Lawsuits

The Strata Property Act specifically permits a strata corporation to sue or be sued. So too, under the Act, an individual may sue or be sued for certain matters, whether in the capacity of a strata council member, an owner or a tenant. Over and above claims at common law, the Act creates helpful remedies for all these persons and establishes certain procedural requirements.

This chapter describes the way the Strata Property Act regulates lawsuits.

 

Choice of Court

Although the Strata Property Act defines sue to mean the act of bringing any kind of court proceeding, 1 some lawsuits may only be brought in the Supreme Court of British Columbia, and not in the Provincial Court of British Columbia, Small Claims Division (often informally called the “Provincial Court” or “Small Claims court”).

Under the Strata Property Act, a claim may be brought in the Provincial Court of British Columbia, Small Claims Division, unless the Act restricts the claim to the Supreme Court of British Columbia, or the claim is otherwise outside the jurisdiction of the Small Claims court. 2 For example, only the Supreme Court may make an order to remedy a significantly unfair act or exercise of voting rights, or to order the strata corporation or an owner, as the case may be, to comply with the statute, as explained below.

The Small Claims Act gives the Provincial Court of British Columbia jurisdiction if the amount claimed or the value of the personal property or services in question is $25,000 or less, excluding interest and costs, and where the claim is for: 3

  • debt or damages,
  • recovery of personal property,
  • specific performance of an agreement relating to personal property or services, or
  • relief from opposing claims to personal property.

The Provincial Court of British Columbia does not have jurisdiction in a claim for libel, slander or malicious prosecution.

Similarly, the Provincial Court of British Columbia lacks jurisdiction in a dispute that questions a strata corporation’s governance. In Armanowski v. Strata Corp., Strata Plan LMS 2151, the Provincial Court said,  4

Thus not all disputes between unit owners and their strata corporation must be heard in the Supreme Court of British Columbia. It depends upon the nature of the unit owner’s claim and whether it falls within the … (Supreme Court of British Columbia’s jurisdiction under) Section 164 [preventing or remedying unfair acts] or 165 [other court remedies] of the Strata Property Act.

Only the Supreme Court of British Columbia has authority to determine a claim for relief from a significantly unfair act or exercise of voting rights  5 or a request to compel a strata corporation to comply with the Strata Property Act. 6  So, for example, the Provincial Court of British Columbia had no authority to decide the matter where:

  • An owner ‘s Provincial Court law suit amounted to a claim that the strata corporation negligently carried out repairs to the common property balcony located outside the owner’s strata lot. In substance, the owner alleged that the strata corporation’s actions were significantly unfair to the owner, contrary to section 164 of the Strata Property Act; 7
  • An owner ‘s Provincial Court law suit amounted to a request for an order requiring the strata corporation to carry out its duty to repair under the bylaws, which brought the matter within section 165 of the Strata Property Act8
  • The owners’ Provincial Court law suit amounted to a claim for damages because the strata corporation had allocated certain expenses in a significantly unfair way, contrary to section 164 of the Strata Property Act9
  • An owner sued in Provincial Court to recover his share of a special levy for engineering services which the owner claimed were never provided or unnecessary. 10 Since the claim apparently questioned the strata council’s actions and the standard to which council was held, the law suit raised questions of governance under both sections 164 and 165 of the Strata Property Act; and where

An owner ‘s Provincial Court law suit claimed reimbursement for certain repairs that were the strata corporation’s responsibility. 11 The strata corporation refused to reimburse the owner for the entire amount claimed, taking the position that the owner spent more than was reasonably necessary to solve the problem. In essence, the owner sought a remedy for what she considered to be an unfair decision, bringing the matter within section 164 of the Strata Property Act. To the degree the owner alleged that the strata corporation failed to carry out its duty to repair, she also raised questions about the corporation’s duty and the repair standard to which it must adhere, all of which brought the matter within section 165 of the Strata Property Act.

In October 2009 the province passed amendments 12 to the Strata Property Act which, at the date of this writing, are not yet in force. If the province brings these amendments into force, the changes will permit either the Supreme Court of British Columbia or the Provincial Court of British Columbia to determine most disputes under the Strata Property Act. The Supreme Court, however, will retain the sole jurisdiction to appoint an administrator. A regulation is necessary to bring these amendments into force. 13

Lawsuit By the Strata Corporation

A strata corporation may, on its own behalf, sue a person against whom the corporation has a claim, including an owner. 14In addition, in certain cases, a strata corporation may sue as a representative of the owners. Before a strata corporation sues as a representative on behalf of the owners, the Strata Property Act requires the corporation to first obtain prior authorization from the eligible voters at a general meeting. The requirement for prior authorization is explained later in this chapter.

To Enforce Compliance

Under section 173 of the Strata Property Act, a strata corporation may apply to the Supreme Court of British Columbia for an order to compel an owner, tenant or other person to:

  • perform a duty he or she is required to perform under the Act, the regulations, bylaws or rules, or to
  • stop contravening the Act, regulations, bylaws or rules.

For instance, a strata corporation successfully applied to the court for an order requiring two owners to comply with a flooring bylaw. 15The strata corporation’s bylaws required wall-to-wall carpeting in the owners’ strata lot, except only in a kitchen, bathroom or the first five feet of an entryway. The purpose of the bylaw was to reduce the noise experienced by persons in units below those with hard flooring. Contrary to the bylaw, the owners installed laminate flooring throughout their suite. The owners claimed that when they purchased their strata lot, they did not know about the bylaw. The court ordered the owners to remove the laminate flooring and replace it with carpet in accordance with the bylaw at the owners’ expense.

A strata corporation may resort to legal proceedings under section 173 of the Strata Property Act as a way to deal with a scofflaw owner who repeatedly contravenes the Act, the regulations, or a bylaw or rule, despite frequent warnings or fines. A court order requiring the owner to comply with the relevant requirement will carry more weight than a strata corporation’s demand that the owner conform. The owner who ignores a court order risks proceedings for contempt.

It is true that a strata corporation, as a corporate entity, may sue in its own name, 16 and that section 173 of the Strata Property Act does not expressly require a 3/4 vote of the eligible voters at a general meeting to first authorize such proceedings. Nevertheless, it is safest to obtain prior authorization for a section 173 lawsuit with an appropriate 3/4 vote resolution. Since, in many cases, the strata corporation likely takes these proceedings as a representative of all the owners, the 3/4 vote removes any concerns about compliance with the prior authorization requirement for representative proceedings, discussed immediately below.

In October 2009 the province passed amendments 17 to the Strata Property Act which, at the date of this writing, are not yet in force. If the province brings these amendments into force, a strata corporation may apply to either the Supreme Court of British Columbia or to the Provincial Court of British Columbia to compel an owner, tenant or other person to comply with the statute. A regulation is necessary to bring these amendments into force. 18

A Representative Suit on Behalf of All Owners

Section 171 of the Strata Property Act specifically permits a strata corporation, as a representative of all the owners (except any who are being sued), to sue an owner with respect to any matter affecting the corporation, including:

  • the interpretation or application of the Act, regulations, bylaws or rules,
  • the common property or common assets,
  • the use or enjoyment of a strata lot, or
  • money, including fines.

This is called a representative lawsuit (or sometimes called a “representative proceeding”). In particular, since the strata corporation does not own the common property, 19 and to the extent that the strata corporation does not itself own any strata lots, the corporation does not have its own claim for defects in, or damage to, common property or strata lots. In these circumstances, the strata corporation may only make a representative claim on behalf of the owners. 20

Before starting a representative lawsuit against an owner, the strata corporation must authorize the suit by a resolution passed by a 3/4 vote at a general meeting. In these circumstances, the owner who is being sued is not an eligible voter. 21 Despite this requirement for prior authorization, the failure to obtain such authorization is not fatal, as explained in more detail below.

Except for any owner who is being sued, in respect of each strata lot every owner must share the expense of the representative lawsuit proportionately, each according to their unit entitlement. However, the unit entitlement of a strata lot owned by an owner who is being sued is not used in the calculations. 22

A Representative Suit on Behalf of Some Owners

Section 172 of the Strata Property Act permits a strata corporation to sue, as a representative of one or more, but not all, of the owners about matters affecting only their strata lots. Before the strata corporation begins the representative lawsuit:

1. The strata corporation must obtain the written consent of the owners on whose behalf the corporation wishes to bring the lawsuit, and

2. The strata corporation must authorize the suit by a resolution passed by a 3/4 vote at a general meeting.

Despite these requirements, the failure to obtain written consent or the strata corporation’s prior authorization is not fatal, as explained in more detail below.

Only those owners on whose behalf the representative lawsuit is brought must contribute to its expense. Each of those owners, in respect of his or her strata lot, must contribute a proportionate share of the expense of bringing the lawsuit according to their unit entitlement. 23 In effect, the owners in question share the legal expense on the same basis used to allocate strata fees.

