Case Studies, Pendrell Place: Daphne Bramham bangs pots as leaky condo rots

"When I lived in the West End, I sometimes banged pots on my balcony along with many of my neighbours."

Excerpt from "Bringing in New Year Scottish-style", by Daphne Bramham
(as printed in The Vancouver Sun Saturday, December 31, 2005, page C7)


Happy New Year! to all leaky condo owners everywhere.

Le Soleil Hotel (Vancouver): Le Soleil Restaurant Inc. et al v. Nomani et al, 2005 BCSC 1804

IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:

Le Soleil Restaurant Inc. et al v. Nomani et al,


2005 BCSC 1804

Date: 20051223
Docket: SO46317
Registry: Vancouver

Between:

Le Soleil Restaurant Inc. and Le Soleil Hospitality Inc.

Plaintiffs

And

Syed Rahmat Nomani, also known as Jewel Nomani, and Jewel Nomani doing business as Jewel Nomani & Associates, and 655673 B.C. Ltd. Andrew J. Louie, 585503 British Columbia Ltd., 365776 B.C. Ltd. and John Doe

Defendants


Before: The Honourable Madam Justice Ballance

Reasons for Judgment

Counsel for the Plaintiff:

Dwight Harbottle, Q.C.
J. Bryant

The Defendant, Syed Rahmat Nomani, also known as Jewel Nomani, acting for himself and for the Defendants, Jewel Nomani doing business as Jewel Nomani & Associates, and 655673 B.C. Ltd.:


Counsel for the Defendants, Andrew J. Louie, 585503 British Columbia Ltd., and 365776 B.C. Ltd.:

A. Epstein

Date and Place of Trial/Hearing:

September 15 and 16;

October 20 and 21, 2005


Vancouver, B.C.

INTRODUCTION

[1] The plaintiffs seek an interlocutory injunction against the defendants, Sayed Rahmat Nomani, also known as Jewel Nomani, Jewel Nomani doing business as Jewel Nomani & Associates, and 655673 B.C. Ltd. (collectively, the %u201CNomani Defendants%u201D). They had initially sought similar injunctive relief against the defendants, Andrew J. Louie and the two defendant companies in which he has an interest namely, 585503 British Columbia Ltd. and 365776 B.C. Ltd. (collectively, the %u201CLouie Defendants%u201D). However, part way through the hearing of the application, the Louie Defendants and plaintiffs negotiated through the evening and reached a conditional settlement rendering it unnecessary to pursue the injunction against the Louie Defendants.

[2] The plaintiffs allege that Jewel Nomani agreed to act as their exclusive agent in relation to the acquisition of multiple strata lots which partially comprise a hotel in Vancouver, B.C. known as Le Soleil Hotel and Suites (the %u201CHotel%u201D), and the lease of the restaurant located within it. The plaintiffs frame their action against the Nomani Defendants on an alleged breach of agency, duty of fidelity, duty of confidence and fiduciary duty and wrongful interference with the plaintiffs%u2019 contractual relations. Stated in general terms, their allegations against the Louie Defendants are that they breached a restaurant lease agreement and conspired with the Nomani Defendants to interfere with the plaintiffs%u2019 operation of the Hotel and their grand plan to gain greater control of it.

BACKGROUND

[3] The facts upon which this application is based are extensive and many of them are disputed. For reasons that will become evident, I have found it unnecessary to recite the facts in much detail in order to give my ruling. Accordingly, I have summarized below only those facts essential to the disposition of this application.

[4] The Hotel is a small and exclusive boutique hotel consisting of common areas including a parking lot and lobby, both of which are governed by separate lease arrangements, and 128 individually strata titled lots. There are also two commercial strata lots which comprise the restaurant in the Hotel. A large number of the strata owners reside offshore.

[5] The original developer of the Hotel went bankrupt, and from January 2002 until approximately March 2002 a receiver attempted to operate the Hotel.

[6] Executive Inn Inc. (%u201CExecutive%u201D) is not a party to this action but is an important factual element of it. It is a public company which licences, operates and manages hotels in British Columbia and elsewhere. Salim Sayani is described by the plaintiffs as Executive%u2019s representative.

[7] At various times before March 2003, Executive and another company called Sunbelt Hotel Management Services Ltd. (%u201CSunbelt%u201D) each sought to operate the Hotel independent of the other. Litigation ensued including a proceeding brought ostensibly on behalf of approximately 93 owners of the 128 strata lots (the %u201C93 Owners%u201D).

[8] In August 2002 this court agreed to the appointment of a monitor and the interim operation of the Hotel by an affiliate of Sunbelt called Le Soleil Hotel and Suites Ltd. (%u201CLSHS%u201D). This arrangement required the Hotel operator to make payments for the use of strata lots to the trust account of the lawyers representing the 93 Owners. In the result, Sunbelt/LSHS has remained on the premises of the Hotel as the operator.

[9] Zul Somani is the principal of both LSHS and Sunbelt.

[10] In addition to the lots owned by the 93 Owners, as at approximately February 2002, Interval Resorts Ltd. and its affiliates (collectively, %u201CInterval%u201D) owned or controlled about 30 of the remaining 37 strata lots. Chris Franiek and Dr. Louie and his family, owned one or more of these 30 strata lots and controlled through the mortgages which they, via their various companies, held.

[11] By the spring of 2003, a settlement between the 93 Owners, Executive and LSHS was imminent. The two authorized representatives of the 93 Owners, Mr. Chee and Dr. Ho, asked Executive and LSHS to end their disputes over the right to manage the Hotel and enter into a joint venture agreement to govern its operation. The plaintiffs%u2019 evidence it that in exchange, Mr. Chee and Dr. Ho indicated that they would agree to provide the 93 Owners%u2019 strata lots for the joint venturers%u2019 long term use.

[12] The plaintiffs say that this prompted Executive%u2019s subsidiary, 640647 B.C. Ltd., and LSHS (Sunbelt%u2019s affiliate) to form a joint venture in February 2003 to lease various strata lots and generally operate the Hotel. This joint venture corporation is the plaintiff, Le Soleil Hospitality Inc. (%u201CHospitality%u201D).

[13] The restaurant is an integral facility of the Hotel. The two commercial strata lots from which it operates are owned by 585503 British Columbia Ltd., one of the Louie Defendants. The restaurant has traditionally operated largely at a loss. Dr. Louie financed its losses over the years. From approximately May 2002 to November 2003, Sunbelt/LSHS and latterly Hospitality helped defray the restaurant%u2019s losses with a $5,000 monthly financial contribution.

[14] Substantially all of the plaintiffs%u2019 evidence on this application is tendered through the affidavits of Sharook Daroowala. He has sworn his affidavits in his capacity as a representative of the plaintiffs as well as a representative of LSHS which is not a party. Under cross-examination on his affidavits, Mr. Daroowala admitted he was neither a director nor officer of the plaintiff, Le Soleil Restaurant Inc.

