Date Issued: March 23, 2022

File: ST-2020-006970

Type: Strata

Civil Resolution Tribunal

Indexed as: 1093870 B.C. Ltd. v. The Owners, Strata Plan NW213, 2022 BCCRT 328

Between:

1093870 B.C. LTD. and SEPIDEH MARANDI

ApplicantS

And:

The Owners, Strata Plan NW213, TIMOTHY SARGEANT, CHRISTOPHER GENGE and CLAUDIO ASSAN-ALCALDE

RespondentS

REASONS FOR DECISION
Tribunal Member:	Richard McAndrew

INTRODUCTION

1.      This dispute is about strata corporation voting, bylaw enforcement and strata expenditures. The applicants, 1093870 B.C. Ltd. (870) and Sepideh Marandi own strata lots in the respondent strata corporation, The Owners, Strata Plan NW213 (strata). The individual respondents, Timothy Sargeant, Christopher Genge and Claudio Assan-Alcalde, acted as strata council members.

2.      The applicants request the following:

a.    The applicants request orders setting aside a 3/4 vote resolution approved on September 29, 2020

b.    The applicants request and they ask for a new vote on a resolution approved on July 31, 2019.

c.    The applicants request the removal of bylaw fines totalling $3,600 against Ms. Marandi’s strata lot for allegedly keeping a pet in violation of bylaw 37.

d.    The applicants request the removal of $400 in bylaw fines against 870’s strata lot for allegedly storing items on its balcony in violation of bylaw 3(4)(q).

e.    The applicants ask for an order requiring the strata to enforce its balcony bylaws against other strata lots.

f.     The applicants request an order scheduling a special general meeting (SGM) to determine whether the owners approve the strata’s 2019 expenditures for legal expenses.

3.      The respondents deny all claims.

4.      870 is represented by its principal or employee, NF. Ms. Marandi is self-represented. All respondents are represented by lawyer, Shawn Smith.

JURISDICTION AND PROCEDURE

5.      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.

6.       The CRT has discretion to decide the format of the hearing, including by writing, telephone, videoconferencing, or a combination of these. Though I found that some aspects of the parties’ submissions called each other’s credibility into question, I find I am properly able to assess and weigh the documentary evidence and submissions before me without an oral hearing. In Yas v. Pope, 2018 BCSC 282, the court recognized that oral hearings are not always necessary when credibility is in issue. Further, bearing in mind the CRT’s mandate of proportional and speedy dispute resolution, I decided I can fairly hear this dispute through written submissions.

7.      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.

8.      Under CRTA section 123, 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.

Claims against Mr. Sargeant, Mr. Genge and Mr. Assan-Alcalde

9.      The parties have resolved and withdrawn multiple claims from the Dispute Notice before this dispute was submitted for adjudication. I find that there are no remaining claims against Mr. Sargeant, Mr. Genge and Mr. Assan-Alcalde. So, I dismiss the applicants’ claims against them.

ISSUES

10.   The remaining issues in this dispute are:

a.    Should I set aside the owners’ approval of the September 29, 2020 special resolution for re-pipe funding?

b.    Should the owners revote on the July 31, 2019 resolution to hire an engineer for pipe replacement?

c.    Did the strata appropriately issue bylaw fines of $3,600 against Ms. Marandi’s strata lot for allegedly breaching bylaw 37? If not, what is the remedy?

d.    Did the strata appropriately issue bylaw fines of $400 against 870’s strata lot for allegedly breaching bylaw 3(4)(q)? If not, what is the remedy?

e.    Has the strata breached the Strata Property Act (SPA) by failing to enforce its balcony bylaws? If so, what is the remedy?

f.     Did the strata make unapproved expenditures for legal costs in 2019? If so, what is the remedy?

EVIDENCE AND ANALYSIS

11.   In a civil proceeding such as this, the applicants must prove their claims on a balance of probabilities. I have read all the submissions and evidence provided but refer only to information I find relevant to provide context for my decision.

