Gray v. Heiss-McKay, 2020 BCPC 157

Citation: Gray v. Heiss-McKay 2020 BCPC 157 Date: 20200529 File No: 1449904 Registry: Vancouver IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: DAVID GRAY and JILL LEVERSAGE CLAIMANTS AND: KRISTINA LOUISE HEISS-MCKAY DEFENDANT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE L. BAKAN Appearing on their own behalf: D. Gray Counsel for the Defendant: T. Boyd Place of Hearing: Vancouver , B.C. Dates of Hearing: October 21, 22, 2019 Date of Submissions: November 20, 2019 December 20, 2019 January 6, 2020, April 3, 2020 and April 8, 2020 Date of Judgment: May 29, 2020 Introduction

[ 1 ] This action arises out of a dispute between former neighbours, regarding whether costs incurred in correcting defects in the title of LMS Strata Plan 1305 (the “Strata”), in which they shared ownership, should be paid wholly by the Claimants or shared between the parties. [ 2 ] The Claimants owned Strata Lot 1 of the Strata and the Defendant owned Strata Lots 2 and 3 at the material time. The Strata was located in the Southlands area of Vancouver, B.C. Both Strata Lot 1 and Lot 2 had homes built on them.

There was a barn on Strata Lot 3. [ 3 ] The homes on Strata Lots 1 and 2, extended beyond the legal boundaries of the Strata registered with the Provincial Land Title Office (“LTO”). The barn roof on Strata Lot 3 had been installed at the request of the Defendant, without the permits required by the City of Vancouver (the “City”). [ 4 ] The Claimants listed Strata Lot 1 for sale. In December 2012, Ms. L.

Ramsay Q.C., the lawyer for potential purchasers of Strata Lot 1, sent a letter to the Claimants stating that because the house extended outside the legal boundaries of Strata Lot 1, title could not be transferred to her clients. This sale did not proceed. [ 5 ] The Claimants almost immediately advised the Defendant and her husband, Mr. McKay, in person of the above problem.

All agreed the defects in title should be remedied. [ 6 ] The documentary evidence at trial indicates the complexity of the strata title amendment. [ 7 ] Allison MacInnis, the Claimants lawyer for the strata title amendment and sale of Strata Lot 1, testified this was the most complex transaction she has worked on. It required amending the strata title in a number of layers. She testified there were no linear lots but bare strata lots and the outlines of the buildings did not correspond to the strata boundaries but encroached.

She advised that there were a number of stakeholders including the ALR, City of Vancouver, Surveyor General, lenders and the two strata owners. [ 8 ] Initially all three strata lots had to be amended at the same time for City of Vancouver’s approval. In late April 2013, the City advised that the barn roof the Defendant had installed on the barn on Strata Lot 3, was done without a City permit.

The documentary evidence supports that by May 2013, the City required the roof be made compliant with the required permit before the strata title could be amended. [ 9 ] Another purchaser made an offer to purchase Strata Lot 1 for $5,300,000, the same price Ms. Ramsay’s client had previously agreed to, contingent on the defects in the strata title being remedied. The Claimants paid in excess of $100,000 in legal fees to Fasken’s and over $40,000 in ‘hard costs’ to cure the defect in title of the Strata which included the Defendant’s property.

The main issue in this case is whether or not the Defendant should contribute to these costs, and if so, in what amount and proportion. [ 10 ] The Claimants seek reimbursement from the Defendant for a portion of the hard costs. They do not seek recovery of their legal fees. In the Notice of Claim and at trial, the Claimants quantified this sum as $25,000 plus allowable costs and disbursements. The $25,000 is based on 66% of hard costs incurred by the Claimants on the basis the Defendant owned 66% of the Strata. In the alternative, they seek 50% of this sum.

This varies slightly from the Claimants’ Written Submission in which $27,331.28 is claimed. [ 11 ] The trial ended on October 22, 2019. I provided a

schedule for closing written submissions. On October 24, 2019, Ms. MacInnis wrote a letter to the Defendant’s lawyer, attaching further business documents and subsequently filed them at the Provincial Court Registry. Her letter stated these documents were found after the trial concluded and contrary to her understanding at trial, that Fasken’s had not retained the original documents. They consisted of receipts in support of disbursements and similar documents listed in Fasken’s records and invoices to the Claimants.

The Defendant objected to these documents being considered by me as they were produced late and were not cross-examined on. The new documents were filed prior to the Defendant’s written submissions being filed. The authenticity of the documents was not challenged. [ 12 ] I allowed the new documents into evidence for the reasons stated in my letter to the parties and counsel dated March 26, 2020.

Position of the Claimants [ 13 ] In the Notice of Claim, the Claimants seek restitution from the Defendant of a percentage of the hard costs they paid, based solely on Defendant’s alleged unjust enrichment. [ 14 ] The Claimants, in their closing written submission, allege further grounds for recovery and seek unjust enrichment in the alternative as follows: (

a) That by agreeing to co-operate in the amendment of the Strata, by implication the defendant agreed to pay the proportion of costs based on proportionate entitlement. (

b) Further that the defendant was required to pay a portion of the costs pursuant to s. 244 of the Strata Property Act to remediate the strata title. (

c) In the alternative, if there was no agreement between the parties, implicit or otherwise, that the defendant was unjustly enriched by the claimants paying all costs to remediate the strata title as they received the benefit of good title to their Lots 2 and 3. [ 15 ] If the restitution is awarded, I will determine whether or not I will consider grounds not plead in the Notice of Claim. Position of the Defendant [ 16 ] The Defendant denies it owes any money to the Claimants. She submits she would co-operate with the remediation of the strata title based on the Claimants’ agreement to incur all of the costs. The Defendant submits that this agreement was entered into between

respective counsel for the parties and not directly between the parties. [ 17 ] Further, the Defendant submits that the facts and law do not support a remedy in unjust enrichment. [ 18 ] In the alternative, the Defendant submits if it is ordered to make restitution, it should be based on 50%, rather than 66% of provable hard costs. Witnesses and Documentary Evidence at Trial [ 19 ] The Claimant, David Gray, and Ms. MacInnis, testified on behalf of the Claimants.

