Ontario: Court rules bankrupt condo developer who deceived a condominium corporation and a purchaser is not entitled to legal defence under the corporation's insurance policy

Boland v. Allianz Insurance Company of Canada, 2006 CanLII 16539 (ON S.C.)

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Date:2006-05-19
Docket:05-CV-297819PD1

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COURT FILE NO.:  05-CV-297819PD1

DATE:  20060519

 

 

 

SUPERIOR COURT OF JUSTICE – ONTARIO

 

RE:                       LAWRENCE ALLAN BOLAND (Applicant) v. ALLIANZ INSURANCE COMPANY OF CANADA and GERLING GLOBAL GENERAL INSURANCE COMPANY and GCAN INSURANCE COMPANY (Respondents)

BEFORE:            Justice C. Horkins

COUNSEL:         Richard Macklin, for the Applicant

                                    Leslie A. Wright, for the Respondent Allianz Insurance Company of Canada

DATE HEARD:   March 29, 2006

E N D O R S E M E N T

 

introduction

[1]               This is an application pursuant to rules 14.05(3)(d) and (h) of the Rules of Civil Procedure seeking a declaration that a duty to defend is owed pursuant to a policy of insurance.

[2]               On two occasions the applicant Lawrence Allan Boland was a member of the board of directors of Metropolitan Toronto Condominium Corporation 1056 ("MTCC 1056"): July 1993 to June 1994 and September 1997 to November 1998. MTCC 1056 has commenced action 05-CV-290574PD2 against Mr. Boland for intentionally or negligently failing to disclose his knowledge about the illegal construction of condominium unit 113.

[3]               Mr. Boland seeks an order requiring the respondent Allianz Insurance Company of Canada (now ING Insurance Company of Canada) to defend him and that he be permitted to appoint his own counsel at ING’s expense. The application against the other respondents has been abandoned.

The Legal Framework

[4]               The pleadings govern the duty to defend. If the claim alleges facts which if proven would fall within the coverage of the policy, then the insurer is obliged to defend.  It is not necessary to prove that the obligation to indemnify will in fact arise to trigger the duty to defend. As stated in Nichols v American Home Assurance, [1990] S.C.J. No. 33 (at para. 17) “The mere possibility that a claim within the policy may succeed suffices. In this sense … the duty to defend is broader than the duty to indemnify.”

[5]               To determine if a duty to defend exists, there must be an assessment of the statement of claim to ascertain the substance and true nature of the claim. The duty to defend is not triggered by labels used in the claim but it is the true nature of the claim that matters. See Non-Marine Underwriters, Lloyd's of London v. Scalera, 2000 SCC 24 (CanLII), [2000] 1 S.C.R. 551 (at para 50).

[6]               Coverage for intentional conduct is excluded. When both intentional and negligent conduct is properly pleaded, the issue is whether the negligent conduct is derivative of the intentional conduct and therefore excluded. In Scalera the court explained how to resolve this issue:

¶ 85     Having construed the pleadings, there may be properly pleaded allegations of both intentional and non-intentional tort. When faced with this situation, a court construing an insurer's duty to defend must decide whether the harm allegedly inflicted by the negligent conduct is derivative of that caused by the intentional conduct.  In this context, a claim for negligence will not be derivative if the underlying elements of the negligence and of the intentional tort are sufficiently disparate to render the two claims unrelated. If both the negligence and intentional tort claims arise from the same actions and cause the same harm, the negligence claim is derivative, and it will be subsumed into the intentional tort for the purposes of the exclusion clause analysis. If, on the other hand, neither claim is derivative, the claim of negligence will survive and the duty to defend will apply. Parenthetically, I note that the foregoing should not preclude a duty to defend simply because the plaintiff has pleaded in the alternative.  As Pryor, "The Stories We Tell: Intentional Harm and the Quest for Insurance Funding", supra, points out at p. 1752, "[p]laintiffs must have the freedom to plead in the alternative, to develop alternative theories, and even to submit alternative theories to the jury". A claim should only be treated as "derivative", for the purposes of this analysis, if it is an ostensibly separate claim which nonetheless is clearly inseparable from a claim of intentional tort.

¶ 86     The reasons for this conclusion are twofold. First, as discussed above, one must always remember that insurance is presumed to cover only negligence, not intentional injuries. Second, this approach will discourage manipulative pleadings by making it fruitless for plaintiffs to try to convert intentional torts into negligence, or vice versa. While courts should not concern themselves with whether or not pleadings are designed to generate insurance coverage, following the guidelines set out above will provide insurers with sufficient protections against manipulative pleadings.

[7]                  In Scalera Iacabucci J. provides a three step process to determine if a claim could trigger indemnity:

¶ 50   Determining whether or not a given claim could trigger indemnity is a three-step process. First, a court should determine which of the plaintiffs legal allegations are properly pleaded. In doing so, courts are not bound by the legal labels chosen by the plaintiff. A plaintiff cannot change an intentional tort into a negligent one simply by choice of words, or vice versa. Therefore, when ascertaining the scope of the duty to defend, a court must look beyond the choice of labels, and examine the substance of the allegations contained in the pleadings. This does not involve deciding whether the claims may have any merit; all a court must do is decide, based on the pleadings, the true nature of the claims.

¶ 51   At the second stage, having determined what claims are properly pleaded, the court should determine if any claims are entirely derivative in nature. The duty to defend will not be triggered simply because a claim can be cast in the terms of both negligence and intentional tort. If the alleged negligence is based on the same harm as the intentional tort it will not allow the insured to avoid the exclusion clause for intentionally caused injuries.

¶ 52     Finally, at the third stage, the court must decide whether any of the properly pleaded non-derivative claims could potentially trigger the insurer's duty to defend.

[8]               In summary this is the legal framework that will be used to consider whether the policy should respond to provide a defence to Mr. Boland. The relevant provisions of the policy follow.

The Insurance Policy

[9]               The ING policy is a Comprehensive Condominium Policy that includes a “Directors’ and Officers’ Liability Section”. The insuring agreement provides coverage for claims that are made against officers and directors during the policy period for a wrongful act that occurs during the policy period. The policy period is April 30, 2005 to April 30, 2006. This policy was a renewal of a previous policy but each renewal contract of insurance of this type is considered to be a separate contract. See Toronto General Trusts Corp. v. Gooderham, [1936] 2 D.L.R. 545 (S.C.C.) at p. 555.

