Date Issued: March 9, 2022

File: ST-2021-005376

Type: Strata

Civil Resolution Tribunal

Indexed as: Nguyen v. The Owners, Strata Plan Vr 97, 2022 BCCRT 260

Between:

THI NGUYEN

Applicant

And:

The Owners, Strata Plan Vr 97

Respondent

REASONS FOR DECISION
Tribunal Member:	J. Garth Cambrey, Vice Chair

INTRODUCTION

1.      This strata property dispute is about a strata corporation’s chargeback of water damage repair and investigation invoices.

2.      The applicant, Thi Nguyen, owns strata lot 24 (#602) in the respondent strata corporation, The Owners, Strata Plan Vr 97 (strata).

3.      Ms. Nguyen says the strata improperly charged her strata lot for expenses related to water damage that occurred to the strata lot immediately below it (#502). She says the strata is responsible for the expenses because it failed to prove the leak originated from #602. Ms. Nguyen seeks an order that the strata reverse its charge back of $12,131.28 from #602’s account. I discuss the charge back amount in greater detail below. Ms. Nguyen also says the strata is responsible to reimburse her $4,568.00 for the cost of repairing #602 as a result of the strata’s leak investigation.

4.      The strata disagrees with Ms. Nguyen and says water damage to #502 was caused by 2 separate incidents originating in #602. The strata says there was a leak from a bleeder valve for the hot water heating system located in #602, and a leak from the #602 bathroom. The strata says, under its bylaws, Ms. Nguyen is responsible to pay it $12,131.28 for the cost to investigate the damage. As for the Ms. Nguyen’s claim for costs to repair #602 after the strata’s investigation, the strata says it is not responsible because under its bylaws Ms. Nguyen is responsible for repairing and maintaining #602, given there was no insurance claim under the strata policy.

5.      Ms. Nguyen is self-represented. A strata council member represents the strata.

6.      As explained below, I find in favour of Ms. Nguyen.

JURISDICTION AND PROCEDURE

7.      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). CRTA section 2 says the CRT’s mandate is to provide dispute resolution services accessibly, quickly, economically, informally, and flexibly. In resolving disputes, the CRT must apply principles of law and fairness, and recognize any relationships between the dispute’s parties that will likely continue after the CRT process has ended.

8.      CRTA section 39 says the CRT has discretion to decide the format of the hearing, including by writing, telephone, videoconferencing, email, or a combination of these. Here, I find that I am properly able to assess and weigh the documentary evidence and submissions before me. Further, bearing in mind the CRT’s mandate that includes proportionality and a speedy resolution of disputes, I find that an oral hearing is not necessary in the interests of justice and fairness.

9.      CRTA section 42 says the CRT may accept as evidence information that it considers relevant, necessary and appropriate, even where the information would not be admissible in court. The CRT may also ask questions of the parties and witnesses and inform itself in any other way it considers appropriate.

10.   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 – Late Evidence

11.   Ms. Nguyen submitted late evidence after the deadline given to her by CRT staff. The strata was notified of the late evidence and responded to it, so I find there were no procedural fairness issues about the late evidence submitted. As such, I have allowed the late evidence and have considered it prior to deciding this dispute.

ISSUES

12.   The issues in this dispute are:

a.    Is Ms. Nguyen responsible for expenses to investigate water damage caused to #502?

b.    Is the strata responsible to reimburse Ms. Nguyen $4,568.00 for damage it caused to #602?

BACKGROUND, REASONS AND ANALYSIS

13.   As applicant in a civil proceeding such as this, Ms. Nguyen must prove her claims on a balance of probabilities, meaning “more likely than not”. I have read all the submissions and evidence provided by the parties, but refer only to information I find relevant to give context for my decision.

14.   The strata was created in May 1973 and consists of an 11-storey building. It continues to exist under the Strata Property Act (SPA).

15.   Land Title Office (LTO) documents show the strata filed a new set of bylaws on December 7, 2017 which repealed and replaced all previous bylaws, except the strata’s pet and rental bylaws, which were not amended and continued. I infer the Standard Bylaws do not apply. Another bylaw amendment was filed with the LTO in June 2019, but that amendment is not relevant to this dispute. I discuss the applicable bylaws below as necessary.

16.   The following facts are not in dispute.

17.   In January 2017, the previous owner of #602 sought and obtained approval to complete various alterations to #602 that included bathroom renovations. The strata’s approval of the requested alterations required the previous owner to sign an “Assumption of Responsibility” form, which was provided in evidence.

