Date Issued: January 22, 2021

File: ST-2020-004242

Type: Strata

Civil Resolution Tribunal

Indexed as: Nicholl v. The Owners, Strata Plan VR 101, 2021 BCCRT 83

Between:

SHELLEY NICHOLL

Applicant

And:

The Owners, Strata Plan VR 101

Respondent

REASONS FOR DECISION
Tribunal Member:	David Jiang

INTRODUCTION

1.      This dispute is about who should pay for water damage and related asbestos removal. The applicant, Shelley Nicholl, owns a strata lot in the respondent strata corporation, The Owners, Strata Plan VR 101 (strata).

2.      Ms. Nicholl says the strata was not entitled to charge back remediation costs of $3,630.38 to her strata lot account. She says she only caused damage to another strata lot and not to any property the strata may charge back repairs for under the bylaws. She also says the strata failed to fulfill the procedural requirements of section 135(1) of the Strata Property Act (SPA) before applying the chargeback. Finally, Ms. Nicholl also says the that the chargeback amount of $3,630.38 is unreasonable. She says $955.50 would be a more appropriate amount.

3.      The strata disagrees. It says its contractors charged a reasonable amount based on a justified belief that asbestos was present. It also says that Ms. Nicholl breached strata bylaw 3(2) and agreed to pay for the remediation. The strata also says that Ms. Nicholl raised her objections about being charged at all too late in this proceeding.

4.      Ms. Nicholl represents herself. A strata council member represents the strata.

5.      As discussed below, I find the strata was not entitled to require Ms. Nicholl to pay for the remediation. I also find that the strata did not comply with the procedural requirements of SPA section 135(1). I order the strata to remove the chargeback for the remediation invoice from Ms. Nicholl’s strata lot account. Given my findings and order, I find it unnecessary to consider whether the chargeback amount was reasonable. My reasons follow.

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.      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.

9.      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.

Preliminary Issue – Submissions about the Strata’s Authority to Charge Back Remediation Costs and the Strata’s Compliance with SPA Section 135(1)

10.   In the application for dispute resolution, Ms. Nicholl claims for the remediation chargeback amount to be reduced to $955.50. She now says the chargeback amount should reversed in full. In her initial submission to the CRT, Ms. Nicholl submits the strata did not have authority to charge back the remediation costs under the bylaws and failed to comply with the procedural requirements of SPA section 135(1). Ms. Nicholl says she did not include these arguments in her application for dispute resolution because she only became of aware of them recently after looking at case law.

11.   The strata objects to these arguments and relies on Rodgers v. The Owners, Strata Plan VR 1322, 2020 BCCRT 368. In Rodgers, the CRT member noted that it is generally unfair to decide claims that are not identified in a Dispute Notice or amended Dispute Notice.

12.   I agree with the reasoning in Rodgers but do not find it applicable to this dispute. In Rodgers, the applicant raised additional claims in submissions that were “expansive” and spanning the applicant’s “many years of discontent with the strata”. I find that in this dispute, Ms. Nicholl has advanced 2 new arguments about essentially the same claim as in the Dispute Notice. That claim is about the chargeback. This is not a situation where the applicant has unfairly raised a host of new claims and submissions that make it difficult for a party to respond to.

13.   The strata also cites Cheung v. Strata Plan VR 1902, 2004 BCSC 1750. In Cheung the court held that a strata corporation can cure a procedural breach of SPA section 135(1) if it reverses a fine and provides new notice documents. The strata says it has suffered prejudice because Ms. Nicholl denied the strata the opportunity to take corrective action by raising these issues late.

14.   I do not find this submission persuasive. The strata could still have reversed the chargeback after Ms. Nicholl raised new arguments. There is no indication the strata reversed the chargeback amount or intends to. The strata also submits, somewhat inconsistently, that it fulfilled the requirements of the SPA section 135(1) through the correspondence in evidence. The strata also provided detailed submissions about the 2 new arguments as well. I do not find it has suffered any prejudice.

15.   Bearing in mind the CRT’s mandate that includes flexibility and proportionality, I find it appropriate to consider Ms. Nicholl’s submissions in my decision as outlined below. I will also consider whether Ms. Nicholl should pay the chargeback amount at all.

ISSUES

16.   The issues in this dispute are as follows:

a.    Did Ms. Nicholl agree to pay the remediation costs of $3,630.38?

b.    Did Ms. Nicholl breach bylaw 3(2)?

c.    Did the strata fulfill the procedural requirements of SPA section 135(1)?

d.    What remediation costs must Ms. Nicholl pay, if any?

