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Water leaks & mould
A Bad Case of Mould:  Goodwin v. DCC No. 54
A water leak becomes ongoing leaks
Leaky washing machine leads to a lien
A leaky shower not proven to be the cause
Condo owner not responsible for blocked drain—unit lien removed  Part 1
Condo owner's win—on appeal—is sent back for new trial                Part 2
An appeal of a small claims case—owner loses   (deservingly)

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 $1,500.

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 Court

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 process.

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

Costs Decision
This hearing was to determine costs due to CCC #66's failed attempt to be granted an appeal.

Mayrand's position
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."

Condo's position
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 party’s expectation.

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 costs.”

Justice Beaudoin awarded her costs in the global amount of $7000, payable forthwith.

What's next?
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 of credit.

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 #502.

The condo corporation had their plumber investigate the water leak on several occasions and determined that it originated from the owner's ensuite shower.

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 the lien.

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 to September;
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 the lien.

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."

"I 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 as follows:
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.
Costs 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
Justice Nordheimer
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), [2008] 3 S.C.R. 41 where he said, at para. 49:
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.
[11]           While 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 plaintiff’s unit.

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.

On December 22, 2015, the Appellant advised the Respondents that they could not enter his unit unless he was present. He then changed the locks.

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 repaired it.

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 habitable.

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 and unreasonable.

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 and taxes.”