Date Issued: July 2, 2021

File: ST-2020-009366

Type: Strata

Civil Resolution Tribunal

Indexed as: Drance v. The Owners, Strata Plan KAS 3625, 2021 BCCRT 728

Between:

MICHAEL DRANCE

Applicant

And:

The Owners, Strata Plan KAS 3625

Respondent

INTRODUCTION

1.      The applicant, Michael Drance, owns a strata lot in the respondent strata corporation, The Owners, Strata Plan KAS 3625 (strata). The strata building is a hotel. The hotel business is operated as Summerland Waterfront Resort Inc. (SWR).

2.      Mr. Drance claims the strata overcharged him for strata fees and improperly collected GST on his strata fees. He seeks an order that the strata start charging the “correct amount” of strata fees, refile its GST returns and refund the amounts of GST he allegedly paid. He also seeks $7,500 for his “time and legal expenses”.

3.      The strata says Mr. Drance is simply frustrated that his strata fees are too high. It says Mr. Drance is paying exactly what all other owners are paying according to their strata lot unit entitlement. The strata also says the CRT does not have jurisdiction to decide the GST claim because it is a Canada Revenue Agency (CRA) matter. In the alternative, the strata says it applied GST to strata fees as required under the Excise Tax Act and there is no basis to grant Mr. Drance’s requested remedies.

4.      This dispute is 1 of 3 linked disputes that I have decided together. The other two disputes are: ST-2020-009835 and ST-2020-009837. I also issued a recent decision in Drance v. The Owners, Strata Plan KAS 3625, 2021 BCCRT 3625 (Drance A) involving the same parties.

5.      Mr. Drance is self-represented. The strata is represented by a strata council member.

JURISDICTION AND PROCEDURE

6.      These are formal written reasons of the Civil Resolution Tribunal. 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.

Request to Withdraw

10.   After this dispute was assigned to me for a decision, Mr. Drance requested permission from the CRT to withdraw all his claims in this dispute.

11.   Under CRT rule 6.1 a party may ask the CRT member for permission to withdraw 1 or more claims assigned to a CRT member for adjudication. Rule 6.1(5) sets out a list of factors for me to consider, including the reason for the withdrawal, the CRT’s mandate, any prejudice to the parties, whether it is in the interest of justice and fairness, and any other factors the CRT considers appropriate.

12.   Mr. Drance says he realized after I issued my decision in Drance A that he made a legal error in bringing this dispute against the strata. He says it would be a waste of time for the CRT to decide this dispute and asks to withdraw it.

13.   The strata objects to Mr. Drance’s withdrawal request. It states that Mr. Drance “bombarded [the strata] with claims requiring hours” for it to respond. It says the strata ownership requires some finality by the CRT issuing a decision and this will not occur if I permit Mr. Drance to withdraw this dispute. It asks that I deny Mr. Drance’s request to withdraw.

14.   The parties already made their submissions and I find there would be some prejudice to the strata in permitting the withdrawal after it has gone through the entire CRT proceeding. Also, I am already deciding the 2 linked disputes involving the same parties. Considering the parties’ ongoing relationship and the number of CRT disputes Mr. Drance filed against the strata, I find it is in the interest of justice and fairness to issue a decision on this dispute. I decline Mr. Drance’s withdrawal request at this late stage.

ISSUES

15.   The issues in this dispute are:

a.    Should I refuse to resolve any of Mr. Drance’s claims?

b.    Is the strata charging Mr. Drance incorrect strata fees?

c.    Must the strata refile the GST returns and refund Mr. Drance his GST?

d.    Is Mr. Drance entitled to the claimed $7,500 in legal fees and for his own time in pursuing these claims?

EVIDENCE AND ANALYSIS

16.   In a civil claim such as this one the applicant must prove their claims on a balance of probabilities. This means Mr. Drance must prove on the evidence that his position is more likely than not the correct one.

17.   Mr. Drance made submissions on matters that involve his claims in the other linked disputes that I find repetitive and not directly relevant to the claims here. He also made submissions over issues that I find were decided in Drance A and a prior CRT dispute published as The Owners, Strata Plan KAS 3625 v. Drance, 2021 BCCRT 151 (KAS 3625). So, while I have reviewed all Mr. Drance’s submissions, I have only referred to what I find necessary to explain and give context to my conclusions on the claims before me.

