Date Issued: July 25, 2018
File: ST-2017-004890
Type: Strata
Civil Resolution Tribunal
Indexed as: Leidl v. The Owners, Strata LMS 1755, 2018 BCCRT 371
Between:
Patricia Leidl
Applicant
And:
The Owners, Strata Plan LMS 1755
Respondent
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REASONS FOR DECISION |
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Tribunal Member: |
James Posynick |
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INTRODUCTION
1. The applicant is the former owner of a strata lot in the respondent strata corporation (the ‘strata’).
2. The applicant was an owner when the Dispute Notice was issued on September 13, 2017 and sold her strata lot on January 16th, 2018.
3. The applicant seeks a refund of legal fees and disbursements incurred by the respondent to place a lien on her strata lot and commence enforcement proceedings as a result of the non-payment of strata fees.
JURISDICTION AND PROCEDURE
4. These are the formal written reasons of the Civil Resolution Tribunal (tribunal). The tribunal has jurisdiction over strata property claims brought under section 3.6 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.
5. 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 that might require an oral hearing.
6. 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.
7. The applicable tribunal rules are those that were in place at the time this dispute was commenced.
8. Under section 48.1 of the Act and the tribunal rules, in resolving this dispute the tribunal may make order a party to do or stop doing something, order a party to pay money, order any other terms or conditions the tribunal considers appropriate.
ISSUES
9. The issues in this dispute are:
a. Does the Tribunal have jurisdiction to decide this matter given the applicant’s change in ownership status?
b. Does the Tribunal have jurisdiction in relation to the Certificates of Lien and to determine legal costs arising out of the lien proceedings?
c. Did the respondent comply with the notice requirements in the Act for the collection of money from the applicant?
d. Is the owner entitled to reimbursement of legal and other costs related to the filing and removal of the Certificate of Lien.
BACKGROUND AND EVIDENCE
10. I have considered all of the evidence presented by both parties but will comment only upon the evidence which I find relevant to the issues in question.
11. The applicant purchased a unit in the strata in October, 2015 and rented it out while she resided at a different, Nicola Street address outside the strata plan. She gave the Nicola street address to the strata for the purpose of receiving notices in accordance with a strata bylaw adopted in February of 2015.
12. The applicant’s tenant moved out of the strata lot on October 1st, 2016 so the applicant planned to move into it in November. On October 6th, 2016, a friend of the applicant send an email to the strata agent advising of the applicant’s November 12th, move-in date. The email also discussed arrangements made to pick-up keys to the unit and inquired about future ‘upgrades’. The agent responded with information about renovations and gave notice of her absence on vacation October 8th to the 17th.
13. On November 9th, 2016, 3 days before the scheduled move-in, the applicant sent an email to the agent’s employee, the ‘Rental Property Manager/Strata Agent’, confirming the move-in. The employee responded on November 10th stating “Appreciate your notice”. The applicant received the keys to the strata lot from the strata president and moved-in on November 12th, 2016. On November 12th, 2016, the applicant sent an email to the agent inquiring about how to set up a monthly debit to pay strata fees from her account. The agent forwarded her inquiry to her ‘accounting department’ and the debit forms were emailed to her. She completed the form but did not return it. As a consequence, her strata fees were unpaid from October 2016 through January, 2017.
14. The respondent says ‘reasonable steps’ were taken to inform the applicant of the outstanding fees by sending ‘monthly statements’ to the Nicola Street address the applicant provided in October 2015. On January 13, 2017, the respondent sent a letter to the same address advising of the strata’s intention to file a Certificate of Lien against title unless she paid 4 months of strata fee arrears within 14 days. Since the applicant no longer lived at that address, the arrears were not paid and a lien was filed by the agent on February 28, 2017 in the sum of $1,284.50 plus allowable costs. The same day the strata sent to the Nicola Street address, by regular mail, a request for payment of strata fees in the sum of $1,284.80 plus lien registration and removal charges of $500.00, for a total of $1,784.80.