18.   On about February 28, 2021, the strata received a report of water ingress into a #502 closet from the resident of #502. The strata retained Modern Niagara Building Services (Modern) to investigate the leak. Modern conducted its investigation between March 1 and 4, 2021, but could not locate the source of the leak, despite cutting a hole in the bathroom wall of #602. Modern provided an invoice to the strata dated March 31, 2021 (Modern invoice) that gave a detailed explanation of what work was done but importantly does not indicate the source of the leak. The amount of Modern’s invoice was $4,231.74, which forms part of the amount the strata charged back to #602. According to Modern, its representatives believed there was a “pool of water” between the subfloor and concrete slab of floors 5 and 6. Ultimately, Modern recommended the strata retain a restoration company to determine the source of the leak.

19.   The strata then retained Circle Restoration (Circle) to investigate the leak. According to Circle’s March 15, 2021 report (Circle report), Circle and its subcontractors attended the building, including #602, between March 5 and 13, 2021. On March 5, 2021, Circle noted an active leak in #502’s bedroom closet. On the same day, Circle determined the faucet or diverter valve for the shower in #602 was leaking and turned the water off to the bathroom of #602. This plumbing leak was repaired on March 6, 2021, but the Circle report states the closet leak in #502 continued. Circle then completed further investigation of #602 and other strata lots. During the course of Circle’s investigation, another leak in the living room ceiling of #502 appeared on March 13, 2021. Circle states this leak was traced to a loose bleeder valve cap in #602, which Circle had tightened, and the leak stopped. Circle provided the strata with 2 invoices for its work, both dated April 8, 2021. It is unclear why Circle submitted 2 invoices as both relate to the work performed between March 5 and 13, 2021. In any event, 1 invoice is for $6,589.29 and the other is for $1,310.25.

20.   Together, the Modern invoice and the 2 Circle invoices total $12,131.28, which is the amount the strata charged back to Ms. Nguyen, and the amount she requests be reversed.

21.   The strata’s plumber attended #602 on March 15, 2021 to replace the bleeder valve cap that was tightened by Circle. The same plumber returned on March 25, 2021 to replace a different bleeder valve cap in #602 that Ms. Nguyen discovered was leaking on March 21. Ms. Nguyen’s daughter apparently tightened that bleeder valve cap to stop the leak on the same date. The parties agree that the second bleeder valve leak did not cause any further leaks into #502 but did damage the flooring in #602. Ms. Nguyen admits the flooring was repaired by her insurer but suggests it was suspicious that the second bleeder valve, only a few feet away from the first bleeder valve, was not inspected by Circle. Given the flooring damage in #602 was covered under Ms. Nguyen’s insurance policy, and she did not claim for the cost of the floor replacement, I find the issue of the floor damage in #602 is not before me. Therefore, I need not determine what might have caused the second bleeder valve to leak.

22.   On May 3, 2021, the strata’s property manager wrote to Ms. Nguyen to inform her that the strata had found #602 caused the leak into #502. The letter stated the total cost of the leak investigation by Modern and Circle of $12,131.28 was Ms. Nguyen’s responsibility and would be charged to her strata lot account under bylaws 5.2 and 7.3(e), which I discuss below.

23.   The parties agree a council hearing was held on June 29, 2021 that did not resolve the dispute.

24.   It is undisputed that the strata’s water damage deductible under its insurance policy is $100,000, so the expenses at issue here are not covered under the strata’s policy.

Is Ms. Nguyen responsible for investigation expenses related to the water damage in #502?

25.   In order for Ms. Nguyen to be responsible for the investigation expenses related to the water damage in #502, she must have agreed to take responsibility for the expenses, or be responsible under the SPA or bylaws.

26.   While it is clear Ms. Nguyen agreed to allow the strata to investigate water leaks into #502 by giving access to #602, there is no evidence Ms. Nguyen agreed to pay the investigation expenses.

27.   SPA section 72 requires the strata to repair and maintain common property among other things. Section 72 also permits the strata, by bylaw, to take responsibility of parts of a strata lot, which the strata has done under bylaw 10.1, discussed below. There is no other provision of the SPA that addresses repair and maintenance responsibilities.

28.   Under bylaw 3.1, an owner must repair and maintain their strata lot except for repair and maintenance that is the strata’s responsibility under the bylaws. Bylaw 10.1 says the strata must repair and maintain common assets, common property that has not been designated as limited common property (LCP) of the strata, LCP based on the frequency of the repairs, and certain parts of a strata lot. The bylaw requires the strata to repair and maintain any LCP or strata lot that involves the structure of the building, the exterior of the building, and “doors, windows and skylights on the exterior of the building or that front on common property”.

29.   As noted, there are 2 different areas of water damage in #502; the main area in the bedroom ceiling closet below #602’s bathroom, and a secondary area in the living room ceiling, near and below #602’s patio door.

