West Vancouver, 2419 Bellevue Ave.: Court rules purchasers of two leaky condominiums can rely on certificate indicating they owed no money for ongoing repairs.

DATE OF RELEASE: FEBRUARY 18, 1993               No. A923714

                                           VANCOUVER REGISTRY

           IN THE SUPREME COURT OF BRITISH COLUMBIA

BETWEEN:                          )

                                  )

     MOIRA DRAKE and               )

     EVA MARY PULHAM               )          REASONS FOR JUDGMENT

                                  )

                   PETITIONERS    )

                                  )

AND:                               )          OF THE HONOURABLE

                                  )

     THE OWNERS,                   )

     STRATA PLAN VR. 1378          )

                                  )          MR. JUSTICE PRESTON

                                 )

                                 )             (IN CHAMBERS)

                   RESPONDENT     )

DATE AND PLACE OF HEARING:                  FEBRUARY 12, 1993

                                            VANCOUVER, B.C.

COUNSEL FOR THE PETITIONER

MOIRA DRAKE:                              B. WASSON

COUNSEL FOR THE PETITIONER

EVA MARY PULHAM:                         D. HOUGH

    

COUNSEL FOR THE RESPONDENT:                 R. UPPAL

__________________________________________________________

     The issues before me arise on the hearing of a petition for relief under the Condominium Act. There are two petitioners. Their positions are similar. Both are purchasers of units in a strata development which was constructed in 1984. Both purchased their units in the latter half of 1991. Some time in the fall of 1989 a leaking problem had developed in the third floor decks of the building which caused structural damage to the building. On November 27, 1989, a special resolution was passed at the annual general meeting of the owners of the strata corporation authorizing the expenditure of $85,000 for the repair of the third floor decks and the structural damage. As the repairs proceeded it became evident that the damage to the decks and to the structure of the building was more extensive than originally thought. On June 25, 1990, at a special meeting of the owners, it was resolved that the budget for the repair work be increased to $108,000. A further special resolution was passed at an annual general meeting in November, 1990 authorizing the expenditure of a further $81,000 to complete the restoration work. The repairs were on-going at the time the petitioners purchased their strata units in 1991. When they purchased their units they were provided with certain information by the Strata Council. Both of them received certificates which read, as follows:

                          CERTIFICATE

          Re:     Municipality of West Vancouver

                Strata Lot 21, District Lot 555

                Strata Plan VR 1378, together with

                an interest in the common property

                 in proportion to the unit entitle-

                ment of the Strata Lot as shown on

                 Form 1.

     The undersigned Strata Corporation under Section 36 of the Condominium Act hereby certifies with respect to the above captioned property as follows:

     1.    The amount of the contribution (share of common expenses) determined as the contribution of the owner of the above Strata Lot is $245.39 per month.

     2.    Such contribution is payable on the 1st day of each month in advance.

     3.    Such contribution has been paid by the owner of the above Strata Lot in full to November 1, 1991 inclusive.

         

     4.    There is no money expended on behalf of the owner of the above Strata Lot not recovered by the Strata Corporation.

     5.    The amount by which expenses of the Strata Corporation for the current fiscal year exceed or are expected to exceed the budgeted amount is NIL.

     6.    The amount of the contingency reserve fund is $20,103.02.

     7.    There are no amendments to the by-laws that have not been filed in the Land Title Office.

     8.    No notices have been given with respect to a unanimous or special resolution that has not been voted on.

     9.    There are no pending proceedings of any kind against the Strata Corporation of which the Strata Corporation is aware.

     10. The Strata Corporation has levied the following special assessments;

          Resolution passed at the 1990 AGM to extend the building repair assessment to January 1, 1992. Any strata lot sale or remortgaging will require pre-payment of the special assessment to January 1, 1992.

     11. The insurance agent of the Strata Corporation is:

          Pro-Technical Insurance Group

          9 - 15243 91 Avenue.

          Surrey, B.C.,

          Tel. 584-7511

     12. The name and address of a member of the Strata Council whom you may contact for further information:

          D. Robinson

          #108 - 2419 Bellevue Ave.

          West Vancouver, B.C. V7V 4T4

          Tel. 925-1216

     [Emphasis added]          


     The petitioner, Moira Drake, received her certificate on November 12, 1991. The petitioner, Eva Mary Pulham, received hers on August 23, 1991. Both of them received, as well, a financial statement relating to the conduct of the strata corporation in 1990. Nothing arises on this application from the provision of that document. Additionally, Ms. Drake was provided with the strata council budget for 1991. Both of the petitioners say that as a result of the information which they received from the strata corporation they concluded that there were no outstanding obliga-tions to the strata corporation which could result in their strata units being encumbered at a later date. They based this, in part, on the portion of para. 10 of the certificate which reads:

    

     Any strata lot sale or remortgaging will require pre-payment of the special assessment to January 1, 1992.

