White v. Owners, Strata Plan BCS3946: BC Civil Resolution Tribunal Identifies AI ‘Hallucinations’ Including Non-Existent Statute

Background: A Stolen Key, a $2,500 Chargeback, and a Self-Represented Claim

Delia and Matthew White are strata lot owners in a B.C. strata corporation. Their vehicle was broken into and mail kiosk keys — along with papers showing their home address — were stolen. The strata decided to rekey the entire mail kiosk and provide all 80 units with new keys; the cost was $2,500 covered by the strata’s insurance deductible. The strata charged this amount to the Whites’ strata account. The Whites disputed the charge before the CRT, the BC small claims and strata tribunal.

The Whites represented themselves. Their submissions cited CRT cases and provisions of the Strata Property Act (SPA) in support of their arguments.

The AI Issue: Non-Existent CRT Cases, Wrong Citations, and a Phantom Statute

Tribunal Member Max Pappin found that the Whites’ submissions “refer to CRT cases that do not apply” and “provide incorrect citations for most of the cases they refer to.” More distinctively, the applicants “repeatedly cite a Strata Property Act (SPA) subsection that does not exist.” The Tribunal Member concluded: “I find these are likely ‘hallucinations’, meaning false or misleading results generated by artificial intelligence.”

This is the first documented AI hallucination case before the BC Civil Resolution Tribunal — an online tribunal that handles strata, small claims, and motor vehicle disputes. The CRT’s accessible, self-serve format makes it a natural target for AI-assisted filings. The ruling cited CRT precedent from AQ v BW, 2025 BCCRT 907, establishing that the CRT’s obligation to give reasons does not require it to address arguments with no basis in law.

Holdings

1. Claim dismissed. The strata validly imposed the $2,500 chargeback; the AI-hallucinated SPA arguments did not change this result.
2. AI hallucinations identified and disregarded. The Tribunal declined to address submissions based on non-existent CRT cases and non-existent statutory provisions, consistent with the principle that arguments with no basis in law need not be answered.
3. CRT precedent on AI-impacted arguments established. The ruling created a CRT record on how to handle AI hallucinations: identify them, call them “likely hallucinations,” disregard the impacted arguments, and decide on valid submissions only.

“The applicants also repeatedly cite a Strata Property Act (SPA) subsection that does not exist. I find these are likely ‘hallucinations’, meaning false or misleading results generated by artificial intelligence.”

— Tribunal Member Max Pappin, 2026 BCCRT 339

India Angle: AI in India’s Consumer and Strata-Equivalent Proceedings

The BC CRT’s accessible, online, self-service model is comparable to India’s Consumer Disputes Redressal Commissions at the District, State, and National levels. The White pattern — citing non-existent statutory provisions via AI tools — is likely to recur in Indian consumer forum proceedings, particularly for housing, apartment, and property disputes where residents’ welfare association rules and RERA provisions may be cited.

Relevant Indian Law

• Real Estate (Regulation and Development) Act 2016 (RERA): Homebuyers frequently appear before RERA authorities and Appellate Tribunals without legal representation. AI tools that generate RERA section citations are particularly prone to hallucination because RERA regulations vary by state and the central Act has many subsections. A non-existent RERA subsection in a homebuyer complaint could undermine an otherwise valid claim.
• Consumer Protection Act 2019, Section 2: Definitions and the scope of “deficiency in service” are frequently cited in consumer forum submissions. AI tools routinely hallucinate subsection numbers within the 2019 Act — particularly Section 2 which has 47 subsections. Verify every subsection number against the bare Act text on indiacode.nic.in.

Three Practical Tips

1. For statutory citations, always verify the subsection exists and says what you claim. Non-existent subsections are the most easily caught AI hallucination — a basic check of the bare Act text takes seconds. The White case illustrates that repeatedly citing a non-existent provision in a submission is both obviously wrong and destructive to the party’s credibility.
2. CRT-style online proceedings are highest-risk for AI hallucinations. Accessible, self-serve online tribunals attract users who are most likely to rely on AI tools without legal guidance. The same applies in India to consumer forum online filing portals. Build verification habits before filing, not after.
3. Courts and tribunals can — and will — decline to address AI-hallucinated arguments. Once a court or tribunal identifies that an argument is based on a non-existent case or statute, it can disregard the argument entirely without detailed analysis. This means AI hallucinations not only fail to help — they may cause valid related arguments to be disregarded by association.

Quick Takeaways

• AI hallucinations have now been documented in the BC Civil Resolution Tribunal — Canada’s most accessible online dispute resolution platform — confirming the problem extends to small claims and administrative forums.
• Citing a non-existent statutory subsection “repeatedly” is a distinct AI hallucination signature that goes beyond citation errors.
• Tribunals can and do decline to address arguments based on non-existent authority — AI hallucinations actively undermine a party’s case rather than merely adding harmless error.
• In India: RERA authorities and consumer forum commissioners are seeing AI-assisted self-represented filings; non-existent subsection citations in these proceedings undermine otherwise valid complaints.