Court File and Parties

Court File No.: CV-22-1685 Date: 2024-01-26 Ontario Superior Court of Justice

Between: Siridewa Abeygunasekara and Nimala Perera, Applicants – and – Peel Condominium Corporation No. 392, Respondent

Counsel: Ben Thind, for the applicants Inderpreet Suri, for the respondent

Heard: June 21, 2023

Reasons for Judgment

Rahman, J.

1. Introduction

[1] The applicants apply for an order declaring that a certificate of lien registered by the respondent against their condominium unit is invalid, and for an order requiring the respondent to discharge the lien.

[2] The applicants are the owners of unit 718 at 35 Trailwood Drive, Mississauga. The building is a residential condominium controlled, managed, and administered by the respondent. In the early morning hours of January 20, 2022, the toilet in the applicants’ unit overflowed. The applicants did not live in the unit. They had leased the unit to a tenant who lived there with her daughter. The water from the overflowing toilet leaked into the unit immediately below the applicants’ unit, number 618. The resident in unit 618 called the building’s security about the leak. After a security guard investigated the leak, he called the building’s superintendent. The superintendent first went to unit 618 and noticed that water was coming from various locations in the unit’s ceiling. He decided to go to the applicants’ unit because it was directly above 618. After eventually getting unit 718’s residents to open the door, the superintendent entered the unit and saw water on the floor and noticed towels had been used to try and soak up the water. The superintendent discovered that the water was coming from the toilet in the unit’s main bathroom. He was not able to turn off the water using the shut-off valve located next to the toilet because the valve’s handle was broken. The superintendent eventually retrieved a key needed to turn off water to the suite and managed to shut off the water. He checked the toilet and determined that the toilet’s flapper was ajar, and that the toilet had been clogged. The superintendent investigated and determined that no other units had backups and there were no blockages in the condominium’s common element pipes. The water leak from the applicants’ unit caused damage to several other suites and the building’s common elements.

[3] The respondent had two different contractors do work to remediate the damage that had been done by the water leak. The contractors’ bills totalled $42,233.47. The respondent’s insurance had a $50,000 deductible. The condominium’s by-laws require unit owners to pay the portion of any loss not covered by the condominium corporation’s insurance. Consequently, the applicants were responsible for paying the entire amount of the contractors’ bills. The respondent informed the applicants of the contractors’ bills and demanded payment by March 1, 2022. The applicants were informed that if the full amount was not paid, it would be collected in the same manner as common expenses in accordance with ss. 85 and 86 of Condominium Act, 1998, S.O. 1998, c. 19 (the Act). When the applicants did not pay the respondent, the respondent ultimately registered a lien against the applicants’ unit to secure payment.

[4] The applicants argue that the respondent cannot establish that the applicants are responsible for the water leak that caused damage in the building. The applicants submit that the superintendent who inspected the cause of the leak is not an expert and that his opinion about what caused the leak is not admissible. The applicants also contend that the respondent has engaged in oppressive conduct by maintaining an unreasonably high deductible and overcharging the applicants for the damage. The applicants also argue that the lien was not registered in a timely way. The applicants request that the lien be declared invalid and be discharged.

[5] The respondent argues that the evidence clearly establishes that the applicants are responsible for the water leak and consequent damage. The respondent says that the building superintendent’s evidence is not expert opinion evidence and is admissible to show the cause of the water leak. In any event, the applicants do not dispute that their toilet overflowed and that the shut-off valve in their unit was broken. The respondent also submits that the lien was registered in a timely way because it was registered within three months of the applicants’ default as required by the Act. Finally, the respondent maintains that it has not acted oppressively in any way towards the applicants because it has not breached any reasonable expectations, nor has it treated the applicants any differently than any other unit owners. The respondent says the lien is valid and the application should be dismissed.

