CRT Roundup—bylaw and rule enforcement, res judicata
May 25, 2017
BY Kevin Zakreski
Bylaw and rule enforcement: compliance with statutory procedure
In SM v The Owners, Strata Plan ABC, 2017 CRTBC 23, a strata lot owner asked for a $150 fine to be waived. The fine was “imposed following a May 2016 vandalism incident involving a member of the applicant’s family.”
The owner didn’t dispute “the nature and scope of the vandalism the strata alleges occurred in either April 2015 or May 2016.” “The only issue,” before the tribunal, “is that in its June 19, 2016 council minutes and June 21, 2016 letter, the strata stated that it had imposed fines while at the same time inviting the owner to respond.” This issue raised whether the strata corporation had complied with the procedure for enforcing a bylaw or a rule set out in section 135 of the Strata Property Act. The tribunal found that, similar to a strata corporation in an earlier court case, the tribunal had initially fallen afoul of section 135 but had ultimately managed to correct its error:
In my view, the strata’s June 21, 2016 letter stating fines had already been levied did not comply with section 135 of the SPA as required. The strata should have provided the owner with the opportunity to be heard before imposing the fines for the May 2016 incident.
However, in Cheung v. The Owners, Strata Plan VR1902, 2004 BCSC 1750, the court held that section 135 of the SPA is a procedural section. I agree. In that case, like here, the strata imposed fines before an opportunity to be heard was given. The strata in the Cheung case then reversed the fines, held a hearing, and then imposed fines. The court held that while section 135 was not initially complied with, the irregularity was rectified prior to the imposition of the fines ultimately imposed.
I find that the scenario in Cheung is essentially what has occurred in this case. Here, the strata sent a letter detailing the complaint and stated it had levied the fines. While the fines were not expressly reversed, the strata did not demand payment initially and instead invited the owner to make contact if she had any concerns. She did, and the hearing was held. After the hearing, the strata then stated it would impose the fines and at that point demanded payment. Like in Cheung, I find here the irregularity in the section 135 process was corrected by the time the strata sent its August 15, 2016 letter.
In the result, the applicant owner’s claims were dismissed.
Jurisdiction of the tribunal: res judicata
East Barriere Resort Ltd v The Owners, Strata Plan KAS1819, 2017 CRTBC 22, concerned “a jurisdiction issue that arose in the course of the facilitation process.” The underlying dispute involved the validity of some bylaw amendments adopted by the strata corporation. A group of owners had brought a petition against the strata corporation in the Supreme Court of British Columbia. That petition ultimately led to the court’s decision in East Barriere Resort Ltd v The Owners, Strata Plan KAS1819, 2016 BCSC 1609. (Update: After the tribunal released its decision, an appeal of this court decision was allowed by the court of appeal.)
The only issue in this tribunal decision was “whether the owners’ tribunal claim that the strata did not properly pass certain bylaws is res judicata because this issue or cause of action has already been determined in the court action.” As the tribunal noted, “[t]he day after the court order, the owners applied to the tribunal for dispute resolution, on the basis of claims which the strata says have already been decided in the court action.”
The positions of the parties fleshed out this jurisdictional dispute:
The strata argues that the owners are barred from bringing an application for dispute resolution to the tribunal, because the owner’s claim has already been dealt with through the court action. The strata requests that I dismiss the owners’ claim.
The owners argue that the basis for the invalidity of the 2002 bylaw amendments is different in the tribunal dispute than it was in the court action. The owners say the court was not asked to, and did not make, a declaration that the bylaws were valid. The owners say all the court considered and decided was whether the strata was required to conduct voting on the basis that some of the strata lots were residential and others were non-residential. They say that whether the strata lots are residential or nonresidential is res judicata. Whether the 2002 bylaw amendments are valid is not res judicata.
The tribunal began its analysis by setting out the leading BC cases and the tests for two types of res judicata: cause of action estoppel and issue estoppel. After applying both tests to the facts of this case, the tribunal found that that strata corporation had met the tests on both counts.
In the result, the tribunal “refuse[d] to resolve this dispute under section 11(1)(a) of the Act.”