Date Issued: August 1, 2019

File: ST-2018-006652

Type: Strata

Civil Resolution Tribunal

Indexed as: Wonch v. The Owners, Strata Plan LMS 3227, 2019 BCCRT 929

Between:

Katherine Wonch

Applicant

And:

The Owners, Strata Plan LMS 3227

Respondent

REASONS FOR DECISION
Tribunal Member:	Kate Campbell

INTRODUCTION

1.      The applicant, Katherine Wonch (owner) co-owns a strata lot in the respondent strata corporation, The Owners, Strata Plan LMS 3227 (strata).

2.      The owner says the strata has not complied with Strata Property Act (SPA) requirements about giving notice of annual general meetings (AGMs), AGM voting, budgeting, and financial reporting.

3.      Some of the owner’s claims were resolved through the tribunal facilitation process, as set out in a February 12, 2019 consent resolution order. I will not address those resolved claims in this decision.

4.      To resolve her remaining claims, the owner seeks the following remedies:

a.    An order that the 2018 AGM be “replaced” by a special general meeting (SGM) because the strata did not give proper notice for the AGM.

b.    A declaration that any voting at AGMs from 2014 to 2018 that did not comply with SPA requirements is invalid.

c.    An order that the strata review the calculation of all strata fees for 2016, 2017, and 2018.

d.    An order that the strata treasurer hold a meeting to review all financial statements and all contingency reserve fund use since 2014, to be attended by all owners who choose to participate.

e.    An order that the strata prepare a more detailed budget for the 2018/2019 fiscal year, compliant with the SPA and the Strata Property Regulations (Regulations).

5.      The strata contests the owner’s claims, but did not provide any evidence.

6.      The owner is self-represented. The strata is represented by a strata council member.

JURISDICTION AND PROCEDURE

7.      These are the formal written reasons of the Civil Resolution Tribunal (tribunal). The tribunal has jurisdiction over strata property claims brought under section 121 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.

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 that might require an oral hearing.

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.

10.   The applicable tribunal rules are those that were in place at the time this dispute was commenced.

11.   Under section 123 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.

ISSUE

12.   The issues in this dispute are:

a.    Did the strata give proper notice for the 2018 AGM, and if not, what remedies are appropriate?

b.    Should any AGM resolutions from 2014 to 2018 be declared valid due to improper voting?

c.    Did the strata calculate strata fees correctly from 2016 to 2018, and if not, what remedies are appropriate?

d.    Must the strata review its financial statements and contingency reserve fund use with all owners?

e.    Must the strata prepare a new budget for 2018-2019?

EVIDENCE, FINDINGS AND ANALYSIS

13.   I have read all of the evidence provided but refer only to evidence I find relevant to provide context for my decision. In a civil proceeding such as this, the applicant owner must prove her claims on a balance of probabilities.

14.   The strata was created in 1998, and consists of 4 residential strata lots. The strata’s bylaws are the Standard Bylaws under the SPA.

15.   The provisions of the SPA are mandatory, and are binding on all strata corporations in British Columbia regardless of their size.

Did the strata give proper notice for the 2018 AGM?

16.   The owner says the strata failed to meet the SPA’s notice requirements for the 2018 AGM, as it sent out the notice too late. The evidence shows that the notice was sent by email 14 days before the June 22, 2018 AGM. The strata says this was sufficient notice, but I disagree, for the reasons set out below.

17.   SPA section 45 says the strata must give every owner at least 2 weeks’ written notice of an AGM. Some tenants and mortgagees may also be entitled to notice, but that is not relevant to this dispute.

18.   The Interpretation Act (IA) sets out rules for how all British Columbia legislation must be interpreted. IA section 25.2(3) says that where a legislated time period includes the phrase “at least”, that time period must be calculated by excluding the first and last days.

19.   Also, the AGM notice at issue in this dispute was sent by email Notification. Notice by email is acceptable, as SPA section 61(1)(b)(vii) says the strata may email a notice to an email address provided by the person for that purpose, if the person has not provided the strata with an address outside the strata plan for receiving notices. The owner does not challenge the delivery method, so I find it complied with section 61(1).

20.   However, SPA section 61(3) says that an emailed notice is conclusively deemed to have been given 4 days after it is emailed. That means that under the applicable provisions of the SPA and the IA, the emailed AGM notice had to be sent at least 20 days before the June 22, 2018 meeting. This did not occur, so I agree with the owner that the strata did not provide the required notice for the 2018 AGM.

21.   The owner also says the 2018 AGM notice was insufficient because the financial statement and budget were not sent out until June 17, 2018. I agree.

22.   SPA section 45(4) says that an AGM notice must include the budget and financial statement. Similarly, section 103(2) says the budget and financial statement must be distributed with the notice of AGM under section 45. This means that the section 45 time limit applies not just to the AGM agenda, but also to the distribution of the budget and financial statement. Simply sending out an agenda, or an email setting the meeting date, does not meet the section 45 notice requirements.

