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Court cases—requisition for owners mtg
Middlesex Condominium Corporation No. 232 vs
Middlesex Condominium Corporation No. 232
(Owners & Mortgagees)
09 October 2012
Case can be read here:
is an extremely important court case for condo owners. Justice Carey
must of known this as he wrote a very detailed summary of the case in
very clear language so that ordinary people can understand his decision.
Condo boards, influenced I believe by their corporation
abuse their positions by denying the owners of their basic democratic
rights. Justice Carey has made it clear that this can prove to be as
expensive for them as individuals as it can be for the regular owners.
Here are the major points that I took from this case.
The owners have the right to inspect the records and the courts will
When the board has lost the confidence of the majority of the owners,
the board can be recalled at a special owners meeting. The board must
respect that right.
Stirring up old divisions and finger-pointing on the part of the board
was seen by the judge as being unhelpful and the owner's were given
credit for being responsible and reasonable with their correspondence.
When the corporation's lawyer said that all correspondence to the board
should go to him, the board put distance between itself and the owners.
The board stopped the AGM because they
were not getting their way. Justice Carey
stated that the owners' actions was "... democracy at work, not
Sean Eglinton, the property manager sided with the old board. He stated
that the fact that the old board did not recognize the new Board "has
significantly increased the confusion amongst the owners" and, as a
result, the Condominium is ungovernable". The judge did not buy this.
"Nothing in the applicant's material or supplementary material supports
the submission that this building is stumbling into the "abyss" in
"chaos" and cannot be governed. The language used in the applicant's
material is in turn hyperbolic, exaggerated and alarmist."
The application was dismissed with costs to the respondents. The old
board members had to pay the costs for both sides, not the condominium
is a newspaper column about this court decision.
Condo board pays personal price
for clinging to power
Toronto Star, Home Section
By: Bob Aaron Real Estate Columnist
14 Mar 2013
Five former board members of a London, Ont., condominium
have been personally ordered to pay costs totalling $36,300 as a result
of two related lawsuits, after the old board ignored the wishes of a
majority of unit owners. The old board had refused to recognize the
results of a members’ meeting in which a new board was elected.
It all began when the
board of Middlesex Condominium Corporation 232 obtained an engineering
study to determine the remedial work necessary to prevent water leakage
into the building. The board called a general meeting of owners to
approve the borrowing of $600,000 to fund the repairs, which would have
cost a total of $755,000.
The meeting was eventually held and authorization for
the borrowing was defeated.
Unhappy with the high cost of the proposed repairs, a
group of owners
got together and requested a members’ meeting to replace the board of
directors. Instead of calling the general meeting as they were required
to do under the Condominium Act, the old board brought an injunction
application to prevent the meeting from being held, as well as a second
court application to appoint an outside administrator to assume
management of the building.
Last August, Justice Alan
Bryant ruled that the board’s application for an injunction was “for
the sole purpose of preventing the owners from exercising their rights
to hold a requisition meeting to remove the board members from office
and preventing their right to elect a new board.”
In a separate hearing,
Justice Thomas J. Carey turned down the board’s request to appoint an
administrator. A members’ meeting was subsequently held and the old
board was turfed out.
The new board then asked
both judges to order court costs against the members of the old board
personally. In a decision released last month, Justice Bryant found
that the old board acted in bad faith when it brought an injunction
application to prevent the owners from holding a meeting to replace the
board members. Their application, he wrote, was “without merit.”
The court ordered the
five old board members to personally pay court costs of $15,000 to the
In a second decision
released last month, Justice Carey noted that the former board members
had instructed their lawyer to proceed with their application to
appoint an administrator, even though they had been voted out of
office. For a period of time last August, two separate groups were
claiming to be the directors of the condominium.
The judge noted that the
board was “not acting in good faith in pushing ahead with this
unnecessary litigation.” This conclusion, he wrote, prevented the old
board members from being reimbursed from the condominium’s bank
The behaviour of the old
board, Justice Carey wrote, “was deliberate, egregious and requires
sanction.” The old board members were personally ordered to pay costs
of $21,300.52, in addition to the $15,000 awarded by Justice Bryant.