12.   The strata was created in 1974. The strata filed a bylaw amendment package with the Land Title Office (LTO) on December 18, 2001, which repealed and replaced all previous bylaws. Bylaw amendment 23(1)(a) was filed at the LTO on December 19, 2013 which says bylaws fines are up to $200. Further bylaw amendments have been filed at the LTO which are not relevant to this dispute.

 

Should I set aside the owners’ approval of the September 29, 2020 resolution for re-pipe funding?

13.   The strata’s property manager sent a September 1, 2020 notice package for an SGM scheduled for September 21, 2020. The strata cancelled the September 1, 2020 notice because it was inaccurate and sent another SGM notice package on September 9, 2020, scheduling an SGM for September 29, 2020.

14.   The September 9, 2020 notice says that attendance at the SGM would be limited to select strata council members and the meeting would be conducted by restricted proxy. The notice proposed a resolution authorized spending $243,355 from the contingency reserve fund (CRF) and a further $262,615 to be raised by a levy for pipe replacement work.

15.   The strata’s property manager also sent the owners a September 9, 2020 letter saying that the voting at the September 29, 2020 SGM would be held only by restricted proxy because of COVID-19 pandemic restrictions. The September 9, 2020 letter told owners to select one of the strata council members to act as their proxy at the SGM. The letter also said that an online video conference would be held on September 15, 2020 to discuss the proposed re-piping project.

16.   The September 29, 2020 SGM’s sign in sheet shows that 28 owners appeared by proxy at the SGM. Mr. Sargeant provided a June 11, 2021 statement saying that the strata’s property manager and the strata’s lawyer were physically present at the SGM, which was held at the property manager’s office. Mr. Sargeant says that he attended by video conference call with Mr. Genge, Mr. Assan-Alcalde, and several owners, including NF on behalf of 870. None of the parties explained how some owners were able to attend by video conference call despite the SGM notice instructions saying that the attendance and voting at the SGM would only be available by restricted proxy.

17.   Mr. Sargeant says the property manager reviewed the proxies and announced how each person appointing a proxy wanted to vote. Mr. Sargeant says that the property manager then asked the proxies if they were casting their votes accordingly and they agreed so. Mr. Sargeant says that none of the owners present on the video conference call objected during the meeting.

18.   The applicants say that the September 29, 2020 SGM voting procedure did not comply with the SPA and they refer to the CRT decision in Shen v. The Owners, Strata Plan EPS3177, 2020 BCCRT 1157. In Shen, a tribunal member found that the strata conducted an SGM by restricted proxy because COVID-19 pandemic restrictions prevented all owners from physically attending. However, the strata did not allow participation by telephone, video conference or electronic means as permitted under Ministerial Order No. M114. The tribunal member found that preventing eligible voters from attending the SGM breached SPA section 56. Further, the tribunal member in Shen found that the proxy instructions limiting the person appointing a proxy to a specific person identified by the strata breached SPA section 56(3), which allows an owner to select nearly anyone as a proxy.

19.   The strata argues that the non-binding decision in Shen should not be followed. The strata says that the SPA does not require in-person voting as found in Shen. SPA section 56 says that eligible voters can vote “in person or by proxy.” The strata argues that this requires the strata to provide the opportunity to vote either in person or by proxy, but it says that both voting methods are not required. I disagree, I find that a plain reading of SPA section 56 gives owners the choice of voting in person or by proxy. Though several owners attended the SGM by video conference, the September 9, 2020 SGM notice said that voting would only be by proxy. So, I find that the strata did not allow in-person voting, or voting by telephone, video conference or electronic means as permitted under Ministerial Order No. M114. In failing to do so, I find that the strata breached the SPA.

20.   Further, I find that the SGM’s voting procedure breached the SPA by using restrictive proxies. I agree with the tribunal member’s reasoning in Shen that SPA section 56(3) permits owners to choose almost anyone as their proxy, subject to the Strata Property Regulation. So, I find that the strata breached section 56(3) by restricting the owner’s proxy choice to the current strata council members.

