02/07/2019 – Jurisdiction British Columbia
Part 65 published on 01/03/2019
Legal fees not reasonably incurred by strata corporation in collection matter
The owner had failed to pay a special levy; and the strata corporation had enlisted the assistance of a solicitor to collect the unpaid amount. The strata corporation had ultimately obtained an order for payment of the arrears and for payment of the corporation’s reasonable legal costs (to be assessed by the Registrar).
The Registrar determined that all of the legal costs had been unreasonably incurred and accordingly could not be collected by the strata corporation. The Registrar’s reasons were as follows:
In my view, this entire proceeding could have been avoided had the petitioner sent a single email to the respondent, demanding payment of the special levy, as it had in the past, before handing the matter over to their lawyers and incurring legal costs. The respondent was not a “delinquent owner” in the context of Baettig, supra. Upon receipt of the first email demanding payment of the special levy the respondent promptly acknowledged his liability and agreed to pay. He did not agree to pay legal fees which he felt were needlessly incurred. Regretfully, he was not permitted to pay the special levy unless it was accompanied by full payment of the legal fees claimed. The escalating claim for legal fees became a club to cow the respondent into submission.
The legal proceeding that was eventually initiated was meant to obtain an order by which the petitioner could secure the payment of their legal costs which the respondent refused to pay. Legal costs became an end in itself. The legal costs incurred by the petitioner in this matter were not reasonable, or proportional, in the circumstances. Section 118(a) of the SPA is not a carte blanche entitlement to full legal indemnity regardless of the circumstances and conduct giving rise to the proceeding.
The Registrar noted that the past successful communications between the owner and the strata corporation had always been by email….but the corporation’s notices in relation to the particular special levy had been sent only by ordinary mail….before the matter had been transferred to the solicitor for collection. The Registrar said:
The petitioner sent the notice of the current special levy in the amount of $4,532.33 to the respondent by letters dated September 29, 2017 and November 9, 2017. The petitioner did not send an email. The respondent was out‑of‑town during this time period and did not receive notice of the special levy or respond to it. When the petitioner did not receive any response from the respondent to their letters, they turned the matter over to their lawyers.
Editorial Note: The Registrar evidently felt that compliance with the “legal notice requirements” was not reasonably sufficient (in this case) to justify recovery of subsequent legal costs. Extra notice (by email) was determined to be necessary. It seems to me that the owners in a strata corporation have agreed to accept notice sent in accordance with the notice requirements of the corporation’s governing documents. I’m not sure that it’s fair to expect a corporation to provide “extra notice” depending on the circumstances.
The Owners, Strata Plan NW 2089 v Ruby, 2019 BCSC 143