Background: The case involved The Owners, Strata Plan VIS 1549 (Plaintiff) and Cinnabar Brown Holdings Ltd. (Defendant). The dispute arose over an indemnity for legal costs incurred due to alterations made to a strata lot owned by Cinnabar Brown Holdings Ltd.

Legal Arguments/Issues: The Registrar was tasked with assessing costs, expenses, fines, and interest under a referral order. The costs included legal fees and disbursements covered by the defendant’s indemnity. Cinnabar claimed the Registrar misinterpreted the authority of the referral order, incorrectly limited the scope of the Alterations and Indemnity (A&I) Agreement, and rendered the hearing unfair due to insufficient notice about the scope of the consent order. The Strata Corporation argued the fees were reasonable and related to litigation known as Sherwood v. Strata Plan VIS 1549, which arose from alterations made to the strata lot.

Held: The Registrar found no errors in her interpretation of the referral order and the scope of the A&I Agreement. She concluded the legal expenses were reasonable and within the scope of the indemnity agreement. The scope had been previously determined and included the roof alterations leading to the Sherwood litigation. The Registrar provided both parties opportunities to make submissions regarding the scope of the order and the findings of previous courts.

Costs/Damages Awarded: The total net reasonable legal fees and disbursements assessed by the Registrar were $525,000. The appeal by Cinnabar Brown Holdings Ltd. was dismissed, and costs were awarded in favor of The Owners, Strata Plan VIS 1549.