Vancouver, VR 672: Internal battles continue; court approves administrator's fees and legal fees

 

IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:

Ranftl v. The Owners, Strata Plan VR 672 and Wennerstrom,

 

2007 BCSC 599

Date: 20070430
Docket: L042930
Registry: Vancouver

Between:

Linda Margaret Ranftl

Petitioner

And

The Owners, Strata Plan VR 672

Respondent

And

Nils and Helena Wennerstrom

Respondents


Before: The Honourable Mr. Justice McEwan

Reasons for Judgment

Counsel for the Petitioner

M. Fischer

Counsel for the Administrator

G. S. Hamilton

Counsel for the Respondents, Nils and Helena Wennerstrom

P. A. Williams

Counsel for the remaining owners

J. Bleay

Date and Place of Trial/Hearing:

April 4 & 20, 2007

 

Vancouver, B.C.

[1]                This matter came before this court on April 4, 2007, pursuant to an order and directions I made in the course of managing this litigation.

[2]                The application is for a review and passing of the accounts of the court-appointed Administrator of this six-unit, five-owner Strata Corporation.  The background includes a series of order by this court, the first of which was an order by Brown J. made June 2, 2005.  That order assigned to Mr. Garth Cambrey of Stratawest Management Ltd. the administration of The Owners, Strata Plan VR 672:

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.

After further particularizing the administrator’s obligations, the court gave the following directions:

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;

[3]                In accordance with this Order, the appointment was reviewed by Stewart J. who extended it to June 30, 2006.  He also ordered, among other things, a special levy for a building envelope assessment report, and appointed RDH Building Engineering Ltd. to prepare it.

[4]                On December 19, 2005, on account of ongoing difficulties within the Strata Corporation, I ordered that the Administrator assume all the powers and duties of the Strata Corporation.  I went on to order, among other things:

…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; …

[5]                This matter came before me on April 4, 2007 rather than the Registrar pursuant to directions made and concurred in by counsel for the parties.  I accepted that it would be more efficient if I heard the motion rather than put the parties to the time-consuming exercise of acquainting a Master or Registrar with the facts.

[6]                While I have said that the date was worked out in consultation with counsel, including counsel for the owners Morrison, Tam and Collens (the “owners’ group”), on the appointed day, only Mr. Morrison appeared, in person.  Mr. Cambrey testified.  He was cross-examined by Mr. Morrison, who did not give or lead evidence.  I afforded him an opportunity to furnish a written submission.

[7]                Mr. Morrison filed a submission on April 13, 2007.  He suggests he did so “representing himself, Tim Tam, and Serge Collens.”

[8]                The Administrator filed a reply on April 18, 2007.

[9]                The Administrator has produced a summary of his accounts which is attached as Schedule “A” to these reasons.  I am advised that of the total claimed, $4875 has been paid, leaving a balance of $29,971.76.

[10]            The Administrator was specifically authorized by Brown J. in the original order “to retain the necessary professionals, including independent legal counsel for opinion, advice and services in respect of his duties…”.  Pursuant to this authorization, the Administrator claims, as a disbursement, legal fees summarized in Schedule “B” to these reasons.  Of the $34,798.22 claimed, I am advised $7,954.98 has been paid, leaving an outstanding balance of $28,843.26.

[11]            There appears to be no suggestion that the Administrator has failed to put in the time he has claimed.  Rather, the owners’ group submit that he has given poor value, failed to complete the “two simple tasks” he was assigned, and demonstrated poor judgment.  They claim that their property manager could have done most of the Administrator’s work and that “in essence [the Administrator] took over the Strata Council’s duties entirely from day one,” that is, before he was appointed by this court to exercise those duties.

[12]            They complain that the Administrator took four months to retain a property management firm and that this was unnecessary, particularly since the work had been done already by the Strata Council.

[13]            The owners’ group also question the Administrator’s decision to seek the advice of a second building envelope consultant.  There is a hint that this was somehow inappropriate, in that the Administrator hired a firm with which he had had a previous relationship, while refusing to hire the person they preferred.  None of this was put squarely to Mr. Cambrey when he was in the witness box.