[6] For the reasons that follow, the application is dismissed. The respondent has established that the applicants are responsible for the water leak that caused the damage in the condominium building. It is undisputed that the water leak came from the applicants’ overflowing toilet. The superintendent’s evidence is admissible and clearly establishes that the toilet’s flap being ajar and a blockage in the toilet caused it to overflow. The superintendent also deposed that there were no other blockages or leaks anywhere else in the building that could have caused the uncontrolled leakage of water, and the water shut-off valve next to the toilet was inoperable. That evidence is uncontradicted. Further, the respondent has not acted oppressively towards the applicants in any way. There is no basis to find that the deductible or the respondent’s assessment of damages is unreasonable. Finally, the lien was registered within the three-month period set out in the Act. There is no basis to invalidate the lien.

2. Preliminary issues

[7] Before addressing the merits of the application, I will address two related preliminary issues that came up at the beginning of the hearing. First, whether the applicants should be permitted to file an amended notice of application, and second whether portions of the two affidavits filed by the respondents should be struck out. It was in the amended application that the applicants asked to strike out portions of the affidavits filed by the respondents.

[8] I will deal first with the amended application. The applicants tried to file an amended application a week before the hearing. The applicants amended their application principally to ask the court to strike out two affidavits filed by the respondent. [1] The applicants seek to strike out the affidavits mainly because they claim that the affidavits contain improper opinion evidence, and unsourced second-hand information. The respondent opposes the filing of the amended application and argues that the relief the applicants are seeking should have been sought by way of a motion brought in advance of the application hearing. The respondent did file a responding factum with a fulsome response to the applicants’ request to have the affidavits struck, in case the court allowed argument on this issue.

[9] I am satisfied that it is appropriate to consider the application as amended. The respondent was not prejudiced by the filing of the amended application, having fully responded to the request to strike portions of the responding affidavits. While it may have been more convenient had the applicants brought their motion to strike before the application hearing, there was ample time to hear arguments about the admissibility of the affidavits and to hear argument on the merits of the application. This is not a case where the merits hearing had to be adjourned because the parties needed time to digest a ruling about the admissibility of evidence. In cases where there is a voluminous record, and it is unclear whether certain evidence will be admissible, it may be advisable to have the admissibility of affidavit evidence decided in advance of the application hearing. That may be done by bringing a motion, or by bifurcating the hearing of the application so that the same judge hears both. In this case, the parties were able to argue both the admissibility of evidence and the merits of the application without difficulty at the same hearing.

[10] As for the applicants’ request to strike portions of the responding affidavits, it must fail. The applicants ask the court to strike out most of the responding affidavits. The responding affidavits were sworn by Pauline Reynolds, the respondent’s property manager, and Brian Teskey, the building’s superintendent who dealt with the leak and its aftermath. The applicants submit that various paragraphs of both affidavits contain contentious matters, legal argument, unsourced or improper hearsay, and improper opinion evidence. Respectfully, most of the applicants’ request to strike paragraphs from the affidavits is ill-conceived. Much of the applicants’ attack on the affidavits is either overly technical, attacks evidence that is not in dispute, or is simply wrong. The only complaint deserving of more attention is the applicants’ claim that Mr. Teskey’s affidavit contains improper opinion evidence. I will deal with that complaint in more detail when I consider the merits of the application.

[11] For the rest of their complaints, I will not go through a paragraph-by-paragraph explanation about why the applicants’ request cannot succeed. Some examples of the problems with their request to strike will suffice. The applicants allege that information in various paragraphs is not sourced, even when it is (e.g. paragraphs 5, 7, 9 of Ms Reynolds’ affidavit). In some instances, the information is not even in dispute and appears in the applicants’ own record or in Mr. Abeygunasekara’s affidavit (e.g. paragraphs 5, 6, 8 of Ms Reynolds’ affidavit). The applicants also complain about “legal argument” in Ms Reynolds affidavit, when all she has done is explain why the respondent is required to have insurance under the Act, why owners are responsible to pay for damages, and why the lien was registered. None of this is objectionable. The request to strike portions of the affidavits is dismissed.

[12] I will next turn to the merits of the application.

3. Are the applicants responsible for the damage?

[13] The principal issue on this application is whether the applicants are responsible for the damages to other units in the condominium building and its common areas. The applicants are responsible if an act or omission by them led to the water leak.

[14] As mentioned above, there is no dispute that the overflowing toilet in the applicants’ unit caused flooding within their unit and leaked to other areas in the building. There is also no issue that the tenants in the applicants’ unit were present when the toilet was overflowing, and that they would not have been able to shut off the water because the shut-off valve’s handle was broken.

