Date Issued: May 3, 2017

File: ST-2016-00543

Civil Resolution Tribunal

Indexed as: East Barriere Resort Limited et al v. The Owners, Strata Plan KAS1819, 2017 BCCRT 22

BETWEEN :

East Barriere Resort Limited and Waterfront Development Corporation

APPLICANT

A ND :

The Owners, Strata Plan KAS1819

RESPONDENT

REASONS FOR DECISION
Tribunal Member:	Shannon Salter, Chair

INTRODUCTION

 

1)        This is a decision of the Civil Resolution Tribunal (tribunal) about a jurisdiction issue that arose in the course of the facilitation process. Only the evidence and submissions relevant to this issue is referenced below.

 

2)        The respondent, The Owners, Strata Plan KAS1819, is a bare land strata corporation consisting of 4 phases (strata). The applicants, East Barriere Resort Limited and Waterfront Development Corporation, are strata lot owners in phase 4 of the strata (owners).

 

3)        Several owners, including the applicant owners, brought a petition against the strata at the Supreme Court of British Columbia (the court action). The court’s decision in East Barriere Resort Limited v. The Owners, Strata Plan KAS1819, 2016 BCSC 1609, was issued on August 30, 2016 (the court decision). The court also issued an order, dated November 15, 2016 (the court order).

 

4)        The 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.

 

5)        In their application for dispute resolution to the tribunal, the owners claim that certain of the strata’s bylaws are invalid. The jurisdiction issue I must decide is whether this claim has already been judged and decided by the court. If it has, the tribunal may refuse to resolve the dispute. This legal concept is called res judicata, and this term is used in some of the court cases I reference below.

 

6)        For the reasons which follow, I find the owner’s claim in this dispute is res judicata. That is, I find that the court has already considered the same issue or cause of action, and the owners cannot bring substantially the same issue or cause of action to the tribunal for a fresh decision. The tribunal therefore refuses to resolve the owner’s dispute.

 

JURISDICTION AND PROCEDURE

 

7)        These are the formal written reasons of the tribunal. The tribunal has jurisdiction over strata property claims brought under section 3.6 of the Civil Resolution Tribunal Act (Act). Section 11(1)(a) of the Act provides that the tribunal has discretion to refuse to resolve a claim within its jurisdiction if the claim or the dispute has been resolved through a legally binding process or other dispute resolution process.

 

8)        The tribunal has discretion to decide the format of the hearing, including by writing, telephone, videoconferencing, email, or a combination of these. I decided to hear this dispute through written submissions because I find that there are no significant issues of credibility or other reasons requiring an oral hearing. Rather, this issue turns on the interpretation of legal principles.

 

9)        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.

 

ISSUE

 

10)     The issue is 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.

 

BACKGROUND AND EVIDENCE

 

11)     The background to this dispute is set out in the court decision at paragraphs 1 to 27. The parties do not contest these facts, and I adopt the court’s description of them.

 

12)     The following facts are relevant to the issue of res judicata. The strata is a bare land strata created in 1996. The strata includes 4 phases, which were registered in the Land Title Office between 1996 and 2014. The strata’s disclosure statements, combined with the municipality’s zoning requirements, created some confusion about whether certain phases were residential or non-residential under the Strata Property Act (SPA).

 

13)     In the court action, the owners and others were the petitioners. The strata was the respondent. The petitioners argued that the strata’s phases 1, 2, and 4 are non- residential. This would mean that under section 128 of the SPA, the strata should have held a separate three-quarter vote of the non-residential strata lots about bylaw amendments which it enacted in 2002 (the 2002 bylaw amendments). The petitioners argued the 2002 bylaw amendments, which included amendments to bylaws governing the use of a common property dock and prohibiting overnight anchoring, were therefore invalid. The petitioners made other arguments, which are not relevant to the issue in this decision.

 

14)     Among other things, the petitioners asked the court to declare that the lots in strata phases 1, 2, and 4 are not residential and those in phase 3 are residential. They also asked for a declaration that section 128 of SPA requires separate three-quarter majority votes for proposed bylaw amendments. (The court decision at paragraph 15.)

