



COURT
OF APPEAL FOR BRITISH COLUMBIA




Citation:



Chow v.
  The Owners, Strata Plan NW 3243,









2017 BCCA
  28




Date: 20170119

Dockets: CA43257; CA43258

Docket: CA43257

Between:

Angela Yick Ying Chow, Kuo Wei Chin,
Tien-Min Chao,
Shu-Chen Lin, Zhe Lu, Yu Huang, Dominic Ching Ming Ng,
Barbara Cheuk Mee Ng, and Alice Sao Kuan Chan

Respondents

(Petitioners)

And

The Owners, Strata Plan NW 3243

Appellant

(Respondent)

-
and -

Docket:
CA43258

Between:

Bryan Co, Li
Chang, Hsiao-Jung Chia, Franklin Chow, Pau Tseng Chu,
Wen Chen Chu, Margaret Mary Forgie, Aurelee Gromada, Pearl Kaushal,
Permod Kaushal, Wu Yeh Kung, Sai Keung Lam, Alicia Waj Yee Lau,
Yin Yi Lau, Kwok Wing Mak, Siu Yee Mui, Woodming Mui, Lori Murakami,
Terry Kit Kwan Ng, Chien-Yu Ou, Annie Sung, Jacqueline Lin Sun,
Kung-Ming Tsui, Richard Xu, Choi Miu Fong Yung, and Wang Zhao

Appellants

(Petitioners)

And

The Owners, Strata
Plan NW 3243

Respondent

(Respondent)




Before:



The
  Honourable Mr. Justice Harris

The
  Honourable Madam Justice Fenlon

The
  Honourable Madam Justice Dickson




On appeal from:  An order of the Supreme Court of British
Columbia,
dated October 23, 2015 (
Chow v. The Owners, Strata Plan NW 3243
,
2015 BCSC 1944, Vancouver Registry Nos. S143231 & S154891).




Counsel for The Owners, Strata Plan NW 3243; and
Bryan
  Co, Li Chang, Hsiao-Jung Chia, Franklin Chow, Pau Tseng Chu, Wen Chen Chu,
  Margaret Mary Forgie, Aurelee Gromada, Pearl Kaushal, Permod Kaushal, Wu Yeh
  Kung, Sai Keung Lam, Alicia Waj Yee Lau, Yin Yi Lau, Kwok Wing Mak, Siu Yee
  Mui, Woodming Mui, Lori Murakami, Terry Kit Kwan Ng, Chien-Yu Ou, Annie Sung,
  Jacqueline Lin Sun, Kung-Ming Tsui, Richard Xu, Choi Miu Fong Yung, and Wang
  Zhao:





















P. Dougan





Counsel for
  Angela Yick Ying Chow, Kuo Wei Chin, Tien-Min Chao, Shu-Chen Lin, Zhe Lu, Yu
  Huang, Dominic Ching Ming Ng, Barbara Cheuk Mee Ng, and Alice Sao Kuan Chan:









G.S. Hamilton





Place and Date of Hearing:



Vancouver, British Columbia

December 9, 2016





Place and
  Date of Judgment:



Vancouver, British Columbia

January 19, 2017









Written
  Reasons by:





The
  Honourable Mr. Justice Harris





Concurred
  in by:





The
  Honourable Madam Justice Fenlon

The
  Honourable Madam Justice Dickson








Summary:

The respondents, owners of units in a townhouse complex, petition
to the court for an order enforcing their exclusive use of certain visitor parking
spots adjacent to their units, based on their designation in the registered
strata plan as limited common property (LCP). The appellants, other owners
and the strata corporation, argue that the LCP designation was an error, or alternatively,
it was significantly unfair to not remove the LCP designation. Held: appeal
allowed. New hearing ordered. The chambers judge erred in determining that, in
any event, a finding on whether the LCP designation was an error was irrelevant
given the principle of land title indefeasibility. Section 14.12 of the
Strata Property Regulation provides for the rectification of errors in
registered strata plans, and a definitive finding of whether there was an error
is necessary for the proper disposition of the petitions.

Reasons for Judgment of the Honourable
Mr. Justice Harris:

[1]

These appeals
arise out of two petitions at the core of which is the common question of the legal
status of seven parking spaces in a long-established complex of 37 strata-title
townhouses in Richmond.

