Brown v. Crescent Downs Housing Date:, 2013 BCPC 35

Citation: Brown v. Crescent Downs Housing Date: 20130218 2013 BCPC 0035 File No: 24870 Registry: Richmond IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: SHEILA BROWN and KENNETH BROWN CLAIMANTS AND: CRESCENT DOWNS HOUSING COOPERATIVE and BAYWEST MANAGEMENT CORP. DEFENDANTS REASONS FOR JUDGMENT OF HIS WORSHIP L. A. KAHN Appearing in person: Sheila Brown and Kenneth Brown Counsel for the Defendants: Rebecca von Ruti

Place of Hearing: Richmond , B.C. Date of Hearing: February 1, 2013 Date of Judgment: February 18, 2013 [ 1 ] This matter came before me on February 1, 2013 pursuant to the Simplified Trial Rules under the Small Claims Act . Kenneth Brown (“Mr. Brown”) and Sheila Brown (“Mrs. Brown”) appeared in person. Rebecca von Ruti (“Ms. von Ruti”) appeared as counsel for Crescent Downs Housing Corporation Cooperative (“Crescent”) and Baywest Management Corporation (“Baywest”). [ 2 ] There were other claimants in these proceedings, namely, Marie Theresa Heiberg and June Marilynn Irvine.

Both withdrew their claim against the Defendants. [ 3 ] Also, Mr. and Mrs. Brown agreed to dismiss their claim against Baywest, once they understood that Baywest, as property managers, did not have a legal obligation to them regarding the subject of this action. [ 4 ] The hearing proceeded on the basis that the information set out in the Trial Statements of the Claimants and Crescent, together with the documents provided on behalf of Crescent, formed the evidence for me to reach a decision. This evidence was clarified during the mediation phase from discussions with Ms. Brown and Ms. von Ruti.

The parties agreed I could rely upon these discussions as evidence in these proceedings. Background [ 5 ] Mr. and Mrs. Brown were original members of Crescent when it was established about 20 years ago. As the Co-op was being constructed, they decided to convert a closet in the ensuite bathroom to a stall shower. Mr. and Mrs. Brown were responsible to pay for this improvement, which was $950. As well, there was an agreement that if Mr. and Mrs. Brown gave up their membership in Crescent, a new member, who acquired “shares” to allow the new member to live in Mr. and Mrs. Brown’s unit would reimburse Mr. and Mrs.

Brown for the cost of the shower less a depreciation of 10% annually. After 10 years, if Mr. and Mrs. Brown moved, they would not be entitled to any reimbursement for the shower. [ 6 ] In 2009 and 2010, four of the units in Crescent developed leaks which required repairs to the showers. The Crescent board of directors agreed to reimburse the “members” who resided in those units the costs of repairs. [ 7 ] Subsequently, Crescent obtained a legal opinion that it was not responsible for repairs to the showers. Crescent informed the members through the Minutes that it was not responsible for repairs to the showers.

Also, Crescent decided to recover the costs that had been paid to the 4 members noted above. Ultimately, Crescent did not pursue reimbursement from the 4 members. [ 8 ] In late 2011, Crescent carried out a full inspection of all the units, as it was concerned that problems which led to the repairs to the 4 units may occur in other units. As a result of this inspection, Crescent determined that many of the units required repairs to the shower. [ 9 ] Once Mr. and Mrs.

Brown were advised that their shower needed repair, they arranged and paid for repairs with the expectation that Crescent would reimburse them because of the “precedent” with respect to the 4 units above, and also, because of their agreement when they originally installed the shower. This was so notwithstanding notice to the contrary from Crescent they had received prior to incurring the costs. I have no doubt they did not appreciate that Crescent may not be required to reimburse them for the repairs. Legal Framework of Crescent [ 10 ] Crescent was incorporated on June 21, 1989. The agreement between Mr. and Mrs.

