instructor. 

Laura was awarded her Leader of the Canadian Condominium Institute, (LCCI) designation by CCI-N in November 2022.