



COURT OF APPEAL FOR ONTARIO

CITATION: Temedio v. Niagara North
    Condominium Corporation No. 6, 2019 ONCA 762
DATE: 20190930

DOCKET: C66339

Paciocco, Harvison Young and
    Zarnett JJ.A.

BETWEEN

Jean
    Temedio

Applicant
(Appellant in Appeal, Respondent in Cross Appeal)

and

Niagara North Condominium
    Corporation No. 6 and Simpson Wigle Law LLP

Respondents
(Respondents in Appeal, Appellants in Cross Appeal)

Benjamin J. Rutherford, for the
    appellant in appeal and respondent in cross appeal

Erik Savas, for the respondents in
    appeal and appellants in cross appeal

Heard: August 16, 2019

On appeal from the order of Justice Heather
    McArthur of the Superior Court of Justice, dated
December 3, 2018 with
    reasons reported at 2018 ONSC 7214
.

Zarnett J.A.:


Introduction

[1]

The appellant, Jean Temedio, asked the application judge to order the
    assessment of legal bills rendered by the respondent lawyers, Simpson Wigle LLP
    (the lawyers), to the respondent, Niagara North Condominium Corporation No. 6
    (the Corporation), on the basis that she was liable to pay the proper amount
    of those legal bills. She also sought an injunction restraining the Corporation
    from enforcing the lien it had registered against her condominium unit to
    secure payment of those legal bills, until after any assessment was concluded.

[2]

The application judge referred one set of legal bills to assessment in
    St. Catharines, but otherwise denied the relief Ms. Temedio had sought. Ms.
    Temedio appeals seeking the balance of the relief she sought, including that
    any assessment be in Toronto. The lawyers and the Corporation cross appeal,
    arguing that no assessment at all should have been ordered.

[3]

For the reasons which follow I would allow the appeal, direct all of the
    lawyers bills to assessment in St. Catharines, and direct that the Corporation
    not enforce the lien against Ms. Temedios unit until 30 days after the
    assessment has been completed if at that time there are amounts owed to the
    Corporation which have not been paid by Ms. Temedio. I would dismiss the cross appeal.

The Facts

[4]

Ms. Temedio owns a residential unit in Niagara North Condominium No. 6,
    a condominium building located on Scott Street in St. Catharines. She purchased
    the unit so that her grandson, Robert James, who is 29 years old, has autism,
    and is unable to live independently, would have a place to live with his
    mother, Kimberley Watson, his sole caregiver.

[5]

Disputes arose between Ms. Watson and the tenant of another unit in the
    building, involving complaints of noise and profanity. The Corporation retained
    the lawyers, who generated various correspondence. That gave rise to one set of
    legal bills (the pre-litigation bills).

[6]

Subsequently, proceedings were brought by the Corporation against Ms.
    Temedio and Ms. Watson seeking an order that Ms. Watson and her son permanently
    vacate the unit, or that she comply with the rules of the Condominium and
    refrain from causing undue noise (the compliance proceeding). That gave rise
    to a second set of legal bills from the lawyers to the Corporation (the
    compliance proceeding bills).

[7]

Taylor J. heard the compliance proceeding. In a decision dated February
    7, 2017, he refused to order the eviction of Ms. Watson from the unit, terming
    such relief draconian and not an appropriate remedy:
NNCC
    No. 6 v. Temedio
, 2017 ONSC 897, at para. 25. He instead ordered
    that Ms. Watson comply with the rules of the Condominium and that Ms. Temedio
    take reasonable steps to ensure that occurred: at para. 26.

[8]

Taylor J. also dismissed Ms. Temedios request to remove the lien the
    Corporation had registered against her unit on January 20, 2015 to secure the pre-litigation
    bills of $1,714.20: at para. 31.

[9]

On the question of costs of the compliance proceeding, Taylor J. was
    critical of the approach the Corporation had taken. He said, at paras. 32-33 of
    his decision:

However, I do not approve of the action of the
    Condominium in continuing to seek the extreme remedy of eviction of Kimberly
    Watson and Robert James as tenants of unit 511. A less heavy-handed approach
    might very well have avoided an application to the court. It was also open to
    the Condominium to apply to the court for an order requiring Jean
Temedio
and Kimberly Watson to comply with the
    rules
.

