Court kiboshes The Harrington’s attempt to terminate a 34-year agreement with neighbouring Discovery Place to share costs after battle.
A Burnaby strata’s attempt to unilaterally end a 34-year-old agreement to share the use and cost of a squash court, exercise room, swimming pool, tennis court and other amenities with its neighbour has been kiboshed by a B.C. Supreme Court judge.
For 34 years, the folks living at the Harrington apartment highrise at 3970 Carrigan Court could head over to Discovery Place next door at 3980 Carrigan Court, to play squash, work out in the exercise room and swim in the pool, according to a B.C. Supreme Court ruling by Justice Steven Wilson last week.
The Discovery Place folks, meanwhile, could head to the Harrington to play tennis.
For more than 30 years, the two stratas shared the use and cost of keeping up the amenities as per a 1985 covenant signed between the developer, Lougheed Garden Estates Phase II Ltd., and the City of Burnaby.
But the Harrington folks decided end all that on March 7, 2019.
At its annual general meeting, the strata adopted a resolution to end the agreement, and gave Discovery Place notice of the termination.
The Discovery Place people didn’t like that one bit and took their concerns to B.C. Supreme Court, petitioning the court to declare the 1985 covenant is a “current, subsisting, and binding agreement” on all the parties and subsequent successors in title.
Discovery Place suggested the timing of the Harrington’s notice was likely tied to the fact the Discovery Place facilities needed “substantial repair” since they are now more than 30 years old and have seen “significant usage” over the years – including by the Harrington folks.
The City of Burnaby, which was named as a respondent in the case, provided a letter to the court, confirming the 1985 covenant had been a condition of its approval of the development.
“As a condition of that subdivision approval, a Section 219 Covenant was registered on the properties to ensure that both properties continued to function as one integrated development, including all existing on-site amenity facilities,” stated the letter. “As such, these amenity facilities must be maintained as stated…”
The letter goes on to say the covenant could only be amended with City of Burnaby approval and any amendment would require amenities “of similar or better quality.”
The Harrington argued the covenant wasn’t enforceable against “successors in title” (i.e. the current strata owners) under B.C. law.
And, if the court found the Harrington and Discovery Place were bound by a “post-incorporation contract,” Harrington argued all it would have to do to end it would be to give “reasonable notice,” which it argued it had.
Justice Wilson agreed Discovery Place, as a successor in title, couldn’t enforce the covenant but ruled the parties had entered into a post-incorporation contract on the same terms as the covenant.
The evidence, he said, was that the parties have “acted in a manner that is wholly consistent with the Covenant from inception and until March 19, 2019,” the day the Harrington announced it was terminating the agreement.
Wilson also concluded neither the Harrington nor Discovery Place was entitled to terminate the agreement unilaterally.
He gave three reasons.
First, he said, the agreement is on the same terms as the original covenant, and there is no language in the covenant about termination.
“The registration against land will remain registered, absent cancellation, against the titles to the two properties in perpetuity,” states the ruling
Second, because of the interconnected nature and unique circumstances, including physical proximity, between the Harrington and Discovery Place, Wilson said Discovery Place wouldn’t be able to enter into an alternative arrangement with another entity.
Third, both the Harrington and Discovery Place would still have obligations to the city under the original covenant, including maintenance of the amenities, even if the agreement between the two parties was terminated – and the city has said it would only consent to an amendment of the covenant if the change involved similar or better amenities and had been approved by both strata corporations.
“The close and necessarily reciprocal nature of the relationship between the parties regarding amenities distributed across the two properties, when coupled with the fact that both are obligated to the City of Burnaby as successors in title under the covenant, leads me to conclude that the agreement between the parties is in perpetuity, subject to a subsequent agreement to the contrary,” Wilson said.