Date Issued: April 17, 2019

File: SC-2018-002297

Type: Small Claims

Civil Resolution Tribunal

Indexed as: Zeng v. The Owners, Strata Plan LMS 2060 et al, 2019 BCCRT 471

Between:

Xiaohong Zeng

Applicant

And:

The Owners, Strata Plan LMS 2060 and Iris Michaan

 

Respondents

And:

Christopher Kar Wah Ho

 

Respondent by third party notice

REASONS FOR DECISION
Tribunal Member:	Shelley Lopez, Vice Chair

INTRODUCTION

1.      In June 2015, the respondent Iris Michaan sold the applicant Xiaohong Zeng strata lot 4 (unit 104) in the respondent strata corporation, The Owners, Strata Plan LMS 2060 (strata). The strata is a small 5-unit complex in Vancouver, with 4 residential units and 1 ground-floor commercial unit. All strata lot owners sat on the strata council.

2.      This small claims dispute is about $3,250 in fines the Provincial Court imposed against the strata in September 2015, relating to unauthorized rooftop decks and attic alterations connected to residential units 103 and 104. Due to the complexity of the facts, I have provided more detail in the introduction here than I ordinarily would.

3.      The third party respondent Christopher Kar Wah Ho was the strata council president in 2014 and at least through early 2015, and is the former owner of unit 103. Mr. Ho says he sold unit 103 in February 2016.

4.      The court’s fines related to the City of Vancouver’s (City) prosecution of bylaw offences in 2014 and 2015 against the strata and against Ms. Michaan and Mr. Ho. The fines followed guilty pleas by Ms. Michaan and Mr. Ho, as well as a separate guilty plea on behalf of the strata. The strata says Mr. Ho improperly pled guilty for the strata, which he denies. Mr. Ho says he pled guilty only to the charge against him and paid his own $1,750 fine.

5.      In July 2017, the City sent the strata a collections letter about the $3,250 in fines against it. The strata says it was previously unaware of the fine against it, and paid it. At that point, Ms. Michaan and Mr. Ho no longer owned units 104 and 103. The strata says that 4 out of the 5 strata lot owners decided in August 2017 at a strata council meeting that the owners of units 103 and 104 should each pay half of the strata’s $3,250 fine, namely $1,625 each. The new owner of unit 103, not a party to this dispute, paid $1,625. Ms. Zeng was the holdout, but she paid the $1,625 “charged” to her under protest because the strata refused to give her a Form B otherwise. Ms. Zeng filed this dispute to recover the $1,625 from the seller Ms. Michaan and/or the strata.

6.      In its third party claim against Mr. Ho, the strata says it wants Ms. Michaan and Mr. Ho to each pay it $1,625. The strata alleges Ms. Michaan and Mr. Ho colluded to hide the City’s fine notices and order and pled guilty on the strata’s behalf without authorization. Mr. Ho denies this. I note that given the nature of the strata’s third party claim, at most the strata would be relieved from paying any award to Ms. Zeng, to the extent the strata proves Mr. Ho is liable for any successful claim by Ms. Zeng against the strata. The strata did not file a claim against Ms. Zeng or Ms. Michaan, so the strata cannot get a remedy from them.

7.      Ms. Zeng is self-represented. The strata is represented by Margaret Paul, a strata council member. Ms. Michaan and Mr. Ho are each self-represented.

JURISDICTION AND PROCEDURE

8.      These are the formal written reasons of the Civil Resolution Tribunal (tribunal). The tribunal has jurisdiction over small claims brought under section 118 of the Civil Resolution Tribunal Act (Act). The tribunal’s mandate is to provide dispute resolution services accessibly, quickly, economically, informally, and flexibly. In resolving disputes, the tribunal must apply principles of law and fairness, and recognize any relationships between parties to a dispute that will likely continue after the dispute resolution process has ended.

9.      The tribunal has discretion to decide the format of the hearing, including by writing, telephone, videoconferencing, email, or a combination of these. Some of the evidence in this dispute amounts to a “she said, she said” scenario. Credibility of interested witnesses, particularly where there is conflict, cannot be determined solely by the test of whose personal demeanour in a courtroom or tribunal proceeding appears to be the most truthful. The assessment of what is the most likely account depends on its harmony with the rest of the evidence. In the circumstances here, I find that I am properly able to assess and weigh the documentary evidence and submissions before me. Further, bearing in mind the tribunal’s mandate that includes proportionality and a speedy resolution of disputes, I find that an oral hearing is not necessary. I also note that in Yas v. Pope, 2018 BCSC 282 at paragraphs 32 to 38, the BC Supreme Court recognized the tribunal’s process and found that oral hearings are not necessarily required where credibility is in issue.

