



COURT OF APPEAL FOR BRITISH COLUMBIA




Citation:



Marshall Mountain Telecom Ltd. v. The Owners, Strata
  Plan EPS 4044,









2021 BCCA 21




Date: 20210119

Docket: CA46307

Between:

Marshall Mountain
Telecom Ltd.

Respondent

(Plaintiff)

And

The Owners, Strata
Plan EPS 4044

Appellant

(Defendant)




Before:



The Honourable Madam Justice Newbury

The Honourable Madam Justice Saunders

The Honourable Mr. Justice Harris




On appeal from:  An
order of the Supreme Court of British Columbia, dated
July 23, 2019 (
Marshall Mountain Telecom Ltd. v. The Owners,
Strata Plan EPS 4044
, 2019 BCSC 1180, New Westminster Docket
S 206131).




Counsel for the Appellant
(via videoconference):



M.S. Both





Counsel for the Respondent
(via videoconference):



G.S. Hamilton





Place and Date of Hearing:



Vancouver, British
  Columbia

November 25, 2020





Place and Date of Judgment:



Vancouver, British
  Columbia

January 19, 2021









Written Reasons by:





The Honourable Madam Justice Newbury





Concurred in by:





The Honourable Madam Justice Saunders

The Honourable Mr. Justice Harris








Summary:

Disclosure statement made by
a real estate developer in the course of marketing strata lots to purchasers,
stated that part of the common property might in future be leased by the
developer, or an assignee thereof, to install and operate telecommunications
equipment on the rooftop of the stratified building. Later, developer granted
such a lease to the plaintiff Telecom, an affiliate of the developer. Lease
was registered as a charge against title. Telecom then granted a licence to a third
party, which sought municipal approval for the construction of a radio tower on
the roof. The municipal authority required the consent of the owner, which by
now was the strata corporation. It refused to consent, arguing that the lease
was invalid because developer had owed a fiduciary duty to the strata
corporation under s. 6 of the Strata Property Act and had allegedly not
provided disclosure statements to all 317 purchasers; that the extent of
disclosure in the disclosure statement had been inadequate for purposes of the
Real Estate Development Marketing Act (REDMA); and that there was no privity
of contract between Telecom and the strata corporation. Telecom sued, seeking
primarily a declaration that the lease was valid and that the lessors
obligations thereunder ran with the land. Injunctive relief was also sought.
Trial court heard the case by summary trial and granted a declaration that the
lease was valid and an injunction requiring strata corporation co-operate with
Telecom in providing necessary consents etc. to enable Telecom to obtain
municipal approval for the construction of the tower.

Held: Appeal Dismissed.
Trial judge had not erred in proceeding with summary trial even though
defendant took the position it had not completed examination for discovery of
developer. Developer had failed to provide all 317 purchaser
acknowledgments of disclosure statements  it did provide 11  and said it
was difficult to locate all 317. There was no allegation that any strata
owner had not received a disclosure statement. It was open to trial judge to
find that all 317 purchasers had received such statements, as deposed to
by president of developer. In finding as a fact that this had occurred, trial
judge had not reversed the evidential onus on plaintiff. Nor had trial judge
erred in finding that the disclosure of the nature of the lease in the
disclosure statements had been sufficient or that the lease ran with the
land. The parties accepted as a proposition of law that disclosure of a
conflict of interest in a disclosure statement effectively met the obligation
of a fiduciary (see s. 6 of the Strata Property Act) to disclose a
conflict of interest on developers part. It was therefore not necessary to
determine whether developers duty to strata lot purchasers was truly
fiduciary in nature; nor whether the disclosure here attained the
protection of strata purchasers in the REDMA context, as suggested in several
trial decisions.

Reasons
for Judgment of the Honourable Madam Justice Newbury:

[1]

It is a well‑known fact  perhaps even one of which judicial
notice may be taken  that the real estate market in Vancouver and environs is
often extremely active and involves high stakes for both sellers and buyers.
Since 2004, the rights and obligations of parties to transactions
involving certain types of real estate in this province have been regulated by
the
Real Estate Development Marketing Act
, S.B.C. 2004, c. 41
(
REDMA
). Described by some as consumer protection legislation,
REDMA
prescribes various steps and filings that must be carried out, notwithstanding
the terms of any contract, by developers in connection with sales of
subdivision lots in a new subdivision, strata lots in a building that is
intended to be stratified, and other shared interests in land.

[2]

This appeal is about the sale of strata lots in a 37‑storey
building called Delta Rise in Surrey, B.C. It was developed by Marshall
Mountain Homes Ltd. (Marshall Homes) between late 2013 and
April 2017 when Strata Plan EPS 4044 was deposited at the Land Title
Office, creating strata units in a strata corporation controlled at first by
the developer but ultimately by the retail purchasers of strata lots. That
strata corporation is the defendant in this proceeding.

The Legislation

[3]

REDMA
provides in s. 5 that a developer must not market a
strata lot unless:

(a) a strata plan ... has been deposited in a land title
office, or

(b) the appropriate municipal or
other government authority has issued a building permit in relation to the
strata lot....

Section 11 requires that before marketing a strata
lot (referred to in the statute as a development unit) the developer must
have made adequate arrangements to ensure that any purchaser will have
assurance of title in one of the ways described in s. 11(2) and that any
purchaser may, by complying with the terms and conditions of his or her purchase
agreement, obtain title free and clear of any mortgage or lien that secures
the payment of money.

[4]

Consistent with the objective of consumer protection, a central feature
of
REDMA
is the requirement that developers of strata lots prepare and provide
disclosure statements to prospective purchasers at the time of entering into
purchase agreements, allow them time in which to consider the statements, and
obtain written acknowledgments that they have had the opportunity to do so. Failing
this, a purchaser is entitled to rescind his or her purchase agreement. In
particular, sections 14 and 15 provide as follows:

Filing
disclosure statements

14

(1)
A developer must not market a development unit unless the developer has

(a)
prepared a disclosure statement respecting the development property in which
the development unit is located, and

(b)
filed with the superintendent

(i)
the
disclosure statement described under paragraph (a), and

(ii)
any
records required by the superintendent under subsection (3).

(2)
A disclosure statement must

(a)
be
in the form and include the content required by the superintendent,

(b)
without misrepresentation,
plainly disclose all material facts
,

(c)
set
out the substance of a purchaser's rights to rescission as provided under
section 21
[rights of
rescission]
, and

(d)
be
signed as required by the regulations.

(3)
A developer must provide to the superintendent any
records the superintendent requires to support any statement contained in the
disclosure statement filed under subsection (1).

