Sabey Rule Blog

Strata Loses Appeal re Insurance Deductibles

By February 3, 2021No Comments

In my previous post: Improperly Charging Insurance Deductibles to Owners, I discussed several cases in the Civil Resolution Tribunal regarding strata corporations charging insurance deductibles to owners. 

Since that post, the appeal of The Owners, Strata Plan BCS 1589 v Nacht, has been completed and the strata corporation lost the appeal. 

In that case, water leaked from the Nachts’ apartment. The leak cost $87,000 to repair. The strata’s insurance covered the repairs, but the strata had to pay the insurance deductible of $25,000. 

The strata wanted the Nachts to pay the deductible, saying they were responsible for the water damage associated with the pipe failure. They based this upon section 158(2) of the Act, saying that the Act required responsibility, even though their bylaw required negligence before an owner had to pay the deductible.  

Or, they tried to say that the Nachts were negligent, and had to pay the insurance deductible based upon their bylaw. 

The Nachts denied they were negligent and said that they had to be negligent before the strata could charge the deductible back to them. 

The original CRT decision was issued on October 4, 2017, leave to appeal was granted on March 21, 2018 and the appeal decision was finally granted on October 18, 2018. 

Essentially, in this appeal, the Court’s task was to determine whether the CRT’s decision was reasonable. 

Although section 158(2) of the SPA only requires an owner to be responsible for the loss before the deductible can be charged back, the CRT found that the strata had narrowed that responsibility and made the strata only able to charge the deductible back if the owner was negligent. The strata, on the appeal, tried to argue that the CRT was incorrect in this decision. The Court found: 

[54] The CRT concluded that the Strata bylaw 4.4(a) augments s. 158(2) in a manner that does not contravene any provision of the Strata Property Act; furthermore, Strata bylaw 4.4(b), reasons the CRT, clarifies or “specifies” the basis upon which the phrase “if the owner is responsible for the loss of damage” in s. 158(2) is to be interpreted. This, in my view, is a reasonable interpretation and application by the CRT of both the enabling legislation and the bylaws in question; as such, the CRT’s decision ought to be upheld. In this context, to the extent the CRT’s interpretation is seen as narrowing the application of s. 158(2), it does not, in my view, meet the threshold of being deeply flawed such that it [sic] falls outside the range of a reasonable statutory interpretation.

Next, the Court had to determine whether the CRT interpreted the strata’s bylaw reasonably, the Court found it did. 

The final ground was whether the CRT reasonably followed the decision of Morrison: the Court found it did: 

[62] I am unable to conclude that the CRT acted unreasonably in considering Morrison. . . Furthermore, the language of the bylaw in Morrison mirrored that of the bylaw in the instant case. The language of the bylaw in Morrison also included the words “owner’s act, omissions, negligence or carelessness”. In this context, the relevance of Morrison in the instant case is patent. Perhaps, more importantly, the CRT does not mechanically apply Morrison, but rather carefully considers it applicability and notes both the similarities and distinguishing aspects of Morrison to the case before it. Again, I see no error of law or unreasonable conclusion by the CRT in this regard.

In the end, the strata’s appeal was dismissed and it owed court costs to the owners. 

This decision upholds a long line of decisions with similar results. The strata must have a properly worded bylaw or it may be unable to collect insurance deductibles from owners, even if the owners were ‘responsible’ because the strata raised the level of responsibility to actual negligence, intentional acts, etc. 

Again, it is for this reason that it is important for a strata to have properly drafted bylaws or they may be unable to enforce them the way they want/need to in certain circumstances. 


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Taeya Fitzpatrick