York Condominium Corporation No. 345 v. Qi, 2013 ONSC 4592 (CanLII)
Decision Date: July 8, 2013
In January 2006 Mr. Qi, a unit owner at YCC 345, defaulted in the payment of common expenses when his cheque was returned NSF. This prompted a lien on his unit. The original default of around $500 increased with the addition of interest (at 12% per annum), $25/month service fee, and legal fees. In Spring 2012 YCC 345 successfully brought a motion for summary judgment, and by that time the debt had ballooned to about $33,000, and the costs for the summary judgment motion brought it to over $46,000. Mr. Qi, who was not represented at the time of the motion, retained counsel who appealed the summary judgment and asked for a costs assessment.
Counsel for YCC 345 argued that the corporation should recover its full legal costs, as provided for in the Condominium Act and in YCC 345’s Declaration. Justice Quigley disagreed. Although the Condominium Act creates a framework for governance, “the directors of condominium corporations are counted upon to act with prudence and reasonable good judgment.” He found that costs should be assessed on a partial indemnity basis, and his reasons include 1) the legal costs were “immensely disproportionate” to the arrears of common expenses; 2) YCC 345 could have taken steps to reduce the conflict; 3) Mr. Qi had offered to settle the matter in 2009, and if reasonable efforts had been made to find a solution, the greater part of the legal expenses would never have been incurred.
Comment: Another judgment stressing that legal fees and related costs must be reasonable. Condominium corporations cannot expect that any and all costs will be passed on to defaulting unit owners.