[15] The applicants take issue with whether the respondent can show that they were solely responsible for the water damage that occurred in the building on January 20, 2022. Specifically, the applicants take issue with the admissibility of Mr. Teskey’s evidence, which the respondent has filed on this application. Again, Mr. Teskey was the building superintendent who investigated the leak. The applicants contend that his evidence about how the leak was caused is inadmissible opinion evidence. I will next turn to the admissibility of Mr. Teskey’s evidence.

3.1. Brian Teskey’s evidence about the leak is admissible

[16] Mr. Teskey attended the applicants’ unit on January 20 as the toilet was overflowing. He knocked on the suite’s door and the tenants initially did not answer. When he knocked again, one of the tenants told him to wait. He asked her to open the door immediately because he had to investigate the cause of water leaking into unit 618. Once inside the applicants’ unit, the tenant said she did not know where the water was coming from. Mr. Teskey saw water on the floor throughout the unit and saw that towels had been placed on the floor to absorb the water. Mr. Teskey began recording video of the situation and went into the suite’s main washroom where he discovered that the toilet was overflowing. Mr. Teskey deposes in his affidavit that, judging by the amount of water he saw, the toilet had been overflowing for some time. Moreover, it was apparent that nobody had turned off the water.

[17] Mr. Teskey tried to turn off the water using the shut off valve next to the toilet. Because its handle was broken, Mr. Teskey had to leave the unit to retrieve a key that would permit him to shut off water to the unit itself. Mr. Teskey returned to unit 618 and recorded video of the damage. After calling the condominium’s emergency flood services contractor, Mr. Teskey returned to the applicants’ unit and investigated the reason for the toilet overflowing. After opening the toilet tank, Mr. Teskey found that the toilet’s flapper was ajar. Mr. Teskey deposes in his affidavit that a defective flapper, on its own, would not cause a toilet to overflow. For an open flapper to cause a leak, there would also have to be a blockage in the toilet. When he investigated the leak, he did not see what was causing the blockage, but he said that there had to have been a blockage because there would be no other reason for water to overflow in that way. Mr. Teskey’s explanation of the reason he concluded there was a blockage is set out below:

If, for some reason, the toilet's flapper doesn’t go all the way down to its normal resting position after the toilet is flushed, the water will continually run into the toilet bowl. This results in a continually running toilet and does not cause the toilet bowl to overflow unless there is some sort of blockage in the toilet itself. When there is a blockage in the toilet, the continuously flowing water has nowhere to go but up and so it flows outside the toilet bowl, causing a leak and damage. In this case, I did not actually see what was causing the blockage in the toilet (it was further into the toilet), but I know the toilet was blocked because that is the only reason water would overflow like that.

[18] Mr. Teskey also deposes that, based on his investigation, there were no other backups in any of the other suites. Mr. Teskey’s affidavit also explains that he can say with 100% certainty that there was no other blockage in the condominium’s common element pipes or in anywhere else in the building. He explains that he can draw this conclusion because, had there been any other such blockages, “water would have backed up in unit 718’s bathtubs first because bathtubs are the lowest fixture to the ground and would be impacted first and before the toilet which is higher up than the bathtub.” Mr. Teskey explains that unit 718’s bathtubs were dry at the time of the leak. Mr. Teskey states in his affidavit that he can draw this conclusion with 100% certainty based on his knowledge and experience.

[19] Mr. Teskey sets out his knowledge and experience of plumbing in his affidavits. He acknowledges that he is not a licensed plumber. He describes his experience as follows:

For the past 20 years, I have been working as a superintendent and doing maintenance for buildings. I was also involved in the construction and renovation industry and used to install/replace toilets and repair plumbing pipes and fixtures. The last time I installed a toilet was for my dad over 2 years ago. While I am not a licensed plumber, I did take a plumbing course in 2006 or 2007 and received a certificate which stated that I had learned all of the basics of plumbing. I know how to handle plumbing issues really well and deal with plumbing issues for the Condominium regularly.