30.   It is clear from the Circle report that the water damage at #502’s living room ceiling was caused by a leaking bleeder valve in #602 because the leak stopped after the valve cap was tightened. Based on the photograph in evidence, and that Circle immediately addressed and stopped the leak, I find the water damage was minimal and amounted to a water stain.

31.   There is no evidence that confirms the main bedroom closet leak into #502 came from #602, as the strata claims.

32.   Based on my review of the Modern invoice I find the work completed by Modern consists entirely of investigation expenses as Modern did not locate the source of any leak. Rather, Modern speculated that there was a “pool of water” on the concrete floor of #602 below a subfloor, but this was not proven. As part of its investigation, Modern cut a hole in the bathroom tiles of #602 approximately 2 feet square.

33.   As for the Circle invoices, based on the Circle report, I find the majority of time charged also concerned investigation of the water leaks. I find the only part of the invoices that included repairs was time spent to repair or remove a leaking faucet or shower diverter valve in #602’s bathroom, and tightening a bleeder valve cap on the hot water system in #602. The shower faucet or diverter valve issue was discovered on March 5, 2021 and the plumbing was repaired or removed the next day. Circle stated the bleeder valve only leaked when the heating in #602 was turned on. There is no evidence about how much water leaked from these 2 areas nor for how long the leaks may have been occurring. More importantly, the Circle report states there was no change in the volume of water dripping into #502, after the $602 bathroom plumbing repairs were complete. Therefore, I find the bleeder valve and faucet/diverter valve leaks in #602 had minimal, if any, impact on the leak into #502. This is also supported by Circle’s continued investigation after the plumbing repairs were completed that included further exploratory openings in #602.

34.   Circle’s subcontractor also replaced the wax seal and supply lines for the toilet in #602, but I find this work was not done as the result of a leak. Rather, I find it was done as a precautionary measure after the toilet was removed to allow the drywall behind it to be opened for inspection into the wall cavity. I find Circle’s second invoice of April 8, 2021 for work completed on March 8 and 10, 2021, summarizes its overall findings. The invoice describes the leak into #502 had stopped on March 10, 2021 and that Circle’s plumber could not make it leak despite testing roof drains and other upper unit plumbing fixtures. The invoice further describes that it was “possible” the wax seal or shower plumbing in #602’s bathroom were leaking but does not confirm they did.

35.   Finally, the invoice also stated the weather had changed, implying that weather may have also caused the leak. This is important as there is a copy of a text message to the strata’s building representative that suggests #602’s balcony sealant should be checked for leaks, which appears not to have been done. As noted above, the strata is responsible for the exterior of the building, including windows and doors.

36.   Based on all of this, I find that Circle did not confirm the source of the leak into #502’s bedroom. However, as explained below, even if the source of the leak was from #602, I find Ms. Nguyen would still not be responsible for the investigation expenses.

37.   In its May 3, 2021 letter, the strata does not differentiate the 2 leaks and simply states that Ms. Nguyen is responsible for the expenses of ”investigating and locating the sources of water leaks from your unit to the unit below”. I find the strata’s letter does not request reimbursement for any repair and maintenance that may have been completed by Modern or Circle and is limited to recovery of leak investigation costs. The strata relies on and cites bylaws 5.2 and 7.3(e) in its letter.

38.   Bylaw 5.2 says that if an owner is responsible for any loss of damage to a strata lot, among other things, that owner must indemnify and save harmless the strata corporation from the expense of “any maintenance, repair or replacement rendered necessary to the strata lot” and other areas, but only to the extent the expense is not covered by insurance. Notably, bylaw 5.2 does not make an owner responsible for investigation costs.

39.   Bylaw 7.3 relates to alterations that must be approved by the strata and states the strata may require that an owner agree in writing to certain term and conditions, including those set out in subsection (e). Subsection (e) states that the owner who receives approval for the alteration may be required to ensure they, or any subsequent owner who receives a benefit from the alteration, indemnifies and holds the strata harmless against, among other things, any costs or expenses incurred by the strata that relate to the alteration. I find bylaw 7.3(e) allows the strata to require an owner to enter into an agreement that includes this term, such as the “Assumption of Responsibility” agreement. While the previous owner entered into such an agreement, I find that agreement does not apply to the Ms. Nguyen, who is a subsequent owner. In other words, a written agreement between the strata and the previous owner does not bind Ms. Nguyen because she is not a party to the agreement. Therefore, I find bylaw 7.3(e) does not apply to Ms. Nguyen as she did not make the #602 bathroom alterations.

40.   There is another bylaw, 7.7, that could have been argued by the strata but was not. Bylaw 7.7 states that the strata will not be responsible for “repairing, restoring or replacing any alterations undertaken by an owner” to a strata lot or other area, and that the current owner of the strata lot receiving the benefit of the alteration must indemnify the strata for “all such additional costs”. Similar to bylaw 5.2 discussed above, I find the additional costs referenced in bylaw 7.7 do not include investigation expenses.

