Part published on 01/01/70
Given the particular circumstances, condominium corporation’s costs for lien collection process to be assessed on a partial indemnity scale rather than on a solicitor-client scale
The defendant owners had defaulted on the payment of common expenses. The condominium corporation registered a lien and ultimately obtained summary judgment for possession of the unit and payment of the arrears. [The original default was $497.51. This amount had “multiplied to about $33,000” by the time of the summary judgment motion.]
The condominium corporation was also awarded costs of the summary judgment motion. The Court subsequently ordered that the costs be assessed. The Court also considered what scale of costs should be used by the assessor (the solicitor-client scale or the partial-indemnity scale). The Court ordered that the costs be assessed on a partial-indemnity scale, for the following reasons:
i) First, the legal expenses charged, totaling $35,767.73 as of July 31, 2012 are immensely disproportionate to the arrears of common expenses claimed by YCC 345 from the defendants and which were allegedly paid or available to be paid at all material times. The defendants cannot reasonably have been expected to anticipate that they would be asked to pay legal costs of this magnitude given the amount of their original default.
ii) In addition to the substantial legal costs claimed, YCC 345 has also been charged (sic)interest on arrears at a significant rate of 12% and it imposes a charge of $25.00 per month no matter what the state of the arrears.
iii) Legal fees of $18,503.43 were incurred before the summary judgment motion. They almost doubled to $35,767.73 at July 31, 2012 following the hearing of the motion. The relatively simple collection activity involved in trying to collect the common expense arrears and other amounts from these defendants, including the registration of the lien and preparing letters of demand, calls into question the reasonability of these amounts or whether they are excessive.
iv) YCC 345 should have taken steps to reduce the conflict between the condominium corporation and the defendants by explaining and/or apologizing to them initially when it was claimed that hurtful and discriminatory language was used and when counsel for the defendants claims this was the only request they really made at that time.
v) The defendants offered to settle this matter in 2008 only two years after the dispute commenced, but four years before the summary judgment motion was brought, similar to what occurred in TCECC No. 1508 v. Stasyna… Had reasonable efforts been made at that time five years ago to find a solution in the offer of settlement that was made, a solution that would have permitted both parties to exit gracefully from the dispute, it appears that the lion’s share of the legal expense would never had been occurred.
[Editorial Note:
The Court seems to be saying that a condominium corporation should be ready to compromise, in appropriate circumstances, when it comes to collection of common expenses, interest and related costs. But in my view the corporation’s obligation is to fully recover those amounts on behalf of the remaining owners.
If the Court felt that the legal costs were unreasonable in this case, the Court could still have ordered that the cost award be reduced, even using the solicitor-client scale.]