Providing disclosure statements to purchasers

15

(1)
A developer
must not enter into a purchase agreement with a purchaser
for the sale or lease of a development unit unless

(a)
a
copy of the disclosure statement prepared in respect of the development
property in which the development unit is located has been provided to the
purchaser,

(b)
the
purchaser has been afforded reasonable opportunity to read the disclosure
statement, and

(c)

the
developer has obtained a written statement from the purchaser acknowledging
that the purchaser had an opportunity to read the disclosure statement
.

(2)
A developer must

(a)

retain
a written statement obtained under subsection (1)(c) for a period of 3 years or
a longer period prescribed by regulation,

and

(b)
produce the written statement for inspection by the superintendent on the
superintendent's request.

(3)
Despite section 4 (2) of the
Electronic
Transactions Act
, a developer may provide a copy of a
disclosure statement by electronic means only with the written consent of the
purchaser. [Emphasis added.]

[5]

Under s. 16, if a developer becomes aware that a disclosure statement
does not comply with
REDMA
or regulations thereto or contains a misrepresentation,
it must immediately file a new disclosure statement with the Superintendent and
provide a copy of the amendment to each purchaser who is entitled at any time
to receive a disclosure statement under s. 15 and has not yet received
title for which he or she has contracted.

[6]

Part 3 of
REDMA
sets out details of purchasers rights of rescission.
Under s. 21(2) the purchaser of a strata unit may rescind his or her purchase
agreement,
even if title to the strata unit has been transferred
, within seven
days of the later of the date of the purchase agreement itself and the date on
which the purchaser acknowledges in writing that he or she has had an
opportunity to read the disclosure statement, or any new disclosure statement required
by s. 16(1)(a). Under s. 21(3), where a purchaser who was entitled to
a disclosure statement does not receive one, he or she may rescind
at any
time
his or her purchase agreement by serving written notice of rescission
on the developer.

[7]

Section 22 deals with the liability of developers for
misrepresentations contained in a disclosure statement. Where the statement
contains a misrepresentation, the purchaser is deemed to have relied on it and
has,
inter alia,
a right of action for damages against the developer.
This applies even where the misrepresentation was removed or otherwise
corrected after the purchase agreement was entered into.

[8]

Finally, the
Strata Property Act
, R.S.B.C. 1998, c. 43
(
SPA
), which replaced the
Condominium Act,
R.S.B.C. 1979,
c. 61, contains various provisions dealing with the relationship between
developers and strata corporations. I have attached the relevant provisions as
a schedule to these reasons; but I note here in particular s. 6:

In exercising the powers and
performing the duties of a [strata] council, the owner developer must

(a)
act honestly and in good
faith with a view to the best interests of the strata corporation
, and

(b)  exercise the care, diligence and
skill of a reasonably prudent person in comparable circumstances. [Emphasis
added.]

Under s. 2 of the
SPA
, the corporation comes
into existence at the time the developer deposits the strata plan in the Land
Title Office. The corporation must hold its first general meeting within the
time-frame described in s. 16.

Factual Background

[9]

Against this statutory background, I turn to the facts of this case. Few
of them are in contention. The chronology begins on October 16, 2013,
when Marshall Homes prepared and filed with the Superintendent a disclosure
statement for use in marketing the 317 strata units in Delta Rise in
accordance with
REDMA
. As required, the first few pages of the statement
set forth in clear terms the rights of rescission of purchasers under
REDMA
and the Superintendents Policy Statement 5 regarding such rights. The
body of the statement disclosed the material items required to be disclosed,
including conflicts of interest on the part of the developer and its directors;
permitted uses of the property under current zoning bylaws; the
responsibilities of strata lot owners generally; the budget of the strata
corporation; management agreements proposed to be entered into by the developer
for the strata corporations first year of operation; and liens and
encumbrances registered against the property or to be registered in future. In
Article 4.4 of the disclosure statement, headed Proposed Encumbrances to
be registered against the Lands, the developer disclosed that in addition to
existing charges, four additional encumbrances might in future be registered
against title to the lands. The third of these was:

(c) a long‑term lease
and/or other charges in favour of the Developer, a related or affiliated
company, or a telecommunications provider with respect to all or a portion of
the common property (including the rooftop of the Building) for the purpose of
installing, operating and repairing telecommunications (including cellular)
equipment, antennae, conduits, cables, wires, communications facilities and
related equipment;

[10]

The marketing of the Delta Rise strata lots was carried out by a property
management company related to Marshall Homes, Maple Leaf Home Realty. (This
relationship was disclosed at Article 1.6 of the disclosure statement.) It appears
that 315 lots were sold (Marshall Homes retained two for its own use) by
the time the strata plan was deposited in the Land Title Office in April 2017,
making it possible for the developer finally to convey the strata units and
close the sales to purchasers.

[11]

According to an affidavit of Mr. Satish Sharma, Marshall Homes agreed
on or about March 30, 2017 to lease to Marshall Telecom Ltd. (Marshall
Telecom), the plaintiff herein, a portion of the rooftop of the Delta Rise
building. The rooftop is designated as common property. Marshall Telecom and
Marshall Homes are non‑arms‑length parties, and Mr. Sharma
was president of both at the time. The recital to the Lease acknowledged that
the rooftop would be designated as common property under the
SPA
and
that title to the common property of the Strata Development may be encumbered
by this Lease. Marshall Telecom covenanted in the Lease that it would use and
occupy the leased area only for purposes of the construction, installation and
operation of telecommunications works as defined, for the term of the Lease.
That term would commence on the day the Lease was filed in the Land Title
Office and terminate on the winding‑up or dissolution of the strata
corporation. The rent payable was stated to be $10.00. The Lease also provided:

1.1
Grant


(a)       Owner
hereby leases to Marshall Telecom for the Term (as defined in Section 1.2) all
of the Lease Area.

(b)       The
Lease Area shall be used and occupied only for the following purpose, and for
no other use or purpose: to construct, install, attach, operate, maintain,
modify, supplement, reconfigure, relocate, replace and remove on, over and
under the Lease Area (identified below), telecommunications works consisting of
a tower, monopole, carrier on wheels (COW), or wooden pole, telecommunications
equipment and apparatus including without limitation, equipment shelter and/or
equipment cabinets, antennas, antenna mounts, attachments, support structures,
anchoring mechanisms, wire, fibre optic or other cabling, cable trays and
associated equipment, all as necessary for Marshall Telecom's undertaking.

(c)       Owner also hereby grants and conveys for the Term and at all
times to Marshall Telecom, for use by Marshall Telecom, its officials,
employees, contractors, subcontractors, agents, licensees, invitees and
permittees,
the full, free and uninterrupted right, licence, liberty,
privilege and easement in common with Owner on, over, under and within common
property in the Strata Development
for the purposes of gaining access to or
egress from any portion of the Lease Area, and for installing, constructing,
repairing, maintaining and/or operating the equipment, as may be necessary for
any other purposes incidental to the above purposes, and in connection
therewith:

i)       to bring vehicles,
machinery, equipment, tools and supplies on to the Lands, and use them for the
purposes described in this Section; and

ii)      to do anything else
on, over, or under the Lands that Marshall Telecom considers necessary or
desirable in connection with the rights granted herein.

