Surrey, The Odyssey Towers: Developer loses two court applications to strike out pleadings by leaky condo owners

 

IN THE SUPREME COURT OF BRITISH COLUMBIA

 

Citation:

Owners v. Lark Odyssey Project Ltd.,

 

2008 BCSC 316

Date: 20080313
Docket: S054794

Registry: Vancouver

Between:

The Owners, Strata Plan LMS 1564

Plaintiff

And

Lark Odyssey Project Ltd. carrying on business as The Lark
Group and the said Lark Odyssey Project Ltd., John Doe
Stucco Cladding, John Doe EIFS Cladding, John Doe
Caulking, John Doe Flashings, John Doe Balcony Railings,
John Doe Balcony Waterproofing, John Doe Bituminous
Waterproofing, John Doe Concrete, John Doe Concrete
Sealant, John Doe Framing, John Doe Elastomeric, John Doe
Consultant, John Doe Sliding Glass, John Doe EPDM, John
Doe Canopy Roof and Lawrence Fisher also known as

Larry Fisher

Defendants

- and -

Docket: S034258
Registry: Vancouver

Between:

The Owners, Strata Plan LMS 1564

Plaintiff

And:

Odyssey Tower Properties Ltd., The Corporation of the
City of Surrey, Starline Windows Ltd., Starline
Architectural Windows Ltd., Glastech Contracting Ltd.,
Glastech 2000 Contracting Ltd., Glotman Simpson
Consulting Engineers Ltd., West Coast Building Coatings
Inc., Lutz Associates Architects Ltd., Hewitt + Kwasnicky
Architects Inc., ABC Company Limited, XYZ Company
Limited, John Doe, Richard Doe, John Doe #1 doing
business as Craftsman Caulking Inc., John Doe #2 doing
business as Durall Metal Products Ltd., G.C.W.
Consultants Ltd., 488432 Alberta Ltd. doing business as
KDH Drywall, Krahn & Associates Engineering Ltd., Lark
Enterprises Ltd., Lark Odyssey Project Ltd., Lark Projects
Ltd., John Doe #3 doing business as Lower Mainland Steel
Ltd., Marzen Artistic Aluminum Ltd., Regional Spray &
Waterproofing Systems Ltd., John Doe #4 doing business
as Sertex Plumbing B.C. Ltd., John Doe #5 doing business
as United Reinforcing Ltd. and/or Abbey Reinforcing, and
Valley Waterproofing Ltd.

Defendants

And:

Odyssey Tower Properties Ltd., Starline Windows Ltd., Starline
Architectural Windows Ltd., Glastech Contracting Ltd., Glastech
2000 Contracting Ltd., Glotman Simpson Consulting Engineers Ltd.,
West Coast Building Coatings Inc., Lutz Associates Architects Ltd.,
Hewitt + Kwasnicky Architects Inc., ABC Company Limited, XYZ
Company Limited, John Doe, Richard Doe, John Doe #1 doing
business as Craftsman Caulking Inc., John Doe #2 doing business as
Durall Metal Products Ltd., G.C.W. Consultants Ltd., 488432
Alberta Ltd. doing business as KDH Drywall, Krahn & Associates
Engineering Ltd., Lark Enterprises Ltd., Lark Odyssey Project Ltd.,
Lark Projects Ltd., John Doe #3 doing business as Lower Mainland
Steel Ltd., Marzen Artistic Aluminum Ltd., Regional Spray &
Waterproofing Systems Ltd., John Doe #4 doing business as Sertex
Plumbing B.C. Ltd., John Doe #5 doing business as United
Reinforcing Ltd. and/or Abbey Reinforcing, and       
Valley Waterproofing Ltd.

Third Parties

Before: The Honourable Mr. Justice Preston

Reasons for Judgment

(In Chambers)

Counsel for Plaintiff/Respondent

D.L. Miachika

Counsel for Defendants/Applicants

D. Roberts, Q.C.
& J.C. Friesen

Date and Place of Hearing:

February 22, 2008

 

Vancouver, B.C.

[1]                This is an application brought under Rules 18A, 19(24)(a) and 18(6) to have certain claims in a statement of claim in action No. S054794 and an amended statement of claim in action No. S034258 dismissed or struck out.

[2]                The plaintiff strata corporation commenced two actions as a result of water leaks in a condominium development.  Action No. S054794 was commenced on August 29, 2005; action No. S034258, on August 1, 2003.  All of the impugned claims in action No. S054794, as well as additional claims, are contained in the amended statement of claim in action No. S034258.   I will deal with this application as if it pertained to action S034258 only.  The result in that action will determine the result in both.