Brown and Crescent regarding the shower was signed on August 28, 1990. The lease between Crescent and Mrs. Brown is dated February 23, 1991. The operation of the lease and the use of the word “member” entitled Mr. and Mrs. Brown to occupy their particular unit. [ 11 ] A portion of the lease is reproduced below: RULES AND REGULATIONS 3(

b) To obey, observe and strictly conform to, and to cause the family, guests, servants, agents and employees of the Member to obey, observe and strictly conform to, all regulations and House Rules now or hereafter established by the Co-operative and to the Memorandum of Association of the Co-op and the Rules for time being of the Co-op, to the same extent as if all such were herein incorporated, and the Co-operative shall have the right to change, repeal or amend the said regulations or House Rules or any of them. All regulations and House Rules shall apply to all Members uniformly and without preference or discrimination. (my emphasis) INTERIOR MAINTENANCE AND REPAIR OF UNIT 3(

g) The Member will, at the Member’s own expense, keep the interior of the Unit in good condition and repair and in keeping with the character of the rest of the Development.

The Co-op shall not be answerable or chargeable for any decorations or repairs therein or thereto except as herein specifically provided, nor for any damage caused to the Unit or its contents by leakage or overflow of water, electricity, gas, oil, steam or vapour from any water, steam, drain, or gas or oil pipes or electric conduits, or from any other source, belonging or appertaining to any other part of the Development, which is under lease, if the repairs were necessitated, or the damage caused, by the neglect or fault of the Member or his guests, agents, employees, licensees or sub-tenant, or any pets belonging to any of them, or any other person entering upon the Member’s Unit.

The Member shall be liable for any damage to any part of the Development

or Lands wilfully or by the negligence of either the Member or any occupant of the Unit and of any of the persons referred to in this article.

Should the Member at any time refuse or neglect for 10 days after written notice to make repairs or to maintain the Unit in good condition and repair as required by this article; the Co-op may make such repairs to place the Unit in proper condition, and may enter or cause its agents or servants to enter the Unit for that purpose, and all expense incurred by the Co-op in that behalf shall be added to the housing charge due or to become due hereunder and to be paid by the Member as part of the next installment thereof. (my emphasis) CO-OP WAIVER PROVISIONS 6. The Member agrees, with the Co-op as follows: (

a) That the failure of the Co-op to insist in one or more instances upon a strict performance by the Member of any covenant herein contained, or the failure of the Co-op to exercise any right or option herein contained, or to serve any notice, or to institute any action or proceeding hereunder, or to terminate this lease, shall not be construed to be a waiver or relinquishment for the future of such covenant, option and/or right, but, on the contrary, such covenant, option and/or right shall continue and remain in the full force and effect.

That the receipt by the Co-op of any sum due by the Member, with knowledge on the Co-op’s part of any breach by the Member of any term, covenant and/or provision hereof shall not constitute a waiver of such breach, and the Co-op shall not under any circumstances be considered to have waived any breach unless such waiver shall have been expressed in writing signed by two of the Co-op’s officers pursuant to authority thereunder given by a resolution approved by the Co-op’s Board of Directors. (my emphasis) CO-OP’S COVENANTS 9. The Co-op hereby covenants and agrees with the Member as follows: … UNIT REPAIRS (

d) To keep in good repair the foundations, walls, supports, roof, gutters, beams, pipes, electrical conduits and other equipment or machinery required for the proper operation of the Development and the Co-op may, upon reasonable notice enter into and upon any portion of the Unit for any of the purposes aforesaid. [ 12 ] In 2001, Crescent created house rules. These are supplemental or in addition to the lease. A portion of the house rules are, as follows: IMPROVEMENTS Policy 1. Members who carry out improvements will not be compensated by the Co-operative. … 3.

The Board of Directors may decide, on the recommendation of the Maintenance Committee to undertake improvements to units and will budget for specific improvements when funds are available. Such improvements will be done to Co-operative specifications. Materials and labour (if done by contract) will be paid by the Co-operative and the improvements will become the property of the Co-operative. A. MEMBER INITIATED IMPROVEMENTS DEFINITION: An improvement is any change that would alter or added to the structure of a unit, or affect the livability of a unit. … E. REIMBURSEMENT FOR IMPROVEMENTS 1.

It is important that all members be aware of what they can expect for reimbursement of improvements or cost options at the time of move-out. A new member, however, is under no obligation to pay for any other improvements that the out-going member may have made to their unit. Any improvements that the member makes are made for the members own enjoyment or convenience and therefore the new member should not be expected to pay for them. If the new member chooses not to pay for the improvements, the out-going member has the option to remove the improvements and to restore the unit to its original condition. 2.