[10]           The Insuring Agreement states (at p. 64):

The Insurer agrees with the Directors and Officers of the Corporation and with the Corporation in consideration of the payment of the premium and in reliance on the statements made to the Insurer in the Application forming a part hereof, and subject to all the terms and conditions of this Policy as follows:

with the Directors and Officers of the Corporation that if, during the Policy Period any claim or claims are made against any of the Directors or Officers, individually or collectively, for a Wrongful Act which occurs during the Policy Period, the Insurer shall pay on behalf of such Directors and Officers any loss which such Directors and Officers shall become legally obligated to pay except for such loss as to which the Corporation shall indemnify such Directors and Officers;

[Emphasis added]

[11]           Wrongful Act is defined as follows (at p. 64):

"Wrongful Act” shall mean any actual or alleged breach of duty, neglect, error, mis-statement, misleading statement or act or omission by the Directors or Officers while acting solely in their respective capacities as Directors and Officers of the Corporation.

[12]           All of the allegations in the claim occurred long before the Policy Period and so they do not fall within the Insuring Agreement. However, coverage is extended to wrongful acts occurring prior to the policy period, if the claim is made during the policy period and provided (at. p. 64):

(a)                that the Directors and Officers of the Corporation, at the Effective Date of the Policy, had no knowledge of, and could not reasonably foresee, any circumstances which might result in a claim, and;

(b)               that there is no other insurance applicable to such Wrongful Act.

[13]           If Mr. Boland can establish that the plaintiff’s allegations could, if proven, fall within the extension of the insuring agreement, the onus shifts to the insurer to show that the claim falls outside of coverage because of an applicable exclusion. 

[14]           There are two relevant exclusions (at p. 65):

6.         EXCLUSION

The Insurer shall not be liable to make payment for loss in connection with any claim made against the Directors or Officers:

                        ….

(d)       for liability based upon or attributable to any Director or Officer gaining in fact any personal profit, remuneration or advantage to which they were not legally entitled

(e)        for any dishonest, fraudulent, criminal or malicious act or any deliberate error or omission committed by or with the knowledge of or consent of any Director or Officer”

[15]           The duty to defend set out in paragraph 3 states (at p. 64):

With respect to such Insurance as is afforded by this Policy the Insurer shall defend any civil suit against:  (a) the Directors and Officers of the Corporation, or any of them; (b) the Corporation, but only with respect to the acts or omissions of the Directors and Officers of the Corporation, alleging any Wrongful Act which is covered by this Policy even if such suit is groundless, false or fraudulent, but the Insurer may make such investigation, negotiation and settlement of any claim or suit as it deems expedient. The insurer shall not be obligated, however, to pay any claim or judgment or to defend any suit after the Limit of Liability has been exhausted by payments of Loss. [Emphasis added.]

[16]           In summary a defence will be provided to Mr. Boland for a wrongful act that is covered by the extension of the insuring agreement and covered by the policy.

is the EXTENSION OF the insuring agreement triggered?

[17]           It is the position of ING that no extension of coverage is available because at the effective date of the policy, Mr. Boland had knowledge of the illegal use of the attic space in unit 113 and could reasonably foresee that this might result in a claim.

[18]           Mr. Boland argues that mere knowledge of the illegal use of the attic space is not enough to trigger the exclusion to the extension. However, this argument alone is not enough to escape the excluding effect of section 2(a). The allegations in the statement of claim, which are assumed to be true, must be considered and they demonstrate that Mr. Boland could reasonably foresee that the illegal attic space might result in a claim. The consequences of the illegal use of the attic space are described in the claim as foreseeable. In paragraph 25 the claim alleges that Mr. Boland turned a blind eye to the foreseeable consequences of Weldon’s use of the attic space. At paragraph 26, the plaintiff alleges that Mr. Boland failed to act on what he knew or ought to have known. This is simply another way of saying that he failed to act on what he knew or could reasonably have foreseen. Further it is alleged in paragraph 29 that Mr. Boland knew that the true legal status had not been disclosed before the sale of unit 113 in January 1998.

[19]           For these reasons I conclude that Mr. Boland is not covered by the extension to the Insuring Agreement and so no defence is owed to him under the policy. However should another court disagree with this conclusion, I will assume that the extension applies and proceed to consider if a defence should be provided. This requires me to review the claim and follow the three-step process to determine if the claim could trigger indemnity.

A Review of the Statement of Claim

[20]           The claim seeks a declaration that Mr. Boland “intentionally or negligently breached his legal duties” to MTCC 1056, while Mr. Boland was a director of MTCC 1056. The sole basis for the breach is set out in the “overview” section of the claim (at paras. 4-6):

4.       MTCC 1056 sues Boland because as a director of MTCC 1056 he intentionally or negligently failed to disclose to MTCC 1056 his knowledge that Richard Weldon (“Weldon”), the original owner of another unit (Townhouse 113) had incorporated common elements attic space as third floor living space for Townhouse 113, contrary to the Declaration.

5.       When Weldon subsequently sold Townhouse 113 to Kelly-Jean Orr (“Orr”) in January 1998 the illegality of the third floor was unknown to MTCC 1056 and all of its directors at the time, excluding Boland. Orr subsequently sued MTCC 1056, Boland, and other parties.

6.       But for the conduct of Boland, the status of the third floor Townhouse 113 would have been known earlier, and MTCC 1056 would not have incurred any potential liability to Orr, and its legal costs in connection with her litigation. The particulars of paragraphs 4 to 6 are set out hereafter.

[21]           The claim then provides the following background facts in paragraphs 7 to 21.

[22]           Mr. Weldon and Mr. Boland were officers and directors of Grand Harbour, the developer and declarant of MTCC 1056. They were also owners of Rylar, one of Grand Harbour’s parent companies.

[23]           Grand Harbour developed financial difficulties. Prior to July 5, 1993, the declaration date for MTCC 1056, Messrs. Boland and Weldon negotiated financial arrangements with the lenders of Grand Harbour that eliminated liability on the part of Messrs. Weldon and Boland, and Rylar for all losses on the project and allowed Messrs. Boland and Weldon to each purchase a townhouse unit in the project. Mr. Weldon purchased unit 113.

[24]            Mr. Boland knew that the boundary of unit 113 stopped at the ceiling of the second floor, that the attic space above it was a common element which could not be incorporated into the unit, that the available zoning was at its maximum, and that the size of the unit could not be expanded without consent of the Committee of Adjustment. 

[25]           Mr. Boland knew that the lenders were anxious to obtain an early declaration date, that the lenders would not accept any delay caused by steps taken to legally redefine the unit boundary for unit 113, and that Grand Harbour could not delay the declaration date. Mr. Boland also knew that any attempt to delay the declaration date would jeopardize his deal to acquire a unit.

