Part 19 published on 01/09/07
Owner responsible for loss falling within deductible on Strata Corporation’s insurance policy
Water damage resulted from a faulty water level switch in the washer of the owner’s unit. The Strata Corporation sought to recover the amount of $5,000.00 from the owner. This amount was the deductible payable by the Strata Corporation on its property insurance policy. [The balance of the repair was covered by the corporation’s insurance.] The Strata Corporation was successful in Small Claims Court.
The Strata Corporation had passed a by-law respecting responsibility for the deductible. Under the terms of the by-law, the owners were obligated to pay the deductible whether or not there had been negligence on their part. The question was whether or not the by-law was consistent with Section 158 of the Strata Property Act which states that the Strata Corporation may sue an owner to recover the deductible portion of an insurance claim “if the owner is responsible for the loss or damage that gave rise to the claim”.
The dispute originally went to Small Claims Court. The Small Claims Court found that the corporation’s by-law was consistent with Section 158 of the Act in that owners could be “responsible” even though there had been no negligence or fault on their part.
On appeal, the Small Claim’s Court decision was upheld. The Appeal Court said:
“I am satisfied that the legislation is clear and that no finding of negligence is required. The legislature used the term “responsible for” in Section 158(2) rather than terms such as “legally liable, liable, negligent”. The choice of the term “responsible” provides the owners with the opportunity to allocate to a particular owner the costs of an insurance deductible in cases where an owner was thought to be responsible for a loss.”