Depreciation to be as follows: bathroom showers – over ten years from date of installation canopies – over ten years from date of installation ... RESPONSIBILITIES FOR UPKEEP, REPAIR AND REPLACEMENT

Membership Responsibility is as follows: 1. Washing, painting, and filling wall and ceiling surfaces when and where necessary. 2. Floor coverings: maintain linoleum and carpets in clean and sound condition (subject to wear and tear). Repairing of any accidental damages. 3. Appliances: maintaining stove, fridge, kitchen and bathroom fixtures, plus baseboard heaters in clean and sound condition. Repairing of any accidental damages . 4.

Windows: maintaining windows in clean condition – free from mildew – breakages are to be reported to the Board. (Breakages are covered by the Co-op’s insurance; however, the member may be billed if responsible, for the deductible). 5. Canopies and Patios: maintaining in clean and tidy condition, and repairing accidental damage. Gutters cleaned interior and exterior. 6. To report any structural defects; e.g. cracks, damaged decking and leaks promptly to the Board. 7.

Vermin and Insects: to report any invasion of these pests immediately to the Board. “The co-op will keep in good repair the foundations, walls, supports, roofs, gutters, beams, pipes, electric conduits, and other equipment or machinery required for the proper operation of the complex and the Co-op may upon reasonable notice enter into and upon any portion of the premises for any of the aforesaid purposes…” Co-operative Responsibility is as follows: 1.

Eventual replacement, with the members unit, due to deficiencies and/or normal wear and tear of the following: stove, refrigerator, hot water tank, thermostats, baseboard heaters, bathroom wall tile, floor coverings (linoleum and carpets, excluding area carpets) to be the responsibility of the Co-op and is to be taken into consideration when calculating the contingency fund. 2. All common walkways, common area gardens and trees, lawns roadways and other communal areas. 3.

Repair and replacement to all foundations, walls, supports, roofs, gutters, beams, pipes, electric conduits, and other equipment or machinery required for the proper operation of the complex.

THE FOLLOWING ARE GUIDELINES WHICH THE MEMBERSIHP MAY FIND USEFUL Membership Responsibility Co-operative Responsibility … Bathroom Bathroom – first and foremost turn off the water and advise maintenance as “stove” above Sink blockages, scratches and taps Sink drain pipes (leaks) Tub blockage & scratches Tub drain pipes (leaks) Caulking, taps, shower Bathroom tile Bathroom tile Toilet – tank (floats & valves) Toilet – tank (leaks) - bowl - bowl (leaks) - plugged toilet - pipes (leaks) Linoleum Linoleum Cupboards Cupboards Countertop Countertop Medicine Cabinet, mirror Light fixture

(my emphasis) [ 13 ] In 2009, the house rules were updated. These related to the operation of Crescent and, in particular, who was eligible for membership, the requirement for meetings, for example. [ 14 ] The members received Minutes of the board meetings. The receipt of those Minutes was deemed to be good and sufficient knowledge of the decisions made by the Board. Mr. and Mrs. Brown, who acknowledged they had received all the Minutes, were taken to have received notice of the decisions made by the Board concerning the shower repairs. [ 15 ] A

summary of the relevant Minutes is, as follows: (

a) August 19, 2009 – An inspection of the condition of the showers. The motion was carried to that effect. (

b) September 16, 2009 – A list was being compiled of the units with showers. (

c) October 21, 2009 – The list of the units with showers to be provided to the Board. (

d) November 26, 2009 – Reference to a list being compiled regarding the ensuite showers. (

e) January 20, 2010 – The need for the list of units with showers. (

f) June 17, 2010 – A number of units needed repairs to the showers. The cost per shower was approximately $5,000. (

g) August 18, 2010 – Discussion regarding the cost incurred for shower repairs and to look into maintaining the optional upgrades in the units, such as showers and canopies. (

h) September 15, 2010 – Reference that unit #37 and #49 will have their showers repaired. To my understanding, these are two of four units I mentioned above. (

i) October 28, 2010 – Three ensuite showers have been repaired. (

j) October 27, 2011 – There are two more showers that are in need of major repairs. (

