Part 38 published on 01/05/12
Condominium corporation ordered to pay owner’s legal costs as a result of corporation’s failure to honour settlement agreement (respecting common element modifications)
Owners in the condominium brought an application to prevent the corporation from making alleged changes to the common elements (without first obtaining voting approval from the owners). The parties settled the application on terms whereby the corporation would treat the changes as substantial for purposes of Section 97 of the Condominium Act, 1998, therefore requiring approval by a 2/3rd vote of the owners. When the 2/3rd vote subsequently failed, the corporation took the position that there was no settlement agreement. The owners then asked the Court to enforce the minutes of settlement, and the Court granted the requested order.
The owners were awarded costs as against the corporation. The Court also made a special order respecting the portion of the costs that related to the Court motion to enforce the settlement agreement ($13,560.00 including HST). The Court said: “That sum is to be paid by the Board and none of it can be re-allocated to the Applicants.” The Court said that “the Board acted in bad faith in attempting to resile from the agreement their own solicitor had negotiated on its behalf”.
[Editorial Note: Directors beware! If a Court concludes that actions are taken in bad faith, Directors may be ordered to pay costs personally.]