That amounts to $7,260
for each former board member — a high price for ignoring the wishes of
a majority of unit owners and pursuing needless litigation.
London lawyer Joe Hoffer
was counsel for the new board of directors. He e-mailed me to say that
the Middlesex condominium cases present “a cautionary tale for condo
boards and their legal counsel to exercise care in taking steps to use
the legal process to prevent owners from exercising their statutory
A number of lessons emerge from this case:
|Condominium board members are
elected representatives of the unit
owners. They carry out the wishes of the owners, and not their own
| Unit owners have a legal right
to depose an autocratic board.
| Condominium litigation among
neighbours is ugly and expensive. It should be avoided if at all
|Condominium boards should
operate in an open and transparent fashion.
Secrecy is only appropriate in very limited circumstances.
|Hanging on to elected office
when it’s clear that a majority of unit
owners are opposed to the existing board is a waste of time and money.
Bob Aaron is a
Toronto real estate lawyer and consumer advocate.
MTCC No. 595
Ontario Superior Court of Justice
|Court file No.
|20 June 2014
On November 13, 2013, the condo board informed the owners that they
were going to replace the existing porcelain tiles in the elevator
lobbies with new tiles at a proposed cost of $72,000 excluding H.S.T.
This notice advised the owners that they had a right to requisition a
meeting of the owners within 30 days of receiving the notice.
Two owners, Hogan and Davis, prepared a requisition form calling for a
meeting to be held so that the unit owners could vote on the proposed
replacement of the existing tiles. The requisition forms were
distributed to each of the units in the corporation.
Sixty-three unit owners filled in the requisition forms as prepared by
Hogan and Davis with their names, 19 of which were signed in cursive
writing and 44 owners printed their name.
The directors held a meeting and decided that because:
|only 19 owners signed their
names, while others printed their names, it
was not a valid requisition because it had less than the 15%
|Also some of the forms were
dropped off at the concierge desk and the
others dropped off at the management office. The corporation’s lawyer
was of the opinion that all the forms needed to be delivered to the
management office as that was the address for service of the condo
|the documentation submitted was
in more than one document as each owner submitted a separate
The board therefore decided not to hold an owners meeting.
Both parties agreed that the replacement of the existing tiles in the
elevator lobbies constituted “an addition, alteration or improvement”
to the common elements of the condo and as the proposed work was
estimated to cost more than 1% but less than 10% of the condo
corporation’s budget for the fiscal year, the provisions of Section 97
of the Act applied.
The applicants’ position was that although the Act does not expressly
state the form of the “requisition” as referred to in s. 46, the
legislation should be construed liberally to meet its statutory
objectives such that the 63 requisition forms should be considered
collectively as the requisition required.
It has been stated in a number of decisions of this court that the
condominium legislation is remedial in nature and should not be rigidly
or narrowly construed.
Further, as far as possible and with due regard to the particular
mutual covenants of individual owners, courts should bring a broad and
equitable approach to the resolution of disputes. Nothing in the
condominium statute restricts the remedies otherwise available for
failure to perform a duty imposed by the legislation.
Subsection 134(3)(c) of the Act provides that in addition to the relief
set forth in subparagraphs (a) and (b), the court may: “grant such
other relief as is fair and equitable in the circumstances”. The court
has a broad ameliorative authority to grant fair and equitable relief
in accordance with this section.
The condo corporation argued that although the Act has been held to
have a consumer protection aspect to it, that should not be taken into
account in considering the issues in dispute on this application. It
was essentially the corporation’s position that the issues at stake
arise from questions of corporate governance and that the language of
the legislation should be construed accordingly and not with a view to
The judge disagreed with the position of the respondent. The commercial
reality of the relationship between the condominium unit owner and the
corporation is such that both the aspects of corporate governance and
consumer protection are concurrently engaged and must be weighed when
considering a dispute such as this. The provisions of the legislation
must be interpreted as being remedial and shall be given such fair,
large and liberal interpretation as best ensures the attainment of its
There is no requirement in the Act that the requisition referred to in
Section 46 be contained in a single document, nor is there a
prohibition to the delivery of counterparts which make up a single
document, namely a requisition. As such, the judge concluded that
giving the liberal and remedial interpretation of the legislation, as
is required in the consumer protection context and at the same time
balancing orderly corporate governance concerns, the 63 requisition
forms collectively constitute the requisition.
