Part 49 published on 01/02/15
Former owner granted opportunity to prove interest in the unit claimed under caveat
The condominium corporation arranged for sale of a unit, for recovery of amounts owed to the condominium corporation under court orders.
After the sale, the former owner filed a caveat against the unit, claiming to be the beneficial owner, by virtue of, amongst other things, a constructive trust.
The purchaser challenged the former owner’s claim under the caveat.
A Master held that there was a triable issue regarding the former owner’s claimed interest in the land, and therefore refused to discharge the caveat on a summary basis (ie. without a trial).
The purchaser appealed the Master’s order to the Court of Queen’s Bench. The Court of Queen’s Bench dismissed the appeal (and therefore confirmed that the former owner had the opportunity to prove his claimed interest in the unit). However, given the former owner’s prior conduct in the court proceeding, the Court of Queen’s Bench imposed strict conditions (respecting the process going forward).
The Court’s decision included the following:
(The purchaser) argues that someone who is aggrieved by a sale of land by a Civil Enforcement Agency may have a claim in damages against the civil enforcement agency or the judgment creditor, but has no further interest in land. That would be the case if the purchaser were a bona fide purchaser for value… There is in my view a triable issue in that regard due to the apparently close relationship between (the purchaser) and (one of the condominium’s directors, who had also acted as the purchaser’s agent on the transaction).
[Editorial Notes:
- 1. It seems to me that one of the morals of this case is as follows: When a strata corporation or a condominium corporation sells a unit, the corporation’s directors should ideally not have any involvement whatsoever in the sale. The sale should be left in the hands of independent agents. Otherwise, the former owner might be afforded an opportunity to challenge the sale as “not at arm’s length”.
- 2. The Court also had this to say about the condominium corporation’s costs: “The enforcement processes pursued by the Corporation led to it incurring $61,803.54 in legal costs to recover less than $6,000 in outstanding condominium fees. I question whether these are reasonable costs.” The question of the reasonableness of the costs was still to be determined. But I wonder: What is a condominium corporation to do? It has a duty to take collection steps, and costs may well be significant – particularly in the case of an extremely uncooperative owner.]