Date of Original Decision: September 11, 2020

Date of Amended Decision: September 11, 2020

File: ST-2020-000133

Type: Strata

Civil Resolution Tribunal

Indexed as: Canadian Regal Education Corporation v. Section 2 of The Owners, Strata Plan EPS1069, 2020 BCCRT 1022

Between:

Canadian Regal Education Corporation

Applicant

And:

Section 2 of The Owners, Strata Plan EPS1069 and The Owners, Strata Plan EPS 1069

RespondentS

AMENDED REASONS FOR DECISION
Tribunal Member:	Richard McAndrew

INTRODUCTION

1.      This dispute is about property alterations at a commercial office and retail strata corporation. The applicant, Canadian Regal Education Corporation (Canadian) owns strata lot 262 (SL262, commonly referred to as unit 5085) and Canadian rents an adjoining strata lot 261 (SL261, commonly referred to as unit 5080) at the respondent strata corporation, The Owners, Strata Plan EPS 1069 (strata). The strata corporation has multiple sections. SL261 and SL262 are located in the respondent strata section, Section 2 of The Owners, Strata Plan EPS1069 (office section).

2.      Canadian removed a partition wall between SL261 and SL262. Canadian wants an order that the section rescind its demand to restore the partition wall. Canadian also says the strata replaced stucco wall coverings outside the elevators in the common property (CP) area of the strata without owner approval. Canadian asks for an order requiring the strata to hold an owners’ vote to approve this alteration.

3.      The office section says Canadian violated the bylaws by removing the wall without strata approval. The office section says it reasonably denied Canadian’s request for retroactive approval.

4.      The strata opposes Canadian’s request for an owners’ vote relating to the wall covering changes. The strata says this area is not strata property. Rather, the strata says this area is part of an adjoining air space parcel and therefore not subject to the Strata Property Act (SPA). The strata also argues that the changes were not a significant change that required owner approval.

5.      All parties are represented by business representatives.

JURISDICTION AND PROCEDURE

6.      These are the formal written reasons of the Civil Resolution Tribunal (CRT). The CRT has jurisdiction over strata property claims under section 121 of the Civil Resolution Tribunal Act (CRTA). The CRT’s mandate is to provide dispute resolution services accessibly, quickly, economically, informally, and flexibly. The CRT must act fairly and follow the law. It must also recognize any relationships between dispute parties that will likely continue after the CRT’s process has ended.

7.      The CRT has discretion to decide the format of the hearing, including in writing, by telephone, videoconferencing, or a combination of these. I am satisfied an oral hearing is not required as I can fairly decide the dispute based on the evidence and submissions provided.

8.      Under section 10 of the CRTA, the CRT must refuse to resolve a claim that it considers to be outside the CRT’s jurisdiction. The strata argues that Canadian’s allegations about the wall coverings near the elevator are outside the jurisdiction of SPA and the CRT. It is undisputed that the stucco surfaces outside the 1^st floor, 2^nd floor and 3^rd floor elevator bays have been replaced with wallpaper and dark aluminum panels. These wall surfaces face an interior mall corridor which Canadian argues are CP subject to the SPA. The strata plan shows that the shopping structure extends over multiple air space parcels. Section 139 of the Land Title Act says each air space parcel is a separate parcel of land. The strata plan shows that the strata is located exclusively on air space parcel 3 (ASP3). The strata plan also shows that the elevator area where the wall coverings were altered is located exclusively on air space parcel 2 (ASP2). Since the strata’s CP is limited to ASP3, I find that the disputed wall coverings are not located on the strata’s CP. As such, I decline to make any findings about these alterations.

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

10.   Canadian objects to some of the office section’s evidence. Specifically, Canadian objects to the admission of emails sent between December 11, 2018 and March 2, 2019. Canadian argues that these documents are not relevant to the dispute. Canadian says these documents only relate to unit 5085 which it says is not in dispute. I note the CRT’s mandate, stated in section 2 of the CRTA, includes applying the CRT rules in consideration of fairness and proportionality and to resolve disputes with speedy, accessible, inexpensive, informal and flexible processes. In consideration of this mandate, I find it is appropriate to give the parties broad latitude in presenting the evidence of their choice. In this matter, since the dispute involves a partition between units 5080 and 5085, I am not satisfied that evidence relating to unit 5085 is completely unrelated to the dispute. I deny Canadian’s objection and I have reviewed and considered this evidence in making my decision.

