Date Issued: April 15, 2021

File: ST-2020-001963

Type: Strata

 

Civil Resolution Tribunal

Indexed as: Docherty v. The Owners, Strata Plan EPS 1034, 2021 BCCRT 388

Between:

HENRY DOCHERTY, SUSAN MEDYNSKI, MICHELE THOMASSE, and MARJORIE DOCHERTY

Applicants

And:

The Owners, Strata Plan EPS 1034

Respondent

REASONS FOR DECISION
Tribunal Member:	Trisha Apland

INTRODUCTION

1.      This dispute is about governance and parking in the respondent strata corporation, The Owners, Strata Plan EPS 1034 (strata), which is a small strata complex with 7 strata lots.

2.      The applicants Henry Docherty, Susan Medynski, Michele Thomasse, and Marjorie Docherty operate a medical practice out of strata lot 3 (SL3) in the commercial section of the respondent strata. The commercial section is not named as a party in this dispute. As the claims are entirely against the strata, I find nothing turns on this.

3.      The applicants claim the strata “vilifies” them and is treating them “unfairly regarding parking and other issues”. The applicants also claim the strata is “trying to reallocate parking unfairly and unlawfully”. As set out in the Dispute Notice, the applicants seek orders that the strata:

a.    stop treating the applicants in a significantly unfair manner, vilifying the applicants and allowing decisions to be guided by personal animosity of one or more other owners

b.    stop handling parking use and allocations in a significantly unfair and unlawful way, and depriving the applicants of appropriate use of common property parking

c.    stop unfairly distributing and relying upon misinformation and false legal information and stop ignoring its lawyer’s advice

d.    implement the applicants’ suggested parking approach before undertaking more aggressive limits which may be unnecessary.

4.      The other part of this dispute relates to meetings, and hearing and document requests. The applicants say the strata has “repeatedly convened meetings without basic compliance” with the Strata Property Act (SPA) or bylaws. They seek an order that the strata hold council meetings and general meetings lawfully and stop holding meetings without required notice, with incomplete notice, and with incorrect procedure and business. The applicants seek additional remedies in argument that I address below.

5.      Next, the applicants claim the strata failed to hold a hearing under SPA section 34.1 and disclose requested documents requested under SPA section 36. They seek $1,000 in punitive or compensatory damages. The applicants also make a separate claim for reimbursement of legal expenses as damages.

6.      The strata agrees it has not technically complied with the SPA at all times. However, the strata says as a small strata corporation, it has been able to manage informally for years without any issues except over parking. The strata denies that it treated the applicants significantly unfairly over the parking lot or other issues. It says the applicants’ claims are in part, over interpersonal conflicts between owners and outside the Civil Resolution Tribunal’s (CRT) authority over strata property disputes. It asks that I either refuse to resolve or dismiss the applicants’ claims.

7.      The applicants are represented by lawyer Matthew Fischer. The strata is represented by lawyer Taeya Fitzpatrick.

8.      For the reasons that follow, I dismiss the applicants’ claims

JURISDICTION AND PROCEDURE

9.      These are the CRT’s formal written reasons. 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.

10.   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.

11.   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.

12.   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 Issues

Preliminary Decision.

13.   On December 8, 2020, a CRT Vice Chair issued a preliminary decision ordering the strata to produce copies of all correspondence about parking from February 28, 2018 onwards exchanged between the strata corporation (including council members and representatives) and owners who are not on council. The Vice Chair also ordered the strata to either disclose audio recordings for the strata’s past general meetings or if they do not exist or cannot be disclosed, a signed statement from a council member explaining the reasons why.

14.   In response to this order the strata produced several emails and 2 signed statements from strata council members. In their sworn statements, the council members affirm that they searched their emails and have disclosed all relevant emails in response to the CRT order, which I accept. As for the recordings, one of the council members wrote that they recorded the general meetings for the sole purpose of preparing minutes. They affirmed that after transposing the minutes into writing, they deleted the recordings and retained no audio copies. The member wrote that they had emailed an audio recording of a September 24, 2019 Annual General Meeting (AGM) to another member but had deleted their own copy. The 2019 AGM audio recording is in evidence.

