OCTOBER

2008
 
Clark Wilson LLP - BC's Law Firm for Business


HUMAN RIGHTS: MORE LESSONS TO LEARN
 

Strata Corporations have been busy defending human rights complaints. In one of the latest decisions to be released, a strata corporation was faced with an owner's request to turn the steps in the building's lobby into a ramp to make the building more accessible to owners with mobility issues.

In the recent decision of Mahoney v. The Owners, Strata Plan #NW332, Baywest Management Corporation and Scott Poniuck, 2008 BCHRT 274, Ms. Holowaychuk was a 91 year old woman, who developed mobility problems over the years. By the time of the human rights complaint, she relied on a walker and found stairs difficult to navigate. The lobby of Strata Plan NW 332, also known as The Heritage, contained a small flight of three stairs between the front door and the elevator. The only way to avoid these stairs was to enter The Heritage through the parking garage. The Heritage was a 35 year old building which, at the time of construction, did not require wheelchair accessibility. Ms. Holowaychuk had been an owner at The Heritage for 30 years.

For about two years prior to launching her complaint, Ms. Holowaychuk had voiced her concerns about the stairs and the need for a ramp to accommodate not only persons with walkers, but also residents with canes, shopping carts, mothers with strollers, delivery personnel, and persons who require wheelchairs. The first time she raised this issue, she attended a Council Meeting and followed up her presentation with a letter to Council. This issue was raised again at the next Annual General Meeting ("AGM"), where, on a show of hands, the majority of the owners were in favour of installing a ramp. The owners directed the Council to research the expense. At the following AGM, the owners failed to pass a 3/4 vote resolution to allow the Council to spend up to $30,000 to install a ramp.

Several months later, Ms. Holowaychuk again wrote to the Council, demanding the installation of a ramp, particularly given that she had recently injured herself on the stairs. She gave the Council one month to respond. As is typical with most strata corporations, the Council did not deal with correspondence until the next Council Meeting, which in this case, was the date of Ms. Holowaychuk's deadline for the Council to respond. At that Council Meeting, the property manager was directed to investigate the options available and the costs to make the lobby accessible. Unfortunately, the Council did not direct the property manager to write to Ms. Holowaychuk as to the steps being taken. This problem was further exacerbated by the fact that the Council did not meet over the summer months, and did not write to Ms. Holowaychuk until after she had sustained a further fall in the lobby a couple of months later. Hearing nothing from the Strata Corporation, Ms. Mahoney filed the human rights complaint on behalf of her mother.

Meanwhile, the property manager's investigations were not particularly successful. He contacted five contractors, but only one provided a quote. Many of the contractors wanted architectural drawings before providing a quote. As a result, he obtained the Council's instructions to send a letter to Ms. Holowaychuk advising her that the ramp issue would be discussed at the next AGM. At that AGM, the owners voted on a resolution to spend up to $3,000 to hire an architect to prepare drawings for the ramp. While the majority did vote in favour of the resolution, it failed to pass. Following the AGM, Ms. Holowaychuk fell again. Approximately six months later, the property manager was able to obtain estimates for various accessibility options, including the installation of a ramp.

Here, Ms. Holowaychuk faced a situation where the Council appeared willing to install a ramp, but was prevented from doing so because the owners voted down resolutions to raise funds to pay for the installation. The Heritage had a history of having difficulty raising funds by way of special levy as many of the owners were on a fixed income.

At the end of the day, the Tribunal dismissed the case against the property manager given that his role was to take instructions from the Council. On the facts of the case, any violation of the Human Rights Code was a violation by the Strata Corporation and not by the property manager. There was no evidence that indicated that the property manager engaged in conduct outside that of a typical strata manager in a similar situation. Accordingly, the property manager was not responsible for the discrimination.

