Lauder v Owners: Condominium Plan No 932, 2021 ABQB 413

Court of Queen’s Bench of Alberta Citation: Lauder v Owners: Condominium Plan No 932 1565 (Grand Carlisle), 2021 ABQB 413 Date: 20210527 Docket: 1803 13413 Registry: Edmonton Between: Mary Jo Lauder Applicant - and - The Owners: Condominium Plan No. 932 1565 (o/a Grand Carlisle) Respondent _______________________________________________________ Memorandum of Decision of A.R. Robertson , Q.C., Master in Chambers _______________________________________________________ Introduction [ 1 ] On February 21, 2021 I released my decision in this dispute, reported at 2021 ABQB 145 .

The parties have not agreed upon costs and they ask me to make an award. [ 2 ] The proceedings were brought by originating application. It was a claim by Ms. Lauder, a condominium unit owner, that the Board of Directors of the condominium corporation engaged in improper conduct, acting in a manner that was oppressive, unfairly prejudicial, or that unfairly disregarded her interests. I found in her favour. [ 3 ] The matter proceeded reasonably promptly. In my decision I noted that the facts might have been thought to demand a trial, but neither side asked for one.

The application was dealt with as a special application. [ 4 ] In my decision I noted that Ms. Lauder was entitled to an award of costs and I was aware that she was seeking that award on

a solicitor-client basis. Disclosure of Offer to Settle [ 5 ] After my decision was released, the respondent condominium corporation filed a Notice of Appeal, which it is entitled to do, and then it made an offer to deal with the entire matter on the basis that each party bear their own costs and the appeal would be discontinued. The applicant Ms. Lauder has referred to that offer (in the written submissions submitted on this costs application) and the condominium corporation objects on the grounds of privilege. [ 6 ] Ms. Lauder argues that the offer was clearly not a compromise.

No costs at all were offered. [ 7 ] I disagree. The unsuccessful party in an application before a Master in Chambers has a right of appeal, and may seek to have further evidence put before the chambers judge who hears the appeal. The condominium corporation indicates that it has further evidence to put before the chambers judge on appeal. [ 8 ] There is a risk, of course, in bringing the appeal and relying on new evidence, because the intent of allowing an appeal is not to turn the application before the Master into an out-of-town tryout before the Broadway opening.

Both parties are expected to present their evidence in the first instance. A successful applicant, relying on new evidence that it did not place before the Master runs the risk of a significant adverse costs award, such as was made in Rudichuk v Genesis Land Development Corp , 2019 ABQB 133 at paras 50-57 . [ 9 ] However, the appeal is a matter of right. The condominium corporation was prepared to give up that right in exchange for each party bearing their own costs. That was a proposed compromise.

In my view, as it was an offer made in contemplation of settlement of the dispute (that is, the appeal) it was a privileged communication. It should not have been brought to my attention and I disregard it (except in the context of addressing an allegation of misbehaviour, discussed below). Factors to Consider [ 10 ] Ms.

Lauder submits that the condominium corporation has engaged in conduct that rightfully attracts an order of solicitor- client costs, because there was no serious issue of fact and the condominium’s behaviour both during and even after the release of my decision is blameworthy. [ 11 ] I have not seen any of that “blameworthy” behaviour. In my view, the condominium corporation simply argued its perspective on the dispute, and although I pointed out that the facts seemed clear that (

a) one of the windows should clearly have been replaced, but it was not, it continued to leak, and my assessment was that (

b) the Board of Directors had ultimately stopped listening to her complaints, that is not misbehaviour in the litigation. Litigants often ignore evidence that does not conform to their perception of the dispute, almost always without realizing it. [ 12 ] The condominium corporation had retained an expert engineer (eventually) and done significant repairs. It had not ignored Ms. Lauder’s complaints from the beginning. It had simply concluded that everything it had to do had been done, when the facts, when I looked at them closely, indicated otherwise. [ 13 ] That is not misbehaviour.

That is simply a court looking at the evidence carefully, concluding that one side was in the wrong, and making the appropriate order in the circumstances. [ 14 ] Making the offer to discontinue the appeal in exchange for each party bearing their own costs was not misbehaviour, if that is what is meant by behaviour after the release of the decision. She may have found it insulting, but “low ball” offers are often made in an attempt to resolve disputes.

Sometimes they are so low that they simply poison settlement discussions, but I do not consider it as misbehaviour. [ 15 ] The condominium corporation points out that “solicitor-own-client full indemnity costs” (directing the payment of all costs associated with the litigation even beyond what might be recoverable as “solicitor client” costs) or “solicitor client” costs are awarded when there has been reprehensible, scandalous or outrageous conduct by a party, and that is not this case.

The misconduct that attracts that kind of award is misconduct during the litigation: Weatherford Canada Partnership v Artemis Kautschuk und Kunstoff-Technik GmbH , 2019 ABCA 92 and Goldstick Estates (Re) , 2019 ABCA 508 . I do not see any such misconduct. [ 16 ] However, that does not end the analysis. [ 17 ] I expect that the By-laws here provide that if the condominium corporation has to sue an owner to make the owner comply with the By-laws, the entitlement to costs is on a solicitor-client basis. That is virtually universal in condominium By-laws.