Lack of Prior Authorization or Written Consent is Not Fatal

While the Strata Property Act requires a strata corporation to obtain prior authorization and, in some cases, written consent before launching a representative lawsuit for the matters described above, a corporation’s failure to comply with these requirements is not fatal to the validity of the legal proceedings. The lack of prior authorization, however, may have consequences internally within the strata corporation.

History

In similar fashion, the former Condominium Act required a strata corporation to obtain authorization to commence certain proceedings on behalf of owners, but the wording was different. In particular, the Condominium Act allowed a strata corporation to sue on its own behalf and on behalf of one or more owners for matters affecting individual strata lots if the affected owners consented in writing and the corporation authorized the proceedings by special resolution. 24 In contrast to the Strata Property Act, the Condominium Act did not explicitly say whether the strata corporation required the authorization and consents before the lawsuit began. 25 The courts characterized these Condominium Act provisions as procedural, allowing a corporation to cure a lack of prior authorization or written consent by obtaining them later, after the legal proceedings began. 26

Initially, when the courts first encountered the Strata Property Act’s requirements for prior authorization and written consents as described above, the courts appeared to follow the same approach they took previously under the Condominium Act. The courts tended to regard the Strata Property Act requirements as merely procedural. This approach suggested that the failure to obtain a requisite authorization or written consent before commencing representative proceedings did not justify dismissing a lawsuit, and the error could be rectified by obtaining the authorization or consent later, after a proceeding is underway. 27

The Coquitlam Case

On June 17, 2003, the Supreme Court of British Columbia handed down judgment in Strata Plan LMS 888 v. Coquitlam (City). 28 In that case, to recover costs of fixing water ingress problems, a strata corporation sued Polygon Construction Ltd. (“Polygon”) and various others for negligence. Later, after the lawsuit was underway, the strata corporation passed two 3/4 vote resolutions authorizing the strata corporation’s legal proceedings. Polygon applied to dismiss the lawsuit because the strata corporation commenced its lawsuit without first obtaining a resolution authorizing the lawsuit by 3/4 vote. The court agreed and declared the proceedings a nullity. In the Coquitlam case, the court found that the strata corporation had no right to sue without first obtaining prior authorization.

Strata Property Act Amendment

In response to the Coquitlam decision, the Province of British Columbia amended the Strata Property Act to override the effect of the Coquitlam case. 29 The amendment removes the ability of any other party in a lawsuit or arbitration to raise as a defence, or to object to, a strata corporation’s failure to first obtain a required 3/4 authorization or written consent. The Strata Property Act was amended by adding section 173.1, which says:

This amendment is retroactive. The requirements for prior authorization and consent in sections 171 and 172 of the Strata Property Act remain, as described above, but a strata corporation’s failure to comply with these requirements is not fatal to the validity of the corporation’s legal proceedings. In a lawsuit or arbitration, this amendment eliminates another party’s ability to object to a strata corporation’s lack of prior authorization or consent, or to raise it as a defence. For instance, in one case where a strata corporation sued a design company, the design company defended, in part, on the basis that the eligible voters did not properly authorize the strata corporation’s lawsuit. The design company claimed that the strata corporation failed to give proper notice for the general meeting where its eligible voters authorized the strata corporation to sue. Section 173.1 was a complete answer to the design company’s contention and the court struck out that portion of the company’s defence. 30

The section 173.1 amendment preserves a strata corporation’s ability to take legal proceedings, even where the corporation incorrectly uses the contingency reserve fund (“CRF”) to pay for the proceedings. In Coupal v. Strata Plan LMS 2503, a strata corporation launched an appeal without first obtaining prior authorization by 3/4 vote. 31 The strata corporation paid for the appeal with funds from its CRF. Contrary to the CRF spending requirements in the Strata Property Act, 32 the strata corporation did not first obtain a 3/4 vote approval for the CRF expenditure.

According to the saving provisions in the section 173.1 amendment, the failure to obtain prior authorization to certain legal proceedings “does not affect the strata corporation’s capacity to commence a suit or arbitration that is otherwise undertaken in accordance with this Act. . . .” (Emphasis added). Despite the section 173.1 amendment, several owners argued that the strata corporation did not properly bring its appeal. They claimed that because the strata corporation failed to comply with the statute’s CRF spending requirements, the appeal was not “otherwise undertaken in accordance with this Act.” . . .

The British Columbia Court of Appeal rejected that argument. The court noted that the strata corporation did not require any prior approval to defend against a lawsuit, or to launch an appeal. The court found that even if prior approval was necessary to appeal, section 173.1 of the Strata Property Act would apply to validate the appeal. The manner in which the strata corporation obtained funding for the appeal did not affect its capacity to commence the appeal, and did not mean that the corporation failed to ensure the appeal was otherwise undertaken in accordance with the Act. 33

Despite the section 173.1 amendment, it appears that any other party in a lawsuit may still compel a strata corporation to show whether, before launching the proceedings, the corporation met the statutory requirements for prior authorization, and where necessary consent, so long as this information is relevant. Information about these matters is not privileged. 34

Arbitration

According to section 176 of the Strata Property Act, the requirements and procedures for authorizing a representative lawsuit, and liability for expenses and judgments in a suit involving a strata corporation, apply with appropriate changes to an arbitration in which the strata corporation is a party. This means, for instance, that if a strata corporation wishes to start an arbitration as a representative of all of the owners, or on behalf of only some of the owners, as the case may be, the relevant lawsuit provisions apply, subject only to changes appropriate to an arbitration. 35

Recall also that the saving provisions of the amendment in section 173.1 of the Strata Property Act extend to arbitration, as explained earlier in this chapter. In an arbitration, this amendment removes the ability of any other party to raise as a defence, or to object to, a strata corporation’s failure to first obtain a required 3/4 authorization or written consent.

For information about arbitrations, see Chapter 28, Arbitration.

Consequences Within a Strata Corporation if There is No Prior Authorization

Despite the section 173.1 amendment described above, the internal management of the strata corporation still requires a prior 3/4 vote or written consent, as the case may be, to launch a representative lawsuit or certain arbitrations. When the province amended the Strata Property Act to override the effect of the Coquitlam case, the government did not alter sections 171 and 172, which require an authorizing resolution and, in the case of section 172, written consents, before commencing a representative proceeding. 36

Within a strata corporation, an owner may still challenge the corporation’s decision to start such a lawsuit or arbitration without first obtaining a 3/4 vote authorization or a necessary written consent.

In some circumstances, the passage of an authorizing resolution or the acquisition of necessary written consents, as the case may be, may also clarify whether, and to what extent, the start of a limitation period is, or was, postponed under the province’s Limitation Act. 37 The Limitation Act establishes the period of time in which a person may bring a lawsuit (called a limitation period), and in some cases, postpones the start of a limitation period.

For instance, the Limitation Act sets a two-year limitation period for bringing a lawsuit for damages for injury to a person or to property, including economic loss arising from the injury. The Limitation Act, however, postpones the start of the two-year limitation period for damage to property until the identity of the wrongdoer is known, and the facts known to the claimant are such that a reasonable person, knowing those facts and having taken appropriate advice, would regard those facts as showing that legal proceedings have a reasonable prospect of success. 38

The British Columbia Court of Appeal has held that a strata corporation ought to be given a reasonable time to bring a representative lawsuit before a limitation period begins, given the requirement for an authorizing resolution, and in addition, in the case of section 172, written consents. In one case, where a strata corporation started a representative lawsuit for property damage one day beyond the two-year limitation period, the court held the suit was brought in time. 39 The court found that the start of the two-year period must be postponed for a reasonable time to allow the strata corporation to investigate its claim, and then give notice of a general meeting and obtain an authorizing resolution. A delay of one day is well within any reasonable postponement of time to complete these tasks before the limitation period begins.

In some situations, a strata council member may also be personally liable to reimburse the strata corporation for its legal expenses if the council member causes the corporation to commence legal proceedings without the necessary prior approval. If the council member has a personal interest in the legal proceedings in question, the risk of personal liability likely increases. For example, in Dockside Brewing Co. v. Strata Plan LMS 3837, the Supreme Court of British Columbia ordered certain strata council members to personally reimburse the strata corporation for approximately $190,399 in legal expenses incurred by the corporation. 40 To pursue their own business goals, the council members in question caused the strata corporation to launch legal proceedings in the corporation’s name without the necessary 3/4 authorization of the eligible voters and contrary to the clear objections of other owners. When participating in council decisions concerning the litigation, the same council members failed to disclose their individual conflicts of interest in accordance with the Strata Property Act. 41 The British Columbia Court of Appeal upheld the decision requiring the council members to personally reimburse their strata corporation.

Where a strata corporation commences a representative lawsuit or certain arbitrations without a requisite prior 3/4 authorization or written consent, as the case may be, the corporation should as soon as reasonably practical rectify the situation by seeking the necessary resolution or written consent.