[2]

Each townhouse has
a two-car garage, but there is an additional parking space adjacent to each of
seven units. The strata corporation has for many years treated these parking
spaces as guest parking; so too had the owners of the units in the complex,
including the owners of the units adjacent to the extra parking spot. They were
described as visitor parking in the original disclosure statement when the
townhouses were developed. Units, including those with the additional adjacent
parking space, have been bought and sold on the basis that each unit has access
to two parking spots, a fact reflected in the documents of sale. Until
relatively recently, everyone operated on the assumption that each unit came
with two parking spots. It turns out, however, that that assumption may have been
wrong. On the strata plan, these parking spaces are not shown as common
property. They are described rather as limited common property. The strata
plan was deposited and registered in the Land Title Office (LTO) in May 1990.
The effect of describing these lots as limited common property is that the
owners of the adjacent units can assert the exclusive right to use the space
adjacent to that unit. While limited common property is not part of
indefeasible title under s. 23(2) of the
Land Title Act
, R.S.B.C.
1996, c. 250, it is a registered right associated with title constituting
a special category of property over which the unit owner has a substantial
degree of control and something approaching a beneficial interest: see
Moure
v. The Owners
,
Strata Plan NW2099
, 2003 BCSC 1364 at para. 22.

[3]

A conflict has
arisen within the strata corporation. The majority of the owners argue that the
description of these parking spaces as limited common property was obviously
a mistake. Six of the seven owners of units adjacent to these parking spaces
assert a right to exclusive use of them because of their description in the
registered strata plan. Efforts to resolve the problem by passing a resolution
to amend the strata plan foundered because such an amendment requires unanimous
approval, which was not obtained.

[4]

The dissenting
owners, identified by the judge as the Chow petitioners, brought a petition
claiming exclusive use of the parking spaces, an order preventing the strata
corporation from interfering with that use, and ancillary orders, including the
cancellation of fines and penalties assessed against them by the strata
corporation.

[5]

The majority of
the owners, identified by the judge as the Co petitioners, brought their own
petition, supported by the strata corporation, alleging that the description of
the parking spaces in the strata plan was in error and the corporation has
acted unfairly in failing to amend it.

[6]

Although
expressing some sympathy for the position the majority found themselves in, the
judge dismissed the Co petition and made the orders sought in the Chow petition.

[7]

The judge reviewed
the evidence about the description of the parking spaces, how units had been
marketed, and what current owners understood they were purchasing when they
bought their townhouses. He noted evidence from a Mr. David Dyck, who is
the British Columbia land surveyor who signed the strata plan that was
subsequently registered. Mr. Dyck deposed that, based on the difference
between the strata plan and the original disclosure statement, he now believes
that he must have made a drafting error on the strata plan in referring to the
seven parking spots as limited common property. The judge dealt with his
evidence and its relevance at paras. 17‑20 of the judgment:

[17]      In
the absence of direct recollection or additional documents, Mr. Dycks
evidence that he made an error is purely speculative. His evidence is at least
as consistent with a change in plans having been made in the year between the
disclosure statement and the strata plan.

[18]      In
any event, neither the disclosure statement nor Mr. Dycks evidence can
affect the status of the registered strata plan. The most fundamental principle
underlying the B.C. land registry system is set out in s. 23(2) of the
Land
Title Act
, R.S.B.C. 1996, c. 250:

23

(2) 
An indefeasible title, as long as it remains in force and uncancelled, is
conclusive evidence at law and in equity, as against the Crown and all other
persons, that the person named in the title as registered owner is indefeasibly
entitled to an estate in fee simple to the land described in the indefeasible
title.

[19]      The
Chow petitioners each hold indefeasible title to their respective strata lots.
The limited common property is not part of the indefeasible title, but it is a
registered right associated with that title. In
Moure v. The Owners
,
Strata
Plan NW2099
, 2003 BCSC 1364, Groberman J., as he then was, said at para. 22
that

[L]imited
common property must be seen as a special category of property over which the
unit owner has a substantial degree of control and something approaching a
beneficial interest.

[20]      The
nature of the right is confirmed by s. 257 of the
SPA
and its
requirement that a designation of limited common property in the original
strata plan can only be changed by a unanimous vote, meaning that it must have
the consent of the owner of the affected unit.

