Hi Thanks for everyone's advice and input. Today I met our attorney and she is going to draft a letter for us. And we also have the full record from the city police department which also stated that her dog was not on leash during the incident.
I know the best option now is to move but as I mentioned in the previous posting, our house's situation is very different from the rest of the other three families in the condo unit, as you can see from this photo, the left side is our side which only our family occupy, the right side is divided into three units containing one 3br unit, one 1br unit in the middle and a 2br unit on the top two floors. Our side is the whole left part of the building therefore we don't really share anything in common except the garden in the back which we never bring our dog to there. Many houses in the city has buildings side by side to each other and are single family. Our neighbor (the one with the dog incident) is the one who occupy the middle one bedroom unit, she drives the top and lower units people nut ! I heard from the neighbor that she made the previous owner of the house who has a german shepherd moved because they no longer able to tolerate her. Our point here is to make sure we take good precaution to avoid any incident that will happen again. In the meanwhile we also muzzle our dog while walk him in the park.
We will consider move to a different house but we still have to have a say in this case and not being defeated without taking any action. Our attorney actually told me that she endanger her dog's life by never leash him, is not her dog is super nice but not leashing him can cause danger to him because there are so many people riding bicycle in the city and he can easily get hit by bicycles if run freely. Anyway, thanks again for all your inputs and advice !