[15] Mr. Daroowala deposes that at all material times, the objectives of Executive, LSHS and Hospitality have been to establish long term arrangements with all, or as many as possible, of the owners of the strata lots of the Hotel to facilitate a cohesive operation. His evidence is that the joint venturers agreed that Executive would manage and oversee the day to day operation of the Hotel, and that he and Mr. Somani (the principal of Sunbelt and LSHS) would secure certain other objectives including formalizing the leases from the 93 Owners.

[16] Mr. Daroowala says that the Hotel cannot operate effectively or efficiently without the majority of the rooms under the management of one hotel operator. He has consistently opposed all efforts to have the owners independently rent or lease out their own rooms or have groups band together to try to, in effect, operate a hotel within the Hotel because he says that poses numerous logistical, security and financial difficulties.

[17] After Hospitality was formed, it sought to complete leases with the 93 Owners for the use of their strata lots. Sometime around June 2003, the 93 Owners divided into two main groups headed by Dr. Ho and Mr. Chee, respectively.

[18] When the Hotel opened in 1999, Jewel Nomani was employed there as a bookkeeper. He later moved from that position to one with the Hotel restaurant and eventually moved to another hotel.

[19] According to Dr. Louie, in June 2003 Mr. Nomani began providing some of Dr. Louie%u2019s corporations with financial and business advice and bookkeeping services. Effective August 1, 2003, one of the Louie Defendants, 585503 B.C. Ltd., and one of the Nomani Defendants, 655673 B.C. Ltd., entered into a %u201CConsultant Services Agreement%u201D. It contemplated that Mr. Nomani%u2019s company would act and be paid as a consultant to Dr. Louie%u2019s company on, among other matters, the leasing of the restaurant.

[20] Mr. Daroowala deposes that in August 2003, Mr. Nomani approached Mr. Somani and offered to use his influence and expertise to assist Hospitality with its management of the Hotel. He revealed that certain %u201Cinteresting opportunities%u201D were available with respect to some of the Interval strata owners and stated he could swing the Interval strata lots the plaintiffs%u2019 way. This was not the first time that Mr. Nomani and Mr. Somani had discussed business prospects. Earlier in April 2002, Mr. Nomani had approached Mr. Daroowala and Mr. Somani in relation to some kind of business offer pertaining to a different hotel which they declined. In any event, in August 2003 Mr. Somani directed Mr. Nomani to speak to Mr. Sayani (Executive%u2019s representative) and they met on August 11, 2003. Mr. Daroowala deposes that during this meeting Mr. Nomani made numerous statements to Mr. Sayani about his being able to assist in obtaining Dr. Louie%u2019s strata lots as well as the remaining Interval lots. Mr. Daroowala says that Mr. Sayani also advised him that in the discussion, Mr. Nomani may have mentioned that he did some bookkeeping work for Dr. Louie or his companies. According to Mr. Daroowala, the next day Mr. Nomani presented Mr. Sayani with a document entitled %u201CConfidentiality Agreement%u201D. Mr. Daroowala%u2019s evidence is that Mr. Sayani considered the document to be somewhat confusing if read literally, but nevertheless signed it making one alteration. Evidently, at that stage, Mr. Sayani sought the specific assurance from Mr. Nomani that he would be working for the plaintiffs on a confidential basis and would not disclose their plans and affairs to anyone else. Presumably, the plaintiffs were concerned about Mr. Nomani%u2019s existing relationship with Dr. Louie. The plaintiffs%u2019 evidence, through Mr. Daroowala, is that Mr. Nomani gave Mr. Sayani the assurance he requested and said that such an assurance went without saying because as the agent for Hospitality, it was a given.

[21] Mr. Daroowala says that further discussions on these matters took place between Mr. Nomani and each of Messrs. Sayani and Somani, respectively throughout early to mid-August 2003. Eventually, Mr. Nomani%u2019s fee structure was negotiated and finalized.

[22] Mr. Daroowala says that Mr. Sayani advised him that an agency agreement with Mr. Nomani was struck in August 2003 by which Mr. Nomani was to assist Hospitality in the furtherance of its overarching objective to use all of the strata lots in the operation of the Hotel. Included within Mr. Nomani%u2019s scope of work was helping Hospitality obtain, by lease or purchase, certain strata lots owned by Dr. Louie or one of his companies, and those owned by Interval and other parties. Mr. Somani advised Mr. Daroowala that Mr. Nomani was bragging that he was now working for Hospitality. The plaintiffs%u2019 evidence is that later that same month, it was agreed that Mr. Nomani would provide his services to Hospitality with respect to arranging a long term lease of the restaurant to Hospitality and the eventual sale to it of the two underlying strata lots. Evidently, Mr. Somani and Dr. Louie had previously explored the prospect of Hospitality leasing the restaurant but had been unable to come to workable terms.

[23] The documentation pertaining to what the plaintiffs%u2019 characterize as their exclusive agency relationship with Mr. Nomani consists mostly of the Confidentiality Agreement, a %u201CLetter of Intent%u201D, a %u201CPromissory Note%u201D and a paper titled, %u201CConsulting Fee%u201D.

[24] The Confidentiality Agreement is dated effective August 12, 2003, and is made between one of Dr. Louie%u2019s companies and Executive. It is a muddled document but its overall thrust appears to protect confidential information and trade secrets of one of Dr. Louie%u2019s companies (not a defendant) which it may furnish with respect to the business of real estate and mortgage lending. The document is executed by Mr. Sayani, explicitly on behalf of Executive Hotels & Resorts.

[25] The draft Letter of Intent sent to Mr. Daroowala by Mr. Nomani is stated to set forth the intentions of Executive as tenant and Dr. Louie%u2019s company, 585503 British Columbia Ltd., as landlord with respect to the leasing of the restaurant. One of the changes which Mr. Daroowala made when he altered the Letter of Intent was to substitute Hospitality as the tenant in place of Executive. The final version was dated August 25, 2003, and signed by Mr. Sayani on behalf of Hospitality, with written authority to bind Mr. Somani as the representative of LSHS.

[26] The Promissory Note is dated August 27, 2003. It is signed by Mr. Nomani who promises to pay to Executive, the sum of $5,000.00 plus interest on demand. Waiver of payment is contemplated in the event that by a specific time, a binding lease between Hospitality and Dr. Louie%u2019s company, 585503 British Columbia Ltd., has been executed and Hospitality has become the operator of the restaurant as per the Letter of Intent.

[27] The Consulting Fee stipulates in relevant part:

In consideration for services related to the lease of [the restaurant] from 585503 B.C. Ltd. to [Hospitality] or its assigns, Jewel Nomani will receive the following as per this schedule:

1. $5,000.00 in the form of Promissory Note, which note shall become void when and if [Hospitality] becomes the Tenant of 585503 B.C. Ltd. before December 31, 2003, advanced upon signing of [the Letter of Intent] between [Hospitality] and 585503 B.C. Ltd.

