The underlying dispute “relates to a duplex strata property; a one-storey oceanfront building in Sooke, B.C.” As the CRT noted in its decision “the strata has operated informally without complying with the [Strata Property Act] and the applicable bylaws. In particular, there have been no regular strata council meetings, no regular annual general meetings, no strata fees collected, no contingency reserve fund, and no strata bank account.”

This method of governing the strata came to a head when the owners fell out over repairs and maintenance. This led to an application to the CRT, which ordered, among other things, that:

• McKnight pay for the repair of the seawall abutting her strata lot;
• McKnight remove Scotch Broom from her strata lot and not plant weeds without the consent of Bourque/Lloyd;
• the strata arrange for annual inspections of each strata residence and yard by a professional inspector who will set standards and make recommendations regarding the upkeep of the strata lots. Contractors must be retained to implement those recommendations within 30 days. Ms. McKnight must be consulted but her agreement is not required for the inspections or work to be performed;
• the strata become a member of the Condominium Home Owner’s Association (CHOA), with the owners to share the membership cost equally; and
• the parties may refer disputes to the CHOA and its decisions will be binding on the parties.

The last point in this list was amended two days after the final order was made. The amendment “included removal of reference to the CHOA’s binding decision making and instead stating the parties should follow the CHOA’s opinion if one is provided.”

Ms. McKnight subsequently applied to the supreme court, arguing that “the CRT member erred in law on the following grounds”:

• Contrary to the Civil Resolution Tribunal Act and the doctrine of functus officio, the CRT member made substantive amendments to a previously delivered and validated order;
• The CRT member exceeded her statutory authority and acted contrary to the doctrine of delegatus non potest delegare by delegating the CRT’s dispute resolution authority to the CHOA and ordering that the parties be bound by the CHOA’s decision making;
• The CRT member exceeded her statutory authority by ordering binding third party decision making by a professional inspector in the nature of, or exceeding, the powers of an administrator under the Strata Property Act, S.B.C 1998, c. 43, where the appointment of such an administrator is a power reserved exclusively for this Court;
• The CRT member misinterpreted the definition of “natural boundary” as it appears in the Land Act, R.S.B.C. 1996, c. 245, thereby incorrectly concluding that the seawall is within the bounds of the strata property and therefore the duty of the strata corporation to repair;
• The CRT member, while correctly stating the burden of proof, incorrectly applied it by shifting the burden to Ms. McKnight to prove the sufficiency of repairs and maintenance rather than requiring Bourque/Lloyd to prove the insufficiency;
• The CRT member erred in her finding of the evidentiary basis required for intervention in decisions of a strata corporation regarding repairs and maintenance;
• The CRT member incorrectly decided without legal foundation that Ms. McKnight must not allow various plant species on her strata lot, basing this decision on a finding that they blocked Bourque/Lloyd’s view from their own strata lot and that one such species is considered invasive by the Invasive Species Council of BC;
• The CRT member erred in applying an incorrect definition of “nuisance” as it appears in the Schedule of Standard Bylaws to the Strata Property Act in finding that the aesthetic appearance of a property may constitute a nuisance;
• The CRT member misapplied the legal standard for unreasonable interference in the use or enjoyment of property in regard to nuisance by applying the incorrect standard of “significant unfairness” as it applies to s. 164 of the Strata Property Act,
• The CRT member ordered the annual inspection of Ms. McKnight’s residence without finding a factual foundation that could support such an order; and
• The CRT member failed to exercise its gatekeeper function in accepting and relying upon Bourque/Lloyds’ realtor’s evidence as expert opinion evidence, contrary to the Civil Resolution Tribunal Rules.

The court began by setting out its framework for granting leave to appeal. It noted that, under section 56.5 of the Civil Resolution Tribunal Act, appeal may only “be brought on a question of law” and that “there must be a demonstration that leave is in the interests of justice and fairness.” On the latter point, the court may consider the following factors:

• 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.

These factors “are not exhaustive and the relevant factors may depend on the individual circumstances of a case.” Finally, the court made the following determination of the standard of review applicable to the CRT’s decision:

In terms of the standard of review, there is disagreement about whether the standard of review ought to be considered in this analysis and, if so, what it is. While the standard of review is clearly relevant to an assessment of the merits (Sattva at para. 75), in my view, given the absence of case law on the issue and its importance to the substance of the appeal, it would be better that the standard of review be determined by the judge in the appeal.