21.   For the above reasons, I find the September 29, 2020 SGM voting procedure did not comply with the SPA.

22.   Despite the above findings, the strata argues that the applicants are now estopped from challenging the September 29, 2020 special levy. The strata relies on the British Columbia Supreme Court (BCSC) decision in Christensen v. The Owners, Strata Plan KAS468, 2013 BCSC 1714 at paras 40-42. The doctrine of estoppel by convention generally prevents parties from challenging things that were previously agreed and relied on by the other party. In Christensen, the BCSC found that the doctrine of estoppel by convention prevented an owner from challenging a special levy many years after the levy was approved. To establish estoppel by convention, the strata must prove that the parties’ dealings were based on shared assumptions of fact or law, the strata acted in reliance on this shared assumption and it would be unjust or unfair to allow the applicants to depart from that shared assumption (Ryan v. Moore, 2005 SCC 38).

23.   The strata argues that the applicants impliedly agreed to the September 29, 2020 proxy voting procedure by completing and submitting the proxy forms without making a formal objection. However, the applicants applied for dispute resolution on September 15, 2020 challenging the September 29, 2020 SGM voting procedure before the SGM was even held. In doing so, I find that the applicants did not impliedly agree that the voting procedure was valid. So, I find that the doctrine of estoppel by convention does not apply.

24.   The applicants request an order cancelling the September 29, 2020 SGM resolution, which would also cancel the approved special levy. The strata says that this would be impractical since the strata has already entered a construction contract and the project is underway. Since the applicants do not dispute these submissions, I accept them as accurate. I agree that it would be impractical to order the cancellation of the special levy and the return of the special levy funds at this time. Instead, I order the strata, if it has not already done so, to hold an SGM within 60 days for the purpose of allowing the owners to vote on the September 29, 2020 SGM agenda items, retroactive to the September 29, 2020. The upcoming SGM must comply with the SPA and the strata’s bylaws and owners must be permitted to vote either “in person” or by unrestricted proxy. If the owners do not approve the resolution by a 3/4 vote, the strata must immediately refund all unexpended CRF contributions and all unspent special levy payments collected, and interest earned, based on the September 29, 2020 resolution.

Should the owners revote on the July 31, 2019 resolution to hire an engineer for pipe replacement?

25.   The applicants claim that a resolution vote held at the July 31, 2019 SGM was performed improperly. The owners voted on a resolution to spend $60,0988 to retain an engineer to prepare specifications for a pipe replacement project at the July 31, 2019 SGM. The resolution said that the engineering fees were to be paid by $30,049 from the CRF and by a $30,049 special levy. The SGM minutes says the resolution was approved by more than 3/4 of the owners with 25 owners approving the resolution and 8 owners voting against it.

26.   The applicants say the voting was improper because the 33 votes cast exceed the number of owners present in person and by proxy. Mr. Sargeant’s statement says that 30 owners were present in person or by proxy at the start of the meeting. However, Mr. Sargeant says that 3 owners, including 870, arrived after the meeting started but before the resolution vote was held. This is consistent with the SGM minutes that say 30 owners, including proxies, were present at the start of the SGM and 3 owners joined after it started. Since the applicants did not provide any evidence disputing Mr. Sargeant’s statement or the SGM minutes, I am find that 33 owners were present, in person or by proxy, at the time of the vote, which is consistent with the number of votes cast. For the above reasons, I find that the applicants have not proved that the July 31, 2019 SGM’s votes were miscounted.

27.   The applicants also claim that the votes were “heavily proxied” by the strata council. I infer that the applicants are claiming that the strata council improperly solicited or exercised proxy votes. As discussed above, SPA section 56 allows voting by proxy.