He concluded that the printed names of the condominium unit owners
equally constitute the document being “signed” as required by the Act.
The intention of the owner in each case is clearly made out that they
wish to have a meeting. The authenticity of the requisition forms was
not an issue.
There is no requirement in the legislation that the requisition be
“signed” in cursive writing. As such, the judge was satisfied that the
intention of each owner was clearly and unequivocally conveyed on each
of the requisition forms and collectively the forms constitute a
requisition under the Act.
The judge ruled that the applicants and the other unit owners who
submitted collectively the required requisition have satisfied the
requirements of the Act. Accordingly, the corporation, by failing to
call the meeting required in accordance with the Act has violated the
It was ordered that MTCC No. 595, shall call and hold a meeting
of the owners to consider the requisition that was delivered to the
Corporation in November 2013, within 35 days from the date of release
of these reasons.
YCC #70 vs Victor Joulid and others
Ontario Superior Court of Justice
Court File #: CV-15-536273
Before: Justice Kelly Wright
Date: 11 December 2015
On December 2013, a group of owners, lead by two minority directors,
were successful in removed three directors, one by requisition. The
other two immediately resigned as they no longer held a majority on the
The new board had to deal with a very large operating deficit and a
depleted Reserve Funds. The building needed expensive repairs to the
underground garage, balconies and the elevators. By February 2014, the
board realized that the corporation was in serious financial troubles
and that the corporation needed major repairs. They raised the monthly fees by almost 4%.
By April 2014, two of the directors, a man and his wife, decided to
sell their unit and move out of the condo which they did in 2015. They found
the harassment from a few owners, over the modest fee increase, too much to bear. However, they
remained on the board.
A small group of owners started a campaign of intimidation and
the directors. They were accused of stealing the corporation's
money and a whispering campaign was undermining their credibility. A
series of anonymous leaflets were distributed through the condo's two
towers and the townhouse units.
A campaign to discredit the directors started in early 2014 and it
picked up later in the year just before the AGM. Anonymous
persons engaging in slander, posting libelous
leaflets around the building and sending threatening e-mails to the
president threatening harm to him and his family. Two directors, the
president and his wife, were accused of stealing the corporation's
money and using the money to buy two houses, some land and an expensive
The board retained the confidence of most of the owners attending the October
2014 AGM but the directors started receiving a series of anonymous
e-mails including a couple of death threats.
By April 2015, after almost a year of being verbally abused, being
libeled by anonymous leaflets and postings, the president, and his
wife, who was first appointed to an open position on the board and then
elected to the board at the October 2014 AGM, decided that
they would serve out the remainder of their terms and sell their unit,
and never again buy a condo.
Due to the corporation desperately needing an increase in funding, the
board approved an almost 4% increase for the 2015 fiscal year. Then the
board distributed a newsletter stating that they commissioned a
comprehensive Reserve Fund Study. The reaction
from a group of owners was furious as they were worried that the board
may levy a Special Assessment to pay for major repairs. By summer of
2015, a claimed 154 owners
(approximately 51% of the units) signed a requisition to remove three
directors off the board.
Requistion to remove three directors
On 20 August 2015, the board was served with the requisition.
In response to this requisition, the board made an application in the
courts naming ten Respondents and asked for the following orders:
|That the requisition be declared invalid.
|An interim and permanent injunction restraining any meeting held in respect of the Requisition.
|An interim and permanent injunction restraining the Respondents from
further dissemination of letters or notices, or the allegations
|A declaration that the Respondents were in violation of sections 134 & 135 of the Act.
|An interim and permanent injunction restraining the Respondents from
canvassing and/or soliciting, directly or indirectly, in respect of, or
for, any election or owners meeting of YCC70 for a period of three
|The corporation's costs for this application.
