Part 36 published on 01/12/11
Appeal dismissed. Absence of cost-sharing agreement did not constitute oppression
The lower Court had held that the developer’s failure to provide a cost-sharing agreement in relation to shared facilities did not constitute oppression or a breach of fiduciary duty. [See Condo Cases Across Canada, Part 33, February 2011]
The condominium corporation appealed. The Court of Appeal dismissed the appeal and upheld the lower Court decision. The Court of Appeal said:
“The statutorily mandated proposed condominiums’ governing documents, which are designed to detail what condominium purchasers should reasonably expect, make no reference to any cost-sharing agreement…”
“As well, in our view, the application judge properly rejected the appellants’ contention that commercial practice was such that buyers of condominium units would reasonably expect that there would be a reciprocal agreement.”
“This is not a case of an oppressor utilizing a superior bargaining position to coerce unfavourable terms from a weaker party or acting behind the weaker parties’ (sic) back. Rather, it is a case in which the appellants voluntarily purchased their condominium units in the full knowledge and disclosure of the rights and obligations associated with their transaction.”
The Court of Appeal recognized the fact that, in the absence of an agreement, litigation might well be required to determine the rights and obligations of the parties in relation to the shared facilities. However, the Court of Appeal said that the risk of costly disputes was not, in and of itself, oppressive.