The other owners of units should not have to bear the burden of paying legal fees through their condominium fees when one owner ignores his or her obligations. I discussed the “social contract” that exists among condominium owners in Condominium Corporation No 0213865 v. Uhrik , 2014 ABQB 478 at paras 58 and 59 . [ 18 ] One might conclude that the social contract would dictate that the reverse should apply, but By-laws do not direct that solicitor-client costs be paid by the owner who successfully sues the condominium corporation.

Nonetheless, that was the approach taken by Master Schlosser in 1212443 Alberta Ltd v Condominium Corporation No 0721898 , 2021 ABQB 329 , where at para 8 , he said: Condominium Boards must not be encouraged to ignore their duties. In the circumstances of this case, fair dealing requires that an aggrieved condominium owner, forced to take this kind of action, should not receive anything less than might be permitted for the Condominium Corporation if the situation were reversed.

A courageous owner, forced to challenge the missteps of the Board in Court and ultimately to protect the interests of the corporation, should not be condemned to mount their campaign at a loss.

[ 19 ] However, the key words in this quote are in the first sentence. He was dealing with a circumstance where there had been “an almost complete failure of the Board to perform its duties.” That is not this case. [ 20 ] Nonetheless, the reality is that the windows were not replaced as had been recommended and as they were supposed to be. The engineer had not tested the window that Ms.

Lauder was complaining about after the significant work was done, the engineer knew (or at least should have known) that the window was supposed to have been replaced, was not, and he relied solely on the statement by the contractor that he had “fixed” it. [ 21 ] The Board of Directors here had access to all of this information, and knew that Mrs. Lauder continued to say that the window leaked, but did not tell the engineer of this. Everyone put their pens down in trying to actually address the complaint.

But until that time the Board had tried to resolve the problem, and actually had addressed the leaking of other windows and walls. [ 22 ] In a condominium, the owner is not in a position to effect the repair on common property themselves. She could not have mitigated her damages by repairing the windows herself. She could not have taken her business elsewhere. Had she sold, she would have been required to disclose the problem, and that would have adversely affected the sale price. She had no choice but to ask the Board of Directors to fix the common property. Here, the common property directly affected Ms.

Lauder. She ultimately had no choice but to bring legal proceedings to try to force a proper resolution. Accepting anything less than getting the leaking to stop was not an option. [ 23 ] On the other hand, since this is a condominium, any recovery of costs by Ms. Lauder is borne by all of the unit holders, including her. She is the one who spurred the Board into taking extensive action to deal with hidden leaking walls and windows, so the other unit holders should be thankful for her courage in advancing the case.

It was not only her unit that was leaking. [ 24 ] I awarded general damages of $5,000, far below what she sought. The condominium corporation argues that that should be taken into account in the costs award. But that was a very small portion of what the case was about. [ 25 ] After going through the terms of the repair, the engineer’s reporting to the Board, and the Board minutes over several years to understand why the last window was still leaking after the extensive work was done, I concluded that the east window had not been replaced and it should have been. In my review, I did not create any new information.

This level of detail should have been brought to the attention of the Board before the application was actually heard. It may have been resolved long before the briefs were filed and the oral argument was held. Blame could be attributed to both sides on this point. [ 26 ] Taking into account that (

a) serving the originating notice, and (

b) following through on the claim until the engineer had looked at the problems and the work was done, were things clearly required in order to get some results, in my view the appropriate award of costs should reflect that the proceedings were effectively mandatory for Ms. Lauder up to the point of the repairs being done and advancing further complaints that were ultimately ignored. [ 27 ] With this in mind I make a lump sum award well beyond the rates set in

Schedule “C” of the Alberta Rules of Court . If I were to use Column 3 of

Schedule “C”, which would roughly grasp the value of the dispute, the costs would be around $5,000 plus GST (I do not have the detail to know). That is far below what I consider to be fair. In particular, I note that the amount of $1,500 is the amount set out in

Schedule “C” under item 8 for applications requiring briefs, and that bears no relationship to the actual costs incurred by a party when arguing a special application. [ 28 ] In all of the circumstances, taking into account that Ms.

Lauder had no realistic choice but to pursue the dispute at least most of the way to the hearing, that the cost of an award in her favour is borne by her neighbours (and by her, to the extent of her unit factor) and that the Board is made up of other owners who have volunteered their services, that the Board’s behaviour through the litigation was far from “reprehensible” or “contemptuous”, I set costs in the lump sum of $35,000 plus GST, for a total of $36,750. That represents roughly 2/3 of what I am told are her solicitor-client costs. Dated at the City of Edmonton, Alberta this 26 th day of May, 2021. A.R.

Robertson, Q.C. M.C.C.Q.B.A. Appearances: Roberto Noce, Q.C. Miller Thomson LLP for the Applicant

Todd A. Shipley Reynolds, Mirth, Richards & Farmer LLP for the Respondent