Court File and Parties

Court File No.: CV-22-00090455 Superior Court of Justice

Between: Michael Matlock, Applicant

And: Ottawa-Carleton Standard Condominium Corporation No. 815, Respondent

Reasons for Decision

Before: The Honourable Justice P. Roger on June 4, 2024, at Ottawa, Ontario

Appearances: J. Rabin, for the Applicant C. Allen, for the Respondent

Reasons for Decision

Roger, J: (Orally)

Factual Background

The Applicant brings this Application seeking a finding that the Respondent has not acted reasonably in meeting its repair obligations under section 89 of the Condominium Act, 1998, S.O. 1998, c. 19, that its conduct was oppressive, and seeks resulting damages under section 134 of the Act. At the outset of the Application, we discussed that although this matter may be brought by application under section 134 of the Act, the factual record is not perfect with significant hearsay issues. It was agreed that there were no material facts in dispute and that we could proceed on this record understanding that it is admitted that a pipe leaked, and that this does not mean that there are no other causes of the leak, including from the cement slab.

By way of brief factual background, about December 5, 2021, a leak was discovered in the Applicant’s residential unit. The leak originated in the mechanical room located just above the second floor of the Applicant’s unit. The Applicant owns a two-story condominium apartment on the 18th and 19th floor of the building, and the mechanical room is on the 20th floor. The leak has not been fully repaired to date, it is not known when it will be fully repaired, and the Applicant has not been able to live in his condominium unit for almost two and a half years, still with no known date when he will be able to return to his unit.

Immediately following discovery of the leak, the Respondent retained contractors and consultants to investigate the leak and carry out remediation. The Respondent’s evidence consists of two affidavits, both from its property manager, Mr. Bourdeau, who has worked at the building since July 26th, 2022. Mr. Bourdeau’s affidavits read like a narrative of all of the steps taken by the Respondent’s contractors and consultants since the leak was discovered. They provide a detailed narrative of what was recommended and what was done from the outset of the leak until now, but they do not explain why investigative and remedial steps occurred as they did nor why it was reasonable that they occur as they did and not otherwise. As well, these affidavits provide very little information, other than the detailed narrative of the timeline, to explain why certain steps were not taken before they were or why certain steps took the time that they did.

The Applicant delivered two brief affidavits and two affidavits and reports from a civil engineer, Frédérick Beaucage. Mr. Beaucage opines that the delay has been unreasonable and that eight months should have been sufficient to complete required repairs. No responding opinion was provided by the Respondent.

Issues

The issues are whether the Respondent breached its duty under the Condominium Act, 1998, S.O. 1998, c. 19 to repair and maintain the common elements, whether the Respondent’s conduct has been oppressive, and, if a breach is established, what are the resulting damages.

Applicable Law

The Respondent’s statutory duty to maintain the common elements must be assessed on the standard of reasonableness. The Respondent is not held to a standard of protection, but to a reasonableness standard of maintenance and repairs. This requires a contextual approach of assessing all the evidence, including the nature of the work to be done and the complexity of the issues, to assess whether the Respondent acted reasonably in the circumstances.

Section 135 of the Condominium Act, 1998, S.O. 1998, c. 19 protects condominium owners from unfair treatment. To prove oppression under the Act, the Applicant must prove that the Respondent failed to meet reasonable expectations and that the Respondent’s conduct was oppressive or unfairly prejudicial, or unfairly disregarded the Applicant’s interests.

Analysis

The Applicant has established that the Respondent did not act reasonably. I accept, with qualifications, the undisputed evidence of Mr. Beaucage in that regard.

I accept Mr. Beaucage’s opinion that the investigation of the cause of the leak was not conducted reasonably. From a commonsense perspective, it makes sense that assessing the cause of the leak needed to occur quickly in order to facilitate the rest of the required repairs. Here, the evidence indicates that the condominium corporation simply assumed what was the cause of the leak. There is no evidence of an early investigation into the cause of the leak.

Furthermore, despite being advised by one of its consultants on June 9, 2022, that possible causes of leakage should be investigated, there is no evidence that such an investigation occurred in 2022. It appears that such investigations instead occurred about May 2023 when the abandoned drain was to be tested. It is not clear if this testing of the abandoned drain resulted from Mr. Bourdeau asking for cameras to inspect the drain in March 2023 or from a note of January 30, 2023 (found at A768) that a drain is currently leaking. In any event, this is an unexplained delay that is not made reasonable because the Respondent assumed that something was the cause of the leak when there is no evidence that such an assumption was reasonable in circumstances where there Respondent’s own consultant recommended investigating possible causes of leakage in June 2022.