[14]            The owners’ group also complain about the Administrator’s “liberal” use of legal advice, particularly during the period while the Administrator operated under the limited mandate outlined in the order of Brown J.  They suggest that much of the work could have been performed by junior lawyers at a rate far less than $225 per hour.  They complain that they have not been provided with the documents which would show everything that passed between Mr. Cambrey and the solicitors, some of which is material over which Mr. Cambrey claims solicitor/client privilege.  They ask that the solicitor’s bills be taxed.

[15]            The written submission of the owners’ group concludes:

 

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Surrey, Chelsea Gardens: Award winning luxury leaky rotten condos under tarps, April 2007

 

Click on the link below for photos of Chelsea Gardens in Surrey,  BC.

The photos were taken April 24, 2007.

chelsea_gardens_surrey

Photo credit: MJB Pics

 

Surrey, 10732 Guildford Drive: Court rules condo owner must pay $106,730.39 for grow op damage

 

IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:

Pham v. The Owners, Strata Plan NW 2003,

 

2007 BCSC 519

Date: 20070418
Docket: S060379
Registry: Vancouver

Between:

Yen Thi Pham

Plaintiff

And

The Owners, Strata Plan NW 2003

Defendant


Before: The Honourable Mr. Justice Maczko

Reasons for Judgment

Counsel for Plaintiff

Andrew Davis

Counsel for Defendant

John D. Shields

Date and Place of Hearing:

March 29 & 30, 2007

 

Vancouver, B.C.

[1]                There are two actions before the court being tried pursuant to Rule 18A.  One is by the plaintiff to have approximately $61,500.00, which is being held in trust by the plaintiff’s solicitor, paid out to her.  The other action is by the defendant, by way of counterclaim, seeking judgment against the plaintiff in the amount of $106,730.39.

[2]                The plaintiff owned an apartment in a strata complex at 10732 Guildford Drive, Surrey, British Columbia.  She claims that she rented out the apartment to two people who, without her knowledge, operated a marijuana grow operation in the apartment.  The defendant alleges that the apartment was never rented and the grow operation was run by the plaintiff.  For the purposes of this 18A, I am not required to resolve that disputed fact.

[3]                The grow operation caused significant damage to the plaintiff’s apartment, to a neighbour’s apartment and to common areas.  On February 11, 2005, the police raided the apartment and the grow operation was closed down.  On February 15, the strata corporation through its agent, the property manager, wrote to the plaintiff telling her about the damage and telling her that she will be obliged to pay the costs of repairs.  The letter also advised the plaintiff that she had not paid her strata maintenance payments.  At no time did she pay strata maintenance payments.  She did not respond to the letter of February 15.

[4]                The defendant again, through its property manager, wrote to her on February 28, 2005 outlining in detail the illegal marijuana grow operation and setting out the damages to the neighbour’s unit and to the common property, the health hazard caused by the growing mould and asbestos, and the risk of electrical fire because of modifications that had been made to the electrical system.  The letter told her that the work to fix the problems would begin shortly and that she would be charged for the cost.  The letter also outlined her breaches of the strata corporation’s bylaws, which included:

·         causing a nuisance;

·         interference with other owners’ right to enjoyment of their property;

·         illegal activity in her unit;

·         using the unit contrary to the purpose for which it was supposed to be used; and

·         failing to advise the council that she would not be living in the unit as required by the bylaws.

[5]                The plaintiff did not respond to this letter.  The defendant wrote to her again on April 26, 2005 notifying her that the work would be commencing that day and would take approximately 2-3 weeks to complete.  The letter also informed the plaintiff that the cost of the work would be in excess of $70,000 and that there was a $50,000 deductible on the insurance policy because the damage was caused as a result of a grow-op in the apartment.  She was again informed that she would be charged for the cost of repairs.  The plaintiff did nothing, said nothing and gave no indication at any time that she objected to the procedure or that she would do the repairs herself.

[6]                The work was completed and the plaintiff was sent a bill for $106,730.39.  The defendant put a lien on the property.  The plaintiff decided to sell the apartment and netted $61,500.00 after paying out the mortgage.  These monies have been held in trust by the plaintiff’s solicitor pending the outcome of this action.