k) November 16, 2011 – More showers are to be fixed. (

l) On December 9, 2011, an inspection was made of Mr. and Mrs. Brown’s unit. A note was made on the inspection report that the ensuite shower needed to be repaired. (

m) January 18, 2012 – Maintenance and repairs of the showers, as noted in the unit inspection left with the unit member, are the responsibility of the member of the unit to have them immediately addressed and to see attached notes from the Maintenance committee. (

n) February 15, 2012 – Obtain legal advice regarding members’ responsibility to maintain the unit. (

o) March 21, 2012 – Based upon the legal advice received, the cost incurred by the co-op in repairing showers is to be recovered from the members of the particular units. The legal opinion was provided to the members. (

p) April 18, 2012 – Letters requesting re-imbursement were sent to members whose showers were replaced at co-op’s cost. (

q) April 25, 2012 – Legal opinion of Gehlen Dabbs, as follows: We confirm that the Board of Directors has retained us to act as the lawyers for the Co-op. In so doing, we act at law upon the instructions of the Board. In that regard, the Board has asked us to provide you with the legal basis for its position that you are responsible for the shower and other repair costs that the Co-op will incur in your units. Here is that legal basis: a. Under

section 3(

g) of the Lease (being the same wording in both the old and new versions of the Lease), the member has the obligation to keep every aspect of the interior of the unit in good repair. That includes the showers for those members that arranged for their installation. b. There is no obligation on the Co-op to thereafter do anything to the interior of the unit. The fact is however that the Co-op may do repairs and renovations from time to time, but in doing so, the Co​op will typically do equivalent renovations to each unit.

That is, if the Co-op as a whole agrees that the housing charges should pay for general renovations from time to time, then that will occur and of course that is a good thing. c. Again, however, because those renovations are, strictly speaking, a voluntary action on the part of the Co-op, it does not carry with it an obligation to do repairs to aspects of particular units that were originally installed at the request of the particular members. There is no such obligation at all upon the Co-op. d.

All members are entitled to equal renovations over the course of time and those who do not have showers are therefore not obliged to contribute to the cost of repairs and renovations for those members who do have showers.

e. After the showers were installed, they became the property of the Co-op at law. That however does not carry with it any obligationwhatsoever on the part of the Co-op to repair them. As set out above, that is because there is no obligation upon the Co-op in theOccupancy Agreement to do any renovations to the interior of the units. It only works out that way if the Co-op wants to voluntarily dorenovations, in which case all members get equal renovations done. Those who want more are required by law to pay for them. (

r) May 16, 2012 – Response to inquiries from a few members to the letter from Gehlen Dabbs circulated with the Minutes of April18, 2012 Board meeting. (

s) June 20, 2012 – A discussion about the repairs of the showers and the member’s financial responsibility of this repair as stated inthe lease agreement. Clarification of the letters circulated to members requesting repayment to the Co-op of the cost of the repairs andthe legal reason the decision was revised. A few members expressed their dissatisfaction with the Co-op’s request that they incur thecost for the repairs of their own shower. (

t) August 15, 2012 – Members reminded that the maintenance and repairs of the showers and the interior of the unit are theresponsibility of the member. [16] On June 24, 2012, Mr. and Mrs. Brown repaired the shower, without any prior consultation with the Board or maintenancecommittee. They did so in good faith, with the full expectation that they would be reimbursed. [17] It is against the context of the facts set out above that I must determine if Mr. and Mrs. Brown are entitled to anyreimbursement. [18] Ms. von Ruti relies upon two cases. The first is Sami’s Restaurant v. W. Hanley & Company Ltd. 2002 BCCA 218.

In thatdecision, Madam Justice Huddart said as follows: [19] At the root of the appellants’ submission that the respondents are estopped from relying on the express expiry date of the 2202lease, is the proposition they “ought not to have allowed the Appellants to expend substantial sums in combining the leases into onerestaurant” during 1988, “all the while knowing that the Appellants believed the leases would expire in 2008 as set out in the 2210lease.” [20] This proposition falters on the failure to establish knowledge on the part of the respondents that the appellants believed the leaseswould expire in 2008.