23.   The evidence confirms that the strata’s treasurer emailed the budget and financial statement on June 17, 2018, only 5 days before the AGM. This is not sufficient notice as required in SPA sections 45 and 103, as set out above.

24.   I will address the appropriate remedy for the insufficient AGM notice later in this decision, after I address the owner’s claims about AGM voting.

Should any AGM resolutions from 2014 to 2018 be declared invalid due to improper voting?

25.   The owner says that since 2014, the strata has failed to include notice of resolutions requiring a ¾ vote in its AGM notice packages. She says any such resolutions that were passed at these meetings should be declared invalid.

 

Limitation Act

26.   As a preliminary matter, I find that part of this claim about AGM voting is time-barred under the Limitation Act (LA).

27.   For disputes filed before January 1, 2019, like this one, the limitation period stopped when the Dispute Notice was issued. The original Dispute Notice for this dispute was issued on September 10, 2018, so I find the limitation period stopped on that date.

28.   As stated in section 13 of the Act, the LA applies to tribunal disputes. A limitation period is a specific time period within which a person may pursue a claim. If the time period expires, the right to bring the claim disappears. Section 6(1) of the LA states that a proceeding in respect of a claim must not be commenced more than 2 years after the day on which the claim is discovered. For the purposes of this dispute, any claims discovered prior to September 10, 2016 would be out of time under the LA.

29.   The evidence shows that the strata holds its AGMs in June each year. Thus, I find that the owner discovered her claims about the 2014, 2015, and 2016 AGM resolutions and voting by at least June 2016. I therefore find that the owner’s claims about the AGMs from 2014 to 2016 are barred under the LA because they were filed outside the 2 year limitation period ending on September 10, 2018.

2017 and 2018 AGM resolutions

30.   SPA section 45 says that an AGM or SGM notice must include a description of the matters that will be voted on at the meeting, including the proposed wording of any resolution requiring a 3/4 vote, 80% vote or unanimous vote.

31.   Based on the evidence before me, I find the strata did not meet this requirement for the 2018 AGM. In particular, the agenda circulated in the AGM notice said that an item under new business was “Storage space utilization”. No vote or resolution on the issue was mentioned. The AGM minutes, circulated by email on June 23, 2018, said that occupant storage in the strata’s amenity room would be allotted in equal shares, with the goal of making the amenity room usable for occupants and owners, and that ping pong or billiards would be moved into the freed-up space. The minutes also state that occupants who exceed their storage allotment would be charged by the strata.

32.   The owner says the common property amenity room was previously used solely for storage, and the change in use set out in the AGM minutes is a significant change in use that required a ¾ vote resolution. Under SPA section 71, the strata must not make a significant change in the use or appearance of common property unless the change is approved by a ¾ vote resolution or there are reasonable grounds to believe that immediate change is necessary to ensure safety or prevent significant loss or damage.

33.   The strata did not dispute the owner’s assertion about the previous use of the amenity room, and provided no contrary evidence about its use history. I therefore accept the owner’s evidence on this point. I also find that reducing the amount of storage space in order to add recreation equipment, and limiting the storage previously allotted to occupants, is a change in the use of common property.

34.   I find there is insufficient evidence before me to determine whether the amenity room use change is significant, based on the relevant criteria set out in Foley v. The Owners, Strata Plan VR 387, 2014 BCSC 1333 at paragraph 19. However, I find that this determination is not required in order to decide this claim.

35.   Regardless of whether the amenity room storage changes were not a “significant change”, triggering the ¾ vote requirement in section 71, I find that the decision about amenity room storage in taken at the 2018 AGM was invalid, for the following reasons.

36.   SPA section 50 says that at an AGM, matters are decided by majority vote, unless a different voting threshold is required or permitted by the SPA or Strata Property Regulation (Regulation). Thus, the decision to change the amenity room use required at least a majority vote. As previously stated, SPA section 45 says that an AGM notice must include a description of the matters that will be voted on at the meeting. There is was no description or indication in the AGM notice that there would be a vote to change the amenity room use, and there is no suggestion in the notice of a possible fee or charge for excess storage.

37.   The excess storage charge is not clearly explained in the minutes, but it appears to be either a bylaw violation fine, which would require a bylaw amendment, or a fee for the use of common property. Section 6.9 of the Regulation says that such a fee can only be imposed if the fee is set out in a bylaw or rule. A bylaw change would require a ¾ vote resolution, and a rule change requires a majority vote at an AGM in order to ratify it. Since no fee and no vote were mentioned in the 2018 AGM notice, I find the strata’s decision about the amenity room change is invalid, and any charge stemming from it is unenforceable.

38.   I also agree with the owner that decisions made at the 2017 AGM were invalid due to lack of notice of voting. For example, the 2017 AGM minutes state that the owners passed a motion to move $4,000.00 from the contingency reserve fund to the operating fund. There is no mention in the 2017 AGM notice of a proposed ¾ vote on this issue, which is what was required. Thus, the vote was invalid.