10.   The tribunal may accept as evidence information that it considers relevant, necessary and appropriate, whether or not the information would be admissible in a court of law. The tribunal may also ask questions of the parties and witnesses and inform itself in any other way it considers appropriate.

11.   Under tribunal rule 126, in resolving this dispute the tribunal may: order a party to do or stop doing something, order a party to pay money, or order any other terms or conditions the tribunal considers appropriate.

ISSUE

12.   The issue in this dispute is who is responsible for paying the strata’s Provincial Court fine of $3,250 relating to the City of Vancouver’s prosecution about unauthorized alterations in units 103 and 104.

EVIDENCE AND ANALYSIS

13.   In a civil claim such as this, the applicant bears the burden of proof, on a balance of probabilities. This means Ms. Zeng must prove her claims and the strata must prove its third party claims against Mr. Ho. I have only referenced the evidence and submissions as necessary to give context to my decision.

14.   As referenced above, the background is somewhat confusing and the evidence before me is limited. I will first set out a brief chronology.

15.   On September 17, 2014, the City sent an Order to the strata “c/o” Ms. Michaan in unit 104, but also addressed to the owners of the 4 strata lots. The City’s Order in part required the strata to provide access to all building areas on October 23, 2014.

16.   The strata did not provide the City the required access on October 23, 2014, which is not disputed. This is confirmed by the September 2015 conviction in Provincial Court to that effect, detailed below.

17.   On April 15, 2015, the court issued a “Summons to a Person Charged With an Offence” to the strata, “c/o” unit 104. At that time, Ms. Michaan owned unit 104, and had started the process of selling it to Ms. Zeng. The summons set out 6 counts, which I have summarized below. I note the strata submitted this document and said it was sent to the owner of unit 103 (either Mr. Ho his purchaser), but as noted above, it is clearly addressed to unit 104.

18.   A court document titled “Conviction – Imposition of Fine” shows that on September 23, 2015 the “defendant” Mr. Ho was convicted by the Provincial Court and fined under the Vancouver Building Bylaw. The document is “Re: Ho” and there is no mention of the strata being the accused in it. In this document, the sentence was 4 separate fines totaling $3,250 relating to 4 separate counts for offences occurring on October 23, 2014, as follows:

a.    Count 1: failed to comply with an order, direction or notice, fine of $1,000.

b.    Count 3: used land/building without a valid development permit, fine of $750.

c.    Count 5: failed to allow an official/person enter the building, fine of $750.

d.    Count 6: caused/allowed/maintained an unsafe condition, fine of $750.

19.   An entirely separate “Conviction of Imposition of Fine” document shows that on September 23, 2015, the “defendant” strata was convicted of the same counts 1,3, 5, and 6 and fined a total of $3,250. There is no indication on this document of who pled guilty on the strata’s behalf, but I note the sentence was made on the same day as Mr. Ho’s.

20.   However, other court documents, each titled “Pleas and Findings”, show a different fine schedule, broken down as follows between Ms. Michaan, Mr. Ho, and the strata. First, the “accused” Ms. Michaan was sentenced to a $500 fine, for count 4 only, after a May 10, 2016 guilty plea. Ms. Michaan provided a copy of a court receipt showing she paid $500 by cheque on May 10, 2016. The “accused” Mr. Ho was on September 15, 2015 found guilty after a guilty plea on counts 1,3,5 and 6 only, with a total fine of $1,750. Mr. Ho says he paid this amount directly to the court, and there is no evidence to the contrary. Finally, of particular significance here, the “accused” strata pled guilty on September 15, 2015 to counts 1,3,5,6, and was also fined $1,750. As with the “Conviction of Imposition of Fine” document, this document does not say who pled guilty on the strata’s behalf, but as noted the sentence was on the same day as Mr. Ho’s appearance. There is no explanation for why this document shows the strata was fined $1,750 and the later September 23, 2015 document shows $3,250. That said, it is clear the City proceeded to collect $3,250 from the strata in July 2017, and the strata paid that amount shortly thereafter.

21.   On August 24, 2017, the strata held a strata council meeting at which it says all owners were presented with the City’s outstanding order and the $3,250 fine notice. The strata says all owners, except Ms. Zeng, agreed that the fine and any subsequent fines for units 103 and 104 would be ‘directed to the respective units”. The strata admits that it told Ms. Zeng that a Form B would not be issued until all fines were paid. At this point, Mr. Ho was no longer the owner of unit 103. His purchaser paid the strata $1,625 as requested, for unit 103.