The co-Claimant, Jill Leversage, did not testify. [ 20 ] John McKay, the husband of the Defendant, Kristina Louise Heiss-McKay, the owner of Strata Lots 2 and 3, testified on her behalf. Ms. Heiss-McKay did not testify. [ 21 ] Thomas Andison was the Defendant’s lawyer at the material times. Unfortunately he passed away prior to trial. By agreement, solicitor-client privilege over his relevant files and those of Fasken’s was waived. These files were before the court as documentary evidence. [ 22 ] It is not in dispute, that apart from an initial conversation between the parties and Mr.

McKay towards the end of 2012, all germane communications on the amendment of the strata plan, including discussions on costs, were between Mr. Andison and Ms. MacInnis. [ 23 ] The parties agree there was no discussion of costs between them and that any such discussions took place between the parties respective lawyers. Relationship between the Parties Prior to December 2012 [ 24 ] The Defendant purchased Strata Lots 2 and 3 in 2007. She and Mr. McKay subsequently retained an architect and renovated their home on Strata Lot 2. The renovated house exceeded the boundaries of the strata lot registered at the LTO.

Mr. McKay testified that the City of Vancouver raised issues regarding the limited common property during the development permit application and that the City provided a memo suggesting the Strata be amended to avoid problems. [ 25 ] The Claimants home also exceeded the boundaries of Strata Lot 1 registered in the LTO. [ 26 ] The amendment and registration of strata lots in the LTO is within Provincial jurisdiction. The City of Vancouver has jurisdiction over the granting of development permits and municipal bylaw compliance. [ 27 ] Mr.

McKay said he and the Defendant knew their home would be non-complaint with the existing Strata when they renovated. He testified he and the Defendant were aware that Strata Lot 1 was not compliant with the strata plan. [ 28 ] Mr. McKay testified that he and his wife hired an architect and understood the architect met with the Claimants to discuss amending the Strata as the City had suggested. He said he understood Mr. Andison also spoke to them. No file notes of Mr. Andison’s were in evidence regarding any such conversations. [ 29 ] Mr. McKay stated he is unaware if Mr.

Andison ever met personally with the Claimants but understood from what Mr. Andison said that the Claimants did not wish to “cooperate” with amending the strata title. The Defendant did not take steps to amend the plan or take further steps in this regard. There is no documentary evidence of any communications from this time. [ 30 ] Mr. McKay said both the Defendant and Claimants would have had to “sign off” on any amendment. Mr. McKay further testified that he and the Defendant did not consider there would be a negative consequence if they did not amend the strata title. [ 31 ] On cross-examination, Mr.

Gray denied the Defendant or anyone on her behalf discussed an amendment of the strata plan with the Claimants. Rather, he testified that Mr. Andison phoned proposing a bare land strata which he understood would let each owner deal with their own lot. Mr. Gray said the Claimants would have agreed to this but he did not think it was allowable as he was told this when the Claimants bought Strata Lot 1. [ 32 ] Mr. Gray recalled meeting with the Defendant’s architect when the Defendant’s development plan was being drafted.

He testified that the Claimants’ opinion was that the plan negatively impacted the privacy of their back yard. He stated they requested that the Defendant put in some trees, that the architect said the Defendant would do this but the trees were not planted. Mr. Gray testified he was unaware title to any of the strata lots in question could not be conveyed until he received the letter from Ms. Ramsay in December 2012. [ 33 ] There is lack of reliable relevant evidence on the parties relationship prior to the strata title amendment process regarding issues between the parties and I do not rely on it. 1.

Did the parties agree that the Defendant would contribute to the costs of amending the Strata Lot or did the Claimants agree they would bear all the costs of the amendment? [ 34 ] None of the parties or Mr. McKay directly discussed cost sharing or the Claimants foregoing any financial contribution in consideration of the Defendant co-operating which co-operation included signing off on the amended strata title. [ 35 ] The bulk of the work to amend the strata title was performed by Ms. MacInnis. She was in communication with Mr. Andison during this process.

[ 36 ] No written agreement on the sharing or waiver of costs arising from the amendment to the strata title was drafted by counsel. There is no evidence anyone else drafted one. The lawyers’ invoices and time entries are silent on any charge for drafting or making any agreement on cost sharing or cost waiving. Rather, the parties drew an inference from their

interpretation of conversations with their respective counsel and counsel’s files produced in document disclosure, on what transpired. [ 37 ] Ms. MacInnis was strong in her testimony that no agreement existed between the parties regarding the payment or waiver of costs. [ 38 ] An email dated February 4, 2013 between Mr. Lukas, a lawyer that worked for the Claimants, and Mr. Andison, was in evidence. This email discusses options regarding the Strata. (Exhibit 2, Tab 1, page 43) [ 39 ] Mr.

