Dawn of a New Era in the CAT? CAT Awards Legal Costs for Enforcement Against Unit Owner
After years of calling for the Condominium Authority Tribunal (the “CAT”) to award legal costs to a successful litigant, it appears that a single, unopposed Stage 3 Hearing decision by the CAT has now paved the way for condominium corporations to recover their legal costs against a violating unit owner.
On Thursday, May 20, 2021, the CAT issued its ruling in Peel Condominium Corporation No. 96 v. Psofimis, 2021 ONCAT 48 (“Psofimis”). Even though this was an unopposed online Hearing where the self-represented unit owner – who had participated in the Stage 2 Mediation, but then refused to participate in the Stage 3 Hearing – did not make any arguments or put forth any evidence of his own, the Psofimis case opens the door for condominium corporations to restore some semblance of order in their communities.
Ever since the CAT was given the authority to decide condominium disputes regarding pets, vehicles, parking, or storage (“PVPS”) issues on October 1, 2020, condominium corporations in Ontario have been hesitant to enforce any of their rules regarding PVPS issues against unit owners, out of fear that the unit owner could easily file an online Application to the CAT to challenge such enforcement – and the CAT’s default presumption is against the awarding of any legal costs, even if the condominium is 100% successful in justifying its enforcement.
As we warned in our previous article on the subject, the lack of PVPS enforcement in condominiums will lead to “chaos” in communities where no rules are being enforced regarding PVPS issues. Fortunately, the CAT has now recognized in Psofimis that indeed, such chaos ought to be avoided and therefore, condominium corporations should be allowed to recover their legal costs in enforcing against a unit owner who has violated the community’s PVPS rules. This is in keeping with the spirit and intent of the Condominium Act as “consumer protection” legislation – the other unit owners of a condominium should not be forced to bear the costs of one unit owner’s intransigence.
The “Overweight” German Shepherds
In Psofimis, the condominium corporation brought an Application to the CAT to enforce its Rule that restricted the weight of household pets to 40 pounds. The condominium was asserting that the unit owner, Mr. Psofimis, had a German Shepherd dog that exceeded 40 pounds.
This was also apparently not the first time that Mr. Psofimis had a German Shepherd which exceeded the condominium’s 40-pound Rule. Prior to the current dog at issue, Mr. Psofimis had another German Shepherd that weighed more than 40 pounds (and at least 1 other German Shepherd prior to that one), but the condominium entered into a grandfathering agreement with Mr. Psofimis in June 2017 wherein Mr. Psofimis agreed not to obtain a new pet that exceeded 40 pounds upon that grandfathered dog’s passing.
After the grandfathered dog passed away, the condominium became aware that Mr. Psofimis had obtained a new German Shepherd puppy which was likely to exceed 40 pounds as it matured. In February 2019, the condominium sent a general reminder notice to all owners, advising them of the 40-pound pet Rule. The Condominium Manager sent a specific warning/compliance letter to Mr. Psofimis on March 16, 2020, which demanded that he re-home his German Shepherd within 2 weeks. The Condominium Manager then followed-up with Mr. Psofimis via email on March 31, 2020, to which he responded that he had no intention of removing his dog from the property. In July 2020, the condominium’s lawyer issued a legal enforcement letter to Mr. Psofimis, demanding the removal of the German Shepherd within 2 weeks, which by then had reached maturity and exceeded 40 pounds. As is typical in legal enforcement letters, the condominium’s lawyer explicitly warned that if Mr. Psofimis failed to comply, then the condominium would commence legal action against him and that he may be responsible for the legal costs incurred.
The condominium presented no evidence of: 1) the German Shepherd actually residing in Mr. Psofimis’ unit, or 2) the German Shepherd in question actually weighing over 40 pounds. Nevertheless, the CAT found it reasonable to assume that the dog was still residing in the unit, since Mr. Psofimis himself had explicitly advised the condominium that he had no intention of removing the German Shepherd; and that German Shepherds overall are likely to exceed the 40-pound weight limit, based on general evidence from the American Kennel Club.
Accordingly, the CAT found that the unit owner was in violation of the condominium’s governing documents, and ordered that the German Shepherd must be removed within 30 days.