[3]                The plaintiff is a strata corporation and the defendant Odyssey Tower Properties Ltd. (“Odyssey”) is the developer, or one of the developers, of the condominium property to which this action relates.  For the purposes of these reasons I will treat Odyssey as the sole developer. 

[4]                The other defendants took no position on this application. 

[5]                The condominium development was to be a two-phase development.  The first phase, and the only one built, is a 20-storey high rise building (the “Phase I Tower”) consisting of 109 strata lots.  The second phase was to be constructed on a separate adjacent parcel of land owned by Odyssey.  The exterior of the Phase I Tower developed leaks, leading to extensive repairs.  The plaintiff seeks to recover the cost of the repairs as well as other damages from one or more of the defendants.

Chronology

[6]                Phase I of the overall condominium development was developed between June 1993 and January 1995.  The first owners of individual units in the Phase I Tower took occupancy in approximately August 1994.

[7]                The construction of Phase II of the development was planned to commence by November 30, 1994 and was to be completed by March 1, 1996.  The owners of Phase II condominium units were to share in the common facilities constructed along with Phase I.  Further common facilities were to be constructed as part of Phase II.  The Phase II condominium council was to be amalgamated with the Phase I council.  The members of the single resulting council were to share responsibility for common expenses and the management of the overall development.

[8]                The construction of Phase II did not commence when planned.  The date upon which Odyssey was to elect whether or not to proceed with Phase II was fixed under the phased strata plan declaration at July 31, 1998.  Odyssey successfully applied, at first administratively and then by court order, on 11 occasions between 1998 and 2006 to extend the time by which it was to make an election whether or not to proceed.  On June 30, 2006 Odyssey elected not to proceed.

[9]                During the period of these extensions, it became evident that the Phase I Tower had a serious water leak problem.  Water was penetrating into the tower. Extensive remedial repairs were required.

This Litigation

[10]            This action was commenced on August 1, 2003.  When this application was filed on November 16, 2007, no examinations for discovery had taken place.  Document discovery was, and remains, incomplete.  The statement of claim was amended to add 14 defendants on January 2, 2008.  An examination for discovery of Mr. Larry Fisher on behalf of Odyssey limited to matters relevant to this application was held on February 13, 2008.  On February 15, 2008, the defendant, The Corporation of the City of Surrey, issued a third party notice adding all of its co-defendants as third parties.

[11]            Odyssey applies to have 26 full paragraphs and six partial paragraphs of the plaintiff’s amended statement of claim struck out or dismissed.  The amended statement of claim is a complex document, 46 pages in length, consisting of 173 paragraphs.  The portions of the amended statement of claim that Odyssey wishes struck out or dismissed may be summarized as follows:

1.         In paragraphs 33-43 the plaintiff claims that the disclosure statements under the Real Estate Act, R.S.B.C. 1996 c. 396 represented that the Phase I Tower was to be part of a 2-Phase development.  This offered significant benefits to the owners of the Phase I units.  Odyssey first delayed then elected not to proceed with the second phase and now intends to develop an independent complex on the adjacent Phase II lands.  Accordingly, the owners of Phase I units have lost significant benefits. 

            2.         In paragraphs 56-68 the plaintiff claims that Odyssey issued disclosure statements under the Real Estate Act and warranted that it would register the Phase I Tower under the New Home Warranty Plan.  Further, Odyssey executed statutory declarations.  These disclosure statements, statutory declarations and statements concerning registration expressly or impliedly required that the Phase I Tower be constructed in accordance with building codes.  However, they contained false statements or omitted to provide required material information concerning design, construction deficiencies and provision for repairs.

            3.         In paragraphs 162-167 the plaintiff claims that by representing in disclosure statements that the Phase I Tower was to be part of a 2-phase development, Odyssey led them to believe that further common facilities would be constructed, that the Phase II owners would share in the costs of maintaining the common facilities constructed as part of Phase I, and that Phase II owners would bear a share of repair expenses.  The plaintiff claims an interest in the Phase II lands in the amount of its compensatory claim.

            4.         In paragraphs 70, 71, 168 and 169 the plaintiff claims that breaches of disclosure statements led to damages.  And in paragraph 172 the plaintiff seeks to rely upon the Real Estate Act and its successor, the Real Estate Development Marketing Act.