15.   The applicants ask that I make an adverse inference because the member deleted the recordings, which I am not prepared to do. There was no obligation for the strata to retain the recordings under the strata’s bylaws or SPA 35 and 36. I accept on the member’s sworn statement that no copies exist because they deleted the recordings after transferring their content into written form. I find their action was unrelated to this dispute.

Standing under SPA section 189.1

16.   Under SPA section 189.1 a strata corporation, owner or tenant may make an application for dispute resolution under CRTA section 4. In their application for dispute resolution Drs. Henry & Marjorie Docherty indicated that they were “owners” of SL3. However, the title search filed in the Land Title Office (LTO) for SL3 in evidence states that the registered owners are: “Drs. H. & M. Docherty Inc., Inc.No. BC0530211”, Susan Medynski, and Michele Thomasse. I find Drs. Henry & Marjorie Docherty are not technically “owners” of SL3. While SL3 is owned by their corporation, I find it is a separate legal entity. There is no evidence, such as a tenancy agreement that Drs. Henry & Marjorie Docherty are tenants. Section 189.1 does not give rights to strata lot occupants, other than owners and tenants. The SPA provision is a requirement for standing. I find Drs. Henry & Marjorie Docherty have no right to bring this CRT dispute against the strata in their personal capacities.

17.   I considered whether to return to the parties for submissions on adding Drs. H. & M. Docherty Inc., Inc.No. BC0530211 as a party to this dispute. However, the applicants are not seeking individual remedies. I find it would not change the result to add Drs. H. & M. Docherty Inc., Inc.No. BC0530211. I find I can proceed with Dr. Medynski and Dr. Thomasse’s claims, which are the same claims as if they were brought as an ownership group. Considering the CRT’s mandate for efficiency, I decided it was not necessary to return for submissions at this late stage in the CRT process.

18.   I dismiss Drs. Henry & Marjorie Docherty’s claims against the strata and proceed with Dr. Medynski, and Dr. Thomasse’s claims.

ISSUES

19.   The issues in this dispute are:

a.    Has the strata acted unlawfully or significantly unfairly towards the applicants? What, if any, is the appropriate remedy?

b.    Has the strata held meetings contrary to the SPA and its bylaws? If so, what is the appropriate remedy?

c.    Must the strata pay the applicants $1,000 for failing to hold a hearing and failing to disclose certain documents?

d.    Are the applicants entitled to reimbursement of legal expenses as damages?

EVIDENCE AND ANALYSIS

20.   In a civil claim such as this one the applicants must prove their claims on a balance of probabilities. I have reviewed all the evidence and submissions provided by all parties, but only refer to that necessary to explain my decision.

21.   The strata plan filed in the LTO shows that the strata was created on December 7, 2012. In 2012 the owner developer filed a full set of bylaw amendments under SPA section 120(2).

22.   The strata consists of a small mixed-use building with 5 commercial strata lots and 2 residential strata lots and an exterior parking lot. The parking lot has 2 delineated parking stalls designated as limited common property (LCP) for 2 residential strata lots. LCP means “common property designated for the exclusive use of the owners of one or more strata lots” (SPA section 1). The rest of the parking lot is non-designated common property.

23.   As provided in SPA section 3 and the strata bylaw 11.1, the strata is responsible for managing and maintaining the common property parking lot for the benefit of the owners.

24.   Bylaw 41.1 applies to parking. It says that one parking stall will be designated as LCP for each residential strata lot. All other parking stalls will remain common property.

Has the strata acted unlawfully or significantly unfairly towards the applicants?

25.   The common property parking lot described above was periodically over-capacity. The parties disagree over what caused that and how to best manage it. I find this disagreement goes to the heart of this dispute.

26.   The applicants claim that the strata has treated them significantly unfairly with respect to the common property parking lot. They allege the council “vilified” them and blamed them for creating the parking issues. They also allege the council made decisions on the basis of personal animosity and is attempting to reallocate parking significantly unfairly and unlawfully. The applicants say the strata might take formal measures such as allocating the parking lot stalls by unit entitlement that could negatively impact their business. They say the strata should not take any such formal measures until it has investigated and attempted less restrictive methods.