22.   On November 1, 2017, the strata issued an invoice to Ms. Zeng for $1,625, for “Unit #104 portion of City fine”. It is undisputed that on November 8, 2017 Ms. Zeng paid this amount, noting on her cheque that she was “forced to pay”.

23.   Ms. Zeng argues that by November 2017, the strata was out of time to collect on the $3,250 fine. That may have been the case had the strata had to sue Ms. Zeng in court to collect after November 2015, but that is not what happened. Ms. Zeng paid the debt, admittedly under protest, so there is no limitation defence to consider here. I also note the strata’s argument that it was not aware of the Order until July 2017, and so on that basis the strata’s collection effort would not be out of time.

Ms. Zeng’s claim against Ms. Michaan and the strata

24.   I turn then to Ms. Zeng’s claim that she should not have had to pay the $1,625. I agree, and my reasons follow.

25.   The strata imposed its court-ordered $3,250 in fines against units 103 and 104 in September 2015. This was after Ms. Michaan had sold unit 104 to Ms. Zeng in June 2015.

26.   Through the tribunal facilitator, I asked for the contract of sale between Ms. Michaan and Ms. Zeng. Ms. Michaan provided the statement of adjustments and order to pay and the registration of title. There is nothing in the documents provided that would indicate Ms. Michaan agreed to pay for any portion of the strata’s fines relating to the 2015 guilty plea. As noted, Ms. Michaan paid for the fines against her and her own strata lot, unit 104.

27.   There is insufficient evidence that Ms. Michaan had anything to do with the guilty plea entered on the strata’s behalf on September 15, 2015. Rather, the strata’s argument is that Mr. Ho improperly pled guilty for the strata. The strata’s argument against Ms. Michaan is that she is responsible for the City’s fines given her unit was one that had alterations, but as noted the strata did not file any claim against Ms. Michaan.

28.   Through the tribunal facilitator, I invited the parties’ submissions about the strata’s authority to charge-back the fine expense to individual owners.

29.   Given the evidence before me, I find the strata should have borne the $3,250 expense, to ultimately be shared among all current owners according to its bylaws and the Strata Property Act (SPA). I say this because as noted there is nothing in the strata’s bylaws that permit a charge-back of a strata debt to specific individual strata lots, regardless of whether most of the owners decided to do so (see Ward v. The Owners, Strata Plan VIS #1165, 2011 BCCA 512).

30.   In particular, it is undisputed that the strata’s bylaws are the Schedule of Standard Bylaws under the SPA, given the transitional provisions of the SPA effective January 1, 2002. As conceded by the strata, there is nothing in the applicable bylaws that allows the strata to charge-back an owner for fines issued against the strata. The strata relies on the meeting it held in which it says all owners voted to hold units 103 and 104 responsible.

31.   However, the strata acknowledges that the owners’ decision at the August 2017 council meeting was not a general meeting. It says Ms. Zeng refused to attend a general meeting so it held an “all owners” meeting instead. Given section 108 of the SPA, a vote at a strata council meeting does not meet the requirements of a general meeting at which the strata could levy funds. Quite apart from the absence of a bylaw permitting a charge-back, the failure to call the appropriate meeting means the strata to date has not properly issued levies against any owners, let alone just units 103 and 104. If the strata wants to levy funds other than as provided in sections 99, 100 or 195 of the SPA, it has to be by unanimous vote at a general meeting. As noted, Ms. Zeng did not agree that units 103 and 104 should be alone responsible for the strata’s fine, and so the vote was never unanimous.

32.   In summary, even if the strata had held a proper meeting and vote as provided for under the SPA, the strata did not have the authority under its bylaws to charge-back the $3,250 fine against only units 103 and 104. In 2017, I find the strata’s only option was to pay the fine expense out of its operating budget (if there was a legal expenses budget to permit this) or allocate it as a contingency reserve fund expense to be ultimately borne by the then current owners, which for unit 104 meant Ms. Zeng, not Ms. Michaan.

33.   I note Ms. Michaan’s evidence that she and Ms. Zeng shared a “rooftop addendum” on May 4, 2015, before the sale completed on June 30, 2015, but this is not in evidence before me. I find I do not need the addendum nor do I need to deal with the other defences raised by Ms. Michaan, given my conclusion above. Nonetheless, I will say that I find there is insufficient evidence that Ms. Michaan hid any notices or orders from the strata and Ms. Zeng has not proved Ms. Michaan concealed the strata’s fine from her. I dismiss Ms. Zeng’s claim against Ms. Michaan.

