Tribunal decision · Ontario CAT

Metropolitan Toronto Condominium Corporation No. 736 v. Latyshko

2024 ONCAT 177 · November 28, 2024 · Notice upheld

TL;DR

ONCAT ordered a noise-and-harassment compliance order against an unparticipating respondent and awarded $4,000 of $12,279 claimed legal costs. The tribunal applied a 'cost-warning-in-the-letter' factor under the Practice Direction on Costs: the corporation's two prior compliance letters (Dec 2022 and Dec 2023) had explicitly warned the respondent of cost consequences and cited the indemnification provisions of the declaration, which the tribunal treated as a discrete prerequisite for shifting hearing costs to the breaching owner.

Why this matters for Alberta owners

TL;DR: If the corporation wants to shift its legal fees to you, it has to have told you that's the consequence — explicitly, in writing, before going to the tribunal. Member Sapin in MTCC 736 v. Latyshko awarded only $4,000 of the corporation's claimed $12,279 in legal costs, but the structural anchor was a discrete factual finding: the corporation had sent the respondent two prior compliance letters (December 2022 and December 2023) that explicitly warned of cost consequences and cited the indemnification provisions of the declaration. Without that documented warning, the cost-shifting basis would have been substantially weaker. The Alberta translation: an Alberta fine notice that demands cost recovery from an owner who was never specifically warned that legal costs would be the consequence of non-compliance has a substantive defect in the cost component, even if the underlying breach is established.

The facts. Metropolitan Toronto Condominium Corporation No. 736 brought an enforcement application against Mr. Latyshko based on a pattern of noise and what the corporation characterized as retaliatory harassment toward neighbouring residents. The corporation had previously taken a 'holistic' approach, sending compliance letters to BOTH sides of a noise dispute on December 15, 2022. When the conduct continued, the corporation sent Mr. Latyshko a second compliance letter in December 2023. Each letter explicitly warned him of cost consequences. Mr. Latyshko did not participate in the tribunal proceeding. The corporation claimed $12,279 in legal costs; the tribunal awarded $4,000.

What the tribunal held. The substantive findings were direct — noise nuisance was established, harassment was within tribunal jurisdiction (citing Ryan 2023 ONCAT 81 — see /tribunal-decisions/2023-oncat-81), enforcement order made. The interesting analysis is in the cost-shifting reasoning.

Notice the structural elements. THREE conditions had to be satisfied for cost-shifting: (1) the declaration's indemnification provision existed; (2) the corporation explicitly warned the owner of cost consequences in writing; (3) the warning was clear enough that the owner understood the consequences of continued non-compliance. Without all three, cost-shifting weakens.

Why the award was only $4,000 of $12,279. The Member calibrated the actual award not by mechanically applying full indemnity (Psofimis-style) but by weighing what the corporation had genuinely needed to spend on a non-participating respondent. The Latyshko approach: even where ALL three cost-shifting conditions are met, the actual quantum is discretionary and the tribunal will scrutinize the corporation's actual legal spending for reasonableness and proportionality.

Why this matters in Alberta. Alberta condominium declarations universally include indemnification provisions allowing cost recovery against breaching owners. CPR s.73.7 requires the Proposed Sanction notice to specify the fine amount and the basis for any cost recovery. But the substantive question of whether costs ARE recoverable runs through the same three-element test: (1) does the declaration support indemnification; (2) was the owner warned in writing; (3) was the warning sufficiently clear. A fine notice that includes a cost component but rests on a corporation that never sent explicit pre-tribunal cost warnings has a Latyshko-style substantive defect.

The practical impact. Many Alberta corporations are sloppy about cost-consequence warnings. The first compliance letter usually demands cessation of the behaviour but doesn't necessarily warn of indemnification. The second letter may or may not name costs. Only when the corporation engages legal counsel does the cost-warning language become explicit — and by then the corporation is also incurring the costs it wants to shift. Latyshko establishes that the warning has to PRECEDE the cost-incurring escalation, not follow it.