[26]           Prior to the declaration date, Mr. Weldon caused Grand Harbour to construct his unit to incorporate the common element space of the attic. On the declaration date, July 5, 1993, MTCC 1056 was registered with the boundary for Unit 113 ending at the ceiling of the second floor. This was done with the knowledge of Messrs. Boland and Weldon. Construction of the third floor in unit 113 continued after the declaration date.

[27]           Mr. Boland spoke to Mr. Weldon about the attic space above unit 113 and reminded Mr. Weldon that the space was part of the common elements and not zoned for residential use. Mr. Boland told Mr. Weldon to “take care of legalizing this problem.”

[28]            Mr. Boland took no other steps during his first term as a director (July 1993 to June 1994) to determine what Mr. Weldon did to remedy the status of the third floor or to alert other members of the board of directors or the property manager that the third floor of Mr. Weldon’s unit contravened the declaration. 

[29]           In January 1998, Mr. Weldon sold unit 113 to Kelly-Jean Marie Orr. This sale occurred during Mr. Boland’s second term on the board of directors. Mr. Boland took no steps before this sale to determine what, if anything, Mr. Weldon had done to legalize the status of the third floor and never told the other directors of his prior knowledge or his conversation with Mr. Weldon concerning the illegal use of the attic space.

[30]           On April 1 1998, the solicitors for MTCC 1056 informed the Board of Directors of MTCC 1056, that the third floor of unit 113 contravened the Declaration. Mr. Boland never told the other Board members about his prior knowledge or his conversation with Mr. Weldon concerning the attic space.

[31]           In March 2001, Ms. Orr sued MTCC 1056, Mr. Boland and others as a consequence of the illegal status of the third floor of unit 113. The Orr action is still pending. Mr. Boland did not disclose his knowledge about the attic space until he was examined for discovery in the Orr litigation in January 2005.

[32]           Mr. Boland’s legal duties are set out in paragraph 24. The claim alleges that Mr. Boland had a fiduciary duty of honesty, loyalty and candor as a director. He was not to allow his own interests to conflict with these duties. He owed a duty of skill and care pursuant to section 24 of the Condominium Act, 1998, S.O. 1998, c. 19 and a “common law duty to exercise reasonable care in the management of the affairs of MTCC 1056 to the standards of a reasonable person in the similar circumstances.”

[33]           Mr. Boland’s breach of his duties is set out in paragraphs 25 through 32. A review shows several clear allegations of intentional conduct. In contrast allegations of negligent (non-intentional) conduct are not obvious. The only reference to negligent conduct is in paragraph 1 that alleges Mr. Boland “intentionally or negligently breached his legal duties” and this is repeated in the “overview” paragraph 4. The claim does not follow the typical format where the allegation of negligence is followed by a list of the particulars of the negligence. It is Mr. Boland’s position that I should look at paragraphs 17(c), 18, 19, 20, 21, 26 and 27 to find the particulars of how he negligently breached his duties as a director.

[34]           Paragraph 17(c) states that Mr. Boland took no steps to determine what if anything Mr. Weldon had done to remedy the status of the third floor space. Paragraphs 18 to 21 state that Mr. Boland took no steps during his second term as a director to determine what if anything Mr. Weldon had done to remedy the status of the third floor or to alert other members of the board to the problem. He did not disclose his knowledge until he was examined for discovery in the Orr litigation.

[35]           Paragraph 25 alleges that Mr. Boland deliberately breached each of his duties by “turning a blind eye to the foreseeable consequences of Mr. Weldon’s conduct”. Alternatively Mr. Boland failed to meet his common law duty of care. It is this alternative claim that Mr. Boland submits is a claim based in negligence.

[36]           Paragraph 26 alleges that Mr. Boland failed to act on what he knew or should have known during his first term. Mr. Boland points to these itemized allegations to say that the particulars of negligence have been pleaded. Paragraph 26 (a) to (h) states:

(a)               The only methods for Weldon to legalize the third floor was either to ask MTCC 1056 to amend the Declaration or to ask the Board of Directors of MTCC 1056 to grant Boland a license over common elements pursuant to By-law No. 2 of MTCC 1056.

(b)               The lenders or other unit purchasers would not agree to an amendment of the Declaration and would have opposed a license from the Board of Directors.

(c)               An amendment to the Declaration or a license to use the attic each required zoning compliance and the written approval of the Board of Directors of MTCC 1056.

(d)               Weldon had not made any application to the Board of Directors either for an amendment or a license, and the Board before June 23, 1994 could not have granted a license without the approval of the purchasers.

(e)                Boland understood Weldon's character and that Weldon would conceal the status of the third floor of his unit unless confronted with the problem and forced to take a step.

(f)                 The other directors of MTCC 1056 would not take any steps, either because they were unaware of the true legal status of the third floor or because they still regarded Boland and Weldon as their superiors and would not hold them to account for their actions.

(g)               Pelican was unaware of the legal status of the third floor in Weldon's unit and as receiver-manager would transfer title to Weldon for the unit without any further or other inquiry.

(h)               After the turnover meeting on June 23, 1994 the new directors of MTCC 1056 and any property manager hired by MTCC 1056 would be unaware of the status of the third floor unless Boland formally communicated this information to MTCC 1056.

[37]           Paragraph 27 states that Mr. Boland was obliged to disclose the truth in order to fulfill his duties. Specifically he should have called a meeting to ensure that Mr. Weldon's violation of the declaration was recorded. He should have proposed a motion to the Board of Directors to commence enforcement proceedings against Mr. Weldon unless Mr. Weldon requested an amendment to the declaration or requested a license for the third floor or agreed to return the third floor to common elements. Mr. Boland also should have informed Pelican, the lenders and the property manager of the true status of the third floor. He also should have informed the owners at the turnover meeting about the status of the third floor or told the new Board of Directors after the turnover meeting.

[38]           All of the allegations about what Mr. Boland should have done what he knew or should have known and what he did not do, must be read in conjunction with paragraph 28 which states that Mr. Boland made a “deliberate decision to remain silent.  His silence was a breach of all of his legal duties to MTCC 1056.”

[39]           The claim alleges that personal gain was the reason for Mr. Boland’s deliberate decision to remain silent. Paragraph 28 (a) to (d) particularizes those reasons as follows:    

(a)               He decided to protect the personal and financial interests of Mr. Weldon, his business associate, in preference to his legal duty to MTCC 1056.

(b)                He knew or believed that if Mr. Weldon was forced to apply for a license or an amendment, other unit owners would oppose it, and Mr. Weldon would be unsuccessful.

