In cities throughout Canada, close to two million people live in condominiums or condos. There are many benefits to living in a condo, but there can also be challenges associated with communal living spaces. While condo owners may own the unit they live in or rent out, all tenants must respect common spaces in a condo building and follow the condo’s bylaws. When someone runs afoul of building bylaws, they could face disciplinary action by the condo’s board. But what happens when the corporation managing a condo building takes disciplinary measures that lead to litigation and backtracking on the action? How much should the condo corporation be on the hook for costs incurred by those they pursued litigation against? 

A recent decision from the Court of Queen’s Bench of Alberta provides us with some insight into how the courts address pre-trial conduct as well as the number of damages appropriate for condo litigation that did not occur. 

Pet dog leads to noise complaints and multiple warnings

The whole matter began as a result of a dog owned by the owner of a condo unit (“LY”) and her son (“KF”). We will refer to LY and KF collectively as “the respondents.” In June 2014 the Board of Directors of the condo corporation received a noise complaint about the respondents’ dog. LY was given a warning that she was in contravention of the condo’s bylaws because she had not obtained approval to have a dog live in her unit. Her dog was causing excessive noise and urinating on common property. 

LY eventually obtained approval to have the dog in her unit. As a stipulation, she was told she would have to ensure that the dog attended obedience school, did not cause excessive noise, and did not track mud through or urinate in common areas. 

Despite this, throughout 2016 and 2017 numerous complaints were filed concerning the dog For instance, a unit owner claimed the dog urinated on his balcony and others complained of muddy footprints and aggressive behaviour. 

The condo corporation brings an action under condo’s bylaws

Eventually, the condo corporation commenced an action under the condo’s bylaws. The condo corporation sought the following relief:

1. A declaration that the respondents engaged in improper conduct;
2. An order requiring the Respondents to cease and desist from making, publishing, posting or otherwise communicating defamatory statements or materials against the condo corporation, its Board of Directors, its management company and its agents;
3. An order declaring that (the dog) be removed from the condominium property permanently;
4. An order evicting (KF)  from the Unit; and
5. Judgement against the Respondents in the amount of $4,293.21.

The condo corporation backtracked on its action

After a lengthy pre-trial process the condo corporation advised the respondent it no longer wished to continue the action. They said that while they understood costs to be $3,375, they offered to provide $8,000 in costs as a gesture of goodwill. The respondents were not quite ready to accept that offer. Instead, they sought full costs, which were ultimately determined to be $55,157 by an Assessment officer. 

The issue of costs made its way before a Master at trial. The Master agreed with the respondents’ position that they were entitled to costs on an enhanced scale due to the conduct of the condo corporation. The impugned conduct included the condo corporation’s attempts to evict KF and his dog as well as its inability to properly manage the matter and handing out of fines without authorization from its own bylaws. 

The amount of costs the condo corporation thought were appropriate were less than 10% of those spent by the respondents. The Master found that while there were a number of complaints made against the respondents by other unit owners, there was “nothing in the records upon which liability of the respondents can be found.” The Master also agreed that the Board and property manager “completely bungled” how they managed the issue and did not properly prepare for litigation. In the Master’s Decision, two-thirds of the total expenses (totaling just over $35,000) were awarded to the respondents. 

The condo corporation appealed the decision, arguing their offer of $8,000 was more than what was warranted. 

Did the trial judge properly consider costs?

The condo corporation said the Master considered inappropriate factors in determining what should be awarded in costs. The Court noted that in making a costs award, judges can consider all or any of the following factors:

(a) the result of the action and the degree of success of each party;

(b) the amount claimed and the amount recovered;

(c) the importance of the issues;

(d) the complexity of the action;

(e) the apportionment of liability;

(f) the conduct of a party that tended to shorten the action;

(g) any other matter related to the question of reasonable and proper costs that the Court considers appropriate.

The condo corporation submitted that its pre-litigation conduct should not have been considered. It cited a 2017 decision from the Alberta Court of Appeal to support this position, but the Court noted the takeaway for that was that costs cannot be awarded for pre-litigation conduct alone. In this case, the Master considered not only the pre-litigation conduct of the parties, but also the conduct during the litigation process, including not being prepared at the hearing. As a result, the court found no reason to overturn the Master’s decision and held the costs award in place. 

Work with the Experienced Litigation Team at HMC Lawyers to Avoid Unnecessary Costs

This decision highlights the importance of working with experienced lawyers, such as the condominium litigation team at HMC Lawyers. We help ensure our clients are properly prepared and have a legal team ready to act in all litigation matters. Please contact us online or by phone at 1-800-480-3534 to see how we can help you in your condominium dispute today.