Andison stated in his correspondence, dissolution of the Strata left the parties open to further requirements by the City to bring structures on the Strata up to the current building code and further, that his client “…was also concerned that their lender may or may not cooperate with this plan of action…” (Exhibit 2, Tab 1, page 43) [ 40 ] Mr. Andison concludes his February 4, 2013 e-mail as follows: “Lastly, our client does not want me to be the one approaching the City and getting the necessary assurances in order to proceed with plan destruction.

Our client is prepared to cooperate as necessary but we are not instructed to do the heavy lifting on the file unless your client would be prepared to pay us to do so. Provided the necessary assurances are received from the City and our client’s lender I would be prepared to recommend that our client proceed with destruction of the existing strata.” [ 41 ] Mr. Andison does not say his client will not pay any costs. The “heavy lifting” on at least a balance of probabilities references legal fees. Mr.

Gray testified he interpreted that the Claimants or their counsel would “carry the ball on this” in terms of legal work and fees only. He disagreed this email formed or confirmed an agreement that the Defendant would not contribute any costs incurred by the Claimants. [ 42 ] By letter dated February 19, 2013, Mr. Andison wrote to Ms. MacInnis confirming her firm could apply to the City of Vancouver to amend the strata plan on behalf of his client, Ms. Heiss-McKay. [ 43 ] Ms. MacInnis’ file note of February 19, 2013 states: 50-50 surveyor /fees.

Hard costs - He wants Tom Andison’s client to pay 50% of hard costs-application to City, PTT,…(Exhibit 2, Tab 3, page 3) [ 44 ] Mr. Gray does not have an independent recall of this telephone conversation with Ms. MacInnis but opined this was the first time he told her he wanted the Defendant to pay 50% of the hard costs. [ 45 ] Ms. MacInnis testified she could not confirm whom this telephone conversation was with. She said the parallel lines she made on the note, indicate a separate conversation than from her notes above the parallel lines. [ 46 ] On February 21, 2013, Mr.

Andison’s file notes reference a telephone call with Ms. MacInnis. Two issues are set out. The first relates to “Sharing hard costs”. (Exhibit 2, Tab 2, page 136) [ 47 ] The above note indicates costs refers to “PTT-??, survey, application to the City and registration costs”. The note indicates Ms. MacInnis told Mr. Andison that the large legal fee portion was being borne by her client. [ 48 ] The Claimants paid the fee charged by the City of Vancouver in the amount of $4,070.56. (Exhibit 2, Tab 2, pages 122 and 135) [ 49 ] On February 21, 2013, Ms.

MacInnis emailed the Claimants following her conversation with Mr. Andison. The email confirms she had spoken to Mr. Andison about the sharing of the hard costs and he was going to speak with his client and advise. She also confirmed Mr. Andison was going to speak to his client about paying the PTT (property transfer tax) on their property and get back to her. [ 50 ] Mr. Andison’s email to Mr. McKay dated February 25, 2013, indicates he had forgotten to discuss with him Ms. MacInnis’ query on Mr.

McKay’s position on “sharing hard costs of the amendment to the strata.” (Exhibit 2, Tab 2, page 136) [ 51 ] In this email, Mr. Andison sets out the Claimants’ expectations conveyed by Ms. MacInnis, on splitting costs with the Defendant for the survey, the cost of which was not known on that date, the application fee to the City of approximately $4,500, and registration costs that could be as high as $2,000. Further, he relayed the Claimants’ expectations that each party bear their own PTT costs. He conveyed Ms.

MacInnis’ comment that their legal fees were going to be greater than his client’s, and that the Claimants were not expecting his client to contribute to the Claimant’s legal costs. [ 52 ] Following communications with Ms. MacInnis, the City dropped its requirement that all three strata titles had to be amended together. Only Strata Lots 1 and 2 required amendment for the sale of Strata Lot 1 to proceed. This meant the Defendant did not have to bring the barn roof on Strata Lot 3 in compliance with the City by-laws and permits.

A survey of all three strata lots had previously been submitted to the City with consent of all the parties. As a result of the change, she testified the surveyor then had to remove Strata Lot 3 from the previously submitted application materials. This resulted in further work by the surveyor and additional cost paid by the Claimants. [ 53 ] March 5, 2013 was the next date the sharing of hard costs was discussed between counsel. Ms. MacInnis has a file note of that date recording a telephone conversation with Mr. Andison. Ms. MacInnis concluded this note indicating that Mr. Andison “knows timing

is crucial”. [ 54 ] Ms. MacInnis agreed her note indicated Mr. Andison told her his client was not interested in cost sharing. She does not recall why she told Mr. Andison that the timing was critical. She said there were many critical points in the process. She did not know if a contract had been signed with a new buyer for Strata Lot 1 on March 5, 2013. No document was put to her in cross-examination. [ 55 ] In cross-examination, she further testified she could not recall if she relayed Mr. Andison’s comments in the March 5, 2013 conversation to the Claimant, as six years had elapsed. Mr.

Gray testified he was told of the Defendant’s position she was not prepared to pay hard costs but cannot recall when he was told. [ 56 ] The Fasken’s file contains a Contract of Purchase and Sale between the Claimants and buyer M. McAllister dated March 5, 2013. The purchase price of Strata Lot 1 was $5,300,000. The sale was subject to the buyer obtaining satisfactory legal advice regarding the current strata documents, amended by-laws, and new registration of the Strata at the LTO.