            5.         In the prayer for relief (para. 173) the plaintiff claims a certificate of pending litigation against the Phase II lands.

[12]             Odyssey submits that the above-noted pleadings cannot stand.  Its submissions raise the following issues.

Does the Strata Corporation Have Standing?

 

 

 (More)

The Odyssey (Surrey): Enefer v. Owners Strata Plan LMS 1564, 2005 BCSC 1331

IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:

Enefer v. Owners Strata Plan LMS 1564,

2005 BCSC 1331

Date: 20050927
Docket: L051884
Registry: Vancouver

Between:

William Lawrence Enefer

Petitioner

And

The Owners, Strata Plan No. LMS 1564

Respondents


Before: The Honourable Mr. Justice Taylor

Supplementary Reasons for Judgment

Counsel for the petitioner:

R. Fayerman

Counsel for the respondent Strata

A. Murray

Counsel for the respondent J. Collins

D.F. Sutherland for P.A. Mazzone

Date and Place of Hearing:

August 12, 2005 & Written Submissions

.

[1] Following delivery of my decision in this application on August 12, 2005, counsel were invited to make submission on the issue of costs as between the petitioner, the respondent strata plan owners and Jerome Collins who was joined as a respondent by consent at the commencement of the hearing of the application.

[2] As a transcript of my oral reasons has been issued I do not intend to review the cause of action or the reasons for my decision. Those reasons are the matrix upon which these reasons are founded.

[3] However, I wish to reiterate one important fact being that the opposition of Mr. Collins, who represented his wife%u2019s interest and those of an undefined group of Owners known as the %u201CToth Group%u201D to the imposition of a levy, for the final portion of the costs of a substantial rehabilitation project was founded, not upon any concern as to the need for such repairs but upon the strata council%u2019s choice of an owner%u2019s representative, whom they viewed as less qualified than the individual Mr. Collins and his supporters subsequently proposed.

[4] The appointment of the Owners%u2019 representative was part of the contractual obligations of the Strata Corporation with its engineers and remedial contractor. As well, the Owners%u2019 representative had responsibilities to the Strata Council beyond those contractual obligations in that he was to assemble information/evidence necessary for litigation against the developer of this Strata Plan.

[5] The appointment was the responsibility of the Strata Council and any dissatisfaction with the actions of the Strata Council%u2019s conduct was a matter to be raised at the next election of its directors.

[6] It was not, however, a matter to be used to highjack or block the levy needed for repairs.

[7] The consequence of the rejection of the levy founded upon this objection to the appointment of the Owners%u2019 representative by the Strata Council was to impair the tenders secured as I discussed in my reasons.

[8] The issue of costs, however, should not be determined by analysis of the voting of the Owners at meetings of the Strata Corporation for that is their right under the bylaws of the Strata Property Act regardless of their motivation.

[9] What is, however, the proper subject matter of the issue of costs is the unsuccessful opposition to the application brought by the petitioner and supported by the Strata Council as representative of all owners.

[10] Counsel for the petitioner seeks costs against the Strata Corporation or against the members of the %u201CToth Group%u201D or, alternatively, the respondent Collins. Counsel for the Strata Council advances a similar position as against the %u201CToth Group%u201D or Collins but also says the respondent Collins should pay the petitioner%u2019s costs directly.

[11] Counsel for Mr. Collins, whose position is that the petitioner is entitled to his costs from the Strata Council as is he himself and that the Strata Council should bear its own costs.

[12] Additionally, counsel for the petitioner and the Strata Corporation seek special costs as against Collins and/or the %u201CToth Group.%u201D

[13] The position of the petitioner and the Strata Council in respect of the Toth Group, in my view, is ill founded as it is predicated upon the members of the so-called group opposing the vote for the third levy.

[14] The members of that group as referred to in Schedule A to Ms. Friedrick%u2019s affidavit is presupposed to have voted owner for owner against the resolution for the levy. There is no evidence that the members so voted as the minutes simply record the number of votes for and against.

[15] Even if this group could be so defined as suggested in the affidavit of Ms. French, the exercise of a democratic right is not a proper basis to assign costs.

[16] There may be many reasons, some obvious some less so, as to why any particular owner might vote against the imposition of a levy.

[17] Furthermore, those of the Toth Group were not parties to this litigation and costs should be awarded against them even if identifiable simply on the basis that Mr. Collins purported to represent their interests as well as that of his wife.