28.   The applicants did not provide evidence or submissions showing how the strata council allegedly breached SPA section 56 or the strata’s bylaws. Further, the strata relies on the binding British Columbia Court of Appeal decision in Strata Plan LMS 3259 v. Sze Hang Holding Inc., 2012 BCCA 196 which says at paragraph 52 that the manner of collecting of proxies does not affect their validity. Based on the decision in Sze Hang and the absence of evidence or submissions showing that the strata breached SPA section 56, I find that applicants have failed to prove that proxy votes were not valid.

29.   The applicants also argue that the July 31, 2019 resolution should be set aside because the strata council allegedly misled the owners. The February 17, 2019 strata council meeting minutes say that the strata’s drain pipes were unable to handle additional washing machine drainage. However, the applicants say that Mr. Sargeant promised that the pipe replacement project, relating to the July 31, 2019 resolution, would include “solutions” that would let owners use washer and dryer machines in their strata lots. The strata acknowledges that it suggested that this might be possible before the July 2019 SGM. However, the strata says that by the time of the September 2020 SGM, the owners were aware that washing machines would not be feasible. I find both parties submissions equally likely. Since the applicants have the burden of proof, I find that that have failed to provide sufficient evidence to prove that the strata misled them.

30.   The applicants also claim that the July 31, 2019 resolution should be set aside because they requested a revote. Shortly after the July 2019 SGM, 9 owners, including Ms. Marandi and 870, sent the strata a petition asking the strata to hold an SGM and revote on July 31, 2019 resolution within 28 days. It is undisputed that there was no revote on the July 31, 2019 resolution.

31.   The applicants do not say which section of the SPA authorizes their requested revote. SPA section 51 permits a reconsideration of resolutions requiring a 3/4 vote if the vote was passed by less than 50% of the strata corporations votes. However, since more than 50% of the owners approved the July 31, 2019 SGM resolution, SPA section 51 does not apply.

32.   SPA section 43(1) permits owners holding at least 20% of the strata corporation’s votes to demand an SGM to consider a resolution. However, I find that the owners have already considered and approved the resolution at the July 31, 2019 SGM. So, I find that there is no pending resolution for the owners’ consideration under SPA section 43(1). I find that SPA section does not apply and that there is no provision in the SPA or the bylaws authorizing the requested revote.

33.   For the above reasons, I dismiss the applicants’ claim for an order requiring a new vote on the July 31, 2019 resolution to hire an engineer for a pipe replacement project.

Did the strata appropriately issue bylaw fines of $3,600 against Ms. Marandi’s strata lot for allegedly breaching bylaw 37? If not, what is the appropriate remedy?

34.   The strata says that Ms. Marandi breached bylaw 37 by keeping a dog in her strata lot. Bylaw 37 prohibits pets inside strata lots, other than temporary visits of 1 day or less. Bylaw 37 requires strata permission for longer pet visits.  

35.   The strata is obligated to enforce its bylaws under section 26 of the SPA. However, it must do so in accordance with the SPA. Section 135(1) of the SPA states that a strata corporation may not impose a bylaw fine unless it has received a complaint, given the owner or tenant written particulars of the complaint and a reasonable opportunity to answer the complaint, including a hearing if requested. SPA section 135(2) says the strata must also give notice in writing of its decision to impose the fine to the owner as soon as feasible. SPA section 135(3) says that once the strata has complied with these procedural steps, the strata may impose fines or penalties for a continuing contravention without further compliance with those steps. The requirements of section 135 must be strictly followed before a fine can be imposed, as set out in Terry v. The Owners, Strata Plan NW 309, 2016 BCCA 449, the leading case on this issue.

36.   The strata imposed a $400 bylaw fine on May 10, 2018 and a $2,600 bylaw fine on August 8, 2018 against Ms. Marandi’s strata lot for keeping a dog in her strata lot. The strata also imposed 9 additional $200 pet bylaw fines against her strata lot between August 23, 2018 and October 18, 2018.