Would the outcome have been different if the unit owner had actually participated in the Stage 3 Hearing, to give his own submissions and present his own evidence? Perhaps. The legal analysis might certainly be different where a unit owner claims that the pet in question is his therapy dog and is necessary for his disability-related needs. But in this case, it appears that no human rights grounds were raised, and the unit owner declined to participate in the CAT Hearing to his own detriment.
The Legal Costs Award
The condominium corporation in Psofimis also sought to recover its legal costs relating to the enforcement of the 40-pound pet Rule against the unit owner: 1) the costs of the condominium lawyer’s legal enforcement letter to Mr. Psofimis, 2) the $200 spent on CAT filing fees, and 3) the legal costs incurred by the condominium in having its condominium lawyer pursue the CAT Application.
The condominium relied on 2 cases, namely Rahman v. Peel Standard Condominium Corporation No. 779, 2021 ONCAT 13 (“Rahman 1”) and Chan v. Toronto Standard Condominium Corporation No. 1834, 2011 ONSC 108 (“Chan”). We note that Rahman 1 is still under judicial review by the Divisional Court of Ontario, but in any event the CAT in Psofimis distinguished from Rahman 1 on the basis of differing factual circumstances.
The CAT found that Chan was more applicable to the situation at bar, given that Mr. Psofimis had been given multiple warnings by the condominium, yet he failed to take those opportunities to remove his German Shepherd. The CAT also held – as the Superior Courts have held in this province for many years – that it would be unfair to the other “innocent” unit owners of the condominium to have to bear the legal costs of a single unit owner’s violations.
Accordingly, the CAT awarded the condominium with all 3 of its sought legal costs: 1) $536 for the legal enforcement letter, 2) $200 for the CAT filing fees, and 3) $3,926.75 for the legal costs of representing the condominium in the CAT. While it is unclear whether the $3,926.75 amount was the entirety of the condominium’s actual legal costs on a full indemnity basis (or some lower amount, as was sought by the condominium in Kamyshan v. York Condominium Corporation No. 465, 2020 ONCAT 46), this relatively modest amount of legal costs may be attributable to the fact that the unit owner did not participate in the Stage 3 Hearing at all – and thus, there was no evidence for the condominium’s lawyer to contradict, no witnesses to cross-examine, and no legal submissions to research and oppose.
The CAT has finally ruled that in an appropriate case, a condominium corporation will be able to recover its costs to enforce against a unit owner for a PVPS violation.
Takeaways for Condominiums: Pets Can Be More Easily Removed, and Condos Can Recover Legal Costs
Prior to the CAT’s expansion of jurisdiction into PVPS issues on October 1, 2020, if a condominium corporation wanted to enforce its pet restrictions against a unit owner, the condominium would have to pursue a compliance Application in the Ontario Superior Court of Justice under Section 134 of the Condominium Act. Now, a condominium can bring an online Application to the CAT and seek a CAT Order requiring the unit owner to remove the violating pet within 30 days of the ruling. While such a CAT Order would still need to be enforced in the Superior Court if the unit owner fails to comply, the CAT is at least another possible venue for the condominium corporation to pursue.
The even bigger takeaway from this Psofimis case is that an incalcitrant unit owner’s refusal to comply with a condominium’s previous demands for compliance, can constitute an “exceptional reason” for the CAT to deviate from its default presumption against awarding legal costs. A condominium corporation can recover its legal costs – both the costs of the legal enforcement letters and the costs of legal counsel representing the condominium in the CAT – against a unit owner who repeatedly refuses to comply.
Is this the dawn of a new era in the CAT? As we called for in our previous article, the CAT needs to bring balance between the individual rights of unit owners and the collective rights of condominium communities. The Psofimis case is the 1st time that the CAT has come down in favour of a condominium corporation after explicitly noting the delicate balancing that must be achieved.
The ongoing COVID-19 pandemic has underscored the need for the collective interests of the many to be preferred over the personal interests of the individual. While we look forward to this pandemic being brought to an end in the near future, we hope that the lessons learned from these tribulations will endure for years to come.
All of the information contained in this article is of a general nature for informational purposes only, and is not intended to represent the definitive opinion of the firm of Elia Associates on any particular matter. Although every effort is made to ensure that the information contained in this newsletter is accurate and up-to-date, the reader should not act upon it without obtaining appropriate professional advice and assistance.
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