In the first decision of its kind, the CRT has award legal fees against an owner and payable to a strata corporation. In the case of Parfitt v The Owners, Strata Plan VR 416, 2019 BCCRT 330, the owners were suing the strata corporation over concerns of the proper governance of the strata corporation.
However, one of the owners had already sued the strata corporation in BC Supreme Court for very similar issues. The CRT found that there were significant overlap between the two actions and refused to resolve the owners’ claims against the strata.
In response, the strata sought an order for special costs (which are the actual legal costs the strata paid to its lawyers to defend the action) against the owners. The strata claimed that the duplicative proceeding was frivolous and an abuse of process.
The CRT noted:
28. Special costs are different from the tribunal’s general authority to order a party to pay another party’s legal fees in exceptional circumstances. However, in this case the power to order legal fees is analogous to an order of special costs. For that reason, I find it helpful to consider the general legal principals applicable to special costs.
29. Special costs are an unusual order, in which a court will order a party to pay all or part of another party’s legal costs. An award of special costs is only made in exceptional circumstances, and is intended to chastise a party for reprehensible, scandalous or outrageous conduct. By rebuking such conduct, the court punishes and deters bad behavior and distances itself from it: Westsea Construction Ltd v 0759553 BC Ltd;, 2013 BCSC 1352, at para. 37.
30. Special costs are set out in the BC Supreme Court Civil Rules, which do not directly apply to the tribunal. However, the tribunal has authority to order payment of legal fees. Tribunal rule 32 says the tribunal will not order one party to pay another party’s legal fees, except in extraordinary cases. This follows from the general rule in section 20(1) of the Act that parties are to represent themselves in tribunal proceedings. To date, there has been no prior tribunal decision ordering payment of dispute-related legal fees.
In this case, the CRT found that the owners’ conduct was threatening and constituted an “extraordinary case”. The CRT noted that the strata incurred approximately $10,000 in legal fees and costs in consulting a lawyer regarding the owners’ claim. Therefore, the CRT found that it was appropriate for the owners to pay the strata 50% of their legal fees in the sum of $5,233.38.
In the end, the owners’ claim was dismissed and they owed the strata legal fees for their threatening conduct.