Exceptions Where Prior Authorization is Not Required

Prior authorization by 3/4 vote is not required every time the strata corporation commences legal proceedings. There are, in effect, exceptions, including:

1. Enforcing a Strata Corporation’s Lien

The Strata Property Act creates a separate regime for suing to enforce a strata corporation lien. Where a strata corporation has filed a lien against an owner’s strata lot for money owing to the corporation, the corporation does not first require a vote to be taken to apply to the Supreme Court of British Columbia for the sale of the strata lot. 42

2. Small Claims

A prior resolution is not required if the strata corporation intends to proceed under the Small Claims Act (that is, in Small Claims court), and there is a bylaw dispensing with the need for prior authorization. Only in the case of proceedings in the Provincial Court of British Columbia, a strata corporation may pass a bylaw that dispenses with the need for prior authorization by the owners. The jurisdiction of the Provincial Court is described at the beginning of this chapter.23

3. Administrator

A prior 3/4 resolution of the eligible voters is not required where a strata corporation wishes to apply to the Supreme Court of British Columbia to appoint an administrator. A majority of strata council may authorize the strata corporation’s application for an administrator. 43 The provision of the Strata Property Act that normally requires the corporation to first obtain a 3/4 vote before commencing representative proceedings does not apply to an application for an administrator.

4. To Defend a Lawsuit

Where someone sues a strata corporation, the corporation does not need a 3/4 vote resolution to authorize the corporation to defend a lawsuit. 44

5. Appeal

A prior 3/4 vote authorization is not necessary for a strata corporation to launch an appeal against a decision in a lawsuit. 45

The Owners as a Group are Not a Legal Entity

Only a strata corporation may sue on behalf of all the owners collectively. There is no provision in the Strata Property Act that permits the owners as a group to commence a lawsuit independent of the strata corporation.

To bring a lawsuit as a group, that group must be recognized as a legal entity. Otherwise, the lawsuit consists of a number of individual claims brought by individual plaintiffs.

It is only the strata corporation that can make a claim on behalf of the strata lot owners, as a group, and then only as a representative claim under sections 171 and 172 of the Act, as explained above. 46

Lawsuit By an Owner

The Strata Property Act recognizes an owner’s right to sue his or her strata corporation and creates certain statutory remedies for an owner.

Against the Strata Corporation

An owner may sue a strata corporation by itself; that is, in its own capacity as a corporation. 47

A person, including an owner, may also sue a strata corporation, in its capacity as a representative of the owners, for any matter regarding: 48

  • the common property,
  • the common assets,
  • the bylaws or rules, or
  • any act or omission by the corporation.

If sued, a strata corporation may join, as a party, any owner whose act or omission gave rise to that claim against the corporation. 49

The strata corporation must as soon as feasible inform the owners about a lawsuit against the corporation. The expense of defending the suit against the strata corporation is shared, in respect of each strata lot, by all of the owners in the same proportions by which strata fees are allocated. An owner who is suing the strata corporation, however, is not required to contribute to the corporation’s defence. 50

To Compel the Strata Corporation to Perform a Duty

The Strata Property Act permits a broad class of persons to sue a strata corporation if it fails to perform its duties, or otherwise contravenes the Act, regulations, bylaws or rules. Section 165 of the Act permits the following persons to apply to the Supreme Court of British Columbia for an order requiring the strata corporation to perform its duty under the Act:

  • an owner,
  • a tenant,
  • the mortgagee of a strata lot, or
  • an interested person. The Act does not define the term interested person.

At the time of this writing, a person may only apply in in the Supreme Court of British Columbia for an order under section 165 of the Strata Property Act. In a case where an owner brought his section 165 application in the Provincial Court of British Columbia, the Small Claims court found it lacked jurisdiction to hear the matter and dismissed the application. 51

For an example of a lawsuit to compel a strata corporation to carry out its duty, see Tadeson v. Strata Plan NW 2644 described in Chapter 25, Carrying Out Repairs. 52 In that case, some owners sued their strata corporation to compel it to carry out building envelope repairs.

Although section 165 of the Strata Property Act gives the court broad authority to remedy a strata corporation’s failure to comply with the Act, the order must relate to the corporation’s compliance. In one case, the British Columbia Court of Appeal overturned a section 165 order prohibiting one individual from standing for election at the next two AGMs. 53 While the court’s authority under section 165 permits an order against an individual, that order must be connected to the strata corporation’s compliance with the Act. For example, a court might order an individual to deliver to the strata council all strata corporation documents in that person’s possession. In this case, the Court of Appeal found that the order prohibiting the individual from standing for election was not connected to the strata corporation’s compliance with the statute.

In October 2009 the province passed amendments 54 to the Strata Property Act which, at the date of this writing, are not yet in force. If the province brings these amendments into force, an owner, tenant or other person may apply to either the Supreme Court of British Columbia or to the Provincial Court of British Columbia to compel the strata corporation to comply with the statute. A regulation is necessary to bring these amendments into force. 55

Significantly Unfair Act or Exercise of Voting Rights

Section 164 of the Strata Property Act enables the Supreme Court of British Columbia to alleviate certain significantly unfair situations in a strata corporation. Under this provision, an owner or tenant may apply to the court to prevent or remedy a significantly unfair action by a strata corporation, including a decision of the strata council. Alternatively, an owner or tenant can apply to the court to prevent or remedy a significantly unfair exercise of voting rights by a person who holds 50 per cent (50%) or more of the votes, including proxies, at a general meeting. Section 164 states:

This provision gives the court broad remedial powers. To remedy a significantly unfair situation, the court may direct or prohibit an activity, vary a transaction or resolution, and regulate a strata corporation’s future affairs.

In October 2009 the province passed amendments 56 to the Strata Property Act which, at the date of this writing, are not yet in force. If the province brings these amendments into force, an owner, tenant or other person may apply to either the Supreme Court of British Columbia or to the Provincial Court of British Columbia for a section 164 order to remedy significant unfairness. A regulation is necessary to bring these amendments into force. 57

Who May Apply

Only an owner or a tenant may seek relief from significant unfairness under section 164.

Where an owner or tenant seeks relief from a significantly unfair act or decision of the strata corporation, it must be an act or decision that is unfair, “in relation to the owner or tenant.” In other words, section 164 of the Strata Property Act permits an owner or tenant to apply for a remedy where they are personally harmed by a significantly unfair act of the strata corporation. They cannot, however, use section 164 to seek relief for harm done to the strata corporation.

For example, in Ang v. Spectra Management Services Ltd. et al., 58 an owner applied under section 164 to have two leases of common property declared void. The Strata Property Act clearly gives the strata corporation the duty to manage and maintain common property, and authority to sue to preserve it on behalf of all the owners when authorized by the requisite vote. In the court’s view, the issue was whether section 164 authorized the owner to make her own application to preserve common property.

In 2002 in the Ang case, the court found that the owner lacked standing to make the application. The court held that any wrong committed in respect of the common property was an injury suffered directly by the strata corporation, not the individual owner. As a corporate entity, the strata corporation was, in law, a separate person whose affairs were managed by a board of directors. 59 At common law, as a general rule the individual members of a corporation may not sue for a wrong done to the corporation. In legal circles, this is called the rule in Foss v. Harbottle, being named after the case that established the rule. 60 In the Ang case, the court found that if any wrong occurred, it was to the strata corporation itself and not to the owner personally. Applying the rule in Foss v. Harbottle, the court held that the strata corporation was the proper party to seek relief for any wrong in these circumstances, not the owner.

There is a question whether the Ang case is still good law to the extent it decided that allegations involving wrongful dealings with common property involve only the strata corporation. Collectively, all the strata lot owners, as tenants in common, own the common property, with each having a share equal to the owner’s proportional share of unit entitlement. 61 The strata corporation, however controls the common property. In 2006, in Hamilton v. Bal, the British Columbia Court of Appeal held that at common law an owner may sue for injury to the owner’s proportionate interest as a tenant in common in the common property. 62 The Hamilton case is explained later in this chapter in “An Owner’s Claim for Injury to Common Property.” An owner who wishes to apply for a remedy under section 164 of the Strata Property Act for injury to the owner’s interest as a tenant in common in the common property should first consult a strata lawyer.

Significant Unfairness

The Strata Property Act introduced the term significantly unfair into condominium law in British Columbia. Previously, the Condominium Act permitted an owner to seek relief in arbitration, or in the Supreme Court of British Columbia, if the affairs of a strata corporation, or a strata council, were exercised in a manner that was oppressive, or unfairly prejudicial, to the owner. 63

In Reid v. The Owners, Strata Plan No. LMS 2503, 64 the superior courts considered for the first time the meaning of the term significantly unfair in section 164 of the Strata Property Act.

To interpret the phrase significantly unfair, the courts looked to earlier decisions that defined the terms oppressive conduct and unfairly prejudicial under the former Condominium Act. Under the Condominium Act, oppressive conduct meant conduct that is burdensome, harsh, wrongful, lacking in probity or fair dealing, or that has been done in bad faith. 65 An act was unfairly prejudicial if it was unjust and inequitable.