The corporation made this application because for over a year the
Respondents have been repeatedly interfering with the management and
the operations of the corporation, they have been harassing the
directors, officers, agents and employees by stating verbally in in
written leaflets that:
|The board is deliberately underfunding the Reserve Fund.
|The board is planning a special assessment.
|Two directors have stolen money from the Corporation.
|The directors have engaged in unethical and dishonest activity.
|Directors have received new cars, properties and major renovations as perks for serving on the board.
|The Respondents knew that most of their allegations were false and were
made recklessly in order to get unit owners to sign the requisition.
The judge stated that she read the materials so she would just hear the summaries.
The Applicants stated that they endured two years of vicious harassment
and horrendous behaviour. The judge asked: "since the leaflets were
anonymous, how do you know it was them? Concerned owners. Are they not
all concerned owners?"
When the Applicant's lawyer referred to photographs of two of the
directors on a leaflet, the judge asked: "What links the respondents to
these photos?" When there was a reference to a respondent listening in
on the President's conversations in his unit, the judge asked: "Who was
eavesdropping on them at the door? How many times was there
eavesdropping? What the photos (from a hidden camera) show is someone
standing in a common hallway."
Commenting further about photos from the hidden camera, the judge
stated: "Thirty seconds standing outside a door is not loitering. Do
you know if the President was home at the time she was walking in the
hallway? How could she be eavesdropping if he was not at home?"
The judge stated that the evidence was: "not compelling. This is not
evidence, this is someone's opinion. Later she said that she was not
convinced that one of the leaflets was an attack. There was no
profanity." At another point she stated: "This is a reflection of
pettiness. The pettiness detracts from the major issues." She also
said" "Owners being recorded and taped without their knowledge. I have
problems with this."
When the Applicant's lawyer stated: "There were many cases of proxy
manipulation" the judge asked: "Is there evidence of pressure to sign
The Respondent's lawyer said little aside from that there were no false
and defamatory statements just canvassing and soliciting signatures.
The court hearing lasted just over two hours and the judge gave an oral judgement stating in part that:
"There is a history between the owners
and the board. The actual evidence put forward by the applicant is
fuzzy at best. Little in detail and the views of the applicants
tainted their views and the board jumped to conclusions. The applicants
demonstrating and mirrored the respondents. There was only three
incidents of one of the respondents going to the office to complain.
Why can't she complain?
Some incidents are of concern. Most of the incidents were anonymous.
The Respondents offered reasonable reasons for their actions and
believed that their information was correct.
Community level requires a high level of tolerance. Owners and the
board must look at how they are acting. Let go of the bad feelings, let
go of the past."
YCC #70 failed in their application to stop the requisition meeting and
in preventing the respondents from participating in the condo's
The respondents were also awarded costs running from a high of $3,500
and $2,000 for the respondents that were represented and from $250 to
$200 for the unrepresented respondents.
R. O'Neill & H. Goldfarb vs YCC #74
Ontario Superior Court of Justice
Court File #: 16-CV-556487
Before: Justice Glustein
Date: 08 August 2016
The Application was settled prior to the start of the hearing with the
exception of only one item that was presented to the judge.
Unfortunately, this case was unreported so the Judgment is sparse on
It is unfortunate as this is an extremely important case for all condo owners for the following reasons:
|A board cannot ignore a proper Requisition to remove directors.
|A board cannot postpone an AGM to avoid a Requisition.
|A board cannot use lawyer letters as a way to bully and punish owners without giving adequate notice of the board's intent.
Fortunately, Victor Lee, one of the Applicants' lawyers wrote an essay on the proceedings on Elia Associates website at Condocentric.ca.
