The Divisional Court Clarifies the CAT’s Costs Jurisdiction

March 11, 2022:

Halton Standard C.C. No. 617 v. Roberts, 2022 ONSC 1477 (Divisional Court)

Introduction

In early 2021, the Condominium Authority Tribunal (the “CAT”):

(i) Dismissed a unit owner’s application seeking the enforcement of a condominium’s governing documents; but (ii) Ordered the successful condominium to pay $200.00 in costs to the unsuccessful unit owner, largely because the application dealt with a ‘novel issue’ within a ’new area of the CAT’s jurisdiction.’

On appeal, Eric Kerson and Jamie Cockburn of SV Law successfully obtained an Order from the Divisional Court overturning the CAT’s extraordinary costs Order. This appellate decision will provide mandatory direction to the CAT, and should result in greater clarity with respect to the breadth of the CAT’s jurisdiction, specifically related to costs.

Facts

In Roberts v. Halton Standard C.C. No. 617 and Yamine, 2021 ONCAT 21, a unit owner commenced a CAT application against: 

(i) Halton Standard Condominium Corporation No. 617 (the “Condominium”); and 

(ii) A neighbouring unit owner regarding the placement of a basketball net. Specifically, the unit owner applied for an Order requiring the Condominium to enforce certain provisions of the governing documents. 

In response, the Condominium asserted that the placement of the basketball net did not violate the governing documents. 

At the time of the application, the CAT had recently assumed jurisdiction over certain disputes in relation to the interpretation and application of condominiums’ governing documents. However, in Roberts, the CAT ruled in favour of the Condominium and dismissed the application. 

Based on the CAT’s jurisdiction at the time, the placement of the basketball net was not in violation of the governing documents. However, the CAT went on to Order the successful Condominium to pay $200.00 in costs (i.e., CAT fees) to the unsuccessful unit owner, stating: “This is a novel issue within a new area of jurisdiction for the Tribunal. It was not unreasonable, in the circumstances…to pursue this dispute despite the fact that she has been unsuccessful.”

The Condominium exercised its right of appeal pursuant to the Condominium Act, 1998, which empowers the Divisional Court to overturn CAT determinations on ‘questions of law.’ While inherently discretionary, costs constitute a ‘question of law.’ Pursuant to the governing law of costs, an order from the CAT requiring a successful party to pay any costs to an unsuccessful party solely on account of the novel nature of an issue is not ‘correct.’ 

On appeal, the Condominium’s counsel explained the foregoing to a three-judge panel of the Divisional Court. In overturning the costs Order, the Divisional Court manifestly agreed, ruling: 

“The novelty and reasonableness of bringing the claim may be relevant factors which would have supported no costs being awarded against the Respondent, the unsuccessful party, but are not relevant factors in support of an award of costs against the successful party, the Appellant. In the absence of a finding of bad faith or misconduct, it was an error of law to award costs against the Appellant.”

Bottom Line

On the surface, condominiums that are successful at the CAT can take heed that they will not be forced to reimburse unsuccessful unit owners’ CAT fees, absent bad faith or misconduct. On a deeper level, however, there are two points of note: 

(i) The CAT clearly has wide jurisdiction to assess costs and issue orders that are just in the circumstances, taking into account a range of contextual factors; 

(ii) The CAT cannot depart from governing legal principles when evaluating ‘questions of law.’ Incorrect determinations in relation to the same may be overturned on appeal.

For any matters relating to condominium law, please contact us here and a member of our experienced team will be happy to assist you. 

Written by Jamie Cockburn, edited by Christopher Mendes & Robert Mullin. *This article does not constitute legal advice, always consult legal counsel.