2. $5,000.00 payable upon commencement of a formal Lease as described in the [Letter of Intent] referred to in # 1.

3. $10,000.00 payable upon the passing of six months after the commencement of Lease referred to in the [Letter of Intent] referred to in # 1.

4. All such terms of this document shall be kept strictly confidential.

Agreed this 28th day of August, 2003.

[28] The Consulting Fee document was modified such that the phrase %u201Cor the receiver for B.C. Ltd.%u201D was added immediately following the reference in the first line to 585503 B.C. Ltd. That alteration was initialled and the document executed by Mr. Nomani and Mr. Sayani.

[29] In addition to the above payments stipulated in the Consulting Fee document, it seems that Mr. Nomani was also entitled to be paid the further sum of $5,000.00 by Executive, which the plaintiffs describe as a bonus.

[30] The first payment of $5,000 pursuant to the Consulting Fee document appears to have been made to Mr. Nomani in two unequal instalments: one on August 18, 2003 and the other on August 27, 2003. Both cheques were issued by Executive: the first to Mr. Nomani%u2019s company and the other to himself personally. Sometime thereafter, the plaintiff, Le Soleil Restaurant Inc., was incorporated. It is noteworthy that this company was not even in existence when the alleged agency relationship was struck.

[31] According to Mr. Daroowala, between approximately July and December 2003, under the guidance and direction of Dr. Ho, Hospitality formalized leases with the approximately 35 of the 93 Owners in the Dr. Ho camp (the %u201CDr. Ho Owners%u201D). He says also that in July 2003 Mr. Chee committed to obtain formal leases for Hospitality in respect of the remaining 93 Owners which Mr. Chee continued to represent (the %u201CChee Owners%u201D) and that Mr. Chee repeated his commitment to do so many times thereafter. The plaintiffs%u2019 evidence is that they committed to Dr. Ho to match for the Dr. Ho Owners, the terms of any lease/rental agreement secured by Mr. Chee for the Chee Owners.

[32] Mr. Daroowala says that during the period September to November 2003, Mr. Nomani regularly reported to Mr. Sayani on the progress of the foreclosures of the Interval strata lots and assisted in negotiating the terms of the restaurant lease. The plaintiffs%u2019 evidence is they understood Mr. Nomani was acting as their exclusive agent. At the same time, however, as early as June 2003, Mr. Daroowala observed that Mr. Nomani was involved directly or indirectly with renting out Dr. Louie%u2019s strata lots. Dr. Louie deposes that at all times in the lease negotiations, Mr. Nomani was acting on Dr. Louie%u2019s instructions. Dr. Louie says that it was not until this action was launched that he learned that Mr. Nomani was being paid by Executive, Mr. Sayani or Hospitality in relation to the lease of the restaurant. He deposes that he was never under the impression that Mr. Nomani was acting on behalf of the plaintiffs or their related companies. This is in direct conflict with Mr. Nomani%u2019s evidence that he immediately told Dr. Louie of his arrangement with respect to the restaurant lease.

[33] In December 2003, a formal lease between Dr. Louie%u2019s company, 585503 British Columbia Ltd., and the plaintiff, Le Soleil Restaurant Inc., in respect of the restaurant was executed. In early January 2004 it was registered in the land title office. Also, in December 2003 Hospitality had sent the applicable form of lease to Mr. Chee and the designated lawyer for the Chee Owners in Malaysia for signature with the expectation that executed copies would be returned shortly.

[34] By February 2004 Hospitality had not received any lease documents executed by the Chee Owners as it had expected. Mr. Daroowala deposes that it felt as though Mr. Chee was starting to give the plaintiffs the cold shoulder which was completely inconsistent with his earlier upbeat messages. According to Mr. Daroowala, the plaintiffs also came to experience difficulties with Dr. Louie around this time and eventually considered him to be in breach of the terms of the restaurant lease. The plaintiffs say this caused them to ask Dr. Louie for a reduction in rent, which he refused.

[35] The relations between the plaintiffs and Dr. Louie became increasingly fractured in April and May 2004. They had briefly engaged in negotiations for Hospitality to take over Dr. Louie%u2019s strata lots, but when Dr. Louie rejected the plaintiff%u2019s offer to lease his units in May, their discussion broke down. Dr. Louie regards this rejection as triggering the beginning of the end of his relationship with the plaintiffs. It was around this point that Dr. Louie and his companies began to acquire additional strata units on his own behalf. Eventually, Dr. Louie transferred one of his strata lots to Mr. Nomani. Hospitality never did acquire an interest in the strata units owned by Dr. Louie or one of his companies or in the Interval lots.

[36] Dr. Louie is a long-standing member of the board of the strata corporation. Mr. Daroowala deposes, based on information and belief, that during a strata council meeting held in June 2004, Dr. Louie initiated and supported a resolution that the members challenge the lobby and parking leases. The plaintiffs were furious and a flurry of strongly worded letters were exchanged. The plaintiffs say that at the next council meeting held later that month, Mr. Nomani was present and that he and Dr. Louie were openly operating against the plaintiffs%u2019 management objectives.

[37] On August 24, 2004, the strata corporation commenced an action against various parties including Sunbelt, LSHS and Hospitality. The principal relief sought was to have the lobby and parking leases set aside. That relief had been sought years earlier by the one strata unit owner who claimed she was bringing a representative action on behalf of the 93 Owners, mentioned previously. That claim was dismissed on the ground that, as an individual owner, she lacked the authority to bring the claim. The validity of the strata corporation%u2019s 2004 action has been challenged by a separate petition filed by other members of the strata corporation.

[38] On October 15, 2004, the plaintiffs commenced an action against the Nomani Defendants substantially identical to the allegations made against them in this proceeding, including seeking injunctive relief. The next month they initiated this claim, this time naming the Dr. Louie Defendants as parties, and discontinued the earlier action.

[39] On December 13, 2004, Mr. Nomani%u2019s company, 655673 B.C. Ltd., commenced a small claims action against Executive and Mr. Sayani seeking payment of the sum of $6,500.00 representing the balance he alleged was owing to his company pursuant to the Consulting Fee document. At this point, I will mention parenthetically that another issue in dispute is whether Mr. Nomani personally, or his company, is party to the Consulting Fee arrangement: that matter is immaterial to the determination of this application. Executive and Mr. Sayani succeeded in having the small claim action transferred to this court on the basis that its subject matter was included in this proceeding.

