A strata corporation, in certain instances, is required to sue its own owners to achieve its goals, which can include, collection of strata fee arrears, special levy arrears, fines, prevent the owner from further breaching the bylaws, collecting insurance deductibles, etc.
The Strata Property Act permits a strata corporation to have a bylaw where the strata corporation can sue an owner in Small Claims Court without first getting 3/4 vote approval of the ownership. However, not all strata corporations have this bylaw.
However, this bylaw doesn’t extend to lawsuits in the Supreme Court of BC. If a strata corporation wants to sue an owner (or any other person or corporation) for things not within the Small Claims Court jurisdiction, the strata corporation has to have 3/4 approval of the ownership.
What happens when a strata corporation has the bylaw and starts a Small Claim against an owner, but then the damages exceed the Small Claim’s threshold of $25,000? The strata corporation has to transfer the claim to the Supreme Court of BC to be able to collect the amounts exceeding $25,000.
Does the strata corporation then have to obtain 3/4 vote approval before it can proceed?
The answer is an unequivocal yes. Master Wilson in the case The Owners, Strata Plan KAS 3162 v Staerkle, 2017 BCSC 392, noted at paragraph 37:
“The legislature has limited the ability of a strata council to bind a strata corporation by requiring that certain decisions require approval by resolution passed by the owners. The provisions of the SPA that require owner authorization restrict the ability of the strata council to bind the strata corporation and give the owners the opportunity to participate in those decisions deemed significant. Some matters require only majority, while others require a unanimous vote. The requirement of a three-quarter vote in order to commence legal proceedings in the Supreme Court is one of about 40 circumstances in which a three-quarter vote is required, . . .”
The Court concluded that “[t]he ability of a strata council to expose the owners to the risk of a judgment for costs of a Supreme Court proceeding without their authorization is the sort of concern” that the SPA is attempting to prevent. Therefore, the strata corporation did require authorization from the ownership before it could continue the claim.