Condo Dispute Wastes a Million Dollars?

The Court of Appeal released its decision in the Boily saga in late October. For those of you that are unfamiliar with Boily, it is the case where the board and a group of owners disagreed on various changes to the common elements. The owners commenced an application against the condominium and directors. The court ordered the condominium to restore the common elements. The directors disregarded the court order. The owners brought a motion for contempt of court. The owners were successful. The were further appeals and motions as the parties dug their heels in.

This matter never should have required a court application, or at least not one with multiple hearing dates, motions, and appeals. This type of dispute seems to be the perfect subject-matter for mediation, which would have been a fraction of the cost.  The costs wasted on this matter have been astronomical. By my calculation (based on the reported cases), the legal costs of all the parties likely exceeded $500,000.00. Add in the restoration costs of $400,000.00 and you are close to 1 million all because they couldn’t agree on the landscaping for the condominium. Does that seem reasonable to anyone?

Here is a more detailed summary of the court’s findings:

June 29, 2011 – The owners commenced an application and brought a motion for an injunction to prevent the condominium from completing work on the property. The court ordered the condominium to restore the common elements to the previous design.

The owners brought a motion to enforce a settlement that was reached between the parties since the directors refused to fulfill the terms of the settlement.

February 24, 2012 – The owners sought costs of $48,538 for the motion for an injunction, a motion to enforce the settlement, and the application. The court awarded $13,560 against the directors personally and $23,141 against the condominium. This left the group of owners with about $12,000 in unpaid legal expenses. It is not reported what the condominium and directors spent on legal fees, but it was likely at least $50,000.00.

March 8, 2013 – The owners brought a motion for contempt of court. The court found that the condominium and directors were in contempt of court. The court ordered the condominium to restore the common elements to the previous design and ordered the directors to personally pay for the costs of the restoration of the common elements, which was approximately $400,000.00. The condominium and directors appealed.

April 29, 2013 – The owners sought costs of $109,598 for the contempt motion.The court awarded $96,803 to the owners, which was to be paid by the directors personally.

August 6, 2014 – The Court of Appeal allowed the appeal, in part. It upheld the contempt finding, but the order requiring the directors to pay for the cost of restoration was replaced with an order that required each director to pay a $7,500 fine to the condominium. No costs were awarded on the appeal.

October 23, 2014 – The Court of Appeal reduced the judge’s costs award for the contempt motion from $109,598 to $35,000, which was still to be paid by the directors personally.

What does all this mean? Of the $500,000.00 (or more) in legal fees paid, the directors were personally responsible for $80,000.00 (without indemnification from the condominium), the group of owners that commenced the application were responsible for over $140,000.00, and the condominium for over $280,000.00.

Who wins? No one.