Law Times

Law TiMes • May 13, 2013 Page 7 COMMENT Condo cost rulings tilting away from generous awards S everal court decisions dealing with cost recovery have emanated out of condo land lately. While the ratios vary, the scattering takes on a distinct shape when viewed as a group that's trending away from generous cost awards for condominium boards that are successful in their litigation against unit owners. While most of these cases arise out of s. 134(5) of the Condominium Act, they also provide valuable insight and guidance to all lawyers on the law of costs. Subsection 134(5) provides an extraordinary remedy to condominium boards that are ultimately successful in compliance litigation against unit owners. According to the act, if a corporation obtains an award of damages or costs in an order made against an owner or occupier of a unit, the damages or costs, together with any additional actual costs to the corporation in obtaining the order, shall be added to the common expenses for the unit. Subsection 134(5) ensures that, regardless of the damages or costs the court may award a corporation in a lawsuit against an owner, it will be able to add all other "additional actual costs" to the bill and then secure a lien in respect of the amount owing if the person doesn't pay. In effect, it amounts to de facto substantial indemnity costs. As such, given a liberal and purposive construction, s. 134(5) can be a powerful and effective tool for condominium corporations in challenging non-compliance with their declarations, bylaws, rules, and agreements. Alas, "liberal and purposive" aren't quite the words I'd use to describe the case law be unclear and referred the cost on s. 134(5) to date. In the 2005 to trial decision in Metropolitan Toronto The Dirt determination back basis. for reassessment on that Condominium Corp. No. 1385 v. This separation and isolation Skyline Executive Properties Inc., of enforcement costs was also the Ontario Court of Appeal a dominant theme in Harvey v. considered s. 134(5) and conElgin Condominium Corp. No 3. cluded that the "additional actual In this Superior Court case, the costs" a condominium corporajudge, citing Baghai extensively, tion could recover and secure held that the condominium cora lien for involved only those Jeffrey Lem poration's dispute with the unit up to and including the actual owner was, all along, an oppresenforcement court order (with subsequent cases extending that logic to in- sion claim and not about a compliance orclude the costs of any appeals). It expressly der. Even though the unit owner prolonged excluded additional actual costs incurred the litigation through unnecessary and imby the condominium corporation in then proper steps, the court wouldn't allow the condominium corporation to secure a lien trying to enforce that court order. The Court of Appeal repeated Skyline's for all additional actual costs under s. 134(5). In Durham Standard Condominium v. strict interpretation in its 2012 decision in Toronto Standard Condominium Corp. No. Morton, the court awarded $29,000 to the 1633 v. Baghai Development Ltd., a case in condominium corporation for the additionwhich a condominium corporation was al actual costs of enforcing its rules against successful in enforcing bylaws and rules re- large dogs. While seemingly a generous cost garding common element uses and fended award, it fell shy of the $74,000 in additional off an oppression claim by the unit owner. actual costs allegedly incurred by the condoThe trial judge in Baghai was also critical of minium corporation in evicting the overthe "scorched earth" litigation strategy em- weight beast. In so doing, the court focused ployed by counsel and the corresponding on another aspect of the Skyline decision: the legal costs sought. The judge suggested s. notion that the costs recoverable under s. 134(5) permitted only "full indemnity for its 134(5) had to be "actually incurred." The most significant of all of these recent fair and reasonable costs related to obtaining condominium cost recovery cases has to be the compliance order." The Court of Appeal confirmed that s. 134(5) covered only fair Royal Bank of Canada v. Metropolitan Toand reasonable additional actual costs relat- ronto Condominium Corp. No. 1226. Royal ing to the compliance order and not addi- Bank wasn't a decision dealing strictly with tional actual costs relating to the oppression s. 134(5). Instead, it dealt with s. 85(1) that defence but found the trial judge's analysis allows condominium corporations to inof what was fair under the circumstances to clude "reasonable legal fees" in the amount secured by their liens. Nonetheless, the Superior Court expressly considered the two provisions to be analogous and referenced Skyline with approval. Even though not directly on point, Royal Bank is important for all lawyers generally as a seminal decision on the law of costs. In this case, the court was both relentless and quite colourful in its description of the law firm's performance and at various points in the judgment referred to some of the legal work as "hysteria-non specific activity," "misguided," and "cookie cutter work." After a lengthy and consistently scathing analysis of the conduct of the litigators and the inadequacy of the accounts they rendered, the court found the legal costs utterly unsustainable. The lawyers, the court found "were not only flogging a dead horse, they were acting as if it would go around the track." There's some talk of expanding the scope of s. 134(5) in the next round of condominium law reform. While I see the logic of expanding s. 134(5) beyond the cost of the compliance order and appeals, it's unlikely the law will ever allow condominium corporations to recover costs they never legitimately incurred either because they were outrageously inflated or they were never proper costs to incur in the first place. Even after condo law reform, dead horses still won't be running around the track no matter how hard the lawyers may flog them. LT Jeffrey W. Lem is a partner in the real estate group at Miller