[40] The plaintiffs blame Mr. Nomani for their failure to acquire the desired strata lots. They say he knowingly and wilfully sabotaged their efforts in this regard by: interfering with their relations and agreements with the other strata lot owners; assisting the Chee Owners and Ho Owners in procuring legal counsel in matters contrary to the interests of the plaintiffs and manipulating them for his own benefit, and acting in direct competition with the plaintiffs; conspiring with Dr. Louie and others in relation to the 2004 strata council meetings and strata corporation litigation; and acting generally in a manner harmful to the plaintiffs.

[41] The plaintiffs say that based on their belief that Mr. Nomani was working exclusively as their agent and in their interests, the representatives of Hospitality frequently disclosed confidential information to him and discussed it in his presence. These confidential communications included discussions about the price and terms relative to the acquisition or lease of the Chee Owners%u2019 strata lots, the strengths and weaknesses of the plaintiffs%u2019 legal positions, details of the plaintiffs%u2019 dealings with the Dr. Louie strata lots and the remaining Interval strata lots and strata lots owned by other parties, and their intentions with respect to the restaurant. They allege Mr. Nomani independently and in tandem with Dr. Louie has ultimately used that information against them.

[42] Mr. Nomani%u2019s evidence stands in sharp contradiction to the plaintiffs%u2019.

[43] First, he has put in issue the parties with whom he reached a deal. He says that no arrangement was ever struck with the plaintiffs and that his relationship was at all times with Mr. Sayani and Executive, neither of whom are parties. In this regard, he points out that he was paid by Executive and that many of the relevant documents were signed by Mr. Sayani allegedly on behalf of Executive or made in Executive%u2019s favour. Mr. Nomani notes also that in support of the plaintiffs%u2019 application to move Mr. Nomani%u2019s small claims action to this court, their counsel%u2019s position was that the Consulting Fee document was not clear and that counsel submitted, in part:

The document is signed by Mr. Nomani (third party) and Mr. Sayani. At issue is who is the agreement between? In what capacity did the signatories sign? Did they sign personally, or on behalf of a company, if so which company? The document is not clear. These matters are now before two courts.

On cross-examination, Mr. Daroowala testified that it was %u201Cimplied%u201D that Mr. Nomani was dealing with Hospitality and not Executive. As well, he deposes that although Executive issued the cheques to Mr. Nomani pursuant to the so-called agreement, that was done for reasons of expediency and Hospitality ultimately reimbursed Executive. Mr. Daroowala%u2019s explanation is based on information he received from Mr. Sayani.

[44] Mr. Nomani%u2019s position is that the parameters of his relationship with Mr. Sayani and Executive were far narrower than what the plaintiffs allege. He deposes that his company was engaged merely to assist in brokering the restaurant lease and more specifically to facilitate the negotiation of the Letter of Intent. He denies that he agreed to act as an exclusive agent for the plaintiffs or anyone in relation to the restaurant lease or securing an interest in additional strata lots or in any other matter.

[45] At the root of the plaintiffs%u2019 claim against the Nomani Defendants is the alleged fiduciary relationship of exclusive agency: the justification for the injunctive relief is the alleged multiple, harmful and continuing breaches of it. From the plaintiffs%u2019 perspective, the purpose of the injunction is to enforce the sanctity of their agency agreement with Mr. Nomani and prevent his further alleged violations of it.

[46] The existence of any relationship between Mr. Nomani and the plaintiffs and its nature and scope, is controversial. The difficulty facing the plaintiffs is that substantially all of their evidence concerning this material issue is given by Mr. Daroowala and is hearsay and double hearsay. The arrangement in question was negotiated between Mr. Nomani and Mr. Sayani and possibly Mr. Somani. Mr. Daroowala had no direct involvement in or knowledge of it.

[47] The effect of Rule 51(10) of the Rules of Court is that an affidavit filed in respect of an application for an interlocutory order may contain hearsay evidence even where such evidence would not be admissible at trial. However, it is always a matter of judicial discretion as to whether an interlocutory order ought to be granted on the basis of hearsay evidence. Double hearsay should never be admitted: Johnson v. Couture, 2002 BCSC 1804. It does not follow from Rule 51(10) that affidavits on information and belief may be used in all circumstances.

[48] In Litchfield v. Darwin (1997), 29 B.C.L.R. (3d) 203, 25 C.P.C. (4th) 403 (S.C.) this court declined to grant an injunction to restrain the plaintiff from trespassing on the defendants%u2019 land because the pertinent material contained in the supporting affidavit was based on information and belief. At para. 4 Mr. Justice De Weerdt explains the basis for his dismissal:

%u2026It is quite simply that the injunctive relief sought should not, in my view, be granted on no more than pure hearsay when it has not been shown that evidence from the original sources in unavailable. It is obvious that cross-examination of the source of the hearsay information is denied to the plaintiff where no affidavit of the source is relied upon by the defendants, as here. Testing the information by cross-examination is thus precluded. Nor is there anything before me to indicate the reliability of the hearsay information.

At para. 5, he makes the following important observation about Rule 51(10):

Rule 51(10) of the Rules of Court permits a litigant to rely upon hearsay on an interlocutory application such as this. But the Rules do not go further. It remains a matter of judicial discretion, to be exercised by the judge hearing the application, whether the injunctive relief sought should be granted on the basis of such hearsay in this instance.

[49] The plaintiffs seek to distinguish Litchfield on the ground that in the case at hand, Mr. Daroowala%u2019s affidavits provide both direct and hearsay evidence and hence their application is not based wholly on information and belief which they submit was the case in Litchfield. In my opinion, that distinction is ill-conceived and flows from a misreading of the Litchfield decision. Litchfield does not stand for the proposition that the court ought to decline to grant an interlocutory injunction only in circumstances where all of the evidence presented is hearsay. The concern expressed by the court in Litchfield was that the pertinent material and facts in issue did not go beyond statements based on information and belief: that is the vital point identified in Litchfield.

[50] In the case here, Mr. Daroowala has no direct knowledge of the nature and scope of the arrangement between any of the Nomani Defendants and the plaintiffs or Mr. Sayani or Executive. His evidence on this crucial and disputed issue is all based on what Messrs. Sayani and Somani have told him including some rather incriminating statements which they attribute to Mr. Nomani.

[51] Counsel for the plaintiffs contends that the evidence of Messrs. Sayani and Somani was unnecessary because Mr. Daroowala was the single most knowledgeable and involved person. There was no other reason given and no evidence that these gentlemen were unable or unavailable to give their direct evidence.

[52] The terms of the proposed injunction are expansive. It seeks to prevent the Nomani Defendants from continuing to act in alleged breach of their fiduciary duty as well as erect a barrier between the two sets of defendants to prevent them from collaborating and acting together to the detriment of the plaintiffs (it is proposed that these latter terms would be suspended until mid-January 2006, pending the possible finalization of settlement with the Louie Defendants). In my view, if an injunction were granted on the desired terms, the plaintiffs would, in effect, be given substantially all of the benefits of a judgment at trial as against the Nomani Defendants. Such a far-reaching outcome should alert the court to exercise extreme caution in admitting hearsay evidence on pivotal issues especially where there is no compelling reason given for the omission of the evidence from the original sources.