In the past 20 years, I have dealt with over 500 floods and approximately 30 floods that were caused by malfunctioning toilets.

[20] The applicants argue that the respondent cannot rely on Mr. Teskey’s evidence that their overflowing toilet was the sole cause of water damage in the condominium. The applicants argue that Mr. Teskey is not an expert witness and cannot give opinion evidence about what caused the toilet to overflow.

[21] The respondent says that Mr. Teskey is a fact witness, not an expert witness. The respondent submits that Mr. Teskey’s conclusions about the cause of the toilet overflow “come from his vast experience in the repair, maintenance and construction industry for the past 20 years and because he has dealt with over 500 floods and approximately 30 floods caused by malfunctioning toilets.”

[22] I agree with the respondent that Mr. Teskey’s evidence is not expert opinion evidence and is admissible.

[23] As the Court of Appeal recently observed in R. v. Kwok, 2023 ONCA 458, at para. 38, “in some cases it will be difficult to draw a precise line between opinions that can be given by lay persons and those that require an expert.” A lay person may give an opinion “only with respect to matters that do not require special knowledge and in circumstances where it is virtually impossible to separate the facts from the inferences based on those facts”: R. v. Collins (2001), 150 O.A.C. 220 (C.A.), at para. 17. There is some room for a witness to give evidence based on knowledge that they have acquired doing a certain occupation. As the Court of Appeal said in Kwok, at para. 38, “an opinion that is based on information gained by ordinary as opposed to specialized training or experience is not an expert opinion, even if that experience may not be common.”

[24] Some of Mr. Teskey’s evidence about the overflow is factual evidence and does not involve opinion evidence. Mr. Teskey’s evidence about the cause of the overflowing toilet in paragraph 17 involves an opinion since he is drawing an inference based on his observations. [2] However, his opinion is not one that requires specialized training or experience. Rather, it falls within an opinion based on his job experience, albeit job experience that may not be that common.

[25] I also note that the applicants were aware that the respondent was going to rely on Mr. Teskey’s affidavit to support its response to the application. Applicants’ counsel cross-examined Mr. Teskey on his affidavit. The applicants chose not to call their own evidence to challenge Mr. Teskey’s conclusions. In short, as a matter of fairness, the applicants cannot claim that they will suffer any prejudice by this court’s consideration of Mr. Teskey’s evidence.

[26] I will next turn to the question of whether the respondent has established that the applicants’ act or omission caused the toilet to overflow.

3.2. The applicants are responsible for the damage

[27] The parties agree that the respondent has the onus of showing that an act or omission of the applicants caused the damage in issue here.

[28] The applicants argue that the respondent cannot establish that they are responsible for the water leak. The applicants argue that the respondent must provide expert evidence to demonstrate what caused the flood. The applicants observe that Mr. Teskey did not find any object in the toilet that may have caused the blockage, and the respondent did not have a plumber come in to assess the plumbing or determine the cause of the overflow. They say that it is not enough for the respondent to simply allege that their unit – which shares plumbing with the whole building – is responsible for the overflow. The applicants say that holding them responsible here “would be tantamount to construing [the by-laws] as imposing strict liability on the owners.”

[29] The respondent counters that the applicants are responsible for the overflowing toilet and the damage in the condominium. Relying on the Divisional Court’s decision in Lozano v. TSCC 1765, 2021 ONSC 983, the respondent says that it need only show the damage was caused by the applicants’ act or omission. The question for the court is not whether the applicants were negligent. The question is – but for the owners’ (or tenants’) act or omission, would the damage have occurred? The respondent argues that the damage to other units and common elements was caused by the applicants’ overflowing toilet. The respondent contends that the tenants likely blocked the toilet, causing it to overflow. The respondent also contends that the lack of a proper water shut-off valve beside the toilet – for which the applicants are responsible – likely caused further damage than would have happened if it had been functional and used by the tenants.

[30] The respondent has met its onus to show that the applicants’ act or omission caused the overflowing toilet and water damage.

