A common stories goes like this: a car leaks oil in the condo garage (and drags it through the driving lanes/ramps). As the title of this post suggests it, the resulting question is often: who gets to pay for the clean up? A recent case before the Condo Authority Tribunal sheds some light on this.
The facts of this case
To respond to a history of cars leaking oil/fluids in the parking garage, this Corporation used a template letter giving owners 2-5 days to clean up their spots and repair their cars. The letter warned that if they failed to do so, the Corporation would go in and clean it – and if required would involve legal counsel.
A “significant” leak of engine or transmission fluid was seen under an owner’s car in early December 2020. The standard letter was sent, advising that the cost to remediate this (if the corporation was required to do it) would be between $100 and $500. In response, the owner claimed to have cleaned his spot.
Fast forward to April, when [another?] “extensive” leak was detected. It had the smell and appearance of oil, which (the Corporation was told) degraded and damaged the mastic topping. Rather than send their standard letter, the Corporation forwarded the matter to legal counsel.
The owner submitted a report from his mechanic indicating that no oil leak was detected leaking from the car. Yet, fresh oil leaks continued to be observed, which resulted in additional exchanges between the owner and legal counsel. This resulted in $1,640 being claimed against the owner.
The owner maintained that his car was not leaking and eventually denied access to his parking space, preventing the Corporation from cleaning/remediating the situation. Leaks continued to appear for a while until they stopped in October 2021.
The Corporation commenced a claim before the Condo Authority Tribunal – under its jurisdiction to deal with disputes over parking and resulting charge backs.
The Corporation’s rule provided that no person was to park a vehicle which may pose a security or safety risk and that, upon 72 hours notice, vehicles in breach of this had to be removed or attended to, failing which the vehicles could be removed at the owner’s expense. Another rule provided that owners were not permitted to allow their underground parking space to become coated with oil or grease and that any cleaning expense incurred by the Corporation would be imposed on the owner.
While there was evidence of regular maintenance on the car, the CAT concluded that the car was leaking oil. One mechanic invoice spoke of “checks for oil leaks “and “cleaning oil stains” and another indicated that there were “no more oil leak on car”. The CAT concluded that the owner did attempt to determine the issue with the car but perhaps not as effectively as one would have anticipated.
So, while there was some degree of compliance, the CAT concluded that it was insufficient. The Rule required the car to be fixed or moved within 72 hours. This was not done. However, the Corporation did not tow the car as it was permitted to do, which resulted in further leaks.
The CAT ordered that the Corporation be granted access to the parking to remediate the situation but on 72 hours notice to the owner. The CAT note in passing that both the declaration and section 19 of the Condo Act allows a corporation to access a unit, on reasonable notice, for the purpose of performing the objects and duties of the Corporation.
The CAT also ordered the owner to pay the cost of repairing the membrane topping, the cost of which was estimated to be $1,808. It is interesting to note that the CAT relied on section 144 of the Condo Act as it was unclear whether the Corporation’s governing documents permitted the charge back.
Disbursements / Costs
As is often the case, the battle then turned to the issue of costs.
The Corporation sought to be reimbursed for the following costs/disbursement:
- $452 in engineering fees for a preliminary opinion on the damage cause by the oil to the membrane.
- This cost was denied as the CAT was not satisfied that this cost was necessary or reasonable.
- For what it’s worth, in many cases, this kind of legal opinion would be required to answer someone’s claim that the leak did not damage the membrane. Had there been a debate on this issue, the Corporation would have probably been dinged for not having an expert opinion on this.
- $2,007 in legal fees incurred before the CAT application (for compliance letter and such).
- The CAT granted only $1,385.
- It concluded that the Corporation did not act reasonably or judiciously when it sent the first legal compliance letter without first having sent their usual warning letter;
- $14,156 in legal fees within the CAT proceeding
- The CAT granted $0.
- The CAT concluded that this was not a case where the owner blatantly and deliberately breached the condo rules over a long period of time. The owner tried to fix his car, although there was a disagreement on what repairs were required. This was also not a case where the conduct of the owner warranted recovery of cost.
- The CAT felt the Corporation did not use all of the tools at its disposal (like its right to access the unit to effect the repairs). The CAT also flagged the fact that some ill-will between the parties may have played a role in the escalation of the dispute.
- $791 in engineering fees for later inspections (+$904 for the engineer to prepare his witness statements and attend cross-examination).
- Both were denied. The CAT indicated that it would be highly unusual to require a party to pay the other party’s witness fees.
- I don’t necessarily agree with this and, in my view, a party should be indemnified for the cost of their expert evidence when such evidence is required, which does not appear to have been the case here. Still, this is a strong signal from the CAT on whether it will allow a corporation to recover the cost of their experts.
This leaves the condo (and its owners) with having to pay some $16,000 for a $1,385 membrane repair. While I understand that the CAT is trying to balance competing interests and to recalibrate the pendulum, the facts of the case appear to suggest that this owner would not grant access to his spot (you can hardly repair the membrane if the car sits in the parking space) and that they would not pay for the repairs. This left the condo with only two options:
- Impose on all owners the cost of remediating the damage caused by this owner’s leaky car;
- Go to the CAT to try to recover that cost.
I fear the message from the CAT may increasingly be that corporations may be left holding the bag even when an owner is clearly at fault…
Condo corporations should exhaust all remedies and tools at their disposal before involving legal counsel or before commencing a CAT proceeding. While this may make sense in most cases, I recall another recent CAT case where the Corporation was blamed for not having started a CAT proceeding early enough.
It is becoming increasingly important for condos to review and improve their indemnification provisions if they want to increase their chances of recovery in compliance or damage matters. Ask your favourite condo lawyer to help you with this.
You can read the CAT case here.