Courts-liens

MTCC No. 744 v. Bazilinsky (The case of the missing parrot)

BC: Downtown Eastside pharmacy fined 'unfairly' by strata (condo)

MTCC No. 744 v. Bazilinsky
CV-11-425809
Madam Justice Backhouse
15 February 2012

The motion
The owners seek an order requiring the corporation to remove a second Certificate of Lien registered against their condominium unit and correction of their status certificate to remove any claim for legal costs other than those ordered by the same judge on 17 August 2011.

The corporation opposed this on the basis that it is entitled to its actual costs pursuant to section 134(5) of the Condominium Act in obtaining an order for compliance with its Declaration and Rules.
It claimed $41,599.45 in this regard.

The history
In November 2010, the corporation contacted the Bazilinskys regarding a bird it alleged had been in their condominium unit. This is a No Pet building. Mr. Bazilinsky responded that he had had a bird for two weeks but it had since been returned to its owner.

In April 2011, the corporation placed a lien on the Bazilinskys’ unit. That lien was discharged following a payment by the Bazilinskys’ mortgage lender in the amount of $3,330.47.

In May 2011, the corporation updated its status certificate and claimed that the Bazilinskys owed approximately $16,500 in addition to the $3,330.47 already paid.

On 05 May 2011, the corporation brought an application in this court alleging that the Bazilinskys were keeping a bird in their unit, in violation of the “no pet” provision of the corporation’s declaration and sought, among other things, an order that the Bazilinskys comply with the corporation’s Declaration and Rules and Regulations and costs on a substantial indemnity basis.
The grounds for the application included Section 134(5) of the Condominium Act, 1998. The affidavit in support of the application referred to the outstanding legal costs as $16,487.94.

On 29 June 2011, the Bazilinskys offered to settle the application on the basis of a payment of $3,000.

On the morning of the hearing of the application on 17 August 2011, the corporation’s lawyer provided the Bazilinskys’ lawyer with a bill of costs seeking costs of $8,815.49 on a partial indemnity basis.

After hearing submissions from both lawyers, I awarded the corporation $3,000 in costs.

The corporation wasn't satisfied
On 13 October 2011, the Bazilinskys’ counsel received a letter from the corporation’s counsel, which stated in part:

“We are also instructed to demand collection of legal fees above and beyond those ordered by Madam Justice Backhouse pursuant to section 134(5) of the Condominium Act, 1998. The total fees incurred in pursuing this matter are $21,897.11 (inclusive of the $3,000 cost award.).”

Section 134(5) of the Condominium Act, 1998 provides:
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 and the corporation may specify a time for payment by the owner of the unit.

The corporation has refused to accept the Bazilinskys’ $3,000 payment in respect of the judge’s order and since December, 2011, had also refused to accept any of their payments towards their monthly common element fees.

On 24 November 2011, the corporation registered a lien in the amount of $23,698.18 against title to the Bazilinskys’ unit which by 28 December 2011 had increased to $27,557.98, including interest on payments that the Bazilinskys had attempted to make but which were returned.

Conclusion
The judge considered the corporation’s bill of costs claiming $41,599.45.

“The costs of obtaining the order essentially ended in June 2011 when the Bazilinskys made their offer to settle. As stated in Metropolitan Toronto Condominium Corp. No. 1385 v. Skyline Executive Properties Inc., supra, legal costs are recoverable only if properly charged by its lawyers and incurred in obtaining the order. Section 134(5) is not an invitation to counsel to aggressively work a file or unreasonably build up costs. The corporation’s costs incurred in the dispute over s.134(5) that arose after 17 August 2011 did not relate to obtaining or holding the order which the Bazilinskys were content with and tried to pay. This was a simple application, the substance of which was consented to before the court date. In my opinion, the value of legal work performed on a solicitor and client basis is no more than $6,500 (inclusive of the $3,000 costs award of 17 August 2011). The Bazilinskys have paid $3,330.47 through their mortgage lender, leaving a balance owing of $3,169.53.”

Judgment
Both counsel made submissions about the costs of the attendance on 15 February 2012. The Bazilinskys were largely successful on this application. The corporation has to pay these costs because its claim was unreasonable. The judge fixed the costs of the application at $5,000.

An order will issue that the Certificate of Lien registered against the Bazilinskys’ condominium unit shall be vacated and their status certificate corrected to remove any claim for legal costs forthwith upon the Bazilinskys paying the outstanding common expenses (without interest because the Bazilinskys sought but were refused the right to pay them) less the net balance owed by the corporation for costs ($5,000 less $3,169.53 = $1,830.47).