[7]                The issue before me is whether the defendant had the legal authority to carry out the repairs and to charge the plaintiff for them.  The plaintiff’s reply to the counterclaim is a bare denial which reads as follows:

The does [sic] not oppose the granting of the relief set out in the following paragraphs of the Defendant’s Notice of Motion dated January 5, 2007:  None

The Plaintiff opposes the granting of the relief set out in the following paragraphs of the Defendant’s Notice of Motion dated January 5, 2007:  All

The Plaintiff will rely on the following affidavits:  To follow.

[8]                The plaintiff alleges that she rented out the apartment and was not responsible for the damage caused by the marijuana grow operation.  However, the bylaws require that she obtain permission from the strata corporation before she is permitted to rent out the apartment.  She did not obtain that permission.  Section 3 of the Strata Property Act, S.B.C. 1998, c. 43 (the “Act”) provides:

3          Except as otherwise provided in this Act, the strata corporation is responsible for managing and maintaining the common property and common assets of the strata corporation for the benefit of the owners.

[9]                Section 133 of the Act provides:

133 (1) The strata corporation may do what is reasonably necessary to remedy a contravention of its bylaws or rules, including

(a)    doing work on or to a strata lot, the common property or common assets; and

(b)    removing objects from the common property or common assets.

(2)        The strata corporation may require that the reasonable costs of remedying the contravention be paid by the person who may be fined for the contravention under section 130.

[10]            In my view, the statute and the bylaws provide the corporation with the authority it needed to carry out the repairs and charge the plaintiff for them.

[11]            In his argument, counsel for the plaintiff raised a number of defences to the counterclaim which I will deal with one by one.

 

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Garibaldi Springs, Squamish: Court finds Windermere Sea to Sky Real Estate Limited and agents Jerry Halstom and Basil Milne breached their fiduciary duty to purchaser of a townhouse strata unit; provided inaccurate information about significant features of the property

Citation:

Matthias v. Garibaldi Springs Development et al

Date:

20070412

2007 BCPC 0138 

File No:

05-09058

 

Registry:

Vancouver

 

 

IN THE PROVINCIAL COURT OF BRITISH COLUMBIA

    

 

 

 

BETWEEN:

RENATE MATTHIAS

CLAIMANT

 

 

AND:

GARIBALDI SPRINGS DEVELOPMENT LTD., WINDERMERE SEA TO SKY
REAL ESTATE LTD., JERRY HALSTROM AND BASIL MILNE

DEFENDANTS

 

 

   

   

 

 

 

 

EXCERPTS FROM PROCEEDINGS

REASONS FOR JUDGMENT

OF THE

HONOURABLE JUDGE A. EHRCKE

 

 

 

 

Counsel for the Claimant:

C. Gleadow

Counsel for the Defendant Garibaldi:

S. Anderson

Counsel for the Defendant Windermere:

B. Nelson

Place of Hearing:

Vancouver, B.C.

Date of Judgment:

April 12, 2007

               

 


[1]        THE COURT:  This is for decision today, and I would like to thank counsel for their helpful submissions.  This lawsuit arises from the claimant's pre-construction purchase of a townhouse strata unit in the Garibaldi Springs Development near Squamish, British Columbia. 

[2]        The defendant, Garibaldi Springs Development Limited, is the developer.  Windermere Sea To Sky Real Estate Limited was the exclusive listing agent which also acted for the claimant as purchaser.  Jerry Halstrom was the realtor with Windermere responsible for marketing the project, and Basil Milne was the realtor at Windermere who had contact with the claimant.

[3]        Dr. Matthias claims against Garibaldi for breach of contract, unjust enrichment and negligent misrepresentation.  She claims against the other defendants for breach of contract, negligent misrepresentation and breach of fiduciary duty. 

[4]        Garibaldi issued a third party notice against the other defendants claiming indemnification. 

[5]        In a nutshell, the claimant says she was led to believe her unit would have granite countertops in the kitchen and a crawl space with a forced air heating system.  As it turned out, it did not. 

FACTS

[6]        The facts are reasonably straightforward.  In November 2003, the claimant became interested in the project.  She has bought a number of investment properties in the past.  At the time, she was in California.  She requested information from Mr. Milne with whom she had dealt before.  He referred her to the project website.  When she requested more information, he provided a map of the development showing the strata lot plans for the different buildings, and, she testified initially, the feature sheet, which is at tab 3C of Exhibit 2.  The plans for the A units, one of which the claimant purchased, are at tab 3D of Exhibit 2.  The plans were also on the project website at all relevant times. 

