Strata Dispute Resolution (22:XV)
|This information applies to British Columbia, Canada. Last reviewed for legal accuracy by the Law Students' Legal Advice Program on July 24, 2023.|
A. Basics of Strata Dispute Resolution
This section discusses a variety of issued related generally to dispute resolution involving strata corporations. It combines discussion of issues specific to strata corporations under the SPA and general practice issues arising in the context of the affairs and dealings of strata corporations.
1. Methods of Dispute Resolution
Four methods currently available for resolving disputes are court litigation, arbitration, mediation, and the Civil Resolution Tribunal (CRT).
a) Court Litigation
Litigation in court involves resolving a dispute using public institutions with independent decision-makers who have considerable legal knowledge, but may or may not know anything about the area the dispute involves.
The SPA provides rules for arbitration in the strata context. Arbitration gives parties more control than court litigation, as they can choose arbitrators that have knowledge about strata law or a particular subject that is of question in a dispute. Arbitration decisions are also kept privately unlike court and CRT litigation, unless appealed to a court after the arbitrator makes its decision.
Mediation is a voluntary process in which an independent person is chosen by the parties to help them reach an agreement. Mediators do not have the authority to make binding decisions, and can occur at any time before, during, or after court proceedings.
d) Civil Resolution Tribunal
Until July 2016, the BC Supreme Court and BC Provincial Court resolved strata disputes. After that date, the CRT has assumed jurisdiction over many strata property matters once within jurisdiction of the courts.
e) Voluntary Dispute Resolution Bylaw
Section 124 of the SPA permits strata corporations to create dispute resolution bylaws. Standard Bylaw 29 creates such a bylaw, and provides as follows:
- A dispute among owners, tenants, the strata corporation or any combination of them may be referred to a dispute resolution committee by a party to the dispute if
- a) all the parties to the dispute consent, and
- b) the dispute involves the SPA, the SPR, the bylaws or the rules.
- A dispute resolution committee consists of
- a) one owner or tenant of the strata corporation nominated by each of the disputing parties and one owner or tenant chosen to chair the committee by the persons nominated by the disputing parties, or
- b) any number of persons consented to, or chosen by a method that is consented to, by all the disputing parties.
- The dispute resolution committee must attempt to help the disputing parties to voluntarily end the dispute.
Strata corporations do not have to use this Standard Bylaw and can wish to create their own voluntary dispute resolution bylaw.
2. Remedies Available at Court
The courts have a wide range of remedies available when dealing with disputes under the SPA, in addition to any that may be available at common law. The remedies available will depend on what section of the SPA is used and what sections of the SPA are alleged to have been breached by the offending party.
A declaration that a strata lot owner or the strata corporation has breached the SPA or a bylaw is a common starting point. It sets the foundation for the rest of the orders sought.
b) Order for Payment or Reimbursement of Money
If a strata lot owner had paid for something that the court finds should have been paid for something that the court finds should have been paid for by the strata corporation, or vice versa, it may be possible to obtain an order requiring reimbursement, like in Blackmore et al v Owners, Strata Plan VR 274, 2004 BCSC 1121.
c) Injunction-like Orders
Injunctions requiring that a strata lot owner or strata corporation stop contravening a section of the SPA or fulfill a duty under the SPA are common.
Damages are available to a strata lot owner in a negligence of contract claim. The CRT has also awarded damages for significant unfairness for breaching the SPA (Lozjanin v The Owners, Strata Plan BCS 3577, 2019 BCCRT 481), although the Supreme Court has not ruled on whether those types of damages are allowed.
The fact that strata lot owners still must live together, work together, and/or get along with each other after decisions are made, makes it necessary for judges to deal with costs carefully. Paras 32 and 33 of Lum v Strata Plan VR 519 (Owners of), 2001 BCSC 493 demonstrate costs should be awarded while remaining sensitive to what is in the best long-term interests of the parties in a claim.
3. Remedies Available at the CRT
Section 123 of the Civil Resolution Tribunal Act, SBC 2012, c 25 (“CRT Act”) permits the CRT to make an order requiring a party to do or refrain from doing something, or requiring a party to pay money.
B. Section 164 - Significantly Unfair Acts
If strata lot owners are unhappy with their treatment by a strata corporation, they can use section 164 of the SPA to remedy “significantly unfair” actions or decisions. On application of an owner or tenant, the Supreme Court may make any interim or final order it considers necessary to prevent or remedy a significantly unfair
- Action or threatened action by, or decision of, the strata corporation, including the council, in relation to the owner or tenant; or
- Exercise of voting rights by a person who holds 50% or more of the votes, including proxies, at an annual or special general meeting.