In the Reid case, the trial court found that the term significantly unfair in section 164 of the Strata Property Act would, at the very least, include conduct that was oppressive or unfairly prejudicial within the meaning of the former Condominium Act. In Reid, the British Columbia Court of Appeal also recognized that a strata corporation must often make decisions that balance the best interests of all of the owners against the interests of only one owner. In Reid, the Court of Appeal interpreted the phrase significantly unfair to mean that a court should not interfere with the actions of a strata council unless those actions result in something more than mere prejudice or trifling unfairness. Borrowing remarks in an earlier case called Gentis v. The Owners, Strata Plan VR 368, 66 the Court of Appeal in Reid adopted this observation:

67

Consequently, in Reid the superior courts rejected an owner’s claim that he was the victim of a significantly unfair action when a strata corporation gave several other persons special privileges to place certain plants and other garden items on common property adjacent to the complainant’s strata lot. According to the complainant, the garden objects obstructed his view and attracted noisy activities that disturbed the quiet of his home. 68

Significant unfairness seems a difficult threshold to establish. Important factors include the nature and magnitude of the conduct in question, and whether the complaint arises from the lawful application of the statute. 69 The courts also consider the past practice of a strata corporation and the extent to which the person seeking the court’s help is harmed. An informal review of cases to the date of this writing suggests that many applications for an order to remedy a significantly unfair action, or exercise of voting rights, fail. When such applications are successful, however, the courts have used section 164 of the Strata Property Act very creatively. 70

To fix a problem, the court may make all manner of decisions, including decisions that normally require a resolution of the eligible voters at a general meeting. For example, in one case, the court remedied the problem by ordering the creation of sections to represent the interests of townhouse and apartment owners respectively. 71 Sectioning allowed the corporation to separately allocate repair expenses between the two sections. Normally, a section is created by bylaw in one of two ways: when the developer files the necessary bylaw with the strata plan, or later when the eligible voters at a general meeting pass the appropriate resolutions to create the bylaw, which is then filed at the Land Title Office. Passage at a general meeting requires approval of the strata corporation by a 3/4 vote and the 3/4 vote approval of the eligible voters in each proposed section. 72

In another case, the court ordered that repair costs be allocated among certain owners under section 100 of the Strata Property Act and the necessary Certificate of Strata Corporation (Form E) filed at the Land Title Office. 73 Normally, a unanimous resolution is necessary to pass a section 100 resolution. Section 100 allows a strata corporation to depart from the general rule that requires each owner to contribute to common expenses on the basis of unit entitlement.

Attacking an Act or Decision of a Strata Corporation

When using section 164 of the Strata Property Act to attack a decision or act, it must be the act or decision of a strata corporation or its strata council. For example, in one case, an application under section 164 for a remedy for significant unfairness was not available to attack the schedule of unit entitlement. In that instance, a surveyor had prepared the schedule of unit entitlement according to the statutory requirements. The court found that section 164 did not apply because the allocation of unit entitlement was not the result of any action or decision by the strata corporation or its strata council. 74

When considering an allegation of significant unfairness under section 164, the court focuses mainly on the conduct of the strata corporation, not the consequences of the conduct. 75

In Peace v. The Owners, Strata Plan VIS 2165, the court said, in part,  76

There is no doubt that in making a decision the Strata Corporation must give consideration of the consequences of that decision. However, in my view, if the decision is made in good faith and on reasonable grounds, there is little room for a finding of significant unfairness merely because the decision adversely affects some owners to the benefit of others. This must be particularly so when the consequence complained of is one which is mandated by the SPA [Strata Property Act] itself.

Section 164 of the Strata Property Act may not be used to attack an individual act or decision of a strata council member whose act or decision was taken on behalf of council as a whole. In Azura Management (Kelowna) Corp. v. Strata Plan KAS 2428, an owner sued two individual strata council members, claiming that they acted in a manner that was significantly unfair, contrary to section 164 of the Act. 77 The owner alleged that the two strata council members, in their campaign for re-election to council, used strata corporation funds to encourage and solicit proxies and to attack others who wished to serve on council. The court dismissed the claim against the two strata council members individually because they acted at all times as strata council members, and not as individuals in their personal capacities. In other words, any steps taken by the two council members involved steps taken by, or for, the strata council as a whole. There was no evidence that that the council members in question benefited personally to the detriment of the strata corporation.

Attacking An Exercise Of Voting Rights

An owner or tenant may use section 164 of the Strata Property Act to attack a significantly unfair exercise of voting rights. The trial decision in Azura Management (Kelowna) Corp. v. Strata Plan KAS 2428 illustrates how section 164 might be used to remedy a significantly unfair exercise of voting rights. 78 Although this aspect of the case was later overturned on appeal for technical reasons, it shows the wide range of potential remedies available. In Azura, there were 495 residential strata lots and four non-residential strata lots. A single owner owned three of the four non-residential strata lots. To amend the strata corporation’s bylaws, the Strata Property Act required passage of a 3/4 vote by the residential strata lots and passage of a similar, but separate, resolution by the non-residential strata lots. 79 The votes of four strata lots (being the non-residential ones, mostly owned by a single owner) could veto an amendment desired by three-quarters of the 495 residential strata lots. To prevent a significantly unfair exercise of voting rights by the owner in question, the court made an order overriding the usual statutory voting procedure. The court ordered instead that at any general meetings where bylaw amendments are considered in future, both residential and non-residential strata lots must vote together as a single group, and not as two distinct groups holding separate votes. The appellate court later overturned this order because, for technical reasons particular to the case, section 164 was not available to the court.

An Owner’s Claim for Injury to the Common Property

Since a strata corporation is a corporate entity, it is, in law, an artificial person. This means that the strata corporation is a distinct legal entity separate from each owner. As an artificial person, a strata corporation has the legal power and capacity of a natural person of full capacity. 80

Under the Strata Property Act, a strata corporation has exclusive authority to manage, insure, repair and maintain the common property and common assets of the corporation, 81 but it does not own the common property or common assets. The owners do. The owners together as tenants in common, in proportions according to the schedule of unit entitlement, own the common property and any common assets. 82

Recall that at common law, as a general rule the individual members of a corporation may not sue for a wrong done to the corporation, since the corporation is, in law, a separate legal person 83 whose affairs are managed by a board of directors. This rule is called the rule in Foss v. Harbottle, being named after the case that established the rule. 84

In Hamilton v. Bal, the British Columbia Court of Appeal held that the rule in Foss v. Harbottle does not apply to a strata corporation in respect of injury to common property. 85 In the Hamilton case, the Court of Appeal explained its decision, in part, as follows:

In other words, since every owner has a proportionate interest as a tenant in common in the common property, each owner has a right at common law, as an incident of ownership, to sue directly for damage to that interest. This means that, entirely apart from the Strata Property Act, an owner may at common law sue a person for injury to the common property.

Recall that section 171 of the Strata Property Act permits a strata corporation, as a representative of all the owners, to sue a person regarding any matter affecting the common property, as described earlier in this chapter. Section 171 of the Act merely creates an alternative mechanism by which the owners, upon obtaining a 3/4 vote approval, may choose instead to use the strata corporation as their vehicle for suing for injury to common property. Since it may be onerously expensive for an individual owner to sue for injury to that owner’s proportionate interest in the common property, section 171 offers owners an alternative way to sue that spreads the legal expense among all the owners. In Hamilton, the Court of Appeal found that when an owner sues for injury to her proportionate interest as a tenant in common in the common property, the owner is not circumventing section 171. Rather, section 171 does not apply.

Nor does section 171 of the Strata Property Act remove and replace an owner’s ability at common law to sue, at the owner’s expense, to enforce his or her rights as a proportionate owner, as a tenant in common, of the common property. In Hamilton, the Court of Appeal said that it would take much clearer language in the Act “to remove the right of individual owners to enforce their rights ‘on their own hook’.” 86

An Owner’s Claim for an Injury to a Strata Corporation

Recall that at common law, as a general rule a shareholder may not sue to recover a loss suffered by the corporation itself. This is known as the rule in Foss v. Harbottle, as described above. The rule means that only the corporation may sue for an injury to the corporation. Over time, the courts recognized a few exceptions to the rule, the best-known being perhaps the derivative proceeding (also called a derivative action).

In a derivative proceeding, a shareholder obtains the court’s permission to sue on behalf of all similarly situated shareholders to recover, for the benefit of the corporation, a loss suffered by the corporation itself. If the derivative action succeeds, the court awards relief for the benefit of the corporation, not for the individual shareholders who sued. For example, if a director with a controlling interest in a corporation carried out a fraud on the corporation for the director’s own benefit, the court may allow another shareholder, on behalf of herself and any other similarly affected shareholders, to bring a derivative action, for the benefit of the corporation, against that director to recover the loss suffered by the corporation as a result of the director’s fraud. At common law, a derivative proceeding tended to be complex with many procedural requirements. Eventually, the provincial and federal corporate statutes replaced the common law derivative action with statutory ones. 87

The Strata Property Act does not contain any mechanism for derivative proceedings. That is, the Act does not permit an owner to sue for himself, and on behalf of all other similarly situated owners, for an injury to the strata corporation. In the absence of a statutory procedure for a derivative action in the Act, it is uncertain whether an owner may apply to the court for permission to bring a derivative action at common law. 88

Apart from the rule in Foss v. Harbottle, the doctrine of privity of contract may also prevent an owner from recovering a loss suffered by a strata corporation. In the law of contract, the doctrine of privity says that only a party to a contract may sue to enforce it, subject to a few exceptions. In Wong v. AA Property Management Ltd., an owner sued the strata corporation’s strata property manager, in part, for breaches of the property manager’s management agreement with the corporation. 89 The court struck and dismissed these claims because the owner had no standing to enforce the management agreement. Only the parties to that agreement could sue to enforce it, those being the strata corporation and the property management company.