(c)               He knew or believed that a conflict between Mr. Weldon and other unit owners would or could affect the marketing image of the unsold units in MTCC 1056 and would cause difficulty for the lenders; and that this in turn would or could affect his potential financial liability to the lenders or his acquisition of Townhouse 117.

(d)               He knew that remaining silent about the status of the third floor of Townhouse 113 would protect his own financial interest by permitting the lenders to cause Pelican [the lenders’ monitor] to transfer ownership of Townhouse 117 to him and to continue to maintain his release from any personal liability to the lenders.

[40]           There are no factual allegations pleaded as the reason for Mr. Boland’s actions other than a deliberate decision on his part to remain silent for personal gain and protection.  

[41]           Paragraphs 29 to 32 deal with Mr. Boland’s second term as a director. Once again it is alleged that Mr. Boland knew that the status of the third floor was unknown to the Board of Directors of MTCC 1056 and its property manager or alternatively that Mr. Boland was willfully blind to whether or not they knew about the status of the third floor.

[42]           Paragraph 30 alleges that Mr. Boland had an obligation to disclose the truth and in paragraph 31 it is alleged that he “deliberately remained silent about his past knowledge of the legal status of the third floor, and by doing so breached his legal duties to MTCC 1056.” The intentional nature of the conduct is reinforced in paragraph 32 which states that Mr. Boland “deliberately chose to remain silent.”

[43]           At the conclusion of claim, MTCC 1056 pleads that Mr. Boland’s conduct was “willful, deliberate, and a betrayal of his legal duties to MTCC 1056 for personal reasons.” But for the deliberate conduct of Mr. Boland MTCC 1056 alleges that it would not have incurred any potential liability to Ms. Orr nor the legal costs in connection with her litigation.

the three step analysis

Is the negligence claim properly pleaded?

[44]           The statement of claim alleges only deliberate conduct on the part of the applicant. There are no facts pleaded as an explanation or reason for Mr. Boland’s omissions other than his deliberate decision to remain silent for purposes of personal gain. 

[45]           The word “negligently” is only used in the prayer for relief (paragraph 1(a)) and in the overview paragraph 4. The claim, when read as a whole, does not set out a factual basis for a claim based on negligent or careless conduct. Deliberate conduct undertaken for the purpose of personal gain, as alleged, cannot support a claim in negligence. 

[46]           For the reasons that I have set out above in my review of the statement of claim, it is questionable in my view whether the allegations of negligence and breach of fiduciary duty are properly pleaded. There is no clear presentation of these allegations.

Are the negligence claims derivative in nature?

[47]           Even if the negligence claims are properly pleaded, I conclude that these claims are entirely derivative in nature. The allegations are based on the “same harm as the intentional tort.”

[48]           The negligent and intentional tort claims arise from the same actions, specifically Mr. Boland’s knowledge of the illegal use of the attic space and his decision to remain silent about this knowledge rather than disclosing it to the Board of Directors. Both the negligent and intentional claims have resulted in the same alleged harm: exposing the MTCC 1056 to potential liability in the Orr action and the costs to defend that action.

[49]           In this case the claim of negligence is subsumed into the intentional tort claim for the purpose of determining the applicability of the exclusion in issue. The wording of exclusion 6(e) is clear and unambiguous. Coverage is excluded for any claim made against a director for any deliberate error or omission committed by that director. Given my decision it is not necessary to consider the applicability of exclusion 6(d), nor step three of the analysis.

conclusion

[50]           There is no duty to defend Mr. Boland in the MTCC 1056 action. Mr. Boland’s application is dismissed. If the parties cannot agree on costs, ING will provide brief written submissions by June 9, 2006 and Mr. Boland will respond by June 23, 2006.

 

___________________________

C. Horkins J.

 

DATE:            May 19, 2006

Case Studies, Pendrell Place: Oldaker wins in Court of Appeal; a leaky condo owner may sue third party

COURT OF APPEAL FOR BRITISH COLUMBIA

Citation:

Hamilton v. Ball,

2006 BCCA 243

Date: 20060517


Docket: CA031443

Between:

Denise M. Hamilton, Christopher Robert Monk,

Richard Bedford Oldaker, Nevena Vojic and Nikica Vojic

Appellants

(Plaintiffs)

And

Gregory E. Ball, Daphne E. Bramham, Maximo Campos,

Susan Carriere, Barbara M. Coleman, Susan B. Erdman, Ilpo R. Halva,

Martin I. Lewis and Beverly L. Lewis

Respondents

(Defendants)


Before:

The Honourable Madam Justice Newbury

The Honourable Madam Justice Levine

The Honourable Mr. Justice Smith

R.P. Hamilton

Counsel for the Appellant
Denise M. Hamilton

D.C. Creighton

Counsel for the Appellants
Christopher Robert Monk,
Nevena Vojic and Nikica Vojic

R.D. Holmes

Counsel for the Appellant
Richard Bedford Oldaker

M.L. Tweedy

Counsel for the Respondents

Place and Date of Hearing:

Vancouver, British Columbia

5 April 2006

Place and Date of Judgment:

Vancouver, British Columbia

17 May 2006

Written Reasons by:

The Honourable Madam Justice Newbury

Concurred in by:

The Honourable Madam Justice Levine

The Honourable Mr. Justice Smith

Reasons for Judgment of the Honourable Madam Justice Newbury:

[1] The "leaky condo" phenomenon experienced over the last several years in the Lower Mainland of this province has placed considerable strain both on condominium owners and on the inner workings of strata corporations, their bylaws, and the provisions of the applicable statute, the Strata Property Act, S.B.C. 1998, c. 43 (the "Act"). This "leaky condo" case raises what appear to be procedural issues that in fact require the consideration of substantive principles of law, including the very nature of strata property ownership. Although the events at issue took place several years ago – late 1998 – various procedural mis-steps have hindered any real progress towards the resolution of the plaintiffs’ claims. Indeed, in addition to the defendants' motion for the dismissal of the action pursuant to Rule 19(24), the chambers judge had before her a motion by the plaintiffs to amend their pleadings by substituting the strata corporation as plaintiff – a motion which they acknowledged in their factum was misconceived. The real question raised by the appeal is whether one or more strata owners may sue a third party for injury to their common property without involving the strata corporation as a plaintiff, and without the approval of the statutory majority required by s. 171 of the Act where the corporation sues.