There were further addendums extending the completion date that had initially been May 1, 2013. (Exhibit 2, Tab 1, pages 21-34) [ 57 ] On March 7, 2013, Ms. MacInnis’ file note documents her further telephone conversation with Tom Andison. (Exhibit 2, tab 3, page 7) It indicates that Mr.

Andison agreed the plans were acceptable, that “he didn’t think he will be able to change his mind.” She recorded “property transfer tax?” under numbers 1, 2 and 3 respectively. [ 58 ] Item number 4 in her notes states: - hard costs? -$5,000 City - $5,000 Reg. - $10,000 Surv. $1,500 Surveyor $22,000 to $25,000 [ 59 ] She then noted “Tom has pitched Jill and David’s position to his guy.” Under this she wrote “unjust enrichment?-sue afterwards?” [ 60 ] Ms. MacInnis testified her note indicated to her that the question of hard costs had become more crystalized. She cannot recall if she asked Mr.

Andison to speak to his client again about cost sharing on March 7, 2013. [ 61 ] Ms. MacInnis stated she said she could not recall six years later, if she told Mr. Andison her client would sue his client or discussed a claim for unjust enrichment against his client. She said she and Mr. Andison had many conversations and while it seems unlikely she would have told Mr. Andison her client would sue his, she has no memory of the conversation. What she says her note indicates is that costs were still a live issue on March 7, 2013 and she would have recalled had there been an agreement on costs between the parties.

Had there been an agreement she testified she would have recorded it. [ 62 ] The next page following the aforementioned file note of Ms. MacInnis’ telephone conversation with Mr. Andison, are her notes regarding her telephone conversation with Mr. Gray. The date of these notes is March 7, 2013. While she cannot say 100% the conversation was on March 7, 2013, the date accords with the entry in the Fasken’s invoice. (Exhibit 2, tab 1, page 88) I find it more likely than not this conversation was on March 7, 2013 following her conversation with Mr. Andison. [ 63 ] These notes indicate she told Mr.

Gray that she had spoken to Mr. Andison and he told her that his client would not pay for any of the costs. Her note states: “I spoke to Tom Andison, not pay any costs, agmt. To put on trees; 40 feet of trees-he is apoplxix-50% is generous-client is livid” [ 64 ] In a column to the right of the above, she has written: He is livid, wait let it go -his client needs to pay for 1/2 because fair [ 65 ] Ms. MacInnis testified she likely communicated the Defendant’s refusal to pay any costs to the Claimants. In regards to the notes about trees, she believes it referenced a past issue. Mr.

Gray had testified he had requested a hedge of trees be planted before 2012, and on his evidence, the Defendant did not do this despite agreeing to. She testified that the person she was referencing in her note above was Mr. Gray. [ 66 ] On cross-examination, Mr. Gray testified that he probably was unhappy the Defendant was not prepared to contribute to costs but does not recall being livid. He said Ms. MacInnis told him the Defendant was not prepared to pay half of the costs. He said he did not understand this as the Defendant had two strata lots. [ 67 ] Mr. Gray said he could not recall if he instructed Ms.

MacInnis to tell Mr. Andison they would sue. He said that by March 7, 2013, he had no choice but to proceed with the process to amend title to complete the sale of the Claimants’ property. He testified they had to close the sale of their property and did not have time to deal with or push the costs issue with the Defendant. They decided to “soldier on” and not deal with the costs issue at that time. [ 68 ] Ms. MacInnis’ file note dated April 4, 2013, relates to a telephone conversation between her and Mr. Gray.

In that note, she wrote “agrees that if have to pay hard costs will pay it but will sue afterwards under unit entitlement-wants to sue later”. Ms. MacInnis

testified that the word “agrees” does not indicate any agreement with the Defendant had been made. She said “unit entitlement” indicated if he sued afterwards it would be under unit entitlement which would be more favourable to the Claimants than the 50/50 hard cost proposal he had made to the Defendant. [ 69 ] Mr. Gray testified that at that time, he probably considered his only option was to sue but had not made a decision to do so yet. He said he had already paid the hard costs and had the option to sue later. He was still hoping the Defendant would pay her share.

He opined April 4, 2013 was the first time he considered suing. He testified he still thought the Defendant would pay their share and re- consider their position after March 7, 2013. [ 70 ] Mr. Gray testified he asked Ms. MacInnis to get him information on his options. Ms. MacInnis’ time entry on April 26, 2013, indicates she met with Mr. Millar, one of her colleagues at Fasken’s, to “discuss potential claim for unjust enrichment”. There is also an entry “further telephone call with Mr. Andison”. There is no note or other record of this telephone conversation in the documentary evidence. [ 71 ] Mr.

Gray testified his focus in April 2013 was concluding the sale on Strata Lot 1. [ 72 ] In late April 2013, the City of Vancouver raised for the first time that the barn roof on the barn on the Defendant’s Strata Lot 3, might need to be remedied to comply with the City building code, before the city would grant approval. The City confirmed this in May 2013. [ 73 ] Ms.

MacInnis sent an email dated May 22, 2013, to the City employee that advised of this new requirement that included the following: The issues with Strata Lot 3 were raised by the City building department at the 11 th hour, after our clients have spent upwards of $100,000 in fees to the City, its surveyors, lawyers, superintendent of real estate, etc in order to fix this problem.