The most interesting part of this case is the issue of undue hardship. If you recall from prior STRATAgies articles regarding human rights complains, once discrimination is established, the strata corporation must accommodate the owner to the point of undue hardship. Here, Ms. Holowaychuk was able to establish discrimination. In response, the Strata Corporation argued that undue hardship would result if it was forced to install a ramp. The only evidence of undue hardship put forward by the Strata Corporation was the estimate of the costs involved and the fact that the owners had voted down the resolutions to proceed. However, no owners testified to show that a special levy would be a hardship to them. In fact, there was no evidence that a special levy was required at all. The Heritage had $95,000 in its contingency reserve fund ("CRF") and there was no indication that the funds were allocated for another project. In addition, the majority of owners voted in favour of the 3/4 vote resolutions to raise funds, indicating that a majority of owners did not find that the costs of installing a ramp would constitute undue hardship.

With respect to the Strata Corporation, the Tribunal ordered the Strata Corporation to obtain architectural drawings and the necessary permits from the city. The Strata Corporation would then need to put the ramp installation contract to tender. If, following bidding, the costs were equal to or less than the estimate obtained by the property manager, the Strata Corporation was directed to proceed with the installation of the ramp. However, if the city refused to grant a building permit or the costs proved to be greater than the estimate obtained by the property manager, the parties were to proceed to mediation to try to come up with an alternate solution. If no agreement was reached, the Tribunal Member retained jurisdiction to hear argument and evidence, if necessary, on the issue of the appropriate remedy.

So, what can strata corporations take from this case? First, communication between the Council and the owner who is making a request for accommodation must be open and frequent.

One of the main reasons Ms. Holowaychuk filed her complaint was that she felt that the Council had completely ignored her request even though the Council was taking steps. Those steps were not however apparent to Ms. Holowaychuk. Perhaps if she had known what the Council was doing, the parties could have worked together to find an appropriate accommodation. Second, property managers can breathe a sigh of relief. Although a property manager may be named in the complaint, they will not be held responsible for discrimination in these types of cases unless their actions go beyond the scope of their duties or fall outside of the conduct of the average property manager. The Tribunal's reasons reassure property managers that they will typically not be held at fault when a strata corporation violates the Code. Finally, we have learned that the Tribunal may very well consider financial constraints in the remedy, but that a strata corporation will have to provide very specific evidence at the Tribunal hearing to prove undue hardship. For example, in this case, if several owners had testified that they could not afford a special levy above a certain amount without causing them undue hardship, the result might have been a different one. In addition, where the CRF holds sufficient funds to pay for the necessary accommodation, a strata corporation may not be able to argue "undue hardship" unless it can demonstrate that the funds are allocated for other expenses. Strata corporations should consider these lessons when dealing with their own potential human rights claims.

Veronica Franco

 

DON’T PREJUDGE A BYLAW INFRACTION!
 

Taking enforcement steps to deal with bylaw and rule infractions continues to provide a source of frustration for strata corporation and property managers. Unfortunately, the BC Courts have been most unforgiving if a strata corporation has not complied strictly with the requirements of section 135 of the Strata Property Act, cancelling fines if the processes set out in the Act have not been complied with.

Section 135(1) provides that:

The strata corporation must not

(a) impose a fine against a person,

(b) require a person to pay the costs of remedying a contravention, or

(c) deny a person the use of a recreational facility

for a contravention of a bylaw or rule unless the strata corporation has

(d) received a complaint about the contravention,

(e) given the owner or tenant the particulars of the complaint, in writing, and a reasonable opportunity to answer the complaint, including a hearing if requested by the owner or tenant, and

(f) if the person is a tenant, given notice of the complaint to the person's landlord and to the owner.

One of the common enforcement problems encountered when trying to collect fines or the costs of remedying a contravention is that the strata corporation often decides that an infraction has occurred and what the enforcement measure is before giving the owner to opportunity to respond. What the Strata Property Act contemplates, and the Courts in turn expect, is that the following procedure will be followed:

  • The strata council receives a complaint from an owner about a bylaw or rule infraction.

  • The strata council conveys to the owner the particulars of the complaint. What are "particulars"? The date, time(s) and conduct giving rise to the complaint and the bylaws potentially infringed by the conduct.

  • The strata council provides the owner with an opportunity to be heard to answer the complaint, including a hearing if requested.

  • The strata council renders a decision regarding the complaint and the enforcement measures to be taken.

