In a recent judgement of the Court of Québec, Small Claims Division¹, a co-owner who has caused water damage to the building was condemned to pay the syndicate of co-owners the sum of $6,397.00 representing the insurance franchise and legal fees. In turn, the co-owner’s personal insurer was ordered to pay the sum of $5,897 to the co-owner who took legal action against him on warranty.
The context
The defendant co-owner disputes the claim of the syndicate of co-ownership, and in turn took legal action against his personal insurance company in this case by calling it as collateral. The co-owner claims to be secured by this company at the time of the mishap for the complaint directed against him by the syndicate of co-ownership.
However, at the hearing, no representative of the co-owner’s insurance company showed up.
The Facts found by the Court
On or around November 28, 2012, the defendant co-owner was the owner of a condominium unit in the building administered by the applicant, the syndicate of co-ownership of the building.
At that time the co-owner was in the process of renovations in the bathroom of his unit, which caused a break of one of the water supply pipes of his bathroom. The water that flows from the pipe causes therefore some damage to the unit of the co-owner, but the damage is greater in the lower units.
In presenting his evidence the administrators of the syndicate testified that the co-owner had never notified the syndicate of his renovation work and had asked no permission, and this despite an obligation to do so under the deed of co-ownership of the building.
However, the Court gives notice to the syndicate that this failure on the part of the co-owner has no influence on the dispute and on the question whether the co-owner is liable, and that it does not have to take this into account.
The co-owner demonstrates that, following the incident, he informed his personal insurer of the occurrence thereof, and the syndicate of co-ownership has done the same with the insurance company of the condominium. It concerns two different insurance companies.
Nevertheless, the co-owner testified that he determined that the damage to his unit was of minor importance, and he submits no claim to his insurer. He decided to take himself charge of the cleaning fee of his unit.
In spite of this, according to the co-owner, an assessor from the co-owner’s insurance company conducted a site visit to see the damage, but the involvement of this assessor stopped there because the co-owner did not intend to produce an insurance claim.
Nevertheless, the Court notes that the co-owner never informed his insurance company that the syndicate held him liable for the damage caused. The insurer of the co-owner is deemed to have been made aware of this when the co-owner sued him on the warranty.
The syndicate’s insurer claims adjuster testified that he visited the scene not long after the disaster to assess the damage. The claims adjuster assesses the damage to $5,312.86. However, as a deductible of $5,000 in the syndicate’s insurance coverage applies and because this amount is not insurable, it must be paid by the syndicate. Consequently, the syndicate’s insurer has sent it a cheque for the difference of $312.86. The syndicate has therefore had to fill the gap of $5,000 from the funds of the syndicate. These $5,000 represent some of the damage claimed by the syndicate’s co-owner.
In addition to this amount the syndicate demanded an additional $1,397.00 for fees paid to legal advisors for advice with respect to the case against this co-owner.
The representative of the syndicate’s insurer testified and filed documents at the hearing to confirm the facts of the insurance claim, the amount of the applicable deductible, and the fact that the insured has paid $312.86.
The syndicate also gave evidence at the hearing of its legal costs to the amount of $1397.00.
For his part, the co-owner invokes that the syndicate cannot claim from him its insurance deductible because the deed of co-ownership states that insurance policies taken out by the syndicate are required to include a waiver by the insurer to take legal action against the co-owners.
The analysis by the Court
The Court conducted an analysis of the relevant provisions of the deed of co-ownership and found that the co-owner was liable to the syndicate for damages caused, that is to say for the insurance franchise that it had to pay, and for reasonable legal costs incurred.
In response to the argument of the co-owner to the effect that the syndicate cannot claim its insurance deductible because the syndicate’s insurer must give up its right to sue, the Court pointed out to the co-owner that it is the syndicate that sues him, and not the syndicate’s insurer. This waiver by the syndicate’s insurer, called a "waiver of subrogation" prevents the latter from taking legal action against the co-owner for the $312.86 that he paid. But it is the syndicate that has paid the deductible of $5000 and it is entitled to sue the co-owner to recover that amount.
According to the claims adjuster of the syndicate’s insurer, the damaged pipe was a common pipe, but which exclusively served the co-owner’s unit. The co-owner has thus also damaged, during the renovation work, a common portion of the building.
According to the Court the co-owner has proved that he had insurance coverage from his insurer covering his civil liability. The Court issued a comment to the effect that the insurer of the co-owner has not shown up in this case because the co-owner has not opened an insurance complaint file following the claim.
After reviewing all of the evidence submitted before the hearing, the Court found that the co-ownership’s syndicate had shown the merits of its claim against the co-owner, and had accepted it.
As for the claim of the co-owner against his insurer, the Court found that it was well-founded and should be upheld, less the sum of $500 deductible which is mentioned in the co-owner's insurance policy.
The Court therefore ordered the co-owner to pay the syndicate the sum of $6,397, plus interest and legal costs.
The Court also ordered the co-owner’s insurer to pay the co-owner the sum of $5,897, plus interest and legal costs.
For any questions on the subject, as well as on real-estate law in general, do not hesitate to contact our team of lawyers specialized in the matter.