...

2.0
SUBDIVISION BY
STRATA PLAN


2.1
Strata Plan

This Lease and the covenants
and obligations of Owner [defined as Marshall Homes] under this Lease
run
with and bind the Lands,
and upon subdivision of the Lands by means of the
Strata Plan such covenants and obligations will:

(a)
continue to run with and bind each subdivided
parcel; and

(b)
be automatically assumed by the Strata
Corporation
.

2.2
Common Property

This Lease is intended to apply
only to a portion of the
common property
of the Strata Development and not at any time to burden the
title to any individual strata lot.

2.3
Terms and
Conditions:

...

(d)       Marshall
Telecom upon paying the Fee shall have full use of the Lease Area subject only
to any obstructions wit[h]in the Lease Area as at the commencement of the Term.
Owner shall not cause interference or permit others to interfere with or impair
the quality of the telecommunications services being rendered by Marshall
Telecom from the Lease Area. Owner shall ensure that other carriers granted
space on the Property coordinate site access and antenna placement with
Marshall Telecom to ensure there is no interference or impairment and Marshall
Telecoms full use of the Lease Area is protected. Owner shall only use the
Lease Area in a manner which does not interfere with the use of Marshall
Telecom of the Lease Area or the telecommunications services thereupon.

...

(f)
Marshall
Telecom may assign its rights under this Agreement and to its equipment and may
sublicence all or any part of the Lease Area to its affiliates,
associates,
lenders, a third party or a purchaser of all or a part of its undertakings and
may undergo a corporate reorganization, including, without limitation, a merger
or amalgamation upon written notice to Owner.

...

(n)       The
terms and conditions of this agreement
shall extend to and bind the heirs,
personal representatives, successors and assigns of Owner and Marshall Telecom.

(o)       Each party, upon the
reasonable request of the other, will execute, do or
cause to be done or
executed all further and other lawful acts, deeds, documents, instruments and
assurances for the better or more perfect and absolute performance of the terms
of this Agreement.
[Emphasis added.]

Attached to the Lease was a copy of an explanatory plan of
the leased area, together with the floor‑by‑floor strata plans for
EPS 4044.

[12]

On April 13, 2017 the strata plan was deposited in the Land
Title Office, and the Lease was registered as a charge on the common property.

[13]

According to Mr. Sharmas affidavit, on or about
November 24, 2017, Marshall Telecom granted a license to Akash
Broadcasting Inc. (Akash) to install and maintain a rooftop tower on the
building for the purposes of FM radio rebroadcasting. The term of this
license was to commence on the date of a first broadcast, projected to be
November 1, 2017, and continue until October 31, 2022, and thereafter
would renew automatically for five‑year periods unless either party
elected to terminate not less than 9 months before the end of the current
term. Akash agreed to pay Marshall Telecom the sum of $4,000 per month in the
first term; the license fee for later periods was to be based on the fair
market value of the installation, but not less than $4,000 per month. Mr. Sharma
stated in his discovery that this revenue was part of the whole business
model of the development and that it had allowed strata lots to be sold at lower
prices than would otherwise have been the case.

[14]

In June 2018, a consultant acting on behalf of Mr. Sharma
applied to the City of Delta for the permit required for the construction of a
radio tower on the rooftop of Delta Rise. The City replied that it required the
permission of the owner, now the defendant strata corporation, in order to
proceed with the application. The strata corporation refused to consent and
told Marshall Telecom it would not comply with the Lease.

[15]

After various communications between the parties and the City, Marshall
Telecom began this proceeding in the Supreme Court of British Columbia against
the strata corporation, seeking specific performance of the Lease, including an
order that the defendant execute and deliver the necessary consent required for
the installation of the tower and related equipment on the leased area; an
injunction restraining the defendant from interfering with Marshall Telecoms
rights under the Lease; and general damages. The notice of civil claim was
filed on September 19, 2018.

Pre-Trial Proceedings

[16]

Two months later, on November 19, 2018, counsel for Marshall
Telecom scheduled a summary trial application. This was done prior to any
examinations for discovery or production of documents. Evidently, the parties then
agreed to adjourn the summary trial application, in part to allow for Mr. Sharma
to be discovered in his capacity as the representative of Marshall Telecom. The
discovery took place on February 8, 2019  six days before the
summary trial was scheduled to begin.

[17]

In his examination for discovery, Mr. Sharma deposed that he had
provided a disclosure statement to each purchaser of a strata unit in the
building at the time of purchase. He said each purchaser had acknowledged
receiving a disclosure statement by signing and dating it, and that these
documents were in the lawyers office. Counsel for the strata corporation, Mr. Both,
requested that Mr. Sharma speak with his lawyers to ask that copies of the
acknowledgements be provided to him. When Mr. Hamilton on behalf of
Marshall Telecom asked if Mr. Both wanted all of the contracts of
purchase and sale with respect to every strata lot, Mr. Both replied that
he did not need the entire purchase and sale document but just wanted the
confirmation that the disclosure statement was received, read and signed. Mr. Hamilton
replied that he would consider that request.

[18]

At the end of the examination for discovery, four requests for document
production were outstanding. Mr. Both closed his discovery by stating,
Subject to my requests for information and documents, those are my questions.
Thank you very much. He characterizes the examination as having been
adjourned (as opposed to terminated), subject to the requests for document
disclosure.

[19]

However, we were told by counsel that rather than providing the 317
acknowledgments, Mr. Hamilton emailed to Mr. Both copies of 11
acknowledgments from a series of random buyers on or about
February 12, 2019  i.e., two days before the trial commenced. On
February 13, he informed Mr. Both that his client was not prepared to
provide all 317 documents which appear to be irrelevant to the legal
issues before the court. Mr. Hamilton informed us that when the trial
began, he told the Court that it would be unduly onerous for his client to
produce all 317. Strangely, the 11 acknowledgments were not entered
into evidence; nor was any attempt made to provide further affidavit evidence
as to the difficulty of producing all 317.

[20]

Mr. Both applied for an adjournment of the trial on the basis that
the documents had not been provided. The trial judge, Mr. Justice Riley, dismissed
the application and the trial proceeded over three days, ending in June 2019.

