Date Issued: June 11, 2021

File: ST-2020-009311

Type: Strata

 

Civil Resolution Tribunal

Indexed as: Sterling Pacific Developments Inc. v. The Owners, Strata Plan KAS 2909, 2021 BCCRT 647

Between:

STERLING PACIFIC DEVELOPMENTS INC.

Applicant

And:

The Owners, Strata Plan KAS 2909

Respondent

And:

STERLING PACIFIC DEVELOPMENTS INC.

Respondent BY COUNTERCLAIM

REASONS FOR DECISION
Tribunal Member:	Sherelle Goodwin

INTRODUCTION

1.      This dispute is about payment of repair costs under strata corporation bylaws.

2.      The applicant and respondent by counterclaim, Sterling Pacific Developments Inc. (Sterling), is a current or former owner of a strata lot in the respondent strata corporation, The Owners, Strata Plan KAS 2909 (strata). Sterling says the strata incorrectly charged it $918.75 to repair common property the strata says was damaged by Sterling’s tenant.

3.      Sterling says the repair costs were captured by a November 16, 2020 Supreme Court consent order that Sterling says has been satisfied and so the strata is not entitled to any further payment. Alternately, Sterling denies its tenant caused any common property damage and disputes the amount of repair costs claimed. I infer Sterling asks that the money be paid to it.

4.      The strata denies that the consent order captures the repair costs. It counterclaims $918.75 for payment of the repair costs.

5.      Sterling is represented by a director. The strata is represented by a strata council member.

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.

Jurisdiction over former owner dispute

10.   The evidence indicates that Sterling intended to close the sale of its strata lot on December 1, 2020. It is unclear whether the sale completed as planned. However, I find that does not affect whether I have jurisdiction to resolve Sterling’s claim.

11.   Section 189.1(1) of the Strata Property Act (SPA) says that only a strata corporation, owner or tenant may apply for dispute resolution with the CRT.

12.    In Downing v. Strata Plan VR2356, 2019 BCSC 1745, the BC Supreme Court stated that the fact that an owner becomes a former owner does not, by itself, result in their no longer being an “owner” under the SPA or remove the CRT’s ability to decide a dispute. The Court also noted the finding in The Owners, Strata Plan LMS 3259 v. Sze Hang Holding Inc., 2016 BCSC 32, that the SPA definition of “owner” includes former owners. Given these decisions, I find that I have jurisdiction to consider Sterling’s claim even if it is now a former owner.

ISSUES

13.   The issue in this dispute are:

a.    Was the strata entitled to charge back the repair costs against Sterling’s strata lot?

b.    Did the November 16, 2020 consent order settle the repair costs?

c.    Must Sterling pay the strata $918.75 in repair costs?

EVIDENCE AND ANALYSIS

14.   In a civil claim such as this one the applicant, Sterling, must prove its claim on a balance of probabilities. The strata must also prove its counterclaim on the same balance. I have reviewed the parties’ submissions and weighed the evidence provided. I only refer to that evidence relevant to this dispute and necessary to explain my decision.

Background

15.   The strata consists of 134 residential strata lots in 2 buildings. Sterling purchased strata lot 119 in 2014.

16.   The strata says SL 119 has been occupied by tenants since its purchase by Sterling. The strata say the tenants have repetitively and continuously breached the strata’s bylaws and damaged both common property and other strata lots.

17.   The strata filed amended bylaws in the Land Title office on October 30, 2015 which I find apply here. The strata later filed further amendments in the LTO which, I find, do not apply to this dispute. I will address the applicable bylaws below.

Chargeback

18.   In an August 11, 2020 letter, the strata warned Sterling that it had received a complaint that its tenant was observed pounding on, and causing damage to, the hallway walls, contrary to bylaw 10.1. The strata gave Sterling the opportunity to respond in writing, or to request a hearing, before the strata decided whether any bylaws were contravened and, if so, what enforcement measures it would take.

19.   Bylaw 10.1 prohibits an owner, tenant, or others, from damaging strata premises which includes common property. The strata plan shows the stairwell and hallways are common property.

 

20.   The strata said it would charge back all repair costs to Sterling’s strata lot account. The strata referred to bylaw 10.3, which requires an owner to indemnify the strata for any costs or expenses arising out of damage for which the owner, or their guests, are responsible. Under bylaw 1.10 “Guests” includes a tenant.

