chapter previous next
Water leaks & mould
A Bad Case of Mould: Goodwin v. DCC No. 54
CondoVoice Summer 2007
By Lou Natale Fogler Rubinoff LLP
This article will review the implications of a reported decision of the
Ontario Superior Court of Justice made on November 12, 2004 and the
subsequent resolution of a case on behalf of the owners of a unit
situated in Durham Condominium Corporation No. 54 (Goodwin v. Durham
Condo Corp. No. 54). The Goodwin Decision is an illustration of the
potential liabilities facing condominium corporations and Board members
who fail to comply with their legal obligations to repair and maintain
the common elements.
After months of failing to correct a serious mould problem, the
Honourable Justice Scott of the Ontario Superior Court of Justice,
found that DCC 54 was “in contempt” of a previous Court Order which
required DCC 54 to rectify all mould problems in a townhouse unit and
to produce an independent expert’s report confirming that the mould was
removed. In his 2004 unreported decision, Justice Scott also ordered
each Board member to personally pay the owners’ costs in the amount of
Although Justice Scott’s contempt order was ultimately set aside by
another Judge for technical reasons, the case highlights the potential
consequences on directors who fail to comply with their legal
obligations. In order to fully appreciate and understand the basis for
the Court making a contempt order against DCC 54 (albeit, subsequently
set aside), it is important to review some of the background facts and
legal steps which the unit owners were required to take.
In January, 2002, the unit owners experienced a fairly minor water
leakage into the basement of the townhouse unit as a result of a
defective vent pipe. During the course of repairing the basement area,
the owners became aware of a much more serious problem in the common
element attic and roof area which resulted in high humidity levels
throughout the unit and the growth of toxic moulds. Despite repeated
requests by the owners, DCC 54 refused to provide to the owners copies
of reports which were prepared by the contractors and engineers who
inspected the unit and investigated the mould problem.
For six months, the owners were given excuses and the “run around” by
the Corporation and its representatives. Finally, out of complete
desperation and frustration, the owners contacted the writer and
explained their situation.
The owners immediately initiated mediation and retained their own
independent engineer who confirmed that there was a serious mould
problem in the unit. As a result of the Corporation’s failure to
adequately deal with the problem, the parties held a mediation in May,
2003, (almost 16 months after the owners first reported the mould
problem to the Corporation). The Corporation agreed at the mediation to
“forthwith” repair and rectify all of the common element deficiencies
and, within a reasonable time thereafter, to provide the owners with an
expert report confirming that the mould problem was adequately
resolved. The Corporation also agreed to pay for some of the owners’
legal costs and out of-pocket expenses.
The case should have ended at that point. However, as a result of the
Corporation doing very little over ten months to address the mould
problem, our office initiated a Court Application against DCC 54,
seeking an Order that the Corporation had failed to fulfill the terms
of the Mediation Settlement and that it had breached its obligations to
maintain and repair the common elements pursuant to sections 89 and 90
of the Condominium Act.
On August 23, 2004 (almost 2 1/2 years after the mould problem was
first reported to the Corporation), the owners were successful in
obtaining a Court Order requiring DCC 54 to forthwith and in no event
later than September 23, 2004, fulfill its obligations under the
Mediation Settlement and to provide the owners with a report from an
independent expert confirming that the mould problem was resolved in a
manner satisfactory to the owners. Justice Magda also ordered the
parties to reattend Court on October 4, 2004, to determine the issue of
damages and costs.
Notwithstanding Justice Magda’s Order, the Corporation failed to do any
repairs to the unit or to provide copies of any reports to the owners
by September 23, 2004, as ordered by the Court. No valid reason was
provided by DCC 54 as to why the Corporation did not comply with
Justice Magda’s Order. When the parties re-attended at Court on October
4, 2004, to review and assess damages and cost, Justice Scott was very
sympathetic to the owners’ dilemma. Even though the owners did not
formally make a motion for contempt, Justice Scott not only found DCC
54 in contempt of Justice Magda’s Order, he also ordered the individual
directors to personally pay $1,500 in costs to the unit owners.
