2016 QCCQ 5554, 2016 QCCQ 5554

Lee c.

Sahaguian 2016 QCCQ 5554 COURT OF QUEBEC (Small Claims Division) CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL Civil Division No: 500-32-140272-131 DATE: April 13, 2016 ______________________________________________________________________ BY THE HONOURABLE DOMINIQUE GIBBENS, J.C.Q. ______________________________________________________________________ MAY JEAN LEE -and- LEONARD SUGDEN Plaintiffs v. hovaness sahaguian -and- robert kornaros -and- lawrence casia Defendants ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] Plaintiffs claim $7,000 from Defendants, the former directors of the syndicate of co-ownership of a condominium complex in which they own a residential unit, for damages suffered as a result of an ongoing water infiltration problem in their unit.

They claim that Defendants are responsible for said damages because the syndicate was negligent in the way that it dealt with the problem. [ 2 ] Defendants deny any liability towards Plaintiffs. They argue that they cannot be held personally liable towards Plaintiffs for their role as directors of the syndicate.

By way of a cross-demand, they also claim damages of $2,287 to compensate for the time spent and expenses incurred to contest the claim. [ 3 ] Although the matter was taken under advisement at the close of the hearing on December 7, 2015, Plaintiffs submitted additional documents to the Court on December 22, 2015, February 11, 2016 and April 1, 2016. The Court has considered all additional documents and information submitted by Plaintiffs for the purpose of this judgment. FACTUAL CONTEXT [ 4 ] Defendants became directors of the Syndicat des copropriétaires Upper West Side, phase 3 (the « Syndicate ») in 2008. Mr.

Kornaros remained a director until November 2011, Mr. Casia until early 2012 and Mr.

Sahaguian until May 2012. [ 5 ] Plaintiffs purchased unit 402 (the « Unit ») in the condominium complex (the « Complex ») in May 2010. [ 6 ] On October 15, 2010, following heavy rains and winds, Plaintiffs found signs of water infiltration at the base of the exterior walls of the Unit, in the bedrooms, and water seeped through the floor boards, causing damage to the flooring and walls. [ 7 ] Plaintiffs immediately advised their insurer, Axa Assurances, whose representative inspected the Unit and eventually indicated that the infiltration may be coming from the exterior walls or the roof. [1] [ 8 ] Plaintiffs also immediately advised the Syndicate, through Defendants, and suggested that there may be a defect in the building structure. [2] The Syndicate responded that they should contact the promoter and builder of the Complex, 6361927 Canada Ltée (the « Builder »), [3] regarding the alleged defect. [4] [ 9 ] In the months that followed, Plaintiffs put pressure on both the Syndicate and the Builder to take prompt action to find the source of the infiltration, see how it could be resolved and carry out the necessary corrective work. [5] [ 10 ] They asked the Syndicate to make a claim under the guarantee issued by La Garantie Habitation des Maîtres Bâtisseurs inc. against construction defects (the « GHMB Guarantee »).

Because it had not yet been determined whether the infiltration was due to a defect in a common area (requiring the Syndicate to make a claim) or in Plaintiffs’ private area (requiring Plaintiffs to do so), the Syndicate asked that Plaintiffs advance the $2,700 fee required to file a claim. [6] The co-owners later confirmed that no action would be taken by the Syndicate in this regard until it was proven that the problem originated from a common area. [7] Plaintiffs refused to advance the fee and a claim was never filed pursuant to the GHMB Guarantee. [ 11 ] Plaintiffs also demanded that the Syndicate submit a claim to the building insurer, Aviva Canada, who mandated experts to investigate the situation.

In June 2011, Aviva’s experts referred to visual defects in the brick and masonry finish as the cause of the

ongoing infiltration, [8] but suggested in April 2012 that there may be multiple sources of infiltration. [9] Aviva Canada eventually denied coverage on the basis that its investigations had revealed a gradual and repetitive damage excluded by the applicable insurance policy. [10] [ 12 ] Plaintiffs continued to put pressure on the Syndicate and the Builder to carry out the corrective work needed.

Numerous exchanges took place between Plaintiffs, the Syndicate and the Builder starting in the fall of 2011 into the fall of 2012, but they could not come to an agreement regarding the scope of the corrective work needed in the Unit (which by then showed signs of mould contamination) or the need to hire an independent professional to oversee the work. [11] [ 13 ] In the fall of 2012, Plaintiffs retained Mr. Jean-François Lavigne of Zaraté+Lavigne, architects, to conduct further investigations.

For the first time, extensive exploratory openings were made inside the Unit, which provided more insight into the cause of the infiltration. In December 2012, Mr. Lavigne concluded that the infiltration was due to the fact that the flashing at the level of the concrete slab of the floors was not continuous, allowing water to penetrate. He also concluded that the Unit needed to be decontaminated given the presence of significant mould. [12] [ 14 ] Mr. Lavigne’s report was communicated to the Syndicate and Builder, as well as to Ms.

Marisa Cobuzzi, who sold Plaintiffs the Unit, and disclosed the defect in the building envelope that had finally been identified. [13] The corrective work to the building envelope was eventually carried out by the Builder in 2014, but the inside of the Unit has not been decontaminated and repaired. [ 15 ] In separate proceedings, Plaintiffs took action against the Syndicate, the Builder and Ms. Cobuzzi invoking the same defect.

