Executive summary: key legal and evidentiary issues

• Petitioners, as owner-occupiers of a strata complex in Victoria, BC, challenged the validity of a 2020 lease renewal between the Strata Corporation and Victoria Regent Hotel Ltd. under ss. 32 and 33 of the Strata Property Act.

• Cause of action estoppel was raised by respondents after a substantially similar petition (Rochette v. McGuire, 2024 BCSC 112) had already been dismissed, barring the petitioners from relitigating the same issues.

• Mootness arose because the petitioners had withdrawn their challenges to the 2020 lease in June 2023, and a new lease was entered into by the Strata Corporation, leaving no live controversy before the Court.

• Allegations of conspiracy, collusion, and corrupt conduct against the individual respondent council members were found to be speculative and unsupported by the affidavit evidence filed.

• Special costs were awarded against the petitioners on the basis that their conduct constituted an abuse of process, including their resistance to consolidating parallel proceedings and their expansion of claims beyond the narrow scope of s. 33.

• Privity of interest between the Coyle petitioners and the Rochette petitioners was established given their identical positions as owner-occupiers, shared legal counsel, and awareness of the parallel litigation.

Background and the strata dispute

The case of Coyle v. McGuire, 2026 BCCA 70, arose from a prolonged dispute among unit owners in a 57-unit residential strata complex overlooking Victoria's Inner Harbour on Wharf Street, known as Strata Plan VIS 962. More than half of the units in the complex were part of a rental pool operated as a hotel by Victoria Regent Hotel Ltd. (the "Hotel Company"), while the remaining units were either owner-occupied or leased on a long-term basis. The Hotel Company used common areas of the strata complex — including the third-floor lobby, elevators, and two levels of parking — under a Common Area Use Agreement, referred to by the parties as a "lease."

The 2020 lease renewal and council turnover

In 2017, the Strata Corporation and the Hotel Company entered into a three-year lease set to expire in early 2020. In February 2019, the Strata Corporation authorized the strata council to negotiate a renewal. Conflict between owner-occupiers and rental pool participants escalated in the spring of 2019, culminating in the removal of four owner-occupier council members at a special general meeting in June 2019. The three remaining councillors, all rental pool participants, engaged in lease renewal negotiations before resigning in November 2019. Five new councillors were elected in January 2020, one of whom resigned shortly thereafter, leaving the four individual respondents — Roger McGuire, James Allard, Mark Stevens, and Gerald Hauck — as the strata council. According to the petitioners, the respondent councillors, on behalf of the Strata Corporation, purported to enter into a three-year lease renewal with the Hotel Company in July 2020, on the same terms as the 2017 lease, though the materials before the courts were not completely consistent on this issue. A consultant's report delivered in November 2020 indicated that fair market rent was substantially higher than the amounts set out in the 2017 lease, and the Hotel Company and the council agreed to a sharp retroactive increase in the rental payments to an amount approximating the consultant's figures. In January 2021, the council also provided releases to the three former 2019 council members in exchange for $10,000 for any claims the Strata Corporation might have against them as a result of their negotiations over the lease renewal.

Multiple petitions and parallel litigation

The dispute spawned three separate petitions. Petition No. 1, commenced in September 2019 by a group of owner-occupiers, initially sought reinstatement of removed council members and was later transformed into a civil action in negligence against the Strata Corporation alone, seeking to recover, as damages, the legal costs incurred investigating and pursuing remedies. In March 2021, the petitioners in Petition No. 1 applied to add the 2020 council members as defendants, but the application was dismissed because the allegations did not conform with s. 33 of the Strata Property Act. This led to the filing of Petition No. 2 (Rochette v. McGuire), which directly challenged the validity of the 2020 lease and the releases given to the members of the 2019 strata council. Petition No. 2 was heard in August 2023 and a judgment was pronounced in January 2024, with the judge unequivocally finding that the allegations of collusion and bad faith against the respondents were not proven. The appeal from Petition No. 2 was subsequently dismissed as moot by the Court of Appeal in reasons indexed as Rochette v. McGuire, 2025 BCCA 149.