[18] Mr. Collins, by consent of the petitioner and the other respondents, was joined as a respondent on the basis of having obtained authorization from his spouse to be %u201Can interested party.%u201D

[19] The petitioner is entitled to costs against the respondent Strata Corporation and against Collins. The respondent Strata Corporation is entitled to costs against Collins.

[20] Mr. Collins, in my view, is not entitled to any costs given my conclusion that any dissatisfaction with the owner%u2019s representative%u2019s appointment was something that should not have been raised in opposition to the petitioner%u2019s application.

[21] Counsel for Mr. Collins suggests that such a disentitlement %u201Cwill send a chill throughout the Strata community as it would make it virtually impossible for anyone to take a dissenting view on a special resolution.%u201D

[22] The liability for costs does not arise from a failed exercise of a democratic right. It arises simply because of the groundless opposition to an application that succeeded.

[23] The suggestion that %u201Cnone of the actions of Mr. Collins brought the Strata Council into the proceeding%u201D is correct but only to an extent. What the actions of Mr. Collins did was to take what would have been an otherwise unopposed application and convert it into a full day%u2019s hearing in large part to counter the submissions anticipated and made by Mr. Collins on behalf of himself that those he purports to represent.

[24] As observed by MacDonald J. in Tadeson v. The Owners Strata Plan NW 2644 A992067 Vancouver Registry 15/1/99 at paragraph 29

%u2026without their opposition there would have been a consent order in these proceedings if indeed the proceedings had been necessary at all.

[25] Counsel for the petitioner and the Strata Corporation seek special costs. In my view, nothing in the conduct of the respondent Collins suggests of any opprobrious behaviour in the course of this litigation. Simply put, Mr. Collin%u2019s position was, as I concluded, one of groundless opposition and thus ill conceived.

[26] Such conduct in the context of the affairs of this Strata Corporation cannot be fairly described as %u201Creprehensible%u201D as that term was defined in Garcia v. Crestwood Forest Products (1994), 9 B.C.L.R. (3d) 242 at par. 12.

[27] While it may have been ill advised it was not conduct that should be %u201Cdeserving of reproof or rebuke%u201D by an award of special costs.

[28] The petitioner will recover his costs from the Strata Corporation which in turn will recover those costs and its own costs both on Scale 3 from the respondent Collins. To the extent that the petitioner recovers his costs from the Strata Corporation he shall not be held responsible for any unit of assessment of those costs by the Strata Corporation upon the owners.

[29] Whether or not others may contribute to Mr. Collins%u2019 liability for costs is a matter between him and the so called %u201CToth Group,%u201D whom ever its members may be.

%u201CJ.D. Taylor, J.%u201D
The Honourable Mr. Justice J.D. Taylor

The Odyssey Towers (Surrey): Enefer v. The Owners, Strata Plan LMS 1564, 2005 BCSC 1866

IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation: Enefer v. The Owners, Strata Plan LMS 1564

2005 BCSC 1866

Date: 20050812
Docket: L051884
Registry: Vancouver

Between:

WILLIAM LAWRENCE ENEFER

Plaintiff

And:

THE OWNERS, STRATA PLAN LMS 1564

Defendants


Before: The Honourable Mr. Justice Taylor

Oral Reasons for Judgment

In Chambers

August 12, 2005

Counsel for Plaintiff

R. Fayerman

Counsel for Respondent Strata Plan

Ms. A. Murray

Counsel for respondent Jerome Collins

O.F. Sutherland

Place of Trial/Hearing:

Vancouver, B.C.

[1] THE COURT: This is an application by an owner in strata plan LMS 1564 for an order in terms as set out in paragraphs (a) to (c) and (f) to (g) of the petition filed the 3rd of August. In essence, the application seeks to authorize the strata council to raise some $850,000 by way of a levy as a part of the funding for a major rehabilitation project.

[2] The strata plan is known by the name Odyssey Towers. It is a leaky condo as that term has come to be applied to many structures in British Columbia. The application is supported by the strata council.

[3] The application is opposed by Jerome Collins who holds a proxy for his wife who owns a unit in the building. Mr. Collins represents a group of owners referred to in the material as the Toth group. It consists of between 30 to 40 percent of the owners.

[4] Mr. Collins with the consent of the petitioner and the strata council was joined as a party at the commencement of the hearing of this application.

[5] It is common ground that the opposition to the resolution to raise $850,000 is founded upon opposition by the Toth group of owners to the employment of another owner Mr. Ed Meril as the owners%u2019 representative in this rehabilitation project.

