Date Issued: July 25, 2022

File: ST-2022-001699

Type: Strata

Civil Resolution Tribunal

Indexed as: The Owners, Strata Plan EPS4792 v. Better Life Solutions Inc.,
2022 BCCRT 845

Between:

The Owners, Strata Plan EPS4792

Applicant

And:

BETTER LIFE SOLUTIONS INC.

Respondent

REASONS FOR DECISION
Tribunal Member:	Kristin Gardner

INTRODUCTION

1.      This dispute is about liability for an insurance deductible. The respondent, Better Life Solutions Inc. (BLS), owns a strata lot in the applicant strata corporation, The Owners, Strata Plan EPS4792 (strata). The strata says BLS’ tenant had a visitor who broke a sprinkler head on common property, which caused extensive water damage and necessitated an insurance claim. The strata says its bylaws permit the strata to recover its insurance deductible from the strata lot owner, BLS. The strata claims reimbursement of its $100,000 insurance deductible.

2.      BLS admits that its tenant’s acquaintance accidentally triggered a sprinkler but says the damage was caused by the strata’s delay in turning off the water. BLS says that neither it nor its tenant were negligent and so the strata cannot hold BLS responsible for the damage. BLS denies that it is responsible to pay the strata’s insurance deductible under the Strata Property Act (SPA) or the bylaws.

3.      The strata is represented by a strata council member. BLS is represented by its director, MW.

JURISDICTION AND PROCEDURE

4.      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.

5.      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.

6.      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.

7.      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.

ISSUE

8.      The issue in this dispute is whether BLS must reimburse the strata $100,000 for its insurance deductible.

BACKGROUND, EVIDENCE AND ANALYSIS

9.      In a civil proceeding like this one, the strata as the applicant must prove its claims on a balance of probabilities (meaning “more likely than not”). I have read all of the parties’ evidence and submissions, but I refer only to what I find is necessary to explain my decision.

10.   The background facts are not seriously in dispute. BLS had rented its strata lot to 2 tenants. One of BLS’ tenants, NG, was moving out on April 26, 2021, and they had friends and acquaintances helping with the move. As one of the helpers was carrying a large furniture piece out of the elevator on the P1 parking level, they accidentally bumped a sprinkler head protruding from the ceiling.

11.   A video recording of the CCTV footage in evidence shows the incident, which resulted in water streaming out of the sprinkler onto the ground and into the 2 adjacent elevator shafts. The footage also shows that firefighters arrived on scene within approximately 10 minutes. The footage does not show how long the water continued flowing before it was shut off.

12.   A settlement summary from the strata’s insurer shows the repair costs totalled over $300,000, most of which were allocated to elevator repairs. Based on the elevator repair estimate and emergency restoration report in evidence, I am satisfied that the repairs were required as a result of water damage from the broken sprinkler head. The strata’s insurer applied a $100,000 deductible to the repair costs, which I accept the strata paid.

13.   BLS alleges that the strata management company (AWM), the strata manager, and the building concierge did not know how to turn the water off, so it was left running for 45 minutes. BLS says it was the strata’s failure to turn the water off sooner that caused the extensive damage. I note that NG provided a statement indicating it took “almost 40 minutes” to shut the water off. The strata provided no evidence to the contrary.

14.   However, even if I accept NG’s time estimate and BLS’ allegation that the strata reasonably could have turned the water off faster, I find nothing really turns on how long it took to turn the water off. This is because BLS provided no evidence that the repair costs or the insurance deductible at issue would have been less if the water had been turned off sooner. Overall, I find BLS has not shown the strata was responsible for the water damage from the broken sprinkler.

15.   In an April 27, 2021 letter, AWM advised BLS of the sprinkler incident and that the strata would likely make an insurance claim to repair the damage. The letter stated that BLS was responsible to pay the strata’s deductible under bylaw 33(2). I discuss this bylaw below. AWM’s letter also stated that BLS could request a hearing, though there is no evidence before me that BLS did so.

16.   Minutes from the strata council’s September 20, 2021 meeting show the council voted to impose a special levy to pay its $100,000 insurance deductible for the water damage. The special assessment schedule shows that BLS’ share of the special levy was $353.67, which was due December 1, 2021. BLS says that it should not have to both pay the special levy to cover the insurance deductible and reimburse the strata for its entire insurance deductible. I infer that BLS means that if it pays both, the strata will receive double recovery. However, I accept the strata’s submission that if BLS pays the strata’s full deductible, the strata can reimburse owners for the special levy, which I find would be required under section 108(5) of the SPA.