11.   Under section 123 of the CRTA and the CRT rules, in resolving this dispute the CRT may order a party to do or stop doing something, order a party to pay money, or order any other terms or conditions the CRT considers appropriate.

12.   CRT documents incorrectly show the name of the respondent office section as Strata Corporation 2 of Strata Plan EPS1069. Based on strata bylaw 1.2, I find that the correct legal name of the office section is Section 2 of The Owners, Strata Plan EPS1069. Given the parties operated on the basis that the correct name of the strata was used in their documents and submissions, I have exercised my discretion under section 61 to direct the use of the office section’s correct legal name in these proceedings. Accordingly, I have amended the office section’s name above.

ISSUE

13.   The issue in this dispute is whether the office section improperly denied Canadian’s request for retroactive approval of the removal of the wall between SL262 and SL262. If so, what is the remedy?

EVIDENCE AND ANALYSIS

14.   In a civil claim such as this, Canadian must prove its case on the balance of probabilities. While I have read all of the parties’ evidence and submissions, I only refer to what is necessary to explain and give context to my decision.

15.   The strata was created in June 2013. The strata is an air space parcel strata corporation operating as a commercial multi-level shopping centre with retail and office businesses. The strata consists of approximately 317 strata lots.

16.   The strata bylaws were filed at the Land Title Office on June 25, 2013. Subsequent bylaw amendments are not applicable to this dispute. Section 119 of the SPA allows strata corporations to govern the use of strata lots and CP with bylaws.

17.   Strata bylaw 2.1 created multiple sections for the strata corporation, including the respondent office section. Under section 194 of the SPA, when sections are created the strata retains its powers and duties in matters of common interest to all owners, and each section is a separate entity with the same powers and duties as the strata for matters that relate solely to that section. SL261 and SL262 are located on the 5^th floor in the office section of the development.

18.   The strata’s relevant bylaws say the following:   

a.     6.4(11) says that any owner or occupant of a strata lot will get prior permission from the strata before making alterations or renovations to their strata lot.

b.    Bylaw 8.1 says an owner must obtain written permission from the strata before beginning any construction on a strata lot. The approval should not be unreasonably withheld.

c.    Bylaw 8.6 says that if an owner does not comply with section 8, the strata may require the owner to remove any unauthorized improvements or alterations and restore the strata lot to its original state at the owner's sole expense. If the owner does not do so, the strata may enter the strata lot and make the restoration itself, at the owner’s expense.

19.   It is undisputed that Canadian removed a partial 7-foot wide partition wall between SL261 and SL262 without notifying the strata. Canadian says it mistakenly believed that its contactor had obtained strata permission before removing the wall.

20.   After the wall was removed, the strata notified Canadian that it had not approved the alteration. On October 23, 2019, Canadian applied for retroactive approval of the alteration.

21.   The office section held a hearing on November 13, 2019. The office section issued a decision on November 20, 2019 denying Canadian’s request for retroactive approval. The office section told Canadian to restore the strata lots to their original condition.

22.   Section 70(1) of the SPA says an owner can remove a wall between adjoining strata lots with the strata’s prior written permission.

23.   Section 70(2) of the SPA says the strata must approve the proposed removal unless the removal fails to comply with a building regulation or law or it interferes with the provision of services or utilities to another strata lot or the CP.

24.   I note that section 70(2) and bylaw 8.1 have different requirements for the removal of a wall between adjoining strata units. Bylaw 8.1 gives the strata discretion to approve or disapprove an alteration to a strata lot, subject to the requirement that such permission cannot be unreasonably withheld. On the other hand, section 70(2) of the SPA does not give the strata any discretion. Section 70(2) says that the strata must grant permission to alter a strata lot unless the request violates building regulations or laws or interferes with other strata lots or the CP.

25.   Section 121(1)(a) says a bylaw is not enforceable to the extent that it contravenes the SPA. I find that the strata’s discretionary power under bylaw 8.1 to decide whether to permit strata lot alterations contravenes the mandatory approval required by section 70(2) of the SPA. So, I find that bylaw 8.1 is unenforceable and, under section 70(2), the office section must approve Canadian’s request to remove the wall if its request complies with building regulations and governmental laws and it does not interfere with other strata lots or the CP.