15. In June of 2017 the strata retained a lawyer to demand payment of strata fees which continued to accrue and remained unpaid. On Saturday July 22nd, 2017, the applicant was served with a Petition for Sale of her unit, at her strata unit. She contacted the agent and said she was unaware the strata fees were not being debited automatically from her bank account. She told the agent she did not receive the statements from the strata, the lien nor the demand for payment from the lawyer and only learned of the arrears when she was served on July 22nd.
16. Since the applicant found a buyer for her strata lot and the transaction could not close without clearing the lien from title, the applicant’s unit was sold on January 16th 2018 on condition of payment of the outstanding ‘arrears’, namely the remaining legal fees, in the sum of $4,805.19, to the strata.
POSITION OF THE PARTIES
17. The applicant says the respondent has not complied with the notice requirements in the Strata Property Act (SPA) because, on several occasions, she communicated her change of residency to the strata and the agent. As a result the respondent should have sent or delivered notices in relation to the arrears and lien to her at her strata lot and the need for any debt collection action would have been avoided entirely. She acknowledges her responsibility for failing to complete setting-up the auto-debit that resulted in the non-payment of strata fees but attributes the error to a lapse of memory related to a workplace disability. She asks for reimbursement of lien fees in the sum of $500, legal fees incurred by the strata in the Petition for Sale proceedings and reimbursement of CRT fees.
18. The respondent says the notices were sent to the applicant’s Nicola Street address because it was the address she gave to the strata when it was purchased in 2015 and, further the applicant was ‘solely’ responsible for notifying the strata of her change of address and she did not do so. As a result the strata sent its notices in accordance with section 61(1)(a) of the SPA and followed the debt collection procedures set out in sections 112 (notice of money owed to the strata), 116 (registering a lien) and 117 (forcing sale to collect money owed to the strata) of the SPA.
19. Finally, the respondent says s. 3.6 (2) (f) of the Act specifically prohibits the tribunal from dealing with claims relating to an interest in land, pointing out that the matter is (or was) already before the Supreme Court of British Columbia. The respondent asks for the dismissal of both of the applicant’s claims.
ANALYSIS
Does the Tribunal have jurisdiction to decide this matter given the applicant’s change in ownership status after the Dispute Notice was filed?
20. The Act, the tribunal rules and the SPA are silent as to whether a change in ownership status affects the tribunal’s jurisdiction. In Kervin v. The Owners, Strata Plan LMS 3011, 2017 BCCRT 146, the tribunal decided it had jurisdiction to dismiss, refuse to hear or continue to hear a dispute. In reaching that decision, the tribunal cited several factors for consideration including:
a. Whether all of the parties to the claim or dispute agree that the claim or dispute should be resolved by the tribunal;
b. Whether an issue raised by the claim or dispute is of importance to persons other than the parties to the dispute;
c. The stage in the tribunal proceeding at which the applicant ceases to be an owner;
d. The relative prejudice to the parties of the tribunal’s potential order;
e. The effect of continuing the proceeding on the tribunal’s resources and mandate.
21. Although I am not bound by the latter decision, I adopt the latter factors as a reasonable, if non-exclusive, means of assessing whether the tribunal ought to exercise its jurisdiction in individual cases. Applying the factors in this case, I find:
a. While there is disagreement about whether the tribunal has jurisdiction to hear this matter, the respondent’s argument focused on the nature of the claim rather than the tribunal’s discretion to hear it.
b. The issue raised in this claim is of importance to other persons, namely other owners because of the consequences to their strata fees and the strata council because of its express obligation under section 31 of the SPA to exercise a reasonable standard of care.
c. The dispute process was well underway by the time the applicant’s status changed.
d. If the dispute is dismissed the applicant will be significantly prejudiced by having to commence a court action against the respondent to recover the disputed sum of money.
e. The dispute in this case is over a relatively small sum of money and ought to be resolved, as contemplated under section 2 of the Act, in a speedy, economical, informal and flexible fashion.
