Corporation Recovers Extensive Costs It Has Incurred to Recover Past Arrears

In our blog post from July last year, we reported on a case where a condominium corporation had spent several years in court in its efforts to collect common expense arrears, and the related costs and disbursements. As reported, the various decisions of the Superior Court, and the cost decision following the ultimate trial of the issue, resulted in the following findings:

  • The unit owners had liability for fees in the amount of $490,410.00 (pursuant to a partial Summary Judgement and the further Trial of the Issue); and
  • Pursuant to section 85(3) of the Condominium Act, 1998, the condominium corporation was entitled to full indemnification of its reasonable legal fees and disbursements, which amounted to a total of $790,914.63.

Today, the Court of Appeal dismissed the appeal of both the trial and cost decisions.

To me, this decision brings some comfort to condominium corporations that are acting reasonably and diligently to collect arrears, but are nevertheless faced with lengthy, challenging, and costly disputes.

The Court of Appeal has confirmed that where the fees and disbursements are reasonably incurred in the proper collection of arrears, even if the fees and disbursements are not proportional to the arrears recovered, full indemnification pursuant to section 85 is warranted.

In my view, this is wholly in keeping with the intent of section 85 of the Condominium Act, and the need to ensure that innocent owners are not financially penalized for costs incurred to collect outstanding arrears.