Strata Corporations are not “government” for the purposes of the Charter

A recent decision on the Supreme Court of British Columbia has dismissed a strata property owner’s constitutional challenges to certain provisions of the Strata Property Act. In The Owners, Strata Plan NW 499 v. Louis, 2015 BCSC 1487, Mr. Justice Armstrong held that, although creatures of statute, strata corporations were not “government” for the purposes of the Charter and therefore, the disgruntled Mr. Louis’ constitutional arguments were not supportable

The Strata had sued Mr. Louis to collect his unpaid strata fees through a sale of his strata unit. In defence, Mr. Louis contended, amongst other arguments, that the provisions of the Act that empower strata corporations to sell the units of owners who have not paid their strata fees or that allow strata corporations to limit the rights of such owners to vote at strata meetings or to run for office on strata council offended his rights under the Charter, specifically, ss. 2(b) and (d) and 7.

Mr. Justice Armstrong entertained arguments from the Attorney General of British Columbia that the Charter does not apply to the Act or the bylaws of the Strata. He stated at paras. 143-44:

[143]     The Strata and the Attorney General argue the Charter does not apply to the Act or bylaws of the Strata. If I am satisfied that this submission prevails, it is unnecessary to decide any of the following issues including standing and breaches of Mr. Louis’s  ss. 2(a), 2(d) and 7 Charter rights.

[144]     The threshold question posed in Mr. Louis’s challenge is whether the Charter applies to the Act insofar as it might affect his private dispute concerning owners’ obligations under the Strata bylaws and rights under the Charter he claims have been infringed by actions of the Strata.

First, Mr. Justice Armstrong considered whether strata corporations could be considered to be “government” or whether the activities of a strata were sufficiently “government-like” [para. 146]. At para. 147 he quoted Mr. Justice LaForest in Eldridge v. British Columbia (Attorney General), [1997] 3 SCR 624 where the learned justice addressed the test for what constitutes “government” for the purposes of the Charter:

LaForest J. summarized the approach to the question of whether the Charter applies to an entity:

[44]      … the Charter may be found to apply to an entity on one of two bases. First, it may be determined that the entity is itself “government” for the purposes of s. 32. This involves an inquiry into whether the entity whose actions have given rise to the alleged Charter breach can, either by its very nature or in virtue of the degree of governmental control exercised over it, properly be characterized as “government” within the meaning of s. 32(1). In such cases, all of the activities of the entity will be subject to the Charter, regardless of whether the activity in which it is engaged could, if performed by a non-governmental actor, correctly be described as “private”. Second, an entity may be found to attract Charter scrutiny with respect to a particular activity that can be ascribed to government. This demands an investigation not into the nature of the entity whose activity is impugned but rather into the nature of the activity itself. In such cases, in other words, one must scrutinize the quality of the act at issue, rather than the quality of the actor. If the act is truly “governmental” in nature – for example, the implementation of a specific statutory scheme or a government program – the entity performing it will be subject to review under the Charter only in respect of that act, and not its other, private activities.

[Emphasis added.]

Applying these principles, Mr. Justice Armstrong concluded that “that strata corporations created under the Act are not by their nature government nor are their activities controlled by government to the extent that they attract Charter scrutiny.” [para. 149]

He noted that the Act, together with the Regulations and strata bylaws, was intended to create a private arrangement pursuant to which strata unit owners could enjoy their individual and collective entitlements:

[151] Similarly, though a strata corporation is created by statute and all powers and duties derive from the statute, it is not subject to the control of government in carrying out its duties and powers. The interplay between the owners, strata bylaws and the Act is in the nature of a private agreement to use the same real property in a common purpose, which is the creation of an individual living space. Strata’s manage and maintain the common property and common assets through an executive council elected by the members to exercise the powers and perform the duties necessary to facilitate each owner’s use of space. The Strata does not act in furtherance of any government program or policy.

Despite certain parallels with municipal governments, he could not make the leap to “government” for the purposes of the Charter:

[160] People acquiring strata title property in BC do so with the assurance that bylaws and regulations are mandated to provide for the orderly administration of the affairs of the strata corporation, including the building, facilities and grounds. Although some of the indicia of municipalities parallel the functions of strata corporations (such as the right to set fees for the proper management and administration of the strata corporation), none of the powers and functions of a strata corporation are those which the province would otherwise have to perform itself. The fees collected by the strata are used for the direct personal benefit of the owners. The Act does not download government functions to the strata that would have been performed by the provincial government in the absence of the strata corporation. The province created the strata corporation to provide a means of property ownership that facilitated private community management of land or space for the benefit of all units in the plan.

[161] If the province had not created this model of property ownership then land that is now strata property would otherwise remain owned, used and governed in the same way as all other land in a municipality. The owners of the land would have the typical relationship with the municipality and be entitled to Charter protection where appropriate. The provisions of the Act that Mr. Louis complains of relate to the rights and responsibilities of owners and strata corporations but do not concern powers and functions the province would otherwise undertake. In my view, the Charter was not intended to address the type of nongovernmental activity performed by strata corporations as provided for in the Act and those activities challenged by Mr. Louis do not come within the ambit of the Charter.

In my view, Mr. Justice Armstrong got it right when he held that the strata activities challenged in the case before him did not fall under Charter scrutiny. In so saying, I note that the governance of strata corporations can have great influence over the lives of their owners – perhaps even greater influence than their federal, provincial or municipal governments may have. For many strata issues, there are remedies in the Strata Property Act, in human rights code legislation and in tort law. But the degree of influence a private governance structure may have over an individual’s life should not dictate whether its activities fall subject to the application of the Charter or not. This was Mr. Justice Armstrong’s point -there must be some greater degree of attachment to the formal State.

I note that, to the extent that some litigant may later want to suggest that this decision means that the Strata Property Act is immune from all Charter review, I would have to caution that, of course, it does not stand for that proposition. The Act, after all, is still an enactment and even though it deals with private matters, it still has to pass constitutional muster. But it is clear from this decision that the strata activities authorized by that Act to ensure orderly raising and collection of strata fees are not, per se, Charter reviewable.

I remain

Constitutionally yours

Arthur Grant

One thought on “Strata Corporations are not “government” for the purposes of the Charter

  1. Hello. I have a question regarding the business practices of a property management company. This Management Company claims on their website that they are maintaining the highest standards in property. I have photos that clearly show that this management company is defrauding us homeowners by doing outrageously bad maintenance. They also use a CONSULTING firm to prepare Deprecation Reports and 2 of the managing partners at this firm are Liecensed brokers for this management company. This CONSULTING firm also claim on their website that they prepare “Comprehensive” Deprecation Reports. I’ve reviewed both Deprecation Reports and noticed that they were using the same photos for their Deprecation Reports and one is a carbon copy of the other.
    Thank you.

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