21.   Under section 121 of the SPA, a bylaw is unenforceable if it contravenes the SPA. SPA section 130 says a strata can only fine a tenant, not the owner, for a tenant’s bylaw violations. SPA section 133 says a strata may do what is reasonably necessary to remedy a bylaw contravention and may require payment of the remediation costs from the person who may be fined under section 130 which, in this case, would be the tenant. While SPA section 131 allows the strata to collect the tenant’s fine or remediation cost from the landlord, the strata must first levy the fine or seek reimbursement of remediation costs from the tenant.

22.   Bylaw 10.3 allows the strata to charge the owner directly, rather than the tenant. However, bylaw 10.3 does not require a bylaw violation to charge repair costs back to the owner. As the bylaw addresses repair costs for damage, instead of costs to remedy a bylaw contravention, I find it does not contravene sections 130 and 133 of the SPA. So, I find SPA section 121 does not apply and find bylaw 10.3 enforceable.  

23.    the strata is not seeking repayment of costs to remedy a bylaw contravention under section 133 of the SPA but rather, charging the owner for its costs to repair damage done by the tenant.

24.   On August 20, 2020 the strata advised Sterling that it had assessed $918.75 against Sterling’s strata lot account, as the cost of repairing the common property wall damaged by Sterling’s tenant. The attached invoice indicates the wall was repaired on August 19, 2020 by Sage Building Management.

25.   In his August 20, 2020 email to the strata, DH asked the strata for proof the damage was caused by the tenant, photos of the alleged damage, any quote for repairing the damage, and confirmation that the building manager repaired the damage outside of normal working hours that it was already being paid for.

26.   Sterling says the strata did not respond to its August 20, 2020 request for information. As the strata does not dispute this, I accept it to be true. I infer Sterling argues that the strata failed to give it proper notice of the complaint and an opportunity to respond to the complaint before charging Sterling the repair costs.

27.   Section 133 of the SPA says that a strata may do what is reasonably necessary to remedy a bylaw contravention and may require payment of the remediation costs from the owner or tenant who contravened the bylaw. Section 135(1)(c) of the SPA says the strata must not require a person to pay the costs of remedying a bylaw contravention without first given the person particulars of the complaint in writing, and a reasonable opportunity to answer the complaint, including a hearing if requested. I find section 135(1)(c) does not apply in this case as the strata charged the repair costs to Sterling under bylaw 10.3, rather than under SPA section 133. While it would have been helpful for the strata to provide Sterling with a copy, or summary of, the written complaint and the hallway photo, I do not find the strata was required to do so under the SPA, prior to charging Sterling the repair costs under bylaw 10.3.

28.   Sterling says the strata has not proven its tenant damaged the hallway. I disagree. The strata’s photo shows a group of roundish indents and shallow holes in a wall. The parties agree that the damaged wall is in the stairwell, which is beside SL 119, according to the strata plan. In an August 3, 2020 email another strata resident (X) reported that he heard “the resident from #403” yelling, screaming and crying for about an hour. X then heard knocking on the door and “serious bangling like with a hammer”. When X went into the hallway, he saw the resident come into the hallway from the stairway door. The tenant told X that the banging was coming from down the hallway then “threw her body against the door several times till it popped open” (reproduced as written).

 

29.   Based on X’s observations, the location of the damage, and the tenant’s behaviour, I find it more likely than not the tenant caused the stairway wall damage, despite that X did not directly see the tenant damage the wall. Sterling has provided no contrary evidence, such as a statement from the tenant denying that she caused the damage. On balance, I find the strata’s conclusion that the tenant caused the damage was a reasonable one.

30.   Under bylaw 10.3 I find Sterling is responsible for reimbursing the strata its stairway wall repair costs. Based on handwritten notes on the August 19, 2020 invoice, I find the strata paid its property manager $918.75 to repair the stairway hall damage.

31.   I disagree with Sterling that the wall damage could have been repaired for less than the $918.75. This is because Sterling provided no evidence, such as an expert opinion or a repair estimate, to show that the $918.75 repair cost was excessive or unreasonable. In the absence of any contrary evidence, I find the August 19, 2020 invoice reasonable for the work done.

32.   Sterling says the strata has failed to prove the property manager had to repair the hallway outside of regular working hours and so the repair work should have been included in the manager’s regular work duties, at no extra cost to the strata, or to Sterling. Sterling provided no evidence supporting this position. Further, I have found the strata did pay the repair costs, regardless of whether the strata also paid the property manager a salary or hourly fee to manage the strata property.

33.   In summary, I find the $918.75 repair costs reasonable. I further find bylaw 10.3 requires Sterling to reimburse the strata for those repair costs, unless the repair costs were captured in the November 16, 2020 consent order, as discussed below.

