Toronto real estate law guru Jeffrey Lem has a knack for making court cases both entertaining and educational at the same time.
His latest effort, which appeared in the Law Times last month, is about the $40,000 parrot. Although the bird, which was housed in a Toronto condominium in violation of the no-pets rules, was the focal point of the case, Lem says it was no more than a red herring for condominium lawyers. (Read the story here.)
Michael and Margarita Bazilinsky live in a condo unit on Holly St., near Yonge St. and Eglinton Ave. In November 2010, the corporation contacted them about a bird believed to have been in their unit. Michael responded that he had had a bird for two weeks but it had since been returned to its owner.
In December 2010, and again in February 2011, the condominium lawyers wrote the Bazilinskys demanding that they remove the bird from the unit. The lawyers threatened court proceedings to enforce compliance.
In May last year, the corporation placed a $3,330 lien on the owners’ unit for legal fees incurred in attempting to evict the bird.
The corporation then brought a court application alleging that the Bazilinskys were keeping a bird in their unit in violation of the “no pet” provision of the corporation’s declaration and rules. The condominium asked the court for an order forcing the Bazilinskys to comply with its declaration and rules, as well as its legal costs of $16,487.94.
When the case was heard in August, the Bazilinskys consented to the removal of the bird but disputed the amount of costs claimed by the board. The condominium asked for $8,800 but was awarded only $3,000 by the judge. Subsequently, the corporation refused to accept the $3,000 offered by the owners, and all subsequent common expense payments.
By February of this year, the legal costs claimed by the corporation had escalated to $41,599.45. The Bazilinskys then brought the case back to court seeking a discharge of the lien against their unit and removal of any claim for legal costs beyond the $3,000 ordered last August.
The condominium board based its claim on section 134(5) of the Condominium Act which entitles the corporation to recover legal costs of obtaining a compliance order against an owner.
Following the hearing in February, Justice Nancy Backhouse ruled that the legislation “is not an invitation to counsel to aggressively work a file or unreasonably build up costs. . . . This was a simple application, the substance of which was consented to before the court date. In my opinion, the value of legal work . . . is no more than $6,500” including the $3,000 costs awarded in August 2011.
Backhouse awarded $5,000 in costs against the condominium corporation, ordered the lien discharged and ruled that the owners did not have to pay interest on the outstanding common expenses which the board refused to accept.
When the smoke cleared, the condo actually owed the Bazilinskys $1,800 in legal fees.
With the case resolved, the Bazilinskys have sold their unit and are moving out of the building. “I feel sorry for the people who live here,” Michael told me last week.
Back to the red herring. In his analysis of the decision, Lem wrote that the case really has nothing to do with parrots, since the principles could have applied equally to the enforcement of any provisions of a condominium’s declaration, bylaws or rules.
The real issue is the extent to which condominium boards can recover their legal costs against allegedly wayward owners.
In a similar case last year, the court ruled the board could not go on a legal rampage and incur wildly outrageous legal bills. It drastically reduced the claimed legal fees.
Condominium corporations are typically successful in recovering all their legal fees against offending owners.
But, says Lem, these new cases “warn condominium managers and their boards that they can’t undertake such litigation so recklessly and aggressively as to prompt the courts to deem their tactics as part of a scorched-earth strategy giving rise to unreasonable and disproportionate legal bills.”
Bob Aaron is a sole practitioner at the law firm of Aaron & Aaron in Toronto and a past board member of the Tarion Warranty Corp. Bob specializes in the areas of real estate, corporate and commercial law, estates and wills and landlord/tenant law. His Title Page column appears alternate Saturdays in The Toronto Star and alternate weeks on Move Smartly. E-mail bob@aaron.ca
May 23, 2012
Legal |