Executive Summary: Key Legal and Evidentiary Issues

• Respondents constructed a ground-level deck on their strata lot without obtaining the written approval required under the Statutory Building Scheme (SBS).

• The Court found a breach of the SBS but declined to grant a mandatory injunction, noting the SBS lacked specific restrictions guiding property owners' proposed improvements.

• Equitable damages of $5,000 were awarded in lieu of an injunction, assessed as the amount the administrator would likely have accepted to grant relief from the SBS — far below the petitioner's claimed $20,000.

• Article 5.11 and clause 5.13 of the SBS were central to the dispute, with the Court finding clause 5.13's cost-recovery language insufficiently clear to support full indemnity costs.

• Contractual interpretation principles from Sattva Capital and the "clearly and unequivocally expressed" test from Eisler Estate were applied to deny the petitioner's claim for solicitor-client costs.

• Party and party costs on Scale B were ultimately awarded to the petitioner as the substantially successful party across all three proceedings.

The dispute at Valley's Edge Park Resort

Moira and Denis Holden owned Lot 5, a bare land strata property within the Valley's Edge Park Resort, a 49-lot recreational development in Edgewater, British Columbia. The Resort was governed by a Statutory Building Scheme registered in June 2006 under s. 220 of the Land Title Act, which required all owners to obtain written approval from the administrator — Valley's Edge Park Ltd. — before undertaking any construction or improvements on their strata lots. In August 2022, the Holdens constructed a new ground-level deck adjacent to their cabin without first obtaining the administrator's written permission.

The approval process and its breakdown

Denis Holden sent a hand-drawn plan to Ken Aylesworth, the president of the strata council, in July 2022, noting it was a request for approval of the added deck. However, Mr. Aylesworth did not forward this diagram to Glen Ortt, the president of the petitioner company, until September 5, 2022 — after the deck had already been completed. Mr. Aylesworth informed the respondents that the strata council had no jurisdiction over such requests and that he would deliver the diagram to Mr. Ortt for review and comment. On September 8, 2022, Mr. Ortt responded with what the Court described as a "testy response," indicating that the required deck approval request form had not been attached and that a ground-level deck had already been built. On November 19, 2022, Mr. Ortt formally notified the Holdens under clause 5.13 of the SBS that the deck was not in compliance and gave them 30 days to remove it or submit building plans. The respondents sent drawings on November 26, 2022, but the petitioner rejected the application on December 3, 2022, stating that the deck was already built without approval and that ground-level decks adjacent to existing 4-foot-high decks were "generally not approved." The respondents declined to remove the deck.

Key provisions of the SBS

Several clauses of the SBS were at issue throughout the litigation. Clause 2.2 prohibited any improvement unless plans showing compliance in all respects had been submitted to and approved in writing by the administrator. Clause 2.3 granted the administrator the sole right and power to approve or reject plans in its discretion, with all decisions being final and binding. Clause 2.4 stated that all improvements were to be controlled as to their design for the benefit of the strata lots and the development as a whole. Clause 2.6 prohibited improvements from impeding views or sight lines of adjacent lots. Article 5.11 prohibited owners from constructing or placing improvements in such a way as to detract from the overall design and reputation of Valley's Edge Park and the strata lots benefiting from the building scheme. Clause 5.13 addressed breach remediation, providing that if an owner allowed a breach to continue for more than 30 days after written notice, the administrator could perform work to cure the breach, with the costs — including "the administration of legal costs" — becoming a debt owed by the owner.

The 2024 decision: breach found, injunction denied

In the first decision issued March 4, 2024 (2024 BCSC 377), Justice Armstrong found that the respondents had breached the SBS by constructing the deck without written approval. However, the Court declined to grant the mandatory injunction sought by the petitioner. Justice Armstrong noted that the SBS did not contain specific guidelines or restrictions that could have informed the respondents' design choices, and the petitioner's reason for rejecting the deck — that it looked like an "afterthought" and a "tagged-on appendage" — appeared thin. There was no evidence the deck interfered with any other owner's use or enjoyment of the Resort. The Court observed that both parties bore some responsibility: the respondents built without approval, but the petitioner failed to respond to the initial plan in a timely manner and did not suggest modifications that might have gained approval. Referencing Arbutus Park Estates Ltd. v. Fuller, the Court found that equitable damages could be awarded in the circumstances where the SBS did not spell out specific restrictions as to what the property owner could or could not do. The petitioner was granted leave to amend the petition to seek equitable damages.

The 2025 decision: quantum of equitable damages

In the second decision issued June 24, 2025 (2025 BCSC 1177), the Court addressed the quantum of equitable damages. The petitioner initially invited the Court to revisit its refusal to grant an injunction, but Justice Armstrong declined, noting that an appeal had been filed with the Court of Appeal and that forum was the proper place for such a challenge. The petitioner sought $20,000 in damages as a deterrent, while the respondents argued the deck cost only $1,800 in materials and had no impact on other property owners. The Court applied the Wrotham Park Estate framework for "negotiating damages," assessing what the administrator could reasonably have demanded as a quid pro quo for relaxing the restrictive covenant. Justice Armstrong recognized the inherent value to all SBS owners of the administrator's ability to control building activity and the risk that unapproved improvements could undermine the scheme's effectiveness. However, the Court found the petitioner's $20,000 claim exceeded what might reasonably have been agreed to, and the respondents' self-reported $1,800 material cost was of limited use because it excluded the economic value of the respondents' (and their friends') labour. The petitioner's estimate of $6,700 for construction costs was found to be more helpful. In the end, the Court assessed equitable damages at $5,000, representing an objective measure of what the petitioner would likely have accepted to grant relief from the SBS and what the respondents could reasonably have been required to incur.

The 2026 costs decision

In the third decision issued April 30, 2026 (2026 BCSC 780), Justice Armstrong addressed the parties' submissions on costs. The petitioner sought full indemnity costs under clause 5.13 of the SBS, or alternatively, party and party costs at Scale B. The respondents argued that the SBS cost-recovery language was not "clearly and unequivocally expressed" to encompass solicitor-client costs, relying on Eisler Estate v. GWR Resources Inc. The Court agreed with the respondents on this point, finding that clause 5.13's reference to "the administration of legal costs" applied only when the administrator had performed physical work to cure a breach — which had not occurred here since no injunction authorized the deck's removal. The Court also noted that no invoice for work or services had been delivered to trigger the payment obligation under clause 5.13. Even if the clause did mandate solicitor-client costs, Justice Armstrong indicated he would have exercised his discretion to deny them, referencing Peace River Partnership v. Cardero Coal Ltd. and Schafer v. Schafer, which establish that courts may decline contractual costs based on factors including degree of success, proportionality of expense, and the manner in which litigation was conducted. The Court observed that proceedings were prolonged partly due to the petitioner's initial failure to claim equitable damages as an alternative.

The ruling and overall outcome

Across all three proceedings, Valley's Edge Park Ltd. was found to be the substantially successful party, having established that the Holdens breached the SBS. The respondents were ordered to pay $5,000 in equitable damages in lieu of the mandatory injunction. On the question of costs, the Court denied the petitioner's claim for full indemnity costs but awarded party and party costs on Scale B in favour of the petitioner. The exact amount of party and party costs was not specified in the judgment, as those would be assessed in accordance with the tariff under the Supreme Court Civil Rules.