



COURT OF APPEAL FOR BRITISH COLUMBIA




Citation:



Bosworth v. Jurock,









2013 BCCA 4




Date: 20130110

Docket: CA039541

Between:

Gregory Bosworth

Respondent

(Plaintiff)

And

Oswald
Jurock, David Barnes, Ralph Case, Standard Apartments Ltd.,
Proper Tee Investments Ltd., and Greenwich Holdings Ltd.

Appellants
(Defendants)

Corrected
Judgment: The text of the judgment was corrected at page 1 where a change was
made on January 10, 2013;




Before:



The Honourable Mr. Justice Chiasson





The Honourable Mr. Justice Frankel





The Honourable Mr. Justice
  Hinkson




On
appeal from:  Supreme Court of British Columbia, November 24, 2011
(
Bosworth v. Jurock
, 2011 BCSC 1583, Vancouver Docket S101830)




Counsel for the Appellants:



W. Branch and K.E.
  Saunders





Counsel for the Respondent:



R.W. Millen and J.R. Goheen





Place and Date of Hearing:



Vancouver, British
  Columbia

December 10, 2012





Place and Date of Judgment:



Vancouver, British
  Columbia

January
  10, 2013





Written Reasons by:





The Honourable Mr. Justice Hinkson





Concurred in by:





The Honourable Mr. Justice Chiasson
The Honourable Mr. Justice Frankel








Reasons for Judgment of the Honourable
Mr. Justice Hinkson:

[1]

This is an appeal from the order of a chambers judge certifying the
respondent Mr. Bosworths action as a class action, pursuant to the provisions
of the
Class Proceedings Act
, R.S.B.C. 1996, c. 50 [
CPA
]. The
reasons for judgment of the chambers judge are indexed at 2011 BCSC 1583.

Background

[2]

Seal Cove Properties Ltd. entered into an agreement with a developer to
sell to it the property and premises of an existing building to be called the
Roosevelt Apartments, once the property had been subdivided into individual
lots by registration and a strata plan had been filed. Those steps were
subsequently taken.

[3]

The developer is a joint venture in Prince Rupert initially held by the
corporate appellants, Standard Apartments Ltd., Proper Tee Investments Ltd.,
and Greenwich Holdings Ltd. The principals of the developer are the appellants
Oswald Jurock, David Barnes, and Ralph Case.

[4]

The appellants marketed the units of proposed stratified apartments in the
Roosevelt Apartments to members of the public in 2006 and 2007. Mr. Bosworth
and his wife purchased a unit in the Roosevelt Apartments on February 22, 2007.
The condominium development is referred to as Strata Corporation BCS 2210 and has
45 units.

[5]

It is alleged that the developer was required to and did provide
prospective purchasers with a disclosure statement, pursuant to the
Real
Estate Development and Marketing Act
, S.B.C. 2004, c. 41 [
REDMA
]. That
statement included an assertion that Seal Cove Properties Ltd. and the
developer had commissioned an engineer's report that would be available at the
developer's office and that, according to the report, the Strata Corporation
BCS 2210 buildings were "free from material defect".

[6]

Mr. Bosworth alleges the disclosure statement does not refer to a field
review done by an engineer in June 2005, or to the problems highlighted in that
review. He also alleges the disclosure statement did not indicate that the field
review was only a quick assessment of the building and that, while it did
include an estimated interim budget for the operation of the proposed strata
plan, it did not forecast any significant maintenance repairs or capital
expenditures.

[7]

After the sale of a number of the strata units, the strata council of Strata
Corporation BCS 2210 confirmed deficiencies in the development that required
the removal of the building's siding, building paper that had been installed
improperly around the windows, and some of the buildings sheathing in order to
visually inspect for mould. The anticipated repair costs are said to be $1,579,922,
or $35,109 per unit. The latter is an assessment only, because the problem only
affects the common property.

[8]

Mr. Bosworth asserts that he has a right of action against the
developer, its directors and anyone who signed or authorized the filing of the
disclosure statement, and seeks to bring his action on behalf of all persons
who acquired a strata unit in Strata Corporation BCS 2210 in the Roosevelt
Apartments. His claims are for misrepresentation pursuant to
REDMA
, and for
negligent and fraudulent misrepresentation.

[9]

The chambers judge found that the pleadings filed by Mr. Bosworth met the
requirements of s. 4(1) of the
CPA
as they disclose a cause of action,
there is an identifiable class of two or more persons, the claims of the class
members offer common issues to be determined, and Mr. Bosworth is a
representative plaintiff who would fairly and adequately represent the interest
of the proposed class. He described the key issues before him as whether the
representative claim proposed for the class action might be brought under
another statute and whether a proceeding under the
CPA
is not the
preferable proceeding.

