Part 33 published on 01/02/11
Absence of cost-sharing agreement did not constitute oppression
This development comprised four condominiums as well as separate free-hold commercial/retail property. There were shared services and easements between the different properties. However, cost-sharing agreements had not been prepared and registered (except for a “limited cost-sharing agreement” in the case of one of the condominiums).
The condominium corporations argued that the developer (who owns the freehold commercial/retail space) unfairly benefits from the lack of a cost-sharing agreement because the developer has the benefit of the shared services and yet has no responsibility to contribute towards the operating and maintenance costs. The Court disagreed. The Court said that the developer “may be responsible at common law for some portion of certain costs” related to shared services. The scope, amount and allocation of those costs would be open to debate, but would be subject to common law principles of negligence, nuisance, restitution and unjust enrichment. In any event, the Court said:
While I can acknowledge that a cost sharing agreement might have been a prudent, and even preferred, way to achieve a fair allocation, the applicants are not without their remedies at common law in the absence of such an agreement. The imputation of an agreement is not necessary to protect their legitimate interests.