 

15)     At paragraph 48 of the court decision, the court dismissed the petitioners’ requests for these declarations. The court also wrote, “any argument that amendments to bylaws passed being invalid on the basis that separate votes under s.128 have not been carried out is rejected.”

 

16)     There are a number of orders in the court order. The fifth order is relevant to the issue in this dispute. It states, “the application for a declaration that amendments to bylaws made on June 30, 2002, October 10, 2009, October 8, 2011, and October 11, 2014, are invalid, is dismissed.” The court’s language in this order, describing the requested declaration, mirrors the petitioners’ wording in their amended petition, dated December 17, 2015.

 

17)     In the tribunal dispute, the owners presented new allegations that the strata did not follow the SPA in passing the 2002 bylaw amendments at its June 30, 2002 meeting. In particular, the owners say the strata did not properly pass bylaws 1 to 23, registered at the Land Title Office on August 6, 2002. The owners say the strata failed to:

 

•           convene an annual general meeting or special general meeting;

 

•           provide the exact wording of the proposed bylaws to owners; and

 

•           obtain a motion, seconder, and vote count to pass the bylaws.

 

18)     As a remedy, the owners request that the tribunal order the strata to cancel the 2002 bylaw amendments registered at the Land Title Office and pay it $10,000 plus costs.

 

POSITION OF THE PARTIES

 

19)     The parties made helpful, detailed submissions, supplemented by relevant caselaw, on the res judicata issue, which I have reviewed and considered.

 

20)     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.

 

21)     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.

 

22)     The owners say that for this reason, the claims before the tribunal and the court are different, and the tribunal has jurisdiction to hear the owners’ claim. The owners therefore ask that I find the tribunal has jurisdiction over their claim.

 

WHEN IS A CLAIM RES JUDICATA?

 

23)     The parties agree on the applicable caselaw on res judicata, much of which is cited below.

 

24)     Res judiciata can arise in two ways. The first is called cause of action estoppel, which stops someone from pursuing a matter that was or should have been the subject of a previous process. The second is called issue estoppel, which stops someone from raising an issue that has already been decided in another process. (Erschbamer v. Wallster, 2013 BCCA 76 at paragraph 12, quoted with approval in Tuokko v. Skulstad, 2016 BCSC 2200 at paragraph 16).

 

25)     The test for cause of action estoppel has 4 parts. Each part must be met:

 

a)     There must be a final decision of a court of competent jurisdiction in the prior action [the requirement of “finality”];

 

b)     The parties to the subsequent litigation must have been parties to or in privy with the parties to the prior action [the requirement of “mutuality”];

 

c)      The cause of action and the prior action must not be separate and distinct; and

 

d)     The basis of the cause of action and the subsequent action was argued or could have been argued in the prior action if the parties had exercised reasonable diligence.

 

[Emphasis in original.]

 

(Cliffs Over Maple Bay (Re), 2011 BCCA 180 at paragraph 28.)

 

26)     With respect to the third part of the test, it can be challenging for courts to determine whether the cause of action in the first and second process are separate and distinct. However, courts have been clear that no separate cause of action exists where a party changes the name of the wrong and the remedy sought, and claims separate legal bases, but the factual situation that would entitle someone to a remedy is the same in both proceedings. In other words, a party cannot relitigate issues simply by arguing different legal bases around the same factual situation. (Tuokko at paragraphs 37 and

38. See also Cliffs at paragraph 28 and Dowling v. Bhander, 2009 BCSC 1812 at paragraph 13).

 

27)     With respect to the fourth part of the test, the courts have confirmed that a party is required to raise all its arguments in the first proceeding. A party may not wait until the second proceeding to raise additional arguments, which could have been raised earlier with reasonable diligence. Cause of action estoppel applies to, “every point which properly belonged to the subject of the first litigation in which the parties, exercising reasonable diligence, might have brought forward at the time.” (Dowling at paragraph

13. See also, Tuokko at paragraph 39.)

 

28)     The test for issue estoppel has 3 parts. Each part must be met:

 

a)     The same question has been decided;

 

b)     The judicial decision deciding the question is final; and

 

c)      The parties or their privies were the same in the judicial decision and the subsequent proceeding.

