Executive Summary: Key Legal and Evidentiary Issues

• Appellants alleged that strata council members breached fiduciary duties and the Strata Property Act in negotiating common area use agreements and executing a release.

• The core claim hinged on whether the 2020 Council had a conflict of interest in executing a release in favour of the 2019 Council.

• The petition sought declaratory relief and damages but was narrowed during hearing to relief contingent on liability in a separate action, which was later dismissed.

• Supreme Court dismissed the petition after finding no proven conflict, self-interest, or bad faith by the 2020 Council.

• Appeal was declared moot because the contingent basis for relief—the success of claims in the 2019 Action—no longer existed.

• The Court of Appeal declined to hear the moot appeal, finding no practical impact or general importance warranting review.

Background of the dispute
This appeal arose from a protracted governance dispute within a strata corporation in Victoria, British Columbia. The appellants, Sylvie Rochette, Jim Tennant, and Laura Podgorenko, were owner-occupiers of strata units and opposed the conduct of the 2019 and 2020 Strata Councils. The strata building includes units operated as hotel rooms through a lease agreement with the Victoria Regent Hotel, causing a division between owner-occupiers and those in a rental pool. The appellants alleged that the 2020 Council members improperly entered into lease renewals and executed a release that shielded the 2019 Council from legal claims, contrary to their obligations under the Strata Property Act.

The agreements and legal proceedings
The dispute centered on two key issues: the negotiation of a common area use agreement (CAU Agreement) with the hotel operator and the execution of a release of claims in favour of the 2019 Council. The appellants claimed these actions were unauthorized and tainted by conflicts of interest. The 2020 Council had entered into two versions of the CAU Agreement—one in July 2020 and a revised version in November 2020—without a formal vote of the strata owners. They also signed a release agreement in January 2021, settling claims brought in a separate 2019 legal action.

In February 2022, the appellants filed a new petition seeking a range of remedies against the 2020 Council, including declarations of breach, personal liability, and punitive damages. However, by the time of the August 2023 hearing, they narrowed their petition to seek only limited declaratory and contingent relief, depending on the success of the 2019 Action. That related case was subsequently settled and dismissed by consent.

Supreme Court decision
Justice Harvey dismissed the petition in January 2024. He found the matter suitable for summary determination and rejected the appellants’ theory that the 2020 Council had acted out of self-interest in executing the release. The Court found no evidence of personal gain, bad faith, or dishonest conduct. The judge emphasized the lack of a proven conflict and the absence of any nexus between the conduct of the 2019 and 2020 Councils. He also ruled that the appellants failed to establish a legal basis for their claims under the Strata Property Act and that the 2020 Council reasonably believed they had authority to act.

Developments after dismissal
Following dismissal of the petition, the 2019 Action—upon which the remaining claims depended—was also discontinued by consent in March 2024. With no longer any claim against the 2019 Council, the basis for relief in the petition was extinguished. The Court noted this procedural development as rendering the petition, and the appeal of its dismissal, effectively moot.

Appeal and Court of Appeal ruling
On appeal, the appellants argued that the chambers judge erred by not ordering cross-examination or more robust procedural steps to resolve disputed facts and by inadequately addressing their conflict of interest claims. The respondents, including the strata corporation and individual council members, applied to have the appeal quashed as moot. The British Columbia Court of Appeal agreed, concluding that the relief sought was entirely contingent on a now-dismissed claim. Without a live controversy affecting the parties' rights, the case failed the “live issue” test under the doctrine of mootness.

The Court found no justification to exercise its discretion to hear the appeal despite mootness. It noted that doing so would expend further resources without legal or practical benefit and reaffirmed that courts do not issue rulings for the purpose of general commentary or community guidance in the absence of a concrete dispute.

Final outcome
The appeal was quashed by the Court of Appeal. The Court declined to address the appellants’ arguments, reaffirming the principle that courts should not engage in academic or abstract adjudication when no current legal rights are at stake.