Court-ordered termination

CCC 396 terminated due to oppression of minority owners
17 Yorkville—Successful injunction to prevent a termination meeting


Dewan v Burdet
Ontario Superior Court of Ontario
Court File No: 01-CV-18977
Heard: Justice Kane
Released: 08 August 2016

Both sides had claims against each other and the plaintiffs requested a court order terminating the commercial condo corporation. As an alternative relief, the defendants also applied for the termination of the corporation.

In 1987 an older warehouse building was converted into a 33 unit commercial/industrial/storage condominium. The Declaration gave basement storage units voting rights and one family used those units to gain and keep control of the condo corporation.

That flaw in voting rights resulted in 28 years of repeated waves of litigation.

The main question was whether one family’s direct and indirect ownership used that voting control since 1997 for their financial gain at the expense of the condominium corporation and whether that constitutes oppression of the Minority unit owners.

Conclusion:
(a)
Mr. Burdet has oppressed the minority unit owners;
(b)
CCC 396 is terminated as a condominium corporation, pursuant to s. 128 or alternative as a remedy for s. 135 oppression;
(c)
Surgeson Carson Associates Inc. is appointed as receiver and manager of CCC 396 to carry out that termination subject to (d) below;
(d)
The interim appointment of CMG as interim Administrator of CCC 396 will continue until the expiration of the appeal period of this decision and during any appeal period and resulting stay of this decision, with the powers and duties specified in the decision of this court dated April 3, 2012, pending the outcome of such appeal accompanied by a stay. CMG’s appointment as interim Administrator otherwise is terminated as of the date hereof;
(e)
The plaintiffs owe CCC 396 common expense arrears and interests, as determined;
(f)
Entreprise Ted Rubac Entreprise' (ETRE) claim as to the December 31, 2001 credit line balance is dismissed;
(g)
ETRE’s claim as to promissory notes 6 and 7 of $20,000 and $30,000, together with interest as determined above, are granted;
(h)
ETRE’s claim as to promissory notes numbered 1 to 5 and 8 are dismissed;
(i)
Mr. Burdet’s claim for his 2001 time charges is granted in the amount of $20,000, together with pre-judgment interest as indicated above;
(j)
All other counterclaims are dismissed.

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Romijay Enterprises Ltd. v. 11 Yorkville Partners Inc
Ontario Superior Court of Justice
Court File No: CV-17-572011
Before: Mr. Justice P. J. Cavanagh
Heard: 13 April 2017

Introduction
Yorkville Partners, a developer, owns 83.33% of the units making up TSCC No 1744. There are two residential units, four commercial units and two parking units. The address is 17 Yorkville Avenue. Romijay Enterprises owns one unit.

Yorkville Partners wishes to terminate the corporation under subsection 124(2) of the Condo Act. The Act provides that dissenting unit holders have the right to challenge the sale price and receive monetary compensation if it is found to be insufficient.

There is a meeting of unit owners is scheduled to be held on April 18, 2017 to consider an offer to buy the condo and to vote on whether the offer should be approved.

Romijay opposes the sale of his unit and relies upon the oppression remedy in section 135 of the Act. Mr. Berman, the owner of his tenant, Soul 7, claims a strong emotional ties to the unit he rents and claims that no nearby unit would be suitable.

Yorkville Partners was incorporated on June 10, 2015 to purchase and redevelop several adjacent properties on Yorkville Avenue, including 17 Yorkville. They intend to build a mixed-use development comprised of a 63 story residential tower above a three story commercial podium. This is a major undertaking, with an anticipated budget in excess of $100 million. Yorkville Partners has already spent more than $50 million to acquire the land that will be required to complete the project.

Yorkville Partners began approaching the owners of units at 17 Yorkville in the fall of 2014 and was prepared to pay the unit owners a significant premium for their units. Yorkville Partners was able to buy five of the six units.

Yorkville Partners bought 19 Yorkville Avenue and it has agreed to pay $19.5 million for 19 Yorkville Avenue closing on January 18, 2018. The purchase agreement is firm. Yorkville Partners would not have agreed to purchase 19 Yorkville Avenue if it would be able to invoke the sale right under section 124 of the Act to buy all the 17 Yorkville units.

By February 2017 it was clear that Yorkville Partners and Romijay had reached an impasse. On February 22, 2017, the Purchaser made the offer to purchase TSCC No 1744 for $24,968,789. Since Yorkville Partners owned more than 80 percent of the units, it believed that it would be able to approve the sale in accordance with section 124 of the Act.

In this case, the moving parties (owner & tenant) are seeking a prohibitory injunction that would restrain the holding of a meeting of unit owners to consider the offer until the action has been finally decided on a motion for summary judgment or at a trial.

The judge granted the plaintiffs’ motion for an interlocutory injunction restraining the meeting from being held until the action is finally adjudicated or until other order of this court.

            
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