[7]        Later in her testimony, Dr. Matthias said it was possible she did not receive the feature sheet until she returned from California.  It is more probable than not that she had it in California, and in any event, she had it before the conditions were removed from her contract. 

[8]        The claimant testified that a number of things attracted her to this project, including the location, which is on a golf course, and the information and the material provided.  She testified that she based her decision to purchase on the material provided.  I am satisfied that she relied on the information in the feature sheet and plans when she decided to purchase the property. 

[9]        On November 22nd, 2003, she made an offer to purchase with conditions, one of which was inspection of the site.  She also signed a Dual Agency Agreement with the defendant realtors, which is at tab 6 of Exhibit 1.  It is dated November 21st, 2003, but the claimant did not sign it until November 22nd.  The names of the realtors, Milne and Halstrom, are printed.  It is not clear whether they ever signed it.  Mr. Halstrom testified that he and Mr. Milne were bound by this agreement because they worked for Windermere.  Mr. Milne did not testify. 

[10]       In December, the claimant visited the site but her building had not been started to any extent.  It was not framed.  There was no display suite.  There were preliminary starts to other buildings.  The claimant also went to Windermere's offices.  She saw a display board for choosing finishings.  Her memory of the board differs from the board which was displayed in court by the defendants.  The claimant recalled seeing only floor tile, carpet and cupboard wood samples.  Mr. Halstrom testified that the only boards in Windermere's offices were the board on display, and another similar board with a second colour scheme.  His evidence is probably more accurate on this point than that of the claimant.  These events occurred in 2003.  The display board shows a granite sample and a very small laminate sample on top of a larger tile, as well as other samples.  The granite and laminate samples pertain to the kitchens.  In any event, the only choice to be made was between two colour schemes.  Mr. Milne gave the claimant an official package of material at this time. 

[11]       There was evidence respecting the claimant's receipt of the disclosure statement.  As it turns out, the statement is not specific enough on the points at issue to be relevant. 

[12]       Following the site visit, the conditions were removed.  The subject removal document is at tab 10, Exhibit 1, and is dated December 12th, 2003. 

[13]       The feature sheet given to the claimant was never the approved feature sheet for the project.  It was a preliminary draft for discussion prepared by Mr. Halstrom, which he distributed to the other agents at Windermere.  It is stamped with his name and title.  The website contained a different feature sheet.  The draft feature sheet lists “granite countertops and glamorous kitchens” as a feature.

[14]       A subsequent feature sheet is at tab 4 of Exhibit 1.  It contains no reference to granite countertops.  As built, the A units have laminate countertops with granite on the kitchen islands only.  Mr. Brickman, president of Garibaldi, recalled another later feature sheet specifying this.  The granite on the island in the claimant's unit had a large red marking in the stone, which was unsatisfactory to the claimant, as were the laminate countertops.  She ultimately had them all replaced with new granite at a cost of $4,186.96.   The plans show a crawl space hatch, near the furnace and hot water tank.  The implication is that there will be a crawl space with a furnace, ducting and a hot water tank.  In fact, the units were built on slabs with baseboard heating. 

[15]       I accept the evidence of Mr. Brickman that this was done because the site is on a flood plain.  The incorporation of crawl spaces would have required raising the level of the units by about four steps to conform to hydrologic requirements.  He did not want to do this for various reasons of which cost was not one.  It would have required re-designing the units to conform with the height restrictions.  As built, the buildings are only six inches below the maximum height.  He was trying to appeal to the market and he considered handicapped accessibility.  His evidence was that it was more expensive in this instance to build on slabs because the grade had to be raised considerably, with a particular compacted fill.  This cost more than the crawl spaces would have.  Although there was argument, there was no evidence to the contrary. 

[16]       The plans which were given to the claimant and were on the website were never the approved plans.  The changes were made early on, before the claimant learned of the project.  Mr. Halstrom was responsible for the website.  He did not change the plans on the website because he considered the elimination of the crawl space an improvement.  At all relevant times, the website displayed inaccurate plans showing crawl spaces. 