The Scheme of the Act

[2] I begin with a general outline of the provisions of the Act that are relevant to the appeal. First, ss. 2‑4 of the Act provide that a strata corporation is established upon the deposit of a strata plan in a Land Titles Office. The corporation has the powers and capacity of a natural person, and its name is required to be "The Owners, Strata Plan ______". The owners of the strata lots are the members of the corporation, but it does not have share capital and the members are not shareholders. Nor do members enjoy limited liability as do shareholders of ordinary companies: s. 166(1) provides that a judgment against the strata corporation is a judgment against all the owners. By s. 291 of the Act, the Business Corporations Act, S.B.C. 2002, c. 57, does not apply to strata corporations.

[3] Section 66 of the Act deals with property ownership. It states:

66 An owner owns the common property and common assets of the strata corporation as a tenant in common in a share equal to the unit entitlement of the owner's strata lot divided by the total unit entitlement of all the strata lots. [Emphasis added.]

Although the phrase "of the strata corporation" may be confusing, other provisions of the Act confirm that the common property and common assets are held and owned directly (i.e., not through the medium of the corporation) by the owners in proportion to their respective unit entitlements. Section 251, for example, requires the Registrar of Titles to include on each indefeasible title representing a strata lot, a reference to "the owner's share in the common property created by the strata plan". Further, s. 251(3) states that a document dealing with the strata lot deals as well, without express reference, with the share of the owner in the common property and common assets. (See also ss. 253(4), 67 and 81.) At the same time, the use, enjoyment, alteration and disposition of common property are subject to various restrictions, and the strata council is responsible for managing and maintaining it "for the benefit of the owners": see ss. 3 and 72(1).

[4] Part 10 of the Act deals with legal proceedings affecting strata corporations and their members. For purposes of this case, the following provisions are of interest:

163 (1) The strata corporation may be sued as representative of the owners with respect to any matter relating to the common property, common assets, bylaws or rules, or involving an act or omission of the strata corporation.

(2) An owner may sue the strata corporation.

164 (1) 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

(a) action or threatened action by, or decision of, the strata corporation, including the council, in relation to the owner or tenant, or

(b) exercise of voting rights by a person who holds 50% or more of the votes, including proxies, at an annual or special general meeting.

(2) For the purposes of subsection (1), the court may

(a) direct or prohibit an act of the strata corporation, the council, or the person who holds 50% or more of the votes,

(b) vary a transaction or resolution, and

(c) regulate the conduct of the strata corporation's future affairs.

* * *

166 (1) A judgment against the strata corporation is a judgment against all the owners.

(2) A strata lot's share of a judgment against the strata corporation is calculated in accordance with section 99 (2) or 100 (1) as if the amount of the judgment were a contribution to the operating fund and contingency reserve fund, and an owner's liability is limited to that proportionate share of the judgment.

(3) Other than as set out in this section, an owner has no personal liability, in his or her capacity as an owner, for loss or damage arising from any of the following:

(a) the management and maintenance of the common property and common assets by the strata corporation;

(b) the actions or omissions of the council or strata corporation;

(c) any contracts made or debts or liabilities incurred by or on behalf of the strata corporation.

* * *

169 (1) If the strata corporation joins or sues an owner in the owner's capacity as owner or as owner developer, or if an owner sues the strata corporation, that owner

(a) is not liable to contribute to legal costs that a court or arbitrator requires the strata corporation to pay,

(b) does not, despite being an owner, have a right to information or documents relating to the suit, including legal opinions kept under section 35 (2) (h), and

(c) does not, despite being an owner, have a right to attend those portions of any annual or special general meeting or council meeting at which the suit is dealt with or discussed.

(2) If the strata corporation pays an amount to an owner in full or partial satisfaction of the owner's claim against the strata corporation, whether or not under a judgment, the owner is not liable to share in the cost of the payment with other owners.

170 The strata corporation may sue an owner.

Then follow sections 171 and 172, which are more directly relevant:

171 (1) The strata corporation may sue as representative of all owners, except any who are being sued, about any matter affecting the strata corporation, including any of the following matters:

(a) the interpretation or application of this Act, the regulations, the bylaws or the rules;

(b) the common property or common assets;

(c) the use or enjoyment of a strata lot;

(d) money owing, including money owing as a fine, under this Act, the regulations, the bylaws or the rules.

(2) Before the strata corporation sues under this section, the suit must be authorized by a resolution passed by a 3/4 vote at an annual or special general meeting.

(3) For the purposes of the 3/4 vote referred to in subsection (2), a person being sued is not an eligible voter.

* * *

(5) All owners, except any being sued, must contribute to the expense of suing under this section.

(6) A strata lot's share of the total contribution to the expense of suing is calculated in accordance with section 99 (2) or 100 (1) except that

(a) an owner who is being sued is not required to contribute, and

(b) the unit entitlement of a strata lot owned by an owner who is being sued is not used in the calculations.

172 (1) The strata corporation may sue on behalf of one or more owners about matters affecting only their strata lots if, before beginning the suit,

(a) it obtains the written consent of those owners, and

(b) the suit is authorized by a resolution passed by a 3/4 vote at an annual or special general meeting.

(2) Only those owners on whose behalf the suit is brought must contribute to the expense of suing under this section.

(3) A strata lot's share of the total contribution to the expense of suing is calculated in accordance with section 99 (2) or 100 (1) except that

(a) only owners on whose behalf the suit is brought are required to contribute, and

(b) only the unit entitlement of strata lots owned by owners on whose behalf the suit is brought are used in the calculations. [Emphasis added.]

[5] It will be noted that where a strata corporation wishes to commence proceedings on behalf of all owners in respect of any of the matters enumerated in s. 171(1), the action must be authorized by a 3/4 vote, not including any person being sued. Where such a resolution is passed, all the owners, except any defendants, are required to contribute to the expense of the action in proportion to their unit entitlements. In contrast, where the strata corporation is suing on behalf of one or more owners about matters affecting only their strata lots, only those owners are required to contribute to the expenses of the action. Approval by a 3/4 majority is also required in that event.

Factual Background

[6] The plaintiffs and the defendants are all individual owners, past or present, of strata units in a residential building located in Vancouver. The plaintiffs originally filed a writ of summons in the Supreme Court in April 2001, claiming damages against the defendants "as a result of their improper conduct and actions concerning the management of the affairs of Strata Plan VR 1008". They alleged breaches of fiduciary duty, breaches of trust, negligence and bad faith, as well as the contravention of various provisions of the Act and its predecessor, the Condominium Act, R.S.B.C. 1996, c. 64. They sought damages and an accounting of the management of the financial affairs of the strata plan by the defendants.

