BC Supreme Court considers first application to appeal CRT decision

11 May 2017

By Kevin Zakreski

There is no automatic right to appeal a decision in a strata-property case by the Civil Resolution Tribunal. If a party disagrees with the CRT’s decision, the party may only appeal to the supreme court if all the other parties consent or if the court grants leave to appeal. Appeals are only allowed on a “question of law arising out of the decision” and, in considering applications for leave, the legislation invites the court to bear in mind the following considerations:

  • whether an issue raised by the claim or dispute that is the subject of the appeal is of such importance that it would benefit from being resolved by the Supreme Court to establish a precedent;
  • whether an issue raised by the claim or dispute relates to the constitution or the Human Rights Code;
  • the importance of the issue to the parties, or to a class of persons of which one of the parties is a member;
  • the principle of proportionality.

In The Owners, Strata Plan BCS 1721 v Watson, 2017 BCSC 763, the court was asked to consider “the first application . . . seeking leave to appeal a decision of the Civil Resolution Tribunal.” Although the court had concerns about the proportionality of granting leave (“since the sums in question are small”), in the end it was “satisfied there is importance attached to the question whether the CRT member made [an] error of law in her analysis and that its resolution by the Supreme Court would establish a potentially helpful precedent for these types of cases before the CRT in the future.”

The case involved the application of a move-in/move-out fee provided for in the strata corporation’s bylaws to tenants of a strata-lot owner. The CRT member ruled in favor of the tenant, deciding that both the nature of the fee and the way it was applied in this case raised concerns:

At the end of day the CRT member hearing the case decided that the $100 moving fee applicable to any person moving into or out of the strata unit regardless of whether any furniture is moved was not reasonable and that the bylaw therefore contravened s. 6.9 of the Regulation under the Strata Property Act, S.B.C. 1998, c. 43.

She also held that it was “significantly unfair” within the meaning of s. 164(1) of the Strata Property Act for the Strata to wait two and a half years to levy the fees in question and then without notice deny access to the building as a mechanism to obtain payment.

The tribunal member therefore granted an order that the fees in question be repaid to the landlord unit owner and that notice of such payment be provided to Mr. Watson so that he could in turn obtain reimbursement from the landlord.

The court noted that it would apply a standard derived from case law on the Arbitration Act to guide its decision-making in this case:

The leave to appeal mechanism in this case is similar to the framework applicable to appeals under the Arbitration Act, R.S.B.C. 1996, c. 55, s. 31. One aspect of the test for leave under that Act is whether the question of law has “arguable merit”: see the discussion of the relevant cases in Greater Vancouver Sewage and Drainage District v. Wastech Services Ltd., 2016 BCSC 68  (CanLII), aff’d at 2016 BCCA 393 . That is the standard which I adopt for the purposes of this case.

In the court’s view, there was “arguable merit” in several of the respondent strata corporation’s arguments. First, on the standing of a tenant to challenge strata bylaws:

The argument by the Strata was that Mr. Watson is merely a tenant in the building and that he has no status to challenge the bylaws, which were duly enacted by the strata owners and to which he bound himself upon the commencement of his tenancy. The CRT member made reference to this issue in paragraph 24 of her reasons, but then failed to address it either later or at all. It is certainly arguable that it was an error of law on the part of the tribunal member to fail to address this possibly threshold question.

Second, on the matter of the flat fee:

The issue here is whether it was reasonable for the bylaw to impose a flat fee in a specified amount which was estimated to represent some or even all of the costs and other inconveniences, including wear-and-tear factors, on an overall basis or whether such a fee must be determined with reference to actual costs triggered by any particular move. What the arbitrator did, it appears, is determine that in Mr. Watson’s particular case, the fee was unreasonably high but she did not determine whether the approach used by the Strata, namely a general recoupment and defraying of expenses, was objectively reasonable.

It is therefore arguable that the tribunal member did not correctly apply the objectively reasonable test to the fee amount mandated in the bylaw, as opposed to the reasonableness of the fee in Mr. Watson’s particular circumstances.

Third, on the application of the test for significant unfairness, it was “arguable that the CRT member did not approach the analysis of this question in the manner required” by leading authorities such as Dollan v The Owners, Strata Plan BCS 1589, 2012 BCCA 44.

In the result, the court granted “leave for the appeal to be pursued on the questions of law that have been identified by the appellant.”

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