The Trial Judges Reasons

[21]

Riley J. began his reasons for judgment by summarizing the strata corporations
three‑part response to the plaintiffs claim for the enforcement of the Lease,
namely that Marshall Homes had entered into the Lease in breach of its
fiduciary duty as a developer, making the Lease invalid; alternatively, that
the Lease was not binding and enforceable against the strata corporation
because it was not a party to it; and in the further alternative, that certain
of the remedies sought by the plaintiff were unjustified. (See para. 2.)

[22]

In the course of setting out the facts, the judge noted Mr. Sharmas
affidavit evidence  which he noted was unequivocal and stands unchallenged 
that each purchaser had been given an opportunity to review the disclosure
statement at the time of purchase. The strata corporation had not presented any
evidence to the contrary. Specifically, there was no affidavit evidence from
any of the more than 300 strata unit purchasers challenging Mr. Sharmas
assertion, or denying receipt of the disclosure statement. (At para. 5.)

[23]

The first issue for determination, however, was whether the case was
suitable for summary trial under R. 9‑1 of the
Supreme Court
Civil Rules
. The strata corporation argued that it would be premature to
proceed because examinations for discovery had only recently been completed,
and because the request for production of the 317 written acknowledgments
was still outstanding. (At para. 13.) Compliance with this request would,
the defendant suggested, assist in determining whether Marshall Homes had
complied with its fiduciary obligation to provide prospective purchasers with
notice of its intention to negotiate contracts for the benefit of Marshall
Homes or its affiliates.

[24]

The judge reasoned on this issue:

In response to this submission,
counsel for Marshall Telecom asserted that the Strata Corporations request for
production of 317 separate written acknowledgements was unduly onerous. Counsel
says Marshall Homes attempted to satisfy the Strata Corporations request by
providing written confirmations from 11 randomly selected purchasers. Counsel
referred to the affidavit of Mr. Sharma, the president of both Marshall
Homes and Marshall Telecom, averring that each of the original purchasers of
Delta Rise strata lots received and acknowledged receipt of the disclosure
statement.
Discovery of Mr. Sharma is now concluded and there is
nothing to contradict

his affidavit. Nor has the Strata Corporation
presented any contradictory evidence
, including affidavit evidence from a
single one of the more than 300 strata unit purchasers denying receipt of the
disclosure statement. [At para. 15; emphasis added.]

[25]

The judge acknowledged case-law to the effect that where there is a
real possibility that further discovery or document production will yield evidence
to support a partys case, an adjournment of a summary trial will be granted to
permit the party to obtain such evidence. However, he said, that proposition
has its limits. Citing
Tassone v. Cardinal
2014 BCCA 149, he
noted that an argument that further discovery might turn up something useful
is not usually sufficient to defeat a summary trial application. (See also
Hamilton
v. Sutherland
(1992) 68 B.C.L.R. (2d) 115 (C.A.) and
Everest
Canadian Properties Ltd. v. Mallmann
2008 BCCA 275, at para. 34.)
Further, where a matter is set down for summary trial, the parties are expected
to come to court prepared for trial. As stated in
Inspiration Management
Ltd. v. McDermid St. Lawrence Ltd.
(1989) 36 B.C.L.R. (2d) 202
(C.A.), if the court can find the facts necessary to decide the issues of fact
or law, it may decide to proceed with the trial unless it would be unjust to do
so in the circumstances.

[26]

Applying these principles to the case at bar, the judge concluded that
he
was
in a position to find the facts necessary to decide the case by
summary trial. He was not persuaded that further document discovery was likely
to produce evidence that would advance the defendants case or undermine the
plaintiffs case; the most counsel could say was that further document
production from Marshall Homes might assist. Further, he said:

... The assertion in Mr. Sharmas affidavit that each of
the Delta Rise strata unit purchasers was provided with and acknowledged
receipt of the disclosure statement stands unchallenged.
The summary trial
application began on 14 February 2019, and continued on two subsequent dates
over the span of the next four months. Over that time, the Strata Corporation
has not put forward any other evidence on this issue, and has not applied to
cross-examine Mr. Sharma on his affidavit.

... The circumstances pertaining
to the marketing and sale of the Delta Rise strata units, the extent of the
owner-developers disclosure concerning the potential for a rooftop lease, the
terms of the rooftop lease, the filing of all relevant documents in the Land
Title Office, and the subsequent steps taken by Marshall Homes to act under the
lease are all before the Court. Moreover, there are
no conflicts in the
affidavit evidence
. [At paras. 189; emphasis added.]

[27]

As to whether it would be unjust to decide the matter summarily, the
judge considered that the case was not factually complex, the legal issues were
not novel, and any further delay would prejudice all parties, given that Marshall
Telecoms application for City approval of the construction of the tower was
stalled and its licensing agreement with Akash was in limbo. He decided it
would be appropriate to proceed.

[28]

Turning then to the merits, the first issue was whether the Lease was
invalid because the developer had allegedly entered into it in breach of its fiduciary
duty. The trial judge noted at para. 22 that both parties were agreed that
the developer had owed a fiduciary duty to
strata unit purchasers
at
common law, which duty was reflected in the
SPA.
He cited
The
Owners, Strata Plan 1261 v. 360204 B.C. Ltd.
(1995) 50 R.P.R.
(2d) 62 (B.C.S.C.), where Thackray J., as he then was, had stated
that this duty encompassed an obligation to the individual buyers [of strata
lots] not to allow [the developers] self‑interest to interfere with the
interests of those present and future purchasers. (At para. 103.) This
seems to represent the views of the majority of appellate courts that have
considered the position of a purchaser who has agreed to buy but who has not
yet had title to a strata unit conveyed to him or her: see
York Condominium
Corp. No. 167 v. Newrey Holdings Ltd
(1981) 122 D.L.R. (3d) 280 (Ont.
C.A.) at para. 18,
lve to app. refd.
(1981) 32 O.R. (2d) 458n
(S.C.C.);
Terrace Corp. (Construction) Ltd. v. Condominium Plan No. 752-1207
Owners
1983 ABCA 126 at paras. 9-10;
Winnipeg Condominium Corp. No. 37

v. 255 Wellington Crescent

Ltd
. (1984) 27 Man. R. (2d) 309 (C.A.)
at paras. 67;
Owners: Condominium Plan No. 86-S-36901 v. Remai
Construction (1981) Inc.

et al.
(1992) 84 D.L.R. (4th) 6 (Sask.
C.A.) at paras. 269; and
Peel Condominium Corp. No. 417 v. Tedley
Homes Ltd.
(1997) 35 O.R. (3d) 257 (C.A.) at para. 19.