[8]

He then turned to
consider the argument that a strata plan can be amended, but that by failing to
amend it, the strata corporation acted unfairly. This argument is based on
s. 164 of the
Strata Property Act
, S.B.C. 1998, c. 43 [
SPA
],
which provides:

164
(1) On
application of an owner or tenant, the Supreme Court may make any interim or
final order it considers necessary to prevent or remedy a significantly unfair

(a)
action or threatened action by, or decision of, the strata corporation,
including the council, in relation to the owner or tenant, or

(b)
exercise of voting rights by a person who holds 50% or more of the votes,
including proxies, at an annual or special general meeting.

(2) For the purposes of subsection (1), the
court may

(a)
direct or prohibit an act of the strata corporation, the council, or the person
who holds 50% or more of the votes,

(b)
vary a transaction or resolution, and

(c)
regulate the conduct of the strata corporations future affairs.

[9]

The judge took the
view, relying on
Dollan v. The Owners, Strata Plan BCS 1589
, 2012 BCCA
44, that this section permits a court to interfere when the conduct of a
majority oppresses a minority. At para. 24 of the reasons he said:

[24]      Section
164 is generally considered to be a provision that is intended to allow the
court to interfere when the conduct of the majority becomes oppressive to a
minority:
Owners of Strata Plan NW 2212 (Re)
, 2010 BCSC 519 at para. 29.
In
Dollan v. The Owners, Strata Plan BCS 1589
, 2012 BCCA 44 the Court of
Appeal said:

[24]      Section 164
is remedial. It addresses that, despite using a fair process and holding a
democratic vote, the outcome of majoritarian decision-making processes may yield
results that are significantly unfair to the interests of minority owners.
Section 164 provides a remedy to an owner who has been treated significantly
unfairly by co-owners or the strata council that represents them.

[10]

The test, from
Dollan,
is twofold (at para. 30):

1.         Examined objectively, does the evidence
support the asserted reasonable expectations of the petitioner?

2.         Does the evidence establish that the
reasonable expectation of the petitioner was violated by action that was
significantly unfair?

[11]

I take it that the
Co petitioners invoked s. 164(1)(a) in support of its argument, since s. 164(1)(b)
is engaged only by the exercise of the voting rights by a person who holds 50%
or more of the votes at an annual or special meeting. Section 164(1)(a) is
engaged by the action or threatened action by, or decision of, the strata
corporation or council. Hence, I take it that the argument must have been that
the strata corporations or councils failure to amend the by-law as it wanted
to do was significantly unfair and that the Chow petitioners are responsible
for that unfairness because of the way they exercised their voting rights. I do
not intend to comment on whether s. 164(1)(a) provides a remedy in these
circumstances or the soundness of the argument advanced, if that indeed was the
theory underlying the Chow petitioners position, given the basis on which the
judge chose to deal with the matter.

[12]

The judge accepted
that the Co petitioners had a reasonable expectation that the parking spaces
were available for visitor parking, but he was not satisfied that the evidence
demonstrated that that reasonable expectation was violated by a significantly
unfair action by the Chow petitioners. He noted that this case involves a
majority alleging unfair treatment arising from a minoritys exercise of a
right derived from the governing legislation. He summarized his conclusion at paras. 33
and 34:

[33]      In
requiring a unanimous vote to remove a limited common property designation, the
SPA
contemplates that the change can be blocked by a single vote from
the affected unit holderan indication of the importance the legislature placed
on the individual rights arising from that designation. I fail to see how
reliance on that express statutory protection can be characterized as
significantly unfair.

[34]      While
I sympathize with the Co Petitioners, who have been faced with an unpleasant
and potentially expensive surprise, that sympathy cannot override the Chow
petitioners reliance on rights that the strata plan and the
SPA
specifically gave them.

[13]

As I would state
the issues on appeal, the Co petitioners and the strata corporation contend
that the chambers judge failed to give proper effect to the surveyors
admission that he had made a mistake. As a result, he did not properly define
the true state of the record before embarking on his analysis under s. 164
of the
SPA
to decide whether the effective exercise of a veto by the
Chow petitioners resulted in action (or failure to act) by the corporation or
council that was significantly unfair. And when he engaged in that analysis,
he failed to give effect to the significant unfairness of permitting the Chow
petitioners to rely on the strata plan when to do so defeated the reasonable
expectations of all owners, imposed costs on the strata corporation to replace
the visitor parking, put the strata corporation in contravention of municipal parking
bylaws, and conferred a significant financial windfall on the Chow petitioners
by increasing the value of their units.

