Pushor Mitchell’s Brent Coyne Wins in BC Court of Appeal

By Pushor Mitchell LLP

A recent decision by the British Columbia Court of Appeal in Radcliffe v. The Owners, Strata Plan KAS1436, illustrates the duty of fair dealing which strata corporations owe to the member owners they serve.

This was a leaky condo case. The Radcliffe’s owned a unit in a large strata complex and sought reimbursement for costs related to restoring their unit. It was quickly determined that water entering into the Radcliffe’s unit originated from a neighbouring balcony related to construction deficiencies of the building envelope (common property). While the Strata Corporation initially took an interest and performed a temporary repair to the unit (that lasted only a matter of weeks), no further measures were taken to find a permanent solution. Consequently the Radcliffe’s experienced nearly 2.5 years of persistent water ingress resulting in them having to replace portions of their flooring and drywall multiple times.

Despite the Strata Corporation’s full knowledge of the Radcliffe’s water problems, it failed to take further appropriate action. The Supreme Court of British Columbia (and later confirmed by the Court of Appeal) held that the Strata Corporation acted in a significantly unfair manner as per s. 164 of the Strata Property Act. Evidence of the Strata Corporation’s unfair dealings towards the Radcliffes included assurances made by the Strata Council that it would repair their unit, including passing a special resolution to commit funds to repair the unit – and later reneging on this promise without explanation. In addition, the Strata Corporation had a history of repairing or reimbursing other owners whose units or property had suffered water damage.

The British Columbia Court of Appeal unanimously agreed with the Supreme Court`s findings that the Radcliffes had been “singled out,” despite evidence that the Strata Corporation fully acknowledged its legal obligations to repair and maintain the common property of the building.

Separately, this decision clarifies the breadth of remedies available under s. 164 of the Strata Property Act, including the awarding of damages in a petition proceeding. Prior to this decision there was no case authority for a petition being utilized as a mechanism for awarding damages in British Columbia.

While this decision suggests that courts in British Columbia are increasingly favourable to the idea of awarding damages in summary proceedings, it also underscores the equitable principles of fairness that informs governing legislation. As the Court of Appeal noted in its reasons, this case is a product of the new Supreme Court Civil Rules and the fundamental principle of reaching an appropriate decision in the most inexpensive and efficient manner possible.

For strata corporations and accompanying councils, this decision has immediate consequences as it serves notice that these governing bodies cannot act with impunity, and the manner in which they govern and treat its members are subject to judicial scrutiny.

A link to the Court of Appeal and Supreme Court decisions can be found here.