[10]

The chambers judge rejected the appellants argument that s. 41(a) of
the
CPA
, which provides that the
CPA
does not apply to a
proceeding that may be brought in a representative capacity under another Act,
precludes certification in this case because ss. 171 and 172 of the
Strata
Property Act
, S.B.C. 1998, c. 43 [
SPA
]

provide for an action
for damages to be brought by the strata corporation on behalf of and as a
representative of others. He concluded that s. 41(a) of the
CPA
did not
bar certification, as Mr. Bosworth himself could not bring a representative
proceeding under s. 171 of the
SPA
.

[11]

Finally, the chambers judge found at para. 79 that the proposed class
proceeding is the preferable proceeding, as the strata representative
proceeding, if it could be brought, would not be more practical, fair,
efficient, or manageable than the class action proposed by Mr. Bosworth.

Issue on Appeal

[12]

The sole issue in this appeal is whether s. 41(a) of the
CPA
is a
bar to proceedings by a strata owner on behalf of other owners of strata units
in the same strata development.

Legislative Provisions

[13]

The appellants contend, as they did before the chambers judge, that s.
41(a) of the
CPA
together with ss. 171 and 172 of the
SPA
prevent
Mr. Bosworth from pursuing a class proceeding against them.

[14]

Section 41(a) of the
CPA
provides:

41 This Act does not apply to

(a) a proceeding that may be brought in a representative
capacity under another Act

[15]

The relevant parts of

ss. 171 and 172 of the
SPA
provide:

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

...

(b) the common property or common assets;

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

...

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

...

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

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

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

Standard of Review

[16]

As this appeal involves the interpretation of statutory wording, the
appropriate standard of review is that of correctness:
Housen v. Nikolaisen
,
2002 SCC 33, [2002] 2 S.C.R. 235 at 247.

Discussion

[17]

The chambers judge accepted that all of the purchasers of the strata
lots in Strata Corporation BCS 2210 remain owners of their strata units in the
Roosevelt Apartments. Mr. Bosworths action is brought on behalf of all of the
original strata unit purchasers. There are no former strata lot owners and all
potential class members remain as owners of the strata lots. The action relates
to deficiencies in the common property and common assets of Strata Corporation
BSC 2210.

[18]

The appellants contend that the Legislature has made structural choices
under the
CPA
, where one plaintiff alone is needed and court approval is
required both to opt out or to proceed, whereas under the
SPA
, only a
3/4 vote of all members is required and no court approval or opt out provision
applies. They contend that because the
SPA
provides for an action for
damages to be brought by Strata Corporation BCS 2210 "on behalf of one or
more of the owners" or as a "representative of all owners", the
action is barred from being brought as a class proceeding by s. 41 of the
CPA.


[19]

Mr. Bosworth contends that to bar an action under s. 41 of the
CPA
,
the proposed cause of action must be available under another statute, and he
must be entitled to pursue his cause of action in a representative capacity
under that other statute. He contends that although the damage upon which his
claim is based is manifested in the common property of the strata corporation,
his claim is not for damage to common property but rather for misrepresentations
allegedly made to each individual investor. He further contends that whether
Strata Corporation BCS 2210 has standing to bring such a claim is unclear.

[20]

The chambers judge found that the
SPA
did not authorize anyone
other than the strata council to bring an action in a representative capacity,
and that s. 41(a) of the
CPA
applied only if Mr. Bosworth could bring a
representative proceeding under another statute. The basis for his finding is
found at para. 66 of his reasons:

... I think the weight of the
authority supports the position that for s. 41 to operate as a bar to
certification of a class proceeding such as this, another Act must authorize
the plaintiff to bring the action in a representative capacity. In
Knight
,
the Court of Appeal found that although s. 41(a) barred the
TPA
claims,
it held that s. 41(a) did not bar the
BPCPA
claim because the
TPA
allowed any person including the plaintiff Knight to sue on behalf of others,
whereas the
BPCPA
had no such provision. Similarly, in
Seidel
,
because Ms. Seidel could not bring a representative action, only the Director,
s. 41(a) of the
Class Proceedings Act
was not a bar to certification. As
well, Crawford supports the interpretation that for s. 41 to be a bar to this
class proceeding, Mr. Bosworth must be able to bring a representative
proceeding under another statute.

[21]

I respectfully agree with the finding of the chambers judge, and with
the basis for his finding. Regardless of the appellants argument that the
history of the development of the legislation must be examined in order to
properly interpret the relevant provisions, the chambers judge properly based
his finding on the jurisprudence that has interpreted the legislation. The
authorities that he relied upon applied a purposive and contextual approach to
the statutory wording in issue and, despite the appellants contention to the
contrary, are consistent with the intended purpose of the bar against competing
actions found in s. 41(a) of the
CPA.

[22]

I am not persuaded by the appellants submission that the fact that there
are no former strata lot owners and that all potential class members remain as
owners of the strata lots is a factor that diminishes the applicability of the
reasoning in
Crawford v. London (City)
(2000), 47 OR (3d) 784 (S.C.J.),
leave to appeal refd [2000] O.J. No. 2088 (S.C.J.). Moreover, while former
owners were in the class proposed in that case, they were not in the other
cases relied upon by the chambers judge.