[7] By an (amended) statement of claim filed November 18, 2002, the plaintiffs clarified that the defendants were members of the strata council of Strata Plan VR 1008 and that the defendants had caused certain repair and maintenance work to be carried out on the common property “without the prior approval of the Owners of Strata Plan VR 1008” (defined as the “Owners”.) The plaintiffs claimed that the work had been carried out defectively and by unskilled persons, rendering certain warranties void, and that a new management company hired by the defendants for the strata corporation continued the practice of engaging unqualified and unlicensed tradespersons to repair the damage caused by the first contractor. According to the amended statement of claim, a renovation of the entire building envelope is now required at a cost that is likely to exceed $800,000. It is also said that the defendants made false representations to the Owners aimed at levying funds which were used for purposes other than those approved by the Owners.

[8] The defendants filed their statement of defence on July 31, 2001. They denied the plaintiffs' allegations and inter alia denied that they as members of the strata council are personally liable for any acts relating to the management and maintenance by the strata corporation of the common property and common assets. In October 2001, they filed a motion to dismiss the action pursuant to Rule 19(24)(a). For reasons that were not explained, the motion did not come on for hearing until November 10, 2003. By that time, the plaintiffs had purported to file a second "amended" statement of claim. (The new amendments required leave of the Court pursuant to Rule 24(1), and since leave was not sought or obtained, the further amended pleading was not before the Chambers judge.) The amended writ stated that the action was a representative one brought on behalf of all the owners pursuant to Rule 5(11). At the same time, the amendment purported to add the following sentence to the writ:

The Plaintiff is a Strata Corporation pursuant to a Strata Plan deposited at the land title office designated VR 1008 and acts in a representative capacity for all owners of Strata Plan VR 1008 other than Defendant owners.

The appeal record does not disclose the nature of the amendments, if any, sought to be made in October, 2003 to the statement of claim.

[9] As I have said, the defendants' application under Rule 19(24)(a) came on for hearing on November 10, 2003, together with a motion of the plaintiffs seeking, inter alia:

that this Action be continued in the name of and on behalf of the Owners, Strata Plan VR 1008 and that the Owners, Strata Plan VR 1008 be substituted as plaintiff in place of Denise M. Hamilton, Christopher Robert Monk, Richard Bedford Oldaker, Nevena Vojic and Nikica Vojic.

And that Denise M. Hamilton, Christopher Robert Monk, Richard Bedford Oldaker, Nevena Vojic and Nikica Vojic be authorized to control the conduct of this Action on behalf of the Owners, Strata Plan VR 1008, together with any other directions for the conduct of this Action that this honourable court deems necessary. [Emphasis added.]

[10] Although she did not have before her the pleadings as further amended by the documents filed on October 15, 2003, the chambers judge treated the action primarily as one in which the plaintiffs were seeking relief "on behalf of the owners of the building as a whole." Thus she began her reasons (delivered orally on November 10, 2003, Vancouver Registry No. S012351) as follows:

The plaintiffs have sued in their individual capacities but it is clear from the amended statement of claim that they are seeking relief on behalf of the owners of the building as a whole. "Owners" has been defined in the amended statement of claim, paragraph 16, to include all of the owners of strata plan VR 1008. It is clear from a review of the contents of the statement of claim, and in particular the relief claim at page[s] 8 and 9 of the statement of claim, that the plaintiffs are seeking to recover from the defendants damages or funds which accrue to the strata corporation or the owners as a whole. [At para. 3.]

She summarized the plaintiffs' position as follows:

The position of the plaintiffs is that they must be entitled to bring this action because if they are not, there is no relief available to them. Secondly, they say that they should be entitled to bring the action as a derivative action on behalf of the strata corporation. Thirdly, they say they should be entitled to maintain the action as a representative action on behalf of all of the owners of strata plan VR 1008, pursuant to Rule 5(11). [At para. 5.]

[11] Having noted that the plaintiffs' complaints related to maintenance "carried out on the common property of the strata building and not repairs relating to their units", the chambers judge referred to s. 171 of the Act, which I have quoted above. She noted that the plaintiffs had been unable to obtain the vote of 3/4 of the ‘non‑defendant' owners required to authorize the strata corporation to bring the action. However, she said:

… As was pointed out by Justice Lowry in the Ang decision, the rule in Foss v. Harbottle applies in relation to members of a strata council, and the individual owners may not bring an action for wrongs alleged to have occurred to the common property. Such claims must be brought under s.171. [At para. 13.]

(As will be recalled, Foss v. Harbottle (1843) 2 Hare 189, 67 E.R. 189, established the seminal rule in company law that a shareholder of a limited company may not sue for a wrong done to the company, since the company is a separate legal person at law whose affairs are managed by a board of directors.)

[12] The chambers judge then moved to the plaintiffs' alternative position, which was that "they are entitled to bring a derivative action, either under the common law or pursuant to Section 164 of the Strata Property Act". She relied on the decision of Lowry J. (as he then was) in Ang v. Spectra Management Services Ltd. et al. 2002 BCSC 1544, 117 A.C.W.S. (3d) 830, to conclude at para. 15 that s. 164 "does not permit an owner or a group of owners to bring an action on behalf of the corporation." In Ang, an individual strata owner had challenged the validity of two leases of common property which she claimed had been granted by the developer of a condominiumized hotel in breach of a fiduciary duty owed to the strata lot owners. Lowry J. elaborated:

Ms. Ang claims that she has been subjected to significant unfair action by the Strata Corporation in respect of the leasing of the common property. She maintains that ACS bore a fiduciary duty, both before and after the filing of a strata plan, to act, in all respects, in the best interests of the owners, citing decisions where it is said such a duty on the part of condominium developers has been recognized: Hill v. Strata Plan N.W. 2477 (1991), 81 D.L.R. (4th) 720 (B.C.C.A.), Strata Plan 1261 v. 360204 B.C. Ltd., [1995] B.C.J. No. 2761 (S.C.), York Condominium Corp. No. 167 et al v. Newrey Holdings Ltd. et al (1981), 122 D.L.R. (3rd) 280 (Ont. C.A.), and Terrace Corp. (Construction) v. Owners, Condominium Plan 752-1207 (1983), 146 D.L.R. (3d) 324 (Alta. C.A.). Ms. Ang says that the duty was breached in a number of ways in respect of both leases because they were not made for the benefit of the owners but for ACS. She accepts that it would not be open to her to complain if proper disclosure of the arrangement ACS put in place had been given in the Disclosure Statement, but she says that it was not and that the statement was, in fact, misleading. She claims that, on the authority cited, the remedy to which she is entitled under s. 164(1) is an order declaring the two leases to be void.

It is, however, significant that Ms. Ang seeks the relief she does not because of any benefit ACS actually received of which she was deprived, but because the owners, of which she is one, do not have control of the common property and hence of the operation of the hotel - something they did not pay for and, when they purchased their units, did not expect to have.