37.   The strata provided dog complaints relating to Ms. Marandi’s strata lot on the following dates: December 6-9, 2017, January 9, 2018, May 1-2, 2018, May 11, 2018, May 20, 2018, May 22, 2018, June 2, 2018, June 4, 2018, June 7, 2018 and June 15, 2018. The strata says that it did not grant Ms. Marandi permission to keep a pet in her strata lot. Since the applicants do not dispute this, I accept this as accurate.

38.   The applicants argue that these bylaw fines “date back many years.” I infer that the applicants are arguing that the strata was out of time to impose bylaw fines under the Limitation Act. However, case law shows that the Limitation Act does not apply to fines under the SPA. See, for example, The Owners, Strata Plan KAS 3549 v. 0738039 B.C. Ltd., 2015 BCSC 2273, aff’d The Owners, Strata Plan KAS 3549 v. 0738039 B.C. Ltd., 2016 BCCA 370. So, I find that the bylaw fines imposed against Ms. Marandi’s strata lot were not barred by the Limitation Act.

39.   The applicants admit that NF’s dog visited Ms. Marandi’s strata lot occasionally. However, they say those were temporary visits permitted by bylaw 37. The applicants argue that bylaw 37 is vague and does not limit the frequency of pet visits. Bylaw 37 says that visiting animals must be on “a temporary basis only (one day or less).” Based on a plain reading of bylaw 37, I find that this bylaw prevents continuous pet stays lasting more than 1 day. However, I find that bylaw 37 does not prohibit frequent visits lasting less than a day.

40.   Based on the consecutive pet complaints from December 6 to 9, 2017, I find that Ms. Marandi more likely than not kept a dog in her strata lot continuously for more than 1 day in violation of bylaw 37 during that period. Similarly, based on the consecutive bylaw complaints on May 1 and May 2, 2018, I find that Ms. Marandi also breached bylaw 37 during that period as well. So, I find that Ms. Marandi breached bylaw 37 on 2 occasions in December 2017 and May 2018. Further, I find that the strata complied with SPA section 135 by notifying Ms. Marandi of the bylaw contravention, providing an opportunity to hold a hearing and by notifying her of the imposed bylaw fine. So, I find that strata properly imposed the $400 May 10, 2018 bylaw fine.

41.   However, I find Ms. Marandi has sufficiently proved that she did not breach bylaw 37 after May 2, 2018. I reach this conclusion based on the applicants’ submissions that the pet visits were only temporary stays. Although the strata received 7 pet complaints relating to Ms. Marandi’s strata lot between May 11, 2018 and June 15, 2018, none of these complaints occurred on consecutive days which might indicate a continuous visit rather than multiple, separate visits which bylaw 37 allows. Further, the strata did not provide any witness statements showing that any of the dog visits lasted more than one day. Also, the strata did not provide any pet complaints after June 15, 2018. On balance, I find that Ms. Marandi has sufficiently proved that she did not breach bylaw 37 after May 2, 2018. So, I find that the pet bylaw fines imposed on Ms. Marandi’s strata on and after August 8, 2018 are not valid.  

42.   The strata’s bylaw fines for pet violations between August 8, 2018 and October 18, 2018 total $4,400. Since the applicants have only requested the removal of pet bylaw fines totaling $3,600, I find that the strata must remove $3,600 in strata bylaw fines, relating to bylaw 37, from Ms. Marandi’s strata lot account.  

43.   Based on the above, I find it unnecessary to determine whether the strata treated Ms. Marandi significantly unfairly by imposing the pet bylaw fines.

Did the strata appropriately issue bylaw fines of $400 against 870’s strata lot for allegedly breaching bylaw 3(4)(q)? If not, what is the appropriate remedy?  

44.   Bylaw 3(4)(q) prohibits items on balconies, other than free-standing plant boxes. The bylaw specifically prohibits flower pots on railings and heavy items, including freezers.

45.   The strata sent 870 a June 6, 2018 bylaw contravention letter for storing construction material on its balcony. The strata sent 870 notices of $200 bylaw fines on both July 16, 2018 and August 7, 2018.

