Durham Condominium Corporation No. 123 v Amberwood Investments Limited et al.

Durham Condominium Corporation No. 123 v Amberwood Investments Limited et al.
Citation	Durham Condominium Corporation No. 123 v Amberwood Investments Limited et al. (2002), 58 OR (3d) 481
Appellant	Durham Condominium Corporation No. 123
Respondent	Amberwood Investments Limited and 1018898 Ontario Inc.
Year	2002
Court	Court of Appeal for Ontario
Judges	Charron, MacPherson and Cronk JJA
Country	Canada
Province	Ontario
Area of law	Covenants
Issue	Can positive covenants "run with the land"?

Facts

A developer, WHDC Harbour Development Corporation, owned two parcels of land that they divided for separate condominium complexes to be built upon. Durham bought one of the parcels and built a condominium complex before the other lot had been purchased. Both complexes were to share a common recreational facility and park, and share the costs. WHDC agreed to subsidize Durham for the expenses until someone purchased the other lot. Amberwood eventually purchased the other lot, and agreed to pay the costs. They did so for a while, but then stopped and stated that positive covenants cannot pass with a transfer of land. Amberwood was successful at trial which Durham appealed.

Issue

1. Can positive covenants "run with the land"?

Decision

Appeal dismissed.

Reasons

Charron, writing for the majority, holds that it is long settled law that positive covenants do not run with the land, and therefore Amberwood prima facie does not have to pay for the costs of the shared facilities. They examine two proposed exceptions to the rule – the benefit and burden doctrine and conditional grants of easements – and decide that they do not apply in this case. Although the Law Reform Commission has recommended change in the law of positive covenants, this should be left to the legislatures.

MacPherson, in the dissent, defines the benefit and burden doctrine in more detail and states that it applies in this case. For this doctrine to apply, the assignee of the positive covenant (Amberwood) must have notice of the covenant. This burden must also be accompanied by a benefit. There might be a qualitative threshold to the benefits and burdens, and there does not need to be a direct link between the two. However, the assignee must be able to exercise a choice about assuming the burdens and benefits. MacPherson argues that these all apply in the case at bar, and thus Amberwood must pay the costs.

Ratio

• Positive covenants on land do not pass to the purchaser upon a sale of the land; even if the purchaser agrees to abide by the covenant, they are not required to do so.