Executive Summary: Key Legal and Evidentiary Issues

• Longstanding exterior “Pad” modification (about 40 years old) raised whether the condominium corporation could suddenly enforce the Condominium Act and require removal after decades of acquiescence.
• Application of the equitable doctrine of laches and the business judgment rule to a condominium corporation that knew of the modification for years but only acted after related litigation arose.
• Assessment of whether the condominium acted reasonably and in good faith in refusing to enter a s. 98 agreement and insisting on removal, despite a clear path to compliance under the Condominium Act, 1998.
• Determination of the appropriate scale of costs (partial vs substantial indemnity) where the successful unit owners alleged unreasonable and bad-faith conduct by the condominium and argued for a “two-way street” reading of s. 134(5) of the Act.
• Scrutiny of the reasonableness and proportionality of the respondents’ Bill of Costs under Rule 57.01, including duplication of counsel, rates, hours spent, and whether the amount sought is what an unsuccessful party could reasonably expect to pay.
• Allocation of responsibility for preparing and paying for a s. 98 agreement governing the Pad, and whether the benefiting unit owners must bear all preparation, implementation, and registration costs going forward.

Background and parties

Wentworth Condominium Corporation No. 21 (the applicant) is a condominium corporation in Ontario. Marc and Kim Robertson (the respondents) are unit owners in the condominium who purchased a unit that included a long-standing exterior modification described as a “Pad.” The Pad had been in place for roughly 40 years before the dispute came to a head. The core conflict arose when the condominium corporation sought to enforce the Condominium Act, 1998 against the respondents in relation to this Pad, asserting that it constituted an improper alteration that should be removed, rather than regularized.

The Pad modification and alleged breach

The Pad was a physical modification associated with the respondents’ unit that had existed for decades. The corporation took the position that it breached the Condominium Act, 1998, in particular the requirements for changes to the common elements that are typically formalized through a written section 98 agreement between the corporation and the unit owner. Despite having actual or constructive knowledge of the Pad for many years, the corporation had not previously taken meaningful enforcement steps. Only when another related litigation matter arose did the corporation move to insist on removal of the Pad rather than working toward a formal s. 98 agreement that would bring the modification into compliance and allocate obligations between the parties. The respondents, by contrast, were prepared to enter into a s. 98 agreement as early as 2024, and maintained that such an agreement could have addressed the corporation’s concerns about access, liability, indemnification, and ongoing responsibilities related to the Pad.

The initial motion and merits decision

On the underlying motion (reasons reported separately at 2026 ONSC 1393), the Court was asked to determine whether the corporation could insist on enforcement requiring removal of the Pad, or whether it was too late to do so given its long period of silence and inaction. The Court found that the equitable doctrine of laches applied: the corporation had, in effect, acquiesced in the existence of the Pad by failing to address any breach for many years before the respondents purchased their unit. The Court accepted that the respondents would suffer detriment if late enforcement were permitted and they were forced to remove the Pad entirely after so many years of reliance on its existence. The corporation also argued for the protection of the business judgment rule, which often shields reasonable, good-faith decisions of condominium boards from judicial interference. The Court held that the applicant could not benefit from the business judgment rule here because its conduct towards the respondents was not reasonable or in good faith, particularly regarding its refusal to enter into a s. 98 agreement and its late, rigid insistence on removal. Equitable relief was therefore granted in favour of the respondents. Rather than ordering removal of the Pad, the Court directed that the parties enter into a s. 98 agreement to regularize the modification and set out their respective rights and obligations going forward.

Condominium Act provisions and policy framework

The litigation unfolded within the framework of the Condominium Act, 1998, S.O. 1998, c. 19. Section 98 of the Act governs agreements for owners’ modifications to common elements. Such agreements typically provide who bears the cost of the alteration and how repair, maintenance, insurance, and related responsibilities are to be allocated. In this case, the s. 98 agreement was the obvious legal instrument that could have been used from the outset to manage the Pad’s status and allocate risk and financial responsibility without resorting to adversarial proceedings. The Court also considered s. 134(5) of the Act, which in many cases allows a condominium corporation that is successful in obtaining an order to recover “additional actual costs.” The respondents advanced an argument that this provision should effectively “cut both ways,” suggesting that where the unit owners are successful, an enhanced scale of costs may be justified. The Court accepted, however, that while s. 134(5) may allow a condominium to seek more than ordinary costs in appropriate circumstances, the overarching requirement remains that any award must be reasonable—neither side is granted an unlimited expense account. Reasonableness and proportionality remained the central touchstones in the costs analysis.

Costs framework and legal test

In the subsequent costs endorsement, the Court applied the usual principles governing costs under Rule 57.01 and the Court of Appeal’s guidance in Boucher v. Public Accountants Council for the Province of Ontario. Costs lie in the discretion of the court, and the overarching goal is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding, rather than simply matching the actual legal bill of the successful party. The Court reaffirmed the general rule that a successful party should have its costs and that in the ordinary course this would mean partial indemnity costs. However, the judge emphasized that proportionality, the conduct of the parties, the complexity and importance of the issues, and the expectations of what an unsuccessful party could reasonably foresee having to pay are all key considerations. Rule 57.01(1) sets out a non-exhaustive list of factors, including the principle of indemnity, the amount claimed and recovered, the complexity of the proceeding, the importance of the issues, conduct that shortened or unnecessarily lengthened the proceeding, and any other matter relevant to costs. Applying these principles, the Court recognized that this was a moderately complex condominium dispute involving factual issues about the long-standing modification and legal questions of laches, the business judgment rule, and the proper use of s. 98 agreements.