 

An Owner’s Claim Against a Strata Council Member for Conflict of Interest [Make heading the same level as the previous heading, “An Owner’s Claim for an injury to a Strata Corporation]

The Strata Property Act permits an owner to sue an individual member of strata council who breaches the statute’s conflict of interest requirements.

Recall that where a council member has an interest, directly or indirectly, in a contract or other transaction with the strata corporation, or in certain cases, an interest in a matter that is under consideration by the council, the statute requires that member to promptly disclose the conflict and to abstain from voting on the matter. The council member must also leave the meeting while the matter is discussed or a relevant vote taken. 90

If a strata council member breaches the statutory conflict-of-interest requirements, then either the strata corporation or an owner may apply to, “a court having jurisdiction” for various relief. If the council member failed to act honestly and in good faith, the court may, among other things, order the council member to compensate the strata corporation or any other person for their loss, including the owner who applied to court. 91

For these purposes, “a court having jurisdiction” is certainly the Supreme Court of British Columbia. At the time of this writing, it is a difficult legal question whether the Provincial Court is, “a court having jurisdiction” to hear such a claim. 92 Before commencing such proceedings in Provincial Court, the reader should first consult a lawyer.

 

Human Rights Complaints

Even a cursory review of British Columbia’s human rights case law indicates a growing trend toward human rights complaints against strata corporations and their strata council members.

The Human Rights Code

Generally speaking, in British Columbia there are two statutes that may govern a human rights dispute, depending on the circumstances, one federal 93and one provincial. 94 Either one or the other will apply. If a human rights complaint involves a strata corporation, the provincial Human Rights Code (the “Code”) will typically govern.

Among other things, the Code is designed to foster a society where everyone is treated with equal dignity and offered full participation in the province’s economic and social life. The Code prohibits certain discriminatory behaviour and provides remedies for victims of discrimination contrary to the Code.

Under the Code, the Human Rights Tribunal (the “Tribunal”) receives, investigates, and determines a human rights complaint. If the parties cannot resolve the complaint with the Tribunal’s assistance, the matter typically proceeds to a hearing before the Tribunal. The Code gives the Tribunal authority to make orders to enforce the Code and remedy discrimination. In most cases, upon filing a certified copy of an order of the Tribunal, including an order to pay costs, the order may be enforced as if it were a judgment of the Supreme Court of British Columbia. 95

Until March 23, 2003, the former Human Rights Commission received and investigated complaints under the Code. Effective March 23, 2003, the provincial government disbanded the Human Rights Commission and transferred that function to the Tribunal.

The Tribunal may only enforce a human right within its authority; that is, it must involve a right protected by the Code and within provincial jurisdiction. For instance, the Tribunal cannot deal with certain complaints involving postal services because the federal government has exclusive authority in that area.

The Code specifically provides that an intention to contravene the Code is not necessary to commit a breach of it. 96 In many cases, and especially where the complaint involves a disability, the onus shifts to the person accused of discrimination to prove that he or she cannot accommodate the complainant without undue hardship. In addition, the Code prohibits retaliation against a person for making a complaint. 97

A Strata Corporation’s Liabilities

The cases to date suggest that strata corporations most often encounter the Code when someone complains of discrimination in the provision of a service or facility, 98 or a tenancy. 99

Discrimination in Providing an Accommodation, Service or Facility

With a few exceptions, section 8 of the Code says that a person must not, because of discrimination on certain grounds, and without a bona fide and reasonable justification,

  1. (a) deny to a person or class of persons any accommodation, service or facility customarily available to the public, or
  2. (b) discriminate against a person or class of persons regarding any accommodation, service or facility customarily available to the public.

Section 8 of the Code prohibits discrimination regarding an accommodation, service or facility customarily available to the public because of, “the race, colour, ancestry, place of origin, religion, marital status, family status, physical or mental disability, sex, sexual orientation or age of that person or class of persons.”

There are two exceptions to the prohibition against discrimination in section 8 of the Code. The Code does not apply regarding an accommodation, service or facility customarily available to the public:

1. In so far as the discrimination may relate to sex, these Code provisions do not apply if the discrimination relates to the maintenance of public decency or to the determination of premiums or benefits under contracts of life or health insurance.

2. To the extent the discrimination may relate to physical or mental disability or age, if the discrimination concerns the determination of premiums or benefits under contracts of life or health insurance.

In British Columbia, section 8 clearly applies to strata corporations. The Tribunal has held that a strata corporation supplies services to the public, being in this case the owners, among others. 100 In one case, for example, the Tribunal found that a strata corporation discriminated against a 91-year-old owner by failing to install a ramp for wheelchair access between the main lobby and the elevators, which were located up a small flight of stairs. 101

Discrimination Regarding A Tenancy

With some exceptions, section 10 of the Code says that a person must not, because of discrimination on certain grounds, 102

  1. (a) deny to a person or class of persons the right to occupy, as a tenant, space that is represented as being available for occupancy by a tenant, or
  2. (b) discriminate against a person or class of persons regarding a term or condition of the tenancy of the space.

The Code prohibits discrimination regarding a tenancy on the grounds of “race, colour, ancestry, place of origin, religion, marital status, family status, physical or mental disability, sex, sexual orientation, age or lawful source of income of that person or class of persons, or of any other person or class of persons.” 103

There are two relevant exceptions to the prohibition against discrimination in a tenancy. The Code does not apply regarding a tenancy:

1. If the space is to be occupied by another person who is to share the use of any sleeping, bathroom or cooking facilities with the person who represented that the space was available for occupancy by a tenant; 104

2. To the extent the discrimination may relate to physical or mental disability, these Code provisions do not apply if the space is a rental unit in residential premises that are designed to accommodate persons with disabilities, and the unit is offered exclusively for rent to a person with a disability or to two or more persons, at least one of whom has a physical or mental disability. Both the rental unit and the premises in which it is located must be designed to accommodate such persons, and the facility must meet prescribed standards for such facilities. 105

In the case of an age restriction, the Code used to create different enforcement rights, depending whether a strata corporation enforced its age restriction against an owner or a tenant. In December 2009, amendments to the Strata Property Act removed this distinction, making an age restriction equally enforceable against an owner or a tenant. For information about age restrictions, see Chapter 23, Age Restriction Bylaws.

Legal Advice

When faced with a human rights complaint, a strata corporation and its strata council must take the matter seriously. The strata corporation should promptly obtain legal advice from a strata lawyer, ideally one with experience involving human rights complaints. Given the prohibition against retaliation, and in some cases a duty to accommodate the complainant, the lawyer’s advice may prevent missteps that can make the strata corporation’s legal situation worse. With the benefit of legal advice, the complaint might also be more effectively settled, without the necessity of a costly hearing.

When a Judgment Affects an Owner

A judgment against a strata corporation is a potential financial liability for every owner, for the reasons explained below.

According to the Strata Property Act, a judgment is a judgment of a court, and includes an order for costs in respect of that judgment. 106 In legal terminology, a person who obtains a judgment that orders someone else to pay money to that person is called a judgment creditor. The person who must pay the money owing under the judgment is called a judgment debtor.

Similarly, an arbitrator’s determination may be enforced as a judgment. The arbitrator’s decision and order for costs may be filed in either the Supreme Court of British Columbia or the Provincial Court of British Columbia. 107 Once filed, the arbitrator’s decision or order for costs may be enforced as if it were a judgment of the court where the decision or order, as the case may be, is filed. For information about an arbitrator’s decision and order for costs, see Chapter 28, Arbitration.

Registration in a Land Title Office

There are various ways to enforce a judgment.

One of the most common ways to enforce a judgment is to register it in a Land Title Office against title to land owned by the person against whom judgment is ordered. 108 If the judgment is not paid, the person holding the judgment may ultimately apply to the Supreme Court of British Columbia for an order to sell the property and use the sale proceeds to pay the judgment, including any accrued interest and court costs. In the meantime, if the owner of the property in question wishes to sell it to a buyer, or to register a mortgage, or in some cases to renew or refinance an existing mortgage, the presence of the judgment on title will effectively compel the owner to first pay the judgment, including any accrued interest and court costs.

In the case of a judgment against a strata corporation, however, the Strata Property Act contains special provisions. The Act allows a judgment creditor to register the judgment against title to every strata lot, and to then enforce it personally against any individual owner, even though the judgment is against the corporation. These provisions are explained below.