Voting by telephone

39.   I also note that in September 3, 2018 email to the owner, the strata treasurer wrote that since 2014, the strata has conducted its AGMs by telephone. I find that this is not an authorized method of conducting AGMs. SPA section 49(1) says a strata corporation may, by bylaw, provide for AGM or SGM attendance by telephone (emphasis added). The strata has no such bylaw permitting telephone attendance. Rather, bylaw 27 of the standard bylaws requires voting by a show of voting cards, which cannot occur by telephone.

40.   Therefore, unless the strata amends its bylaws (which requires a ¾ vote resolution at an AGM or SGM), no one may participate in an AGM or SGM via telephone or by electronic means such as video conference.

 

Remedies for invalid voting at AGMs

41.   The owner requests a declaration that all decisions from the 2017 and 2018 AGMs be declared invalid. I find that is not appropriate in the circumstances, as most of those decisions relate to budgets and spending for periods that have now ended.

42.   However, I find that the strata’s June 2018 decision to change the amenity room storage and charge owners for excess storage is invalid and unenforceable.

43.   Given that I have found several serious problems with the strata’s conduct of its AGMs, I suggest but do not order that it obtain professional advice and assistance on the AGM and SGM procedures required under the SPA.

44.   The owner also requests that the strata hold an SGM, to “replace” the 2018 AGM. The strata says it held an SGM at some point in 2018, which fulfills this remedy request. I do not agree, as there is no evidence before me about the content of that meeting, and no confirmation that proper notice was given. However, I find that since it is now mid-2019, holding an SGM would not benefit the parties. Also, the notice requirements for all future general meetings are set out in the February 2019 consent resolution order, so I infer the strata has already complied with these terms for its 2019 AGM.

Must the strata review strata fees, financial statements and contingency reserve fund use with all owners?

45.   The owner says the strata has made ongoing errors in calculating strata fees, as the balance of the strata fees collected from all owners is not equal to the strata’s operating expenses. She does not request any reimbursement of strata fees, but seeks a meeting in which the strata treasurer reviews the strata’s financial statements, strata fee calculation, and contingency reserve fund use with all owners.

46.   SPA section 99 sets out how the strata must calculate strata fees. In essence, it says that a strata lot owner must contribute to both the operating fund and the contingency reserve fund based on its unit entitlement, which is set out in the strata plan. Thus, the strata fees are not just based on the operating fund, as asserted by the owner, but also on the contingency reserve fund. I find the owner has not proved any specific miscalculation of strata fees.

47.   However, given the strata’s failure to give proper notice of its financial statement and budget prior to the 2018 AGM, and given that the strata authorized removing money from the contingency reserve fund at the 2018 AGM without giving proper notice of the ¾ vote to do so, I find it is appropriate in resolving this dispute to order the review sought by the owner. In making this order, I rely in part on the tribunal’s mandate to recognize relationships between parties to a dispute that will likely continue after the tribunal proceeding is concluded.

48.   I order that within 60 days of this decision, the strata treasurer hold an informal meeting in which they review the strata’s 2018 and 2019 financial statements, the 2019 budget, and the calculation of strata fees for 2017, 2018, and 2019. The meeting may be held by telephone or video conference, and must be open to all strata lot owners who chose to attend. The strata may choose a reasonable time and format for the meeting, and must notify owners about the meeting time and location at least 14 days in advance, with attached copies of all documents to be discussed at the meeting.

49.   While the owner requested review of documents from 2014 onwards, I find this is unproductive given that no retroactive reimbursement is sought. I note that the owner is entitled to request such documents under section 36 of the SPA if she wishes to do so.

Must the strata prepare a new budget for 2018-2019?

50.   As the 2018 fiscal year is over, I do not order the strata to prepare a new budget for that period.

51.   As submitted by the owner, the strata’s budget must fully comply with SPA section 103 and section 6.6 of the Regulation. The financial statement must comply with section 6.7 of the Regulation. This is covered by the February 2019 consent resolution order, so I make no further order about this.

FEES AND EXPENSES

52.   Under section 49 of the Act and the tribunal rules, the tribunal will generally order an unsuccessful party to reimburse a successful party’s tribunal fees. I find the owner was substantially successful in this dispute, so I find she is entitled to a refund of $225 in tribunal fees. Neither party claimed dispute-related expenses, so none are ordered.

53.   The strata must comply with the provisions in section 189.4 of the SPA, which include not charging dispute-related expenses against the owner.

DECISION AND ORDERS

54.   The owner’s claims are allowed in part.

55.   The decision about amenity room storage taken at the 2018 AGM was invalid, and is therefore unenforceable.

56.   I order that within 30 days of this decision, the strata reimburse the owner $225 for tribunal fees.

57.   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 123.1 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.

58.   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 123.1 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.