17.   In a January 25, 2022 letter to BLS, the strata’s lawyer advised that the strata had decided to require BLS to pay the $100,000 insurance deductible under section 158(2) of the SPA and bylaw 33(2).

18.   Bylaw 33(2) says that if an owner is responsible for loss or damage to a strata lot, common property or common assets, the owner must indemnify the strata for any maintenance, repair and replacement expenses not covered by the strata’s insurance policy. The bylaw also provides that without limiting the generality of the word “responsible”, an owner is responsible for their own acts or omissions, as well as those of any tenants, occupants, visitors, agents, contractors or employees of the strata lot or the owner. The bylaw provides that any insurance deductible paid or payable by the strata is considered an expense that will be charged to the owner.

19.   Section 158(1) of the SPA states that an insurance deductible for a claim on the strata’s insurance is a common expense. Section 158(2) states that a strata may sue an owner to recover the deductible “if the owner is responsible for the loss or damage that gave rise to the claim”.

20.   The courts have interpreted SPA section 158(2) as permitting a strata to sue an owner to recover its insurance deductible, even if the owner’s responsibility falls short of negligence: see The Owners, Strata Plan LMS 2835 v. Mari, 2007 BCSC 740 and Yang v. Re/Max Commercial Realty (482258 BC Ltd.), 2016 BCSC 2147.

21.   The standard of responsibility set by SPA section 158(2) can be modified by bylaw: Strata Plan LMS 2446 v. Morrison, 2011 BCPC 519 and The Owners, Strata Plan BCS 1589 v. Nacht, 2019 BCSC 1785, upholding the CRT decision 2017 BCCRT 88 on appeal. In other words, a strata corporation’s bylaws may require the strata corporation to prove negligence before it can recover its insurance deductible from the owner.

22.   However, I find that bylaw 33(2) sets the same standard of responsibility as SPA section 158(2) and does not require the strata to prove negligence. I find that establishing an owner’s “responsibility” under bylaw 33(2) requires proof of an act or omission by the owner, a tenant, occupant, or visitor of the strata lot, giving rise to loss or damage to common property. There is no requirement that the act or omission be negligent.

23.   BLS argues that NG’s friend who bumped the sprinkler head was not a “visitor” under the bylaws, but a “mover”. I disagree. In their statement, NG referred to the people helping with the move as both “acquaintances” and “friends”. According to the Merriam-Webster online dictionary (www.merriam-webster.com), “visitor” means one that visits, and “visit” is defined as to pay a call on as an act of friendship or courtesy. A visit also means “a short stay”.

24.   Whether the individual who broke the sprinkler head was NG’s friend or merely an acquaintance is immaterial. There is no indication that they were a professional mover or that NG was paying them to help. Based on NG’s statement, I find they came to BLS’ strata lot for a short duration to help NG move, and they did so out of friendship or courtesy. On the evidence before me, I am satisfied that the individual who broke the sprinkler was a “visitor” of BLS’ strata lot, as that word is used in bylaw 33(2). Further, I note that even if the individual was being paid as mover, I would have found they were a contractor under bylaw 33(2).

25.   Overall, I find the strata has established that a contractor or visitor to BLS’ strata lot broke a sprinkler head, which gave rise to loss or damage to common property. Bylaw 33(2) makes BLS responsible for that loss or damage. Therefore, I find that BLS is liable for the strata’s insurance deductible under bylaw 33(2) and SPA section 158(2).

26.   I find that BLS must reimburse the strata for its $100,000 insurance deductible.

CRT FEES, EXPENSES AND INTEREST

27.   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. I therefore order BLS to reimburse the strata for CRT fees of $225. The strata did not claim any dispute-related expenses.

28.   The Court Order Interest Act (COIA) applies to the CRT. The strata is entitled to prejudgment interest on the $100,000 deductible from January 25, 2022, the date of the strata’s request for reimbursement, to the date of this decision. This equals $310.

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

ORDERS

30.   I order that within 21 days of the date of this decision, BLS must pay the strata a total of $100,535, broken down as follows:

a.    $100,000 for the insurance deductible,

b.    $310 in prejudgment interest under the COIA, and

c.    $225 in CRT fees.

31.   The strata is also entitled to postjudgment interest under the COIA, as applicable.

32.   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.