[23]

The chambers judge relied on
Knight v. Imperial Tobacco Canada Ltd
.
2006 BCCA 235, 267 D.L.R. (4th) 579, in which this Court considered s. 41 of
the
CPA
in connection with purported class actions brought against
cigarette manufacturers under the
Trade Practices Act
, R.S.B.C. 1996, c.
457 and its successor legislation, the
Business Practices and Consumer
Protection Act
, S.B.C. 2004, c. 2 [
BPCPA
],

and ruled that a
proceeding contemplated by s. 172 of the
BPCPA
could not properly be
described as the type of action that could be brought in a representative
capacity.

[24]

At para. 10 in
Knight
,

Mr. Justice Hall wrote:

... There is no provision in this
section that is similar in effect to s. 18(3) of the [
Trade Practices Act
].
While an individual may bring an action under s. 172 without having a special
interest or indeed any interest under the statute, I do not consider that the
section provides for the individual bringing the action to act as a
representative of anyone else. Section 172 merely provides that the individual
bringing the action does not have to have a specific interest in the consumer transaction
that might give rise to an action.

[25]

Madam Justice Newbury summarized aspects of
Knight
at para. 13 in
Jellema v. American Bullion Minerals Ltd.
, 2010 BCCA 495:


... Section 18 of the
earlier statute ("
TPA
") provided in ss. 1 that an action could
be brought by a person whether or not that person had a special or any interest
under the Act or was affected by a consumer transaction. Subsection 3 permitted
any person to sue on his or her own behalf and on behalf of consumers generally
or a designated class of consumers in British Columbia. The Court found in
Knight
that this was "legislation of the sort that would preclude a claim brought
under it from certification because of the provisions of s. 41 of the [
Class
Proceedings Act
]".

[26]

The chambers judge recognized that in
Jellema
, this Court held
that an oppression action codified in s. 227(2) of the
Business Corporations
Act
[
BCA
] was not a proceeding that may be brought in a
representative capacity, and thus was not a bar to a proceeding under the
CPA
.
He referred to paras. 2324 of the reasons of Newbury J.A., where she wrote:

... Like Hall J.A. in
Knight
, I do not consider that
the section by its terms provides for the applicant to act as the
representative of anyone else. In other words, nothing in the wording of s. 227
contemplates a "declaration made expressly by the court, or implicitly by
the statute, at the front end of the proceeding that the complainant's action
will govern the rights and obligations of the members of [a] specifically-defined
representative class." (
Stern
, para. 68.)

...

Given also that the
Class
Proceedings Act
is to be interpreted in a broad and remedial manner, I
agree with the plaintiffs that the case at bar is exactly the type of case in
which the benefits and protections of a class action are appropriate...

[27]

The chambers judge also referred to the decision of the Supreme Court of
Canada in
Seidel v. TELUS Communications Inc
., 2011 SCC 15, [2011] 1
S.C.R. 531, where the lines drawn by the repealed
Trade Practices Act
and the
BPCPA
that were considered in
Knight
was discussed with
respect to s. 41 of the
CPA
. He referred to the reasons of Binnie J. for
the majority who said, at 567568:

Reference was made to s. 41(a) of
the
CPA
which provides that no class action can be instituted where a
representative action is available. However, under the
BPCPA
, only the
Director may bring a representative action. Ms. Seidel may not do so. While
consumer activists may bring actions despite the fact that they have not
personally suffered any damage, such actions cannot be brought as
representative actions under the
BPCPA.
This is to be contrasted with
the situation under the now repealed
TPA
, where s. 18(3) allowed
consumer-brought representative actions. Accordingly, s. 41(a) of the
CPA
is not a bar to Ms. Seidel's application for certification.

[28]

In the case before us, Mr. Bosworth cannot personally bring an action
against the appellants as a representative action. His inability to do so places
his claim in the same context as the claims of Mr. Knight and Ms. Seidel under
the
BPCPA
, and Mr.Jellema under the
BCA.

[29]

I therefore conclude that the chambers judge was correct in finding that,
because Mr. Bosworth was unable to bring a representative proceeding under
another statute, s. 41(a) of the
CPA
is not a bar to certification of
his action as a class action, and I would dismiss the appeal.

[30]

The standing of a strata corporation to bring representative claims on
behalf of strata unit owners based upon allegations of misrepresentation in a
disclosure statement was described simply as arguable in
Strata Plan LMS
1564 v. Lark Odyssey Project Ltd
., 2008 BCCA 509 at para. 12. Given my view
that Mr. Bosworths claim is not barred by s. 41(a) of the
CPA
, it
is unnecessary to resolve this interesting question.

Conclusion

[31]

I would dismiss the appeal.

The Honourable Mr. Justice Hinkson

I agree:

The
Honourable Mr. Justice Chiasson

I agree:

The Honourable Mr. Justice
Frankel