In order to amend the documents to remove the addition to Strata Lot 3, virtually all of the work to date is lost and our client will have to spend an additional $50,000 to essentially start from scratch… I cannot express to you how frustrated and disheartened our clients are to have come so close and followed all of the directions from the City in order to be punished at the last minute for a roof that was constructed by our client’s neighbour without permit. (Exhibit 2, Tab 1, p. 35) [ 74 ] Ms. MacInnis suggested alternate options.

The City did agree to permit Strata Lot 1 and 2 to be amended leaving Strata Lot 3 to be dealt with in the future between the City and the Defendant. [ 75 ] I accept this resulted in additional survey costs of $2796.15, paid by the Claimants. [ 76 ] Fasken’s statement of account to the Claimants indicates that the revised strata plan documents were signed by the Defendant by July 9, 2020. The registration of the amended strata lots is indicated to have been done on July 26, 2013. (Exhibit 2, Tab 1, pages 103 and 104). [ 77 ] A ‘without prejudice’ letter dated June 19, 2014 from Mr. Millar of Fasken’s, to Mr.

Andison was replied to by Mr. Andison’s ‘without prejudice’ letter dated July 14, 2014. He set out his client’s instructions to decline to contribute to the Strata Amendment Hard Costs. In that letter, Mr. Andison states: When our client purchased her strata lots she requested your client’s co-operation in amending the plan at that time. It would have been a simple amendment at that time and our client had offered to pay the costs of the amendment. Your client refused to co-operate with this request and then took steps to make the development of our client’s strata lots more difficult than necessary.

As a result of the history between the parties, when your client sought our client’s co-operation in amending the strata plan when it was necessary for them to do so , our client only agreed to co-operate and provide the necessary signatures and consents on the firm understanding that they would not be responsible for any of the costs of the strata amendment. Your client was unhappy with this position but ultimately agreed to proceed on that basis. Our client relied on this agreement and provided her cooperation on that basis. Analysis [ 78 ] Credibility of the parties or those that testified is not in issue.

Given some of the events in issue, occurred over six years ago however, it is not surprising some facts cannot be recalled in detail or reliably. The documentary evidence is of great assistance in confirming dates and what transpired or did not. [ 79 ] Neither Ms. Leversage or Ms. Heiss-McKay testified at trial. The legal files indicate Ms. MacInnis communicated primarily with Mr. Gray and Mr. Andison with Mr. McKay. Mr. Andison passed away prior to trial. There is a significant lack of reliable evidence that the Claimants ever agreed to forego claiming a cost contribution from the Defendant. Mr.

McKay agreed there was never any discussion between himself, the Defendant and the Claimants on the payment or waiver of hard costs arising from the strata title amendment. [ 80 ] Ms. MacInnis testified in a credible and reliable manner. The evidence supports that she is experienced and competent legal counsel. She was clear that there was no agreement on cost sharing or waiver of same between the parties. All discussions on possible cost sharing were between her and Mr. Andison. She testified that their discussion on costs did not lead to an agreement between the parties on costs. Neither her file or Mr.

Andison’s contains any agreement, draft agreements or correspondence on same. Neither counsels’ invoices to their respective clients contained a charge for preparing an agreement or documenting one. [ 81 ] I accept Ms. MacInnis’ evidence that she told Mr. Gray that Mr. Andison said his client would not contribute to costs, but that

there was never any agreement that the Defendant would not have to pay. She testified that if there had been such an agreement, she would have discussed this and documented it. [ 82 ] She referenced the without prejudice correspondence between Mr. Millar and Mr. Andison dated June 19, 2014 and July 14, 2014 respectively, as adversarial. She correctly testified she cannot say what was in Mr. Andison’s mind other than that he was advocating for his client. Both letters were written on a without prejudice basis supporting their adversarial nature.

They contain hearsay evidence and cannot be relied of for the truth of their contents. [ 83 ] Based on the evidence as a whole, I find there was no agreement between the parties on costs. There was clearly no meeting of the minds between the parties or their counsel. The conditions for finding a legal agreement on costs between the parties are lacking. [ 84 ] Given there was no agreement to either share costs or that the Claimants would cover all costs, I will consider whether or not the Claimants are entitled to recovery of all or part of the Claimants hard costs. 2.

Rejection of Remedies not Plead in the Notice of Claim [ 85 ] I will not consider if the Claimants have a remedy against the Defendant under the Strata Property Act . No remedy under this Act was pled in the Notice of Claim and no amendment of the Notice of Claim was applied for. I have no evidence or insufficient evidence to rule on this submission in any event. [ 86 ] The decisions in Dalla Rosa v. Town of Ladysmith 2017 BCPC 178 (at paragraphs 33-35 ) and Kamloops Honda Cars v.

Collinge , 2000 BCSC 1686 , inform my decision not to consider the Claimants’ submissions for relief under the Strata Property Act and any remedy other those pled in the Notice of Claim. 3. Do the Claimants have a claim in unjust enrichment against the defendant for the hard costs paid in full by the Claimants? [ 87 ] In the Notice of Claim, and at trial, the Claimants sought $25,000 in restitution from the Defendant based on representing 66% of hard costs they submit they paid for strata amendment hard costs.