[14]

The Chow
petitioners defend the judgment, arguing that the judge appreciated the factual
circumstance relating to the strata plan finding, in effect, that it had not
been shown that there had been a mistake when it was deposited, but in any
event of that fact, the judge properly applied the law recognizing that it was
not significantly unfair to rely on rights conferred by statute and the
rights derived from registration of the strata plan in the LTO

to resist the proposed amendment.

[15]

Much of the
argument on appeal focused on how the case had been argued before the judge.
There seems to be no dispute that the judge was invited to decide whether the
strata plan identified the parking lots in error as limited common property. It
appears though that the thrust of the Co petitioners argument was to use the
fact of the alleged error as a factor to be taken into consideration in
assessing whether refusing to support the motion to amend the strata plan was
significantly unfair on the basis I have described above. In other words, the
focus was on whether the use of a veto provided by s. 257 led to significant
unfairness given the apparent need to amend the strata plan to deal with the
mistake in the plan. Section 257 provides, insofar as is relevant:

To amend a
strata plan to designate limited common property, or to amend a strata plan to
remove a designation of limited common property made by the owner developer at
the time the strata plan was deposited or by amendment of the strata plan, the
strata plan must be amended as follows:

(a)
a resolution approving the amendment must be passed by a unanimous vote at an
annual or special general meeting;

[16]

In my view, the
issue as it was framed before the judge did not adequately focus on the issues
he had to decide and, as a result, he was led into error given his view of the
status of the registered strata plan. Those errors are the following.

[17]

First, the judge
expressed the view that the only way to amend the strata plan was by way of a
resolution passed under s. 257: at para. 20. Respectfully, I
disagree.

[18]

Second, and linked to the first error, he therefore concluded that neither
the disclosure statement nor Mr. Dycks evidence can affect the status of
the registered strata plan at para. 18. Again, I disagree because there
is another statutory provision to correct an error.

[19]

As a result, he
appears to have proceeded on the basis that it was irrelevant whether the
strata plan contained an error because the statute as a whole contemplated that
the Chow petitioners were entitled to rely on the strata plan as deposited and
registered when it came to exercising rights in connection with a resolution
under s. 257. It may be for this reason that the judge did not make a
definitive finding of fact one way or the other about whether there had been an
error in the drafting of the plan. Rather, the judge focused on Mr. Dycks
evidence, describing it as purely speculative and suggesting that it was at
least as consistent with a change in plans after the disclosure statement of a
year earlier: at para. 17. The judge did not grapple with the totality of
the evidence bearing on the question because he appears to have regarded it as
essentially irrelevant.

[20]

In my opinion, the
first question that needed to be answered definitively was whether the strata
plan contained an error in its description of the parking spots as limited
common property. Such a finding is the foundation for the rest of the analysis.

[21]

Section 257 is not
the only means by which errors in the designation of property in a strata plan
can be rectified. Errors may be corrected under the
Strata Property Regulation,
B.C. Reg 43/2000 (the 
Regulation
).

Section 14.12
of the
Regulation
provides:

Correction of errors

14.12
(1)
In this section:

error
means any erroneous measurement or
error, defect or omission in a registered strata plan;

registered
strata plan
includes
any document, deposited in the land title office, that

(a)
is referred to in section 245(a) or (b) of the Act,

(b)
forms part of a strata plan under the
Condominium Act
, R.S.B.C. 1996,
c. 64 or a former Act, or

(c)
amends or replaces a document referred to in paragraph (a) or (b).

(2)
If it appears to the registrar that there is an error in any registered strata
plan, the registrar may give notice or direct that notice be given to any
person, in the manner and within the time determined by the registrar, and the
registrar, after considering submissions, if any, and examining the evidence,
may correct the error.

[22]

There is clearly a
jurisdiction for the registrar to correct an alleged error such as the one
engaged in this case because what is alleged is an error or defect in a
registered strata plan. The registrar may give notice to any person, examine
the evidence, and consider submissions in reaching a decision about whether
there has been an error, and whether and how to correct it.

