Condominium Plan No., 2022 ABKB 842

Court of King’s Bench of Alberta Citation: Condominium Plan No.7822583 v Asiedu, 2022 ABKB 842 Date: 20221216 Docket: 1703 17712 Registry: Edmonton Between: The Owners: Condominium Plan No.7822583 0/A Cedarwoods Respondents (Plaintiffs) - and - Yaw Asiedu Appellant (Defendant) _______________________________________________________ Memorandum of Decision with Respect to Prejudgment Interest and Costs of the Honourable Justice Donald Lee _______________________________________________________ Introduction [ 1 ] A written memorandum of decision on the merits of the appeal by Mr.

Asiedu (“the Appellant”) was issued by me in Condominium Plan No.7822583 v Asiedu , 2022 ABKB 745 . Following the release of that written memorandum of decision, the Appellant took a number of positions on a number of further issues concerning costs, interest charges of the condominium corporation,

and his entitlement to a setoff, which are opposed by the condominium corporation. The present memorandum deals with those issues. Interest on the Outstanding Condo Fees owed by the Appellant [2] The Appellant’s submission is that the condominium corporation’s conduct in this matter resulted in significant delays inresolving the matter and should result in the condominium corporation not receiving any interest from approximately September 2016 toSeptember 2019. This period of time essentially covers the time when the Appellant stopped making condominium fee payments.

Asauthority for this proposition, the Appellant submits Horst Tyson Dahlem Professional Corporation v John F Schneider ProfessionalCorporation (Canmore Legal Services), 2017 ABCA 97 at para 40, (Dahlem) which the Appellant says allows me to take into accountexceptional delays and the calculations of any award of interest with respect to even contractional interest obligations. [3] However, the Court of Appeal’s decision in Dahlem at para 40 does not allow me to use my discretion to deny or reduceinterest in this particular matter as stated specifically in paras 39 and 41: [39] In Rayani, this Court considered the power to disallow interest under the Judgment Interest Act, SA 1984, c J-0.5.

However, section2(2)(

h) of that Act, along with s 2(2)(

h) of the current Judgment Interest Act, RSA 2000, c J-1, both provide that a court shall not awardpre-judgment interest under that

section if there is an agreement between the parties respecting interest; see also National Trust Co vConroy (1995), (ABQB), 168 AR 161 at para 18, [1995] 6 WWR 363 (QB). [40] In Magnum, the Court disallowed a contractual interest rate of 15% compounded monthly for a loan which was intended to be aone month loan, on which payment was extended for thirteen months. Litigation extended over eight years. It was found neither partycould have foreseen or intended that interest would accrue for over eight years.

The unforeseen and unintended interest accumulationwas found to verge on unconscionable and thus a reduction in the interest payable was allowed. [41] The discretion to deny interest under the Judgment Interest Act does not extend to contractual interest. Here the parties hadcontracted that any outstanding amounts would bear interest at 6.5% per annum, compounded semi-annually. There is no basis forfinding that the 6.5% interest rate is unconscionable.

Nor is there any indication that the parties expected interest would accrue for only alimited period of time. (emphasis added) [4] The present case does deal with contractional interest in that the Appellant contracted through the condominium bylaws topay interest on unpaid assessments at the rate of 18% pursuant to Condominium Bylaw

section 2.01(h), which binds all condominiumcorporation unit holders. In addition to the requirement under the Bylaws to pay all common expense levies and assessments against theunit with interest on arrears at a rate of 18% per year calculated from the due date,

section 40 of the Condominium Property Act (“TheAct”) authorizes the condominium corporation in Alberta to charge interest on unpaid assessments.

Section 76 of the Regulations of thatAct sets the interest rate to be 18% on unpaid fees and assessments. [5] I consider 18% interest annually to be an unusually high interest rate, given that amounts owing double in just a four years at18% compounded annually, and 18% is considerably more than the Appellant would be paying under his Scotia bank mortgage.However, I am not able to relieve the Appellant from both from his contractual obligation and from his obligation authorized by the Actto pay this interest rate.

It is of some benefit albeit relatively minor to the Appellant that I believe the amount of interest calculatedshould be simple interest, rather than compound interest that has gone into the some of the condominium corporation’s calculations.

Ifurther note that the condominium corporation did cease charging interest at a certain point during the parties protracted negotiation,which was a benefit to the Appellant notwithstanding that the bylaws could have been interpreted to require interest to continue. [6] Furthermore, while other decisions in the Court of Appeal may support my view that 18% is a very high interest rate, evenhigher interest rates have not been considered to be problematic with respect to loan agreements. [7] In Alberta the Unconscionable Transactions Act, RSA 2000, c U-2 which only deals with loan agreements and not thepresent situation, does provide that if the Court finds that the cost of the loan is excessive and the transaction is “harsh andunconscionable” the Court may relieve the debtor from the obligation to pay that interest rate.

With respect to the AlbertaUnconscionable Transactions Act, cases such as Lydian Properties Inc v Chambers, 2007 ABQB 541 as affirmed by 2009 ABCA 21sets out four identifying features of an unconscionable transaction to be considered when determining whether the Act applies: a. The grossly unfair and improvident nature of the loan transactions; b. The lack of independent legal or other appropriate professional advice to the weaker party; c.

An overwhelming imbalance in bargaining power between the parties caused by the weaker party’s lack of sophistication, businessliteracy, or a physical and mental disability; and d. The knowing exploitation where the stronger party or the weaker party’s vulnerabilities. [8] The Unconscionable Transactions Act does not provide a cause of action, but borrowers often plead it in conjunction withequitable doctrines of unconscionability or in actions based on the Interest Act, RSA 1985, c I-15 or the Criminal Code, RSA 1985, c C-46. Under the Criminal Code 60% a year interest or above is forbidden.