In the alternative, they claim 50% of the strata amendment hard costs. [ 88 ] The sum claimed above was a reduction to $25,000. This was the monetary limit for Small Claims Court when the Notice of Claim was filed. The Claimants did not apply to increase the claim although the maximum damages a party can claim has increased to $35,000. The Claimants submit that the Defendant has been unjustly enriched in the amount of $25,000, or $20,058.38, in the alternative. [ 89 ] The Claimants seek $27,331.29 in their written submissions. Given Mr.

Gray confirmed at trial that the maximum the Claimants were seeking was $25,000 that is the maximum amount I will consider. [ 90 ] The Defendant submits the evidence does not support a claim for unjust enrichment in this action. [ 91 ] The law requires the following three factors to be established for a claim of unjust enrichment to succeed: 1. An enrichment of the Defendant; 2. A corresponding deprivation to the Claimant(s); and 3.

The absence of a juristic reason for the enrichment which include a contract or disposition of law, for the enrichment. [ 92 ] The Claimants have established that the Defendant was enriched by the Claimants paying all the hard costs which included those for Strata Lot 2, owned by the Defendant. The Claimants also paid the costs to survey Strata Lot 3 and further costs for a required amended survey when Strata Lot 3 was removed from the strata title amendment. In the latter part of May 2013, Ms. MacInnis eventually received consent from the City of Vancouver to remove Strata Lot 3 from the amendment process.

The parties were not put on notice of the need for the Defendant to comply with building permit requirements for the barn on Strata Lot 3 until late April or May of 2013 after the Claimants had spent significant legal fees and survey costs including the three strata titles. (

i) Enrichment of the Defendant [ 93 ] The Defendant was enriched by receiving a perfected title to Strata Lot 2 as a result of the strata title amendment. The evidence establishes, on a balance of probabilities, that without this work and related costs being undertaken by the Claimants, the Defendant would not have been able to sell or transfer its lots and they would not have been registerable at the LTO.

There was a corresponding detriment to the Claimants as they paid the hard costs claimed to amend the title on the strata lots. (ii) Deprivation to the Claimants [ 94 ] Once the defective title to Strata Lots 1 and 2 was remedied, the Defendant could sell, transfer or finance Strata Lot 2, without the impediment of a defective title. Mr. McKay testified he had received mortgage financing from CWB, prior to the amendment to title.

He said he was a long-time client of CWB, did not provide CWB with a copy of the strata plan in place prior to purchasing Strata Lots 2 and 3, and was not required to make a formal financing application for the purchase. [ 95 ] The Claims have been deprived of funds they paid for hard costs to the benefit of the Defendant. (iii) Juristic Reason [ 96 ] I found no agreement existed between the parties on the costs in issue. At best, I find the Claimants hoped the Defendant would be persuaded to contribute to payment and the Defendant hoped the Claimant would not pursue her for the same. The Claimants

immediate priority was closing their sale of Strata Lot 1 and they deferred legal action until it was completed. They did however, instructMr. Millar to write to Mr. Andison requesting payment of the hard costs prior to the completion of the sale. This request was refused, thesale completed and the Claimants filed this action. [97] This case is distinguishable from Binichakis v. Smitherman 2009 BCPC 131; Binichakis v. Smitherman, 2010 BCSC 178. TheClaimant was a strata resident. He took it upon himself to clean the underground parking lot absent a request from the Defendant stratacorporation.

He conceded he did not get the approval of the Strata Council before doing the work (paragraph 18 Binichakis 2009 BCPC131). The Strata Corporation was not aware he had done the cleaning until he submitted an invoice for same over a year later. TheClaimant unsuccessfully sued for compensation on the basis that the Defendant was unjustly enriched by his actions and he suffered adeprivation, as he was not paid for the work. [98] The Honourable Judge P. Gulbransen held there was an enrichment of the Defendant and a deprivation to the Claimant.

Hefurther held there was no juristic reason for the enrichment. [99] The enrichment, however, was not held to be unjust as he had not asked council if they wanted him to clean the lot even thoughhe was aware council had to approve all expenditures, he was not asked to do the work and there was an employee tasked to do the lotcleaning, the council members were unaware he had even done the work until long after it was completed. [100] In the case before me, the Defendant was aware and consented to the strata title being corrected.

Correspondence between theparties counsel indicates the Defendants input and consent to the method on how the title was remedied. [101] The Defendant was apprised throughout the process by Mr. Andison of the ongoing steps being taken on amending the title andgiven input. [102] In this case, I find that the Defendant clearly requested and had input to how the title was remedied. The Defendant receivedlegal title as a result of the Claimants’ undertaking. The process was clearly undertaken with the Defendant’s knowledge. She wasrepresented by counsel throughout. [103] I reject the Defendant’s submission that Mr.

Andison said he was “not instructed to do the heavy lifting”, unless the Claimantswere prepared to pay Mr. Andison, related to the hard costs of the strata title amendment process. This comment only related to the legalfees to counsel. [104] Mr. McKay’s testimony that he told Mr. Andison on a number of occasions that the Defendant would not contribute to costs ishearsay.

There is no evidence of an agreement between the parties to this effect. [105] The fact the Claimants concentrated on steps required for the sale of Strata Lot 1, rather than taking steps to obtain hard costsfrom the Defendant, does not negate their restitution claim in unjust enrichment. I do not find that the Claimants “chose to lie in theweeds” as submitted in paragraph 33 of the Defendant’s written closing submissions filed on December 19, 2019. [106] The Defendant signed the final documents required to register the corrected title after receipt of the letter from Mr.