[29]

On the other hand, in
Peel Condominium Corp. No. 505 v.
Cam-Valley Homes

Ltd.
(2001) 196 D.L.R. (4th) 621, a majority of the
Ontario Court of Appeal reasoned that the nature of the duty owed by a
developer to purchasers of strata units is not fully understood and that it
cannot be correctly described as a fiduciary one. In the analysis of
Finlayson J.A.:

...
A prospective purchaser cannot be the fiduciary of the
developer in any accepted equitable sense; otherwise the developer could not
negotiate with the buyer at all
. Furthermore, the trial judges emphasis on
the
Condominium Act
as having consumer protection objectives does not
reflect the balance that this court has said exists between that goal and the
commercial realities of the condominium industry. The basis of the relationship
is set out more accurately by Robins J.A. for this court in
Abdool v.
Somerset Place Developments of Georgetown Ltd.
(1992), 10 O.R. (3d) 120, 96
D.L.R. (4th) 449. He held on behalf of the court at p. 145:

While I may generally
agree with the learned judge's critique of the legislation, I am unable to
accept his approach to the current disclosure requirements. In my respectful
opinion, this approach fails to construe s. 52 in a manner that properly
balances consumer protection and the commercial realities of the condominium
industry and, if adopted, would require a disclosure document incompatible with
the underlying aim of the section. [At 635; emphasis added.]

and:

... The developer
does not hold the condominium property in trust for the purchaser of the unit,
it holds the title to the unit in trust for the prospective purchaser who has
executed an agreement of purchase and sale to purchase a unit. The developer's
good faith obligation, or duty, is to carry out the terms of the agreement and
deliver whatever title the contract between the parties calls for. This
obligation or duty is circumscribed by the documentation required by the
Condominium
Act
. The purchaser, for his or her part, has an equitable interest in the
unit by virtue of the agreement that is signed;
an equitable interest that
equity will enforce by specific performance. However, there is no overarching
fiduciary duty arising out of the relationship of a vendor and purchaser as
such. The suggestion by the trial judge that a prospective purchaser is
entitled to repose some element of trust in the developer that it will deal
with the purchaser's reasonable expectations in the disclosure documents
introduces an element of paternalism that is totally unjustified in such a
relationship
. As I have indicated, the protection of the consumer rests
with compliance by the developer with the disclosure provisions of the
Condominium
Act
. It is inappropriate to refer to the unit holder as a fiduciary in any
circumstance.
The prospective purchaser is protected by the statutory
requirement of full disclosure, not the extension of fiduciary principles to
the bargaining process
. After executing an agreement of purchase and sale,
he or she is entitled to rely on the good faith of the developer to carry out
the agreement honestly. [At 6389; emphasis added.]

The majority also doubted the suggestion made by Wilson J.A.,
as she then was, in
Newrey
that a fiduciary duty is owed to prospective
purchasers  i.e., persons who have
not yet signed
binding agreements
of purchase. Finlayson J.A. described this suggestion as unsupported by
the general law and contradicted by recent decisions. (At 636.) These
discussions, of course, took place in a statutory context that differs from
that imposed by
REDMA
.

[30]

Returning to the case at bar, the trial judge noted case‑law to
the effect that as long as a developer acts in adherence to the development
plans described in the disclosure statement, and prospective purchasers have
notice of the owner-developers intentions, the developers entering into a
transaction for its own benefit might not constitute a breach of its (fiduciary)
duty. On this point, he noted in particular
The Owners, Strata Plan VIS 2968
v. K.R.C. Enterprises Inc.
2007 BCSC 774 revd on other grounds by
The
Owners, Strata Plan VIS 2968 v. K.R.C. Enterprises Inc.
2009 BCCA 36, in
which Madam Justice Gerow reviewed
Hill v. Strata Plan NW 2477
(1991) 57 B.C.L.R. (2d) 263 (C.A.) and
Peel Condominium v. Tedley
Homes Ltd.
,
supra
. From these, she reasoned:

It is clear from the cases that the courts have
acknowledged that one of the objectives of the
Condominium Act
is
consumer protection. However, this
objective is attained by the disclosure
requirements of the
Condominium Act
and must be seen in the context of
the full disclosure package
:
Peel Condominium Corp. v. Cam-Valley Homes
Ltd.
(2001), 196 D.L.R. (4th) 621 at 635 (Ont. C.A.).

In
Hill
the Court of Appeal took
into consideration that the purchasers were aware there was a problem, that a
prudent purchaser would have made an effort to clarify the situation by
searching the title, and that
the purchasers would have been able to
walk away from the purchase if it could not be concluded to their satisfaction.

The cases in which
courts have found that the developer has been in breach of its fiduciary duty,
regardless of notice, are cases in which the limitation has not been included
in the disclosure statements nor registered against the title

to the
property

so that the prospective purchaser can determine the extent of
any restrictions on the common property by searching the title. [At paras. 279;
emphasis added.]

[31]

Applying this reasoning, Riley J. concluded that a developer who
fairly discloses its intention to enter into a transaction from which it will
benefit will not for that reason alone be found to have breached its duty to
strata lot purchasers. At para. 29, he again emphasized Mr. Sharmas
affidavit evidence to the effect that each purchaser had received and
acknowledged receipt of the disclosure statement, which had expressly stated
that the common property might be encumbered by a telecommunications lease in
favour of Marshall Homes or an affiliate thereof. Again, the defendant had
adduced no evidence calling this testimony into question.

[32]

The strata corporation next submitted that the disclosure statement had
not fairly disclosed the
full extent
of the encumbrance constituted by the
Lease. In its submission, the terms of the Lease were more burdensome than suggested
by the description in the disclosure statement: the term was for the entire
life of the strata corporation; the $10 consideration payable to Marshall Homes
had not been specified; the Lease allowed for significant intrusions on the
property for the installation and construction of telecommunications
equipment; the Lease purported to run with each subdivided parcel of land on
the property (although it correctly stated that it bound only the common
property and not the strata lots themselves); and it imposed positive
obligations on each party to execute such further documents and take any
further lawful action as may be required for the better or more perfect and
absolute performance of its terms.

[33]

The summary trial judge did not find this argument persuasive. In his
analysis:

... In broad strokes the
disclosure statement provided fair notice to purchasers that the
owner-developer reserved the right to enter into a telecommunications lease on
the common property. The disclosure statement indicated that the lease would be
for the benefit of the owner-developer or an affiliated company.
The terms
of the lease negotiated between Marshall Homes and Marshall Telecom are
entirely consistent with the description contained in the disclosure statement
.
Moreover, the lease itself was filed in the Land Title Office and registered
against the title to the Delta Rise property on the very same day that the
strata plan was filed and registered. Thus, each strata title purchaser was at
liberty to search the title in the course of the conveyancing process, prior to
completion. [At para. 31; emphasis added.]