34.   I find Ms. Zeng is entitled to reimbursement of the $1,625 from the strata. She is entitled to pre-judgment interest on this sum under the Court Order Interest Act (COIA), from November 8, 2017.

35.   As this is a small claims dispute, rather than under the tribunal’s strata property jurisdiction, I make no order about the strata reimbursing Mr. Ho’s purchaser for the $1,625 she paid. Again, that purchaser is not a party to this dispute. However, given the tribunal’s mandate that includes being mindful of parties’ ongoing relationships, I suggest the strata consider its obligations in this respect. Nothing in this decision prevents the strata from taking proper steps under the SPA to charge all current owners for their respective share of the $3,250 strata fine expense.

The strata’s third party claim against Mr. Ho

36.   Given the nature of a third party claim, which the strata filed against Mr. Ho only, the strata’s only claim can be that Mr. Ho should be responsible for the $1,625 I have ordered the strata to pay Ms. Zeng. The strata cannot get an award of $3,250 payable to it, as requested. In any event, I have already addressed Ms. Michaan’s liability above.

37.   Thus, the substantive allegation here is that Mr. Ho improperly pled guilty on the strata’s behalf and therefore exposed it to paying the $3,250 fine for alterations in units 103 and 104. The strata says therefore Mr. Ho should pay for the strata’s share of the fine, saying also that he improperly hid the City’s notice and Order.

38.   On balance, for the purposes of this dispute I find the most likely scenario is that the court’s entry of a guilty plea for the strata was based on Mr. Ho’s attendance. He was the strata council president. However, given that a separate guilty plea was entered the same day for Mr. Ho personally on the same counts, I find the strata has not proven that Mr. Ho intentionally pled guilty on the strata’s behalf knowingly without authorization from the strata council.

39.   In other words, I find the strata has not established that Mr. Ho acted without proper authority such that he must be held personally liable. I find the strata has not proved Mr. Ho breached the standard of care to act honestly and in good faith and in the strata’s best interests, as required in section 31 of the SPA.

40.   Section 22 of the bylaws says a council member is not personally liable if they acted honestly and in good faith in the course of exercising powers as a strata council member. I find the strata has not proved Mr. Ho should be held personally liable for the strata’s fine. As he no longer owned unit 103 at the time the strata imposed the fine against units 103 and 104, Mr. Ho is not responsible for unit 103’s share of the strata’s fine, based on unit entitlement or otherwise.

41.   Further, there is insufficient evidence before me that the strata would not have been found guilty in any event, even if Mr. Ho had not (unintentionally) pled guilty on the strata’s behalf. As noted above, the strata had no charge-back bylaw in place at the time, and so the strata would have to bear the expense regardless.

42.   Given my conclusion above, I find the strata’s third party claim against Mr. Ho must be dismissed.

Tribunal fees and dispute-related expenses

43.   Ms. Zeng was successful in her claim against the strata. In accordance with the Act and the tribunal’s rules, I find the strata must reimburse Ms. Zeng $11.34 for serving the Dispute Notice by registered mail. Ms. Zeng did not pay tribunal fees so I make no order about them. Ms. Michaan did not claim fees or expenses.

44.   As the strata was unsuccessful in its third party claim against Mr. Ho, I find it is not entitled to reimbursement of fees or expenses. Mr. Ho did not claim fees or expenses.

ORDERS

45.   Within 14 days of this decision, I order the strata to pay Ms. Zeng a total of $1,668.86, broken down as follows:

a.    $1,625 in debt,

b.    $32.52 in pre-judgment interest under the COIA, and

c.    $11.34 in dispute-related expenses.

46.   Ms. Zeng is entitled to post-judgment interest, as applicable.

47.   The parties’ remaining claims are all dismissed.

48.   Under section 48 of the Act, the tribunal will not provide the parties with the Order giving final effect to this decision until the time for making a notice of objection under section 56.1(2) has expired and no notice of objection has been made. The time for filing a notice of objection is 28 days after the party receives notice of the tribunal’s final decision.

49.   Under section 58.1 of the Act, a validated copy of the tribunal’s order can be enforced through the Provincial Court of British Columbia. A tribunal order can only be enforced if it is an approved consent resolution order, or, if no objection has been made and the time for filing a notice of objection has passed. Once filed, a tribunal order has the same force and effect as an order of the Provincial Court of British Columbia.