[6] On the 19th of September, 2004, having in hand a proposal for rehabilitation from an engineering firm, other than that presently engaged, the strata council proposed a special resolution to raise through a levy the sum of $5 million. A 75 percent majority was needed. That resolution passed by a vote of 90 to 3.

[7] As a result of further proposals by another engineering firm, Morrison Hershfield to which I will refer as "MH" that expanded upon the earlier proposal and revised costs, on the 6th of March 2005, a second special resolution was proposed and passed by the owners by a vote of 80 to 3 in favour of that special resolution. That resolution raised a levy of $1.15 million.

[8] The amount so authorized by the owners had been predicated on an as of yet to be completed set of drawings. When they were completed and the tendering process involving a contractor and the number of subtrades followed through, it was evident that the funds raised by the previous two levies were some $650,000 short of that required to complete the rehabilitation once undertaken in addition to a further $200,000 for a new roof for the structure.

[9] Prior to the 19th of September vote in which the $5 million was authorized, despite the 90 to 3 vote, the owners of this building have been divided into various factions in respect to a number of unrelated issues.

[10] Nevertheless, in September and March these two groups were able to coalesce for the overall good of the structure in which they live or have condominiums.

[11] At no time have the owners passed a resolution pursuant to section 27(1) of the Strata Properties Act by which they might have sought to direct or restrict the council in the exercise of its powers or performance of its duties. Such a vote would have been by way of a simple majority.

[12] Following the 19th of September and prior to the 6th of March resolution, the strata corporation through its council entered into contracts with MH on the 14th of January 2005 and a construction manager Heatherbray Restoration Company Ltd. hereafter referred to as Heatherbray, on the 26th of January 2005.

[13] The vote on the 6th of March which predicated on not yet completed drawings. A term of each of these two contracts required the strata corporation to designate an individual who would be the Strata Plan's representative who was to be familiar with the project and would liaise with MH, Heatherbray and the owners as required.

[14] In addition to liaising with the engineers and contractor, the job required the owners%u2019 representative to provide weekly and monthly progress reports, to council, to keep the owners generally informed with respect to progress by way of the preparation of graphs or other information. It also required the holder of this position to approve progress payments for the job which at that point was expected to cost $6.15 million and to maintain records for proposed litigation against the developer as a result of the poor workmanship that resulted in the water problems.

[15] The strata council discussed who would be best suited for this task and concluded that Mr. Meril fitted what they wanted. Recorded in the council minutes of the 24th of March at paragraph 5, a copy of which once approved at the next meeting of the board of directors is then made available to the public, there was a discussion about the need for MH and Heatherbray for a single contact and that the council would prepare a term of reference for such a position. That was prepared and the term of reference document contains some 12 points in terms of what was required of this liaison person.

[16] By April the 20th meeting of the council, the council minutes record that Mr. Meril had been appointed to this liaison position at a salary of $5,000 a month with the duration of the work expected to last 13 months. The minutes recorded Mr. Meril suite and telephone number so that owners might contact him. The same minutes record that the drawings "will be complete 75 percent by April 27th after which Heatherbray will prepare costs within 5 percent of actual costs." These minutes were formally issued after the 20th of May meeting once approved by the board.

[17] A contract for Mr. Meril's services was prepared in accordance with the job description and according to the minutes of the May 20th meeting (released the 2nd of June) it was then that the contract was signed between Mr. Meril and the council. The contract refers to the fact that the contract could be terminated after 14 months on a month's notice. As I pointed out earlier, it was anticipated this project once commenced would take some 13 months.

[18] Counsel for Mr. Collins objected to the way in which Mr. Meril was advised of his selection. Whether or not he was advised by a letter or informally at a birthday party as it appears he was is not relevant. This Strata Corporation is a community of neighbours some of who admittedly do not agree with one another on various issues. It is not some formal corporate monolith. Thus one might expect a certain degree of informality in terms of the way in which some of its affairs are conducted.

[19] Heatherbray then tendered the project. Mr. Keenan of Heatherbray at paragraph 12 of his affidavit says this was in the beginning of June. He generally obtained three bids for each of the subtrades. Upon receipt of these tenders, the costs tendered taking the minimum bids were some $650,000 beyond that authorized by the earlier two resolutions, plus there was the additional $200,000 that had been determined would be the cost of the new roof. As a consequence of this revised cost estimate and the roof costs, the strata council proposed a further special meeting by which a special resolution to raise the additional $850,000 by way of a levy was to be proposed.