Therefore, although the Condominium was
    successful in obtaining an order in this proceeding, I have a discretion with
    respect costs. In fixing costs, I take into consideration the amount of the
    lien which has already been registered against unit 511. I therefore fix the
    costs of this application payable to the Condominium by Jean
Temedio
and the Kimberly Watson, jointly and
    severally, in the amount of $2,500 inclusive of disbursements and HST. This
    amount shall be charged to the common element expenses of unit 511.

[10]

Following the decision of Taylor J., on March 13, 2017, the Corporation
    advised Ms. Temedio that she was responsible for the Corporations actual costs
    in pursing the compliance proceeding, that those actual costs were $52,000, and
    that amount would be added to the amounts secured by the lien against her unit.
    The Corporation relied on s. 134(5) of the
Condominium
    Act, 1998
, S.O. 1998, c. 19.

[11]

Ms. Temedio sought to appeal the decision of Taylor J. to this court
    but did so beyond the applicable time limit. Her motion to extend the time to
    appeal was opposed by the Corporation, and this generated a third set of legal
    bills from the lawyers (the appeal bills). Ms. Temedios request for an
    extension of time was dismissed by Nordheimer J.A. on December 19, 2017, and
    the Corporation was awarded costs of $5,000.

[12]

On February 1, 2018, Ms. Temedio was notified that the Corporations
    actual costs of the appeal related proceedings were $29,588.46, that the
    Corporation claimed the appeal bills from her pursuant to s. 134(5) of the
Condominium Act
, and that this amount would
    also be added to the costs secured by the lien.

[13]

On January 18, 2018, Ms. Temedio commenced the application which
    resulted in the orders which are the subject of this appeal and cross appeal.
    Ms. Temedio sought an order for the assessment of all of the legal bills which
    the Corporation was claiming Ms. Temedio was responsible to pay and were secured
    by the lien. After the Corporation issued a notice of sale on April 25, 2018,
    claiming $85,290.17 as payable under the lien and giving notice of intention to
    sell her unit to realize that amount, Ms. Temedio amended her notice of
    application to also claim an injunction restraining the enforcement of the lien
    until after any assessment had taken place.

[14]

Ms. Temedio paid the $2,500 costs award of Taylor J., and the $5,000
    costs award of Nordheimer J.A. The balance of the amounts claimed by the
    corporation arising from the pre-litigation bills, the compliance proceeding
    bills, and the appeal bills remain unpaid.

The Decision of the Application Judge

[15]

The application judge held that since s. 134(5) of the
Condominium Act
made Ms. Temedio liable to
    pay the legal bills incurred by the Corporation, Ms. Temedio was entitled to
    apply for an assessment of the lawyers bills in the same way as the
    Corporation might have, under s. 9(1) of the
Solicitors
    Act
, R.S.O. 1990 c. S.15.
She further held that Ms. Temedio was required to establish special
    circumstances to obtain an assessment, as the Corporation would have had to if
    it were applying to assess the accounts, due to the fact that some of the accounts
    were rendered more than 12 months before Ms. Temedios application was
    commenced, and all had been paid:
Solicitors

Act
, ss. 4
    and 11; at paras. 8-15.

[16]

The application judge held that Ms. Temedio had not established special
    circumstances with respect to the pre-litigation bills, because she had not
    taken steps to have the accounts assessed earlier but had unsuccessfully sought,
    before Taylor J. to obtain a ruling that the Corporation was not entitled to a
    lien for these costs: at paras. 16-19.

[17]

The application judge also held that Ms. Temedio had not established
    special circumstances with respect to the compliance proceeding bills of $52,000,
    because the only ground of special circumstances she advanced was that the fees
    were excessive. She held that the fees did not appear excessive for a two day
    application given the number of pages of material filed. She also observed that
    Ms. Temedio was an active party to the compliance proceeding whose counsel anticipated
    that the Corporation would claim fees in approximately that amount; therefore
    Ms. Temedios own legal fees must have been the equivalent: at paras. 20-23.

[18]

The application judge found that special circumstances existed for the appeal
    bills ($29,588.48). The special circumstances arose from a comparison of the
    appeal bills with the compliance proceeding bills, given the less extensive
    work required for the appeal related proceedings. Accordingly, the application
    judge referred the appeal bills to assessment: at paras. 24-31.