Unfortunately, strata corporations often shorten the process by simply issuing one letter advising the owner that they have breached the bylaw and what the enforcement measure will be. Doing this creates two significant problems for the strata corporation:

  • The owner may not have sufficient information to defend himself against the complaint; and

  • More significantly, the council will appear to have prejudged the owner's guilt before the owner even has an opportunity to respond.

This last point is exemplified in a recent decision of the BC Court of Appeal involving a society, McLachlan v. Burrard Yacht Club, in which the Court set aside the expulsion of Mr. McLachlan from the yacht club. The expulsion had been proceeded by several years of acrimony between Mr. McLachlan and the yacht club over the club's affairs. Events reached the point that the Board of Directors felt that Mr. McLachlan's conduct in advocating his positions crossed the line, infringing the club's bylaws. In May 2005, the Board wrote to Mr. McLachlan advising him as follows:

I am instructed by the Board of Directors to advise you that the Board has determined that .... you have (1) wilfully infringed the Bylaws, Rules and Regulations of the Club... This is your notice that a meeting of directors has been called especially for the purpose of considering your possible suspension or expulsion from membership in consequence of your conduct. ... You are entitled to attend the meeting with or without your legal counsel and to make such explanation of your conduct as you may think fit.

At the Board meeting, the decision to expel was made. After a general meeting of the members affirmed the Board's decision, Mr. McLachlan appealed to the Courts. Initially unsuccessful at the Supreme Court level, the Court of Appeal ultimately set aside the expulsion. In doing so, the Court held that Mr. McLachlan had not been afforded the requisite degree of "procedural fairness" or "natural justice", the three basic requirements of which are (1) notice; (2) an opportunity to make representations; and (3) an unbiased tribunal.

Although the Court of Appeal held that the enforcement procedures of voluntary organizations, such as social clubs, only require "fair play" or "good faith" on the part of the organization, that standard had not been met here. In particular, as the notice letter advised Mr. McLachlan that "the Board had determined that contrary to Club Bylaw ... you have", the Board was found to have prejudged the complaint against Mr. McLachlan and that, by the time Mr. McLachlan attended the Board meeting, he could reasonably assume that the case against him had been predetermined and the Board was biased against him. With respect to the holding of hearing to consider a complaint, the Court held as follows:

The rationale for affording a person an opportunity to be heard is the idea that people will listen with an open mind to that which is said and reach a considered decision.

Having an open mind can be difficult, particularly when dealing with an owner with a history of bylaw infractions or acrimony with the owner in question. However, as the McLachlan case makes clear, any body charged with the power to enforce must exercise that power in a manner that is fair to the member involved. Failing to do so can result in enforcement decisions, such as the levying of fines, being set aside by the Courts.

Allyson Baker

 

COLLECTIONS - WHAT WE NEED FROM YOU IN ORDER TO HELP YOU!
 

At various times, the strata council may instruct the strata corporation's property manager to pursue collection of outstanding arrears due from various registered owners. These times may include the weeks leading up to annual general meetings or special general meetings, when registered owners are several months in arrears of their regular strata fees, when registered owners have failed to meet the deadline for payment of special levy, or when a new property manager, or property management firm, has assumed the management duties for a strata corporation. Each strata corporation's tolerance for arrears will be different at different times. Frequently, a newly elected strata council will "clean house", and pursue recovery of outstanding arrears owed by registered owners so that the budget can be met and all financial obligations of the strata corporation can be paid.

When a strata corporation elects to pursue recovery of arrears from a registered owner, it is essential that the strata corporation's records be accurate, current, and complete. Without maintaining accurate records, there may be insufficient evidence or compliance with the provisions of the Strata Property Act to permit full recovery of the arrears owing. When maintaining records, consider the following:

  • Ensure copies of all correspondence, emails, and faxes with owners are maintained in a file designated for the specific strata lot involved. This file should also include all notices delivered to that registered owner pursuant to the bylaws of the strata corporation with respect to alleged breaches of the bylaws, notices of the intention of the strata corporation to issue fines and/or penalties, and the intention of the strata corporation to file a Form G - Certificate of Lien;

  • Have strata council members, property managers, and the staff at the property management firms record details of all telephone conversations or in-person meetings with registered owners, including the date, time, and a detailed description of the discussion which took place, and promises that were made, etc.;