"This past summer, our firm acted as counsel for a group of more than
60 Unit Owners who were urgently seeking a remedy from the Ontario
Superior Court of Justice. Several months earlier, the Unit Owners had
submitted a Requisition to the Board of Directors for a meeting to vote
to remove 3 of the 7 Board members. The Unit Owners had agreed to join
the Requisition to the agenda of the upcoming Annual General Meeting;
however, the Board of Directors decided to postpone the AGM beyond the
6-month period mandated by Section 45(2) of the Condominium Act, 1998,
S.O. 1998, c. 19 (the “Act”).
This group of 60+ Unit Owners amounted to nearly 25% of the
condominium’s total number of unit owners. These Unit Owners alleged
that their democratic rights as unit owners were being oppressed, as
the Board, after having received the Requisition for several months,
refused to recognize the Requisition as valid.
The Unit Owners also alleged that, as part of the Board’s oppressive
conduct, the condominium had levied unlawful chargebacks against
specific unit owners who had voiced their opposition to decisions made
by certain Board members. Accordingly, the Unit Owners retained our
firm to urgently seek that the Court:
|declare that the Requisition was valid;
|add the business of the Requisition to the AGM agenda;
|appoint an independent chairperson to oversee the AGM;
|declare the chargebacks as having been improperly levied by the condominium; and
|grant other related relief.
On the morning of the Hearing on August 8, 2016, the condominium
consented to a majority of the relief sought by the Unit Owners,
including adding the Requisition’s vote to remove the directors to the
AGM agenda, and appointing a neutral third party to serve as the AGM
chairperson. However, one key point of contention that remained between
the Unit Owners and the condominium was whether the chargeback levied
against one of the Unit Owners was proper.
The condominium took the position that the legal fees which were
charged back to this unit owner, were part and parcel with the
condominium’s duty to prevent workplace harassment, because the said
unit owner had been allegedly harassing the property manager and/or
Board members. According to the condominium, the cost of the
enforcement letter sent by the condominium’s legal counsel should
properly form part of her unit’s common expenses.
The Unit Owners on the other hand, were of the particular position that
the unit owner’s behaviour did not amount to harassment, as she had
merely been voicing her complaints about the governance of the
condominium in a legitimate fashion. Even if her behaviour did amount
to harassment, the condominium’s Declaration only allowed for a
chargeback if said unit owner’s behaviour had damaged the common
elements or other units, which her behaviour had not.
Moreover, no warnings from the condominium, either from its Board or
property management, had been given to the unit owner prior to the
enforcement letter being issued directly to her by the condominium’s
lawyer. Said enforcement letter by legal counsel also demanded that she
pay $1,171.92 to their office, for the costs of a one-and-a-half-page
enforcement letter. The Unit Owners viewed this chargeback as the
latest instalment in a pattern of oppressive conduct by the Board to
silence any dissent in the condominium community against it,
particularly since placing said unit owner into arrears would eliminate
her right to vote at the AGM and/or any vote to remove the directors.
In this unreported case of O’Neill et. al. v. York Condominium
Corporation No. 74, Court File No. 16-CV-556487, Justice Glustein of
the Ontario Superior Court of Justice agreed that York Condominium
Corporation No. 74 (“YCC 74”) could not substantiate its allegations
regarding the unit owner’s conduct and even if it could, YCC 74 had
acted unreasonably. Justice Glustein held that the chargeback levied on
the unit owner was improper, and ordered that the money she had paid,
under protest to YCC 74 in order to preserve her right to vote, be
returned in full to her. His Honour ruled:
… even if [the unit owner] could be seen to be in breach of the
declaration or by-laws, it is not just and equitable to require her to
pay over $1,000 for a lawyer’s letter setting out complaints as to her
conduct, particularly where she received no warning from YCC 74 that
legal intervention might be required, and in fact no warning whatsoever
until she received the letter from legal counsel. Imposition of a
requirement to pay legal fees (even if permitted under a declaration)
without any warning “would send a message that a challenge to the
authorities will attract serious negative consequences” and “is not a
message which ought to be communicated when the legislative environment
is one which is intended to encourage openness.”