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MTCC No. 1067 v. 1388020 Ontario Corp
Superior Court of Justice—Ontario
Court File No: CV-16-557120
Before: J. Ferguson, J.
Heard: 08 August 2017

4002 Sheppard Avenue East

This motion for summary judgment is brought by the plaintiff against the defendant who owns and occupies eight condominium units and three VIP parking spaces in a condominium located at 4002 Sheppard Avenue East.

This matter stems from an outstanding balance owed by the defendant for unpaid condominium common elements maintenance fees (“maintenance fees”), interest and additional claimed expenses for such things as bank runs and fees for reviewing records (“claimed expenses”).

In June of 2016 the plaintiff registered a lien against the condominium.
Interest

Interest rates
Section 7 of By-law No. 1 provides specifically for two charges to be levied:

(a)

“Arrears of payments required to be made under the provision of this Article XI shall bear interest at the rate of thirty (30%) percent above the prime rate charged by the Toronto Dominion Bank to its best risk commercial accounts per annum and shall be compounded monthly until paid and shall be deemed to constitute a reasonable charge incurred by the Corporation in collecting the unpaid amounts within the meaning of the Act.”

(b)

In addition to any other remedies, the Board may bring legal action on behalf of the Corporation to enforce collection thereof and “they shall be added to any amounts found due, all cost of such action, including cost as between a solicitor and his own client”.

Claimed expenses
The plaintiff submits that it is entitled to all of the additional claimed expenses in collecting the unpaid maintenance fees.

The judge accepted the defendant`s position that there is no provision under any of the existing by-laws which permits the plaintiff to claim any such further expenses and that those expenses are included in the high interest rate charged of 33%.

Costs
There were differences in what both parties saw as legitimate costs.

Section 134(5) & 85(1)
Those points have particular significance in this case. Costs must demonstrably reasonable. Further Sections 134(5) and 85(1) do not give counsel the licence to spend the client`s money with impunity. (This includes monies spent as legal fees)

Although it is not my role to perform an item-by-item analysis of the bill of costs, the plaintiff has provided a bill of costs broken down into categories. Certain categories are clearly not part of this straightforward action to recover unpaid condominium maintenance fees. This would include the categories of notice of sale and legal research; the motion to intervene; the attendance at commercial court.

Ruling on interest rates
The judge ruled that there was a contractual arrangement made between the parties with respect to interest. Interest is to be paid as per the condominium by-law.

Costs
Under all the circumstances and in applying the legal principles regarding costs, costs are set in the amount of $30,000.00 inclusive of fees, HST and disbursements.

Comments
The judge includes rulings on determining costs in paragraphs 22 to 25.

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Omnicare Pharmacy Ltd. v. The Owners, Strata Plan LMS 2854
Docket:   S164895
Registry: Vancouver
Before:    The Honourable Madam Justice Adair
Date:       20 February 2017

Downtown Eastside pharmacy ﬁned ‘unfairly’ by strata, judge rules
Vancouver Sun
Stephanie Ip
22 February 2017

Omnicare Pharmacy was fined by its building's strata corporation after complaints by residents about loitering, littering, noise and 'alarming' disturbances outside the business. Nick Procaylo PNG

A judge has ruled in favour of a pharmacist who claimed a strata council levied fines against his Downtown Eastside business in a “campaign” to push him and his customers out of the building.

Harvey Chan, a licensed pharmacist and president of Omnicare Pharmacy, launched the petition in B.C. Supreme Court last year after the Carrall Station strata alleged Chan’s business had breached several bylaws. The strata fined Chan $1,000 following several letters advising him of the allegations.

Chan argued the bylaws used by the strata to issue the fines were invalid and that the strata had acted “unfairly” in their treatment of the pharmacy.

“Mr. Chan asserts that these new complaints by the strata council are designed as part of the strata corporation’s ‘campaign’ to force him to move … and they reinforce his belief that the strata corporation has singled out Omnicare’s business for ‘special unfair treatment,'” the court documents read.

Omnicare is on the ground level of an eight-storey building at 1 E. Cordova St. known as Carrall Station, which was completed in 1997 and features eight commercial and 74 residential units.

The dispensing pharmacy, which is open seven days a week, has been operating since 2000. It serves an average of 200 customers daily, many of whom require methadone treatment and lived in the area before Carrall Station was built.

Chan told the judge he opened the pharmacy “in a very difficult neighbourhood” and had worked hard to build goodwill with customers and addictions-care practitioners. Chan previously served coffee to those waiting for prescriptions as a “simple kindness,” something that prompted the strata to complain of litter.

According to the strata, there had been a “growing sense of frustration and anger” among owners in recent years due to alleged loitering, noise and disturbances coming from those outside the pharmacy’s entrance, described as “alarming” by one resident.

On Wednesday afternoon, the sidewalk in front of the pharmacy was quiet, with only the occasional customer coming or going. A sign on the pharmacy’s door advised customers there was no smoking, no public phone or washroom — and no more free coffee.