[31] Section 12.3 of the condominium’s By-Law No. 9, enacted by the respondent, makes clear that owners and their tenants are responsible for any damage caused to other units or common elements where the damage is caused by an act or omission of either the owner or their tenant(s). It also makes clear that the unit owner is responsible for the lesser of the deductible or the cost of the repairing the damage, and that this amount shall be added to the unit’s common expenses. The By-Law’s language mirrors the language in s. 105 of the Act respecting an owner’s responsibility for the acts or omissions of their tenants, the owner’s liability for paying the deductible, and that any such amounts become part of the common expenses payable by the owner. The relevant section of the By-Law is set out below:

Pursuant to subsections 105(2) and (3) of the Act, where any insurance policy obtained or maintained by the Corporation contains a deductible clause that limits the amount payable by the insurer, then the portion of any loss that is excluded from coverage shall be deemed a common expense, provided however that if an owner, tenant or any other person residing in the owner's unit with the permission or knowledge of the owner, by or through any act or omission causes damage to such owner's unit or to any other unit or to the common elements in those circumstances where such damage was not caused by any act or omission of the Corporation or any of its directors, officers, agents or employees, then the amount which is equivalent to the lesser of the cost of repairing the damage and the deductible limit of the Corporation's insurance policy shall be added to the common expenses payable in respect of such owner's unit.

[32] The respondent is correct that it does not have to show that the applicants acted negligently. The correct test to apply here is that set out by the Divisional Court in Lozano, at paras. 22-23:

Section 105 does not import, on a plain reading, any concept or requirement of unit owner negligence. The reasonableness of the unit owner’s conduct is, in fact, not mentioned or alluded to at all. A contextual and purposive analysis lends support for this conclusion as well. As found by the application judge, in part relying on the cited passage from Justice Demong in Cornerstone Heights, s. 105 represents a policy decision made by the Legislature to place the burden of paying the insurance deductible on the person (unit owner) that caused the loss, without consideration of whether that unit owner’s actions were negligent or otherwise. Further, the interplay of s. 105 and the corporation’s governing documents demonstrates that the risk of loss is, in fact, an allocation of insurance risk. This is because not only is the corporation required to have insurance (albeit perhaps subject to a deductible) but the unit owner is also, by virtue of s. 38 of the Declaration, required to have insurance to support its obligations under s. 105 and para. 12.03 of the corporation’s by-law to indemnify the corporation against the cost of the deductible if the loss is caused by the unit owner’s act or omission.

There is a suggestion, however, in some of the cases that the standard under s. 105 is one of “strict liability”: see, for example, Zafir v. York Region Condominium Corporation No. 632, 2007 ONSC 4893. I do not accept this view. The introduction of this idea, in my view, confuses and complicates the nature of the analysis and is, again, not warranted by the straightforward language and policy of s. 105: see, for example, Cornerstone Heights at paras. 35 and 36 Even under strict liability, an owner could defend an assessment for the cost of the deductible on the basis that they took “all reasonable care” to prevent the damage. This would still permit a role for an assessment of whether the owner’s conduct met a reasonable standard of care in the analysis, a concept which, in my view, is entirely foreign to the language of s. 105. The reasonableness of the owner’s act or omission is not part of the analysis under s. 105 at all; it is sufficient, to invoke liability, that the damage be “caused” by the owner’s “act or omission”. [Emphasis added.]

[33] The respondent’s evidence (specifically Mr. Teskey’s affidavit) establishes that the applicants’ act or omission caused the water damage in the condominium. The respondent has established both that something clogged the applicants’ toilet causing it to overflow, and that the applicants did not properly maintain the toilet’s shut-off valve which would have allowed their tenants to turn off the water once the toilet started overflowing.

[34] First, the cause of the toilet overflowing. I am satisfied that the respondent has established the applicants are responsible for the toilet overflowing. Mr. Teskey’s affidavit establishes that the flapper being ajar, plus some kind of blockage within the toilet, caused the toilet to overflow. The fact that he could not find whatever was blocking the toilet is of no moment because whatever had been blocking the toilet may have eventually cleared. More importantly, Mr. Teskey investigated whether any other suites in the building had backups and did not find any. He is also able to say that there were no blockages in the common element pipes. That means any blockage must have been in the applicants’ toilet.