26.   I have also considered the undisputed fact that Canadian altered the wall before it received strata or section approval. Section 70(1) of the SPA says that an owner needs the strata’s prior written permission. The issue of retroactive approval of a prior alteration was discussed in Foley v. The Owners, Strata Plan VR 387, 2014 BCSC 1333. The court in Foley found that an owner had significantly altered a roof deck adjoining their strata lot without the strata corporation’s approval and contrary to section 71 of the SPA. The court found that, even though section 71 is likely intended to be complied with before a significant change is made, the democratic government of a strata corporation should not be overridden by the court unless absolutely necessary. (See Foley at paragraphs 30 through 34.) The court ordered the strata corporation’s ownership consider the significant change made, by a 3⁄4 vote at a general meeting and permit the change if the vote passed. Since Foley refers to an alteration to CP under section 71 and this matter refers to the removal of a wall between 2 strata lots under section 70, the decision in Foley is not binding on my decision here. However, I find that the issues presented in Foley are similar to those in this matter and I find that the reasoning in Foley is persuasive. For these reasons, I find the process followed by Canadian to seek retroactive approval of the wall removal is not contrary to the SPA.

27.   I have also considered the undisputed fact that Canadian owns SL262 but Canadian rents SL261. Section 70(1) of the SPA says an owner or owners can remove a wall between adjoining strata lots but Canadian is not the owner of SL261. However, I note that the owner of SL261 applied to the municipality for a building permit for these alterations. As such, I am satisfied that the owner of SL261 approved of this alteration. I find that there is no reason why the “owner or owners” referred to in section 70(1) could not apply to 2 owners acting together to remove a wall between their strata lots, as in this matter. So, I find that section 70(1) of the SPA applies even though Canadian does not own SL261.

28.   For the above reasons, I find that the section must retroactively approve Canadian’s request to remove the wall if Canadian’s request complies the requirements of section 70(2) of the SPA.

29.   Canadian says the construction complied with building regulations and the project was approved by the municipality. Canadian provided a building permit dated September 24, 2019 allowing construction to expand unit 5085 into unit 5080. The strata did not provide any evidence disputing Canadian’s building permit. The strata also did not provide any evidence that the alterations did not comply with building regulations or governmental laws. Based upon Canadian’s undisputed building permit, I am satisfied that Canadian complied with building regulations and governmental laws. Also, there is no evidence before me indicating that the removal of the wall affects any other strata lots or the CP.

30.   Based on the above, I find that the office section was required to approve Canadian’s request for retroactive approval of its request to remove the wall between SL261 and SL262 under section 70(2) of the SPA. So, I find that the office section’s November 20, 2019 decision denying Canadian’s request to remove the wall is void and unenforceable. Under section 123 of the CRTA, I order the office section to retroactively approve Canadian’s request to remove the partial wall between SL261 and SL262.

CRT FEES and EXPENSES

31.   Under section 49 of the CRTA, and the CRT rules, the CRT will generally order an unsuccessful party to reimburse a successful party for CRT fees and reasonable dispute-related expenses. I see no reason in this case not to follow that general rule. Since Canadian was partially successful, I find that Canadian is entitled to reimbursement of one-half of its CRT filing fees, being $112.50. Since no party requested reimbursement of dispute-related expenses, none are ordered.

32.   The strata must comply with section 189.4 of the SPA, which includes not charging dispute-related expenses against Canadian.

ORDERS

33.   I order that:

a.    The office section must retroactively approve Canadian’s request to remove the partial wall between SL261 and SL262.

b.    The office section pay Canadian $112.50 for CRT fees.

34.   Canadian is also entitled to post-judgement interest under the Court Order Interest Act.

 

35.   Under section 57 of the CRTA, a validated copy of the CRT’s order can be enforced through the British Columbia Supreme Court. Under section 58 of the CRTA, the order can be enforced through the British Columbia Provincial Court if it is an order for financial compensation or return of personal property under $35,000. Once filed, a CRT order has the same force and effect as an order of the court that it is filed in.

 

 

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Amendment Notes: This decision was amended on September 11, 2020 under section 64 of the CRTA to correct a typographical error with the index.