TSCC No. 1633 v. Baghai Development Limited, 2012 ONCA 417
Court of Appeal for Ontario
Heard: 03 January 2012
Justices of Appeal: Rosenberg, Simmons and Armstrong
On appeal from the orders of Justice Lois B. Roberts of the Superior
Court of Justice, dated June 11, 2010 and May 13, 2011, and from the
costs endorsements dated June 14, 2011 and June 22, 2011.
TSCC 1633 is a mixed use condominium located at 16-18 Harrison Garden
Blvd, just south of Yonge and Sheppard in North York. The ground floor
has retail/commercial units while the upper floors contain residential
apartments. Rabba, a small grocery store, leases five units from Baghai
Development, the developer.
Rabba no longer has any merchandise on the sidewalks at this location.
Rabba had been putting merchandise on the sidewalks in front of the
store. The condo corporation complained. Agreements were made a
regularly broken. The condo corporation took the landlord and tenant to
court to get the merchandise off the sidewalk.
Baghai claimed that this was unjust as Rabba had a lease that states:
"The landlord specifically grants to the Tenant an exclusive and
irrevocable licence to use the area outlined in yellow on Schedule “A”
attached hereto, at no extra charge to the Tenant, for the purpose of
the seasonal display of fresh produce, fresh flowers, live plants and
other temporary sales kiosks in such a manner as not to impede the safe
flow of pedestrian traffic around the area, and subject to compliance
with all applicable laws."
However, the condo corporations Declaration and By-laws say different. By-law No. 1 says:
"Section 9: The sidewalks, entry, passageways, walkways and driveways
used in common by the owners shall not be obstructed by any of the
owners or used by them for any purpose other than for ingress and
egress to and from their respective units."
The lower court judge ruled that the Declaration and the By-laws
override the lease. The grocery store and its landlord appealed. The
Appeals court upheld the decision. Pretty straight forward.
Lower court Costs Awarded
TSCC claimed partial indemnity costs of $172,373.01 and full indemnity
costs of $199,020.97. TSCC argued that it was entitled to the higher
amount by virtue of s. 134(5) of the Condominium Act, 1998, which
"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… ."
Baghai and Rabba acknowledged that, as the successful party, TSCC was
entitled to an award of costs. However, they disputed TSCC 1633’s
entitlement to full indemnity costs, and also argued that the amounts
claimed were excessive. They suggested an award of $80,000, plus or
minus disbursements, was appropriate.
The application judge fixed TSCC’s costs at $100,418.11, including taxes and disbursements.
Appeal of costs order
TSCC 1633 asked for leave to appeal the costs order. Its principal
submission is that that the application judge erred by failing to order
full indemnity costs, in accordance with s. 134(5) of the Condo Act.
Appeals court ruled that the application judge accepted that TSCC was entitled to full
indemnity for counsel’s appearances at cross-examinations and the
various court hearings. However, she concluded that the amounts
claimed for preparation and research (over 330 hours in total) were
“overkill” given the relative simplicity of the legal issues, on the
one hand, and the expertise of TSCC’s counsel, on the other. She
explained, at para. 22, that TSCC could have avoided much of the
expenses claimed if it had tried to negotiate or arbitrate a solution,
“instead of embarking on a scorched earth campaign.”
Section 134(5) of the Condominium Act, 1998 does not allow the
applicant to expend or authorize its counsel to expend any amount and
then ask that it be completely indemnified for costs that are otherwise
disproportionate and unreasonable. The Court retains its discretion to
determine what amount of costs is fair and reasonable and to award no
costs where appropriate.
The application judge went on to hold that the amount TSCC spent on the
compliance order was excessive given that the legal issues were
relatively straightforward, and its counsel, Mr. Fine, is an expert in
She described the time counsel spent preparing the application
materials (some 196 hours in total) as “overkill”. Similarly, she found
that the nearly 36 hours counsel spent on legal research was not
In arriving at this figure, it appears that the application judge
essentially came up with what she thought was a reasonable amount for
TSCC to have paid its lawyers to obtain the compliance order. There is
no arithmetic to support the amount of $95,000.
An appellate court will not interfere unless the trial
judge considered irrelevant factors, failed to consider relevant
factors, or reached an unreasonable conclusion.
Ordinarily, an appellate court will defer to a trial judge’s decision
to reduce a bill of costs because the successful party overspent on the
litigation. This holds true even when the trial judge does not “show
her work” – that is, when the final number is not accompanied by a
detailed breakdown of how it was arrived at.
"I would grant leave to appeal the costs award and allow the costs
appeal. I would refer the costs back to the application judge for
reassessment. In light of the already protracted history of this
dispute I would urge the parties to sit down and attempt to settle the
costs, and, failing which, to seek an expedited date for this matter."
Costs of the main appeal
TSCC is entitled to partial indemnity costs for the costs of responding
to the appeal of the compliance order, plus additional actual costs in
accordance with s. 134(5) of the Act. In respect of the oppression
application appeal, TSCC is entitled to partial indemnity costs.
Costs of the cross-appeal
"To a great extent TSCC was responsible for the problems associated
with the costs order made by the application judge. In these
circumstances I would make no costs award in respect of the