[17]       There were construction delays and the completion date was extended.  On June 23rd, 2004, the claimant inspected the unit for deficiencies with Laura Farquhar, a representative of the developer, for about 45 minutes.  The claimant was rushed and had not brought her materials.  Ms. Farquhar filled out the certificate, at Exhibit 1, tab 21.  It lists deficiencies but not omissions.  This was the claimant's understanding of its purpose.  The claimant noted that aside from the island, the kitchen countertops were laminate.  She discussed the countertops with Ms. Farquhar.  Ms. Farquhar said they were not supposed to be granite countertops.  The claimant had not brought her feature sheet, but she said she was sure granite countertops were a feature.  The claimant also said she did not like the red blotch in the middle of the granite on the island.  Ms. Farquhar said it was supposed to be like that.  Ms. Farquhar hovered near the claimant. 

[18]       Towards the end of the inspection, they went into an empty space on the lower floor near a hot water tank.  The claimant asked what it was.  Ms. Farquhar said it was for storage.  The claimant did not notice the missing crawl space, but felt uneasy and added “nothing else noted but may find something in future, assured this will be dealt with if necessary” to the certificate.  Ms. Farquhar said they would take care of any other problems in the future. 

[19]       On June 28th, 2004, the claimant faxed Ms. Farquhar her feature sheet, with a note saying “the kitchen is hardly glamorous with the countertops that are in place at the moment.” 

[20]       Some time later, the claimant examined her documents and realized that the crawl space and furnace were missing.  Dr. Matthias completed the purchase on June 29th, 2004, and took possession on June 30th.  Her legal advice was to complete and then try to address the issue of the granite countertops. 

[21]       I note that the Statement of Adjustments at Exhibit 1, tab 26, page 24 states:

“All representations, warranties, covenants and agreements contained in any and all agreements relating to the purchase and sale contemplated in this statement, and as set out in this statement will survive the completion of the purchase and sale and the registration of the lands in the name of the purchaser.”

 

This is signed by a representative of Garibaldi. 

 

[22]       Shortly after completion, the claimant went to Mr. Milne's office.  She wanted the countertops changed.  She intended to rent the townhouse as a luxury residence.  The countertops were not changed.  The unit was rented for a short term, and in September 2004, the claimant arranged to replace the countertops with granite herself. 

[23]       On October 10th, 2004, she wrote to Mr. Brickman advising that she had been unable to resolve this issue with his representatives, that she was having the countertops replaced, and that she would send him the invoice and proceed with legal action unless she was compensated.  When the countertops were changed, she stored the original granite from the island in her garage for two years, but it was a hazard to children so she gave it to a friend for use in a tool shed.  As noted, the cost of changing the countertops was $4,186.96. 

[24]       The claimant testified that had she known of the problems with the granite, crawl space and furnace initially, she is not sure what she would have done.  She may have looked at other properties or tried to reduce the price.  However, she said at another point that at the time of purchase, she did not think it was possible to negotiate a different price than the price set by the developer.  She prefers forced air heat to baseboard heating.  She finds it faster and more efficient and it does not interfere with furniture placement.  She noted that the unit has attractive high ceilings.  As it turns out, the value of this townhouse has been climbing since the sale. 

[25]       The claimant filed the Notice of Claim on September 27th, 2005.  An expert report obtained by the claimant is at tab 5, Exhibit 2.  The writer, Toby Mallinder, is a surveyor and a partner in BTY Group which provides costing and project management services to the construction industry.  He indicated that baseboard heating is less expensive than forced air.  He also said that a crawl space with forced air heating would have been more expensive to build, but it does not appear from the report that he was aware of the issues respecting grade and height.  His capital cost estimate for building on a slab does not include raising the grade. 

[26]       In summary, the two real estate salesmen involved provided inaccurate information to the purchaser.  The sheet provided by Mr. Milne indicated that the kitchen counters would be granite.  The plans distributed by both salesmen and shown on the website showed that the unit would have a crawl space and furnace. 