This delayed investigation of the causes of the leak delayed repairs and led to a suggestion made only in December of 2023 that the cement slab between floors 19 and 20 should be tested. It defies common sense that making such a recommendation two years after the leak is reasonable, which probably explains why no such evidence was filed by the Respondent on this Application. This led to the discovery in March 2024 that the cement slab is leaking and that it needs to be waterproofed. I agree with Mr. Beaucage that this being discovered in March 2024, over two years after the leak was discovered, is not reasonable. It is also not reasonable that the Respondent still has absolutely no idea when the Applicant’s condominium unit will be repaired. We can see that if the possible causes of leakage or leakages had been investigated early on, as they reasonably should have, we would not be here today.

With regards to oppression, the Applicant has not established that the Respondent acted unfairly or that it unfairly disregarded the applicant’s interests. There is evidence of a difficult relationship between the parties, but no evidence that the Respondent did not act in good faith. Further, there is no evidence that the Respondent acted unfairly or that it adopted a “laissez faire” approach. Rather, the evidence of the Applicant’s expert, Mr. Beaucage, is that the Respondent acted negligently.

Assessing when the repairs should reasonably have been completed is a difficult task on the face of this record.

Accepting that the Applicant only removed his belongings by March 2022, this delayed remediation work somewhat. Accepting as well that the work was somewhat more complex than what might have ordinarily been encountered on such projects by Mr. Beaucage and that it was further delayed by an acoustical assessment, this could extend the eight months assessment of Mr. Beaucage to about twelve months or to about April 2023. Extending the timeline further for the requirements of tendering and delays that reasonably resulted from this could bring us to a timeline of about fourteen months or to about the end of June 2023.

If investigating for leaks had occurred within a reasonable time of June 2022, the leaky cement slab and other possible sources of leakage would have been discovered within a reasonable time of June 2022 and, despite their alleged complexity, should reasonably have been repaired within about ten months or by June 2023. I arrive at this conclusion because I accept from Mr. Beaucage that this was not reasonably managed and that none of this is overly complicated if managed reasonably.

This extended timeline is also within the May 2023 timeline that was then suggested by the Respondent, and further this does not count that investigating the source of the leak might also reasonably have been conducted during the period of January to March 2022, which would point towards a shorter timeframe. However, perfection is not the standard and by June 30, 2023, seems reasonable in the circumstances on the evidence before the Court.

The Applicant argues adverse inference, but this was more an onus issue. The onus was on the Applicant and the Applicant met his onus by proving unreasonableness with the evidence of his expert, Mr. Beaucage. The Respondent then failed to disprove that issue. Providing evidence, as the Respondent did, of its step-by-step approach is not, in the circumstances of this case, evidence that it was reasonable to proceed in that fashion, and Mr. Beaucage’s evidence that the leak should have been investigated sooner makes sense. Indeed, if one examines the whole history and does not adopt a step-by-step approach, it is not reasonable not to have investigated the leak in January or February 2022, or at the latest within a reasonable time after this was suggested by its consultant in June 2022.

Consequently, I find that acting reasonably all required repairs should have been completed by June 30, 2023. I find further that the Respondent shall exert reasonable efforts to complete all required repairs as soon as reasonably possible.

In cases where there is noncompliance with the Condominium Act, 1998, S.O. 1998, c. 19, the Court may require the condominium corporation to pay damages incurred as a result of noncompliance and costs incurred by the Applicant in obtaining the order.

The evidence, including the Applicant’s cross-examination, establishes that the Applicant has not been able to reside in his unit since July 1, 2023, because of the Respondent’s failure to reasonably repair the common elements. As a result, the Applicant has been unable to enjoy the benefit of ownership of his condominium unit. The expenses incurred for common elements, insurance, and taxes are therefore wasted expenses. As well, it is not disputed that such expenses compare reasonably to the cost of renting a similar alternative accommodation. Indeed, the owner of such a comparable unit would wish to cover her costs of ownership that are likely comparable to those of the Applicant and that owner would likely wish to make a profit as well. As a result, assessing what is outlined in the summary of damages prepared by the Applicant an amount of about $5,500 per month seems reasonable.

Considering again the Applicant’s summary of damages, I allow as damages, from July 1, 2023, for the applicant’s condominium fees, property taxes, Dymon Storage expenses, insurance, and Hydro Ottawa as shown on his summary of damages.

The only amount that I do not allow is the Bell expenses because although that I appreciate that the Bell service was complicated, it could have been stopped or discontinued prior to July 2023.

