Part 52 published on 01/11/15
Court refuses to set aside sale of caretaker’s suite to strata corporation
The developer sold one of the units – the caretaker’s suite – to the strata corporation for $339,000, with related mortgage financing. The sale transaction was completed at a time when the developer still controlled the strata council.
The strata corporation subsequently sought to rescind the sale on the basis that it was not properly authorized under the Strata Property Act. In the alternative, the strata corporation claimed damages for breach of fiduciary duty by the developer in failing to set a fair sale price.
The strata corporation’s claims were dismissed. The Court found that the transaction had been properly disclosed to all purchasers. The Court also concluded that the necessary 75% resolution of owners had been passed and there was no breach of fiduciary duty on the part of the developer. The Court also held that the sale price had been fairly determined. The Court said:
In my view the plaintiff has not established the defendants acted in a manner other than in good faith and honestly. As they were required to, the defendants disclosed they intended to set the Suite aside from the sales pool for the purposes of a caretaker’s suite. They then proceeded to do so and set a price of $339,000.
…
Based on the evidence of the value of the Suite at the time it was removed from the pre-sale list for transfer to the plaintiff and when it was removed from such list, I cannot conclude the defendants acted in a manner which abused their position of trust or that they acted in less than an honest and good faith manner. I conclude they have not breached their fiduciary duty to the plaintiff.