22. I have also considered the principles of law and fairness as set out in section 2. Since this case involves the requirement for the strata council to give notice to owners before taking action to collect a debt, it is particularly appropriate that this tribunal resolve the question of whether notice was given in a procedurally fair manner.
23. After considering all of the factors, I find the applicant’s dispute ought to continue to be heard by this tribunal.
Does the Tribunal have jurisdiction in relation to the Certificates of Lien and to determine legal costs arising out of the lien proceedings?
24. The respondent argues this tribunal does not have jurisdiction to deal with claims relating to an interest in land, citing section 3.6(2)(f) of the Act which prohibits the tribunal from dealing with forced sale proceedings taken in the Supreme Court of British Columbia. However the applicant’s claim does not concern those proceedings. The claim is for the repayment of money paid to the strata for legal fees and expenses that, the applicant says, resulted from the respondent’s failure to serve notice of a debt in accordance with section 112(1) of the SPA. In other words: the applicant’s claim falls squarely within the jurisdiction of this tribunal under section 3.6(1)(d) of the Act. It is a claim concerning ‘money owing’, or allegedly owing, to the strata by the applicant.
25. Although the debt in question arose from lien proceedings taken by the strata agent, there is no prohibition in the Act against the tribunal exercising jurisdiction in relation to such proceedings. In any case, the amount in question was incurred by the strata for the commencement of forced sale proceedings that, according to documentary evidence before me, did not result in a judgment, rather than lienproceedings.
26. I also considered whether the Supreme Court would make an order prohibiting this tribunal from deciding the issue of costs in this case under section 11(1(f) of the Act. Taking into account the undisputed facts and circumstances, the mandate of this tribunal and the economic interests involved, I am satisfied the court would decide it is in the best interests of justice for this matter to be resolved by this tribunal. Further, for the reasons set out below, it would be patently unfair and reflect poorly on the administration of justice, generally, to require the applicant to participate in the Supreme Court proceedings to recover legal costs that arose that from improper service of notice by the strata.
Did the respondent comply with the notice requirements in the Act for the collection of money from the applicant?
27. Amended bylaw 4(2)(a) requires owners who rent their strata lot to deliver to the strata or its agent a ‘form K’ which includes an address for serving notices upon the owner. Section 61(a) of the SPA requires the giving of notice to persons who have an address outside the strata plan, where required under the Act, the bylaw or the rules, by serving it on the person or by mail “to the address provided”. Section 61 (1)(b) states notice to resident owners may be given in many ways, e.g. in-person, putting it under the door of the unit, by mail, fax or by email. Section 112(1) requires the strata to give 2 weeks written notice before taking action to collect a debt.
28. Section 112(2) requires the strata to give 2 weeks written notice demanding payment of any debt, failing which a lien may be registered by the strata.
29. The applicant delivered a Form K, Tenant’s Undertaking under section 146 of the SPA containing the Nicola Street address when she purchased her unit in 2015 as required under amended bylaw 4(2)(a) because she rented-out the unit and had a mailing address ‘outside’ the strata. After her tenant left in October 2016, she decided to move into the unit and both she and a friend sent several emails to the agent about her pending move-in in November. The emails were acknowledged. In one email, the Rental Property Manager/Strata Agent thanked her for giving ‘notice’ of the move-in. The applicant subsequently obtained keys from the strata council president and moved-in.
30. The amended bylaw contains requirements for absentee owners to give an address ‘outside’ the strata and section 63 of the SPA addresses how ‘required or permitted’ notices, records and documents under the SPA, bylaws or rules, are to be given to a strata. However, even though the respondent says owners are ‘required’ to provide change of address information to the strata, there are no requirements in the strata’s bylaws or the SPA for strata lot owners – absentee or resident - to give written notice of a change of address to the strata.