[20] At a special general meeting of the 19th of July this resolution proposed a levy of the $850,000. An amendment was proposed at that meeting to reduce the $850,000 by $65,000, an amount that had been contemplated as the cost of Mr. Meril's services as the owners%u2019 representative. Thirty-five voted in favour of the amendment; 58 against. That proposed amendment was defeated as it did not obtain a 75 percent majority.

[21] The vote on the resolution itself as originally proposed was then taken. Fifty-eight voted in favour; 37 were opposed. Because that did not result in a 75 percent majority, it was also defeated.

[22] A third resolution proposed by the so%u2011called Toth group that would have rescinded Mr. Meril's contract was by agreement of the owners in attendance tabled as it had no purpose at that point given the defeat of the $850,000 resolution.

[23] The tenders received have not yet been accepted. They are open for acceptance by the strata corporation through its general contractor Heatherbray up to the 15th of August. On that date, 95 percent of them will lapse.

[24] Mr. Keenan deposes that they will, in his opinion, either be lost entirely because subtrades will move away from this project given the uncertainty of the Odessey Towers rehabilitation project proceeding. Alternatively, he suggests that if retendered, it can be expected that the cost will increase by 10 to 15 percent above current tendered amounts.

[25] Following the defeat of the July resolutions, Mr. Collins then organized a demand under section 43(1) of the Strata Properties Act for a special general meeting for the purpose of considering a special resolution proposed to raise $785,000 and cancel the contract with Mr. Meril. It is not challenged that this demand to the strata council received the requisite 25 percent of the owners%u2019 signatures necessary for such a meeting to occur.

[26] The demand was delivered to a Mr. Alison. Mr. Alison is not a member of the strata council but because of the absence on holidays of the property manager, Mr. Bower, had stood in as chairman of the meeting on the 19th of July. There is no evidence as to when Mr. Alison gave the demand to the strata council.

[27] A Mr. Hadad is the chairman of the board of directors. On July the 28th, Mr. Collins wrote to Mr. Hadad demanding that a special general meeting be held no later than Tuesday, August the 16th. That of course would be a day after the tender had expired. On August the 4th Mr. Collins then wrote a second letter demanding the special general meeting be held on August the 14th. On August the 8th, the council having considered this request then issued a notice of the special general meeting to which was attached the special resolution proposed by Mr. Collins and the owners who had signed the section 43 demand.

[28] Special resolutions require 14 days notice exclusive the day of notice and the day the meeting to every owner. The meeting was then scheduled for the 28th of August. There is no provision in the Strata Property Act for the abridgment of the notice period. On the basis of 14 days plus 2, the earliest that the meeting could have occurred was the 24th of August. Following the issuance of this notice, the strata council solicited proxies in opposition to that resolution.

[29] As Ms. French deposes to at paragraph 13 of her affidavit, the council has acquired 35 of such proxies. There is a potential of 109 votes in the strata plan. To succeed, a special resolution therefore would require 82 votes in favour. If the strata council is provided with no more than the 35 votes that it had as of August the 10th and all the other owners supported the motion, the best that they could muster in support of the resolution would be 74, insufficient to obtain a three%u2011quarters majority.

[30] While one should not with any sense of confidence predict the dynamic of democracy, given the fractious conduct within this strata corporation and the past voting practices, it is reasonable to assume that when put to a vote this resolution would be doomed to failure, and as with the 19th of July meeting, the owners of the strata corporation will again be deadlocked.

[31] Counsel for Mr. Collins argued that scheduling of the August 28th meeting was simply done so as to create a crisis that now exists being that the August 15th date rapidly approaches. The timing, in my view, cannot be said to be contrived. It was simply a consequence of the way in which the section 43 demand was delivered to Mr. Alison who presumably then in turn eventually delivered it to the strata council.

[32] Section 3 of the Strata Properties Act (Act) charges the strata corporation with the responsibility to manage and maintain the common property and assets for the benefit of the owners. Section 72(1) of the Act makes that obligation very specific and furthermore mandatory when it provides as follows: "A strata corporation must repair and maintain common property and assets."

[33] Within the strata corporation there is no issue that the substantial repairs that were proposed by MH are necessary as evidenced by the two votes, for the $5 million one based upon the earlier engineering estimates and the additional $1.5 million based upon MH's recommendations. As I observed earlier both of those votes were almost unanimous as to the need for these repairs.