As a result, I will conduct the preliminary assessment of the merits of the appeal as though correctness were the standard of review, an approach favourable to the applicant. I recognize that this may tip the balance in favour of granting leave. However, given that the standard of review has not yet been decided, this is fairer.

The court found that five grounds met the tests it had formulated:

• whether the CRT was functus: “The variation [of the final decision two days after it was made] is clearly related to a key aspect of the appeal. This question appears to be one of specific importance to Ms. McKnight and of general importance given the CRT is still in its early stages and the scope of its authority is yet to be fully determined.”
• sub-delegation: “Given that the CRT member’s first order required the parties to submit to binding dispute resolution by CHOA respecting matters that might otherwise be decided by the CRT, it is at arguable that the rule against sub-delegation is engaged. I note also that no party has pointed me to a provision in the Act that might authorize sub-delegation. The question here is both of specific and general importance. In my view it would be in the interests of justice and fairness to grant leave to appeal on this issue.”
• appointing an administrator: “There are significant, long-term obligations potentially occasioned by the orders around inspections and following through on recommendations. Proportionality also favours granting leave to appeal.”
• test for nuisance: “In my view there is arguable merit to this ground. While administrative tribunals certainly may be entitled to adapt or even ignore common law rules when interpreting similar statutory terms, and the CRT member provided reasons for her departure, it is at least arguable that it is an error to include aesthetic appearance in the definition of nuisance. Further, a precedent from this court on this issue is potentially of considerable significance for strata property owners in general.”
• improper opinion evidence: “There is arguable merit to this ground. The realtor’s evidence appears to be mainly opinion evidence rather than evidence about experiences and observations. It is also arguable that it ought not to have been accepted as such except in accordance with the CRT Rules. While the admission of evidence is discretionary, particularly where, as here, the tribunal may accept evidence not admissible in a court (Act, s. 42(1), s. 38 expressly makes the tribunal’s discretion regarding procedure subject to the Rules.”

The court concluded by expressing “concern over the duplex deadlock between the parties in managing the affairs of the property.” But this concern was overridden by the “arguable merit to certain grounds raised.”

The post BC Supreme Court grants leave to appeal CRT decision in dispute over upkeep of duplex strata property first appeared on British Columbia Law Institute.

• 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.”

The post BC Supreme Court considers first application to appeal CRT decision first appeared on British Columbia Law Institute.

Responsibility for repairs to strata lot

Rawle v The Owners, Strata Plan NWS 3423, 2017 CRTBC 15, involved a dispute between a strata-lot owner and a strata corporation, which “arose because a fireplace exhaust pipe, also known as a flue, was found to be disconnected in the [strata lot’s] fireplace wall cavity. The owner says the smoke fumes from the fireplace vented into the wall space, causing severe damage.” The tribunal was asked to determine whether “the strata [was] responsible for any of the owner’s replacement costs for his fireplace and the surrounding wall area.”

Analysis of this issue led the tribunal to consider first “whether the wall cavity and the fireplace flue are common property, or as claimed by the [owner], limited common property.” Based on its reading of section 68 of the Strata Property Act, the tribunal determined that these items were common property. Since they were common property, they fell within the strata corporation’s repair-and-maintenance obligations.

Next, the tribunal spelled out the standard that the strata corporation was expected to meet in carrying out these obligations:

The strata is not an insurer. Courts have held that a strata is not held to a standard of perfection. Rather, it is required to act reasonably in its maintenance and repair obligations. If the strata’s contractors fail to carry out work effectively, the strata should not be found negligent if it acted reasonably in the circumstances. The strata has no liability to reimburse an owner for expenses that the owner incurs in carrying out repairs to their strata lot, which are the owner’s responsibility under the bylaws, unless the strata has been negligent in repairing and maintaining common property.

The tribunal found that the damage to the owner’s strata lot couldn’t be attributed to the strata corporation’s negligence. This finding turned to a large extent on the owner’s actions:

The problem with the owner’s approach is that having found the disconnected flue, he did not contact the strata to advise them of the cause until after he had arranged for the work to be done. In doing so, the strata was left with no opportunity to arrange for the flue reconnection themselves. Such an approach is not consistent with the strata’s bylaws. There is insufficient explanation before me as to why the owner could not have contacted the strata before starting the repair and replacement work.