Not only is there no direct evidence the respondent knew in March 1988 of Mr. Yehia’s mistaken belief that thelease would expire in 2008, the trial judge rejected Mr. Yehia’s evidence of an express oral agreement to extend the expiry date of thewritten lease his solicitor drafted. She found Mr. Yehia first suggested to Mr. Hanley that the leases ran together in 1994. By letter ofJune 28, 1994, Mr. Yehia set out his position that the parties had agreed this would be the case. … [28] There is no injustice in permitting the appellants to enforce their legal rights in these circumstances.

The appellants have notestablished that the conduct and behaviour of the respondents, and Mr. Hanley in particular, is such as to make it “wholly inequitable that[they] should be entitled to succeed in the proceeding.” This is the fundamental test for the application of estoppel by conduct approvedby this Court in Litwin Construction

(1973) Ltd. v. Pan (1988), (BC CA), 29 B.C.L.R. (2d) 88 (C.A.) at 99. Theprevention of injustice caused by reliance is the purpose of estoppel by conduct or acquiescence. [19] Ms. von Ruti relies upon this case for the principle that although Crescent paid the repairs for 4 units noted earlier in theseReasons, it does not prevent Crescent from declining to pay for the repairs incurred by Mr. and Mrs. Brown, or other members. [20] The second case is Peter v. Synala Housing Cooperative, 2003 BCSC 483. Mr. Justice Edwards noted at paragraph 25 thatClause 7 of the lease said, as follows: CO-OP WAIVER PROVISIONS 7. The Member agrees with the Co-op as follows: (

a) That the failure of the Co-op to insist in one of more instances upon a strict performance by the Member of any terms contained inthis lease, or the failure of the Co-op to exercise any right or option contained in this lease, or to serve any notice, or to institute anyaction or proceeding hereunder, or to terminate this lease, shall not be construed to be a waiver or relinquishment for the future of suchterm, option and/or right, but, on the contrary, such term, option and/or right shall continue and remain in full force and effect. (

b) That the receipt by the Co-op of any sum due by the Member, with knowledge on the Co-op’s part of any breach by the Memberof any term, and/or provision of this lease shall not constitute a waiver of such breach, and the Co-op shall not under any circumstancesbe considered to have waived any breach unless such waiver shall have been expressed in writing signed by two of the Co-op’s Directorspursuant to a resolution approved by the Co-op’s Board of Directors. [21] In the Peter case, the member was over housed, ie. she had more space than was required. At paragraph 30, Mr.

JusticeEdwards said, as follows: [30] If I am wrong about that, I would find that clause 7 precludes Ms. Peter arguing the Co-op waived its right to enforce the oneperson per bedroom policy by signing the lease in contravention of the policy. [22] Ms. von Ruti relies upon the Peter case, again, for the proposition that a prior decision made the Board does not bind the Boardregarding a different decision it makes regarding another unit, i.e. the fact that the Board authorized reimbursement for the repairs to the4 units in 2009 and 2010 does not obligate Crescent to pay for the repairs to other units.

[ 23 ] After reviewing the legal framework, the lease, the house rules, the changes to the house rules, and the case law, I conclude that Crescent is not obligated to reimburse Mr. and Mrs. Brown. Neither the terms of the lease and the house rules, nor the agreement when Mr. and Mrs. Brown installed the shower at first instance supports that Crescent is responsible for the repairs incurred by Mr. and Mrs. Brown in June 2012. Nor is Crescent estopped, that is, prevented from making a different decision concerning Mr. and Mrs.

Brown’s unit, than it did regarding the 4 units for which Crescent paid for the repairs to the showers. [ 24 ] It is regrettable that Crescent expected elderly individuals such as Mr. and Mrs. Brown to appreciate the effect of the Minutes, even though the Board discharged their legal obligation. [ 25 ] As Mrs. Brown explained at the end of the hearing, damage has been done far in excess of the costs of the repairs. This dispute has affected Mr. and Mrs. Brown’s enjoyment of living and relationships with their neighbours. Mrs. Brown is 80. It has been, and continues to be, extremely unpleasant for Mr. and Mrs.

Brown and, no doubt, other members, as a result of what has occurred. I expect that the actual costs saved by Crescent are minimal as the reimbursement would have been paid from contingency funds or other funds collected from all of the members. [ 26 ] Accordingly, I must dismiss the claim. ________________________ Lawrence A. Kahn Adjudicator