An owner of a strata property could be found to be responsible for property damage under a strata policy despite the fact that the owner did not cause the damage

An owner of a strata property was found to be responsible for property damage caused by a burst water pipe.  The pipe burst due to a build up of acid in the local water supply.  There was no negligence of the owner.  The owner claimed for the damage under his homeowner’s insurance policy.  Wawanesa paid the claim and then brought an action against the strata for payment of part of the damage.  The application was dismissed on the basis that the damage was the responsibility of the owner because it occurred on his property.

Strata Plan KA 1019 v. Keiran, [2007] B.C.J. No. 1148, British Columbia Supreme Court, Burnyeat J. May 30, 2007

The Claimant Strata Corporation brought an action against the owners of an individual strata unit (the “Owners”) for damage caused by a burst water pipe. The failure was due to high acid levels in the local water and not to any negligent act or omission by the Owners.

The cost of the repairs was approximately $3,700, which was less than the $10,000 deductible in the insurance policy held by the Strata Corporation. The Strata Corporation accordingly looked to the Owners for the cost of repairs. The owners had a household insurance policy with the Insurer, which provided a limit of $2,500 in respect of liability of a strata owner for an assessment in respect of any insurance deductible of the Strata Corporation. This amount was paid by the Insurer to the Strata Corporation in partial settlement of the claim. The Strata Corporation then sought to recover the balance of the claim ($1,287.80 plus costs) from the Owners.

The same household policy held by the Owners provided that, upon payment of a $500 deductible by the Insureds (i.e. the Owners), the Insurer would pay for the remaining property damage for which the Insureds were found to be “responsible”. The trial judge considered whether it could be said that the Owners were “responsible for the loss or damage” and answered this question positively. In particular, her honour held that because the Owners had a duty to repair and maintain the premises, they were “responsible” for the loss.

She therefore ordered the Insurer to pay the Strata Corporation $787.80 on behalf of the Owners, after taking into account the $500 deductible. The Supreme Court judge upheld this decision, finding that “being responsible for the loss or damage” was not the same as being negligent.

This case was originally summarized by Shanti Davies and originally edited by David W. Pilley.

To stay current with the new case law and emerging legal issues in this area, subscribe here.