EVIDENCE AND ANALYSIS

17.   In a civil claim such as this, the applicant Ms. Nicholl bears the burden of proof on a balance of probabilities. Though I have reviewed all the evidence and submissions, including case law, I only refer to what is necessary to explain my decision.

18.   The background facts are largely undisputed. The strata consists of 44 strata lots in a low-rise building that provide residential apartment-style housing. Ms. Nicholl owns and lives in strata lot 30 on floor 3. Another individual, SP, lives in strata lot 15 on floor 2, which is directly below strata lot 30.

19.   On February 12, 2020, Ms. Nicholl’s contractor removed a toilet from strata lot 30. The contractor turned off the water shutoff valve. The following morning SP saw water damage affecting her ceiling and a connected wall. SP contacted CF, the representative for the strata’s property manager.

20.   The source of the leak is undisputed. Ms. Nicholl’s contractor and the strata’s plumber determined on February 13, 2020 that the water leak originated from the toilet shutoff valve in strata lot 30, which was faulty. The contractor replaced the valve.

21.   CF asked another contractor to remove wet drywall. Its representative, VP, provided a statement as evidence. VP says that he knew from previous work that the strata’s building had asbestos in it. VP wrote he assumed that there would be asbestos in strata lot 15. He hired another contractor to do asbestos abatement.

22.   The evidence shows the asbestos contractor completed the abatement by removing wet drywall located on the ceiling and the connected wall in strata lot 15 on February 18 and 27, 2020. VP then used machinery to dry the affected areas. VP’s company invoiced the strata $3,630.38 for the emergency remediation on February 28, 2020. This amount includes the asbestos contractor’s fee of $1,873.24.

23.   Following this, Ms. Nicholl’s contractor entered strata lot 15 on February 28, 2020 to replace the drywall. In a statement, the contractor’s representative, GL, says that the affected drywall was made of newer materials and date stamped August 30, 2011. I note the building is older than this. GL says this meant that the drywall would be free of asbestos. There is a picture of the stamp in evidence. GL also took a drywall sample for testing. An August 13, 2020 lab certificate says the sample tested negative for any asbestos.

24.   On March 2, 2020, Ms. Nicholl emailed CP to complain that the strata’s contractor unreasonably charged for asbestos abatement. At the April 6, 2020 strata council meeting, the strata council decided to charge back the full amount of the $3,630.38 invoice to strata lot 30. The strata mailed Ms. Nicholl an April 8, 2020 letter that advised the strata had paid the remediation invoice and “assessed the cost to your strata lot account”. The strata requested reimbursement. On April 22, 2020, the strata sent another letter stating it had considered Ms. Nicholl’s correspondence and decided to still charge back the full remediation cost to Ms. Nicholl’s strata lot account.

25.   Ms. Nicholl requested and had a hearing with strata council on May 5, 2020. The strata council wrote in a May 12, 2020 letter that it determined its contractor proceeded reasonably and the strata would not reduce the chargeback amount. Ms. Nicholl then filed her application for dispute resolution.

The Strata Bylaws

26.   The strata’s bylaws are registered in the Land Title Office. The relevant bylaws are part of a new set of bylaws adopted on November 30, 2001, which replaced all previous bylaws and amendments. There are subsequent amendments which are not relevant.

27.   Bylaw 2(1) says that an owner must repair and maintain their strata lot, except for repair and maintenance that is the responsibility of the strata under the bylaws.

28.   Bylaw 3(2) says that an owner, tenant, occupant or visitor must not cause damage other than reasonable wear and tear to the common property, common assets or those parts of a strata lot which the strata must repair and maintain under the bylaws or insure under SPA section 149.

29.   Bylaw 8 says the strata must repair and maintain common assets of the strata, common property that have not been designated as limited common property (LCP), and certain forms of LCP, including the structure of a building. Bylaw 8(d) also says the strata must repair and maintain strata lots in the strata, but this duty is restricted to only some parts of the strata lot, most notably the structure of a building.

Issue #1. Did Ms. Nicholl agree to pay the remediation costs of $3,630.38?