46.   Though 870 admits that it had items on its balcony, it argues it did not breach bylaw 3(4)(q). In its initial submissions, 870 says the items were “some low risk debris.” However, 870 did not explain what specifically this debris was. Further, in its reply submissions, 870 describes the balcony items as patio furniture. 870 did not explain this discrepancy or provide any photographs of the balcony items. Based on the above, I find that 870 has not proved that it complied with bylaw 3(4)(q). Further, I find that the strata complied with SPA section 135 by notifying 870 of the bylaw contravention, providing an opportunity to hold a hearing and by notifying it of the imposed bylaw fines.

47.   870 also argues that the strata unfairly imposed bylaw fines against it. In Chorney v. Strata Plan VIS 770, 2016 BCSC 148, the court said that a strata council can investigate bylaw contravention complaints as it sees fit, as long as it complies with principles of procedural fairness and does not act significantly unfairly. Although the applicants do not use these words, they effectively argue that the strata acted significantly unfairly by failing to enforce the balcony bylaw against other strata lot and by strata council members holding a personal bias against NF. The CRT can make orders to remedy significantly unfair actions or decisions by a strata corporation, including its council, under section 123(2) of the CRTA.

48.   In Reid v. Strata Plan LMS 2503, 2003 BCCA 126, the BC Court of Appeal interpreted a significantly unfair action as one that is burdensome, harsh, wrongful, lacking in probity or fair dealing, done in bad faith, unjust or inequitable. In King Day Holdings Ltd. v. The Owners, Strata Plan LMS3851, 2020 BCCA 342, the BC Court of Appeal confirmed that the reasonable expectations of an owner or tenant may also be relevant to determining whether the strata’s actions were significantly unfair. I find that the applicants’ reasonable expectations are relevant in this dispute, consistent with previous CRT decisions about how a strata corporation enforces its bylaws. See for example, Tran v. The Owners, Strata Plan VIS6828, 2021 BCCRT 28. The questions on this point are from Dollan v. The Owners, Strata Plan BCS 1589, 2012 BCCA 44:

a.    What were the applicants’ expectation?

b.    Was that expectation objectively reasonable?

c.    Did the strata violate that expectation with a significantly unfair action or decision?

49.   I find that 870 expected the strata to objectively investigate bylaw complaints and enforce bylaws in an equal manner against all strata lots. Further, I find that this expectation was objectively reasonable.  

50.   It is undisputed that another strata lot owner has stored a freezer on their balcony since 1992, which is specifically prohibited by bylaw 3(4)(q). The strata says that it previously investigated the freezer storage and decided not to issue a bylaw violation notice because the strata lot owner said they used the freezer for medical reasons. The strata says that it exercised its discretion to grant that strata lot owner an exemption from bylaw 3(4)(q) on compassionate grounds.

51.   The courts have addressed the strata’s discretionary powers to enforce its bylaws in various circumstances. As set out below, the strata must act reasonably.

52.   In Strata Plan LMS 3259 v. Sze Hang Holding Inc., 2016 BCSC 32, the Supreme Court held that a strata council has discretion whether to enforce its bylaws in certain circumstances but that such discretion is limited, particularly in circumstances where the strata owners have a reasonable expectation that the bylaw will be consistently enforced.

53.   The BC Court of Appeal confirmed that a strata corporation need not enforce a bylaw, even though there is a clear breach, where the effect of the breach on other owners is trifling. See Abdoh v. The Owners of Strata Plan KAS 2003, 2014 BCCA 270.

54.   I find the strata has discretion not to enforce its bylaws in limited circumstances. I find that in exercising its discretion, the strata must be reasonable, and consider the expectations of the owners with respect to prior enforcement of the bylaw. That is, if the strata has consistently enforced the bylaw, it might be unreasonable for the strata not to continue to enforce it. Further, even if there is a clear breach of a bylaw, if the effect of the breach is unimportant or trivial to the strata owners in general, it is reasonable for the strata not to enforce it, provided the strata acted reasonably in doing so.

