Part 43 published on 01/09/13
Although fixed-price contract for gas supply was void, condominium corporation’s resulting claims were out of time (due to expiry of limitation period)
?The condominium corporation’s property manager had signed a fixed-priced contract for the supply of natural gas, without Board authority. The condominium corporation applied for a declaration that the contract was void, and for recovery of excessive gas charges (the difference between the amount paid under the fixed-price contract, and the amount that the corporation would otherwise have paid).
The Court agreed that the contract was void. The Court said:
Unlike regular corporations, where an employee or agent can contract on behalf of the corporation, condominium corporations cannot contract unless there is a resolution of the Board of Directors authorizing (or ratifying) the contract.
However, the Court held that the condominium corporation’s application was out of time and dismissed the application. The Court said:
- “…The Board of Directors of the (condominium corporation) was aware of the fact that the contract with the Respondent was void at least as of September 10, 2009”;
- “At the latest, the Board was aware of the issue as of October 19, 2009 when the property manager wrote to the Respondent, stating that the contract was void due to a lack of Board authorization.”
- “This Application was issued on September 26, 2012.”
Accordingly, the application was started after expiry of the applicable two-year limitation period.