They have since bee settled out-of-court. [ 16 ] In the instant case, Plaintiffs seek to recover from Defendants some of the costs for the decontamination and reconstruction of the Unit, expert fees, legal fees and other damages up to the $7,000 jurisdictional ceiling applicable to small claims. ANALYSIS [ 17 ] Plaintiffs argue that as directors of the Syndicate, Defendants are personally liable towards them for the decisions and actions of the Syndicate. They claim that Defendants must be held responsible for the damages claimed because the Syndicate:

a) failed to properly maintain the common areas of the Complex, thus violating its obligations under

article 1077 of the C.C.Q.;

b) did not pursue the claim against Aviva Canada, the building insurer, after it denied coverage for the damages to the Unit;

c) did not file a claim under the GHMB Guarantee;

d) more generally, was negligent and did not act quickly enough to resolve the water infiltration problem. [ 18 ] Plaintiffs’ position is unfounded for the following reasons. [ 19 ] As a starting point, Plaintiffs’ basic premise that administrators of a syndicate of co-ownership are personally responsible for the actions of the syndicate is wrong in law. [ 20 ] Since the coming into force of the Civil Code of Québec (the « C.C.Q. ») in 1994, the responsibilities of directors, including their responsibility for the conservation and maintenance of the building, have been transferred to the syndicate of co-owners, a legal person created by law. [14] [ 21 ] The directors of a legal person such as a syndicate of co-owners are the mandataries of said legal person and do not engage their personal liability for the acts and decisions made for and on behalf of the legal person, except if they commit a fault in the execution of their mandate. [15] [ 22 ] This appears from the following articles of the C.C.Q. : 309.

Legal persons are distinct from their members. Their acts bind none but themselves, except as provided by law. 321. A director is considered to be the mandatary of the legal person. He shall, in the performance of his duties, conform to the obligations imposed on him by law, the constituting act or the by-laws and he shall act within the limits of the powers conferred on him. 322. A director shall act with prudence and diligence. He shall also act with honesty and loyalty in the interest of the legal person. [ 23 ] The same principles are also reflected in

Article 36 of the Declaration of Co-ownership: [16] “ 5.1.3 Responsabilité et immunité du conseil d’administration

ARTICLE 36. Les administrateurs ne sont pas personnellement responsables envers les tiers avec qui ils contractent au nom et pour le compte du syndicat pourvu qu’ils agissent dans les limites des pouvoirs qui leurs sont conférés. De même, les administrateurs n’engagent pas leur responsabilité personnelle envers le syndicat lorsqu’ils agissent dans les limites de leurs pouvoirs avec prudence, diligence, honnêteté et loyauté dans l’intérêt du syndicat et de la copropriété.

Dans ces conditions, ils sont tenus indemnes par le syndicat et n’assument aucune responsabilité pour les frais, dépenses, charges ou pertes qu’ils ont encourus pour l’administration de l’immeuble et du syndicat. ” [ 24 ] This means that in order to succeed in their claim against Defendants, Plaintiffs had the onus of proving, on a balance of probabilities, [17] that Defendants acted illegally, negligently or in bad faith, or that they failed to respect an obligation provided by law

or by the Declaration of Co-ownership. [18] [ 25 ] Plaintiffs have not met this burden of proof. On the contrary, the evidence suggests that Defendants acted at all times prudently and diligently, in good faith and in the interest of the Syndicate and the co-owners in their conduct on behalf of the Syndicate regarding the water infiltration problem and Plaintiffs’ demands. [ 26 ] The evidence shows, particularly the testimony of Plaintiffs’ expert, Mr. Jean-François Lavigne, that the identification of the exact cause of the water infiltration was a complex matter that required extensive investigation.

It is only when Plaintiffs authorized Mr. Lavigne to proceed to invasive openings from the interior of the Unit that the exact cause of the problem could be identified and the proper corrective action planned and carried out as it was. [ 27 ] Prior to the Mr.

Lavigne’s intervention, the various reports had suggested possible causes, but the Court concludes from the evidence that the existence of a defect in a common area had not been established. [ 28 ] Under the circumstances, Defendants cannot be blamed for the way that they handled the matter; there is no conclusive evidence that they violated any of their obligations as directors of the Syndicate and, moreover, their decisions regarding Plaintiffs’ demands were confirmed at the general annual assembly of co-owners. [19] [ 29 ] Given that Plaintiffs have failed to prove a fault on the part of Defendants, Plaintiffs’ claim must be dismissed.

It is unnecessary to turn to the damages claimed and the causal link between said damages and the alleged fault and. [ 30 ] As to Defendants’ cross-demand, it must also be dismissed. Indeed, except in unusual circumstances absent in the instant case, parties must bear the burden of preparing their case when they elect to exercise their rights or defend themselves before the Court.

FOR THESE REASONS, THE COURT: DISMISSES the principal action; WITH JUDICIAL COSTS of $156 representing the judicial stamp on the contestation; DISMISSES the cross-demand; WITHOUT COSTS as it resulted in no additional costs to Plaintiffs. __________________________________ DOMINIQUE GIBBENS, J.C.Q. Date of hearing: December 7, 2015