The Ministry of Government and Consumer Services will soon be expanding the scope of disputes that can be heard by the Condominium Authority Tribunal (CAT).
Since its inception in November 2017, the CAT has exclusively adjudicated disputes respecting access to records under the Condominium Act and Regulations. However, amendments to Regulation 179/17 (that will be effective as of October 1, 2020) will broaden the CAT’s jurisdiction to include disputes related to a condominium corporation’s Declaration, By-laws or Rules that:
- prohibit, restrict, or otherwise govern pets, animals, parking vehicles or storage in a unit, the common elements, or the assets, if any, of the corporation; and
- govern the indemnification or compensation of the corporation, an owner, or a mortgagee in relation to the above-noted disputes.
In conjunction with the expansion of the CAT’s jurisdiction, sections 132 (4.1) and 134 (2.4) of the Condominium Act (which are also expected to come into effect on October 1, 2020) will ensure that parties involved in the types of disputes mentioned above will no longer have the option of bringing their dispute before a court, or of submitting it to arbitration or mediation. In other words, the CAT will be only mechanism available to adjudicate these disputes.
Among the concerns associated with broadening the CAT’s jurisdiction (which we have detailed in a previous blog) is parties’ inability to recover legal costs. Under the existing CAT Rules of Practice, the CAT may order payment of reasonable expenses or other costs related to the use of the CAT such as:
- tribunal fees
- expenses or other costs that are directly related to a user’s participation in the tribunal process; or
- expenses or other costs related to behavior during the tribunal process that was unreasonable or for an improper purpose, or that caused an unreasonable delay.
The Tribunal may also order an unsuccessful party to pay the other party’s CAT fees and reasonable dispute-related expenses (which do not include legal fees). However, section 46 of the Rules of Practice explicitly provides that the CAT will not order payment of legal fees (i.e. fees charged by a lawyer or a paralegal) “unless there are exceptional reasons to do this”. Thus, while parties have the option of being represented by legal counsel before the CAT, successful parties (which can include condominium corporations) will generally not be able to recover their legal costs.
To our knowledge, the government has not yet addressed this ongoing concern respecting recovery of costs. Conversely, the expansion of the CAT’s jurisdiction is likely to increase the need for expert evidence in proceedings and parties’ reliance on legal experts to navigate their disputes. Therefore, we are of the view that broadening the CAT’s jurisdiction to include new (more complex) types of disputes while not allowing successful parties to recover legal costs could produce negative consequences, including the risk that litigants may be forced into self-representation (rather than having legal representation) because of the inability to recover the related costs. We note that this may also defeat the intent of “indemnification” provisions in condominium governing documents (which may state that violating owners are obligated to cover all resulting costs, including legal costs, incurred by the Corporation).
Although the CAT will also have the ability to determine rights of the condominium corporation to recover chargebacks (in relation to the above-noted violations), it’s not clear that this will allow CAT to order recovery of the legal costs for the CAT process!
The effects of the government’s decision to expand the CAT’s jurisdiction will become clearer in the months to come. We will be sure to keep you updated!
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