[27]       Mr. Halstrom gave some explanation for these things.  As noted, he testified that somehow the claimant must have received a copy of his draft feature sheet.  He did not replace the plans he had used with accurate plans because, in his opinion, the plans actually constructed were an improvement on the plan circulated.  As noted, Mr. Milne did not testify. 

LEGAL CONSIDERATIONS AND CONCLUSIONS 


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Vancouver, VR 672: Governance of leaky rotten condo paralysed; court orders administrator to start million dollar repair project

 

IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:

Ranftl v. The Owners, Strata Plan VR 672 and Wennerstrom,

 

2007 BCSC 482

Date: 20070410
Docket: L042930
Registry: Vancouver

Between:

Linda Margaret Ranftl

Petitioner

And:

The Owners, Strata Plan VR 672

Respondent

And:

Nils and Helena Wennerstrom

Respondents


Before: The Honourable Mr. Justice McEwan

Reasons for Judgment

Counsel for the Petitioner

M. Fischer

Counsel for the Administrator

G.S. Hamilton

Counsel for the Respondents, Nils and Helena Wennerstrom

P.A. Williams

Counsel for the remaining owners

J. Bleay

Date and Place of Trial/Hearing:

October 27 and December 14, 2006

 

Vancouver, B.C.

I

[1]                On December 19, 2005, I vested in Garth Cambrey, the Administrator of Strata Plan VR 672, all the powers and duties of the Strata Council (see Ranftl v. Strata Plan VR 672, [2005] B.C.J. No. 672 (QL), 2005 BCSC 1760).

[2]                This was an expansion of powers that had been conferred on the Administrator pursuant to a Consent Order entered before Brown J., on June 2, 2005.  The five owners of this six-unit condominium had become incapable of managing the property owing to a series of paralysing disagreements about the condition of the building and what should be done about it.

[3]                When I made the order, I directed that a review of the situation take place as soon after June 30, 2006 as the parties could set it down.

[4]                In order to address the condition of the building, the Administrator engaged a consulting firm, RDH Building Engineering Ltd. (“RDH”), to prepare a building envelope condition assessment report.  This was delivered on December 6, 2005.  A second opinion from a firm called JRS Engineering Ltd. (“JRS”) was delivered on June 30, 2006.  It confirmed the RDH opinion.

[5]                As a result of the recommendations of the engineers, the Administrator seeks a series of orders, that:

1.     the Owners, Strata Plan VR 672 repair its buildings envelope in accordance with the recommendations in the building envelope condition assessment report prepared by RDH Building Engineering Ltd. (“RDH”) dated December 6, 2005, or as may be modified after consultation with the Registered Owners and RDH, including repairs to areas of strata lots damaged by water ingress, mold investigation and remediation (the “Repairs”);

2.     the Administrator impose a special levy against the registered owners of Strata Plan VR672 (the “Registered Owners”) without the requirement of a 3/4 vote of the Registered Owners in the sum of $960,000.00 to fund the Repairs to be paid in accordance with unit entitlement as follows:

(i)     the sum of $99,000.00 payable immediately; and

(ii)    the sum of $861,000.00 payable on or before March 1, 2007, or such other date this Honourable Court deems reasonable;

3.     without limiting the generality of the powers conferred on the Administrator by the Order of McEwan J. pronounced December 19, 2006, the Administrator shall:

(i)     retain RDH to provide engineering services, including preparation of design drawings and specifications, preparation of a tender package, quality assurance and the coordination of professionals to implement the Repairs;

(ii)    approve the drawings and specifications prepared by RDH with reasonable consultation with the Registered Owners;

(iii)   approve the tender package prepared by RDH with reasonable consultation with the Registered Owners;

(iv)   enter into a construction contract for the Repairs following the tender process; and

(v)    act as the Owners’ Representative in relation to the construction contract;

4.     the Administrator imposed a special levy against the Registered Owners, without the requirement of a 3/4 vote resolution, in the sum of $22,500.00 to be paid immediately in accordance with unit entitlement for the purpose of paying the expenses of the Administrator as of June 30, 2006;

5.     the Administrator impose a special levy against the Registered Owners, without the requirement of a 3/4 vote resolution, in the sum of $21,000.00 to be paid immediately in accordance with unit entitlement for the purpose of paying future fees and disbursements of the Administrator, subject to the accounts of the Administrator being approved by the Registrar, unless otherwise approved by a unanimous vote of the Registered Owners;

8.     the Administrator report to the Court as soon as possible after May 31, 2007;

[6]                The Petitioner, Linda Margaret Ranftl, generally supports the Administrator’s application except that she seeks a specific direction respecting interior repairs to her own strata lot (Unit #4), and seeks to be excluded from any levy for a share of the fees of Owen Bird, solicitors for the Strata Corporation.

