Condo Law Digest – November 2013

Ottawa-Carleton Standard Condominium Corporation No. 671 v. Friend, 2013 ONSC 5775 (CanLII)
Decision Date: October 9, 2013
http://canlii.ca/t/g0x7z

At a meeting of owners in November 2008 it was decided that the water meters would be replaced with energy meters, so that the energy costs for each unit could be fairly determined.  The condominium agreed to pay for the purchase and installation of the new meters.  After about a year meters had been replaced in 49 of the 50 units.  The owners of the remaining unit, Mr. and Mrs. Friend, advised the corporation that they would allow access to their unit only under certain conditions.  The condominium found these conditions unacceptable and informed the Friends that if they did not provide access for the purpose of installing the new meter they would ultimately be required to pay the installation costs themselves.  Over the next 18 months the corporation continued to request access to the unit and warned the Friends about the possibility of bringing a court application.  The Friends continued to refuse access, a court application was brought, and a case conference was held in November 2012.  At that time it was agreed that a new water meter would be installed, and that payment for the installation, obligations to pay outstanding water charges, legal costs and various bylaw violations related to storing sports equipment on the unit’s balcony, would be the subject of a future hearing.

At the hearing, Judge Maranger found that the condominium acted in a manner that was “fair and reasonable” and that the respondents (particularly Mr. Friend), “simply decided that the rules of the condominium were not going to apply to him.”  He ordered the Friends to comply with all bylaws, and to pay for installing the meter, for outstanding water charges as calculated by the condominium, and for $15,000 in legal costs incurred by the corporation.

Comment:  I can only quote the judge: “That a matter such as this ended up in Court is unfortunate, the cost consequences here are 5 to 10 times the value of the claim.”


A follow-up to two cases I reported in the September Condo Law Digest:



In Green v. York Condominium Corporation No. 834 and ThyssenKrupp Elevator (Canada) Ltd. the plaintiff was ordered to pay to the defendant $20, 000 in legal costs and over $8000 in disbursements.

In 673830 Ontario Limited v. MTCC 673 the plaintiff was ordered to pay the defendant costs in the amount of $15 000.

Condo Law Digest – August 2013

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.

Conflicts that Should have been Mediated: (2) The Elusive Parrot

Photo credit:  SantaRosa OLD SKOOL (via flickr)

Every now and then I hear about a conflict that wasn’t mediated but should have been.  Mediation would have saved the participants time, money and aggravation.

What is the cost of breaking a rule?  If you live in a condo in Ontario the cost can be very high indeed.  One of the provisions of Ontario’s Condominium Act is that condo owners who fight compliance applications can be obliged to pay the condominium board’s legal costs, as well as management fees and surveillance costs.  An owner who doesn’t pay up might find a lien placed on his unit.  The reason for this extraordinary provision (which is not enjoyed by individuals or corporations) is to discourage owners from pursuing frivolous lawsuits against boards.  After all, the legal costs for a condo board are shared by all owners, and it would not be fair for the corporation as a whole to suffer because of one litigious owner.  Condo owners who go to court over compliance issues have to be pretty confident that they have a strong case.

(Please note that I am not a lawyer and the above paragraph is not intended to be taken as legal advice!  If you are a condo owner in dispute with a board, please consult a lawyer, preferably one with experience in this area.)

The cost of breaking the “no pets” rule for their condo building almost cost Michael and Margarita Bazilinsky more than $40,000.  At some point, late in 2010, judging by squawks heard in the corridor, a parrot took up residence in the Bazilinskys’ unit.  Mr. Bazilinksy claims that he was merely parrot-sitting for a friend, and he supplied affidavits from three independent parties (a personal trainer, a real estate agent and an electrician) affirming that there was no parrot in the unit.  The board inspected his unit in early 2011 and found no evidence of a parrot.  They were convinced, however, that Bazilinskys had smuggled the parrot out of the unit for the day, and pointed to what they deemed “suspicious” footage on a surveillance camera of the Bazilinskys taking a covered box out of their residence.  In August 2011 Mr. Bazilinsky consented to an order to remove the elusive parrot, and to pay the board’s court costs of $3000.

The board then exercised their right under the Condominium Act to recover “actual additional costs” related to their eviction of the parrot.  They placed a lien on the Bazilinskys’ unit for $41,599.  Last month a judge ruled that this amount was excessive, and ordered Mr. Bazilinsky instead to pay $6500 of the board’s legal fees, less the $5000 he had to spent in court costs to bring the recent motion.

I learned about this case from an article in the Globe and Mail by Ian Merringer, who mentions that both parties claim that the other party had waived opportunities for mediation.  The Condominium Act includes a mediation process intended to resolve disputes before legal costs become excessive for either party.  From the brief description and the outline of facts presented in the article, it would seem that both parties had something to gain from an attempt to mediate.  Even if the Bazilinskys had eventually to find another home for the parrot, a mediated agreement to that effect would have cost significantly less than the legal costs they eventually incurred.  Mediation would have saved money and probably also time for the board.  And let’s not forget that the Bazilinskys and the board members are neighbours who are likely to see one another in the corridors and other public areas of the building.  I can’t imagine that their interactions now are anything but tense.  While they might never have been friends in the first place, listening to each other and working towards a mediated agreement might at least have given them the dignity of mutual respect.





