Lozano v. TSCC 1765 was one of our Top 10 cases for 2020 because it reaffirmed that a higher negligence threshold is not applicable for s.105 chargebacks. You can read a summary of the case in our newsletter, Condo Alert!, Winter 2020.
Lozano’s insurer (who paid the insurance deductible) appealed the 2020 decision, asking the Divisional Court to re-write s.105 of the Condo Act and adopt a “robust” negligence test for liability under that section. The court rejected this proposal and dismissed the appeal a few days ago.
The court strongly emphasized that:
- The language of s.105 is straightforward. To invoke liability, damage must be caused by an owner’s act or omission;
- s.105 is does not include any concept or requirement of owner negligence or reasonableness. These concepts aren’t mentioned at all;
- There is nothing supporting a negligence test. It is inconsistent with all the law developed in relation to s.105 in Ontario; and
- s.105 reflects a policy decision by the Legislature to make the unit owner that caused the loss pay the insurance deductible without consideration to whether that owner’s actions were negligent.
The Divisional Court agreed with the lower court judge that the Lozanos did not turn off the water when they left the country (the “omission”), which “caused” the leak and triggered the s.105 insurance deductible chargeback.
These decisions supply a clear-cut answer for condo corporations in s.105 chargeback scenarios. RIP, negligence test.
You can read the full decision here.