55.   I find that the applicants have not proved that the strata unfairly enforced bylaw 3(4)(q) unequally. Though the bylaw was enforced against 870 but not the other strata lot owner, I find that the applicants have not applied the bylaws unfairly. Rather, I find that the strata reasonably considered the medical accommodations of the other strata lot owner within its limited discretion to enforce bylaws. I find that the applicants have not proved that the exemption granted to other strata lot owner based on claimed medical need, but not to 870, was burdensome, harsh, wrongful, lacking in probity or fair dealing, done in bad faith, unjust or inequitable.  

56.   Further, I find that 870 has not proved that the strata enforced bylaw 3(4)(q) unfairly because Mr. Sargeant personally disliked the applicants. Mr. Sargeant sent NF a hostile letter on September 11, 2017. Based on the letter and the parties’ submissions, I am satisfied that Mr. Sargeant and NF likely held negative feelings about each other. However, I find that applicants have failed to prove that the strata or the strata council treated 870 differently from other owners based on these feelings about each other.

57.   For the above reasons, I find that the applicants have not proved that the strata acted significantly unfairly when it imposed bylaw fines against 870. So, I dismiss this claim.

Has the strata breached the SPA by failing to enforce its balcony bylaws? If so, what is the remedy?

58.   Under sections 4 and 26 of the SPA, the strata, through its council, must enforce its bylaws. Under section 26 of the SPA, the strata council must exercise the powers and perform the duties of the strata including the enforcement of bylaws. That duty is subject to the SPA, regulations, bylaws and rules, and subject to the strata’s limited discretion discussed above.

59.   Under section 133 of the SPA the strata may do what is reasonably necessary to remedy a contravention of its bylaws or rules.

60.   The applicants claim the strata has failed to enforce bylaw 3(4)(q) against 4 strata lots. As discussed above, the applicants say that a strata lot has a freezer on its balcony. The applicants also provided photographs showing planters attached to 2 strata lots’ balcony railings. The applicants also say that a strata lot has plants on its balcony and a hole drilled through the exterior wall at the balcony.

61.   However, I find it unnecessary to determine whether the strata properly enforced these alleged bylaw violations because the applicants have not provided any evidence or submissions showing that they, or other owners, have sent complaints to the strata about these alleged bylaw violations. In the absence of owners’ complaints, I find that the applicants have not proved that the strata failed to enforce bylaw 3(4)(q) against other strata lot owners and I dismiss this claim.

Did the strata make unapproved expenditures for legal costs in 2019? If so, what is the remedy?

62.   The applicants claim that the strata’s 2019 legal expenditures violated the SPA. The applicants request an SGM so the owners can decide whether to approve these expenses.

63.   The strata does not dispute that its 2019 legal fee expenditures exceeded its 2019 budget. The strata’s 2019 general ledger shows that it spent $10,776.46 on legal fees and the strata’s 2019 budget comparison shows that $2,500 was budgeted. Based on these documents and strata’s admission, I find that the strata’s 2019 legal fee expenditures exceeded its budget.  

64.   The strata argues that these legal expenses are not an unapproved expenditure because a legal expense line item was included in the budget. The strata relied on the CRT decision in Woytuik v. The Owners, Strata Plan VIS 5970, 2017 BCCRT 32. In Woytuik, a tribunal member found that an unapproved expenditure is one for which there was no line item in the budget. However, this decision is not binding on me and I decline to follow it. SPA section 98 says that unapproved expenditures are proposed expenditures that were not put forward for approval in the budget. I find that these proposed expenditures includes the amount of the proposed expense, not just the entry of a line item in the budget. Since the strata’s legal expenses exceeded the approved budget, I find that the strata made unapproved expenditures for legal expenses.

65.   SPA section 98(3) says that unapproved expenditures can be made out of the operating fund or CRF if there are reasonable grounds to believe that an immediate expenditure is necessary to ensure safety or prevent significant loss or damage. SPA section 98(5) says such emergency expenditures are limited to the minimum amount needed to ensure safety or prevent significant loss or damage.