Arguments on the scale and quantum of costs

The respondents sought substantial indemnity legal costs and disbursements totalling $25,398.27. Their actual legal fees were higher, at $29,331.41, plus disbursements of $1,257.69. They argued that the case was significant within condominium law, that they were substantially successful, and that the corporation’s conduct—refusing to mediate or negotiate, declining to enter a s. 98 agreement despite an obvious path to compliance, and acting only after related litigation—had unnecessarily lengthened the proceeding. They pointed out that, had the corporation accepted a s. 98 agreement earlier, the whole hearing might have been avoided. In response, the condominium corporation accepted that the respondents were largely successful but argued that, in a typical case, only partial indemnity costs would be appropriate and that the respondents’ costs were disproportionately high for the work involved. The corporation highlighted that two counsel attended for the respondents, adding to the bill, and contended that the additional counsel’s attendance was unnecessary. It submitted that the respondents should recover, at most, partial indemnity costs not exceeding $15,000 plus disbursements, stressing that costs awards should reflect what is fair and reasonable for the losing party to pay, not the full amounts charged by counsel.

Court’s analysis of conduct, indemnity level, and reasonableness

In assessing costs, the Court placed weight on the corporation’s conduct before and during the litigation. The judge had already found on the merits that the applicant did not act reasonably or in good faith, particularly in light of its long-standing knowledge of the Pad and its failure to enforce until another litigation arose, coupled with its refusal to agree to a s. 98 agreement when that would have been a straightforward solution. The Court observed that, had the corporation been successful, it likely would have pursued full indemnity costs based on its by-laws and statutory authority. Considering these factors, the judge concluded that this was a case where enhanced, substantial indemnity costs in favour of the successful respondents were justified. At the same time, the Court reiterated that it is not required to go line-by-line through the Bill of Costs or mechanically multiply hours by rates. Instead, the judge examined the overall reasonableness of the time spent and the fees and disbursements claimed, taking into account counsel’s experience (with Mr. Pulver called in 2005 and Ms. Bartlett in 2016), hourly rates, the moderate complexity of the case, the importance of the issues to the parties, and the fact that both sides’ Bills of Costs were broadly comparable at the partial and substantial indemnity levels. The Court accepted that the quantum of substantial indemnity costs sought was within the range of what an unsuccessful party could reasonably expect to pay in a case involving pleadings, cross-examinations, facta and compendiums, and a half-day hearing.

Section 98 agreement preparation and allocation of future costs

An additional issue concerned who should prepare and pay for the s. 98 agreement ordered in the merits decision. The respondents argued that the corporation, as the condominium entity responsible for ensuring compliance with the Act, should bear those preparation costs or that they should at least not be saddled with them after already facing enforcement proceedings. The corporation countered that it had already suffered the consequences of its delayed enforcement—most notably through the Court’s grant of equitable relief and the direction to proceed via a s. 98 agreement instead of removal—and should not be further prejudiced by the additional legal costs of drafting and registering the agreement. The Court agreed with the condominium on this discrete issue. Because the Pad modification is for the exclusive benefit of the respondents’ unit, and because they had already acknowledged that they would enter into a s. 98 agreement, the judge held it was reasonable that the respondents be responsible for the preparation, implementation, and registration of that agreement. Section 98 agreements are designed to allocate the costs of the alteration, including repair, maintenance, and insurance obligations, and to avoid undue financial or maintenance burdens falling on the condominium and, indirectly, on other owners. The Court thus directed the respondents to prepare the agreement and to bear all costs associated with ensuring the modification is properly documented and compliant.

Overall outcome and significance

In the final result, the Court confirmed the substantive success of the respondents, Marc and Kim Robertson, on the underlying motion and on the subsequent question of costs. The condominium corporation was denied the relief it sought—namely, forcing the removal of the long-standing Pad—and instead was required to proceed by way of a s. 98 agreement, reflecting the application of laches and the rejection of the business judgment rule in the particular circumstances. On costs, the Court ordered the applicant condominium corporation to pay substantial indemnity costs to the respondents fixed at $22,000 plus applicable HST, along with disbursements of $1,257.69, payable forthwith. Because the decision does not specify the HST calculation, the precise gross total cannot be determined from the text alone, but the combined award is $23,257.69 before HST is added to the $22,000 costs portion. At the same time, the respondents, as the beneficiaries of the modification, must prepare and pay for the s. 98 agreement and all related implementation and registration expenses. Overall, the case underscores that condominium corporations that delay enforcement for decades and then act unreasonably and without good faith risk both losing on the merits and facing substantial indemnity cost consequences, while unit owners who benefit from a long-standing modification may still be required to assume the ongoing legal and financial responsibilities needed to regularize that modification under the Condominium Act.