| officedweller |
May 27, 2019 9:12 PM |
Off topic - but going back to the discussion about pre-construction contracts binding the strata...
BC Court of Appeal overturned a lower court decision, resulting in the enforcement of a positive obligation to share costs.
Quote:
Strata Plan LMS 3905 v. Crystal Square Parking Corp.
CORPORATION — Contracts — Pre-incorporation contracts • REAL PROPERTY — Easements — [Lower] Court finding that positive obligations under easement agreement regarding maintenance of strata parkade did not run with land and unenforceable by developer against strata corporation — Developer’s appeal of dismissal of its counterclaim for payment of parkade expenses owing under pre-incorporation contract allowed — Pre-incorporations contract may ground a new, and identical, contract where evidence demonstrating an intention to be bound.
The defendant developer and the plaintiff strata corporation’s predecessor in title entered into an easement agreement under which the defendant agreed to operate, maintain and insure the strata’s parkade and reserved its right to reimbursement from a percentage of costs from the then yet-to-be incorporated plaintiff. Eight years later, a dispute arose concerning shared parkade expenses. In an action by the plaintiff, the court held that the positive obligations regarding maintenance of the strata parkade in the easement agreement did not run with the land and were unenforceable against the plaintiff. The court also dismissed the defendant’s counterclaim for payment of the parkade expenses owing on what the defendant claimed was a binding pre-incorporation contract. The defendant appealed the dismissal of its counterclaim. Held, appeal allowed. Contracts made before a party is incorporated may ground a new, and identical, contract binding that party if within a reasonable time of its incorporation, the party shows an intention to be so bound. Here, the judge erred in considering the irrelevant fact that the plaintiff had not been privy to the pre-incorporation contract and placing undue weight on the fact the defendant had not formally adopted the agreement. The judge also erred by considering conduct occurring some eight years after the plaintiff was incorporated, and looking to the subjective, rather than objective, indicators of the plaintiff’s intention to be bound.
Strata Plan LMS 3905 v. Crystal Square Parking Corp. C.A., Garson, Willcock & Fisher JJ.A., 2019 BCCA 145, Vancouver 2019 BCCA 145 CA44250, May 07, 2019 , 25pp., [CLE No. 69458] • Appeal from judgment of Young J., 2017 BCSC 71, [2017] C.D.C. 63426 (CLE) • K. McEwan, Q.C., E. Kirkpatrick, for appellant; G.S. Hamilton, for respondent.
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https://www.courts.gov.bc.ca/jdb-txt...19BCCA0145.htm
A similar dispute arose regarding the costs of the Jameson House parking garage (the automated mechanical one).
But in this case, the BC Court of Appeal (the same Justices) upheld the lower court decision striking down the positive obligation - both cases where considered together.
Quote:
Strata Plan BCS 4006 v. Jameson House Ventures Ltd.
REAL PROPERTY — Easements • Under easement agreement, developer agreeing to operate, maintain and insure strata parkade with right to reimburse itself a percentage of its costs from yet-to-be created strata corporation — Court finding parkade covenant being a positive one not running with land ["Austerberry rule"] — Developer’s appeal dismissed — While there were compelling reasons to allow exceptions to the Austerberry rule, it was for the legislature to make the appropriate modifications.
The respondent, the developer of a commercial/residential strata complex, executed an easement agreement with the petitioner strata corporation’s predecessor in title under which the respondent agreed to operate, maintain and insure the strata parkade and reserved its right to reimburse itself a percentage of its costs from the then yet-to-be created petitioner ["strata covenant"]. A dispute subsequently arose concerning shared expenses. The court found the parkade covenant to be a positive one not running with the land ["Austerberry rule"] and not enforceable against the petitioner. The respondent appealed. Held, appeal dismissed. The Austerberry rule was a long-standing one and while there were compelling reasons to allow exceptions, as has been done in the U.K., it was for the legislature to make the appropriate modifications to the rule, not the courts. Although the Austerberry rule did not preclude truly conditional easements, the pleadings in the present case did not squarely raise the issue as to whether the continued exercise of the easement by the dominant tenement was conditional on the fulfillment of the corresponding burdens.
Strata Plan BCS 4006 v. Jameson House Ventures Ltd. S.C., Garson, Willcock & Fisher JJ.A., 2019 BCCA 144, Vancouver CA44904, May 07, 2019 , 35pp., [CLE No. 69457] • Appeal from judgment of Donegan J., 2017 BCSC 1988, [2017] C.D.C. 65502 (CLE) • G.S. McAlister and A. Morrison, for appellant; P. Mendes, A. Chang, for respondent.
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https://www.courts.gov.bc.ca/jdb-txt...19BCCA0144.htm
and another:
Quote:
Rohaly v. Strata Plan, EPS 319
REAL PROPERTY — Restrictive covenants — Cancellation • Restrictive covenant registered against strata units in seniors’ supportive living complex requiring owners to hire and pay a set fee to particular service provider — Covenant creating positive obligation running with land and unenforceable — Court ordering cancellation of covenant.
AARC was the owner/developer of a seniors’ independent supportive living strata complex built in early 2011. AARC’s disclosure statement described how supportive living services would be available and delivered to unit owners and identified potential encumbrances that would be registered against title to each strata lot. The disclosure statement also outlined a supportive living services agreement ["SLSA"] each purchaser of a strata lot would be required to sign. At its core, the SLSA required the purchaser to contract with ARRC for supportive living services for a set fee. This requirement was registered as a restrictive covenant against each strata lot. In October 2011, AARC sold its interest in the complex to ASVH Ltd., an entity that operated retirement residences. The deceased purchased a unit in December 2011 and lived there until 2014 when he was required to leave for health reasons. During the time he lived there, he paid for and received supportive living services in accordance with the SLSA. After he left, he continued to be charged service fees under the SLSA in the monthly amount of $1,000. He attempted to sell the unit but no offers were forthcoming. Prior to his death, the deceased filed a petition seeking to have the restrictive covenant cancelled under s. 35(2) of the Property Law Act. The executrix of his estate continued the petition. Held, petition granted. The fact that each strata owner was not personally served with notice of the petition was not fatal; service on the strata corporation was sufficient. Although framed in the negative, the restrictive covenant was positive in substance. It required the petitioner to hire and pay a specific service provider (ASVH) in perpetuity and its overall effect was to make the SLSA run with the land. An obligation to hire and pay a specific service provider is not negative in substance and cannot be a valid restrictive covenant said to run with the land. Furthermore, an enforceable restrictive covenant must touch and concern the benefitted land in the sense that it must be connected with the enjoyment and for the benefit of the dominant. Here, the SLSA could not be said to benefit any of the strata units. Rather than benefitting the dominant tenement, the true beneficiary of the restrictive covenant was ASVH, not in its capacity as owner, but in its capacity as the service provider.
Rohaly v. Strata Plan, EPS 319 S.C., Donegan J., 2019 BCSC 667, Vancouver S176931, April 30, 2019 , 40pp., [CLE No. 69417] • D. Cowper, for petitioner; V. Chahal and D.F. Hepburn, each for one respondent.
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https://www.courts.gov.bc.ca/jdb-txt...19BCSC0667.htm |
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