Action steps for owners

How to use Latyshko if your fine notice includes a cost component — five steps. (1) Pull every pre-notice communication from the corporation. Compliance letters, manager emails, board correspondence — get the full chronology. (2) For each, identify whether it explicitly warned of cost consequences. The language has to be specific: 'you will be held responsible for all legal costs that would be incurred' or equivalent. Implicit references to indemnification provisions in passing are not enough. (3) For each warning, identify when in the chronology it came. Did the warning come BEFORE the corporation started incurring the costs it wants to recover? Or did the warning come AFTER the lawyer's hours had already been billed? (4) If the warning came after the cost was incurred, the corporation can recover only the costs incurred AFTER the warning — Latyshko establishes the temporal sequence as essential. (5) Frame your defence around the missing or late cost-warning step. This isn't a defence to the underlying breach — but it's a robust defence to the cost component of the notice.

The contrast with Schnitzler and Occleston. We've already covered Schnitzler (2022 ONCAT 108) on chargeback recoverability where the corporation went directly to counsel without warning or investigation. Latyshko is the structural opposite: corporations that DO send the right pre-tribunal cost warnings AND DO investigate AND DO escalate progressively succeed on cost recovery, even where the owner doesn't participate. Together with Occleston (2022 ONCAT 103 — proportionality limits on cost quantum) the three cases form a coherent doctrine: cost shifting requires (a) clear pre-tribunal warning, (b) reasonable conduct by the corporation, (c) proportional quantum tied to hearing substance.

The bottom line: cost recovery is not automatic just because the declaration contains an indemnification clause. Member Sapin's Latyshko decision establishes that the corporation must have explicitly warned you of cost consequences in writing before incurring the costs it wants to recover — and the warning has to be clear enough that you understood the consequences of continued non-compliance. Run FineCheck on the notice; pull the corporation's pre-notice correspondence; flag any missing or late cost-consequence warnings as substantive defects in the cost component.

What the tribunal said

Selected excerpts from the Ontario CAT's reasoning. Full decision on CanLII.

[10] The corporation decided to take a 'holistic,' and, I find, an even-handed approach to resolve the noise dispute between the owners. It provided both owners with the GTA report and on December 15, 2022, sent each of them a legal compliance letter. ... [30] Second, I find that Mr. Latyshko was well aware of the corporation's Rules about noise and the consequences of failing to cease his behaviour, because MTCC 736 warned him of these consequences in its December 2022 legal letter to him: 'We also wish to warn you that if there are any further incidents of retaliation or harassment against the residents of [redacted] the corporation intends to take legal action against you to make you cease such behaviour. If legal steps are required to be taken, you will be held responsible for all legal costs that would be incurred.' [31] And again, in December 2023, after demanding that he cease his behaviour: 'We hereby caution you that if you fail to comply ... the Corporation will have no choice but to take legal steps against you to obtain your compliance. In such case, you will be responsible for all legal costs that may be incurred ...' [33] Finally, MTCC 736's Declaration and Rules contain provisions that allow it to be indemnified for any costs incurred as a result of a breach of the Rules by Mr. Latyshko, and I find the corporation advised Mr. Latyshko of this in its letters to him.

Connects to FineCheck's framework

Got a similar Alberta condo fine? A FineCheck report applies the same substantial-compliance + prejudice framework the tribunal used here. $15. Run a check on your notice →

Jurisdictional note: Ontario CATdecisions are not binding on Alberta's CDRT, but the CDRT will look to other Canadian condo tribunals for guidance under analogous statutory provisions until its own case law develops. The substantial-compliance + prejudice framework used in this decision parallels the test in CDRT Policies and Procedures s.7(b).

Decision date: November 28, 2024 · Citation: 2024 ONCAT 177 · Outcome: notice upheld. FineCheck's commentary is published for research and educational use; not legal advice. Verify any reliance on this decision against the original text.