Judgment Against a Strata Corporation

The Strata Property Act makes a judgment against a strata corporation a judgment against all the owners. Section 166 of the Act says:

This means that if a judgment creditor holds a judgment against a strata corporation, the judgment creditor may choose to register the judgment in the Land Title Office against the title to any, or all, of the strata lots in the strata plan. For example, in The Owners, Strata Plan VIS 4534 v. Seedtree Water Utility Co. Ltd. et al., a utility company obtained judgment for approximately $7,411 against a strata corporation. The utility company then registered its judgment for approximately $7,411 in the Land Title Office against title to every strata lot in the strata plan. The Seedtree case is described in more detail below. 109

Owner’s Personal Liability for a Judgment Against a Strata Corporation

If someone obtains a judgment in court or arbitration proceedings against a strata corporation, the direct effect of that judgment upon an individual owner may initially vary. It depends who pays the whole amount due under the judgment: the strata corporation, another owner, or the individual owner in question.

Where a Strata Corporation Pays the Judgment

If a strata corporation pays a judgment against the corporation, each strata lot must contribute to the cost of the corporation paying that judgment, including any accrued interest and court costs. Every strata lot must contribute according to the general rule that governs payment of common expenses, subject to only a few exceptions. The general rule requires each strata lot to contribute proportionately according to the schedule of unit entitlement. An owner is personally liable to the strata corporation for the contribution due in respect of the owner’s strata lot. 110

In the case of a judgment against the strata corporation, an exception may occur if the corporation has, under section 100 of the Strata Property Act, adopted another formula for payment of the judgement. 111 In that case, every owner is liable to pay the share due in respect of his or her strata lot in accordance with the formula established by the section 100 resolution. For information about the section 100 exception, see Chapter 26, Paying For Repairs.

Another exception occurs if an owner obtains a judgment against the strata corporation; for example, in a lawsuit or arbitration. In that case, the owner, as the judgment creditor, does not have to contribute to payment of the judgment. 112

Where Another Owner Pays the Judgment Against the Strata Corporation

Alternatively, suppose that another owner, to remove the judgment from his or her title, pays the whole amount due to the strata corporation’s judgment creditor under a judgment, including any accrued interest and court costs. The remaining owners are liable to proportionately reimburse that owner. To reimburse the owner who paid the entire judgment, each remaining owner must contribute his or her strata lot’s share of the judgment according to the schedule of unit entitlement.

Where the Owner Pays the Judgment Against the Strata Corporation

Recall that if a judgment creditor holds a judgment against a strata corporation, that judgment creditor may register the judgment against the title to every strata lot in the strata plan.

In The Owners, Strata Plan VIS 4534 v. Seedtree Water Utility Co. Ltd. et al., the Supreme Court of British Columbia held that if a judgment creditor with a judgment against a strata corporation registers the judgment against title to an individual owner’s strata lot, then that owner must pay the whole amount due under the judgment to the judgment creditor to remove the judgment from title. 113 The owner may then obtain reimbursement by collecting proportionate contributions from the remaining owners. In the meantime, by virtue of paying the whole amount due under the judgment, that owner has already paid his or her proportionate contribution to the judgment and everyone else’s too.

In the Seedtree case, there were four strata lots in the strata plan. Apparently, the schedule of unit entitlement figure for each strata lot was .25 (or, in other words, 1/4 for each strata lot respectively).

In Seedtree, the Seedtree Water Utility Co. Ltd (the “Utility Company”) obtained judgment for approximately $7,411 against the strata corporation. The Utility Company then registered its judgment for approximately $7,411 against each of the four strata lots in the strata plan.

The two owners of one of the strata lots asked the Supreme Court of British Columbia to release the approximately $7,411 judgment registered against title to their strata lot upon those owners paying the Utility Company 1/4 of that judgment amount. The two owners argued that since the unit entitlement of their strata lot was 1/4, section 166 of the Strata Property Act allowed them to remove the judgment from their title by paying 1/4 of the judgment to the judgment creditor. According to the two owners, it would then be up to the judgment creditor to collect the balance of the judgment remaining from the rest of the owners on the same basis, one strata lot at a time. The Court rejected the owners’ interpretation of section 166 of the Strata Property Act.

To remove the Utility Company’s judgment from their title, the court held that the two owners must pay the Utility Company the full amount of its approximately $7,411 judgment, including any accrued interest and court costs. The Court held that until the Utility Company receives payment of the judgment in full, the Utility Company does not have to release its judgment against title to the owners’ strata lot. If the two owners in question pay the full amount owing to the Utility Company under its judgment, then the judgment will be released and those two owners will then be entitled to collect proportionate contributions from the remaining owners. The Court explained its reasoning this way, 114

To illustrate, suppose that someone obtains a judgment against a strata corporation and then, as judgment creditor of the strata corporation, registers that judgment against the title to each of the strata lots in the strata plan. Suppose also that the strata corporation does not promptly pay the judgment. If an owner needs to remove the judgment from the owner’s title to sell or mortgage the owner’s property, that owner must pay to the judgment creditor the whole amount of the judgment, including any accrued interest and court costs. Of course, once an owner pays the judgment in full, including any accrued interest and court costs, the judgment is satisfied and the judgment creditor cannot enforce the judgment against any of the other strata lots.

The owner who pays the entire judgment may then claim reimbursement by exercising his or her right to proportionate contribution from the other owners. Recall that as between all the owners within the strata corporation, each owner is ultimately liable only to contribute his or her strata lot’s share of the judgment according to unit entitlement or, where applicable, such other formula as the strata corporation may have adopted under section 100 of the Strata Property Act.

Consequently, the other owners must reimburse the first owner in portions according to the schedule of unit entitlement, or where applicable, in accordance with such section 100 formula as the strata corporation may have adopted. In the meantime, as between the first owner and all the others, by virtue of paying the judgment in full, the first owner has already paid his or her own proportionate contribution to the judgment.

Judgment Against an Owner

What happens when someone obtains judgment against an owner, instead of against a strata corporation?

If a person obtains judgment against an owner, that person, as a judgment creditor, may register the judgment at the Land Title Office against the owner’s interest in the owner’s strata lot.

For example, if a strata corporation obtains a judgment against an owner in court or arbitration proceedings for money owing for an unpaid fine, the corporation, as judgment creditor, may register its judgment against title to that owner’s strata lot. If the owner, as judgment debtor, does not pay the amount owing under the judgment, the strata corporation, as judgment creditor, may take enforcement proceedings against the owner. Among other things, the strata corporation, as judgment creditor, may ask the Supreme Court of British Columbia to order the sale of the owner’s strata lot to pay the judgment.

Court Costs

Whether proceedings occur in the Supreme Court of British Columbia, or in the Provincial Court of British Columbia, the court has a discretion to award court costs. Generally speaking, a party who prevails in court is entitled to an award of court costs against the unsuccessful party, unless the court says otherwise. Depending whether legal proceedings occur in the Supreme Court of British Columbia or in Small Claims court, costs are calculated differently.

Supreme Court of British Columbia

Effective July 1, 2010 a new set of Supreme Court Civil Rules came into effect. Effective July 1, 2010 the principal Rule governing costs is Rule 14. 115

A complete explanation of costs in the Supreme Court of British Columbia is beyond the scope of this work. The law concerning these costs can be complex. A reader who considers bringing legal proceedings in the Supreme Court of British Columbia should consult his or her lawyer about the reader’s potential entitlement to, and liability for, court costs.

Small Claims Court

Court costs in the Provincial Court of British Columbia, Small Claims Division are relatively simple when compared to court costs in the Supreme Court of British Columbia. In Small Claims court, costs are called expenses. Unless a judge or registrar orders otherwise, an unsuccessful party must pay the following expenses to the successful party: 116

  • any fees the successful party paid for filing any documents,
  • reasonable amounts the successful party paid for serving any documents,
  • any other reasonable charges or expenses that the judge or registrar considers directly relate to the conduct of the proceeding.

In addition, if a party proceeds through trial in the Provincial Court of British Columbia without any reasonable basis for success, the court may order that party to pay a penalty to the successful party. The penalty may be as much as ten per cent (10%) of the disputed amount, or the value of the matter in dispute. The court may also order a party or witness whose conduct causes another party or witness to incur expenses to pay all or part of those expenses. 117

A full explanation of Provincial Court of British Columbia costs is beyond the scope of this work. The reader, however, may obtain more information about Small Claims court, and particularly costs, at the website of the Ministry of Attorney General at http://www.gov.bc.ca/ag/. 118 The reader may also find informative booklets about Small Claims court procedures at any of the court’s registries, and at most public libraries in British Columbia.


