The recent decision by the Supreme Court of Canada in Owners, Strata Plan LMS 3905 v. Crystal Square Parking Corp., 2020 SCC 29 (“Crystal Square”) provides a useful summary of basic contract principles applied in the context of a pre-incorporation contract. This decision is important for Ontario not-for-profit corporations (“NFPs”) and business corporations incorporated in Nova Scotia (even if they operate in Ontario).
At issue was the Crystal Square building complex in Burnaby, British Columbia, containing an office tower and parking garage among other buildings. In March 1999, the Crystal Square developer and the City of Burnaby entered into an agreement setting out various rights and obligations regarding the complex (the “Agreement”). The Agreement included terms for access to the parking facility and the fees payable.
The appellant, a strata corporation (in Ontario, a condominium corporation), was established in May 1999 for the owners of the office tower units (“Strata Co.”). The unit owners used the parking facility and paid for it. Strata Co. never assumed the Agreement.
In 2002, the developer sold the rights to the parking facility to the defendant, Crystal Square Parking Corporation (“CSPC”) and assigned the Agreement to CSPC. CSPC hired Impark to operate the parking facility and accept payment from the unit owners per the Agreement.