[53] It is not uncommon for the court to adjourn an application for an interlocutory injunction in order to allow cross-examination on the affidavits. Indeed, in this case, cross-examination of Mr. Nomani, Mr. Daroowala and Dr. Louie on their affidavits filed in respect of this motion did take place. But the Nomani Defendants have had no opportunity to cross-examine Messrs. Sayani or Somani for the purposes of this application. The fact that it may be open to such defendants to proceed with an examination for discovery of one or both of these individuals in the ordinary course of the action does not adequately address this point.

[54] The plaintiffs urge that the documentary evidence on this application supports their assertion that Mr. Nomani was acting as their exclusive agent under a broad scope of work, including facilitating the acquisition of additional strata lots. I do not share that view. I consider the Confidentiality Agreement, Promissory Note, Letter of Intent and Consulting Fee document, when read in light of the totality of the evidence, to be equivocal on that matter. Nor do I accept that the words and actions of Mr. Nomani are consistent only with the nature and breadth of the arrangement alleged by the plaintiffs. Absent the extensive hearsay evidence concerning their alleged relationship with Mr. Nomani, the plaintiffs%u2019 evidence on that critical issue is woefully inadequate.

[55] Injunctive relief is drastic and extraordinary. In my view, the court ought to receive direct evidence on essential facts in dispute on interlocutory applications of this kind whenever it is reasonably practicable and obtainable and in the absence of urgency. I endorse the approach taken in the Litchfield case. It seems to me that to apply a less rigid evidentiary threshold could well run the danger of compromising a meaningful consideration of the actual test for granting an interlocutory injunction.

[56] For the foregoing reasons, I conclude that injunctive relief ought not to be granted in this case. The plaintiffs%u2019 application is dismissed with costs against them at scale 3.

%u201CS.K. Ballance, J.%u201D
The Honourable Madam Justice S.K. Ballance

Case Studies, Pendrell Place: Under New Management

Effective January 1, 2006, Century 21 Prudential Estates (RMD) Ltd., Property Management Division, has assumed management duties of Strata Plan V.R. 1008, Pendrell Place. Century 21 took over property management from Strataco Management, run by J.P. Daem who, in May of 2005, gave 60 days notice for the management contract with Pendrell Place (but who then agreed afterward to stay on until such time as the strata corporation could retain another property management company. Mr. Daem and Strataco Management resigned as property manager as of December 31, 2005.)

In a letter dated December 23, 2005 sent to all owners of units in Pendrell Place, W.D. Blackall, General Manager of Century 21 Property Management, listed David Distelmeyer as the new Strata Manager. Mr. Blackall went on to say that:

Effective communication between the Owners, Council Members and Management is an important ingredient in the administration of any Strata Corporation, and your input is certainly encouraged relevant to problems or questions you may have from time-to-time concerning your Strata Lot, your Strata Corporation or the condominium industry in general.




My examination of Pendrell Place documents leads me to believe that the leaks and rot at Pendrell Place were not caused by ineffective communication, nor was the lack of repair, which extends to this very day.

Case Studies, Pendrell Place: Strataco Management and J.P. Daem sued

Strataco Management Ltd., Jean-Pierre Daem and The Owners, Strata Plan NW 2089 are being sued by DCP Developments (Belmondo) Ltd.

The Writ of Summons in Action No. L-053092 was filed in the Vancouver Registry on December 22, 2005. DCP, the owner of three lots in Strata Plan NW 2089, claims against Strataco, Daem and the strata corporation for:

1. their refusal or failure to comply with the Strata Property Act; and ...specifically, their delay in issuing Forms B and F ... and their refusal or failure to provide information as required under the Act.

2. their breach of trust in refusing or failing to properly credit and account for payments made by [DCP] in February 2004 ($28,284.37) and September 2005 ($116,496.28).

DCP seeks orders that the Forms be issued and that the funds be returned with interest.

Strataco and JP Daem resigned as Property Manager for Pendrell Place effective December 31, 2005.

Vancouver, VR 672: Governance of small 6-unit leaky rotten condo complex a shambles; Court finds Strata Corporation dysfunctional, expands Administrator's authority

IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:

Ranftl v. The Owners, Strata Plan VR 672,

 

2005 BCSC 1760

Date: 20051219

Docket: L042930

Registry: Vancouver

Between:

LINDA MARGARET RANFTL

PETITIONER

And:

THE OWNERS, STRATA PLAN VR 672

RESPONDENT


Before: The Honourable Mr. Justice McEwan

Reasons for Judgment

Counsel for the Petitioner:

M.D. Fischer

Counsel for the Respondent, The Owners, Strata Plan VR 672:

J.L. Williams

Counsel for the Respondents, Nils and Helena Wennerstrom:

A.L. Baker

Counsel for the Administrator, Garth Cambrey:

G.S. Hamilton

Date and Place of Hearing:

December 8, 2005

 

Vancouver, B.C.

     

 

[1]                The issue in this case is the governance of a small six unit, five owner Strata Corporation in the Fairview Area of Vancouver.

[2]                The Petitioner is one of the owners.  On November 26, 2004 she sought an order pursuant to s. 174 of the Strata Property Act, S.B.C. 1998, c. 43 appointing an Administrator to exercise the powers and duties of the Strata Council on behalf of the owners.

[3]                The section reads as follows:

Appointment of administrator

174 (1)       The strata corporation, or an owner, tenant, mortgagee or other person having an interest in a strata lot, may apply to the Supreme Court for the appointment of an administrator to exercise the powers and perform the duties of the strata corporation.

(2)      The court may appoint an administrator if, in the court's opinion, the appointment of an administrator is in the best interests of the strata corporation.

(3)      The court may

(a)    appoint the administrator for an indefinite or set period,

(b)    set the administrator's remuneration,

(c)    order that the administrator exercise or perform some or all of the powers and duties of the strata corporation, and

(d)    relieve the strata corporation of some or all of its powers and duties.

(4)      The remuneration and expenses of the administrator must be paid by the strata corporation.

(5)      The administrator may delegate a power.

(6)      On application of the administrator or a person referred to in subsection (1), the court may remove or replace the administrator or vary an order under this section.

[4]                The Court must be satisfied on such an application that the appointment is in “the best interests” of the Strata Corporation.

