BC Supreme Court directs an assessment of strata corporation’s reasonable legal costs for remedying a contravention of its age bylaw
19 October 2018
By Kevin Zakreski
In The Owners, Strata Plan NWS3075 v Stevens, 2018 BCSC 1784, the BC Supreme Court considered a strata corporation’s request for an order that the respondent strata-lot owner “pay its actual legal fees, other fees and disbursements pursuant to s. 133 of the Strata Property Act.” Section 133 allows a strata corporation to “do what is reasonably necessary to remedy a contravention of its bylaws or rules.” The court granted the strata corporation its order, and referred the assessment of the amount of costs to be paid to a registrar of the court.
Stevens involved “a 63 unit residential complex called Central Heights Manor located in Abbotsford.” The strata corporation had an age bylaw, “requiring occupants to be 55 years or older.” The respondent “owns a unit in the complex and is under the age of 55.”
The case had a complicated procedural history, involving prior proceedings in the supreme court, the provincial court, and the Civil Resolution Tribunal. In this proceeding:
The Strata applies for a declaration that [the respondent] is in breach of an order granted following a petition hearing on July 13, 2017 (“Petition Order”), and is in contempt of court. It seeks orders that include, among other things, the forced sale of her unit, vacant possession and exclusive conduct of sale, and an order requiring her to pay its actual legal fees, other fees and disbursements pursuant to s. 133 of the Strata Property Act, S.B.C. 1998, c. 43 [SPA], as assessed and determined by the Registrar.
The requests for orders holding the respondent in contempt of court and for a forced sale were dismissed in short order. The bulk of the court’s reasons focused on the issue of recovering costs under section 133. As the court noted, the court of appeal had recently decided that actual legal costs may be recovered in connection with the strata corporation’s lien:
At the hearing the Strata’s only submission was it was entitled to recover its actual legal costs assessed as reasonable by a registrar, based upon The Owners, Strata Plan KAS 2428 v. Baettig, 2017 BCCA 377 (CanLII), a case decided after the Petition Order.
At issue in Baettig was the interpretation of section s. 118 of the SPA, which allows reasonable legal costs, certain fees and reasonable disbursements incurred in registering and enforcing a lien against an owner’s strata lot to be added to the amount owing to the strata corporation under the Certificate of Lien.
Do similar considerations apply under section 133, where the lien is not present? As the court observed:
s.133 does not require a debt action and is essentially silent on the procedure for recovery of the reasonable costs of remedying a contravention. Section 133(2) simply provides that a strata “may require” that those reasonable costs be paid by the person who may be fined for the (actual) contravention under section 130. In the absence of a power to impose a lien (ss. 116 and 118) or a fine (s. 130) for the costs of remedying a contravention, it appears the only way to “require” an owner to pay, is by “suing” or making an application pursuant to ss. 171(1) and 173(1).
Since the enactment of the SPA there appears to be some confusion, reflected in the pleadings and materials of the Strata here, about the relationship between “costs” pursuant s. 133 and Rule 14-1 of the Civil Rules, and the recovery of costs provided for in a strata bylaw.
In the court’s view, the legislative framework set out in the act does allow a strata corporation to recover its actual legal costs to remedy a contravention of its bylaws:
Here the Strata first sought recovery of its reasonable expenses including legal expenses relying upon s. 133, in its petition at the petition hearing. The Strata then asked for the same relief in its notice of application. In the meantime, the CRT refused to determine [the respondent’s] claim against the Strata related to the same or similar expenses.
The first question is: Does s. 173 allow for such an application? I am satisfied the answer is yes.
Section 173 expressly permits a strata to make applications for orders requiring an owner to perform a duty required by the SPA, the bylaws or the rules, as well as to stop contraventions of the same. Again, s. 133 allows a strata to require an owner to pay the reasonable costs of remedying a contravention. Although it is unclear if requiring an owner to pay gives rise to a “duty” under the SPA, it would be incongruous to impose upon a strata the burden of suing separately for the costs of remedying a contravention associated with an application to stop an owner from contravening, particularly in light of the purpose of s. 133 identified by Baettig. It is also significant that the Strata’s application was brought in a petition proceeding and the petition itself sought recovery of legal costs under the section.
This gives rise to a second question: Is the Strata’s application for s. 133 costs incurred as a result of the petition and the petition hearing properly before me? Because there is no indication s.133 costs or court costs were adjudicated at the petition hearing, again the answer is yes. Also, leaving aside the distinction between s. 133 costs, and court costs, requiring the parties to appear before Walker J. to address the issue of s. 133 costs for the petition hearing would increase litigation costs and cause inconvenience to both. Further, the Strata’s application for a reference to the registrar was not made at the petition hearing, based as it is upon Baettig, which, again, was decided subsequently.
In the result, the court “direct[ed] an assessment of the Strata’s reasonable costs of remedying the contravention of its bylaw(s) be held by a registrar.” Finally, the court also made the following comments on the reasonableness of the strata corporation’s claims:
To facilitate the efficiency of a registrar’s hearing and without intending to fetter the exercise of his or her discretion, I wish to comment on the question of reasonableness. Firstly, I regard proportionality as an important consideration in assessing whether and to what extent the Strata’s actual costs are reasonable. Reasonable costs include those necessary for the proper presentation of the case. The result or the degree of success achieved is also a factor. While the Strata was successful at the petition hearing, it was largely unsuccessful in its application before me. To be recoverable the actual costs claimed must fall within the scope of the “reasonable costs of remedying the contravention.” Significantly, the Strata did not establish [the respondent] had engaged in a further breach of the age bylaw. The other alleged breaches were of the Petition Order, not the by-laws, most of which I also dismissed along with the contempt application, and the application for a forced sale. In addition, I regard the Strata’s allegations that [the respondent] breached the Petition Order through her statements to the media or on social media, and its decision to obtain and rely upon the evidence of her [brother] as unreasonable. Further, I do not consider the actual costs incurred to prepare the Strata’s further written submissions requested twice, to be reasonable. Most were not responsive. Those that were should have been provided at the hearing.