In the result, the owner’s claim was dismissed.

Responsibility to repair and maintain common property: exterior walls and roofs

Oakley v The Owners, Strata Plan VIS 5481, 2017 CRTBC 17, involved a rather unusual strata property. The strata had been developed in four phases, which resulted in seven detached houses. But:

The strata plans registered for each of the 4 phases do not indicate that the strata is a bare land strata. The strata plans registered for each of the 4 phases do not have any notations with respect to the exterior boundaries of the strata lots. The strata plan of each phase depicts each building as a strata lot.

The owner asked the tribunal for an order “that each strata lot owner be responsible for the repair and maintenance of the exterior walls and roofs of their strata lot.” The owner argued such an order was justified by the nature of the strata and its longstanding practice “that to date the owners have repaired and maintained their own houses.”

The tribunal decided that the owner’s arguments couldn’t displace the clear wording of the act.

Section 68 defines the boundaries of a strata lot. Unless otherwise shown on a strata plan, the boundary between a strata lot and the common property is midway between the wall, floor or ceiling that faces the strata lot or common property. It is important to address whether the strata plan shows otherwise. I have reviewed the strata plans. . . . I find that section 68(1) of the SPA applies. The boundary between the strata lot and the common property, which surrounds all the buildings, is midway through the exterior wall of each detached strata building. The strata plan does not show otherwise. I find that the exterior walls and roofs of the strata lot buildings are common property.

Since the exterior walls and roofs are common property, the strata corporation is responsible for their repair and maintenance by virtue of section 72 of the act.

Strata council: composition and meetings

Clayton v Chantler et al, 2017 CRTBC 18, involved a claim by a strata-lot owner against three fellow owners, each of whom serve on the strata property’s council. The gist of the owner’s claim was “the council members, together with a 4th council member, conducted strata business at a strata council meeting without 5 council members present, when the strata’s bylaws state that there must be a minimum of 5 council members.”

The council members replied that “meeting was urgently required due to the unexpected January 15, 2016 resignation of the council’s president and given the materials that needed to be dealt with for the upcoming annual general meeting.”

The case involved interpretation of the strata corporation’s bylaws, which provided that the “council must have at least 5 and not more than 7 members.” The bylaws also contained a procedure that allowed remaining council members to replace a retiring member and provided that the quorum for a council meeting was “2, if the council consists of 2, 3 or 4 members.”

The tribunal summarized the issue and its resolution as follows:

The question arising here is what should the remaining 4 council members have done, when the strata council president resigned and the council members felt business needed to be done in preparation for the upcoming AGM. I pause to note that the applicant has not really provided an answer. The implication is that her view is that the council meeting should not have occurred until a 5th council member was present, even if that meant the AGM package could not be properly completed and delivered on time. For the reasons that follow, I do not consider such an approach to be reasonable or in the best interests of the strata owners.

***

I find the combined effect of the relevant SPA provisions and the strata’s bylaws is this. Faced with a council member’s resignation, the remaining council may continue to act with less than the minimum 5 members, until an annual or special general meeting is called to fill the vacancies on council.

In the result, the applicant owner’s claims were dismissed.

Collection of arrears of strata fees, special levies, and other charges

The bulk of this month’s decisions concerned collection of outstanding strata fees, special levies, other charges—or, in most of the following cases, some combination of these items. In each of the following five cases, the strata corporation was unopposed, as the owner in arrears didn’t make submissions before the tribunal. The resulting decisions, as the tribunal put it in one case, raised issues that “are relatively straightforward in principle” but occasionally complicated by “a significant amount of math calculation.”

The Owners, Strata Plan NW 1666 v Logan, 2017 CRTBC 13, The Owners, Strata Plan NW 1666 v Parsabad, 2017 CRTBC 14, The Owners, Strata Plan NW 1666 v William et al, 2017 CRTBC 16, each involved the same strata corporation seeking to collect arrears of strata fees and special-levy funds needed in connection with a re-piping project.

The Owners, Strata Plan LMS 921 v Otchere, 2017 CRTBC 20, concerned “a debt claim in a default judgment application where liability is assumed.” The Owners, Strata Plan NW 1512 v Yang, 2017 CRTBC 21, concerned amounts owning to the strata corporation for repairs to the owner’s balcony, proceeding again as “an application for default judgment, in which liability is assumed.”