As indicated above, Justice Scott’s contempt and cost order was later
set aside by Justice Ferguson for procedural reasons, specifically,
that the directors had no notice of the Court hearing. Justice Ferguson
stated that “while I am sympathetic to the Goodwins’ position, the
procedure to be followed on a contempt motion was not met”. The Judge,
however, did state that DCC 54 was not in compliance with the original
Order made by Justice Magda and that “it may in fact be appropriate to
have the costs paid personally by the officers and directors”.
The Judge went on to state that: “I do note that the quantum of the
costs award was reasonable and appropriate, however, the officers and
directors ought to have been served and the procedure followed to
obtain a formal contempt order.
What is also important about the Goodwin Decision is that the Judge
rejected DCC 54’s position that the owners were not entitled to
initiate the Court Application and obtain the original Court Order
because the parties had already commenced the mediation and arbitration
Justice Ferguson’s decision makes it clear that even though the
mediation and arbitration process was initiated, a party may be
entitled to commence a Court Application under section 134 of the Act
where there is an alleged breach of the Act or if a party fails to
comply with a mediated settlement agreement.
Sadly, this saga did not end until many months after the owners
obtained the original Court Order. The owners initiated another claim
in 2006 against DCC 54 and nine individual directors seeking damages in
excess of $450,000. The Corporation’s insurers refused to cover the
directors against the owners’ claim which alleged bad faith. The
parties ultimately settled with the Corporation paying a substantial
sum to the owners.
There are many lessons to be learned by this case. One thing is for
sure: if DCC 54, its directors and representatives had properly
fulfilled their obligations, the Goodwins would not have had to live in
a toxic environment and many thousands of dollars would have been saved.
Williams Estate v CCC No. 66
Superior Court of Justice of Ontario
Court File No: 11-53224
Before: Justice Maranger
03 September 2015
Lise Mayrand in her capacity as executrix of the Estate of George
Williams sued The CCC No. 66 for water damage caused to the estate’s
condo unit. The claim alleges that the water infiltration was as a
result of defects in the construction of the buildings common elements.
The issue first arose on 26 Dec 2009 when a significant amount of water
infiltrated the condominium unit. A notice of action was issued on 22
Dec 2012. The original statement of claim was issued and filed on 20
Jan 2012. The statement of defence was filed on 25 July 2012.
The original claim addressed just the one claim of water infiltration
the unit. However, there were ongoing water leaks into the unit.
Evidence presented by expert reports confirmed that there were a series
of leaks because of different reasons over a few years.
The plaintiff applied to have these other leaks added to the original application. The condo corporation resisted.
After a lot of evidence was heard, the judge allowed the application to
include the additional water leaks because, in addition to other
reasons, the condo corporation knew about them. However he recognized
that the plaintiff was late in adding these new claims to the
application so that would affect their being awarded costs.
On 26 November 2015, Justice Maranger ruled that there would be no costs awarded to the plaintiff.
Williams Estate v CCC No. 66 (Part 2)
Superior Court of Justice of Ontario
Court File No: 11-53224
Before: Justice Beaudoin
04 December 2015
Motion For Leave to Appeal
PCC #66 seeks to appeal the earlier decision to allow the additional leaks be be included in the initial application.
The condo corporation main arguments were:
• A conflicting decision
• Good reason to doubt the correctness of the decision
• The owner should have used mediation and arbitration
After giving an explaination and his decsions on these arguments,
Justice Beaudoin ruled that: "it was open to Justice Maranger to
conclude, as he did, that all matters should be dealt within the action
already commenced by the Plaintiff and he exercised his discretion
appropriately. I conclude that there is no reason to doubt the
correctness of his decision."
So the condo lost a second time.
Williams Estate v CCC No. 66 (Part 2—Costs)
Superior Court of Justice of Ontario
Court File No: 11-53224
Before: Justice Beaudoin
02 February 2016
This hearing was to determine costs due to CCC #66's failed attempt to be granted an appeal.
The owner asked for fees of $8,175 on a substantial indemnity basis,
since the date of her offer, plus disbursements and taxes for a total
amount of $9,385.
"She relies on section 131 of the Courts of Justice Act and the factors
enumerated under Rule 57. Specifically, she invites me to consider her
offer to settle dated October 5, 2015 which provided for the dismissal
of the motion for leave to appeal with costs on a partial indemnity
basis until the date of the offer, and on a substantial indemnity basis
thereafter. Mayrand submits that she successfully beat her offer to
settle and that she should have the benefit from that offer."
