Court finds strata-lot owners suffered “no prejudice” from arbitrators’ failure to advise them of the possibility of a mediated settlement
May 12, 2017
BY Kevin Zakreski
Hunt v The Owners, Strata Plan LMS 2556, 2017 BCSC 786, is the latest chapter in a dispute involving the proposed installation of a heating, air-conditioning, and ventilation system on a strata’s limited-common-property balcony. Although the HVAC system was never actually installed, the prospect of its approval by the strata council drove neighboring strata-lot owners to commence an arbitration proceeding against the strata corporation under part 10 of the Strata Property Act. This led to a stinging rebuke by the arbitration panel and an award of special costs against the owners by the BC Supreme Court.
In this case, the owners sought “judicial review of [the] arbitral award and related costs order.” The owners argued “the arbitration award and the costs award should be set aside on the basis of procedural unfairness, a reasonable apprehension of bias and noncompliance with ‘an important procedural provision of the Strata Property Act.’ ”
This provision is section 181, which the court considered in detail. Section 181 provides “[b]efore holding a hearing, the arbitrator must advise the parties of the possibility of a mediated settlement.”
While the evidence pointed to the arbitrators’ failure to “strictly” comply with section 181, the court concluded that the owners could not have the arbitration and costs awards set aside for this reason:
The arbitration process was pursued by the petitioners when they well knew that Mr. Pinette had not been given permission to install the HVAC equipment on floor 3. I agree with the respondent that the petitioners throughout the arbitration proceedings were opposed to a mediated compromise but I do not understand what a mediated compromise could have meant. There was nothing to compromise because Mr. Pinette did not have permission to install the HVAC. Nevertheless the petitioners insisted on arbitration.
I agree with the respondent that even though s. 181 of the Strata Property Act was not strictly complied with the petitioners have thereby suffered no prejudice. They were aware of mediation as a possible alternative. Even that alternative had an air of unreality. There was no dispute to mediate. It would be a triumph of form over substance to give effect to the petitioners’ complaint concerning s. 181.
In the result, the owners’ application for judicial review was “dismissed with costs.”