30.   The parties dispute whether Ms. Nicholl agreed to pay the remediation costs and should be bound to pay it.

31.   I find the alleged agreement is in the correspondence. On February 14, 2020, Ms. Nicholl emailed the strata’s property manager, CF. She wrote that, based on emailed comments from SP, the strata would pay for drying out the ceiling and testing for asbestos, and Ms. Nicholl would pay for repairing the drywall. She asked the strata to clarify what she had to pay. CF emailed back the same day that the strata would conduct emergency repairs to prevent damage to “common areas”, and the cost would be charged back to Ms. Nicholl’s strata lot account. Ms. Nicholl did not immediately respond. She next raised concerns about the cost of remediation in March 2020, as detailed above.

32.   I find from reviewing the correspondence that Ms. Nicholl merely asked CF for his view on what she had to pay the strata. Ms. Nicholl did not say she agreed with CF. In these circumstances, I do not find that Ms. Nicholl agreed to pay the remediation costs or otherwise waived the strata’s procedural requirements under SPA section 135(1) by not immediately replying. Consistent with this, Ms. Nicholl subsequently disputed the chargeback amount and the strata granted her a hearing.

33.   I also note that CF said the strata would charge for emergency repairs to prevent damage to “common areas”, which I interpret to mean common property. The evidence shows the strata’s contractor removed drywall that I find is part of strata lot 15 and not common property. If I had found Ms. Nicholl agreed to pay the remediation costs, I would still find she did not agree to pay the cost of work done in strata lot 15.

 

Issue #2. Did Ms. Nicholl breach bylaw 3(2)?

34.   Section 116(1) of the SPA allows the strata to register a lien against a strata lot for certain unpaid debts, such as strata fees. However, a chargeback of repair costs is not a lienable amount under section 116 or the other provisions of the SPA. For the strata to charge back repair costs to a strata lot account, it must have the authority to do so under a valid and enforceable bylaw or rule that creates the debt. See Ward v. Strata Plan VIS #6115, 2011 BCCA 512 at paragraphs 40 to 41.

35.   I find that the strata does not have a chargeback bylaw. In any event, the strata does not rely on one in this dispute. In its April and May 2020 letters to Ms. Nicholl, the strata did not identify its basis for charging back the remediation costs. The strata submits Ms. Nicholl breached bylaw 3(2), the strata reasonably remedied the contravention under SPA section 133(1), and then charged back remediation costs under SPA section 133(2).

36.   SPA section 133 says a strata corporation may do what is reasonably necessary to remedy a contravention of its bylaws, which includes doing work on a strata lot. It also says that the strata may require the owner to pay the reasonable costs of remedying the contravention. Under SPA section 135(1), before requiring a person to pay the costs of remedying a bylaw contravention, the strata must have received a complaint, given the owner written particulars of the complaint and a reasonable opportunity to answer the complaint, including a hearing if one is requested.

37.   The strata says Ms. Nicholl is liable under bylaw 3(2) because she damaged common property, the structure of the building, and property the strata must insure. Ms. Nicholl says she did not breach bylaw 3(2) because her contractor only caused damage to strata lots 30 and 15 and not other property.

38.   There is no evidence of damage to common property. The evidence shows VP removed drywall that I find was part of strata lot 15.

39.   There is also no evidence of damage to the structure of the building. The strata says it acted to preserve the floor joists but without evidence I do not find it apparent that they were in jeopardy. I find my conclusion consistent with the reasoning in the non-binding but persuasive decision of Hu v. The Owners, Strata Plan BCS 3507, 2020 BCCRT 74. In Hu, the CRT Vice Chair found that a dishwasher leak did not compromise the structure of the building because there was no evidence of compromise.

40.   This leaves the issue of whether Ms. Nicholl’s contractor damaged any property the strata must insure. SPA section 149 says a strata corporation must insure buildings shown on the strata plan and fixtures built or installed by the owner developer as part of the original construction on the strata lot. Section 9.1(1) of the Strata Property Regulation (SPR) defines such fixtures to include floor and wall coverings.

41.   The strata says that the removed drywall is part of the strata’s building and is therefore property it must insure. I disagree that this is the correct analysis. I find the removed drywall was a fixture under the SPA and SPR because it covered the ceiling and a wall. The question is then whether the drywall, as a fixture, was part of the original construction of the owner developer, as contemplated in SPA section 149. Based on GL’s evidence, I find that it was not. GL says he found the 2011 date stamp on the ceiling drywall. On balance, I am satisfied the drywall on the connected wall was of a similar age. As such, I find that the removed drywall was not part of the original construction and the strata had no obligation to insure it.

