Land Title Practice Manual

278.1 Confirmation By Court Of Winding-up Resolution

In This Volume

278.1 (1) A strata corporation that passes a winding-up resolution in accordance with section 277, if the strata plan has 5 or more strata lots,

  • (a) may apply to the Supreme Court for an order confirming the resolution, and
  • (b) must do so within 60 days after the resolution is passed.
  • (2) For certainty, the failure of a strata corporation to comply with subsection (1)(b) does not prevent the strata corporation from applying under subsection (1)(a) or affect the validity of a winding-up resolution.
  • (3) A record required by the Supreme Court Civil Rules to be served on a person who may be affected by the order sought under subsection (1) must, without limiting that requirement, be served on the owners and registered charge holders identified in the interest schedule.
  • (4) On application by a strata corporation under subsection (1), the court may make an order confirming the winding-up resolution.
  • (5) In determining whether to make an order under subsection (4), the court must consider
  • (a) the best interests of the owners, and
  • (b) the probability and extent, if the winding-up resolution is confirmed or not confirmed, of
    • (i) significant unfairness to one or more
      • (A) owners,
      • (B) holders of registered charges against land shown on the strata plan or land held in the name of or on behalf of the strata corporation, but not shown on the strata plan, or
      • (C) other creditors, and
    • (ii) significant confusion and uncertainty in the affairs of the strata corporation or of the owners.

2015-40-52, effective July 28, 2016 (B.C. Reg. 206/2016).

CASE LAW

In Dubas v. Strata Plan VR 92, 2019 BCCA 196, the court upheld the chambers judge’s decision that the Strata Property Act does not require a supermajority vote of owners to authorize the strata council to retain a realtor to solicit offers for the sale of the strata complex, and that ss. 277 and 278.1 provide sufficient protection for the rights of minority owners in their requirement of an 80% vote and court approval of a winding-up resolution.

Court Confirms Special General Meeting Resolutions for Winding-up and Sale of Strata Complex

Strata Plan LMS 3746 v. Strathcona Denture Clinic Inc., 2022 BCSC 1961 was a dispute over the winding-up and sale of a 25-unit commercial strata complex. The petitioner, GC Ltd., the owner of 22 of the units, and the pending owner of two additional units issued a notice under s. 43 of the Strata Property Act requiring the strata council to convene a special general meeting (“SGM”) to approve motions to dissolve the strata corporation and to sell the strata complex to CD Ltd., a company related to the petitioner. The notice attached an agenda for the meeting, an interest schedule, and a restricted proxy form. The motions were approved by 88.5% of the unit owners; they were not approved by the respondents, two brothers who owned a unit in the complex in which they had operated a denture clinic for over 14 years. The petitioner now applied for court confirmation of the SGM resolutions. The respondents opposed the petition, claiming they would be unable to purchase or rent another commercial space within the same neighbourhood without further investment or mortgage debt, rendering the winding-up and sale significantly unfair to themselves.

Held, petition allowed. There had been substantial compliance with the procedural requirements of the Strata Property Act relating to the winding-up and sale of the strata property: more than 80% of the unit owners supported the resolutions, and all owners would receive fair compensation for their units from the sale proceeds. The winding-up and proposed sale were in the best interests of the owners generally. Here, the respondents had failed to establish anything more than their own view that the winding-up and the sale were not in the best interest of the strata corporation as a whole; rather, it was clear they simply did not wish to sell their strata lot and move their business to a new location. After balancing the competing interests and the magnitude of hardship and inconvenience, the court found the respondents had failed to demonstrate that the hardship and convenience they would suffer was so grave as to warrant refusal of the court’s confirmation under the Strata Property Act.