Condominium Corp. No. 42 v. Hashmi et al
Ontario Superior Court of Justice
No : 06-CL-6587
Date: August 2012
After having an administrator for six years, YCC # 42 is to hold an
election for a board of directors. The corporation lawyer suggested
that the judge mandate that if any candidates ran for the
designated owner-resident position and lost, they should not be
allowed then to run for one of the other four board vacancies.
argument was that allowing the losing candidates to run for the
other board positions made it hard to organize the election.
Newbould rejected this argument, as it would unfairly deprive the
losing owner-residents their full opportunities to be elected to the
also directed that the board mail an announcement to all owners prior
to the sending out the election notice asking for all interested owners
to submit their names and addresses to be included in the election
notice. This decision was made to give every candidate an equal
opportunity to be considered by the owners who will be voting by proxy.
Davis v. Peel
Corporation No. 22
Ontario Superior Court
Date: 04 June 2013
An owner went to court to have the results of an owner's meeting
annulled due to the chair approving twelve proxy votes. She claimed
that the chair gave voting rights to 12 units that the corporation’s
management and lawyer submitted were in arrears for over 30 days and
therefore forfeited their
This was critical because if the 12 votes were not cast, the four
directors would not have been removed at
the requisition meeting.
The challenge to the chair
When the formal portion of the meeting was convened, the
requisitionists’ lawyer objected to the corporation’s lawyer chairing
the meeting on the ground that the person who had designated him to act
as chair was not eligible to be a director.
The unit owners then present voted in favour of the requistionists’
lawyer chairing the meeting by a show of hands. She proceeded to do so.
After being appointed, the new chair examined the 12 proxies that were
rejected by DPC Property Management. She asked the unit owners who
allegedly were in arrears to stand and state whether or not they felt
PCC #22's records were accurate. Six unit owners spoke and advised the
Upon reviewing all of the proxies that were alleged to be invalid, as
chair of the meeting, the chair made the decision that they should be
included in the vote because the records presented to her by the
management company appeared inaccurate.
| payments made by unit owners to
PCC #22 were not credited to their accounts;
|despite the fact that some unit
owners had made payments for all
arrears prior to the commencement of the requisition meeting, they were
still being denied the right to vote;
could not explain or provide evidence as to why some unit owners were
allegedly in arrears;
| notice was not provided to unit
owners that they were in arrears; and
|DPC had updated the records for
PCC #22 only a few days prior to the
meeting, and on that basis was asserting the existence of arrears that
had not been apparent before that time.
According to her evidence, she made her decision based on the
The chair made the determination that all proxies should be counted
towards the vote as there was no clear evidence that any unit owner
should lose their right to vote.
|DPC had been updating records on
08 October 2012 for arrears that could
not be explained and which were not 30 days old;
|several of the unit owners were
never advised that they were allegedly
in arrears and DPC was unable to explain what the unit owners were in
arrears for; and
|one unit owner who allegedly was
in arrears produced banking records of
her own that evening, based upon which the chair concluded that all her
expenses had been paid for.
PCC #22 is comprised of 104 units. As a result, in order for a director
to be removed an affirmative vote of 53 in favour of removal was the
minimum required in respect of any director. The results of the vote
were as follows:
The applicant submitted that because PCC #22's lawyer and DPC Property
Management had found the impugned proxies to be ineligible because the
unit owners were in arrears; that should have been the end of the
The judge ruled that while the lawyer and the manager may assist in the
meeting registration process; that does not confer authority upon them
to make final determinations. Where there is a challenge to a proxy,
that decision should be made by the chair of the meeting.
The chair was not neutral
The applicant also argued that the requistionists’ lawyer rulings as
chair of the meeting should not be permitted to stand because she was
retained by the requisitionists and therefore was duty bound to support
their agenda to remove the existing board.
It is for the applicant to establish to the satisfaction of the court
that what chair did was contrary to the best interest of the
corporation. The fact that a chair of a meeting has an interest in the
outcome of a decision does not impugn the integrity of the process.
The judge also stated that the bylaws of PCC #22 do not specify that
corporate meetings are to be chaired by a neutral third party. If the
unit owners wish to insert such a requirement, they may amend the
I found this to be an interesting comment. Who has attended an AGM
where the chair (far too often a property manager
or the corporate lawyer) was completely fair
and neutral? I have but it is not always the case.