  • Retain copies of all invoices for services and charges which have been charged back to a strata lot, including any written notice given to the owner of the strata lot that the invoice is being charged back to their strata account, including insurance deductibles;

  • With those registered owners who do not pay by pre-authorized payment, and who do not provide post-dated cheques for their annual strata fee payments, retain a copy of any payment received which provides possible leads to track down defaulting owners through their bank, alternate addresses, or businesses;

  • Maintain up-to-date emergency contact information, phone numbers, email addresses, work numbers, vehicle license plate numbers, and alternate individuals to contact in case of emergency. These details will assist in locating defaulting owners should legal action become necessary to recover payment;

  • In the event that a property management firm assumes the management duties for a strata corporation which brings with it owners already in default, ensure not only that the amount of the balance forward of the arrears for each strata lot is provided to the new property manager, but also that the complete detailed historical account from the previous property manager is obtained. Without the historical accounting ledger for the defaulting owner, it is impossible to determine the composition of the lump sum balance with a view to establishing those claims which are protected by a Form G - Certificate of Lien as set out in s. 116 of the Strata Property Act. Without an itemized list of the charges against the strata lot, the strata corporation runs the risk of being unable to provide sufficient evidence that the total amount owing is protected by a Form G and/or recoverable through a forced sale proceeding in the Supreme Court.

These documents and details will ensure that, should it become necessary to pursue legal remedies against a registered owner for recovery of outstanding arrears, the strata corporation will have the evidence required to prove its case, and thus recover the full amount permitted under the provisions of the Strata Property Act.

Nancy Vianello, Paralegal

 

CLARK WILSON SPONSORS INAUGURAL WOMEN'S LEADERSHIP FORUM

Shine: Radiate Your Leadership - 2008 Women's Leadership Forum Clark Wilson is proud to have been a silver sponsor of the 2008 Women's Leadership Forum, held September 29-30 in Vancouver. This event, which has enjoyed remarkable success in Alberta since 2005, was our province's inaugural forum.

Themed Shine: Radiate Your Leadership, the Forum was designed to assist women to achieve their full potential as leaders and future leaders within their organizations. Participants were challenged and inspired through thought-provoking and inspirational keynote sessions, presentations, panel discussions and workshops. The forum also included many opportunities for participants to network and share ideas and experiences with their peers.

For more information, visit the Women's Leadership Foundation website at: www.wlf-womensleadershipfoundation.ca.

 

CLARK WILSON TO PARTICIPATE IN CLIMATE SMART

This fall, Clark Wilson will be participating in Climate Smart, a new service developed by Ecotrust Canada and sponsored by West Coast Air. As part of the service, we will be attending a three part workshop series focused on measuring, reducing and offsetting our carbon footprint. The service also offers new tools for tracking greenhouse gas emissions. With Clark Wilson's own Green Program launched this summer and several initiatives underway, we are enthusiastic to participate, share ideas, and gain some new tools for our program.

 

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Clark Wilson LLP - BC's Law Firm for Business

800.885 West Georgia Street
Vancouver, BC  Canada V6C 3H1
Tel. 604.687.5700
Fax. 604.687.6314

Questions or Comments?

For more information on any article contained in this issue of Clark Wilson LLP's STRATAgies or on any Strata Property Group matter, please contact any member of our Strata Property Group.

Strata Property Group Members
Lawyer Direct Telephone
& Email Info
Pat Williams T. 604.643.3171
paw@cwilson.com
Allyson Baker T. 604.891.7732
alb@cwilson.com
Veronica Franco T. 604.891.7714
vpf@cwilson.com
Kristine All T. 604.891.7775
kpa@cwilson.com
Nancy Vianello
(Paralegal)
T. 604.643.3143
ndv@cwilson.com


Clark Wilson LLP's STRATAgies is published periodically by the Strata Property Group at Clark Wilson LLP. The information contained in
this newsletter should not be treated by readers as legal advice and ought not to be relied on without detailed legal counsel being sought.
Editor: Allyson Baker © 2008, Clark Wilson LLP. All Rights Reserved.