The availability or not of insurance is not a relevant consideration as the private insurance rule would be applicable to the circumstances of this case.

The parties should, with my findings, be able to calculate damages to date from my findings and should be able to agree on the form of an order for those damages. If they cannot agree on the form of an order, they may ask for an appointment before me to finalize the form of the order.

The order should be for damages up to date with interest to date as per my findings explained above, plus ongoing damages payable monthly for the monthly equivalent of those numbers, together with any adjustment if and when required to reflect any increase in the monthly costs that I have ordered, an order that reasonable efforts be made by the Respondent to complete repairs within a reasonable time and an order for costs.

Costs

This brings us to the topic of costs. On costs, I find that the Applicant’s costs are reasonable. His fees, with HST, are about $15,000 higher than the Respondent’s costs. However, these fees include about $4,000 for the second appearance which is not reflected in the Respondent’s costs outline, and which brings the difference between the two parties to about $10,000. That difference I find reasonable because the Applicant had to spend more time to meet his onus. I note that it is not unexpected to see the costs of a plaintiff or of an applicant exceeding those of a defendant or respondent for exactly that reason. As well, in this case the Applicant had to instruct his experts and those were as well additional costs that the respondent did not incur. In addition, I note that fees of about $62,000 with HST for an application of this importance to the parties, with this level of complexity is reasonable and should be within the reasonable contemplation or expectation of the losing party, particularly when their fees are in the range of about $46,000.

The Applicant was the successful party, and I see no reason why he should not be entitled to his costs. The Applicant’s amount claimed for his expert is as well reasonable and the disbursements related to that expert are reasonable and accepted.

This brings us to whether costs should be ordered on a full indemnity basis or on a partial indemnity basis or on some other scale.

Under the Courts of Justice Act, R.S.O. 1990, c. C.43, costs are typically awarded on a partial indemnity basis and substantial indemnity costs are reserved for cases where offers are a relevant consideration or where the circumstances are exceptional, none of which is applicable in the circumstances of this case.

However, in this case the Condominium Act, 1998, S.O. 1998, c. 19 is applicable. The Condominium Act provides for a statutory remedy at Section 134 by an owner or occupier of a unit that may be brought by application. At section 134(3) the Act provides that the Court may require the Condominium Corporation or the party against which the application was brought to pay the damages incurred and “the costs incurred by the applicant in obtaining the order.”

Costs “incurred” seems to suggest full indemnity costs. Incur is defined as something undesirable that happens to someone because of something that person did such as for example incurring a late fee or late fees because that person is late or there’s a past due that is late on some payment, or the payment is past, so you are incurring something for something you have done. This definition again suggests that incur relates to full indemnity costs.

No cases were referred to me specifically on point except the decision of Vanduzer v. Ottawa-Carleton Standard Condominium Corp. No. 708, 2010 ONSC 900 at paragraph 34 which seems to suggest the availability of full indemnity costs without, however, providing an analysis. The many decisions from the Court of Appeal on this topic that were referred to me today deal with the Courts of Justice Act, R.S.O. 1990, c. C.43 and not with the Condominium Act, 1998, S.O. 1998, c. 19 and section 134(3) of that Act.

From my perspective, section 134(3) of the Condominium Act, 1998, S.O. 1998, c. 19 is clear by providing costs “incurred” that it refers to full indemnity costs. That section means that full indemnity costs are available, subject to reasonableness and to the Court’s discretion to order less costs in appropriate circumstances. The amounts sought by the Applicant are reasonable and those amounts are ordered, I see no reason not to.

Here, considering s.134(3), I see no reason to order anything but full indemnity costs. The language of Section 134(3) is clear that it allows for full indemnity costs, and under the circumstances of this case I see no reason to exercise my discretion to order costs on a different scale or on a partial or a substantial indemnity cost.

Consequently, costs are fixed in the all-inclusive amount of $71,734.33 payable by the Respondent to the Applicant within the next 30 days.

Electronic Certificate of Transcript (Subsection 5(2))

Evidence Act

I, Amanda Dalton, certify that this document is a true and accurate transcript of the recording of Matlock v. Ottawa Carleton Standard Condominium Corp. No. 815, in the Superior Court of Justice, held at OTTAWA, Ontario, on June 4, 2024, taken from Recording No. 0411_MR56_20240604_151341 10_ROGERP.dcr, which has been certified in Form 1.

January 29, 2025 (Date) (Name) Authorized Court Transcriptionist ACT ID 2559630016 amandaadalton@outlook.com 613.803.6770