[5]                On February 22, 2005 the Petitioner came before Mr. Justice Cole.  The matter was adjourned on the following basis:

THIS COURT ORDERS THAT

1.         this matter is adjourned for 60 days to no fixed date;

2.         within 30 days, the Respondent is to obtain a building envelope construction report;

3.         within 60 days, the Respondent is to have the repairs completed in accordance with the building envelope construction report, weather permitting;

4.         the Respondent is to make reasonable efforts to provide bank statements for the last four years, and the Petitioner is to pay 0.25 cents per page to the Respondents for such bank statements;

5.         within two weeks from today, the Respondent is to have available all section 35 documents, organized by type and chronological order, to be available for inspection at the offices of Owen Bird Law Corporation;

6.         the Strata Council is to put forward a three‑quarter vote resolution for the consideration of the Owners for a special assessment to fund the cost of a financial audit at a Special General Meeting within 60 days;

7.         all documents upon which the parties intend to rely at a further hearing of this matter should one be necessary are to be exchanged at least two weeks prior to any further hearing.

THIS COURT DECLARES THAT

8.         an emergency exits [sic], as contemplated under section 98(3) of the Strata Property Act and Bylaw 21(2) from the Schedule of Standard Bylaws, and there are reasonable grounds to believe that an immediate expenditure is necessary to ensure safety or prevent significant loss or damage, whether physical or otherwise.

[6]                There were a number of continuing problems and many of the terms of this order were not carried out.

[7]                On June 2, 2005 this matter came before Madam Justice Brown.  The Petition was adjourned by consent, on the following terms:

THIS COURT ORDERS that Mr. Garth Cambrey (“Mr. Cambrey”) of Stratawest Management Ltd. be appointed the administrator of The Owners, Strata Plan LMS 672 (the “Strata Corporation”), pursuant to Section 174 of the Strata Property Act, S.B.C. 1998, c. 43 as amended (the “Act”), to exercise the powers and duties of the Strata Council and the Strata Corporation, subject always to the requirements of the Act, the Bylaws and the Rules of Strata Corporation and limited to matters related to the repair of the building envelope and retaining a property management company for full management services;

THIS COURT FURTHER ORDERS that Mr. Cambrey, as Administrator shall, inter alia, perform the following:

1.         Take such steps as may be necessary to ensure that the Strata Corporation determines the appropriate recommendation for the building envelope repair or remediation, including the following;

(a)        appoint an independent engineering firm to undertake a building envelope inspection, if Mr. Cambrey deems that necessary;

(b)        consider the recommendations made in all building envelope investigation studies including the existing studies (collectively the “Existing Studies”) of Mr. Henry Touwslager and Mr. William McCreery and the inspection of the independent engineering firm (if retained);

(c)        ensure that all owners have access to the reports of the independent engineering firm and the Existing Studies at least one month prior to any meeting called for the purpose of presenting recommendations and voting to raise funds to remediate the building envelope;

(d)        recommend what work, if any, should be done to repair or remediate the building envelope of the Strata Corporation and the estimated cost of any such work;

(e)        present the owners with the findings of the building envelope inspection, the evaluation of the Existing Studies and the suggested remediation program for the building; and

(f)         draft a resolution incorporating the preferred remediation plan, the estimated cost, the name of the engineering firm to be retained to supervise the work and put that resolution to a 3/4 vote of the Owners for their approval and acceptance, at a meeting called for the purpose;

2.         Select a property management company to provide full strata management services to the Respondent Strata Corporation, prepare a revised budget to accommodate the remuneration of the strata management company and Administrator, and call a special general meeting of the owners to approve the revised budget.

3.         Enter into a management contract with the selected property management company if the revised budget is approved and otherwise apply to this Court for direction.

4.         Attend all Strata Council Meetings and General Meetings of the Strata Corporation;

THIS COURT FURTHER ORDERS THAT the Respondent provide access to all information, records and documents requested by the Administrator, and provide such authorizations as are requested by the Administrator to obtain information, records and documents held by third parties which relate to the Strata Corporation;

THIS COURT FURTHER ORDERS that Mr. Cambrey may retain the necessary professionals, including independent legal counsel, for opinion, advice and services in respect of his duties pursuant to this appointment;

THIS COURT FURTHER ORDERS that Mr. Cambrey’s fees of $150.00 per hour plus disbursements shall be rendered monthly, and shall be payable by the Strata Corporation, provided that at the request of any party, Mr. Cambrey shall pass his accounts before the Registrar of the Supreme Court of British Columbia;

THIS COURT FURTHER ORDERS that Mr. Cambrey’s appointment shall be reviewed by the Court on or before September 30, 2005, at which time Mr. Cambrey shall report to Court with respect to the steps he has taken, the costs incurred as a consequence of his appointment as Administrator and whether his appointment as Administrator should continue;

THIS COURT FURTHER ORDERS that Mr. Cambrey shall be at liberty to apply to the Court for directions to assist and permit him to discharge his duties as Administrator hereunder;

THIS COURT ORDERS THAT the Administrator and/or any party have liberty to apply to this Court to substitute another Administrator for the one appointed, extend the term of an Administrator for any subsequent term or terms, or to expand or reduce the scope of an Administrator’s powers, as this Court deems appropriate;

THIS COURT FURTHER ORDERS THAT, if any 3/4 vote resolution(s) or majority vote resolution(s) of the owners are required to give effect to any of the Orders set out herein, and if such resolution(s) do not pass at a general meeting of the owners, that the Administrator and/or any party have leave to apply to this Court for an Order approving the resolution(s);

THIS COURT FURTHER ORDERS that no person shall issue any process against Mr. Cambrey, Stratawest Management Ltd. or any employee or representative of Stratawest Management Ltd. related to this appointment without leave of the British Columbia Supreme Court.

[8]                The Administrator reported to the court on September 30, 2005 as required by this order.  His appointment was then extended to June 30, 2006 and a levy was ordered for his remuneration and to fund an engineering report on the Building Envelope.  That report was delivered December 7, 2005.

[9]                The consent order of June 2, 2005 reflects a recognition that the Strata Corporation had, at least in some respects, become dysfunctional.  The test a court would apply in imposing such an order is found in Lum v. Strata Plan VR519, 2001 BCSC 493, at paragraphs 11 and 12 per Harvey J.:

In my view after reviewing the authority available, bearing upon this question, factors to be considered in exercising the Court's discretion whether the appointment of an administrator is in the best interests of the strata corporation include:

(a)        whether there has been established a demonstrated inability to manage the strata corporation,

(b)        whether there has been demonstrated substantial misconduct or mismanagement or both in relation to affairs of the strata corporation,

(c)        whether the appointment of an administrator is necessary to bring order to the affairs of the strata corporation,

(d)        where there is a struggle within the strata corporation among competing groups such as to impede or prevent proper governance of the strata corporation,

(e)        where only the appointment of an administrator has any reasonable prospect of bringing to order the affairs of the strata corporation.

In addition, there is always to be considered the problem presented by the costs of involvement of an administrator.

I also take into consideration the comments of Huddart, J. in Cook, supra, that the democratic government of the strata community should not be overridden by the Court except where absolutely necessary.