[7]                The Respondents, Nils and Helena Wennerstrom, while generally not opposed to the relief sought by the Administrator, seek as well as to be exempted from payment of a share of the legal fees of Owen Bird.

[8]                The Respondents John Morrison, Timothy Tam and Serge Collen (the remaining owners of Strata Plan VR 672) take the position that the building envelope is not in need of the repairs recommended by RDH, that a special levy of $960,000 is not necessary, and that it is not necessary to further retain RDH.  They consent to the levies payable to Owen Bird, as passed by the registrar.

II

[9]                The Administrator has filed a report to the court dated August 4, 2006.  This report attaches reports by the two engineering firms outlining what, in their opinion, is necessary in order to remedy the problems with the building.  The Administrator also outlines a series of steps he took to notify the owners and to obtain some consensus as to what needed to be done.  These culminated in a meeting July 25, 2006, which the Administrator summarizes in his report.  He outlines the remaining issues in the following terms:

At the Information Meeting held July 25, 2006 all Owners were present in person and had the opportunity to ask questions of Joel Schwartz, the author of the JRS Report.  As noted previously, JRS Engineering Limited agreed with the recommendations of RDH Engineering Ltd.  The matters of demolition and reconstruction as well as phasing the repairs were also discussed.  Mr. Schwartz was of the opinion that the costs of demolishing and reconstructing the building would exceed the cost of repairing the building and that phasing the repairs was simply a matter of spreading the financial impact over a period of time and not a technical matter.  In Mr. Swartz’s opinion, the cost of repairing the building in phases would be more expensive than a single-phase repair as there would be redundant costs involved in a phased repair.

It is evident to me that there are three outstanding issues of the Strata Corporation that are contentious among the Owners which I categorize generally as building repair; Strata Corporation finances and Strata Corporation governance.

With respect to the building repair, I believe the second opinion of JRS Engineering Ltd. confirms the opinions and recommendations contained in the RDH Report in that a full building remediation is required.  The targeted repair approach previously taken by the Strata Corporation is not adequate to address necessary building repairs.  The roof membrane located on the main roof and balconies is at the end of its service life and is in need of replacement.  The face-sealed stucco walls located on the North and South elevations of the building leak and should be replaced.  If it is possible to reduce repair costs by replacing balcony divider walls with glass and aluminum rather than retain the existing wood frame and wood siding, replace skylights with an alternate type of skylight, and replace select windows, the Strata Corporation should pursue this.  Phasing the repair could also be considered but will very likely result in additional costs overall.  The building needs to be repaired but the Owners cannot agree on the method or extent of repair and will require professional advice from a qualified engineer familiar with building envelope repairs.

I have received confirmation from the Homeowner Protection Office that this building, because of its age, does not require warranty nor does it meet the requirements for the Reconstruction Loan Program.  As a result, the Owners may choose not to proceed with a warranty on the building repairs in an effort to save costs and all Owners will be responsible for raising funds from their own sources to cover their proportionate costs of the repair.  It may be possible for the Strata Corporation to borrow funds on behalf of some or all Owners through loan arrangements, however I have not pursued this possibility.

It is my recommendation that RDH Building Engineering Ltd. be retained by the Strata Corporation to proceed with design and specifications for a full building remediation based on consultation with the Owners with respect to design changes and possible cost saving and phasing measures.

With respect to interior repairs and particularly those repairs to suite #205, it is my recommendation that any mold concerns must be alleviated and should be investigated and eliminated as soon as possible in conjunction with the building repair.

[10]            The Administrator also addresses two further issues of corporate governance.  The first is a question of accounting:

With respect to the Strata Corporation finances, I am not certain that an audit of the Strata Corporation books of account would be possible or productive.  I believe R. Jang will have received most information required to produce a reasonably accurate financial statement for the Strata Corporation, provided the remaining information requested of Mr. Morrison and Dr. Tam is received.

