Adi Development Group can buy out its business partner on Burlington’s Nautique waterfront condo, for about $18.4 million, the court has ordered, after a bitter battle for control of the site.
The Morgan Investments Group Inc., an investment firm led by Nigel Morgan, and Adi Development Group, led by Tariq Adi, came together in 2014 to build the 25-storey, 254-unit project.
But the parties were deadlocked and unable to make decisions on, among other things, the price of the remaining 54 unsold units. The building faced COVID delays and then the collapse of the condo market. Morgan’s camp thought the units were overpriced, Adi’s said they had responded to the market with a good pricing strategy.
The dispute landed in civil court earlier this month, with the two parties disagreeing even on whether the project was completely finished, and each one looking to buy out the other and end the relationship.
In the Aug. 27 decision, Justice William Black ruled that Adi could buy out Morgan, for about $18.4 million. This was more than the $17.7-million price-tag Adi asked for.
Morgan’s legal team had asked for a “shotgun” sale, a mechanism where one or more of the shareholders buys out the shares of another. Morgan had also wanted to see Adi replaced as the exclusive listing agent, and to add a third board member.
The justice found there was oppression on both sides, a legal term that basically means they were unfair to each other — Adi said Morgan bought out a loan without his knowledge to gain the upper hand, and Morgan said Adi did not share enough financial information and decision making with him.
“This was a just outcome and a spectacular victory for us,” said Justin Nasseri, one of Adi’s lawyers, said in an email to the Star.
“ADG has steered the ship to safety. Its focus will be on homeowners and customers and delivering value to them while we sell the balance of the units,” he added.
Morgan Investment Group declined to provide a comment on the decision.
On the justice’s finding of oppression, Nasseri said Adi “acted in good faith and ethically at all times.”
In a previous interview before the decision, Morgan said there was nothing illegal about buying out the loan, calling it “normal business.”
The unravelling of the relationship in court offered a glimpse behind the scenes into the tough conversations developers are having across the GTA, as the condo market falters.
The Toronto-area average condo price dropped to $615,000 in July, the lowest in four years, per the Toronto Regional Real Estate Board.
The area’s new home market also saw the worst July on record, last month, according to the Building Industry and Land Development Association (BILD).
The parties still need to negotiate a closing date for the buyout.
The project also made headlines in late 2022.
After complaints from buyers that they were asked to pay more than they originally agreed for units, and told they would have their purchase agreements cancelled if they refused, Adi Morgan Development Group (Lakeshore) Inc. paid a $60,000 penalty and $2.6 million to purchasers as part of a settlement with the Home Construction Regulatory Authority (HCRA).
