Executive Summary: Key Legal and Evidentiary Issues

• Strata corporations lack standing to sue under s. 22 of REDMA following the Findlay CA decision, requiring individual purchasers to bring such claims.

• Individual unit owners sought to be added as plaintiffs after the Court of Appeal clarified standing requirements in August 2024.

• Defendants argued the proceeding should be declared a nullity and that adding parties after the limitation period would cause prejudice.

• The plaintiff maintained claims for breach of contract and negligent/fraudulent misrepresentation in addition to the REDMA claim, for which strata standing remains arguable.

• Rule 6-2(7)(c) provides discretionary authority to add parties where a real issue exists and it is just and convenient to do so.

• Tenfold Projects Inc.'s involvement in marketing six "developer's release" units created a triable issue sufficient to preserve the claim against them.

Background of the dispute

This case arises from the development of a residential building called "the Wade," located at the intersection of Pandora and Cook Streets in Victoria, British Columbia. The plaintiff, The Owners, Strata Plan EPS 6871, commenced an action against several defendants including Amadon Westwater Projects Ltd., Axis Asset Management Ltd., Tenfold Projects Inc., and two individual directors, David Andrew Price and Miroslaw Wladyslay Tomaszewski. The strata corporation alleged that the defendants made misrepresentations in disclosure statements regarding certain amenities that would be included in the construction, which the defendants subsequently failed or refused to install. The claims were brought under s. 22 of the Real Estate Development Marketing Act (REDMA), as well as for breach of contract, fraudulent misrepresentation, and negligent misrepresentation.

The standing issue

At the time the action was commenced, there was no authority for the proposition that a strata corporation could not commence an action pursuant to s. 22 of REDMA on behalf of the individual owners if authorized to do so pursuant to s. 171 of the Strata Property Act. However, on August 21, 2024, the BC Court of Appeal issued reasons for judgment in The Owners Strata EPS401 v. Findlay, 2024 BCCA 305, ruling that the strata corporation lacks standing to bring a claim under s. 22 of REDMA and that such a claim must instead be brought by the individual original purchasers of the units from the developer. This reversed the prior ruling of the Supreme Court of British Columbia in The Owners Strata EPS401 v. Findlay, 2023 BCSC 500. In response to this development, the plaintiff applied under R. 6-2(7)(b) or alternatively R. 6-2(7)(c) to add the individual owners as additional plaintiffs.

The defendants' applications

The defendants applied under R. 9-5 or alternatively R. 9-6 to strike the claim without leave to amend. They also applied to strike the claim against two of the defendants, Axis Asset Management Ltd. and Tenfold Projects Inc. The defendants argued that proceedings started by a party without standing should be ruled a nullity, relying on Ari v. Insurance Corporation of British Columbia, 2021 BCCA 180 and Madadi v. Nichols, 2021 BCCA 10. They further submitted that adding the individual owners as parties to the action would prejudice them from relying on a limitation defence, and that prior to the court's decision in Findlay CA, the plaintiffs knew or ought to have known there was significant risk that their claim would fail based on standing.

The court's analysis on adding parties

Justice Young found the more flexible discretionary R. 6-2(7)(c) to be more appropriate in this case. The court determined there was a question between the proposed plaintiffs and defendants related to relief claimed in the proceeding and the subject matter of the proceeding, fulfilling the threshold requirement. The court noted the modern approach is to treat procedural errors or defects as irregularities instead of nullities. The delay in adding the parties was explained by the efforts of the plaintiff to get their consent to be added, ensure that all additional plaintiffs are original purchasers of the units they currently own, and obtain evidence of the misrepresentations they each relied on. Between April and September 2025, when the application was provided to the plaintiffs and when it was filed, there were four individuals who sold their properties and therefore no longer had an interest in the proceeding. The court found no evidence to infer that the decision not to add the owners as plaintiffs was deliberate or to mislead the court.

Considerations regarding the limitation period

While the expiration of the limitation period was necessary to weigh, the court held it did not warrant finding this proceeding a nullity based on the factors in Letvad. There was no surprise that the individual owners were seeking to be added to the proceeding, as they were always represented by the strata corporation. The court noted this does not set a precedent permanently extinguishing the limitation period in s. 22(9) of REDMA, as this is a very specific factual scenario, applied in light of the timing of Findlay CA's release. The individual purchasers began moving into the building in 2021 and this is when these misrepresentations would have crystallized. The strata brought this action in 2023, prior to the expiration of the limitation period. If the purchasers brought an action now, it would fall outside of the two-year period, which would avoid a hearing of the matter on its merits.

Claims against individual defendants

The plaintiff consented to dismissing the claim against Axis Asset Management Ltd. However, regarding Tenfold Projects Inc., the court declined to strike the claim. Evidence put before the court by the plaintiff outlined that Tenfold was responsible for marketing and selling a "developer's release" of six units that were originally held back from sale. The defendants submitted that Tenfold had no involvement in the development or marketing of the Wade, and that the only involvement was through the defendants Mr. Price and Mr. Tomaszewski, who serve as partners at Tenfold and directors of Amadon. The court found there remained an issue of whether Tenfold was partially responsible for the misrepresentations in this case.

Ruling and outcome

The Honourable Justice Young denied the defendants' application to strike the entire claim and allowed the plaintiff's application to add the individual owners as additional plaintiffs to the action. The claim against Axis Asset Management Ltd. was struck with the plaintiff's consent, but the claim against Tenfold Projects Inc. was not struck. The plaintiff, as the successful party in both applications, is entitled to its costs at Scale B. No specific monetary award was determined at this stage, as this decision addressed only the procedural matters of party standing and the addition of plaintiffs; the substantive claims remain to be determined at trial on their merits.