[34] It is in the fulfillment of its section 3 responsibility, that the council engaged the engineers, the contractor, and propose the three resolutions to undertake this necessary project. In the fulfillment of its responsibilities and duties the strata corporation acts through its council.

[35] The council accordingly engaged MH, and Heather Bray, in anticipation of the funding already approved in September and subsequently approved in March.

[36] It would be the height of irresponsibility knowing that it was short some $650,000 plus the cost of the roof repairs to commit to the tenders received through Heatherbray in the total funding authorized by the first two resolutions but not the third. To do so in my opinion would be a dereliction of its duty by exposing the strata corporation to a liability that exceeded its authorized funding to meet that liability. No responsible party to a contract should enter a contract without knowing that at least at that point it has the ability to fulfill its obligations.

[37] Much of the complaint of the respondent Mr. Collins and those for whom he speaks centres around Mr. Meril. Mr. Collins perceives that the $850,000 resolution somehow included the expenditure of $65,000 with the liaison person to be included in that sum. That is not correct as his cost was part of the earlier approved votes. The $850,000 is derived solely from the increased cost of the tenders and the roof repairs. Nevertheless the $65,000 is included in the overall figures.

[38] However, by reducing the third resolution to $65,000, Mr. Collins seeks to eliminate not only the funding for the position of Mr. Meril but also the contractual obligations by which he would be engaged.

[39] Mr. Collins proposes another person Mr. McKoven [phonetic] be appointed as a liaison person and points to aspects of his background that he says are better for the owners as a whole. In my opinion it is not necessary for this court to assess the relative merits of Mr. McKoven over those of Mr. Meril for to do so would be an interference that essentially would be in a form of judicially imposed interference or restriction under section 27, something that I would not be prepared to do. The Owners have not sought to limit council in this respect and I see no reason for this court to so limit council.

[40] Mr. Collins also complains that he has not seen the contractual arrangements between MH, Heatherbray and Meril, until this petition was filed. Firstly, they have in fact been disclosed by the affidavit of Miss French, but more importantly there is no evidence of any requests being made prior to the commencement of the events following the 19th of July to see them or that the council was at any time obliged to provide owners generally with copies of any subcontracts they proposed to enter into. The council is charged with the obligation and the responsibility of repair and maintenance. It has selected a person it concluded was the appropriate person to perform those tasks as set out in his job description. Those are not tasks lightly undertaken or fulfilled and despite Mr. Collins conversation with Mr. Keenan of Heatherbray. They will amount to considerably more than what was in fact discussed in Mr. Collins affidavit at paragraph 29.

[41] The responsibility of the liaison person goes far beyond what contact Mr. Keenan envisions as a liaison person. That person must also deal with owners, must prepare documentation and information necessary for the propagation of the litigation against the developers, approve progress payments to the contractor and subtrades which will involve a necessary examination of the state of progress from time to time once that progress draws are requested and finally must provide the owners and council with progress information from time to time. These tasks are not insignificant. They will be time consuming and will require much attention on the part of the person who performs them.

[42] The council conclude that a paid position would bring a degree of dedication to the task in a way that a volunteer might initially bring but which may wane over time. That is a decision of the council that it was entitled to make. It is not one which the owners in the absence of any section 27(1) resolution would have any role in.

[43] Having elected their representatives to council, the recourse of the owners who are dissatisfied with the conduct of the council is at the ballot box when directors are next elected assuming that before then there is no significant unfairness in the way in which the council conducts itself towards the owners%u2019 interest. No owners suggest that the engagement of Mr. Meril inflicts some significant unfairness upon them as that term is used in section 164. Indeed his costs amount to less than 1 percent of the total repair costs which including that expense of $65,000 amounts to some $7 million.

[44] Counsel for Mr. Collins argues that under section 98 the council was unauthorized to enter into a contract between the strata corporation and Mr. Meril. With the greatest respect to counsel, section 98 has no applicability here as that section concerns itself with operating budgets or contingency fund expenditures.

[45] Mr. Meril's engagement under the terms of the contract entered into is no different than the contracts of engagement between MH and Heatherbray. It is directly relayed to the overall repair budgeted, including the roof, of almost $7 million of which $6.15 million has been approved.

[46] Absent the approval of the further $650,000 and the $200,000 for the roof, the entire project stands in peril by either not being able to retain those who have tendered so far within the repair budget or to be faced with increases in costs that may range from 10 to 15 percent over that which is budgeted.