[19]

Applying the test for an interlocutory injunction, the application
    judge refused to enjoin the Corporation from enforcing its lien: at paras. 34
    and 37. She held that there was an absence of real details or expert
    information about her grandsons condition so no irreparable harm was shown:
    at para. 35. The balance of convenience favoured the Corporation because even
    though some bills were to be assessed, Ms. Temedio would still be responsible
    for significant costs, and the Corporations ability to function was negatively
    impacted by the failure of Ms. Temedio to pay the legal bills: at para. 36.

Statutory Provisions

[20]

Section 4(1) of the
Solicitors Act

provides that a lawyers bill shall not be ordered
    assessed more than twelve months after the date the bill was delivered unless
    special circumstances are shown. Section 11 of the
Solicitors
    Act
provides that payment of a bill does not preclude
    the ordering of an assessment, if special circumstances are shown.

[21]

Section 9 of the
Solicitors Act
permits a person other than the client to obtain an order referring a
    bill for assessment if that person is liable to pay the bill, and expands the
    range of circumstances that justify ordering the assessment. Sections 9(1) and
    (2) of the
Solicitors Act
provide as follows:

9
(1)
Where a person, not being chargeable as the principal party, is liable
    to pay or has paid a bill either to the solicitor, his or her assignee, or
    personal representative, or to the principal party entitled thereto, the person
    so liable to pay or paying, the persons assignee or personal representative,
    may apply to the court for an order referring to assessment as the party
    chargeable therewith might have done, and the same proceedings shall be had
    thereupon as if the application had been made by the party so chargeable.

(2)
If such application is made where, under the provisions hereinbefore
    contained, a reference is not authorized to be made except under special
    circumstances, the court may take into consideration any additional special
    circumstances applicable to the person making it, although such circumstances
    might not be applicable to the party chargeable with the bill if he, she or it
    was the party making the application.

[22]

Subsections 134(1) and (5) of the
Condominium
    Act
provide that a condominium corporation may apply
    to the court to enforce its by-laws or rules against a unit owner and may add
    any costs awarded together with additional actual costs incurred in obtaining
    the order to the common expenses of the unit.

[23]

Subsections 85(1), (2) and (5) of the
Condominium
    Act
permit a condominium corporation to register a
    lien for amounts owing by an owner for common expenses, and to enforce the lien
    in the same manner as a mortgage.

Analysis

[24]

Ms. Temedio argues that the application judge erred in finding that
    special circumstances were required to be shown. She argues that the
    application judge erroneously approached the matter as though the date of the
    delivery of the bills by the lawyers to the Corporation was what mattered, when
    Ms. Temedios assessment application was commenced within twelve months of
her

receipt
of the compliance proceeding bills. She also argues that because the
    lien may be enforced in the same way as a mortgage, she should be treated in a
    manner analogous to a mortgager. Alternatively, she argues that the application
    judge erred in not finding special circumstances for both the pre-litigation
    and compliance proceeding bills.

[25]

I do not find it necessary to decide whether Ms. Temedio is right that
    no special circumstances needed to be shown. In my view even if the application
    judge was right in requiring Ms. Temedio to show special circumstances, she
    erred in failing to find that special circumstances were present, sufficient to
    warrant assessment of all of the bills.

[26]

A judges finding about the existence of special circumstances
    warranting the referral of a bill for assessment may be interfered with on
    appeal if the judge made an error in principle or arrived at a clearly
    unreasonable result:
Echo Energy Canada Inc. v.
    Lenczner Slaght Royce Smith Griffin LLP
, 2010 ONCA 709,
104 O.R.
    (3d) 93, at para 29.

[27]

In my view, the application judge made an error in principle.

[28]

When a person other than the client is liable to pay a lawyers bill, not
    all of the same incentives that may exist between the lawyer and the client to
    ensure the bill is reasonable may be present. Thus, in considering whether
    special circumstances have been shown, a more generous approach is to be taken
    when the person applying for the assessment is a person liable to pay the bill
    but is not the client. Section 9(2) of the
Solicitors
    Act
allows the court to consider extra circumstances
    applicable to such a person which would not pertain to the client itself.
    Although being a third party liable to pay the bill is not in and of itself a
    sufficient special circumstance, this court has endorsed the concept that a
    third party should be given more favorable consideration than the client who
    received and paid the account:
Plazavest Financial
    Corp. v. National Bank of Canada
(2000), 47 O.R. (3d) 641, at p. 651
(C.A.). The application judge failed to advert to and apply this principle.