Tribunal procedure: addition of strata as named respondent

Bourque et al v McKnight, 2017 CRTBC 19, was an interim procedural decision—that is, it wasn’t “the tribunal’s final decision as to the substance or merits of the dispute.”

The tribunal characterized the broader dispute as follows:

The Owners, Strata Plan VIS 2963 (strata) is a strata corporation with only 2 strata lots, Lot A and Lot B. A strata plan with only 2 strata lots is often called a duplex. The applicants, Joseph (Wayne) Bourque and Anne Lloyd, own Lot B. The respondent Wendy McKnight owns Lot A. Given the strata has only 2 council members (an owner from Lot B and the owner from Lot A), the parties here are effectively deadlocked.

“The procedural issue in this decision,” the tribunal noted “is the addition of the strata as a named respondent.” This was sought by the applicant because “[s]ome of the issues arising in the dispute relate to property that the strata, rather than an individual owner, has the obligation to repair and maintain.”

The tribunal decided to add the strata corporation as a named respondent, noting that “because both owners are on the strata council and together make up the entire strata, naming the strata is essentially a formality.”

The post CRT Roundup—responsibility for repairs, strata-council composition and meetings, collection of arrears, and tribunal procedure first appeared on British Columbia Law Institute.

In June, the Provincial Court’s jurisdiction for small claims cases will increase from disputes up to $25,000 to disputes up to $35,000. This change is accompanied by the announcement that the Civil Resolution Tribunal (CRT) will begin resolving small claims disputes up to $5,000.

In fact, the Government stated that “using the CRT will be mandatory for most claims up to $5,000”. This is expected to free up resources in Small Claims Court, which will allow the monetary limit to be raised. CRT chair Shannon Salter said the monetary threshold for small claims resolution through the CRT will likely increase gradually.

CRT’s Jurisdiction

As the Provincial Court of BC explained, not every type of claim under $5,000 will be under the authority of the CRT. The CRT will resolve issues of:

• debt or damages
• recovery of personal property
• opposing claims to personal property
• demanding performance of an agreement about personal property or services.

However, the following issues will not fall under CRT jurisdiction even if they are under $5,000:

• a claim for libel, slander or malicious prosecution
• a claim for or against the government
• a claim excluded from the authority of the CRT by regulations (there are no such exclusions now)
• a constitutional question (any question requiring notice under section 8 of the Constitutional Question Act)
• a question of whether there is a conflict between the Human Rights Code and another law.

Access to Justice

Attorney General and Minister of Justice Suzanne Anton called the changes “a giant step forward for access to justice” and said the new structure “will make it easier for British Columbians to resolve their legal disputes more affordably, and with less complexity”. The CRT has already been resolving strata disputes since July 2016.

The announcements are of interest to the BCLI, which is currently preparing a Study Paper on Financing Litigation.

The post Changes coming to Civil Resolution Tribunal and Small Claims Court first appeared on British Columbia Law Institute.

The CRT has been handling strata property disputes since last year. Last month, in a presentation to the Condominium Home Owners Association of BC, the CRT reported that since their online strata property tribunal was implemented in July 2016, their Solution Explorer has been visited over 3,700 times and they have received 216 applications for dispute resolution.

In a major new initiative, this year the CRT will start handling small claims disputes. In a recent interview with Legal Feeds, CRT chair Shannon Salter said that the online small claims dispute resolution system will likely begin with a lower threshold than the $25,000 limit which applies for small claims and gradually increase. The CRT has taken the following steps in order to implement this new service:

Beta version Solution Explorer for Small Claims

In December, the CRT launched a beta version of the Solution Explorer for small claims disputes. The Solution Explorer, which is already fully functional for strata disputes, is a self-help tool that allows users to find legal information specific to their issue.  The Solution Explorer asks users to answer several questions regarding their situation, before providing helpful information on how to resolve the problem.

Changes to the CRT Rules

In January, the CRT began public consultation on changes to the CRT Rules. The changes are meant to ensure that the Rules work for small claims disputes. Interested members of the public can read the draft changes to the CRT Rules.

The post An Update on the Civil Resolution Tribunal first appeared on British Columbia Law Institute.