[23]

If that procedure had been followed here, there may have been no need to
resort to a resolution under s. 257. Clearly, s. 257 is not the only
way to amend a registered strata plan. Indeed, it may not be the appropriate
section under which to proceed, because, as I read the section, it contemplates
a procedure for amending a strata plan when there is no issue about the
correctness of the plan, but where for other reasons a strata corporation wants
to change the designation of property from one status to another. In light of
the existence of s. 14.12 in the
Regulation
, s. 257 is not the
only means to amend a registered strata plan and,
prima facie
, is not
the relevant provision for correcting errors.

[24]

The registrar was
asked to exercise the jurisdiction under s. 14.12 but declined, apparently
because the issue was before the courts. Whether or not that is all that can be
said about the reason for declining jurisdiction, the rectification issue was
before the court. The Legal Basis portion of the respondents Amended
Response to Petition, filed April 28, 2014, expressly sought rectification
of the mistake as provided for under s. 14.12. I am satisfied that in
these circumstances a court has the jurisdiction to deal with the issue posed
by s. 14.12 and make a declaration determining rights under the section
and, if the court determines there was such an error that should be rectified,
pronounce an order directing the registrar to correct the record. I do not rule
out the possibility that a court might refer the matter back to the registrar
to exercise his or her powers under the
Regulation
and stay proceedings
in the court pending that determination.

[25]

In the result,
there needed to be a definitive finding of fact on whether the strata plan
contained an error that should be corrected. As I read his reasons, the judge
did not make such a finding, and was misdirected into stating that such a
finding was irrelevant. Had that finding been made, the issue of whether the strata
corporation was acting in a significantly unfair manner in failing to pass the
s. 257 resolution may have been irrelevant. Indeed, the judge seemed to
rely on the Chow petitioners exercise of a right arising from the governing
legislation to find that there was no significant unfairness: at paras. 32‑33.
A finding as to any error could affect that right, and in turn, affect the
significant unfairness assessment.

[26]

In any event, I
cannot agree that whether or not there had been an error is irrelevant to the analysis
undertaken by the judge in dealing with the case as it was presented to him. In
my respectful view, the equities of that analysis can only properly be
undertaken if it is known whether the Chow petitioners were relying on a state
of title that reasonably they knew was in error, for example, or that was in
fact, to the surprise of most involved, the true state of title. I do not think
it advisable to go any further in this analysis. Respectfully, I think the
judge erred in treating it as irrelevant.

[27]

I am not persuaded
that the judge was properly invited to decide what I see as the essential first
question in the analysis, although clearly there was much argument about the error
and a mass of evidence before him. However, the issue was properly pleaded and
its relevance to the proper disposition of the petitions is not in doubt.

[28]

Had the issue been
fully addressed, one might expect to have seen an explicit effort to grapple
with the relevant evidence. The issue was whether the strata plan, as deposited,
erroneously described the parking stalls as limited common property. The
disclosure statement filed by the developer a year earlier than the plan
described the stalls as visitor parking. A disclosure statement is a document
required to be filed by statute, and purchasers are entitled to rely on it.
Material changes to a development require an amendment to the disclosure
statement:
Woo v. Onni Ioco Road Five Development Limited Partnership,
2014
BCCA 76. A change to these parking spots from common to limited common property
would, it was accepted, have required the filing of an amended disclosure
statement. There was no such amendment in relation to these stalls, although
there was an amended disclosure statement dealing with other matters. The Chow
petitioners acknowledged that there was no evidence that the developer was not
complying with its regulatory obligations. The amendment that was made would
tend to suggest that it was complying with them. The only evidence of a change
in plan respecting these parking stalls is derived from the plan itself, the
suggestion being that the error would not be repeated within the plan unless it
was a deliberate change. But that does not appear to follow because once the
error was first made, it may simply have been repeated in respect of each
stall. Finally, subsequent conduct may also be probative of whether an error
had been made. All of these issues need to be weighed and assessed to determine
the fundamental question whether the strata plan contained an error.

[29]

For these reasons,
I would allow the appeal in the Co petition and set aside the orders below in
both petitions. I have reluctantly concluded that this Court is not in a
position on the record before us to make the necessary findings to substitute
an order disposing of the petitions. Unfortunately, it is necessary to remit
the petitions to the Supreme Court for new hearings. Although they were
requested, this is not, in my opinion, a case justifying an award of special
costs.

The
Honourable Mr. Justice Harris

I
agree:

The Honourable Madam Justice Fenlon

I
agree:

The
Honourable Madam Justice Dickson