Is the strata charging Mr. Drance incorrect strata fees?

18.   Mr. Drance did not point to any specific error the strata made in calculating his strata fees. Instead, Mr. Drance essentially argues the strata should not have allocated common expenses for common property repair and maintenance to his strata fees because his strata lot is not in the SWR’s hotel “rental” pool and does not benefit from the hotel revenue. I find no need to further summarize Mr. Drance’s arguments because I find they are basically the same or similar arguments as he made in Drance A over alleged misallocation of common expenses. As set out in Drance A, I found the SPA prevents the strata from allocating common expenses in the way Mr. Drance asserted it should be done and I dismissed his claim. My discussion over common expenses is at paragraphs 46 to 54 of the Drance A decision. I find Mr. Drance has simply reframed his claim here to be more about his own strata fees and it is essentially the same underlying claim I decided in Drance A.

19.   Under CRTA section 11(1) the CRT may refuse to resolve a claim if it considers the claim was already resolved through a legally binding process or is an abuse of process. I refuse to resolve Mr. Drance’s claim over his strata fees under SPA section 11(1) because I find this claim was already decided in Drance A and it would be an abuse of process to resolve it.

20.   Also, I find the requested order that the strata start charging the correct amount for strata fees is unnecessary and too broad to be enforceable. The strata is already required to follow the SPA and charge “correct” strata fees. So, I would have declined to grant the requested remedy in any event.

Must the strata refile the GST returns and refund Mr. Drance the amount of GST he paid?

21.   Mr. Drance argues that the strata incorrectly charged him GST on his strata fees since 2019. He says the strata should not collect GST on his strata fees because his strata lot is not in the rental pool nor part of the hotel business.

22.   The strata says it must charge and remit GST on Mr. Drance’s strata fees in this commercial strata hotel. It says it is required to do so by law under Part IX of the federal Excise Tax Act. It argues that Mr. Drance’s claim is not about SPA matters and does not fall within the CRT’s jurisdiction and is a CRA matter instead. It says Mr. Drance has the option of recovering his GST, if he is entitled to it, by filing a GST return with the CRA.

23.   Mr. Drance says he called the CRA himself and confirmed his strata lot does not “attract GST”. Mr. Drance does not specify who he called at the CRA. The CRA’s Excise and GST/HST Rulings and Interpretations Service provides rulings and interpretations of Part IX of the Excise Tax Act about GST. Mr. Drance did not submit any written ruling or interpretation from the CRA. I find Mr. Drance’s own statement on what the CRA allegedly told him is not neutral and is not persuasive evidence that the CRA decided GST does not apply to his strata lot.

24.   The CRT’s strata property jurisdiction is set out under CRTA section 121 and includes a list of matters in “respect of” the SPA. I find the central issue in Mr. Drance’s claim is whether or not GST applies to Mr. Drance’s strata fees under the Excise Tax Act. Absent a CRA ruling, I find Mr. Drance is essentially asking me to interpret the Excise Tax Act and determine whether GST applies to his strata fees.

25.   I agree with the strata that this question is a CRA matter that does not fall within the CRT’s jurisdiction. I also agree with the strata that the process for Mr. Drance to obtain a GST refund is through an application to the CRA. Further, the CRT has no jurisdiction to order the CRA to issue a GST refund.

26.   CRTA section 10(1) says the CRT must refuse to resolve a claim that it considers is not with in the jurisdiction of the CRT. As I find this claim falls is a CRA matter and outside the CRT’s jurisdiction, I must refuse to resolve Mr. Drance’s GST-related claim on that basis.

CRT FEES and EXPENSES

27.   I find Mr. Drance’s claim for $7,500 for legal fees and his own time is a claim for dispute-related expenses. Under section 49 of the CRTA, and the CRT rules, the CRT will generally order dispute-related expenses and CRT fees to the successful party. However, the CRT will not order payment of compensation for time spent dealing with a CRT proceeding or legal fees except in extraordinary circumstances. I find no extraordinary circumstances here.

28.   Also, as Mr. Drance was the unsuccessful party, I find he is not entitled to reimbursement of his claimed $7,500 expenses for his own time and legal fees. So, I dismiss his claim for CRT fees and dispute-related expenses.

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

ORDER

30.   I dismiss Mr. Drance’s claims for CRT fees and expenses and refuse to resolve his remaining claims.