[34]

Finally in connection with the validity of the Lease, the defendant
submitted that the Lease was invalid because it had not been placed before the
strata corporation at the first annual general meeting as required by s. 20
of the
SPA.
The trial judge did not regard this as fatal. He noted
299
Burrard Management Ltd. v. The Owners, Strata Plan BCS 3699
2014
BCSC 390, in which the Court held that such a failure does not make the
contract unenforceable as a matter of law. (At para. 63.) Similarly here, the
judge concluded that the fact no encumbrances had been put before the meeting
was an irregularity that did not amount to a breach of the developers
fiduciary duty or otherwise render the Lease invalid. (At para. 33.) No
challenge is made on appeal by the defendant to this ruling.

[35]

At paras. 3443 of his reasons, the trial judge dealt next with the
strata corporations argument that it was not bound by the terms of the Lease
because there was no privity of contract between it and Marshall Telecom. (Indeed,
the strata corporation was not in existence when the Lease was granted.) Riley J.
noted in passing some authorities dealing with pre‑incorporation
contracts at paras. 356; but the plaintiff relied instead on the fact
that the Lease stated it would run with the land and that its terms would be automatically
assumed by the strata corporation. The judge noted the suggestion made by
Madam Justice McLachlin (as she then was) in
Nylar Foods v. Roman Catholic
Episcopal Corporation of Prince Rupert
(1988) 48 D.L.R. (4th) 175
(B.C.C.A.) that a covenant may by its words clearly establish that the parties
intended to create a restriction that runs with the land. Marshall Telecom
also cited the rule in
Spencers Case
(1583) (1558-1774) All E.R. 68,
where an exception was created to a formerly strict and ancient rule that
positive covenants could not be enforced by or against successors in title.
Spencers
Case
clarified that the burden and the benefit of a covenant, which
touches or concerns the land demised and is not merely collateral, may run at
law with the reversion and the term of the lease whether the covenant be
positive or restrictive.

[36]

Relying as well on
Williams & Rhodes,

Canadian Law of Landlord and Tenant
(6th ed., 1988), the trial
judge reasoned:

... Landlord-tenant arrangements are in a class of their own
because the obligations under a lease only encumber the very property that is
the subject of the lease, and only during the term of the lease. Thus, in the
case of leaseholds, it is
not at all inconsistent with the nature of
property that positive covenants affecting the land bind those who take the
term of the leasehold by assignment:

Amberwood
at para. 27.This
distinguishes the case at bar from other recent decisions holding that by
virtue of the so-called rule in
Austerberry
, positive obligations
under an easement cannot run with and bind the land:
The Owners, Strata Plan
BCS 4006 v. Jameson House Ventures Ltd.
, 2019 BCCA 144 at para. 2,
74-76, 79-80, 81;
Crystal Square
at para. 4, 31.

I return then to the issue of
enforceability of covenants said to run with the land in the landlord-tenant
context. Applying the rule in
Spencers Case
as summarized in
Amberwood
,
the key question is whether the burdens and benefits under the rooftop lease
touch or concern the land and are not merely collateral:
Williams &
Rhodes
at p. 15-77. To qualify as an obligation touching or concerning
the land,
a covenant must either affect the land as regards mode of
occupation, or it must be such as
per se
, and not merely from collateral
circumstances, affects the value of the land
:
Rogers v. Hosegood
,
[1900] 2 Ch. 388 at p. 395, cited with approval in
Galbraith v.
Madawaska Club Ltd.
, [1961] S.C.R. 639 at p. 652. [At paras. 401;
emphasis added.]

[37]

He concluded that the burdens and obligations under the Lease sought to
be enforced by the plaintiff run with and bind each subdivided parcel within
the Delta Rise property and affect the land as regards mode of occupation.
This included the obligation of the lessor
and its assigns
to take
further steps and execute such further documents as might be necessary to allow
the leased area to be used for its stated purposes. (At para. 43.)

[38]

With respect to the relief sought by Marshall Telecom, the Court found
that with one exception, it was unnecessary to grant injunctive relief. A
declaration that the obligations of the lessor contained in the Lease run with
the land and are therefore binding on the strata corporation would clarify
any uncertainty as to the enforceability of the Lease and there was no
suggestion that the defendant would disregard its obligations thus clarified.
However, the judge concluded that given that the City of Deltas approval
process had been on hold pending receipt of an application signed by the
defendant or a letter from it authorizing Marshall Telecom to proceed with the
application on the defendants behalf, a mandatory injunction compelling the
strata corporation to sign or execute all necessary documents for the
application to proceed, would be in order.

[39]

Marshall Telecoms claim for damages was adjourned generally.

On Appeal

[40]

The strata corporation filed a notice of appeal in this court on August 15, 2019.
It asserts in its factum that the summary trial judge erred in:

a.    making
the following palpable and overriding errors of fact, errors of law, and/or
errors of mixed fact and law, one or more of which caused him to erroneously
deny EPS 4044s application at the outset of the Summary Trial Application to
adjourn the hearing pending disclosure of information and documents, including
the Disclosure Receipts:

committing a palpable and overriding
error of fact by concluding that the examination for discovery of Mr. Sharma
had been concluded at the time of the Summary Trial Application;

ii. committing an error of mixed fact and law by
determining that Mr. Sharma's evidence was unchallenged; and

iii. committing an error of law by reversing the
evidentiary burden.

b.    committing an error of law by
misconstruing the
timing
and
extent
of the disclosure required
for an owner developer to contract with itself for its benefit as developer but
to its detriment as owner without breaching its fiduciary duty to original
purchasers of strata lots.

Adjournment
of Examination for Discovery?

[41]

I turn to the defendants argument that the trial judge committed a
palpable and overriding error of fact in finding that Mr. Sharmas examination
for discovery had been concluded. Mr. Both relies on the fact that the
transcriber of the discovery added Proceedings adjourned at the end of the
transcript after Mr. Both had stated, Subject to my requests for
information and documents, those are my questions. It is, of course, not for
the transcriber to characterize what, as a matter of law, occurred. Much
trouble would have been avoided if counsel had clearly stated that he would
want to question Mr. Sharma more after the documents had been provided. The
plaintiffs lawyer could then have taken issue with the idea of adjourning,
or more helpfully, could have said he intended to proceed with the trial on
February 14 but would ensure the requested documents were delivered
expeditiously. It could hardly be said those documents were irrelevant. As
already mentioned, Marshall Telecom in fact delivered a random group of 11
acknowledgments to Mr. Both on February 12, 2019 and told the
trial judge at trial that the request to produce all 317 acknowledgments was
too onerous. Counsel adduced no evidence to this effect.