Read about another Conflict that Should have been Mediated (curiously, also involving an animal.)

I’m in Mediation. Why do I need a Lawyer?

The Ontario Association of Family Mediators “Code of Professional Conduct” states that mediators must inform clients of the advisability of obtaining independent legal advice, both from the outset of the mediation and prior to signing any mediated agreement. Indeed, many mediators will not accept as clients people who refuse to obtain independent legal advice. Sometimes people who are working with a mediator are dismayed to find this out. “We want to stay out of court!” they protest. “Why do we need lawyers?”

The short answer: Your goal is not just an agreement. Your goal is a durable agreement, one that neither party will be motivated to challenge in the future. A durable agreement will save you time and money in the long run. It will provide stability for everyone involved and allow both parties to get on with their lives.

There are two main reasons why consulting a lawyer is important for crafting a durable agreement. First, each party needs a lawyer to certify their financial disclosure. If it turns out that one of the parties has (whether by mistake or on purpose) misrepresented his or her financial situation, any agreement reached on the basis of the misrepresentation may not be durable. The other party would have a reason to challenge the agreement in court.

Second, both parties need independent legal advice. This means that each party needs to know their rights under the law, and to what extent (if any) the mediated agreement deviates from these legal rights. For example, if one of the parties agrees to forgo spousal support, she needs to know what her legal entitlements are so that she can make an informed decision. If she makes a decision without having all of the relevant information, then any agreement she signs may not be durable. She would have a reason to challenge the agreement in court. Now, some people, for all kinds of reason, decide to accept an agreement that does not reflect their legal entitlements. Some agree to settlements that provide less than their legal entitlement. Some agree to settlements that are more generous to ex-partners than is strictly legally required. Many different kinds of agreements may be fine, as long as everyone is fully informed about their rights and obligations under the law.

Independent legal advice means that each party needs a separate lawyer. By definition, one lawyer cannot offer independent advice to two parties in the same dispute. It is a good idea to consult with a lawyer early on in the mediation process, and be informed about your rights and obligations as you proceed. This is likely to save you time and money in the long run. If you’ve developed an agreement on the basis of misinformation or misunderstanding, a lawyer may advise you to start over.

Finally, be sure to engage a lawyer who has expertise in family law. Don’t hire your cousin the corporate lawyer or the really likeable real estate lawyer who helped you buy your house. Family law is complicated and you want to make sure that whomever you work with is well-informed. If you’re determined to stay out of court, make sure your lawyer knows this and respects your wishes. (And to find a lawyer who is also determined to stay out of court, consider working with a collaborative lawyer.)

Women, Money and Financial Literacy

I recently read about a divorcing couple who met with a mediator, only to be told that mediation would not be the best option for them. Later, when pressed, the mediator offered several reasons why she was reluctant to take them on as clients. But the factor that seemed the most significant to me was the divorcing woman’s discomfort talking about money and her lack of basic financial literacy. Was the woman in this case a recent immigrant and unfamiliar with North American ways? Was she uneducated? Was English her second language? You might be surprised to hear that she was a highly educated (Ph.D.), middle-class, native-born American.

But then again you might not be surprised. A recent survey by the Globe and Mail of 800 of their (presumably educated and sophisticated) readers, found that only 29% of women and 53% of men said that they were “absolutely” financially literate. When the woman in the case I’ve mentioned reflected on her situation, she found that she had gradually let her husband take over the family’s money management. There was nothing sinister about this – she disliked having to think about such things, he enjoyed working with numbers, and she felt that he would do a better job. But this meant that when they decided to divorce she was a bit lost. She had to pick up money management skills at the same time as she was trying to cope with the stress of divorce and the added burden of being a single parent.

The Canadian Task Force on Financial Literacy defines “financial literacy” as having the knowledge, skills and confidence to make responsible financial decisions. While everyone should be knowledgeable about their money and able to make good decisions, the costs of financial illiteracy are particularly high for women, who still tend to earn lower salaries than men.

How can you become financially literate if you’re not? If you aren’t already familiar with your family’s financial situation, get better acquainted with it. As a minimum, you should know the amount of your monthly rent or mortgage payment, your monthly cost of living, how much money you’re setting aside for savings each month, the outstanding balance on your credit cards, and how much you’re paying in interest. You can get more familiar with your financial situation by taking on some money management tasks each month: pay the utility bills, make the mortgage payment. Get involved the next time you renew your mortgage. Sit down with the person who handles the family finances and have him or her go over the basics with you. If you’re handling finances by yourself for the first time and you feel overwhelmed, get help. (The woman whose story I’ve told in the opening paragraph ended up asking her mom for help). In Canada, the Toronto Star maintains a great website with lots of practical information. For help with your specific situation, it might be worth your while to sit down with someone where you do your banking, a certified financial planner or a certified divorce financial analyst.