[35] Second, the failure to maintain the shut-off valve. I accept Mr. Teskey’s evidence that the water seemed to have been running for some time when he entered the applicants’ unit. The video he took shows a great deal of water flooding the unit. Mr. Teskey deposed that the shut-off valve next to the toilet was broken. Even if the applicants had instructed their tenants how to turn off the water, the tenants would not have been able to because the valve’s handle was broken. Had the tenants been able to shut off the water (and known how to do so), they could have at least stopped the water flow before it flooded their unit and leaked into the neighbouring units and common elements. The applicants are responsible for maintaining their unit, including the toilet’s water shut-off valve. Had the tenants been able to promptly shut off the water, it is quite likely that the water would have been shut off much earlier and not leaked to other areas outside the applicants’ unit.

[36] The respondents have established that the applicants’ acts or omissions were responsible for causing the water damage. I now turn to the applicants’ various allegations that the respondent has acted oppressively towards them.

4. Has the respondent acted oppressively towards the applicants?

[37] The applicants allege that the respondent’s conduct towards them has been oppressive in three respects. First, the applicants say that the deductible in the respondent’s insurance policy is too high. Second, they say that the respondent has improperly charged them for damage not connected to the water leak. Third, the applicants say that the registration of the lien against their unit put them at risk of defaulting on their mortgage. I will deal with each of these arguments in turn.

4.1. The insurance policy’s deductible does not constitute oppressive conduct

[38] The applicants argue that the $50,000 deductible in the respondent’s insurance policy is too high, and therefore oppressive within the meaning of s. 135 of the Act. The applicants contend that, under s. 99(7) of the Act, the respondent is required to maintain a “reasonable deductible.” The applicants submit that a $50,000 deductible is not reasonable.

[39] A court considering an oppression claim made under s. 135 of the Act, must apply a two-part test. The first part involves the applicant demonstrating that there has been a breach of their reasonable expectations. The second part of the test considers whether the impugned conduct amounts to "oppression", "unfair prejudice" or "unfair disregard": Metropolitan Toronto Condominium Corporation No. 1272 v. Beach Development (Phase II) Corporation, 2011 ONCA 667, at paras. 5-6. The applicants have not satisfied either part of the test.

[40] First, there is no evidence to show what the applicants’ reasonable expectation was. The applicants have filed nothing on this application to show what would be considered a reasonable deductible for a condominium corporation to have. The applicants’ record does not even have any information about their subjective expectations, let alone any evidence that would support a breach of any reasonable expectations. They have not even said why the deductible is unreasonable. And they have not filed any evidence that suggests what a reasonable deductible would be for a similar condominium. The court cannot simply look at the deductible in this case and conclude it is unreasonable without any evidence about what deductible is common amongst other condominium corporations. In any event, the applicants’ reasonable expectations would be shaped by whatever they knew about the condominium’s declaration and by-laws at the time they became unit holders, and any time amendments were made to the by-laws thereafter. The insurance held by the respondent would not have been a secret and would presumably have been something accessible to the applicants upon request. On this record, there is nothing that can support a finding that their reasonable expectations were breached.

[41] Second, there is nothing to suggest that the selection of the insurance deductible, or its application to the applicants, amounts to oppression, unfair prejudice, or unfair disregard. Decisions about how to comply with the condominium’s by-laws and the Act, including purchasing insurance protection, are made by the condominium’s board. The respondent is required to carry insurance. The policy it chooses is based on a decision made by the condominium through its board. Those decisions are entitled to deference – based on the so-called business judgment rule – because boards are in a better position to make such decisions than courts. As the Court of Appeal observed in 3 716724 Canada Inc. v. Carleton Condominium Corporation No. 375, 2016 ONCA 650, at para. 51:

Moreover, the rationale underlying the business judgment rule in the corporate law context is also applicable to condominium corporations. As representatives elected by the unit owners, the directors of these corporations are better placed to make judgments about their interests and to balance the competing interests engaged than are the courts. For instance, in this case the security concerns arose in part as a result of the condominium’s location, and the Board members’ knowledge of that area is clearly an advantage that they enjoy over any court subsequently reviewing their decision. [Emphasis added.]