The hotel is not the customary kind of condominium complex that was to be operated for the benefit of the owners alone. It was a business that ACS was to operate for its own benefit as well. The owners had, at the outset, a choice of whether to lease their units or to occupy them and keep them separate from the hotel operation. … [At paras. 8-10.]

[13] Lowry J. began his legal analysis by reciting s. 171 of the Act and noting that the plaintiff and her associates had been unable to muster the required 3/4 vote. He reasoned that they were attempting to circumvent s. 171. In his view, the question was therefore whether s. 164(1) authorized an owner "to make his or her own application to preserve common property notwithstanding the statutory scheme which vests in the strata corporation the responsibility to manage and maintain the property and to sue to preserve it on behalf of all the owners when authorized by the requisite vote." (Para. 17.) He found that “If any wrong had been committed, it was to the Strata Corporation” and that the rule in Foss v. Harbottle therefore applied to negate the cause of action. In his words:

The rule in Foss v. Harbottle is among the most firmly entrenched rules of company law. It states that where there is damage to a company, being a distinct legal entity, only the company, and not the shareholders, is the proper party to seek relief. In Watson, supra, at paras. 25-29, the Court of Appeal held that Lee v. Block Estates, supra, correctly decided that the rule applied to limited partnerships. I can see no sound reason why it should not apply to a strata corporation. I am supported in my view by the reasoning employed in what, with respect, is a full consideration of the point well supported by authority in Beck v. Andrews Realty, supra, at paras. 10-27. Little need be added to what is said there.

* * *

The wrong for which Ms. Ang seeks relief is not one that was suffered by her in any personal capacity and she is not a party to either of the leases she seeks to have declared void. If any wrong was committed, it was to the Strata Corporation itself. Ms. Ang is attempting to pursue what is, in effect, a derivative proceeding, something that is not open to her on this application. The rule in Foss v. Harbottle precludes her application as, in my view, it should. Its working is consistent with the statutory scheme that vests the authority to initiate proceedings to preserve common property in the Strata Corporation. No one owner ought to be able to apply to have a lease of such property declared void. [Paras. 18 and 20; emphasis added.]

As for s. 164, it was said to do "no more than authorize proceedings by an owner to redress the actions of a strata corporation that are significantly unfair to that owner", much like the oppression remedy provided by most company law statutes. Since Ms. Ang had not shown she had any particular grievance arising out of actions of the strata corporation, he concluded that she was also "without standing" under that provision to apply to have the leases of common property declared void. (See also Beck v. Andrews Realty [1994] B.C.J. No. 2796 (Prov. Ct.), at paras. 24-7.)

[14] The chambers judge ruled that similarly in the case at bar, the plaintiffs were not alleging any "unique or particular oppression related to them in their individual capacity or as a minority group." Accordingly, she said, any “derivative claim” was precluded. (Para. 17.) (With respect, it appears the Court here confused a derivative action – i.e., a proceeding taken with leave of the court by a shareholder or other interested person to enforce a right or assert a defence belonging to a company – with an oppression action – i.e., a proceeding by a shareholder complaining of oppressive conduct of a company vis-à-vis the shareholder in particular. See Business Corporations Act, S.B.C. 2002, c. 57, s. 232 and s. 227, respectively.) Nor, the chambers judge said, was any of the exceptions to the rule in Foss v. Harbottle raised by the statement of claim in this case, "even if the exceptions have survived Section 171." (Para. 19.)

[15] Finally, with respect to the plaintiffs' prayer to bring their action in a "representative capacity on behalf of the owners of Strata Plan VR 1008", the chambers judge acceded to several objections raised by the defendants – first, that Rule 5(11), dealing with representative actions, did not itself create substantive rights; second, that the plaintiffs did not represent the other owners; and most importantly, that Mr. Justice Cohen had already dealt with this issue in The Owners, Strata Plan LMS 888 v. The City of Coquitlam, 2003 BCSC 941, 15 B.C.L.R. (4th) 154. At para. 41 of his reasons in that case, Cohen J. had stated that the “plaintiff's right to commence a representative action does not exist outside of ss. 171 and 172 of the [Strata Property Act].” The Chambers judge apparently assumed that as in the case at bar, the plaintiffs in Coquitlam were individual owners of a strata plan who had commenced their action without the approval of 3/4 of the owners. In fact, however, the plaintiff in Coquitlam was the strata corporation itself, which in accordance with s. 13(2) of the Condominium Act (the counterpart to s. 2(1)(b) of the Act) was titled "The Owners, Strata Plan LMS 888". Cohen J. found the requirement for approval by the statutory majority before proceedings were commenced, to be mandatory and substantive rather than procedural. Since no such approval had been given, he dismissed the action. Thus his reasons dealt with the right of a strata corporation to bring an action under what is now s. 171 of the Act without the required approval, not with the right of individual owners to bring an action on their own behalf or as the representatives of some or all other owners in respect of injury or loss to their common property.

[16] In any event, the chambers judge in the case at bar considered that it would not be consistent with the scheme of the Act if individual owners could sue to protect their own rights to or interests in their common property. In her analysis:

… the entire scheme of the Strata Property Act is based on the fact that strata properties involve collective as well as individual rights. There are interconnecting rights and obligations which the legislature has determined must be exercised or recognized in a specific manner, and have set the requirement of a three-quarter majority of persons who are not intended to be defendants in the action.

It must be assumed, as the legislature has assumed, that reasonable people protecting their own interests and acting collectively are in the best position to make a decision as to whether or not a certain course of action is warranted given the risks and potential benefits of that course of action. In this case the plaintiffs having been unable to persuade their fellow owners to pursue this course of action against some of their former or present fellow owners must abide, in my view, by the decision made. [At paras. 25-6.]

[17] For similar reasons, the chambers judge also refused the plaintiffs' application to have the strata corporation substituted as plaintiff and to be authorized to control the litigation. She found this alternative not to be feasible, since it would override s. 171 and the wishes of those strata owners who refused to approve the commencement of the litigation. Such a ‘circumvention’ of the Act would, given the "long history of conflict between owners in this building", be unwarranted.

[18] In the result, the action was dismissed.

On Appeal

[19] On appeal, Mr. Holmes on behalf of the plaintiffs (who was not counsel in 2003) has re-cast, or at least re-focussed, the position reflected by the pleadings described above. The plaintiffs no longer seek – if they ever did – to sue as representatives of all owners or derivatively on behalf of the strata corporation. Instead, they rely simply on the fact that they, together with others, are tenants-in-common of the common property, and assert that like any other co-owners, they are entitled to sue for a remedy for injury to their own interests in such property. On this view, it is not necessary to rely on s. 171, Rule 5(11), or even an exception to the rule in Foss v. Harbottle.