27.   The applicants seek several prospective orders as summarized in the introduction above. I address these claims together as they inter-relate about the common property parking lot.

28.   The strata denies the applicants’ claims. The strata says it has not restricted the applicants’ parking lot use nor amended its bylaws to allocate parking stalls. It says it has been working for years to find a resolution to parking issues that satisfies the needs of all owners. Further, it says the ownership is authorized under the SPA to take formal measures such as amending the strata bylaws to regulate the common property parking lot. It says it is not significantly unfair to do so.

29.   The strata says some of the applicants’ claims are essentially against council members and for alleged harassment. The strata argues that the CRT has no authority to decide such claims. The applicants say their claims are only against the strata and I agree. The applicants seek no remedies against any individual council member or other owner and I find their claims are not framed in harassment. I find the applicants’ claims are brought against the strata for failure to comply with the SPA and for alleged significant unfairness.

30.   Under CRTA section 123(2) the CRT has authority to make an order to prevent or remedy a significantly unfair action, decision, or exercise of voting rights by a person who holds 50% or more of the votes at a general meeting in resolving a claim under CRTA section 121(1)(e) to (g).

31.   CRTA section 121(1)(e) to (f) apply here. These sections say the CRT has jurisdiction over a claim in respect of the SPA concerning an action, threatened action or decision of a strata corporation, including the council, in relation to an owner or tenant. To prove their claims, the applicants must establish on a balance of probabilities that the strata engaged in significantly unfair action or threatened action or made a significantly unfair decision in relation to the applicants.

32.   The BC Supreme Court has considered “significant unfairness” as it applies to SPA section 164, which grants the court authority to remedy significant unfair actions. The courts have defined “significant unfairness” as conduct that is oppressive and unfairly prejudicial. Oppressive conduct means conduct that is burdensome, harsh, wrongful, lacking in probity or fair dealing, or done in bad faith. Unfair prejudicial conduct means conduct that it is unjust or inequitable (see tests in King Day Holdings Ltd. v. The Owners, Strata Plan LMS3851, 2020 BCCA 342, Reid v. Strata Plan LMS 2503, 2003 BCCA 128, and Dollan v. The Owners, Strata Plan BCS 1589, 2012 BCCA 44). I find the same test applies when deciding whether there is significant unfairness under CRTA section 123(2).

33.   For context, the common property parking lot capacity and use has been an ongoing disputed issue between owners and owner representatives. In addition to the applicants’ medical clinic, the strata complex had a dental office, a liquor store, and a financial services business, which all have staff and clients and different parking needs. It is not clear whether the parking lot capacity is currently a problem because there is no parking lot data or statistics on use or owners’ needs before me in this dispute.

34.   I have reviewed the parties’ correspondence, meeting minutes, witness statements, and an AGM audio recording. I find the evidence does not show that the council “vilified” the applicants or that it was distributing false legal information as the applicants assert. However, I find some council members misunderstood or misapplied the SPA at times. I find the evidence does not support the applicants’ assertion that the strata made decisions based on personal animosity towards the applicants. Instead, I find the evidence shows differences of opinion on how to resolve the parking issue and the strata sometimes failed to follow the procedural requirements under the SPA.

35.   For example, at the 2019 AGM the owners voted on an owner resolution to amend the parking bylaw to restrict all owner’s use of the undesignated parking lot to the number of stalls equal to their unit entitlement. Only the applicants were opposed to the bylaw amendment and the vote passed. However, the strata had not provided nor attempted to provide notice of the resolution’s wording as required under SPA section 45(3). The parties agree the vote was rendered invalid.

36.   Following the AGM, the strata acknowledged the vote was invalid and it did not then file the bylaw amendment in the LTO. The strata took no further action to formally limit any owner’s use of the undesignated parking lot stalls. Except for the original 2 residential LCP stalls, the parking lot remains undesignated common property.

37.   I find the evidence does not establish that the strata has deprived the applicants or placed restrictions on the applicants’ use of the undesignated parking lot. Nor is it currently attempting to impose parking restrictions against the applicants or their business. I find the applicants’ concerns over the strata’s future actions are speculative.