[42]

In this unfortunate situation, I expect that many judges might have
adjourned the trial to permit counsel to produce all 317 acknowledgments
or to cross‑examine Mr. Sharma or his solicitor on the difficulty of
producing them. However, the trial judge was mindful of the prejudice this
would involve for Marshall Telecom and its licensee. It appears that counsel
for the defendant did not apply to cross‑examine Mr. Sharma under
R. 9‑7(12) at trial or at any point in the
four months
over which the trial was heard. Nor, as the judge observed, did the defendant
present any evidence of its own or of any of its members to the effect that any
strata owner had
not
received a disclosure statement or had sought
rescission of his or her purchase. In these circumstances, it was open to the
judge to find there was likely no real possibility that further discovery
would turn up evidence to the effect that not all purchasers received disclosure
statements.

[43]

As this court stated in
Tassone
,
supra
, at para. 38, there
is no rule that a discovery must always take place before a matter may be dealt
with by way of summary trial. The important question for the trial judge was whether
he could find the facts necessary to determine the issues before him. I am not
persuaded that Riley J. erred in the exercise of his discretion in
deciding that it would not be unjust to proceed in this case, even though the
circumstances were less than ideal.

Evidence
Unchallenged?

[44]

The defendant also argues that the trial judge fell into error in
failing to identify that counsel
had
directly challenged Mr. Sharmas
evidence at discovery that the original purchasers of strata lots received and acknowledged
receiving disclosure statements. In its factum, the strata corporation submits
that it was entitled to challenge Mr. Sharmas evidence by way of examination
for discovery. It had exercised that right. It did not have a duty, counsel
submits, to produce independent evidence disproving Mr. Sharmas bare assertion
on this point, or to cross‑examine him on his affidavit.

[45]

As I read the transcript of the discovery, Mr. Both
asked
various questions
about the disclosure statements and received
straightforward answers from Mr. Sharma that unambiguously supported
Marshall Telecoms case. Whether the questions amounted to a challenge of the
deponents evidence is perhaps debatable, but Mr. Sharmas affidavit and
discovery evidence were before the Court and were not contradicted
by any
evidence
. In my opinion, it cannot be said the trial judge was wrong, much
less clearly and palpably wrong, in finding at para. 29 that the
disclosure statements were provided to all purchasers of strata lots at or
before the time of purchase. The defendant did not have a duty to adduce
evidence to the contrary, but if it wanted to prevail at trial, it had to meet
the plaintiffs case.

[46]

I would not accede to this ground of appeal.

Reversed
Evidentiary Burden?

[47]

Finally under this rubric, the defendant submits that by denying its application
to adjourn pending production of the acknowledgments and any cross‑examination
of Mr. Sharma thereon, the trial judge effectively shifted the
evidentiary burden from Marshall Telecom to the strata corporation.

[48]

The term evidential burden generally refers in civil litigation to the
obligation of a party to adduce evidence such that any motion by the opposite
party for a non‑suit will be overcome. As stated in Lederman, Bryant and
Fuerst in
The Law of Evidence in Canada
(4th ed., 2014):

A major source of confusion is
the failure to describe the effect of the satisfaction of an evidential burden.
A party who has the evidential burden must point out the evidence on the record
or adduce evidence to the satisfaction of the trial judge. The party who has an
evidential burden is not required to prove a fact or issue either on a balance
of probabilities or beyond a reasonable doubt. In this sense, the discharge of
an evidential burden proves nothing  it merely raises an issue. [At §3.26.]

The authors
also write:

In a civil negligence action,
the plaintiff must adduce
some evidence of the defendants negligence to overcome a non‑suit.
If the trial judge rules adversely to the plaintiff, the plaintiff will lose
the case. If the theory of the defence is contributory negligence, the
defendant must point to evidence on the record or adduce sufficient evidence of
contributory negligence in order for the trial judge to leave this issue for
the jurys consideration.
If the defendant fails to satisfy this evidential
burden, the defendant will lose on this issue, although he or she will not
necessarily lose the case as the plaintiff must satisfy the persuasive (legal)
burden of proof on the issue of the defendants negligence.

Accordingly, a party who has both
the evidential and persuasive burdens on an issue will lose on that issue as a
matter of law if that party fails to satisfy the evidential burden. Conversely,
if the party has only an evidential burden on an issue, failure to satisfy it
will not automatically result in the loss of the case because the trier of fact
must still accept the evidence of the party having the persuasive burden on the
other issues. If that evidence is indeterminate, the persuasive burden will be applied
against the party having the onus of proof. [At §3.334.]

[49]

Proceeding on the basis, then, that where a party satisfies an
evidential burden, the trier of fact
may
make a determination
favourable to that party in the absence of evidence to the contrary, but is not
required
to do so, I cannot agree with the notion that an impermissible
shifting of the evidentiary burden from the plaintiff to the defendant took
place in this case. The fact is that, as the trial judge said more than once,
the defendant adduced
no evidence
to the effect that the original
purchasers of all 317 strata lots did not receive disclosure statements,
in the form appended to Mr. Sharmas affidavit, at the time of purchase.
Certainly the inference that disclosure statements had been provided to all
purchasers was available to the trial judge. The plaintiff met the evidential
burden on it to adduce evidence in support of its case and the defendant failed
to adduce any evidence to the contrary, or otherwise in support of its defence.
I cannot say the trial judge was wrong to reach the conclusion he did.

Timing and
Extent of Required Disclosure

[50]

As mentioned earlier, the parties are agreed that the developer was
subject to a duty, which counsel described as fiduciary, not to use its position
of control over the strata corporation for its own benefit. It is therefore not
necessary for us to wade into the debate (which may be limited to the previous
statutory regime in Ontario) evident in
Cam-Valley, supr
a, about the
nature of the duty owed at common law by a developer to individual strata lot
purchasers. In
K.R.C. Enterprises
, decided in 2007, Gerow J.
referred briefly to
Cam-Valley
but did not take up this issue. She did
adopt the statement of Finlayson J.A. at 635 to the effect that the protection
of strata purchasers in this context is attained by the disclosure
requirements of the
Condominium Act
and must be seen in the context of
the full disclosure package. (At para. 27.) This proposition is consistent
with several decisions of our trial court in the
REDMA
context: see for
example
625692 B.C. Ltd. v. The Owners, Strata Plan BCS1492
2015 BCSC
119,
per
Verhoeven J.;
Strata Plan BCS 3165 v. KBK No. 11
Ventures Ltd.
2014 BCSC 2276
per
Kelleher J.; and most recently,
Interville
Development Limited Partnership v. The Owners, Strata Plan BCS2313
2019
BCSC 112 at para. 98,
per
Warren J. As I understand it, the
defendant does not contest this proposition on this appeal. Not having received
substantive argument on these points, I do not find it necessary or appropriate
to decide it on this occasion.