Millarrequesting contribution to hard costs. The benefit to the Defendant in completing the title amendment process was much greater thanrevoking co-operation to remedy the title, as she did not wish to contribute to the hard costs. [107] I find in these circumstances, the party doing the bulk of the work that benefited both parties, would reasonably expect to receivea significant contribution to costs from the other party. Even if the Defendant had not, as I find, consented to the title amendment, shewould have received an “incontrovertible benefit”. [108] In Peel (Reg. Municipality) v.

Canada (SCC), [1992]3 SCR 762, McLachlin, J. (as she then was) held that whilemost cases of unjust enrichment involve a positive conferral of a benefit on a Defendant, a benefit may also be “negative” in the benefitspares the defendant an expense they would have been required to undertake. (pages 790-796) [109] The evidence strongly indicates that the title, prior to its amendment, could not be legally conveyed and was not in legalcompliance due to the expansion of the structures on Strata Lots 1 and 2 beyond the boundaries on the existing title. [110] Correction of the title was an inevitable expense at some point by all parties to this action.

The Claimant was required to correctthe title on Strata Lot 1 which required the amendment of Strata Lot 2 as well in order to complete the sale of Strata Lot 1. All partieswere under a legal obligation to amend had the Land Title Act required this, or to transfer the property. [111] McLachlin J. states: An “incontrovertible benefit” is an unquestionable benefit, a benefit which is demonstrably apparent and not subject to debate andconjecture. Where the benefit is not clear and manifest, it would be wrong to make the defendant pay, since he or she might well havepreferred to decline the benefit given the choice.

According to Justice Gautreau…where an unjust benefit is found “one dischargesanother’s debt that is owed to a third party of discharges another’s contractual or statutory duty”…The late Justice Gautreau adds thefollowing pertinent remarks at pp. 270-71: “While the principle of freedom of choice is ordinarily important, it loses its force if the benefit is an incontrovertible benefit, because itonly makes sense that the defendant would not have realistically declined the enrichment…Likewise, the principle of freedom of choiceis a spent force if the benefit covers an expense that the defendant would have been put to in any event, and, as an issue, it is weak if thedefendant subsequently adopts and capitalizes on the enrichment by turning it to account through sale or profitable use.”(page 795) [112] After considering further legal commentary, McLachlin J. concludes: It is thus apparent that any relaxation on the traditional requirement of discharge of legal obligation which may be effected through the

concept of ‘incontrovertible benefit’ is limited to situation where it is clear on the facts (on a balance of probabilities) that had the plaintiff not paid, the defendant would have done so.

Otherwise, the benefit is not incontrovertible.( p. 796) [ 113 ] I find on a balance of probabilities, that the Defendant would have amended the strata title at some point, incurring at least the hard costs paid by the Claimants. [ 114 ] The Claimants have established on a balance of probabilities that the Defendant has been unjustly enriched by the Claimants paying 100% of the hard costs arising from the strata title amendment. From the evidence, the hard costs are the disbursements incurred and independent legal fees, to remediate the title. 4.

What portion of proven restitution claim is payable to the Claimants by the Defendant? [ 115 ] The final strata title amendment only included Strata Lots 1 and 2. The proportion of any restitution the Defendant is found liable for therefore, is based on 50% rather than the 66%. 5. Restitution Owing by the Defendant [ 116 ] The Claimants must prove, on a balance of probabilities, that they incurred the restitution claimed.

As stated above, I find they are entitled to 50% rather than 66% of hard costs claimed and proven on a balance of probabilities. [ 117 ] The nature of these costs and approximations of the total were discussed between Mr. Andison and Ms. MacInnis as outlined herein. [ 118 ] By letter dated November 19, 2019, to the Provincial Court Registry, Ms. MacInnis attached copies of original receipts that had not be found at the time of trial. She further advised some of the disbursements related only to Strata Lot 1 and reduced the claim from this group from $4645.63 to $4500.00.

The largest disbursement in this group is an invoice from Dye and Durham in the amount of $4037.90. [ 119 ] The costs claimed fall into the following four categories: 1. Survey fees 2. Application fees paid to the City of Vancouver 3. Fees to the Superintendent of Real Estate 4. Registration and Title Search Fees/miscellaneous disbursements (

i) Survey Fees [ 120 ] On the first day of trial, the Defendant provided new documents that were admitted into evidence as Exhibit 3A. These included a Without Prejudice letter from Mr. Millar of Fasken’s dated June 19, 2014 to Mr. Andison as previously referenced. No objection was raised to the letter being admitted as evidence at trial. In the letter, Mr. Millar stated he attached copies invoices for the costs in support of the hard costs incurred by the Claimants, including the survey invoices. These attachments were not with the copy of the letter marked Exhibit 3A at trial.

The survey invoices, except for the January 23, 2013 invoice, are in evidence. The Claimants have not proven on a balance of probabilities, that the January 23, 2013 survey invoice was attached to Mr. Millar’s letter. [ 121 ] The Claimants paid the sum of $29,799.63 in survey costs to Bennett Land Surveying Ltd. The January 23, 2013 invoice is $8804.72, the March 11, 2013 totals $18,162.78 and that of July 9, 2013 is for $2796.15. The invoices are addressed to Mr. Gray at the street address of Strata Lot 1 - 3360 West 53 Ave, Vancouver, B.C. The ‘Re’ heading lists this address as well.