 

Notes:

  1. Strata Property Act, s. 1(1) (definition of “sue”).
  2. David v. Vancouver Condominium Services Ltd., [1999] B.C.J. No. 1869 (QL), 1999 CarswellBC 3210 (Prov. Ct.); Valana v. Law et al., 2005 BCPC 587; contra Clappa v. Parker Management Ltd., 2003 BCPC 305.
  3. Small Claims Act, R.S.B.C. 1996, c. 430, s. 3; and Small Claims Court Monetary Regulation, B.C. Reg. 179/2005, s. 1.
  4.  Armanowski v. Strata Corp., Strata Plan LMS 2151, 2011 BCPC 271 at para. 26.
  5.  Strata Property Act, s. 164.
  6.  Strata Property Act, s. 165.
  7.  Clappa v. Parker Management Ltd. et al., 2003 BCPC 305.
  8.  Matthews v. The Owners, Strata Plan NW 1874, 2009 BCPC 66.
  9.  Frechette v. Crosby Property Management Ltd. et al., 2007 BCPC 174.
  10.  Armanowski v. Strata Corp., Strata Plan LMS 2151, 2011 BCPC 271.
  11.  Grantham v. Strata Plan VIS 4116, 2013 BCPC 146.
  12. Strata Property Amendment Act, 2009, S.B.C. 2009, c. 17, s. 5 (amends the Strata Property Act, s. 33(1) to add the option to apply to the Provincial Court of British Columbia to remedy a breach of a strata council member’s conflict of interest requirements), s. 10 (amends the Strata Property Act, s. 52(2) to add the option to apply to the Provincial Court for a remedial order where a unanimous vote fails, amends s. 58(1) to add the option to apply to the Provincial Court to appoint a voter, amends s. 59(6) to add the option to apply to the Provincial Court regarding the consequences of an inaccurate Information Certificate (Form B), amends s.164(1) to add the option to apply to the Provincial Court for an order to remedy a significantly unfair act or exercise of voting rights, amends s.165 to add the option to apply to the Provincial Court for an order to require a strata corporation to comply with the statute), s. 25 (amends the Strata Property Act, s.173 to add the option to apply to the Provincial Court for an order to require an owner or other person to comply with the statute, and by adding a new provision permitting the strata corporation, if certain criteria are met, to apply to the Supreme Court of British Columbia or to the Provincial Court to authorize a special levy for repairs or maintenance).
  13. Strata Property Amendment Act, 2009, s. 37.
  14. Strata Property Act, s. 170.
  15. The Owners, Strata Plan VR 19 v. Collins et al., 2004 BCSC 1743.
  16. Strata Property Act, s. 2(2).
  17. Strata Property Amendment Act 2009, s. 25 (amends the Strata Property Act, s.173 to add the option for a strata corporation to apply to the Provincial Court of British Columbia to compel an owner, tenant or other person to comply with the statute).
  18. Strata Property Amendment Act 2009, s. 37.
  19. The owners own the common property and any common assets as tenants in common, each in proportion to the schedule of unit entitlement. For information about the ownership of common property, see the Strata Property Act, s. 66 and Chapter 17, Common Property.
  20. The Owners, Strata Plan LMS 1468 v. Reunion Properties Inc., 2002 BCSC 929 at para 24. For information about an owner’s claim for injury to common property, later in this chapter see “An Owner’s Claim for Injury to Common Property.”
  21. Strata Property Act, s. 171(2), (3).
  22. Strata Property Act, s. 171(5), (6). For information about the schedule of unit entitlement, see Chapter 15, Finances.
  23. Strata Property Act, s. 172(3).
  24. Condominium Act, R.S.B.C. 1996, c. 64, s. 15(7)(b). The former Condominium Act in section 1(1) defined a special resolution, in part, as “…a resolution passed at a properly convened general meeting of the strata corporation … by not less than 3/4 of the votes of all persons entitled to vote on the resolution under this Act or the bylaws, present at the meeting in person or by proxy at the time the resolution is passed.”
  25. Condominium Act, s. 15.
  26. See, for example, The Owners, Strata Plan NW 651 v Beck’s Mechanical Ltd., 1980 CanLII 603, [1980] B.C.J. No. 46 (QL)(S.C.); The Owners, Strata Plan LMS 1328 v. Marco Polo Properties et al., 2000 BCSC 776; The Owners, Strata Corporation VR 2673 v. Comissiona et al., 2000 BCSC 1240.
  27. See, for example, Strata Plan LMS 1151 v. Summit Strata Management Ltd. et al. (18 December 2000), Vancouver Registry Doc. S006571 (S.C.); The Owners, Strata Plan LMS 1468 v. Reunion Properties Inc., 2002 BCSC 929; The Owners, Strata Plan LMS 1463 v Krahn Bros. Construction Ltd., 2003 BCSC 903, aff’d on other grounds 2004 BCCA 190.
  28. The Owners, Strata Plan LMS 888 v. Coquitlam (City), 2003 BCSC 941, supp. reasons 2003 BCSC 1311.
  29. Miscellaneous Statutes Amendment Act (No. 3), 2003, S.B.C. 2003, c. 96, s. 62 (In force 2 December 2003 by Royal Assent).
  30. The Owners, Strata Plan VR 2734 v. Cragg and Cragg Design Group Ltd., 2008 BCSC 1737.
  31. Coupal v. Strata Plan LMS 2503, 2004 BCCA 552, rev’g 2002 BCSC 1444 (S.C.).
  32. Strata Property Act, s. 96(b).
  33. Coupal v. Strata Plan LMS 2503, 2004 BCCA 552 at para 18.
  34. Strata Plan VR 1280 v. Oberti Architecture et al., 2003 BCSC 112, aff’d 2003 BCCA 213 (sub nom The Owners, Strata Plan VR 1280 v. Oberto Oberti Architecture and Urban Design Inc., et al.).
  35. Specifically, section 176 of the Strata Property Act extends the following lawsuit provisions to arbitration: sections 166 [Owner’s liability for judgment against strata corporation]; 167 [Defending suits];169 [Limit on owner’s responsibility for costs]; 171 [Strata corporation may sue as representative of all owners] and 172 [Strata corporation may sue on behalf of some owners].
  36. See Strata Plan LMS 2940 v. Quick as a Wink Courier Service Ltd., 2010 BCCA 74 at para. 36 aff’g 2007 BCSC 948.
  37. Limitation Act., R.S.B.C. 1996, c. 266, s. 6.
  38. Limitation Act, ss. 3(2); 6(3), (4).
  39. Strata Plan LMS 2940 v. Quick as a Wink Courier Service Ltd., 2010 BCCA 74 aff’g 2007 BCSC 948.
  40. Dockside Brewing Co. v. Strata Plan LMS 3837, 2005 BCSC 1209, aff’d 2007 BCCA 183, leave to appeal dismissed without reasons, [2007] S.C.C.A. No. 262, 2007 CanLII 40504.
  41. Strata Property Act, ss. 32, 33. For information about a council member’s duty to disclose a conflict of interest, see Chapter 7, Strata Council.
  42. The Owners, Strata Plan VR 1008 v. Oldaker et al., 2004 BCSC 63; Strata Plan LMS 307 v. Krusoczki, 2006 BCCA 154; and Strata Plan BCS 3699 v. Burrard Development Inc., 2013 BCCA 356 at para. 25
  43. The Owners, Strata Plan LMS 2643 v. Kwan et al., 2003 BCSC 293; and Strata Plan BCS 3699 v. Burrard Development Inc., 2013 BCCA 356 at para. 25
  44. Coupal v. Strata Plan LMS 2503, 2004 BCCA 552.
  45. Coupal v. Strata Plan LMS 2503, 2004 BCCA 552.
  46. Extra Gift Exchange Inc. et al. v. Ernest & Twins Ventures (PP) Ltd. et al., 2007 BCSC 426 at paras 55-62.
  47. Strata Property Act, s. 163(2).
  48. Strata Property Act, s. 163(1).
  49. Strata Property Act, s. 168.
  50. Strata Property Act, s. 167(1), (2). See, for example, Taychuk v. The Owners, Strata Plan LMS 744, 2002 BCSC 1638.
  51. Matthews v. Strata Plan NW1874, 2009 BCPC 66.
  52. Tadeson v. The Owners, Strata Plan NW 2644 (1999), 30 R.P.R. (3d) 253, 1999 CanLII 6999 (B.C.S.C.). Enefer v. The Owners, Strata Plan LMS 1564, 2005 BCSC 1866, supp. reasons on costs 2005 BCSC 1331; Browne et al. v. The Owners, Strata Plan 582, 2007 BCSC 206.
  53. Jiwan Dhillon & Co. v. Strata Plan LMS4385, 2010 BCCA 324.
  54. Strata Property Amendment Act, 2009, s. 10 (amends the Strata Property Act, s.165 to add the option to apply to the Provincial Court of British Columbia for an order to require a strata corporation to comply with the statute).
  55. Strata Property Amendment Act, 2009, s. 37.
  56. Strata Property Amendment Act, 2009, s. 10 (amends the Strata Property Act, s.164 to add the option to apply to the Provincial Court of British Columbia for an order to remedy significant unfairness).