This took care of the November, 1990 assessment which was, the petitioners say, the only obligation disclosed by the certificate.

     In December, 1991 at another annual general meeting of the owners, it became apparent that the previous assessments had not been sufficient to complete the repairs to the building and a further resolution was passed authorizing the strata corporation to expend monies sufficient to repay indebtedness of $97,800 incurred as a result of the reconstruction and repairs. The resolution took this form because, since June 25, 1990, the accounts for the repairs had been paid by borrowing money from four of the owners of strata lots in the development and paying the accounts for the repairs as they fell due.

     The issues raised by the petition are:

     1.    Can the petitioners rely upon the information provided to them in their certificates to avoid payment of that portion of the December, 1991 assessment which relates to monies expended by the strata corporation before the dates upon which they were provided with the certificates.

     2.    In the case of Ms. Drake, can she rely on para. 5 of the certificate, in combination with the 1990 budget, to avoid obligation for expenses which the strata corporation incurred before the annual general meeting of December, 1991 and which the strata corporation expected (at the date of the certificate) to incur in excess of the amounts budgeted.

     At the conclusion of the hearing, it became apparent that a ruling on the first issue to which I have referred would perhaps allow the parties to conclude the dispute without resort to further litigation. Accordingly, I will deal only with the first issue. If that does not resolve the dispute between the parties, they are at liberty to apply further. Because I have proceeded with the hearing, all further applications should be brought before me.


     Section 36(1) and (2) of the Condominium Act read, as follows:

     Certificate of corporation

     36. (1) The strata corporation shall, on the appli-cation of an owner, or purchaser or his authorized agent, certify within 7 days

          (a) the amount of contribution of the owner under section 35;

          (b) the manner in which the contribution is payable;

          (c) the extent of payment;

          (d) the amount of money expended for the owner under section 34(2) and not recovered by it;

          (e) the amount, if any, by which the expenses of the strata corporation for the current fiscal year are expected to exceed the expenses budgeted for the fiscal year;

          (f) the amount of the contingency reserve fund;

          (g) that there are no amendments to the bylaws not filed in the land title office other than those certified;

          (h) that no notices have been given for a unanimous or special resolution that has not been voted on, other than those certified; and

          (i) that there are no pending proceedings against the corporation of which it is aware other than those certified.

    

          (2) In favour of a person dealing with that owner, the certificate is conclusive evidence of the matter certified in it.

          The respondent contends that the certificate that was delivered to the petitioners was delivered solely to satisfy the obligations of the strata corporation pursuant to s. 36. He points to the numerical arrangement of the first 9 paragraphs of the certificate and their correspondence to the alphabetical arrange-ment of the 9 sub-paragraphs of s. 36(1). He points as well to the preamble to the certificate which states:

     The undersigned Strata Corporation under Section 36 of the Condominium Act hereby certifies with respect to the above captioned property as follows:

     There are two problems with that submission:

     1.    The wording of para. 4 of the certificate goes beyond the wording necessitated by s. 36(1)(d). That subsection is restricted to the amount of money expended on behalf of the owner under s. 34(2) whereas para. 4 of the certificate has no such restriction.

     2.    The information provided by the certificate goes beyond that necessitated by s. 36(1). In particular, paras. 10, 11 and 12 provide information that is not mandated by s. 36(1).

     The strata corporation is entitled to limit the information that it provides to the purchaser to the information required by s. 36 (and the information in Form A required by s. 11 of the Act). In my view, however, the strata corporation in the circumstances before me has gone beyond the obligations imposed by statute and has stated to the petitioners by para. 4 of the certificate "There is no money expended on behalf of the owner of the above Strata Lot not recovered by the Strata Corporation." That statement appears in a document which provides information that is mandated by s. 36 as well as information that is not. As a result, the strata corporation is estopped from taking proceedings against the petitioners to recover monies expended on behalf of the owners of the strata units before the date upon which the certificates were delivered to the petitioners.

     As I indicated earlier in these reasons for judgment the finding that I have made does not allow me to dispose finally of the matters at issue between the parties.

     The parties have liberty to apply, by telephone conference if necessary, to deal with matters arising from these reasons for judgment.

                      "B.M. PRESTON, J."

Vancouver, B.C.,

February 18, 1993.