31. The respondent relies on section 61(1)(a) as authority for notice by mail to the address given by the applicant in 2015 being sufficient. I disagree. In the absence of a bylaw requiring owners to give notice of a change of address in writing, the emails sent to the strata in October and November 2016 before her return to the unit, one of which was specifically acknowledged as notice of her return, were more than sufficient to allow the agent to effect a change of address in the strata records. With that change of address in hand, the strata was bound to comply with section 61(1)(b).
32. The notice provisions in the SPA evidence a legislative intention to allow for the use of email in communications in the conduct of strata business. It is up to the strata or its agent to ensure such communications are governed by effective practices and procedures to ensure records are kept current.
33. I conclude the respondent has not proven it gave proper notice to the applicant as required under sections 61, 112 and 116 of the SPA because it was advised of a change of address and did not give notice at the address provided or in any other of the prescribed ways.
Is the owner entitled to the reimbursement of the cost of lien proceedings and the legal fees incurred by the commencement of sale proceedings?
34. The strata decided not to impose a fine or require the applicant to pay interest on the strata fee arrears. The strata did not incur legal expenses for registering the lien. The work was performed by the agent. According to a February 28, 2017 demand letter prepared by the agent, fees for the registration and (eventual) lien removal were $500.
35. The legal fees incurred by the strata are for the commencement of forced sale proceedings in the Supreme Court under section 117 of the SPA. Accounts of the lawyers submitted into the evidence demonstrate fees and disbursements of at least $4,805.29, including the filing and service of a Petition and Affidavit. There was no evidence that the Petition was heard or abandoned. The evidence demonstrates the applicant paid the lien registration and removal fees and legal costs out of the proceeds of sale of her strata lot.
36. Taking into account my finding that the applicant was not given notice of the debt nor of the strata’s intention to file a lien, and considering the authority given to me under section 48.1 of the CRTA, I find the strata incurred no reasonable legal costs in this case and order the strata reimburse the $500 lien registration and removal costs and the $4,805.29 legal costs paid by the applicant to the respondent.
DECISION AND ORDERS
37. I order that the strata reimburse the applicant:
a. the sum of $500.00 for lien registration and removal fees; and,
b. legal fees in the sum of $4,805.29 paid by the applicant to the respondent in relation to forced sale proceedings in the Supreme Court of British Columbia; and,
c. $5.91 pre-judgment interest on the lien registration and removal fees and
d. $28.49 on the legal fees; and,
e. $225.00 for tribunal fees.
38. The applicant is also entitled to post-judgment interest.
39. Under section 189.4 of the SPA, an owner who brings a tribunal claim against a strata corporation is not required to contribute to any monetary order issued against the strata corporation or to any expenses the strata corporation incurs in defending the claim. I order the respondent to ensure that no part of the amount ordered to be paid by the respondent, or any other expenses incurred by the respondent in defending this claim, are allocated to the applicant owner.
40. Under section 57 of the Act, a party can enforce this final tribunal decision by filing, in the Supreme Court of British Columbia, a validated copy of the order which is attached to this decision. The order can only be filed if, among other things, the time for an appeal under section 56.5(3) of the Act has expired and leave to appeal has not been sought or consented to. Once filed, a tribunal order has the same force and effect as an order of the Supreme Court of British Columbia.
41. Orders for financial compensation or the return of personal property can also be enforced through the Provincial Court of British Columbia. However, the principal amount or the value of the personal property must be within the Provincial Court of British Columbia’s monetary limit for claims under the Small Claims Act (currently $35,000). Under section 58 of the Act, the Applicant can enforce this final decision by filing in the Provincial Court of British Columbia a validated copy of the order which is attached to this decision. The order can only be filed if, among other things, the time for an appeal under section 56.5(3) of the Act has expired and leave to appeal has not been sought or consented to. Once filed, a tribunal order has the same force and effect as an order of the Provincial Court of British Columbia.
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James Posynick, Tribunal Member |