38.   While I agree with the applicants that the strata’s decision to permit the vote on the resolution without notice was contrary to the SPA and procedurally unfair, I find the error was effectively remedied. I find the strata has discretion in how it manages the common property parking lot so long as it complies with the SPA and the bylaws. I find the applicants have not established that the strata has taken any action, threatened any action, or made any decision that is significantly unfair to the applicants. I dismiss the applicants’ claims on this issue.

Has the strata held meetings contrary to the SPA and its bylaws?

39.   The SPA and bylaws set out mandatory requirements that need to be followed when setting and holding general and council meetings. The strata records dating back several years show the strata has not always complied with these requirements, which the strata admits. However, the strata says that despite not technically following the SPA, its governance is transparent and it is doing more than is required. I disagree since it is not always following the SPA and its bylaws.

40.   While the SPA does not prevent a council from discussing strata related business informally as the strata often did here, all council decisions must be ratified at a properly convened meeting (Kayne v. The Owners, Strata Plan LMS 2374, 2007 BCSC 1610). The strata is also required under SPA sections 35 and 36 to maintain records of its meeting minutes. Bylaws 23.3 and 24.1 require that the strata record all council meeting votes and inform owners of the minutes of all council meetings within 2 weeks of the meeting, whether or not the minutes have been approved. I find several instances where the council must have made a decision or purported to make a decision but did not keep minutes. For example, there are no minutes related to the council’s decisions when setting down items for its general meeting agendas. As another example, in August 2020 a council member emailed the ownership that council appointed them to replace a council member but there were no minutes ratifying the council’s decision.

41.   I find the strata contravened the SPA and its bylaws by not ratifying some of its council’s decisions in properly convened meetings and by not recording council decisions in its minutes or informing the owners as required under bylaws 23.3 and 24.1.

42.   As a remedy, the applicants seek an order that the strata “hold council meetings and general meetings lawfully and stop holding meetings without required notice, with incomplete notice, and with incorrect procedure and business”. I find the applicants’ requested order is too vague to be enforceable. It also does not account for strata owners’ ability to consent to waive certain procedural requirements. Further, I find it unnecessary, as it otherwise repeats existing legal obligations. For these reasons, I decline to make the order.

43.   As a separate claim, the applicants say the strata audio recorded the 2019 AGM without the attendees’ consent. The applicants ask that I order the strata to stop audio recording meetings without an authorizing bylaw or without the knowledge and consent of all attendees. The strata argues that I should decline to decide this claim because the requested remedy was not in the Dispute Notice. In the alternative, the strata says it is not prevented from audio recording meetings and that it obtains permission from all owners prior to recording any meetings. To support its position the strata submitted its secretary’s signed statement that says they obtained the consent from all the meeting attendees to record the AGM.

44.   I find the strata had sufficient notice and an opportunity to respond to this additional claim. As I find no prejudice, I find it is appropriate to resolve it here.

45.   I listened to the audio recording of the 2019 AGM. I agree with the applicants that it does not capture the attendees’ express consent and there was no written consent. However, near the start of the meeting, a person is heard saying loudly and clearly “glad you are recording this”. Considering the very small group of 6 attendees, I find they likely knew the meeting was recorded and did not object to it. I find the SPA and the bylaws are silent on audio recording meetings and do not prohibit it. I find the applicants have not established a basis for the CRT to interfere and direct the strata on its future recording of meetings. I dismiss this claim.

46.   Next, the applicants ask that I order the strata to stop trying to cancel or reschedule general meetings. I find the SPA and bylaws do not prevent a strata from cancelling or rescheduling general meetings. I decline to make this order.

47.   For the reasons above, I dismiss the applicants’ claims on these issues.

Must the strata pay the applicants $1,000 for failing to hold a hearing and failing to disclose certain documents?