[51]

Nor is it necessary to decide whether, as suggested at para. 29 of
K.R.C.
Enterprises
, a purchasers access to a title search could constitute,
without
more
, sufficient notice for purposes of overcoming the conflict of interest
created by a transaction between the developer and itself or an affiliated
entity. I also leave that question for another day.

[52]

As for the
extent
of the developers disclosure, I am unable to agree
with the defendant that Marshall Homes was required to provide an actual
copy

of the Lease
as part of the disclosure statement. As far as I am aware,
it is not standard practice for the actual lease or other charge to be
appended to a disclosure statement and nothing in
REDMA
suggests such a
requirement. In the case at bar, it is reasonable to assume that the Lease did
not even come into existence until shortly before its execution on
March 30, 2016  long after the marketing of the strata lots had begun.

[53]

Cam-Valley
does offer some guidance concerning the standard of
disclosure applicable in this context. At 6356, the majority quoted with
approval the comments of Robins J.A. for the Court in
Abdool v.
Somerset Place Developments of Georgetown
(1992) 96 D.L.R. (4
th
)
449 (Ont. C.A.):

The objective of consumer
protection is attained by the requirement of full disclosure under s. 52
of the
Condominium Act
and must be seen in the context of the full
disclosure package. As Robins J.A. stated at p. 145:

The vagueness of the requirements and the absence of
statutory guidelines mandate a broad and flexible approach --not a rigid or
stringent one--in determining whether a given disclosure statement is adequate.
As I indicated earlier, the disclosure statement cannot be viewed as separate
from and unrelated to the other documents called for by s. 52(6) and (7);
it
must be seen in the context of the entire disclosure package. The narrative
section of the disclosure statement can realistically be expected to do no more
than highlight or summarize the most important features of the condominium
documents and assist purchasers in comprehending those documents by directing
them to the full text
.

Earlier, Robins J.A. dealt
with the standard of compliance by which disclosure is to be measured by the
court. He said at p. 136:

These disclosure provisions
must of course be given a
construction consistent with their consumer protection objectives
. However,
in judging the adequacy of the disclosure for the purposes of deciding whether
an agreement is binding, the rights of both parties to the agreement must be
taken into consideration. The purchaser is
clearly entitled to the information
called for by the Act in order to make an informed decision
about his or
her condominium purchase. At the same time however,
once the ten-day period
has expired, the vendor is entitled to assume that it has a binding agreement
of purchase and sale
and to rely on the certainty of that agreement in
developing the project and conducting its business affairs. [At 6356 of
Cam-Valley; emphasis added.]


[54]

Applying this reasoning in the context of the statutory scheme created
by
REDMA
, I see no error in the trial judges conclusion that the disclosure
statement in the case at bar met the required standard. Anyone reading it would
know the purpose for which the Lease would be granted, the nature of the equipment
that might be required and the fact it would run with the land; and would
reasonably expect that it would impose positive obligations on the strata corporation
to co-operate in giving effect to its terms. If further information was wanted,
the Lease was available in the Land Title Office from and after April 13,
2017, the date on which the strata plan was also deposited.

Disposition

[55]

In the result, I would not accede to any of the grounds of appeal
asserted by the strata corporation. I would dismiss the appeal.

The Honourable Madam Justice Newbury

I agree:

The
Honourable Madam Justice Saunders

I agree:

The Honourable Mr. Justice
Harris

Schedule of Legislation

Strata
Property Act,
R.S.B.C. 1998, c. 43

Owner developer's control of strata corporation

5

(1) The
owner developer must exercise the powers and perform the duties of a council
from the time the strata corporation is established until a council is elected
at the strata corporation's first annual general meeting.

(
2) In exercising the powers and performing the duties
of a council, the owner developer need not comply with bylaw requirements
respecting the constitution of the council or the holding or conduct of council
meetings
.

Owner developer's standard
of care

6
(1) In exercising the powers and performing the duties
of a council, the owner developer must

(a) act honestly and in good faith with a view to the
best interests of the strata corporation, and

(b) exercise the care, diligence and skill of a
reasonably prudent person in comparable circumstances.

(2) Without
limiting subsection (1), the owner developer must make reasonable efforts to
pursue any remedies under warranties in existence with respect to the
construction of the common property and common assets.

(3) Sections
32 and 33 do not apply to an owner developer exercising the powers and
performing the duties of the council, as long as the owner developer complies
with subsection (1) of this section.

Passing resolutions before first conveyance

8        Before
the first conveyance of a strata lot to a purchaser, the owner developer may
pass any resolution of the strata corporation permitted or required by this Act
or the regulations, including a resolution to amend the strata corporation's
bylaws under section 127, without holding a special general meeting.

Restriction on contracting powers

10
In the period after the first conveyance of a
strata lot to a purchaser but before the first annual general meeting, no
contract or transaction may be entered into by or on behalf of the strata
corporation with either the owner developer or a person who is not at arm's
length to the owner developer, unless the contract or transaction is approved
by a resolution passed by a unanimous vote at a special general meeting.

Business at first annual general meeting

20      (1) At
the first annual general meeting, the eligible voters must elect a council, for
a term of one year, in accordance with section 25.

(2) At
the first annual general meeting, the owner developer must

(a)
place before the meeting and give the strata corporation copies of all of the following:

(i)  all plans that
were required to obtain a building permit and any amendments to the building
permit plans that were filed with the issuer of the building permit;

(ii)  any document in
the owner developer's possession that indicates the actual location of a pipe,
wire, cable, chute, duct or other facility for the passage or provision of
systems or services, if the owner developer has reason to believe that the
pipe, wire, cable, chute, duct or other facility is not located as shown on a
plan or plan amendment filed with the issuer of the building permit;

(iii)
all contracts
entered into by or on behalf of the strata corporation
;

(iv)  any disclosure
statement required by the
Real Estate Development Marketing Act
or
section 139 of this Act;

(v)  the registered
strata plan as obtained from the land title office;

(vi)  names and
addresses of all contractors, subcontractors and persons who supplied labour or
materials to the project, as required by the regulations;

(vii)  all warranties,
manuals, schematic drawings, operating instructions, service guides,
manufacturers' documentation and other similar information respecting the
construction, installation, operation, maintenance, repair and servicing of any
common property or common assets, including any warranty information provided
to the owner developer by a person referred to in paragraph (vi);

(viii)  all records
required to be prepared or retained by the strata corporation under section 35;

(ix)  any other records
required by the regulations, and

(b) place an annual budget,
prepared in accordance with section 21, before the meeting for approval.

(3) If the owner developer
contravenes subsection (2) (a) and the strata corporation must pay money to
obtain a document referred to in that provision, the amount of the payment is
money owing to the strata corporation by the owner developer, and sections 112
to 118 apply. [Emphasis added.]


