STEVENSONS SUCCESSFULLY DEFENDS DEVELOPER FROM OPPRESSION ACTION
Richard Macklin —
In a Court of Appeal for Ontario endorsement released on October 21, 2011, the Court dismissed an appeal launched by three condominium corporations against three developers. The appeal relates to an integrated condominium development with freehold retail units on the main floor and condominium units above. The unit owners and retail share services and provide structural support for each other. However, the parties have no cots sharing agreement. The owners alleged that they were on the “short end of the stick” in this arrangement – to the tune of roughly $34,000 per year. They sued the developers for oppression. The application was dismissed at the Superior Court of Justice and, as set out above, the appeal failed.
The basis for the developer’s success was that the existence of the retail complex and its high level of integration was fully disclosed in the pre-sale documents as was the existence of the easements that retail had over the unit owners’ property and vice-versa. Thus, although the words “there is no cost sharing agreement” do not appear in the pre-sale documents, the four judges who hear the case determined that, in light of the full disclosure of the integrated arrangement, such further disclosure was not mandated. The trial and appeal courts also rejected the condominium corporations’ argument that cost sharing in such circumstances was an “inevitable” business practice.
See Metropolitan Toronto Condominium Corporation No. 1272 v. Beach Development (Phase II) Corporation, 2011 ONCA 667