 

(Tuokko at paragraph 45, citing Angle v. M.N.R, 1974 CanLII 168 (SCC) at paragraph 254. See also, Cliffs at paragraph 31.)

 

ANALYSIS

 

29)     In applying the test for cause of issue estoppel, there is no dispute that the first 2 parts of the test are met. The court decision was a final decision of a court of competent jurisdiction. The owners and strata were parties to the court action.

 

30)     Regarding the third part of the test, I have considered the owners’ argument that the tribunal dispute is a separate and distinct cause of action. However, the owners are seeking essentially the remedy in the tribunal dispute as they did in the court action; a finding that the 2002 bylaw amendments are invalid and resulting relief.

 

31)     Further, consistent with the court’s approach in Tuokko, I find that the factual situation that would entitle the owners to this remedy is the same in both proceedings; the strata’s conduct in enacting and registering the 2002 bylaw amendments.

 

32)     I agree with the owners that the legal bases for challenging the validity of the 2002 bylaw amendments are different in the tribunal dispute and the court action. However, a party cannot relitigate issues simply by arguing different legal bases around the same factual situation. (Tuokko, paragraphs 37 and 38.)

 

33)     For these reasons, I find that the causes of action in the court action and the tribunal dispute are not separate and distinct with respect to the 2002 bylaw amendments. The third part of the test for cause of action estoppel is therefore met.

 

34)     I find that the fourth part of the test is also met. The owners have not explained why they did not, or could not, raise their additional legal bases for challenging the 2002 bylaw amendments during the court action. The owners are not permitted to wait until the tribunal dispute to raise additional arguments which could have been raised in the court action with reasonable diligence. (Dowling at paragraph 13 and Tuokko at paragraph 39.)

 

35)     There are good policy reasons for requiring parties to raise all their arguments during the same proceeding. If there were no such rule, a party could strategically “hold on” to certain arguments and save them for subsequent proceedings, in case the party is unsuccessful in the first proceeding.

 

36)     This would strain the court’s or tribunal’s resources, and increase the time and expense for other participants. It would also deprive the other parties of finality in resolving their dispute. These outcomes would significantly hurt the public’s confidence in the administration of justice.

 

37)     In considering the parties’ arguments, and the evidence before me, I find, on the balance of probabilities, that the test for cause of action estoppel is met in this case. The tribunal dispute is therefore res judicata.

 

38)     I find that issue estoppel also applies to the owner’s dispute. There is no disagreement that the first two parts of the test for issue estoppel are met. The owners and the strata were parties to the court action, and that the court decision is a final judicial decision. With respect to the third part of the test, I agree with the strata that the issue in both proceedings is the same, namely whether the 2002 bylaw amendments are valid. For this reason, the test for issue estoppel is met in this case, and the owners’ tribunal dispute is res judicata on this basis as well.

 

39)     A decision-maker may have a residual discretion not to apply the doctrine of res judicata in special circumstances. Section 11(1)(a) of the Act is discretionary, and so it is necessary to consider whether there are any special circumstances in this case. Special circumstances may arise, for example, where there are issues of fraud, misconduct, fresh evidence, or overriding fairness concerns (Tuokko at paragraph 51). However, the owners have not presented evidence that any of these special circumstances apply in this case.

 

40)     I find that the owners’ dispute is res judiciata, and the tribunal therefore refuses to resolve this dispute under section 11(1)(a) of the Act.

 

DECISION AND ORDERS

 

41)     For the reasons set out above, the tribunal refuses to resolve this dispute under section 11(1)(a) of the Act.

 

42)     Under section 49 of the Act, and tribunal rules 14 and 15, the tribunal will generally order an unsuccessful party to reimburse a successful party for tribunal fees and reasonable expenses related to the dispute resolution process. The strata was successful in this dispute. The strata asked for “costs” in its submissions, however, it did not pay any tribunal fees in this dispute. It also did not identify any reasonable expenses for which it requests to be reimbursed. For this reason, I make no order on the reimbursement of fees or expenses.