42.   The strata says it was unaware that this drywall was replaced in strata lot 15. I find this is likely the case. However, I do not find this affects whether Ms. Nicholl is liable under the bylaws. I conclude that Ms. Nicholl did not breach bylaw 3(2) because her contractor did not cause any damage to common property, the structure of the building, or property the strata must insure.

43.   Given the above, I find the strata did not have the authority to charge Ms. Nicholl for the remediation costs under the bylaws. I order the strata to immediately reverse the $3,630.38 it charged Ms. Nicholl for the contractor’s February 28, 2020 invoice.

 

Issue #3. Did the strata fulfill the procedural requirements of SPA section 135(1)?

44.   I find the above is enough to resolve this dispute. However, even if it were not, I would also reach the same decision because I find the strata did not fulfill the procedural requirements of SPA section 135(1).

45.   In Terry v. The Owners, Strata Plan NW 309, 2016 BCCA 449, the BC Court of Appeal found that strict compliance with SPA section 135 is required before a strata corporation can impose fines. The court also determined that bylaw fines may be found to be invalid if the procedural requirements set out in section 135 are not followed. I find that strict compliance is equally necessary when the strata requires a person to pay the costs of remedying a contravention, as the same provisions of section 135 are engaged.

46.   The strata says it fulfilled the requirements of SPA section 135(1)(e), which requires the strata to provide an owner the owner particulars of the complaint in writing. It says it advised Ms. Nicholl about the particulars of the complaint in its April 8, 2020 letter.

47.   I disagree. In Terry at paragraph 28, the Court of Appeal wrote that the strata must identify the bylaw or rule contravened. The strata’s letters of April and May 2020 do not cite any bylaws. The strata did not identify what bylaw Ms. Nicholl allegedly breached until this dispute started.

48.   Further, and contrary to the strata’s submissions, the strata council meeting minutes show the strata council decided to charge back the full amount of the remediation invoice on April 6, 2020. I find the strata’s April 8, 2020 letter provided Ms. Nicholl notice of this decision, rather than particulars of the complaint or any opportunity to respond. The strata did not fulfill the requirements of SPA section 135(1), which must be met before the strata charges back any costs of remedying a contravention.

49.   The strata says, alternatively, that it cured any noncompliance with SPA section 135(1) by providing Ms. Nicholl a hearing and considering her correspondence. It says the situation is like the one in the non-binding decision of Lum v. Section 1 of the Owners, Strata Plan LMS 921, 2019 BCCRT 1207. In that dispute the strata corporation sent a letter imposing a fine. However, the strata corporation explicitly refrained from demanding payment from the owner to give the owner an opportunity to respond. The CRT members found that this provided the owner a reasonable opportunity to respond.

50.   While I acknowledge the strata’s efforts, I find they fall short of what is required in Cheung, which is binding. As noted above, in Cheung the court held that a strata corporation can cure a procedural breach of SPA section 135 if it reverses a fine and provides new notice documents. In this dispute the strata did not reverse the chargeback, so I find Cheung distinguishable. I also find this dispute is distinguishable from Lum. The strata demanded payment in its letters of April 8 and April 22, 2020, both of which were sent before the hearing of May 5, 2020. Unlike the situation in Lum, I do not find the strata refrained from demanding payment until Ms. Nicholl had an opportunity to be heard.

51.   As I have found Ms. Nicholl is not liable for 2 different reasons, I find it unnecessary to consider whether the chargeback amount was reasonable. I conclude that she is not responsible to pay any portion of the chargeback.

CRT FEES AND EXPENSES

52.   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.

53.   Ms. Nicholl is the successful party. I therefore order the strata to reimburse Ms. Nicholl for CRT fees of $225. Ms. Nicholl also claimed $36.75 for asbestos testing as a dispute-related expense. The supporting receipt shows the test took place after Ms. Nicholl filed her application for dispute resolution. I find this expense reasonable and connected to this dispute, and I order the strata to pay it.

54.   The strata must comply with section 189.4 of the SPA, which includes not charging dispute-related expenses against the owner, Ms. Nicholl.

ORDERS

55.   I order the strata to immediately reverse the $3,630.38 chargeback for the emergency remediation invoice of February 28, 2020 from Ms. Nicholl’s strata lot account.

56.   Within 14 days of the date of this decision, I order the strata to pay Ms. Nicholl $261.75, for $225.00 in CRT fees and $36.75 for dispute-related expenses.

57.   Ms. Nicholl is entitled to post-judgment interest, as applicable.

58.   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.