66.   The strata argues that the expenses were needed for its legal representation in this dispute. Though I note that the 2019 legal expenditures at issue were spent before this dispute started in 2020. Further, I find that the strata has not shown that these expenses were a necessary emergency expenditure under SPA section 98(3).

67.   The applicants request an SGM to determine whether the owners approve these legal expenses. In contrast, the strata says that there is no practical benefit in doing so now since this expenditures were made several years ago and the money has already been spent. I agree and find that ordering an SGM to approve the expenditures at this time would not serve any consequential purpose since I cannot order non-parties to refund their legal fees to the strata. For the above reasons, I decline to order an SGM relating to the 2019 legal expenditures and I dismiss this claim.  

68.   In their submissions, the applicants also request unspecified relief against the strata council respondents, Mr. Sargeant, Mr. Genge and Mr. Assan-Alcalde. The applicants asked for an order holding these respondents “responsible” for the unapproved expenditures. I find that this claim is not before me as it was not raised in the application for dispute resolution and it would be unfairly prejudicial to Mr. Sargeant, Mr. Genge and Mr. Assan-Alcalde to allow a new claim against them in the submissions. Further, I find that such claims are premature before the strata owners have an opportunity to determine whether to approve the expenditures at the SGM. Further, even if these claims were at issue, I would refuse to resolve such claims because I do not have authority to make orders against Mr. Sargeant, Mr. Genge and Mr. Assan-Alcalde for negligence or breach of fiduciary duty under section 31 of the SPA.

69.   For the above reasons, I dismiss this claim.

CRT FEES AND EXPENSES

70.   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. Since the applicants were partially successful, I find that they are entitled to reimbursement of one-half of their CRT fees. This totals $112.50.

71.   The strata requested reimbursement of legal expenses. The strata provided a July 26, 2021 letter from its lawyer saying that the strata incurred $24,634.87 in legal fees and disbursements. CRT Rule 9.5(3) says that except in extraordinary circumstances, the CRT will not order reimbursement of legal fees in a strata property dispute. Rule 9.3(3) says that relevant factors in assessing whether the dispute is extraordinary, the CRT may consider the complexity of the dispute, to what degree representatives were involved, whether there was unnecessary delay or expense. The strata argues that an award of legal fees is appropriate because the applicants allegedly harassed the strata council and the strata’s property manager. However, I find that these allegations are not relevant since the strata has not provided evidence or submissions showing that the applicants’ alleged conduct caused any unnecessary delay or expense. Further, I find that the issues in the dispute were not particularly complex. For the above reasons, I find that there are no extraordinary circumstances in this dispute to justify reimbursement of legal fees. So, I dismiss the strata’s claim for reimbursement of legal fees and disbursements.

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

ORDERS

73.   I order that:

a.    I order the strata, if it has not already done so, to hold an SGM within 60 days for the purpose of allowing the owners to vote on the September 29, 2020 SGM agenda items, retroactive to the September 29, 2020. The upcoming SGM must comply with the SPA and the strata’s bylaws and owners must be permitted to vote either “in person” or by unrestricted proxy.

b.    If the owners do not approve the September 29, 2020 resolution by a 3/4 vote, the strata must immediately refund all unexpended CRF contributions and all special levy payments collected, and interest earned, based on the September 29, 2020 resolution.

c.    Within 30 days, the strata must remove $3,600 in strata bylaw fines, relating to bylaw 37, from Ms. Marandi’s strata lot account.

d.    Within 30 days, the strata must pay the applicants $112.50 as reimbursement of CRT fees.

74.   The applicants’ claims against Mr. Sargeant, Mr. Genge and Mr. Assan-Alcalde are dismissed.

75.   All other claims are dismissed.

76.   The applicants are also entitled to post-judgment interest under the Court Order Interest Act.

77.   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.