Accuracy of the financial
Justice Stinson went on to determine that the accuracy of the DPC’s
financial records as of 09 October 2012 was, at best, questionable.
Subsequent to the meeting, DPC has been terminated as the property
manager of PCC #22, and new management has attempted to obtain from DPC
the necessary financial information and documents to reconstruct the
records of the corporation (and, indeed, has gone so far as to initiate
court proceedings to obtain same).
In particular, an effort has been made to reconstruct the arrears list
30 September 2012 and 30 October 2012, as accurately as possible.
There is no sign of the 30 September 2012 arrears list that was
purportedly used by PCC #22's lawyer and manager at the 09 October 2012
meeting. The only available one is as of 30 August 2012.
Burdon of proof
The burden is on the applicant to present evidence that establishes
that the conduct of the corporation was in violation of the Act.
The judge concluded that the applicant failed to make out a case for
the relief sought. The application was dismissed.
At that time of this posting (late June 2013), DPC Property
Management's website: "www.dpcpm.ca
was currently down for maintenance".
Davis v. Peel
Corporation No. 22
Ontario Superior Court
Date: 08 October 2013
The parties were unable to agree to costs and subsequently filed
written submissions with Justice Stinson.
The successful respondent, PCC #22, sought costs on a substantial
indemnity basis, in the amount of almost $46,000. The applicant
submitted that each party be ordered to pay their own costs or in the
alternative that PCC #22 pay her partial indemnity costs. She submitted
that the costs claimed by PCC #22 are excessive and further that the
threshold to award substantial indemnity costs has not been met.
As the successful litigant, in the ordinary course PCC #22 would be
entitled to an award of costs against the unsuccessful party. The
applicant, however, submits that the facts of this case are such that
the ordinary practice should
This dispute raised the question of the legitimacy of the election of
the new Board of Directors of PCC #22. The election of the new board
followed a period of dissatisfaction and dissent among some unit owners
including dissatisfaction regarding the practices of DPC Property
Management that was hired by PCC #22 to operate the affairs of the
corporation and maintain the corporation’s financial and other records.
That dissatisfaction was, in part, justified given the poor state of
the records when the new Board assumed control. Indeed, it was the
status of those records that in large part gave rise to the disputes
that led to this application.
Although a new Board was elected at the disputed meeting and remains in
place, one cannot lose sight of the fact that the substandard fashion
in which the records of the corporation were maintained led to the
problem and the litigation.
corporation has responsibilities
The corporation is distinct from its Board of Directors and its
management company, yet it cannot escape responsibility for their
actions and failures.
In this case the failure to maintain proper records must be laid at the
feet of the corporation.
Had those records been current, accurate and reliable, the voting
eligibility of all unit owners would have been clear at the outset of
the meeting. The confusion as to voter eligibility and the resultant
need for the rulings by the chair would have been obviated. In turn,
there would have been no question in the mind of the applicant
concerning the legitimacy of the procedure followed and the outcome of
The applicant is merely a unit holder. She was not a member of the old
Board of Directors. She cannot be held responsible for the shortcomings
in the record-keeping of PCC #22.
She raised legitimate questions regarding the propriety of the voting
process. Those questions would not have arisen had PCC #22 maintained
its records in the fashion that it should have. PCC #22 cannot avoid
responsibility for the situation that gave rise to the concerns about
the legitimacy of the election process.
A matter of
interest & concern
In the judge's view, this was a matter of interest and general concern
to all unit owners at PCC #22. Each has an interest in the proper
governance of the corporation and the proper adherence to due process
in the conduct of the affairs of the unit owners.
The applicant incurred a significant personal expense to retain her own
counsel to raise these questions. Having regard to the circumstances
described above, and in particular the reasons for the problem in the
first place, in my view it would be inappropriate and unfair to require
the applicant to pay any costs to PCC #22.
The applicant has requested that her costs be paid by PCC #22. Although
the applicant may have had cause initially to be concerned about the
legitimacy of the vote, she continued with the application despite
having received information which indicated that her complaint could
have had no impact on the outcome. She also declined an offer from PCC
#22 for the withdrawal of the application on a without costs basis.
Her decision to proceed to the hearing notwithstanding that offer
negates any suggestion that the successful party should pay her costs.
The judge concluded that each party should bear their own costs of the
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