She also argued that she should not be denied the costs of this motion
as she has now has had to argue twice with respect to the merits of her
request to amend her pleadings.
financial inequities between the parties
"She also claims she should be indemnified especially in light of the
financial inequities between the parties; a condominium owner should
not have to fight her condominium corporation to get it to stop water
infiltrations into her unit.
The matter was of utmost importance to her as the ongoing problems
affected her home and her ability to occupy it. Had she not been
successful on the motion, her claims would have been limited to
substantially lower damages."
CCC # 66 argues that the amount of costs sought by Mayrand does not
fall within the range of costs that they should reasonably have
expected to pay.
The corporation submits that the offer to settle was not so substantial
as to be awarded substantial indemnity costs. A total cost award in
favour of Mayrand in the amount of $4500 would be appropriate.
Analysis and Conclusion
CCC # 66 recognizes that Mayrand is entitled to costs, they just wanted them to be lower that what she was asking for.
The judge ruled that Mayrand made a reasonable offer. She had to
respond to a motion for leave to appeal and she was successful. The
judge concluded that not all claims are subject to mandatory
arbitration under the Condominium Act.
The judge ruled:
"The hourly rates and time spent by her counsel were reasonable, and
while CCC #66 argues that costs claimed are too high, it has not
disclosed its own counsels’ dockets which are the best indication of a
While the financial disparity between the parties is not an enumerated
factor under Rule 57.01, it may nevertheless be a consideration under
Rule 57.01(1)(i) “as any other matter relevant to the question of
Justice Beaudoin awarded her costs in the global amount of $7000, payable forthwith.
Most likely, the owner and the condo corporation will be going back to
court to seek a judgment over her claim for damages and oppression.
Hadani v TSCC No. 2095
Small Claims Court
Court File No: SC-14-00000644-0000
Before: Deputy Judge Samuel S. Marr
Released: 30 June 2016
TSCC 2095 328 Fleet Street West
Rahim Hadani rented out his out his penthouse condo. The washing
machine in the unit overflowed three times and damaged the unit below.
The condo billed him the costs of the repairs and he refused to pay so
the condo corporation put a lien on his unit. His bank, who had the
mortgage paid to remove the lien and put the costs on the owner's line
The owner sued the condo corporation to recover the $16,599.68. The owner lost. Now he will have additional legal costs to pay.
Jagat Rao vs TSCC No. 1764
Small Claims Court
Court File No: SC-12-15327-00
Before: Deputy Judge J Prattas
Released: 07 April 2016
Unlike the above case, the owner won this Small Claims case. The owner
owns Unit # 602 and there was water damage right under his unit in Unit
The condo corporation had their plumber investigate the water leak on
several occasions and determined that it originated from the owner's
TSCC No. 1764 placed a lien on Unit # 602 in the amount of $2,464.65.
TD Canada Trust, the plaintiff’s mortgagee, paid the total amount of
Jagat Rao sued to recover this expense. He disputed the condo corporation's facts on several grounds:
| He did not use the ensuite shower at the time of and during the leak and only sporadically in the previous four years;
|The property was about four and one-half years old at the time of the
leak and there was no reason for such leakage to occur from his unit;
|Because of his extensive travels he had very limited use of his entire
unit, including the showers generally and only for the months of June
|When in Toronto, for about four years prior to the leak, he used the
main shower of the unit and a couple of times the bathtub shower in the
ensuite bathroom after he obtained permission from the property manager;
|He instructed any house sitter not to use the ensuite shower;
|Several other units, the garage,
the gym and other facilities on the property had experienced similar
water leaks which would indicate
faulty workmanship of the condominium common elements.
The judge states was incumbent upon the defendant to prove in an
unambiguous and straightforward fashion the source of the leak and how
it was stopped, something which the defendant failed to do.
The owner's contractor found that the grout, the silicone and the tiles
in the stall were all fine, there were no cracks or gaps in the
caulking and the tiles or any other indications that would suggest that
the water could leak from the ensuite shower stall. As far as he was
concerned the stall did not need any repairs or replacing of the tiles
or the silicone or the caulking and in his view the water leak could
not have emanated from that stall.
The judge preferred his evidence over that of condo's plumber on that point.