41.   Based on my review of the strata’s bylaws, I find the strata was entitled to charge Ms. Nguyen for repair costs relating to the bathroom alterations under bylaw 7.7, but chose not to do so. Rather, the strata chose only to seek reimbursement of leak investigation costs which it not entitled to recover under its bylaws.

42.   For these reasons, I find Ms. Nguyen is not responsible to pay the Modern and Circle invoices of $12,131.28 the strata charged back to #602. Therefore, I order the strata to reverse this amount from the account of #602.

Is the strata responsible to reimburse Ms. Nguyen $4,568.00 for repair expenses?

43.   As I have mentioned, bylaw 3.1 generally makes Ms. Nguyen responsible for repairs to #602. Although Ms. Nguyen did not use these words, I find the essence of her claim to be one of significant unfairness. She says she should not have to pay to repair the exploratory openings in #602 made by the strata’s contractors because the strata did not prove the water leak into #502 was from #602. I agree.

44.   Based on the photographic evidence, the exploratory openings were significant. Several large holes were cut into bedroom and bathroom walls, including tiled shower and other walls in #602. Ms. Nguyen undisputedly paid $4,568.00 to repair the exploratory openings as evidenced by an invoice from TDD Flooring and Renovation. I note the invoice is incorrectly totalled. The correct total is $4,768.00, $200 more that Ms. Nguyen’s claim. However, I accept Ms. Nguyen’s submission that she paid $4,568.00, so I have not adjusted the amount of her claim. Further, it would be procedurally unfair for me to award damages in excess of her claimed amount.

45.   SPA section 164 sets out the BC Supreme Court’s authority to remedy significantly unfair actions. The CRT has jurisdiction over significantly unfair actions under CRTA section 123(2), which has the same language as SPA section 164. See The Owners, Strata Plan BCS 1721 v. Watson, 2018 BCSC 164. Significantly unfair means conduct that is oppressive in that it is burdensome, harsh, wrongful, lacking in probity or fair dealing, or done in bad faith, or conduct that is unfairly prejudicial in that it is unjust or inequitable. See Reid v. Strata Plan LMS 2503, 2001 BCSC 1578, affirmed in 2003 BCCA 126 and Kunzler v. The Owners, Strata Plan EPS 1433, 2021 BCCA 173.

46.   In order to be successful, Ms. Nguyen must show that the strata’s actions are more than mere prejudice or trifling unfairness. See Ernest & Twins Ventures (PP) Ltd. v. Strata Plan LMS 3259, 2004 BCCA 597 and Reid v. Strata Plan LMS 2503, 2003 BCCA 126 at paragraphs. 27 to 29. I find she has done so.

47.   At a basic level, the issue is whether the strata treated Ms. Nguyen significantly unfairly by causing $4,568.00 in damage to #602 while investigating the water leak into #502. Then, having not established the leak was coming from #602, declined to repair #602 because the strata’s insurance policy was not triggered. Put another way, the strata caused $4,568.00 in damage to #602 while unsuccessfully sourcing a leak, and left Ms. Nguyen to repair the damage it caused.

48.   I find the strata’s actions not to repair #602 were burdensome, harsh and wrongful. The strata did not argue the amount of the repair expenses, which I find are reasonable, so I order the strata to pay Ms. Nguyen $4,568.00 as damages.

CRT FEES, EXPENSES AND INTEREST

49.   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. Ms. Nguyen was the successful party so I find the strata must reimburse her $225.00 for CRT fees.

50.   No party claimed disputed-related expenses, so I order none.

51.   The Court Order Interest Act (COIA) applies to the CRT. Ms. Nguyen is entitled to pre-judgement interest under the COIA for the $4,568.00 she paid to repair #602. The date Ms. Nguyen paid the repair invoice is unclear. However, on a judgement basis, I find it reasonable to use the date of the Dispute Notice of July 15, 2021 as the starting date for pre-judgment interest. I find Ms. Nguyen is entitled to pre-judgement interest from July 15, 2021 until the date of this decision. I calculate the interest to be $13.40.

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

ORDERS

53.   Within 30 days of this decision, I order the strata to:

a.    Reverse the Modern and Circle invoice charges totalling $12,131.28 from the account of #602, and

b.    Pay Ms. Nguyen a total of $4,806.40 broken down as follows:

                              i.        $4,568.00 for damages,

                            ii.        $13.40 for pre-judgement interest under the COIA, and

                           iii.        225.00 for CRT fees.

54.   Ms. Nguyen is entitled to post-judgement interest under the Court Order Interest Act, for CRT fees as applicable.

55.   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.