[47] The view of those that have tried to tie the approval of the remaining funding necessary for this project to the disengagement with Mr. Meril places them in a position of being ones who know the price of everything and the value of nothing. History has shown that while volunteer work is admirable, where private interests as here are at stake with some 109 units, problems can and do develop when strictly volunteer supervision is relied upon. That was unquestionably a fact which the council took into account in determining that the position should be a paid one.

[48] I now turn to the more immediate question of whether or not this Court should make a declaration sought by the petitioner and supported by the strata council being:

1) Firstly, that the sum of $850,000 in addition to the $6.15 million already approved is required to be paid for the rehabilitation of Odyssey tower. Rehabilitation is recommended by MH.

2) That the strata corporation be directed to proceed with those repairs, and

3) That the strata corporation be authorized to issue a special levy based upon unit entitlement not to exceed the sum of $850,000 in addition to that approved in September and at March.

[49] Section 165 as it applies to this case provides as follows:

On application of an owner, tenant, mortgagee of a strata lot or interested person, the Supreme Court may do one or more of the following:

(a) Order the strata corporation to perform its duties as required to perform under this act, the regulations the bylaws or the rules and as applies here.

(c) Make any other orders it considers necessary to give effect to an order under paragraph (a) or (b).

[50] I have no reservation in concluding that these owners in terms of any special resolution being passed are in a simple deadlock position. Neither faction can raise the requisite three%u2011quarters majority. Clearly the stumbling block is the approach view of the Toth Group towards the Meril contract, something that I have concluded was entirely within the competence of council to conclude. The council was obliged under the terms of the strata corporation's agreement with MH and Heatherbray to appoint such a liaison person and they concluded such a person should also have other duties. The repairs are necessary as is evidenced by the earlier resolutions whatever the reasons for the opposition of Mr. Meril's appointment may be, whether they be economic or personal.

[51] As I have earlier observed, the way to deal with a council that does something the owners disagree with is to vote for or against such directors at the appropriate time. It is not appropriate to hijack already agreed upon necessary repairs by playing brinksmanship to the special resolution needed to secure the repair funding. The consequence of what has happened is a hamstringing of the Strata Corporation in its ability to fulfill its obligation under sections 3 and section 72 which had already received the endorsement of the owners in the earlier meetings as to the necessity for this rehabilitation.

[52] I conclude on the evidence that the deadlock that prevents either faction from obtaining a three%u2011quarter majority has resulted in the corporation being unable to perform its duties that it is required to by statute. Counsel for Mr. Collins argued that if such an order is made under section 165, that it should only be for $785,000 with a further provision eliminating a contract for Mr. Meril. As I observed earlier it is not for this Court in essence to make orders under section 27(1) that restricts or limits the ability of council to perform its functions.

[53] Whatever the merits or otherwise of Mr. Meril's engagement, the council on behalf of the corporation has concluded that his services are necessary for the proper fulfillment of the task set out in the job description as well as fulfilling its contractual obligations to both the engineer and the general contractor. To not require the strata corporation to fulfill its duty to repair, will result in a significant increase in costs after the 15th of August. If the memorandum of the strata council attached as Exhibit P to Mr. Collin's affidavit is correct, the tender bids can be expected to rise by a minimum of 10 percent, paling into insignificance to the cost of Mr. Meril.

[54] Accordingly, I conclude that council has been unable to perform its duty and obligation of repair, as a consequence of this deadlock. Therefore, the orders sought are made. There will as well in addition be an order that the respondent's strata corporation pay the petitioner's cost on scale 3 and that the petitioner will be exempted from any payment of any special assessment levied by the strata corporation necessary to pay those costs. No submissions were made in respect to Mr. Collin's cost or any responsibility for cost. If counsel wish to make those submissions, they may do so in writing.

(SUBMISSIONS)

[55] I've asked counsel if there's any issue with respect to the question of costs in terms of Mr. Collins either as an entitlement to or a responsibility for. Miss Murray informs me that she wishes to make written submissions in that respect and therefore what I'm going to do is direct the petitioner of the strata corporation file any written submissions with respect to costs by August the 30th. Mr. Sutherland on behalf of Mr. Collins you will have until the 15th of September to respond and any replies to your submissions are to be received by the 22nd of September. (SUBMISSIONS)

[56] If there is any difference between the petitioner and the strata corporation, they can be responded to by the replies due the 22nd of September.

%u201CP.D. Dohm, A.C.J. for J.D. Taylor, J.%u201D
The Honourable Associate Chief Justice P.D. Dohm
for The Honourable Mr. Justice J.D. Taylor