[20] Mr. Holmes developed three principles in support. First, he noted cases decided in various disparate areas of the law to the effect that that which is not prohibited by law is permitted, and by corollary, that unless a right of action is expressly taken away by legislation, it continues to exist. He referred us to MacMillan Bloedel Ltd. v. British Columbia, 2000 BCCA 422, where this court approved the formulation of Lord Atkinson in Attorney‑General v. De Keyser's Royal Hotel Ltd. [1920] A.C. 508 (H.L.) at 542, that "[u]nless the words of the statute clearly so demand, a statute is not to be construed so as to take away the property of a subject without compensation." Reference was also made to Chester v. Bateson [1920] 1 K.B. 829, which at 834 cited a stirring passage from the judgment of Scrutton J. in In re Boaler [1915] 1 K.B. 21 at 36; and to Raymond v. Honey [1983] 1 A.C. 1 (H.L.) at 12-3. (In the same vein, I also note Attorney General v. Guardian Newspapers (No. 2) [1990] 1 A.C. 109 (C.A.) at 178, aff’d [1990] 1 A.C. 233 (H.L.); and P. Hogg, Constitutional Law of Canada (looseleaf, 1997) at 31-2; and Ruth Sullivan, ed., Driedger on the Construction of Statutes (4th ed., 2002), at 399-400.)

TO READ THE REST OF THE CASE CLICK ON LINK

2006 BCCA 243 Hamilton v. Ball

Case Studies, Pendrell Place: Century 21 strata agent illegally postpones AGM

May 16, 2006

VIA E-MAIL TO:

Mr. Dave Distelmeyer, Strata Agent on behalf of the Council of Owners Strata Plan VR 1008; and

Mr. Bill Blackall, General Manager, Century 21 Prudential Estates (RMD) Ltd.

AND ALSO TO:

Real Estate Council of British Columbia (Maureen Coleman), as a complaint to the RECBC

Owners (some present, some previous), Strata Plan VR 1008, for information

RE: 2006 AGM, Pendrell Place, a leaky rotten condo building at 1819 Pendrell Street, Vancouver

I have received, on behalf of Mr. Richard B. Oldaker, the Owner of a leaky condo, Strata Lot 22, Strata Plan VR 1008, your notice regarding the planned deferral of the Annual General Meeting (AGM) that was to be held, but now will not be held, by May 31, 2006, that is, within two months of the fiscal year end, in accordance with the Strata Property Act (SPA).

You stated “This item was discussed in detail during a special meeting with Council to discuss the current court action.”

You have failed to distribute Minutes of the Council Meeting within two weeks as required by the SPA.

You stated in reference to not holding the AGM by May 31, 2006, that “The additional grace period will permit time ….”

The SPA does not provide for a “grace period”. The SPA is quite specific and devoid of the bafflegab found in your notice.

The AGM could have been held in accordance with the SPA with all the required reporting to the Owners, including financial statements that you are required by law to keep and provide to Owners and the Real Estate Council of British Columbia (RECBC).

Since the SPA does not provide a “grace period” but does provide that a “Special General Meeting” can be held when required, for example after the court has ruled on “the pending court decision concerning legal matters between an Owner and the Strata Corporation”, the deliberate, ill-conceived illegal deferral of the inevitable 2006 AGM coupled with the deliberate failure to distribute information to the Owners of the Strata Corporation constitute unacceptable outrageous behaviour, although your behaviour fits a pattern of similar illegal actions in the past which were facilitated by previous unlicensed strata property managers.

It is my opinion that your participation in the deferral of the AGM is illegal and contrary to your obligations set out in Ministerial Order M417 Real Estate Services Act – Rules as a person holding a License to offer “Strata Management Services” as issued by the RECBC, albeit a temporary License because you and Mr. Blackall have not taken the required course and have not passed the required examination.

Furthermore, to my knowledge, the Strata Corporation has not authorized the expenditure of “… funds required for legal fees to be paid by way of special levy….” Any so-called obligation to pay such funds beyond $20,000.00 already authorized by a disputed Special Resolution appears to be without substance. The proposed retroactive raising of funds by way of a Special Levy to pay the unauthorized expenditure is a backwards way of conducting Strata Corporation business. In my opinion a Licensee should dissociate him or herself from such devious behaviour. Any use of Strata Corporation funds without proper authorization as required by the SPA is, of course, on the face of it, clearly illegal and quite contrary to specific requirements of Licensees governed by the RECBC under which you and Mr. Blackall presently hold your temporary Licenses to provide Strata Management Services.

I also note that you seem to be operating under the dangerous illusion that you are the “Strata Agent on behalf of the Council of Owners”.

Please be advised that it is my considered opinion that your obligation in law (SPA; RECBC) is to act in the best interest of all Owners, in accordance with all relevant laws, regulations and rules, not the specific interest of the Strata Council, or the pecuniary interest of a lawyer apparently engaged by members of the Strata Council in furtherance of the personal interests of certain present and past Council members who are defendants in suits brought against them by other owners.

I suggest that you consider the behaviour of the Strata Council and the Strata Property Agent in the case of Dockside Brewing Co. Ltd. et al. v. The Owners, Strata Plan LMS 3837 et al., 2005 BCSC 1209, wherein the Strata Council members were found liable for funds misspent on legal matters despite the able defence efforts of their lawyer, Mr. G. Stephen Hamilton, and wherein the Strata Property Manager refused to write additional illegal cheques to fund the illegal activities of certain Strata Council Members:

http://www.courts.gov.bc.ca/jdb-txt/sc/05/12/2005bcsc1209.htm

I have great hopes that the previously unregulated behaviour of unlicensed Strata Property Managers will become more lawful as the RECBC enforces compliance by licensees.

Dr. James Balderson, Ph.D., Q.S.
COLCO: The Coalition of Leaky Condo Owners
www.myleakycondo.com

Campbell Government refuses leaky condo compensation

No leaky condo compensation:

BC Liberals continue NDP Policy

[Excerpts from Hansard for May 4, 2006]

D. Routley: Would the House help me welcome to our midst Dr. James Balderson and Mr. Rudy Eylmann, both members of COLCO, the Coalition of Leaky Condo Owners, who are tireless advocates for the rights of those who are experiencing the ongoing crisis of leaky condos in B.C.
...

D. Routley: I'd like to ask the minister a few questions about the leaky-condo crisis and what steps are being taken to assist those owners who are still struggling with the burden of repairing their units.

 (More)