It is therefore my recommendation that the Court order Mr. Morrison and Dr. Tam to produce all Strata Corporation documents and funds in their possession or control and that the Administrator have the continued authority to retain the services of an accountant or other professional to assist in recovering documents, if required, or to produce a reasonably accurate set of financial statements for the Strata Corporation should the documents required by R. Jang not be available.

I believe the matter of legal fees owed to Owen Bird is a matter requiring the assistance of the Courts.  While I have not received confirmation from Mr. Morrison or Dr. Tam (Mr. Collen has submitted cancelled cheques to R. Jang) as to the monies raised for payment of legal fees, I believe the amounts that were suggested were raised and the apportionment of those amounts as submitted by Mr. Morrison is accurate.  However, there are no records of the Strata Corporation to indicate that these fees are an expense of the Strata Corporation other than the initial $10,000.00 raised in February 2005.  Mrs. Ranftl is exempt from paying these legal fees as she is the Petitioner in this action pursuant to Section 167 of the Strata Property Act.  It is questionable whether the Wennerstroms are exempt from paying these legal fees as they have opposed the actions of the Strata Corporation since May 2005 and no documented evidence exists that the Strata Corporation passes the requisite ¾ Vote Resolutions required to raise Special Levies for payment of legal fees.  In fact, it appears that the Wennerstroms were never asked to contribute after they advised they would not contribute further.  If it is found that the Wennerstroms are not required to pay their proportionate share of the legal fees or that the Strata Corporation is not the client of Owen Bird the legal fees remaining outstanding to Owen Bird would be paid by the three individuals who provided instructions to Owen Bird.  Namely, Mr. Morrison, Dr. Tam and Mr. Collen.

[11]            He also addressed the matter of legal fees for Owen Bird:

There has not been cooperation of Owners, even in the simplest of matters.  This has proved to be the case with various time delays in providing information, conducting General Meetings and the defeat of most of the ¾ Vote Resolution proposed.  It is my opinion that with the current ownership, the Strata Corporation will not be able to govern its own affairs with respect to agreement on design or agreement on method of repair and will not be able to raise funds necessary to complete the needed repairs.  As a result, it is my recommendation that an Administrator is required to continue with this Strata Corporation until the building envelope repair process is underway and the Strata Corporation finances have been adequately reported.

I recommend that the court impose a Special Levy in the aggregate amount of $960,000.00 ($160,000.00 per Strata Lot) for the purpose of funding interior repairs to individual Strata Lots that may be deemed necessary to RDH Building Engineering Ltd. and to fund a complete building envelope repair as contemplated by the RDH Report on the understanding that the Owners have input into design and cost decisions but that the Administrator has the authority to instruct RDH on behalf of the Strata Corporation without the need to convene a General Meeting of the Strata Corporation.  I further recommend that this Special Levy be payable in two instalments; being $99,000 ($16,500 per Strata Lot) immediately to cover the anticipated costs of design and specification preparation (including legal review of contract and tender documents) plus mold investigation and repair; and $861,000 ($143,500 per Strata Lot) on or before March 1, 2007 to cover the anticipated cost of repair to the building envelope.  If cost savings can be realized through a consultation process with the Owners and RDH Building Engineering Ltd., the Administrator should be given the authority to reduce the second instalment to an amount adequate to cover the estimated repair costs of RDH Building Engineering Ltd.  I believe that with some costs savings realized this total amount will be adequate to cover both interior and exterior repair costs.

I further recommend that the court impose a Special Levy in the aggregate amount of $22,500.00 ($3,750.00 per Strata Lot) payable immediately for the purpose of paying outstanding fees and disbursements of the Administrator subject to all accounts of the Administrator being passed by the Registrar.

I further recommend that the Court impose a Special Levy in the aggregate amount of $21,000 ($3,500.00 per Strata Lot) payable immediately for the purpose of paying future fees and disbursements of the Administrator subject to all accounts of the Administrator being passed by the Registrar or alternatively, unanimous approval of the Owners.

[12]            He makes the following recommendation respecting a special levy and his fees:

 

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