[29]

Viewing the matter through the lens of the favourable consideration to
    be given to Ms. Temedios request, the dates when the bills were delivered to
    the Corporation, and the payment of them by the Corporation have less
    significance than they would if the Corporation were seeking the assessment. The
    circumstances that justify an assessment of the bills do not need to overcome
    the inference of propriety and reasonableness of the bills that arises from
    delay in seeking assessment, or payment, by the client.

[30]

Similarly, a consideration of the length of time spent arguing the
    application, the number of pages of materials filed, or whether Ms. Temedios
    counsel correctly predicted how large the Corporations claim for legal fees
    would be, are not determinative of whether special circumstances exist for Ms.
    Temedio to assess the bills. This is especially so given that Taylor J. made a
    finding about why the Corporations legal bills may have risen to what they
    were, which raise questions about the fees charged. The application judge
    failed to take this into account.

[31]

Taylor J. voiced his disapproval of the conduct of the Corporation in
    seeking the extreme remedy of eviction (which the Corporation did not obtain)
    and observed that a less heavy-handed approach on its part might have avoided
    litigation altogether. Ms. Temedio was on the receiving end of that
    unsuccessful strategy and approach, yet to the extent the legal bills to the
    Corporation included time spent on it, Ms. Temedio is being asked to pay for
    it. The extent to which the fees charged may include amounts for pursuing the
    failed eviction strategy and the heavy-handed approach raise questions about
    the amount of the legal bills. So too does the fact that Taylor J. limited the
    Corporation to an award of $2,500 in costs for the compliance proceeding; this also
    raises a question about the total fees of $52,000 charged for that proceeding.

[32]

Taken together and viewed in light of the correct principle, there were
    sufficient special circumstances to warrant a review of the compliance proceeding
    bills at an assessment at the request of a third party like Ms. Temedio given
    that her request is entitled in law to favorable consideration.

[33]

Given the relationship between the pre-litigation steps and the
    compliance proceeding itself, I would also include the pre-litigation bills in
    the assessment. I do not view Taylor J.s ruling about the ability of the Corporation
    to register a lien for those bills to be a ruling on their quantum or to
    preclude assessment to determine their appropriate amount.

[34]

It follows from my conclusions that the cross appeal of the Corporation
    must fail. I see no error in the application judges determination that the
    appeal bills proceed to assessment; indeed, that conclusion is fortified by a
    determination that the pre-litigation and compliance proceeding bills should
    proceed to assessment.

[35]

I would not interfere with the order of the application judge as to the
    place of assessment. She did not err in exercising her discretion to order that
    the assessment take place in St. Catharines.

[36]

Given that all of the bills will now proceed to assessment, I would
    set aside the dismissal of the request for an injunction and substitute an
    order enjoining the Corporation from enforcing its lien until the assessment
    has been completed. In my view, the application judge erred in finding that
    there was no irreparable harm due to an absence of evidence about Ms. Temedios
    grandsons condition. There was uncontradicted evidence in the affidavit of Ms.
    Temedio that her grandson has autism and is unable to live independently,
    that the unit was purchased so that he would have a place to live with his sole
    caregiver, and that requiring that the unit be sold would result in dislocation
    of her grandson from the home he has grown accustomed to living in [which]
    would likely lead to severe emotional and mental complications, the extent of
    which [Ms. Temedio has] not, at this juncture, been able to fully ascertain.
    As well, the application judges finding that the balance of convenience
    favoured the Corporation was premised on the limited assessment she ordered.
    Since all of the bills are to be assessed, and since according to the
    Corporations counsel an assessment in St. Catharines will not involve
    significant delay, the balance of convenience favours the granting of an
    injunction.

Conclusion

[37]

I would allow the appeal and vary the judgment of the application judge
    to refer all the legal bills to assessment in St. Catharines, and to direct
    that the Corporation not enforce its lien until 30 days after the completion of
    the assessment and then only for such amounts found due on the assessment to
    the extent that such amounts remain unpaid. I would dismiss the cross appeal.

[38]

The parties may make written submissions on costs, not exceeding two
    pages. Those of Ms. Temedio should be delivered within 10 days of this date.
    Those of the respondents should be delivered 5 days thereafter.

Released: DP September 30, 2019


B. Zarnett J.A.
I agree. David M. Paciocco J.A.
I agree. Harvison Young J.A.