However, my conclusion is while the 18% interest rate is veryhigh, it is authorized both by contract through the Bylaws as well as by the Act, and no case authority that I have come across allows meto grant the Appellant any relief from that interest rate: See for example the 48% interest rate discussed in Settlement Lenders Inc vBlicharz, 2016 ABCA 33. [9] In the present matter the parties were engaged in negotiations which involved the insurance adjusters so no inordinate delayoccurred here unlike in Dahlem, and there were insufficient features of an unconscionable transaction present as per Lydian.

Is the Appellant Entitled to a Setoff? [ 10 ] The Appellant is now raising a setoff provision that should have formed the basis of a counter claim by him, which counterclaim he actually never made. In any event, there would be a limitations bar against any counter claim issues now being raised. [ 11 ] Furthermore, I do not believe that the Appellant is entitled to any setoff irrespective of these comments.

The Appellant points out that it was common knowledge in Fort McMurry that the local Wood Buffalo council passed a number of motions intended to provide financial relief to homeowners affected by the May 2016 wildfires including using different rebate and fee waivers mechanisms.

Accepting as correct that the condominium corporation benefited from a number of these fee waivers that concerned the development such as building permits, survey fees, and demolition and landfill fees, etc., otherwise payable by the condominium corporation, there is no contractional relationship between the Wood Buffalo council and the Appellant.

Accordingly, the Appellant enjoys no right or entitlement to a setoff as against the condominium corporation, as none of the rebates and off sets awarded by the Wood Buffalo council were owing by the condominium corporation to the Appellant per se. [ 12 ] Presumably all of these rebates that ended up in the possession of the condominium corporation would have been used by them to offset expenses, as there is no basis to suggest otherwise. From what I can gather from the Appellant’s submissions these rebates though not insignificant, amounted to at least $540 for his unit.

Whatever the amount, all rebates received by the condominium corporation represented a financial benefit to the Appellant ultimately, which accrued indirectly through the condominium corporation accounts for the benefit of all unitholders.

However, they do not constitute the basis for finding an equitable or legal setoff in this appeal. [ 13 ] I further note that the Appellant is not able to advise the Court at this late stage of these proceedings what the exact amount of the entitlement or setoff is that he seeks, although he blames the condominium corporation for this problem because it failed or refused to provide the relevant documents to him for which he could base such a calculation. [ 14 ] Nonetheless, since the Appellant is not entitled to a setoff, and the amount is not certain or ascertainable at this time, I cannot grant the Appellant any relief or entitlement to a setoff.

Additionally, as pointed out no setoff defence was advanced in any event, and any counterclaim at this time would be limitation barred. The Costs of the Appeal [ 15 ] The condominium corporation submits that it is entitled to costs for the current appeal before me on a solicitor client basis, although no formal Bill of Costs has yet been prepared. Through to June 30 th , 2022, legal fees incurred for this appeal according to the condominium corporation amount to just under $10,000, with more costs being incurred since June 30 th for this appeal. [ 16 ] The Condominium Bylaws at

section 6.02 indicates that the condominium corporation may recover solicitor client costs for any action performed by a condominium corporation against individual unit holders. The Act deems the condominium corporation bylaws to be a contractional relationship between the owners with each other and the owners with the condominium corporation in section 32(6) of the Act . [ 17 ] Accordingly, the condominium corporation argues that there is a contractional obligation between the parties that costs as between solicitor and client are due and owing by the Appellant to the condominium corporation.

There was an attempt by the condominium corporation to settle the matter on a with prejudice basis for an all-inclusive amount of $5,000 with costs, but the Appellant rejected this offer on September 26, 2022, and proceeded with the appeal. [ 18 ] Although the Appellant has been ultimately unsuccessful in this appeal, it is still up to this Court to decide the issue as to whether or not costs will be awarded to the condominium corporation on a solicitor client basis.

I decline to award costs to the condominium corporation on a solicitor client basis because the Appellant raised a number of important issues in this matter that needed to be dealt with pursuant to the appeal process.

Although the Court is not able to assist the Appellant in granting any relief from the extremely high 18% prejudgment interest provided for in the bylaws and in the Act , it can and will assist the Appellant by not awarding solicitor client costs for this appeal. [ 19 ] Through the combination of significant prejudgment interest, the party and party costs, the condominium corporation has already been somewhat insulated from any legal fees that it has incurred in this matter.

Awarding solicitor client costs on top of regular costs and the 18% annual interest could result in a windfall of sorts to the condominium corporation for pursuing an action that is going to prove extremely costly to the Appellant. The condominium corporation should not receive such a benefit through additional solicitor client costs, but it is entitled to ordinary costs in the appeal.

Hopefully through the truncated process that has been used in this matter efficiently, those party and party costs should be significantly lower than solicitor client costs incurred in a normal appeal process. [ 20 ] As for the costs related to the action before the Applications Judge (formally the Master) which led to the granting of the Redemption Order, those matters are still to be determined by the Applications Judge, who has specifically reserved his decision on those costs pending this appeal.

The parties should return to the Applications Judge now that the appeal has been concluded before me and receive the decision with respect to any costs arising from the granting of the Redemption Order to the condominium corporation. Conclusion [ 21 ] The Appellant’s application for interest relief and for a set off are denied. Costs will not be awarded for this appeal on a solicitor client basis but rather on a party and party basis. [ 22 ] The Applications Judge (Master) will determine the issue of costs for the granting of the Redemption Order.

Heard on the 27 th day of November, 2022. Dated at the City of Edmonton, Alberta this 15 th day of December, 2022. Donald Lee J.C.K.B.A. Appearances: Yaw Asiedu Self Represented, Appellant Hugh Willis, Willis Law for The Owners: Condominium Plan No.7822583, Respondent