22/06/2020 – Jurisdiction Manitoba
Part 70 published on 01/06/2020
Court of Appeal confirms condominium corporation’s beneficial ownership of parking unit
The Developer had made the seven-stall parking area in the building a unit rather than a common element (and had leased the unit to the condominium corporation on terms set by the Developer). The lower Court determined that the condominium corporation was the beneficial owner of the parking unit, due to the Developer’s failure to properly disclose its intention to retain the parking unit. [See Condo Cases Across Canada, Part 65, March 2019.]
The Developer appealed. The Court of Appeal dismissed the Appeal, The Court of Appeal said:
On the basis of the above review and analysis, I would accept and adopt the principles outlined in Newrey. The common law provides that, where, on a balance of probabilities, it is objectively reasonable to conclude that there was a common intention between the purchasers of a condominium unit and the developer of the condominium project that disputed property would be a common element of the condominium corporation, then the developer will have a duty to convey the disputed property to the condominium corporation, despite title to the disputed property being registered in the developer’s name.
…
To conclude, there is no basis for intervention by this Court with respect to the application judge’s determination that a reasonable unit owner would have been led to believe that the parking unit was a common element of the Condominium Corporation. The application judge did not err in applying the principles in Newrey and concluding that the Developer had breached a fiduciary duty owed to the unit owners—and that title to the parking unit should therefore be transferred to the Condominium Corporation and the parking lease declared null and void.
The Court of Appeal was also required to deal with a further issue – namely, the issue of certain mortgages against the parking unit. The Court of Appeal ordered that two of three mortgages be discharged from title to the parking unit. However, in relation to a third mortgage, the Court of Appeal ordered that the matter be referred back to the Application Judge to determine whether or not that mortgage should also be removed from title.
Winnipeg Condominium Corporation 479 v. 520 Portage Avenue Ltd. et al