  57. Strata Property Amendment Act, 2009, s. 37.
  58. Ang v. Spectra Management Services Ltd., 2002 BCSC 1544.
  59. Salomon v. Salomon & Co. Ltd., [1897] A.C. 22, 66 L.J. Ch. 35 (H.L.).
  60. Foss v. Harbottle (1843), 2 Hare 461, 67 E.R. 189 (V-C).
  61. Strata Property Act, s. 66. For information about common property, see Chapter 17, Common Property.
  62. Hamilton v. Ball, 2006 BCCA 243.
  63. Condominium Act, s. 42.
  64. Reid v. The Owners, Strata Plan LMS 2503, 2001 BCSC 1578, aff’d 2003 BCCA 126, leave to appeal dismissed without reasons (23 April 2004) SCC Bulletin case # 30057, [2003] S.C.C.A. No. 500.
  65. See Blue-Red Holdings Ltd. v. Strata Plan VR 857 (1994), 42 R.P.R. (3d) 421, 1994 CanLII 1503 (sub nom Blue-Red Holdings Ltd. Estate) (S.C.) and Esteem Investments Ltd. v. Strata Plan No. VR 1513 (1987), 21 B.C.L.R. (2d) 352, 1987 CanLII 2419 (S.C.), rev’d on other grounds (1988), 32 B.C.L.R. (2d) 324, 1988 CanLII 3215 (C.A.).
  66.  Gentis v. The Owners, Strata Plan VR 368, 2003 BCSC 120.
  67. Reid v. The Owners, Strata Plan LMS 2503, 2003 BCCA 126 at para 27 quoting Gentis v. The Owners, Strata Plan VR 368, 2003 BCSC 120 at paras 28-29.
  68. For more information about Reid v. The Owners, Strata Plan LMS 2503, 2001 BCSC 1578, aff’d 2003 BCCA 126, leave to appeal dismissed without reasons (23 April 2004) SCC Bulletin case # 30057, [2003] S.C.C.A. No. 500, see Chapter 17, Common Property.
  69. See, for example, Peace v. Strata Plan VIS2165, 2009 BCSC 1791 where the court dismissed a claim that significant unfairness ocurred when the owners decided to finance repairs in accordance with the statute by allocating costs according to unit entitlement.
  70. See, for example, The Owners, Strata Plan VR 1767 v. Seven Estate Ltd. et al., 2002 BCSC 381 (Order to alter schedule of unit entitlement).
  71. Chow v. The Owners, Strata Plan LMS 1277, 2006 BCSC 335. In Chow, the court declined to follow Large et al. v The Owners, Strata Plan 601, 2005 BCSC 1128 where the court earlier held that it lacked authority to remedy significant unfairness by ordering the creation of sections.
  72. Strata Property Act, ss. 192193. For information about sections, see Chapter 10, Sections.
  73. Fraser v. Strata Plan VR 1411 et al., 2006 BCSC 1316; Shaw v. The Owners, Strata LMS 3972 et al., 2008 BCSC 453. For information about the section 100 exception, see Chapter 26, Paying for Repairs.
  74. Southern Interior Construction Association v. Strata Plan KAS 2048, 2007 BCSC 792.
  75. Liverant v. The Owners, Strata Plan VIS-5996, 2010 BCSC 286.
  76.  Peace v. The Owners, Strata Plan VIS 2165, 2009 BCSC 1791 at para. 55.
  77. Azura Management (Kelowna) Corp. v. Strata Plan KAS 2428, 2009 BCSC 506, rev’d in part 2010 BCCA 474.
  78. Azura Management (Kelowna) Corp. v. Strata Plan KAS 2428, 2009 BCSC 506, rev’d in part 2010 BCCA 474.
  79. Strata Property Act, s. 128(1)(c). For information about amending bylaws in a strata corporation with both residential and non-residential strata lots, see Chapter 20, Amending Bylaws.
  80. Strata Property Act, s. 2.
  81. Strata Property Act, ss. 3, 72 and 149. For information about the duties of a strata corporation, see Chapter 6, Strata Corporation.
  82. Strata Property Act, s. 66. For information about the interests that an owner of a strata lot acquires, see “Anatomy of a Strata Development” in Chapter 2, The Creation of Strata Developments.
  83. Salomon v. Salomon & Co. Ltd., [1897] A.C. 22, 66 L.J. Ch. 35 (H.L.).
  84. Foss v. Harbottle (1843), 2 Hare 461, 67 E.R. 189 (V-C).
  85. Hamilton v. Ball, 2006 BCCA 243.
  86. Hamilton v. Ball, 2006 BCCA 243 at para 27.
  87. See, for example, federally the Canada Business Corporations Act, R.S.C. 1985, c. C-44, s. 239; and in British Columbia the Business Corporations Act, S.B.C. 2002, c. 57, ss. 232, 233. See Prudential Assurance v. Newman Industries (No. 1), [1981] Ch. 229; Prudential Assurance v. Newman Industries (No. 2), [1982] 1 All E.R. 354, [1982] Ch. 204 (Eng. C.A.).
  88. Extra Gift Exchange Inc. et al. v. Ernest & Twins Ventures (PP) Ltd. et al., 2007 BCSC 426. See generally Goldstream Resources Ltd. (Re) (1986), 2 B.C.L.R. (2d) 244, 1986 CanLII 1042 (S.C.).
  89.  Wong v. AA Property Management Ltd., 2013 BCSC 1551.
  90.  Strata Property Act, s. 32. For more information about a strata council member’s conflict of interest obligations, see Chapter 7, Strata Council.
  91.  Strata Property Act, s. 33.
  92.  In 2009 the province passed amendments to the Strata Property Act which, if adopted, would have permited, the strata corporation or an owner to apply to either the Supreme Court of British Columbia or to the Provincial Court of British Columbia: Small Claims Division for an order to remedy a strata council member’s conflict of interest: Strata Property Amendment Act, 2009, S.B.C. 2009, c. 17, s. 5. Before bringing this amendment into force, however, in 2012 the province further altered this amendment to restrict an applicant to applying only to the Supreme Court of British Columbia: Civil Resolution Tribunal Act, S.B.C. 2012, c. 25, s. 107. A regulation is necessary to bring this change into force: Civil Resolution Tribunal Act, S.B.C. 2012, c. 25, s. 112.
  93. Canadian Human Rights Act, R.S.C., 1985, c. H-6.
  94. Human Rights Code, R.S.B.C. 1996, c. 210.
  95. Human Rights Code, s. 37, 38, and 39.
  96. Human Rights Code, s. 2.
  97. Human Rights Code, s. 43.
  98. Human Rights Code, s. 8.
  99. Human Rights Code, s. 10.
  100. Williams v. Strata Council #768, 2003 BCHRT 17, Konieczna v. The Owners, Strata Plan NW 2489, 2003 BCHRT 38.
  101. Mahoney obo Holowaychuk v. The Owners, Strata Plan NW #NW332 and others, 2008 BCHRT 274.
  102. Human Rights Code, s. 10(1).
  103. Human Rights Code, s. 10(1).
  104. Human Rights Code, s. 10(2)(a).
  105. Human Rights Code, s. 10(2)(c).
  106. Strata Property Act, s. 1(1) (“definition of “judgment”). In broader terms, judgment means “a judgment, decree or order” of the Provincial Court of British Columbia, the Supreme Court of British Columbia, the Court of Appeal for British Columbia, the Federal Court of Canada: Court Order Enforcement Act, R.S.B.C. 1996, c. 78, s. 81 (definition of “judgment”) or of the Supreme Court of Canada: Supreme Court Act, R.S.C. 1985, c. S-26, s. 51.
  107. Strata Property Act, s. 189. An arbitrator’s decision and order for costs may only be filed in the Provincial Court of British Columbia if the amount claimed or the value of the services or property involved is within the court’s monetary jurisdiction, and the decision is in respect of debt or damages, recovery of personal property, specific performance of an agreement relating to personal property or services, or relief from opposing claims for personal property.
  108. Court Order Enforcement Act, s. 86(2).
  109. The Owners, Strata Plan VIS 4534 v. Seedtree Water Utility Co. Ltd. et al., 2006 BCSC 73 at para 1. The actual amount of the judgment was $7,410.95.
  110. Strata Property Act, s. 99. For information about the general rule, see Chapter 26, Paying For Repairs.
  111. Strata Property Act, ss. 100(1) and 166(2).
  112. Strata Property Act, ss. 169 and 176.
  113. The Owners, Strata Plan VIS 4534 v. Seedtree Water Utility Co. Ltd. et al., 2006 BCSC 73.
  114. The Owners, Strata Plan VIS 4534 v. Seedtree Water Utility Co. Ltd. et al., 2006 BCSC 73 at paras. 3 to 6.
  115. Supreme Court Civil Rules, B.C. Reg. 168/2009, R. 14.
  116. Small Claims Rules, B.C. Reg. 261/93, R. 20(2) and Sch. A.
  117. Small Claims Rules, B.C. Reg. 261/93, R. 20(5), (6).
  118. “Ministry of Attorney General” online: Province of British Columbia, Ministry of Attorney General home page < http://www.gov.bc.ca/ag/> (last accessed 4 May 2010).