[10]            The Petitioner’s position before this court is that the limited mandate given to the Administrator under the order of June 2, 2005 should now be expanded.  The Notice of Motion seeks that:

1.         The authority of the Administrator be expanded to exclusively exercise all of the powers and perform all of the duties of the Strata Corporation;

2.         The Strata Council be permitted to act only as directed by the Administrator or as directed by further order of this Court;

[11]            The Respondent, The Owners, Strata Plan VR 672 has the support of three owners representing four units.  They take the position that the appointment of an administrator was and remains unnecessary and seek an order that the Administrator be removed.

[12]            The controversies are, as counsel for the Respondent Owners has submitted, of two kinds.  There are disagreements respecting the condition of the building and what to do about that and there are also disagreements over governance.

[13]            There are several inches of materials before the court.  At the hearing it was not possible to review all of the affidavits and documents submitted.  I have now done so, and reviewed the written arguments of both parties.  I have also taken account of the position of Nils and Helena Wennerstrom who were joined at the hearing on December 8, 2005.  They are owners of a unit and essentially support the Petitioner.

[14]            The Administrator does not oppose an expanded role.

[15]            There is much back and forth in the affidavits concerning events since the appointment of the Administrator.  The affidavit of the Petitioner sworn September 27, 2005 refers to some 38 exhibits illustrating – I say this without making a value judgment – an extraordinary amount of skirmishing over process for such a small entity.

[16]            Something of the tenor of the ongoing difficulties with this Strata Council can be discerned in the affidavit of John Morrison sworn September 8, 2005.  He complains that even within the limited terms of reference of the order of June 2, 2005, the Administrator has gone too far:

5.         Cambrey has exceeded his jurisdiction as Administrator on many occasions since his appointment on June 2, 2005, including:

a)         advising on and objecting to the manner in which notice of council meetings is provided even though the Owners themselves had come to an agreement respecting same.  Attached hereto to this my Affidavit as Exhibits “A”, “B” and “C” are true copies of a letter and emails from Cambrey to the Owners dated June 29, 2005, August 8, 2005, and August 31, 2005, respectively, wherein Cambrey makes reference to the manner of notice given;

b)         advising the Owners of what Cambrey alleged to be contraventions of the Strata Property Act and the Order of Madam Justice Brown, including matters relating to voting requirements and the calling of council meetings.  See Exhibit “A” above;

c)         using his authority to control the timing, content and structure of council meetings as opposed to simply attending them as set out in the Order of Madam Justice Brown.  See Exhibit “A” above;

d)         forming an unqualified opinion that ongoing repairs to the building envelope should be discontinued and then instructing repairmen to cease all work on the property until further notice by him when his authority was limited to the appointment of a further inspector and the making of recommendations on the basis of information provided to him by qualified professionals.  Attached hereto to this my Affidavit as Exhibit “D” is a true copy of a letter from Cambrey to the Owners dated July 14, 2005, wherein Cambrey forms the opinion that it would be prudent for the Strata Corporation not to proceed with current repairs.  Attached hereto to this my Affidavit as Exhibit “E” is a true copy of a letter from Cambrey to William McCreery, Architect, (“McCreery”) dated July 13, 2005, wherein Cambrey instructs McCreery not to proceed with current repairs.  Attached hereto to this my Affidavit as Exhibit “F” is a true copy of an email from Cambrey to the Owners dated July 27, 2005, wherein Cambrey advised the Owners that the repairs will not be completed at that time;

e)         instructing repairmen to reinstall certain handrails without having the authority or qualified professional basis for doing so.  Attached hereto to this my Affidavit as Exhibit “G” is a true copy of a letter from Cambrey to the Owners dated July 29, 2005, wherein Cambrey refers to his instructions to replace balcony railings until such time as a decision is made on a building envelope inspection.  See also Exhibit “E” above, wherein Cambrey instructs McCreery to arrange for railings to be reinstalled; and

f)          By letter from Cambrey to the Owners dated July 29, 2005, and marked as Exhibit “G”, it is clear that Cambrey believes his authority extends to making any decisions in respect of ongoing repairs, including halting them until further notice.  See also Exhibit “B” above.

6.         Cambrey has acted unreasonably during his appointment as Administrator, including:

a)         Refusing to even consider McCreery’s building assessment proposal without any reasonable basis for doing so;

b)         Taking an unreasonable position in respect of the continuation of current repairs, despite the damages accruing to one of the Owners as a result of the poor condition of his rental suite;

c)         Making repeated requests that notices of council meetings be delivered other than by email when for reasons of ease and convenience, all of the Owners had agreed to such means of notice; and

d)         At the Strata Corporation’s expense, outlining discrepancies, and inaccuracies in minutes of council meetings, and more particularly, preparing a 6-page letter to me outlining same.  Attached hereto to this my Affidavit as Exhibit “H” is a copy of that letter.  See also Exhibit “B” above;

e)         Following the Special General Meeting that took place on August 3, 2005, wherein the majority of Owners voted against Cambrery’s [sic] proposal to retain a building envelope inspection report through RDH Building Engineering Ltd., Cambrey wrote to the Owners demanding that they reconsider their vote or face repercussions, including having to pay significant legal and administration costs.  A true copy of this letter from Cambrey to the Owners dated August 11, 2005 is attached hereto to this my Affidavit as Exhibit “I”.

7.         Cambrey has exhibited bias in carrying out his appointment as Administrator, including:

a)         Entering into discussions and meetings relating to the building envelope work with certain owners, namely the Plaintiff and the Wennerstroms, and with no other Owners or council members;

b)         Entering into discussions with and appearing to take advice from Mr. Fischer, counsel for the Plaintiff, in particular respecting the legal interpretation of the Order of Madam Justice Brown.  See Exhibit “B” above.  Upon a review of Cambrey’s accounts, it appears that neither the Defendants nor their counsel were privy to all such communications

c)         Forming the opinion that McCreery had a personal relationship with me and thereafter refusing to even consider any proposal put forth by McCreery in respect of further work needing to be done, even though such proposal was the most cost effective and was supported by a majority of the Owners.  A discussion of the above is set out in the Minutes of Special General Meeting of the Owners held on August 3, 2005, a true copy of which is attached hereto to this my Affidavit as Exhibit “J”; and

d)         Being overtly confrontational and dismissive with the Defendants and with McCreery and suggesting that McCreery lacked impartiality without having any basis for doing so.  Attached hereto to this my Affidavit as Exhibit “K” is a true copy of an email from Cambrey to McCreery dated August 3, 2005, wherein Cambrey implies that McCreery has conducted himself in an unprofessional manner.  See also Exhibit “H” above.

8.         Prior to his appointment as Administrator, Cambrey was unable to provide the Strata Corporation with an estimated budget in respect of his appointment.  However, given Cambrey’s limited role as set out in the Order of Madam Justice Brown, one would expect his fees to be modest.

