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{"id":536,"date":"2019-08-25T21:20:50","date_gmt":"2019-08-25T21:20:50","guid":{"rendered":"http:\/\/societiesact.ca\/?p=536"},"modified":"2019-08-27T15:51:25","modified_gmt":"2019-08-27T15:51:25","slug":"can-a-society-fine-its-members-2019-bccrt-830-tam-v-owners-association-et-al","status":"publish","type":"post","link":"http:\/\/societiesact.ca\/can-a-society-fine-its-members-2019-bccrt-830-tam-v-owners-association-et-al\/","title":{"rendered":"Can a society “fine” its members? 2019 BCCRT 830: Tam v. Owners Association et al"},"content":{"rendered":"

When a Society may properly fine its members was raised before the Civil Resolution Tribunal, in the context of a rental pool arrangement and compulsory society membership in Whistler, BC. The case is\u00a0Tam v. Evolution Owners\u2019 Association et al<\/a><\/em>, 2019 BCCRT 830 (CanLII).<\/p>\n

<\/p>\n

Forum:<\/b><\/p>\n

BC Civil Resolution Tribunal (As a Small Claim, not a Societies Claim)<\/p>\n

Facts:<\/b><\/p>\n

The applicant owned a quarter share of a residential strata lot. Each owner in the strata had a sublease with the respondent society, Evolution Owners\u2019 Association (Evolution), which provided that all rentals be managed through Evolution\u2019s rental pool.<\/p>\n

Evolution\u2019s bylaw 18.5 (a) prohibited an owner from renting out or advertising their unit for rent other than in accordance with the sublease, which requires that Evolution will manage the rental exclusively. Bylaw 18.5 (b) prohibited an owner from advertising their unit for rent on any service arranged by Evolution or its manager, including Craigslist.<\/p>\n

Bylaw 18.5 (d) required an owner in contravention of bylaw 18.5 (a) to pay Evolution the \u201crack rate\u201d for the strata lot for each day it was rented in contravention of bylaw 18.5 (a). It also requires an owner to pay Evolution $50 for each separate medium or service the owner advertised the strata lot for rent in contravention of bylaw 18.5 (b).<\/p>\n

The applicant advertised the unit on Craigslist and rented it to the respondent of a Craigslist ad. The applicant was fined a significant amount ($3,400). The applicant sold the unit and subsequently disputed the fines as a small claim. A counter-claim was brought but will not be addressed in this case comment.<\/p>\n

Analysis and Holding:<\/b><\/p>\n

The CRT decided this case, which involved the interpretation of s. 70 of the Societies Act<\/em>, without counsel for either the applicant or Evolution (as is the process of the CRT). It stated that even if fines were available as discipline of a member, no procedural fairness was afforded as no prior notice of the fine had been given under s. 70(3) of the Act and no opportunity to be heard was provided. The fine was quashed.\u00a0The fine amount and court ordered interest was payable to the applicant as a small claims debt.<\/p>\n

In coming to its conclusion, the CRT stated the problematic obiter dicta, meaning non-binding comments, underlined in the following:<\/p>\n

\u201cEvolution says it has authority to levy fines against its members under section 70 (1)<\/span><\/a> of the Societies Act<\/span><\/a><\/i>, which says the bylaws of a society may provide for the discipline or expulsion of members. Evolution says \u201cdiscipline\u201d must reasonably be interpreted to include fines, as there are limited ways to discipline members of a society.<\/p>\n

The question of whether \u201cdiscipline\u201d in section 70(1)<\/span><\/a> of the Societies Act<\/span><\/a><\/i> includes fines has not been judicially considered, but I find it is unlikely that section was intended to allow societies to fine its members. Other sections of the Societies Act<\/span><\/a> <\/i>refer specifically to fines. If the legislature had intended fines to be a form of discipline under section 70(1)<\/span><\/a> there is no reason it could not have specifically referred to fines in that section, which it did not do.<\/span> However, because of section 70(3)<\/span><\/a> of the Societies Act<\/span><\/a><\/i> which I address below, <\/i>I find it is unnecessary for me to make a finding as to whether fines are included in discipline under section 70(1)<\/span><\/a> of the Societies Act<\/span><\/a><\/i>.\u201d<\/p>\n

Critique:<\/strong><\/p>\n

Where are the core societies and corporate law principles?<\/em><\/p>\n

Bylaws create a contractual relationship between a member and the society as an organization. They are subject to the law of contract, with the remedy for disagreement being resignation (subject to special resolution and now the claim of oppression) or in this case, payment of the fine and sale of the unit that the bylaw rental fees and fines applied to.<\/p>\n

As we will recall from\u00a0Senez c. Montreal Real Estate Board,\u00a0<\/em>[1980] 2 S.C.R. 555 (SCC),\u00a0<\/em>wherein the Supreme Court of Canada stated the following fundamental principles of societies law, referred to with approval in BC in\u00a0Lee v Lee\u2019s Benevolent Assn. of Canada<\/em>, 2007 BCSC 794:<\/p>\n