Middlesex Condominium Corporation 229 v. WMJO Limited (Ontario Superior Court)

The original developer, Trenlon Developments Ltd., entered into a development agreement with the City of London under which Trenlon agreed to “construct and maintain a sanitary sewer pumping station with the capacity to service 156 townhouse units”.

The development agreement also provided that its terms and conditions “would run with the land and be binding upon all successors and assigns as subsequent owners and occupiers of the lands from time to time”.  The development lands were subsequently acquired by Award Developments Limited.  Award transferred a portion of the property to Double G Contractors Limited.  Award and Double G entered into a joint use and maintenance agreement stating that:

• Double G would create a condominium on its lands;
• Three further condominiums would be created in three further phases on the remaining portion of the lands (retained by Award); and
• The parties would share the use and maintenance of the joint facilities (including the pumping station), and would each be responsible for a proportionate share of the costs.

The Double G lands were developed into a 43-unit condominium (Middlesex Condominium Corporation 229).

A portion of the Award lands were ultimately acquired by WMJO Limited and were developed into three condominiums (each containing 14 units).  The units in the three condominiums were all owned and rented out by WMJO.  The Court said:

Each of the 42 units owned by WMJO is connected to the private sanitary sewer system owned by the unit owners and (Middlesex CC 229).

The balance of the lands were developed into a 71-unit housing co-operative.  The Court explained the result as follows:

Therefore, there are five townhouse style complexes consisting of 156 residential units on the property that was originally the subject of the development agreement between Trenlon and the City (the 43 units which are part of the plaintiff’s condominium complex (MCC 229), the 42 units which are part of the three defendant condominium complexes and the 71 units in (the housing cooperative)) which all share certain amenities and infrastructure, in particular, the use of common entrances from Hamilton Road, the internal roadways, a common storm water sewage system and a common sanitary sewage system. 

For many years, (until 2006) all of the parties contributed to the costs of the pumping station.  Thereafter, no further payments were made by WMJO (on behalf of the three 14-unit condominiums).  WMJO denied any obligation to pay, asserting that previous payments had been made mistakenly.

The Court held that WMJO, as owner of the units in the three condominiums, was obligated to pay towards the costs of the pumping station.  The Court said that the obligations in question were positive covenants that could ordinarily not be enforced against subsequent land owners (who were not actual signatories to the registered agreements).  However, WMJO was nevertheless liable either on the basis of unjust enrichment or as having personally accepted the joint use and maintenance agreement (by having received the sewage services in the face of an expectation to make payment for those services).  The Court also held as follows:

1. Middlesex Condominium Corporation 229 had authority to make the claim, not under section 23 of the Condominium Act, but under the corporation’s general rights to sue contained in the Legislation Act, 2006.
2. The three condominium corporations could not be liable for the following reason:  “They do not own the units or common elements that are producing the sewage that is pumped away by the plaintiff’s sewage pumping station.”  Only WMJO, as owner of the units, could be liable.  The Court said that this was akin to a joint venture, and ordered that WMJO pay a “pro rata” share of the expenses to maintain and operate the plaintiff’s private sewage system.