48.   The applicants requested a hearing under sections 34.1 of the SPA in October 2019. The strata admitted it did not then hold a hearing, so I find it was in violation of SPA section 34.1(3). I find the strata also did not provide copies of all the emails the applicants requested under SPA section 36 between council and owners not on council (SPA section 35(2)(k)). This was the subject of the December 8, 2020 preliminary decision. I find the strata did provide copies of the emails following the CRT’s order.

49.   The only requested remedy is that the strata pay the applicants $1,000 as compensation for the strata’s failure or refusal to “abide by these fundamental obligations related to transparency and accountability.”

50.   The applicants assert the matter could have been resolved had the strata held a hearing under section 34.1. I find their assertion is not proven on the evidence. The parties continued to engage, including with assistance of lawyers, after the hearing request and were unable to resolve the disputed issues.

51.   Based on the email records and council’s witness statements, I find the strata’s non-compliance was likely an oversight or misunderstanding of the SPA. The SPA does not include any express provisions that require a strata corporation to pay an owner a penalty where it failed to comply with SPA sections 34.1 or 36. I find the applicants have not established any basis to make this payment order.

52.   In argument, the applicants also seek an order that the strata comply with future hearing and document requests and that the strata comply with the December 8, 2020 order. The strata provided the ordered documents and in any event, I would have no authority to order the strata to comply with a prior CRT order. The strata is otherwise already required to comply with the SPA for future requests. I decline to grant this additional order.

Are the applicants entitled to reimbursement of legal expenses as damages?

53.   The applicants are claiming reimbursement of their “reasonable legal expenses as a damage like-award on the basis that they were required by the extraordinary circumstances and unlawful conduct of the strata”.

54.   In bringing this claim, the applicants rely on Radcliffe v. KAS 1436 2015 BCCA 448. In Radcliffe the Court of Appeal affirmed that damages are a permitted form of relief on a petition brought under SPA section 164 for significant unfairness. I find Radcliffe is not helpful here. The applicants did not bring this claim under SPA section 164, which is outside the CRT’s jurisdiction. In any event, the awarded damages in Radcliffe were not for reimbursement of legal expenses so I find it is not helpful. The damages were the costs to repair the petitioner’s strata lot caused by water ingress from common property. Also, as I dismissed the applicants claim under CRTA section 123(2), I find the applicants are not entitled to damages. I dismiss the applicants’ claim for reimbursement of legal expenses as damages.

CRT FEES AND EXPENSES

55.   Under section 49 of the CRTA and CRT rule 9.5(1) the unsuccessful party will usually be required to pay CRT fees and dispute-related expenses unless the CRT decides otherwise. As the applicants are the unsuccessful party, I dismiss their claim for paid CRT fees and dispute-related expenses. 

56.   The strata paid no CRT fees. However, it claims reimbursement of legal fees as dispute-related expenses. Under rule 9.5(3) the CRT will not order one party to pay another party’s legal fees in a strata property dispute unless extraordinary circumstances apply. When determining whether extraordinary circumstances exist in a particular dispute, CRT rule 9.5(4) says the CRT may consider the complexity of the dispute, the legal representative’s degree of involvement, whether a party’s conduct has caused unnecessary delay or expense, and any other factors it considers appropriate.

57.   The strata says the applicants’ conduct was reprehensible and deserves deterrence or punishment. It says the applicants participated in the very defects that they are complaining about and wrongly placed sole blame for failure to comply on the strata. It also says the applicants’ claimed remedies had no merit.

58.   I find the applicants did not act improperly in bringing their claims even if they were not successful in the outcome. The SPA and CRTA permits owners, including council members, to bring claims to the CRT against the strata for failure to comply with the SPA and bylaws. It is not about individual blame. The strata is a corporation that is required to comply with the SPA and its bylaws.

59.   I find the applicants did not engage in conduct to cause unnecessary delay or expense. While the strata was represented by their legal counsel, I find the subject matter was not overly complex. There is also no evidence of any reprehensible conduct during the dispute process. Weighing these factors, I find the strata has not proven on a balance of probabilities that extraordinary circumstances apply to this dispute. I dismiss the strata’s claim for legal fees.

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

ORDERS

61.   I dismiss applicants’ claims, the strata’s claim for reimbursement of legal fees, and this dispute.