[42] There is nothing to suggest that this principle of giving deference to the board should not apply in this case. There is simply no evidence that the respondent has acted oppressively.

4.2. The amount of damages assessed was not unreasonable

[43] The applicants also appear to claim that the amount charged back to them for damages amounts to oppressive conduct. The applicants allege that there are problems with the calculation of the amounts they are responsible for paying to cover the water damages. In particular, the applicants contend that one of the contractors billed to repair pre-existing damage in a second-floor hallway. The applicants claim that the contractor could not have ascertained what damage was caused by the flood and what damage was pre-existing. The applicants argue that, to the extent that amounts for pre-existing damage were “unreasonably assessed” against them, the respondent has engaged in oppressive conduct.

[44] The respondent says that the contractor’s observation that there was pre-existing damage does not mean that it repaired that damage. The respondent maintains that the contractor charged only for its emergency services for repairing the damage caused by the toilet overflow. The respondent also argues that if the court does find that the damages are less than the originally assessed, the lien does not become invalid. The amount of the lien can be corrected without invalidating the certificate of lien.

[45] I agree with the respondent that there is no basis to find that the amount the respondent assessed for the costs of repairing damages is unreasonable. The bills submitted by the contractors are detailed enough to determine that they repaired damage resulting from the water leak. The damage was extensive. The amount of the work that was done seems reasonable and there is no indication that the specifically repaired the pre-existing damage.

[46] Even if the amount of the lien is incorrect (and I do not find that it is), that does not make the lien invalid. The respondent correctly observes that a lien is not invalid simply because it is not accurate. As Davies J. observed in Toronto Standard Condominium Corporation No. 1724 v. Evdassin, 2021 ONSC 6271, at paras. 28-29, a lien’s inaccuracy does not make it invalid and if it is incorrect it can be corrected:

The amount of a registered lien does not have to be accurate in the same way a notice of sale does under the Mortgages Act, R.S.O. 1990 c. M. 40: York Condominium Corporation No. 482 v. Christiansen, 2003 ONSC 11152 at para. 49. The Condominium’s lien would have expired if it was not registered within three months of Mr. Evdassin’s failure to pay his common expenses: Condominium Act, s. 85(2). If the lien is set aside now because the amount is not accurate, the Condominium will lose its lien rights altogether for Mr. Evdassin’s unpaid common expenses. It would be unfair for the Condominium to lose its lien rights just because the amount registered is not exactly the amount he owes. Registering a lien is one of the early steps towards enforcing a debt secured by property: Christiansen, at para. 49. The precise amount owing by Mr. Evdassin will be determined if a notice of sale is issued in the future.

If, however, the amount of a lien is clearly incorrect or excessive, it can also be corrected without invalidating the lien: Metropolitan Toronto Condominium Corporation No. 744 v. Bazilinsky, 2012 ONSC 1187 at para. 23. In this case, the lien registered on Mr. Evdassin’s unit is actually for less than the total amount the Condominium was entitled to recover from him. The Condominium could have demanded its full legal fees (minus the unrelated July 24, 2019 docket) under s. 2.2 of its Declaration, including costs incurred after my decisions was released. However, the Condominium decided to reduce its fees by 20 percent, or $7,393.23, to reflect my earlier finding that 80 percent of counsel’s time was likely spent on the Kitec pipes issue. I do not need to review the Condominium’s accounts line-by-line or reduce the value of the lien as Mr. Evdassin suggests because the lien is for less than the total amount the Condominium was entitled to recover.

4.3. Registering the lien was not oppressive

[47] Finally, I will address an oppression allegation that the applicants made in their notice of application, but was not addressed in their written or oral submissions. The applicants claim that the registration of the lien is oppressive because their mortgage contains a condition that no liens be registered against their unit. The applicants claim registration of the lien is oppressive because it risked placing them in default of their mortgage.

[48] Like their other arguments about oppression, this one must fail. The respondent was legally entitled to register the lien (as explained above). The applicants cannot rely on a contract they have with a third-party (their lender) to claim that the condominium has acted unfairly or oppressively towards them. Indeed, the fact that the declaration/Act entitled the respondent to register the lien means that it was within their reasonable expectation that such a lien could be registered.