When the invoices are reviewed, it is apparent that the first two invoices relate to surveying the land and buildings on the strata lots as a whole. [ 122 ] The first invoice was not in evidence at trial nor did the Claimants apply for it to be admitted as new evidence. A copy of the invoice was attached to the Claimants’ written submission filed November 20, 2019. This is distinguishable from Ms. MacInnis’ submission and explanation for submitting copies of further invoices. The January 23, 2013 invoice was a document addressed to the Claimants’ address and one they were in control of.

They did not have control over the original documents which were only in the possession of Fasken’s. I therefore am not considering January 23, 2013 invoice in the amount of $8804.72 as part of the Claimants’ claim. [ 123 ] The July 9, 2013 invoice relates solely to the strata plan amendments relating to the barn and re-compilation of Form V and W. The evidence at trial established this work related to amending the previously prepared documents to take out Strata Lot 3. The City of Vancouver had initially requested the barn roof on Strata Lot 3 be made in compliance with the by-law. Ms.

MacInnis was successful in getting Strata Lot 3 removed from amendment so that the closing could proceed. [ 124 ] Initially the City of Vancouver required all three Strata Lots to be included in the amended title. The City later only required Strata Lots 1 and 2 to be amended. The Claimants incurred additional survey costs of $2796.15 by taking Strata Lot 3 out of the proposed strata title amendment. The Defendant received the benefit of a survey of Strata Lot 3 although it did not form part of the new amended title containing what was Strata Lots 1 and 2.

The Defendant did not obtain a benefit from the removal of Strata Lot 3. It was part of the costs of the entire amendment. [ 125 ] The Claimants are entitled to 50% of invoices dated March 11, 2013 and July 9, 2013 being $10,479.47. (ii) Subdivision Application Fee to the City of Vancouver [ 126 ] The evidence supports these fees in the amount of $4076.56 were paid by the Claimants to the City of Vancouver. The

Claimants are entitled to 50% of this from the Defendant being $2037.78 (iii) Fee paid by Claimants to the Superintendent of Real Estate [ 127 ] The evidence supports this fee in the amount of $1600.00 was paid by or on behalf of the Claimants. The Claimants are entitled to 50% payment by the Defendant of $800.00 (iv) Registration and Title Search Fees [ 128 ] The Claimants paid $4500.40 in Registration and Title Fees. This was the sum reached when costs relating only to Strata Lot 1 were removed. This reduction was set out after Ms. MacInnis found the original documents that she understood did not exist.

This is explained in her letter dated October 24, 2019 to Mr. Boyd. Copies of the original invoices were attached to that letter. [ 129 ] I allowed the letter of October 24, 2019 and attachments into evidence as outlined in my letter of March 26, 2020 to the parties and counsel. Ms. MacInnis acted promptly in advising Mr. Boyd that the new documents that had not been located on October 22, 2019 had been located and reducing the claim for disbursements under this heading that were related solely to Strata Lot 1. The Claimants did not have control over these documents.

They were in the possession of Fasken’s. [ 130 ] The January 31, 2013 invoice in the amount of $105.20 is from Dye and Durham. It relates to document filing fees for the Strata and in particular, amending by-laws and change to contribution calculations. It accords with Fasken’s invoice time entries for drafting and filing strata documents. The Claimant is entitled to $52.60 from the Defendant being half of this invoice. [ 131 ] The June 7, 2013 Dye and Durham invoice is for $201.60. It relates to communications, including emails, regarding the subdivision. It relates to the remediation of the strata title.

The Claimant is entitled to $100.80 from the Defendant. [ 132 ] The July 30, 2013 invoice from Dye and Durham is $4037.97. It relates to a number of document registrations. The Claimants have not established on a balance of probabilities that the REJECT services is claimable. The Claimant is to be reimbursed 50% of this invoice less the above items for a total of $1972.49. [ 133 ] The September 10, 2013 Dye and Durham invoice in the amount of $124.13 relate to RESUBMIT LAND DOCUMENTS - DECLARATIONS SUBMITTED FOR GRAY YOUND SUBDIVISON PACKAGE.

There is no evidence why the documents had to be re- submitted and I disallow the Claimants’ reimbursement for this cost. [ 134 ] Similarly, I disallow the claim for the Dye and Durham invoices dated September 16, 2013 and September 25, 2013, each of which is in the amount of $15.75 for RESUBMIT DOCUMENTS.

Summary of Restitution for Proven Costs the Defendant shall pay to the Claimants [ 135 ] I find the Defendant liable to the Claimants’ for 50% of proven hard costs as follows: Survey Fees $10,479.47 Subdivision Application Fee $2037.78 Superintendent of Real Estate Fee $800.00 Dye and Durham Invoice January 31, 2013 $52.60 Dye and Durham Invoice June 7, 2013 $100.80 Dye and Durham Invoice July 30, 2013 $1972.49 TOTAL $15,443.14 [ 136 ] I award the Claimants judgment against the Defendant for $15,443.14 plus the costs and interest below. [ 137 ] In addition, the Claimants are awarded $156.00 in filing fees, $80.00 in services fees ($236.00) plus pre-judgement interest on $15,443.14 as calculated by the Provincial Court Registry from August 1, 2013 to date. [ 138 ] The Defendant shall pay the Claimants $15,443.14 plus costs and interest awarded within 45 days of this judgment. _____________________________ The Honourable Judge L.

Bakan Provincial Court of British Columbia