Petition No. 3 — the current proceeding

The current proceeding, Petition No. 3, was filed in March 2023 by the appellants Marylou Coyle, Michael Brent Furdyk, and Charles Gorrie — different individuals from the Rochette petitioners but similarly situated owner-occupiers represented by the same counsel. This petition also challenged the 2020 lease and the 2019 council releases, adding allegations that the individual respondents had conspired with the Hotel Company and had acted corruptly. About a week after the filing of Petition No. 3, the Strata Corporation entered into a new lease with the Hotel Company, the validity of which was not being challenged. In June 2023, the parties to Petition No. 2 and Petition No. 3 reached an agreement whereby the petitioners withdrew their challenges to the validity of the 2020 lease. When respondents sought to consolidate Petitions No. 2 and No. 3, the Coyle petitioners were not agreeable.

The statutory framework: sections 32 and 33 of the Strata Property Act

The petition was brought under ss. 32 and 33 of the Strata Property Act, S.B.C. 1998, c. 43. Section 32 requires council members with a direct or indirect interest in a contract or transaction with the strata corporation to disclose the conflict, abstain from voting, and leave the meeting during discussion and voting. Section 33 provides that if a conflicted council member fails to comply with s. 32, the strata corporation or an owner may apply to court for remedies — including setting aside the contract, requiring compensation, or requiring disgorgement of profits — unless the contract has been ratified by a three-quarter vote at a general meeting. The Court of Appeal emphasized that these provisions are narrowly directed to conflicts of interest and do not extend to other errors or omissions in a councillor's work for the Strata Corporation.

The lower court's decision on cause of action estoppel

After Petition No. 2 was dismissed, the respondents applied to strike Petition No. 3 on the basis of cause of action estoppel. The chambers judge agreed, finding the proceeding to be an abuse of process. He determined that the Coyle petitioners were in privity of interest with the Rochette petitioners, as both groups were unit owners whose claims derived solely from the right they all have in common under s. 33, rather than from injury or loss personal to them. He noted the Coyle petitioners knew that Petition No. 2 was extant prior to it being heard and could have taken steps to have their petition heard at the same time, thereby putting the 2020 council to the burden of defending themselves a second time. The petition was dismissed and special costs were awarded to both the individual respondents and the Strata Corporation.

The Court of Appeal's analysis of mootness

On appeal, the Court of Appeal addressed a preliminary motion to quash the appeal on the basis of mootness. Justice Groberman, writing for a unanimous panel that included Justice Grauer and Justice Fleming, found that the issues raised in the petition were no longer live. The petitioners had withdrawn their challenge to the 2020 lease in June 2023, and the petitioners had discontinued Petition No. 1 as against the members of the 2019 council in March 2024, the only proceeding in which the releases could possibly have been relied upon. The Court rejected the petitioners' argument that the appeal should proceed so that the respondents could be "adjudged guilty of wilful misconduct, fraud, theft or wrongful exercise of authority" under s. 22(4)(b) of the Strata Corporation's bylaws, which would deny them indemnification. The Court held that the bylaw provision does not contemplate stand-alone inquiries by the courts to determine whether the indemnity provision applies, and that it would be counterproductive to expose the parties to what could be massive additional legal expenses simply to determine whether or not they are entitled to an indemnity.

The substantive appeal and estoppel elements

Although not strictly necessary given the mootness finding, the Court briefly considered the substantive appeal. The four requirements for cause of action estoppel — finality, mutuality, non-distinctness of the cause of action, and the ability to have argued the basis of the claim in the prior action — were all found to be satisfied. While the petitioners argued the finality criterion was not met because the Rochette decision was under appeal, the Court noted that the weight of authority supports the idea that a determination qualifies as final even though it may be under appeal. On mutuality, the Court found ample evidence of privity between the Coyle and Rochette petitioners: identical positions as owner-occupiers, shared legal counsel, awareness of each other's litigation, and the inference that the Coyle petitioners chose not to participate directly in Rochette for strategic reasons rather than from a lack of privity. The legal and factual bases for both petitions were identical, and no meaningful difference existed between the claims.

Ruling and outcome

The Court of Appeal quashed the appeal from the dismissal of the petition on the basis that it is moot and dismissed the appeal from the award of special costs. The panel upheld the chambers judge's finding that the petitioners had litigated in an inefficient manner and that their approach abused the process of the court. The Court noted that the allegations of conspiracy and corruption were speculative, that the petitioners had opposed consolidation of the parallel proceedings, and that courts expect parties to exercise greater caution when using litigation to attack the integrity of others. The respondents — Roger McGuire, James Allard, Mark Stevens, and Gerald Hauck — as well as the Strata Corporation, were the successful parties, with special costs awarded in their favour. No exact amount for the special costs was specified in the decision.