Section 134(5) of the Condominium Act, 1998, permits the condominium to add “additional actual costs” to the common expenses payable for a unit where it is successful in obtaining an order for damages or costs from the owner or occupant of the unit. Many condominiums rely upon section 134(5) of the Act when seeking costs from owners and occupants after a successful application. The courts have recently begun to resist such claims where the amount sought for legal costs is excessive or unreasonable.
In one of the more recent decisions (York Condominium Corporation No. 301 v. James (2014) SCJ) the condominium sought over $125,000.00 in costs from the owner. The condominium also sought over $27,000.00 for security, plumbing, inspection, and locksmith charges. The court refused to allow the condominium to recover all of its legal costs. The court refused to award any of the other charges.
The condominium brought an application against the owner seeking an order that she move out of her unit and sell it. The Office of the Public Guardian and Trustee was appointed as the Litigation Guardian for the owner since she suffered from a mental illness. The condominium was successful on the application and the owner was ordered to sell her unit. The condominium sought its costs from the owner.
The court (confirming an earlier decision) stated that there are two different aspects of costs in condominiums – the award of costs (the court ordered costs one party must pay to the other) and additional other costs (the costs between the client and his/her own lawyer beyond the court ordered costs). The focus is on the amount that would be reasonable for a client to pay its own lawyer.
In the end, the court found that the number of hours claimed was excessive and that a client would not expect to pay for some of the time incurred. The court awarded $58,000.00 to the condominium, which was less than half of what was sought.