There was also telling evidence, which the judge accepted on a balance
of probabilities, that several other units on the property experienced
similar leaks, as did the garage which remained closed for at least two
months. According to Rao it is a well known fact that water leaking has
been an issue in the property. Even in the summer of 2014 there was
water leaking into the gym.
In the result there was a judgment for the plaintiff against the defendant as follows:
|$5,958.16 for the Claim;
|$175 for court disbursements;
|Prejudgment interest at the court rate on and from April 16, 2012.
|Postjudgment interest at the current court rate.
The judge found that it was appropriate to award costs and disbursements to the
plaintiff in the amount of $1,800 all inclusive.
Washington v YCC No. 441
Toronto Small Claims Court
Court File No. SC-14-8500-00
Deputy Justice J Prattas
Released: 18 July 2016
Reasons for Judgment
Mr. Washington originally claimed the amount of $23,142.96 from the
condo corporation for the recovery of money paid by him to discharge a
lien. This amount included $5,808.09 for common expenses which may or
may not have been in arrears and the balance for costs associated with
the clearing of the blockage of the plumbing system and lien costs. The
amount claimed was reduced at trial to $17,336.87.
There was a plumbing blockage which occurred on March 15, 2013 affected units 47, 48, 49 and 51.
Narval Washington submits that he did not cause the blockage and he is
therefore not responsible for any of the plumbing or lien costs in this
regard and that the condo corporation should return the amount of
$17,336.87 improperly paid by him to the condo corporation pursuant to
Narval Washington uses Unit # 48 to prepare food for Caribbean foods
for a number of restaurants. This preparation includes the trimming of
fat, bone and excess skin from cuts of meat and the marinating of meats.
Mr. Washington has a grease trap in his unit which he cleans and has
maintained by a grease trap company. He claims that no food is cooked
in his unit. According to the condo the plaintiff deposits on average
three litres of used cooking oil a day into a container at the property
for pick-up by a bio-fuel company.
After a two day trial, the judge ruled that the commercial condo
corporation did not have sufficent evidence to prove that Narval
Washington's Unit #48 was the cause of the drain blockage.
The judge wrote:
"Since the defendant took the position
that the source of the blockage was from 48, it was incumbent upon the
defendant to prove in an unambiguous and straightforward fashion the
source of the blockage. It failed to do so."
The judge was also unimpressed by the testimony of the condo's directors:
"Most important of all I find from the
testimony of the board members that the board was irresponsible and
rather flippant in “determining” that the plaintiff should pay for the
clearing of the blockage. The board members testified that the decision
to have the plaintiff pay these costs took no more than a few seconds
or at most no more than “three minutes”, and any discussion in this
regard was laden with expletives – leaving no room or time for any
sober discussion -- that the plaintiff should pay for the clearing of
the blockage. In my view this is not a professional and serious way to
determine such important issues as the allocation of costs to a
particular unit owner."
therefore conclude that the plaintiff is not liable for the costs and
expenses that he was obligated to pay to the defendant in relation to
the clearing of the blockage (including the lien amounts and charges)
and all amounts that he paid and expenses that he incurred in this
regard should be paid back to him by the defendant."
The judge failed to understand why the cheques for the monthly common expenses
were not deposited by the defendant.
He assessed the damages the plaintiff is entitled to recover from the defendant at $17,336.84, consisting of the following:
a) The plumbing repairs $11,485.22;
b) Pre-lien late payment interest $481.65;
c) Pre-lien collection admin charge $287.20;
d) Legal costs for lien registration and discharge $1,050;
e) Legal costs for collection after registration of lien $3,282.77;
f) Legal costs to July 18, 2014 for collection $750.
There shall be judgment for the plaintiff against the defendant
a) $17,336.84 for the Claim;
b) $175 for court disbursements;
c) Prejudgment interest at the court rate on and from October 28, 2014.
d) Postjudgment interest at the current court rate.
are discretionary to the trial judge. The plaintiff was completely
successful. This was a two-day trial. In considering all the
circumstances of this case, including proportionality, and in
exercising my discretion I find that it is appropriate to award costs
to the plaintiff in the amount of $2,500 all inclusive and I so order.
Washington v YCC No. 441
Divisional Court File No: 409/16
Heard at Toronto: 16 August 2017
The onus of proof
On this point, I repeat the observation of Rothstein J. from F.H. v.