9.         Since the appointment of the Administrator on June 2, 2005, the Strata Corporation has incurred total costs of $3,562.80 in respect of Cambrey’s administration.  Attached hereto to this my Affidavit as Exhibit “L” is a true copy of Cambrey’s accounts.  In the Minutes of Special General Meeting of the Owners held on August 3, 2005, attached hereto as Exhibit “H”, Cambrey put forth a budget for his administration in the amount of $10,000.  Cambrey estimated that his total fees up to the end of September, 2005 alone could be as high as $8,000.

[17]            The flavour of these controversies from the perspective of the Administrator can be gleaned from this excerpt from his report of September 16, 2005, which he appended to an affidavit of the same date swearing it to be true:

All strata lot owners comprising the strata corporation are strata council members however, the diverse opinions of the owners are such that the governance of the strata corporation has failed in that the strata corporation is unable to meet it’s statutory obligation to repair and maintain the common property pursuant to Section 72 of the Strata Property Act.

The strata council President has a disregard for requirements of the Strata Property Act such as providing notice in accordance with Section 61 of the Strata Property Act and recent attempts to reverse the vote taken at the September 7, 2005 Special General Meeting in which the 3/4 Vote Resolution to complete repairs was defeated by suggesting that Mr. & Mrs. Wennerstrom were not entitled to vote at such meeting as they had not paid a Special Levy.  This is contrary to the Strata Property Act as the strata corporation does not have the requisite bylaw in place pursuant to Section 53(2) of the Strata Property Act.  Mr. Morrison’s email of September 8, 2005, which was not sent to me directly but forwarded to me by an owner, purports to reverse the 3/4 Vote Resolution.  I attach a copy of Mr. Morrison’s email together with my reply and reply of Mr. Wennerstrom and a copy of correspondence issued by Mr. Patrick Williams, legal counsel for Mr. And Mrs. Wennerstrom as Appendix ‘N’.

Additionally, Mr. Morrison has written two letters to me dated July 21, 2005 and August 31, 2005 on behalf of the strata council, which are not supported by all members of the strata council.  I attach a copy of the July 21, 2005 letter to which I replied by way of my Notice to Owners dated July 29, 2005 contained in Appendix ‘C’.  I attach a copy of August 31, 2005 letter together with my reply of September 14, 2005 and email from Mrs. Ranftl and Mr. Wennerstrom as Appendix ‘O’.

Mr. Morrison has failed to notify me of council meetings.  I attach a copy of Mr. Morrison’s email to owners dated September 8, 2005 as contained in Appendix ‘N’ which was not copied to me by Mr. Morrison and calls for a Strata Council meeting for September 21, 2005.

I believe, with the assistance of R. Jang & Associates, the governance of the strata corporation will be enhanced with respect to adhering to the Court Order and the requirements of the Strata Property Act such as General Meeting Notice requirements and unbiased minute taking at meetings in which a representative of R. Jang & Associates Ltd. is in attendance.  I also believe R. Jang & Associates will ensure the Strata Corporation financial records are maintained in a professional and timely manner also in accordance with the Strata Property Act.

[18]            On November 29, 2005 the Petitioner swore an affidavit deposing to ongoing problems involving the appointed manager:

3.         I understand that Raymond Jang started acting as the strata manager for The Owners, VR 672 on September 1, 2005.

4.         Now produced and shown to me and marked as Exhibit “A” to this my Affidavit is a series of emails sent by Raymond Jang to the Strata Council showing that Mr. Jang has requested the strata corporation’s records on at least 6 occasions, and as of November 25, 2005 still does not have all of the records which the Strata Corporation is required to keep pursuant to section 35 of the Strata Property Act.

5.         I understand that the strata manager is unable to fully perform the duties for which he is being remunerated until he receives all of the Strata Corporation’s records.

[19]            It would take a very long time and cost a great deal in legal fees to get to the bottom of the charges and counter-charges that have been exchanged or to determine the reasonableness or unreasonableness of the positions taken in this matter.  There is no question that this Strata Corporation is dysfunctional within the test set out in Lum.  The half-way measure of a limited Administration has apparently just moved the controversies within this Strata Corporation to a different plane, that of the jurisdiction of the Administrator.  This, in the terms of the test set out in Lum, is a “struggle within the Strata Corporation among competing groups such as to impede or prevent proper governance of the Strata Corporation.”  I say so without suggesting that at least paragraphs 11(a), (c) and (e) have not been more than made out as well, notwithstanding the restraint respect for self-governance requires.

[20]            The Respondent Owners submit that “the Petitioner is effectively seeking to vary the order of Madam Justice Brown”, and that “there must be compelling new evidence to vary that Order.”  This overlooks the fact that what the Petitioner seeks is the same relief she sought in the Petition, and that the interlocutory order was not imposed by Madam Justice Brown but went by consent.  It is not helpful to confuse orders of that kind with actual adjudications.  The order of Madam Justice Brown was not the type of order to which such tests apply.

[21]            In the course of the hearing before me the owners of one of the units, Nils and Helena Wennerstrom sought to make submissions.  Counsel for the Strata Corporation objected to this.  I permitted it, but only on the basis that they be joined as Respondents.  That, in my view, is their proper role, notwithstanding that they generally support the Petitioner.  The Rule against two counsel appearing for two different petitioners would militate against their addition in that manner.

[22]            In the course of submissions, counsel advised that a practice has developed permitting such interested parties to be represented and heard without being joined.  I cannot imagine why that would be so, or why it should be a hazard of bringing a Petition that interested persons, who will not assume the risks and responsibilities of getting on the record, be allowed to complicate the proceedings.  I think it quite irregular.

[23]            I take it to be understood that the appearance of the Administrator, by counsel, was properly a matter within his discretion in connection with the duties the court has entrusted to him, as was his report to the court at the hearing.  The Administrator is not made a party in such circumstances.

[24]            Having now had an opportunity to review all of the material and to consider the further written submissions of counsel, in addition to what was addressed on December 8, 2005, I am satisfied that the motion should be granted.  Accordingly, I order:

1.         That the Administrator’s authority be expanded to include all of the powers and duties of the Strata Council;

2.         That the Strata Corporation be relieved of all its powers and duties;

3.         That the remuneration and expenses of the Administrator be paid at the rates established before Madam Justice Brown, and paid by the Strata Corporation following review and approval by the Registrar;

4.         That there be a review before this Court of the Administration as soon as one can be scheduled after June 30, 2006, with the Administrator, however, continuing after that date until further order of this Court;

5.         That having found the Strata Corporation dysfunctional but not having found fault, at this point, with either faction, the issue of costs be adjourned pending the review;

6.         That there be liberty to apply respecting anything arising in connection with the implementation of this order;

7.         That I am seized of the matter until further notice.

“T.M. McEwan, J.”
The Honourable Mr. Justice T.M. McEwan

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