Life Isn't Always Fair, Section 164 of The Strata Property Act

I am often asked by strata lot owners to assist them when they don't agree with a decision, which has been made by the strata corporation; whether it is made by the owners as a whole at a general meeting or by the council. The obvious starting point for such a matter is whether or not the strata corporation or the council is/was permitted do what it is doing or has done. In other words, are they complying with the Strata Property Act and/or the bylaws? If they aren't then the issue is generally easily solved. If they are within what the law permits them to do, then the matter becomes more complex. The question I often find myself faced with is "How do I help an owner who feels that he or she is being treated unfairly?" In order to answer that question, I turn to s.164 of the Strata Property Act (the "Act") and the case law surrounding it.

Section 164 of the Act reads as follows:

Preventing or remedying unfair acts

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 corporation's future affairs.

This section permits an owner or tenant to apply to the court in order to prevent or remedy an action or decision of the strata corporation (including the council). In other words, an owner who feels that a decision taken the by strata corporation, such as the passage of a bylaw, the imposition of a fine, the reversal of a designation of limited common property or any number of other similar matters has been significantly unfair to them can seek the assistance of the court. Although the section is usually relied upon to deal with things that have already been done, it can also be relied upon in a peremptory manner to deal with impending actions or decisions.

Simply because an owner doesn't like a decision of the strata corporation or doesn't feel that it was fair, doesn't mean that the court will intervene. One of the key aspects to s.164 is that its deals with actions and decisions which are significantly unfair. The word "significantly" modifies the word "unfair", meaning that the court will not intervene simply because an owner is unhappy with or disagrees with a decision of the strata corporation, even if it affects them negatively. There must be an element of significant unfairness about it.

The phrase "significantly unfair" has been defined by the court in the case of Gentis v. Strata Plan VR368 2003 BCSC 120, 8 R.P.R. (4th) 130 (which adopted the definition set out in Reid v. Strata Plan LMS 2503 [2001] BCJ No. 2377 adding only a couple of additional comments. The Court of Appeal later approved the definition in Gentis itself when it considered the Reid case). The now widely accepted definition of "significantly unfair" is as follows:

"The meaning of the words "significantly unfair" would at the very least encompass oppressive conduct and unfairly prejudicial conduct or resolutions. Oppressive conduct has been interpreted to mean conduct that is burdensome, harsh, wrongful, lacking in probity or fair dealing, or has been done in bad faith. "Unfairly prejudicial conduct" has been interpreted to mean conduct that is unjust and inequitable."

"I would add to this definition only by noting that I understand the use of the word `significantly' to modify unfair in the following manner... the court should only interfere with the use of this discretion if it is exercised oppressively, as defined above, or in a fashion that transcends beyond mere prejudice or trifling unfairness"

"I am supported in this interpretation by the common usage of the word "significant", which is defined as "of great importance or consequence".

In order to have the court intervene, the owner or tenant making the application must prove the following:

1 That the action/decision falls within the scope of "oppressive conduct" or "unfairly prejudicial conduct" (i.e. was the decision made in bad faith? Was it burdensome? etc.)

2. Does the action/decision go beyond mere prejudice or trifling unfairness? (In other words, is the issue and/or impact significant enough that the court should interfere with what has been decided?)

In deciding whether an action or decision has been significantly unfair, the court will need to look at the facts of each case closely. In what manner were things done? What is the impact of the action/decision? The court is also entitled to review the matter "in light of the balancing of competing interests that must