5. Was the lien registered in time?

[49] The applicants argue that the respondent did not register the lien within the time period set out in the Act. To understand the parties’ positions on this issue, it is necessary to set out some more factual background.

[50] There is no dispute that the applicants received three letters from the respondent in February 2022. The first letter, dated January 20, 2022, informed the applicants that they would be responsible for paying for damages caused by the water leak. The letter informed the applicants that once the respondent received and paid invoices for the remediation and repair work, the amounts “will be charged back against your unit for reimbursement.” An invoice from one of the contractors (Moderno) was attached to this letter. The second letter was post-dated March 1, 2022, but sent some time in February. That letter informed the applicants that the full amount of the Moderno invoice was due March 1, 2022. The applicants then received a third letter “shortly after” February 16, 2022 (Mr. Abeygunasekara provided this time estimate based on an email exchange he had with the building’s management). This letter was also post-dated to March 1, 2022. [3] The letter attached the invoice from the second contractor (Bombolini Solutions). Like the previous letter, the letter explained the applicants’ responsibility for paying for the water damage. The letter started by referencing the previous “chargeback notice” letter and explaining the applicants’ liability for the Bombolini invoice. The letter explained, “Your account will be charged back the total amount of $12,825.50; upon receipt of this invoice full amount must be paid by March 1st, 2022, to clear your account.”

[51] There is no dispute that the respondent registered the lien against the applicants’ unit on May 31, 2022.

[52] Subsection 85(2) of the Act requires a condominium corporation to register a lien within three months of an owner’s default to contribute to common expenses. The applicant contends that “any purported default associated with non-payment of common expenses arising from the Moderno invoice crystalized ten days after delivery of the First Letter [dated January 20].” The applicants say that the default crystalized 10 days after the first letter by operation of s. 11.3 of By-Law 9. That section deals with the annual assessment of additional expenditures. I set out the full text of the section below:

In addition to the annual assessment, additional expenditures not contemplated in the foregoing budget may be assessed at any time during the year by the board serving notice of such assessment on all owners, as an additional common expense. The notice shall include a written statement setting out the reasons for the assessment. The assessment shall be payable by each owner within ten (10) days after the delivery thereof to him, or within such further period of time or in such installments as the board may determine.

[53] The respondent says that the deadline for payment in both of the March 1, 2022 letters is clear – March 1, 2022. The respondent argues that this is the appropriate date from which to calculate the three-month deadline to register the lien. Because the lien was registered on May 31, 2022, it was registered within the three-month deadline.

[54] I agree with the respondent that the deadline for payment was March 1, 2022, and that the May 31, 2022 registration was within the three-month deadline. The applicants’ reliance on s. 11.3 of By-Law 9 is misplaced. That section deals with special assessments that are assessed on “all owners.” That section does not concern assessments that arise because of an assessment against an owner for damage to the condominium that is assessed under s. 105 or a by-law passed pursuant to that section. The letters the respondent sent to the applicants made clear that the deadline for payment was March 1, 2022. When payment was not received by that date, the applicants were in default. The three-month deadline set out in s. 85(2) of the Act started running on March 1, 2022. The respondent was required to register the lien by June 1, 2022. It did so. Thus, the lien was registered in time, and is valid.

6. Conclusion and order

[55] The application is dismissed.

[56] As the successful party, the respondent is entitled to its costs of this application. The respondent may file its costs submissions by February 2, 2024. The applicants may respond by February 12, 2024. The costs submissions shall not exceed three pages (double-spaced, one-inch margins), excluding the bill of costs and any offers to settle. The respondent may file a one-page reply (double-spaced, one-inch margins) by February 16, 2024. In addition to filing their submissions with the court, and uploading them to CaseLines, the parties should also email a copy to my judicial assistant ryan.chan2@ontario.ca. If I have not received submissions within these time limits, I will assume that the parties have resolved the issue and will make no costs order.

Rahman J.

Released: January 26, 2024

[1] The other amendments are of no consequence to the outcome of the application.

[2] An inference drawn from an observed fact is an opinion: Collins, at para 17.

[3] The letters were post-dated to the due date of payment to make it easier for the billing department to track.