Thomson LLP. His e-mail address is jlem@millerthomson.com. LAO refugee changes amount to cutbacks BY MAUREEN SILCOFF AND KRISTIN MARSHALL For Law Times I individually, the operating presumption is that hearing coverage for people from designated countries will be exceptional. This would be a major cut. While we commend LAO for funding appeals to the refugee appeal division as a pilot project, it fails to mention a major cut already in place. LAO has eliminated opinion certificates for Federal Court applications. These certificates allowed unsuccessful refugee claimants to seek a lawyer to start the judicial review process. The certificates covered the filing of a notice of application and writing an opinion letter to LAO concerning the merits of funding the judicial review. Now, LAO expects refugee claimants to find a lawyer who will put out approximately $200 in disbursements and $400 in legal fees on the chance that if it deems there to be merit, there may be retroactive payment. This is unworkable. Lawyers are refusing to take cases on speculation. We know of no other jurisdiction that touts speculation as a modernized approach to access to justice. We're seeing the fallout. Refugees unable to afford legal fees can't access the Federal Court. The new law ended preremoval checks for most people, so they're subject to deportation if they fail to apply to the Federal Court. Refugees are also resorting to unscrupulous unqualified people who ghost write Federal Court applications by drafting ineffective documents under their name. Self-representation is an option at the Federal Court, but representation by a non-lawyer isn't. LAO indicates that in light of the new refugee laws, it's finalizing a model that "ensures access to justice to this marginalized population." We have consistently made it clear that the changes proposed by LAO will do anything but ensure access to justice. We call on LAO to continue to fulfil its statutory mandate. LT u SPEAKER'S CORNER f you broke your leg, would you look for a remedy on the Internet or go to the hospital? The answer is clear. But what if the hospital put out a notice telling you to cure yourself over the Internet? We would be outraged. And we should be similarly upset with Legal Aid Ontario's suggestion that refugees prepare their cases based on Internet information. How is this a serious suggestion for refugees who arrived only recently in traumatic circumstances with no computer, English skills or money? This is merely one of our concerns about the plans discussed in LAO vice president David McKillop's April 15 article in Law Times in which he defends LAO's changes to its refugee services. On Dec. 15, 2012, a new refugee determination system came into force. The federal government dramatically overhauled the system. Refugee claimants now have only 15 days from instituting their cases to prepare their basis of claim forms and they must appear at hearing within 60 days. These times frames create nearly impossible conditions to gather and present evidence. The new law also distinguishes refugees based on nationality by creating designated countries of origin. The criteria for such designations are suspect. Designation can be based on statistics from the Immigration and Refugee Board alone and not on human rights records. The consequences of a designation are severe. People from these countries are subject to even tighter time frames and have no access to an appeal at the newly created refugee appeal division. The government can deport them before the Federal Court hears a judicial review. National organizations, including the Canadian Association of Refugee Lawyers and the Canadian Council for Refugees, have criticized the changes for contravening constitutional rights. And because refugee claimants in the new refugee determination process are subject to such quick time frames, they're not here long enough to obtain work permits. As such, they face even greater hurdles when it comes to their ability to pay for legal services. Ontario has a tradition of providing access to justice to low-income people through LAO. Today, many refugees are contributing to our society because LAO provided them with the means to successfully plead their case. Now, in light of these harsh new laws, LAO needs to step up to secure access to justice. Instead, it's cutting back. The innovative changes LAO mentions are actually part of a series of cuts that will dramatically undermine refugees' access to qualified counsel. Refugee claimants with lawyers are much more likely to succeed in their applications than those who represent themselves. Besides the suggestion that refugees rely on Internet information to prepare their claims, LAO proposes having unsupervised paralegals represent them. Refugee representation requires knowledge of natural justice and Federal Court case law. It requires knowledge of administrative and constitutional law. In Singh v. Minister of Employment and Immigration, the Supreme Court of Canada found refugee hearings engaged s. 7 of the Charter of Rights and Freedoms because of the risk of persecution. Despite regulation by the Law Society of Upper Canada, unsupervised paralegals are simply not able to provide high-quality representation in most refugee claims. LAO says legal clinics will represent more refugees. Clinics are already working at capacity. They have given a clear message to LAO that the private certificate program is the cornerstone of refugee representation. Not all legal clinics provide services in the immigration and refugee law area. In fact, few specialize in refugee representation and those that do are unable to take on an additional caseload. LAO is considering not providing certificates for refugee hearings, particularly for people from designated countries. While LAO says it will assess all cases www.lawtimesnews.com Maureen Silcoff is chairwoman of the access to justice committee at the Refugee Lawyers' Association of Ontario and Kristin Marshall contributed to this article on behalf of the Inter-Clinic Immigration Working Group.

• Cover