Executive Summary: Key Legal and Evidentiary Issues

• Dispute centered on enforceability of a pre-incorporation Air Space Parcel (ASP) Agreement involving strata parking rights

• Strata alleged the agreement was unconscionable and entered into under a mutual mistake

• Court found no inequality of bargaining power or evidence of a fundamentally unfair bargain

• Strata’s post-agreement conduct confirmed intention to be bound by contract terms

• Legal fees and operating expenses were found recoverable under the contract’s operating cost provisions

• CSPC was awarded damages with deductions for two incorrect invoices and unsupported costs

Facts and outcome of the case

Background and parties

This case arose from a long-running dispute between The Owners, Strata Plan LMS 3905 (“the Strata”) and Crystal Square Parking Corporation (“CSPC”) over obligations under a 1999 Air Space Parcel Agreement (the “ASP Agreement”). The ASP Agreement governed easements and shared responsibilities related to a mixed-use complex in Burnaby known as the “Crystal.” It allocated parking spaces and required each strata or parcel owner to contribute to the costs of operating a shared parking facility.

The Strata represented the office unit owners in one of the parcels (ASP 2), while CSPC owned and operated the parking facility (ASP 5). The ASP Agreement predated the incorporation of the Strata, but CSPC argued that the Strata’s post-incorporation conduct—accepting parking passes, making payments, and exercising parking rights—constituted an agreement by conduct.

Procedural history

The dispute began in 2012 when the Strata stopped making full payments, objecting to the mounting capital cost obligations and the lack of transparency from the parking operator. CSPC responded by revoking the Strata’s parking rights, prompting litigation. A 2016 trial initially ruled in favor of the Strata, finding the agreement unenforceable. That decision was overturned by the BC Court of Appeal and upheld by the Supreme Court of Canada, which sent the case back to trial to resolve the remaining issues: unconscionability, mutual mistake, and damages.

Legal issues and findings

The retrial focused on whether the ASP Agreement was unconscionable, affected by mutual mistake, and whether CSPC had a right to revoke parking access while still seeking payments.

The court rejected the claim of unconscionability, finding no inequality of bargaining power and no unfair contract terms. The Strata, a sophisticated corporate entity, had ample opportunity to seek legal or financial advice but did not do so. Its claims of being misled or disadvantaged were unsupported.

On the issue of mutual mistake, the court found that only the Strata had misunderstood the repayment structure for capital costs. CSPC had properly assessed the financial model before purchasing the facility. Since the Strata’s mistake was unilateral and due to its own failure to investigate, equitable relief was denied.

CSPC’s suspension of parking rights in response to non-payment was held to be valid under the agreement’s terms, which expressly permitted suspension for non-payment while maintaining the obligation to pay.

Damages and post-judgment interest

CSPC’s counterclaim for unpaid fees and related costs was largely successful. The court awarded $2,831,223.67 in damages, subject to deductions:

• $202.63 for two wrongly billed invoices

• A yet-to-be-determined amount for unsupported costs, excluding recurring items like taxes and insurance

CSPC was also granted post-judgment interest at a rate of Prime + 5%, compounded monthly, pursuant to the agreement.

Costs

The matter of legal costs was not resolved in the judgment. The court gave the parties 30 days to reach an agreement or return for a separate hearing on costs. However, since CSPC succeeded on all issues, it is positioned as the prevailing party likely entitled to costs.