McDougall, 2008 SCC 53 (CanLII),  3 S.C.R. 41 where he said, at
In all civil cases, the trial judge
must scrutinize the relevant evidence with care to determine whether it
is more likely than not that an alleged event occurred.
The central problem with the trial judge’s reasons is that he appears
to find that, in order for the defendant to resist the plaintiff’s
claim, the defendant had to prove absolutely that the plaintiff caused
the plumbing blockage. In so finding, the trial judge appears to
have reversed the onus of proof and also to have applied the wrong
burden of proof.
the defendant was not obliged, in defending the plaintiff’s claim, to
“definitively” prove that the source of the plumbing blockage was the
plaintiff’s unit nor was the defendant obliged to prove “in an
unambiguous and straightforward fashion” that the plaintiff’s unit was
the source. Rather, as in any civil proceeding, the onus rested
on the plaintiff.
In order to succeed on his claim, it was the plaintiff’s obligation to
establish that it was more likely than not that he was not the source
of the plumbing blockage. It is, of course, open to the defendant to
lead evidence that will result in the plaintiff failing to prove his
case, as the defendant attempted to do in this case, but the defendant
does not bear the onus of proof.
this might be seen to be a simple quarrel over semantics, it is not in
this case when one considers all of the evidence, especially the
evidence revealed by the videotape of the actual cleaning of the pipes
and the comments made by the plumber thereon. The two videotapes
of the cleaning of the pipes show the plumber “snaking” the pipes to
clear the blockage. He is heard, on at least three occasions,
referring to grease including one specific reference to “chicken”
grease. The only unit producing “chicken” grease was the
Justice Nordheimer ruled: "In the end result, given the concerns that I
have with the onus of proof that the trial judge appears to have
employed, with the standard of proof he appears to have applied, and
with his failure to refer to key evidence, I am not satisfied that the
decision reached is a safe and reliable one. Consequently, the decision
cannot stand. At the same time, given the nature of the evidence, I am
not in a position to say that the plaintiff could not succeed in his
claim if the proper analysis of the evidence is undertaken. As a
result, a new trial must be ordered."
The appeal is allowed, the judgement below is set aside and a new trial is ordered before a different trial judge."
The defendant is entitled to its costs of the appeal fixed in the
amount of $5,000 inclusive of disbursements and HST payable by the
plaintiff within thirty days.
If an owner challenges a lien, it is the owner’s obligation – and not
the condominium’s obligation – to establish that he or she was more
likely than not, not the source of the alleged damage.
Cho v Middleton
Divisional Court File No: 189/16
Justice L.A. Pattillo (Orally)
Heard at Toronto: November 21, 2016
This was an appeal of a Small Claims case.
The Appellant claimed $25,000 in damages arising from water damage that
resulted from a leak or leaks in the units above the Appellant’s
condominium. The claim was to recover expenses of finding alternative
accommodation while the remediation and restoration was completed.
The Appellant’s condominium suffered a water leak on December 27-28,
2014. MTCC 1099 immediately responded to the Appellant’s unit and
commenced emergency drying services. The Appellant was advised by
letter dated January 20, 2015 that arrangements were being made to
carry out the necessary repairs to his unit.
A dispute arose between the Appellant and MTCC 1099 concerning the
repair and damages to his personal belongings. The Appellant moved out
of the unit on May 12, 2015 to a house he owned in Kingston, Ont.
December 22, 2015, the Appellant advised the Respondents that they
could not enter his unit unless he was present. He then changed the
MTCC 1099 retained the services of a locksmith and on January 29, 2016,
entered the unit in the absence of the Appellant’s permission and
The Corporation retained a professional restoration company to carry
out the repairs. It also retained an environmental
testing laboratory to test for mould both before and after the repairs.
The Respondents’ expert testified that based on tests they did, there
were safe levels of mould in the unit and confirmed that the unit was
The Small Claims trial took place on February and March 2016 and for a
half day on March 21, 2016. On the last day, the Trial Judge
refused to hear new evidence and the judge ruled in favour of the
condominium and awarded costs.
The owner also lost this Appeal.
It is not hard to understand why he lost. From the evidence stated in
the judgment, the owner appears to have been extremely uncooperative
Given the issue and the fact that this was an appeal from Small Claims
Court, proportionality is an important consideration. The judge awarded the condo corporation's
costs of the appeal at $7,500 inclusive of disbursements