According to the judgment, police are called to the property once every two months on average. To date, the individuals prompting the calls to police have not been known to pharmacy staff, who work to keep problems at bay both at and near the pharmacy.

“Mr. Chan acknowledges that, generally speaking, his customers are ‘some of the most difficult people in society,’ suffering mental illness, drug addictions and many other social problems. However, from Mr. Chan’s perspective they are ‘still people and deserving of our understanding, respect and support,’ and he has a professional obligation as a licensed pharmacist to provide services to them,” the ruling read.

Justice Elaine J. Adair ruled that the bylaws used by the strata to fine Omnicare were not valid, as they were not in compliance with the Strata Property Act and had been amended over the years. Additionally, of the five bylaws referenced by the strata, only one addressing nuisance had an equivalent in the previous set of valid bylaws.

On that allegation, Adair ruled that the sidewalk in front of the pharmacy does not constitute common property over which a strata might have jurisdiction, meaning the strata has “no power to enforce its bylaws in respect of activity there.”

In her judgment issued Monday, Adair called the strata’s fines “burdensome, harsh and wrongful” and their actions “oppressive and significantly unfair.” As a result, she ordered all fines against Omnicare to be canceled and the pharmacy awarded costs.

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TSCC 1462 v. Dangubic, 2018
Superior Court of Justice—Ontario
Court File No: CV-17-568359
Before: Justice E.M. Morgan
Date: 19 January 2018

Defendant “did not lead trump because he had no trump to lead!”
—John I. Laskin

The Defendant is an owner at The Rio–Tower 2 at 253 Merton St in Toronto. He breached the condo's by-laws by being noisy and getting into verbal confrontations with other residents.

The Plaintiff, TSCC #1462 says that he currently owes a total of $14,358.40 in common expenses. This is composed of:

$ 3,136.32	costs of compliance letters written by condo’s lawyers to the owner.
1,659.82	accrued interest.
9,562.50	legal costs in respect of the lien and attempted collection of arrears.

The condo's Declaration and By-laws provide for the indemnification of these expenses to be added to the common expenses and to be dealt with in the same manner as common expenses.

Is the lien valid?
The first compliance letter sent to the owner by the condo's lawyers was dated November 24, 2015. The second compliance letter was sent on December 4, 2015. The condo registered a lien in respect of the arrears in common expenses on March 29, 2016.

The owner submits that the lien was registered out of time. Section 85(2) of the Condominium Act provides that the lien must be registered within 3 months of the claim for arrears. Since the claim was first made by the Plaintiff on November 24, 2015 and the lien was not registered until March 29, 2016, it appears on the surface, that the three month period had already passed.

Counsel for TSCC #1462 explains that the lien amount has been adjusted monthly on a rolling forward basis. Commencing January 1, 2016, the owner has paid the monthly common expenses by means of pre-authorized deductions from his account. The corporation, however, has been allocating these payments to the earliest arrears first, not to the latest arrears as the owner would have it. Since each monthly payment is allocated to the earliest arrears, the arrears for which the owner’s unit has been liened move forward each month.

In YCC #482 v Christiansen, 2003, the court made it clear that the arrears can be allocated in whatever way the condo corporation sees fit. It is for the creditor, not the debtor, to apply its accounting method to the monthly payments made.

This approach was adopted and further elaborated upon by Justice Gilmore in DCC # 56 v Stryk, 2013. Justice Gilmore reasoned that there is nothing wrong with the condominium corporation crediting any payments in a chronological way against the oldest outstanding expenses first, including common expenses owing due to a special assessment and not part of the ordinary monthly expenses.

Judgment
The Defendant shall pay the Plaintiff $14,358.40. The Plaintiff shall also have an order for possession and leave to issue a writ of possession.

The Plaintiff deserves its costs of the motion and action. The condominium’s by-laws suggest that the condo corporation deserves full indemnity for all legal costs incurred in recouping common expenses owed by a unit owner. Section 85(3)(c) of the Condominium Act provides that all reasonable costs and expenses are recoverable. Plaintiff’s counsel has submitted two alternative scales in his Costs Outline,

Costs
The condo has submitted two alternative scales in its costs outline, TSCC #1462 sought either $18,223.39 on a full indemnity basis or $16,556.41 on a substantial indemnity basis. The judge used his discretion to award $16,556.41, the lesser of the two amounts.

Comments
Thanks to the language the condo corporation has in its Declaration and By-laws, TSCC #1462 was able to treat its legal costs as common expenses. Note the very high interest charges.

The owner ends up paying the condo a total of $32,581.79 for its legal costs. On top of that he has to pay his own legal expenses.
—CondoMadness

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