Justice McCarthy agreed with the corporation’s lawyer that subsections 33(1) and 51(a) of the Act are merely permissive; they indicate how a director may be removed in the absence of a bylaw dealing with removal before a term and do not prevent a bylaw being passed by which a director may be removed.

The owners’ will
The judge was of the view that Bylaw No. 9 expresses the desire of the majority of the unit owners that a director should be disqualified from holding office upon the happening of any number of events. One of those events would be a conclusion by the board of here violations of the director’s code of ethics.

The code of ethics was adopted by and agreed to by the members of the corporation.

Three violations of the code of ethics would have the same effect of disqualifying a director as if the director became an undischarged bankrupt, was convicted of a criminal offence, or ceased to own a condominium unit.

Concerns with the process
The ethics review calls for a procedure to be followed. That procedure calls for an ethics review preceded by certain preliminary steps of notification. The procedure is to be the same as that used by the board to decide all corporate matters, except to ensure fairness, it permits the subject director to be present at the board meeting and to be heard. The board is then expected to determine the matter and render a decision.

It was the judge’s decision that he should accept the board`s decision unless it had acted capriciously or unreasonably and that the principals of procedural fairness and natural justice cannot be ousted from such an ethics review.

While the review may not require findings, it must certainly involve considerations of some modicum of evidence. Indeed, in the present case, the board relied upon witness statements.

That being the case, the board was, in the judge's view, required to adhere to some minimal standard of procedural fairness and the basic standard of procedural fairness and the basic principles of natural justice. Not to do so would be unreasonable and capricious.

Insufficient notice
In this case, it is clear that Mr. Gordon was provided with notice of the hearing on 18 November 2011 through his solicitors. The notice itself with full particulars was dated on 21 November 2011, the very day of the hearing.

I find that procedural fairness requires that reasonable notice of such an ethical review should have been given to Mr. Gordon in advance of that date. One business day prior to the review date is simply not sufficient, fair or necessary.

Disclose evidence
As well it is unclear whether the Mr. Gordon received the witness statements that the board intended to rely upon. Mr. Gordon and one of the other directors, said he did not. A third director could not confirm that these statements were disclosed prior to the review. Certainly no evidence was tendered to show that an email, memo or letter was provided to Mr. Gordon attaching the statements or summarizing their content.

Must be a fair hearing
It is a fundamental principle of natural justice and procedural fairness that a
person facing the termination of his standing or office, should be made aware in a fulsome manner of the case which he has to meet. Moreover, the fact that this was a review of alleged ethical violations which would impact not only on Mr. Gordon’s standing as a director but also on the his reputation in the community, required that Mr. Gordon be provided with some assurance that he would receive a fair hearing.

Biased director
In this case, it was plain and obvious that Director Rotman was looking to have Mr. Gordon removed from the board and was seeking to unite the other board members to effect this removal. Rotman admitted this in cross-examination and
it was made plainly obvious in his emails to the other directors, dated 16 November 2011.

The email dated 18 November 2011 from Rotman to the other directors in advance of the ethics review contains the following statements:
“I would ask you to limit your questions to the decision at hand, to act on this information for the purpose of voting that Stan Gordon be removed from his position as a director of the corporation.”

And this is followed by:
“We must arrive at a decision quickly so that our decision for the removal of Mr. Gordon can be given to him as quickly as possible when he returns to the meeting.”

That one of the directors resigned in protest over the manner in which the review was conducted provides an indication that a person close to the situation was concerned about the procedure being followed. Any reasonable person would be.

Justice from the dark agesThe judge stated that it is one of the principles of natural justice and a key element of procedural fairness that a person who is to be making the decision should not have predetermined the matter before a review. At the very least, Director Rotman should have recused himself from the review and desisted from attempting to influence other directors who would be participating in the review.