Consent Order

34.   On May 1, 2020 the strata filed a petition in the BC Supreme Court, asking that the court evict Sterling’s tenants from SL 119, order Sterling to sell the strata lot, allow the strata to enter the strata lot to clean, and order the tenants to abide by the SPA and the strata’s bylaws. The strata filed affidavits in support of its petition, describing the tenants’ history of contravening the strata’s bylaws and alleging that the tenants made loud noises, smoked marijuana, left common property doors unsecured, brought animals onto common property, and took mail and other property belonging to other residents.

35.   The parties filed a consent order in court on November 16, 2020. Sterling says the strata’s lawyer prepared the consent order. Since the strata does not dispute the statement, I accept it as true.

36.   The relevant terms of the consent order include:

•         clause 8 – Sterling agrees to pay monthly strata fees, special levies and other amounts that “become due and owing” during its ownership of the strata lot, except as set out in the order.

•         clause 9 – Sterling agrees to pay the strata a total of $1,120 for costs of the court proceeding to fully satisfy all fines, issued and potential, for all events up to and including August 26, 2020.

37.   Sterling says Section 9 of the consent order includes the $918.75 in repair costs because the costs relate to an event that occurred prior to August 26, 2020 and the costs were charged back to Sterling prior to August 26, 2020.

38.   The strata says the consent order only refers to fines, and so does not include the repair costs charged. I agree.

39.   I find the consent order is a contract, or agreement, between the parties and I must interpret it as such. The ‘modern approach’ to contract interpretation involves reading the contract as a whole and giving the words their normal and ordinary meaning in line with the real world surrounding circumstances of the parties when they made the contract (see Sattiva Capital Corp. v. Creston Moly Corp. 2014 SCC 53).

 

40.   Sterling provided the body of an email from CI, who was Sterling’s lawyer in the Supreme Court action. The undated email says that CI intended the consent order to resolve “all charges for contravention of the bylaws or remedying the same”. CI said it was her understanding that the charged repair costs were resolved in the consent order, based on communications with the strata’s lawyer. Neither CI nor Sterling provided copies of any communications between CI and the strata’s lawyer.

41.   In contrast, the strata says it intended for the consent order to resolve only fines and not the charged repair costs.

42.   The consent order expressly refers to full satisfaction of fines in clause 9. It does not expressly include repair costs. Nor does clause 9 include “other amounts” as clause 8 does. I find that, by using the word “fine” and not any other words in clause 9, the parties agreed to resolve the fines owing, or that might become owing, but did not agree to resolve any other amounts owing, or that might become owing, such as repair costs. Given that the strata charged the repair costs to Sterling in August, I find it likely that the parties were both aware of the outstanding costs when they drafted, and signed, the November 16, 2020 consent order. In other words, if both parties intended the consent order to include the repair costs, then they could have, and should have, included “repair costs”, or “other amounts” in the terms of the order.

43.   On balance, I find the plain and ordinary meaning of the word ‘fine’ in this context does not include repair costs.

44.   Sterling also says the charged repair costs are not amounts that “became due and owing” under clause 8 of the consent order and so Sterling is not obliged to pay. I disagree. While clause 8 identifies Sterling’s obligations to pay the strata amounts going forward, it does not specifically excuse Sterling from any other payments it may be required to make, such as outstanding strata fees or these repair costs.

45.   On balance, I find the consent order does not resolve the outstanding charged repair costs.

Repair Costs

46.   In summary, I find Sterling must pay the strata $918.75 in repair costs.

47.   I dismiss Sterling’s claim and allow the strata’s counterclaim. I order Sterling to pay the strata $918.75 in repair costs.

CRT FEES, EXPENSES AND INTEREST

48.   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. As the strata was successful in its counterclaim, I order Sterling to reimburse the strata $125 in CRT fees. As the unsuccessful party, Sterling is not entitled to reimbursement of its CRT fees. Neither party claimed any dispute-related expenses.

49.   The Court Order Interest Act (COIA) applies to the CRT. The strata is entitled to pre-judgement interest on the $918.75 repair costs from August 20, 2020, the date of the strata’s letter requesting payment, to the date of this decision. This equals $3.33.

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

ORDERS

51.   Within 30 days of the date of this order I order Sterling to pay the strata a total of $1,047.08, broken down as follows:

a.    $918.75 in repair costs,

b.    $3.33 in prejudgment interest, and

c.    $125 in CRT fees.

52.   The strata is also entitled to post-judgment interest under the COIA.

53.   Sterling’s claim is dismissed.

54.   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.