The CRT has the same authority to make orders about significantly unfair acts and decisions under the CRT Act.
1. Legal Test for Significant Unfairness
The legal test for significant unfairness is the same between the courts and the Civil Resolution Tribunal (Dolnik v The Owners, Strata Plan LMS 1350, 2023 BCSC 113).
The basic test for whether an action is significantly unfair is whether 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” (Kunzler v The Owners, Strata Plan EPS 1433, 2021 BCCA 173). The owner’s reasonable expectations are a relevant factor, but they are not determinative.
The following questions can be used to assess whether the owner’s reasonable expectations were breached (Dollan v The Owners, Strata Plan BCS 1589, 2012 BCCA 44):
- Examined objectively, does the evidence support the asserted reasonable expectations of the petitioner?
- Does the evidence establish that the reasonable expectation of the petitioner was violated by action that was significantly unfair?
See Collins v The Owners, Strata Plan NES 2865, 2023 BCCRT 577 for an application of this test for significant fairness.
2. Proper Parties in Significant Unfairness Claims
Section 164 allows a strata lot owner or tenant to apply for an order regarding a significantly unfair action by the strata corporation, including the strata council, or a person who holds 50 per cent or more of the votes at a general meeting. Strata owners should not include as defendants individual strata council members unless those members have “personally benefitted to the detriment of the Strata Corporation as a result of a breach of their duties and obligations owed to the Strata Corporation” (Azura Management (Kelowna) Corp. v Owners of the Strata Plan KAS 2428, 2009 BCSC 506 at para 9).
3. Remedies Available under Section 164
Section 164 gives the court broad discretion to fix a problem caused by a strata corporation that has acted in a significantly unfair fashion. This could include compensation in the form of damages, moulding the remedy to suit the problem, making an order to regulate the strata corporation’s future conduct, and more.
4. Bylaws to Collect Legal Fees
Many strata corporations have bylaws that allow them to collect not just costs but legal fees back from owners involved in disputes with the strata corporation. In Hammerberg & Co. v Margitay, 2001 BCSC 1312, an example of this bylaw was held to be valid, but it could be argued that if costs have already been awarded by the court against a strata lot owner, it might be significantly unfair for the strata corporation to recover legal fees from that same owner.
5. Scope of Judge/Tribunal’s Power to Remedy Significant Unfairness
The court or CRT have a broad range of powers to prevent or remedy a significantly unfair action of the strata corporation, arising from s 164 of the SPA and s 48.1 of the CRT Act. The CRT’s remedial power includes awarding general damages.
It is important to note that just because a strata corporation is following the SPA, they may still be acting significantly unfair and breaching section 164. A variety of factors should be considered in every scenario to determine whether a strata corporation could be acting significantly unfair under section 164, including:
- The knowledge of the strata lot owner at different times;
- The involvement of the owner in creating the situation;
- How the strata council has dealt with other owners in similar situations; and
- The involvement of individual strata council members or other in their role as owners in creating the situation.
6. Cases Decided under Section 164
A few examples of cases decided under s 164 include:
|Name of Case||Issue||Significantly Unfair?|
|Reid v Strata Plan LMS 2503 (Owners), 2001 BCSC 1578||Strata council resolution giving the owners permission to place planters, etc. on common property patio not significantly unfair to owner whose windows looked over area||No|
|Als v Strata Corporation NW 1067, 2002 BCSC 134||Strata council refused permission to rent strata lot; not significantly unfair||No|
|Strata Plan VR1767 (Owners) v Steven Estate Ltd, 2002 BCSC 381||Assessment of contribution to costs of building envelope repair based on erroneous unit entitlement registered at the land titles office in the strata plan is significantly unfair||Yes|
|McGowan v Strata Plan NW1018 (Owners), 2002 BCSC 673||Bylaw allowing balcony enclosure; different treatment of some owners justified by safety issues||No|
C. Responsibility for Judgements
All strata lot owners are responsible for their proportionate share of the total judgement based on their unit entitlement. When a judgement is granted against a strata corporation, it can be registered against the title to all strata lots. When a judgement is in favour of a strata lot owner, that owner is not responsible for legal costs payable by the strata corporation or for a proportionate share of the judgement (ss. 169 and 171(6)).
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