Justice Glustein quoted from the Court’s decision in York Condominium
Corp. No. 60 v. Brown at paragraph 40, and emphasized that the
chargeback was improper because no prior warning was given to the unit
owner before the enforcement letter was issued to her by YCC 74’s legal
counsel. His Honour held that this lack of prior warning also
distinguished the situation at bar from the Court’s decision in Muskoka
Condominium Corporation No. 39 v. Kreutzweiser, where the Court there
upheld a condominium’s chargeback of legal fees because several
warnings had been given to the unit owner prior to the involvement of
the condominium’s lawyer.
The O’Neill et. al. v. York Condominium Corporation No. 74 case stands
as a reminder to condominium corporations that although it is always
advisable for the Board to consult with the condominium’s lawyer
regarding any harassing or intimidating conduct that arises from a unit
owner, a prudent Board should issue warning letters to the unit owner
first, via property management. If the conduct still persists, then the
Board’s next step is to instruct the condominium’s lawyer to issue an
enforcement letter, whereby the costs of same could be charged back to
the unit owner depending on the wording of any indemnification
provisions in the Declaration. Otherwise, if the Board “jumps the gun”
and goes directly to their legal counsel for an enforcement letter, the
costs of that enforcement letter may not be recoverable as a
chargeback, regardless of the wording of the Declaration."
|THIS COURT ORDERS that the business ofthe Requisition shall be added to
the agenda of YCC 74's AGM and that the notice of the AGM shall be
delivered within 45 days from the date of this Judgment, and delivered
to all unit owners of the Respondent in accordance with section 47 of
the Condominium Act. The business of the Requisition is a vote to
remove the directors' positions held by the following directors: Jack
Royt , Michela Alessi, and Evelyn Strong.
|THIS COURT ORDERS that YCC 74 is hereby required to deliver to counsel
for the Applicants, a current YCC 74 unit owner's list within seven (7)
days from the date of this Judgment.
|THIS COURT ORDERS that the AGM:
(a) The AGM shall be chaired by an independent, third party
chairperson, namely Mr. Armand G. R. Conant of Shibley Righton LLP, the
costs of which shall be borne 50% by YCC 74 and 50% by the Applicants;
(b) YCC 74 shall use, and the chairperson shall accept as valid, a
form of proxy that reflects the updated agenda for the AGM, circulated
by YCC 74, or any proxy which the validity of same shall be determined
by the chairperson acting reasonably and that complies with the
(c) The proxies are to be deposited with the property manager of the
Respondent by 5 pm on the date of the AGM and counsel for the
Requisitionists can be present at the time and place of the deposit of
the proxies, including but not limited to, supervising the chain of
custody of the proxies.
COURT DECLARES that the chargeback letter issued by YCC 74's legal
counsel to Ms. Goldfarb in the amount of $1,171.92 is improper.
|THIS COURT ORDERS that the $1,171.92 paid under protest by Ms.
Goldfarb to YCC 74 shall be returned to her legal counsel, in Trust,
within 21 days of the date of this Judgment.
|THIS COURT ORDERS no costs of this proceeding.
These court orders shows that:
|The Appliciants were very worried about having a fair election.
|The chargeback letter was improper.
|It is very expensive for owners to fight their board of directors.
The Applicants need to pay their legal bills in full, half the cost of
having Armand Conant chair the AGM plus, as owners of the corporation,
their portion of the corporation's legal fees and its half of Armand
However, if the Requistionists are successful in removing the three
directors and get their candidates elected, the new board may vote to
pay all of the Applicants' legal fees as they can agrue that they were
occurred on behalf of the corporation.
2308478 Ontario Ltd vs YRCC No. 715
Superior Court of Justice
Court File No: CV-16-550261
Justice G. Dow
Date: 09 December 2016
The applicant is a corporation with a show room in Unit 1 of 166
Bullock Drive, Markham, an industrial-retail building with 36
The applicant claimed that the respondent Board of Directors had failed
to act in the best interests of the condominium corporation by failing
to maintain an adequate reserve fund and not responding to a reserve
fund study identifying maintenance issues, particularly the roof.
The second issue is a failure to address parking issues.
In 2012-2014, little or no money was spent doing any capital repairs or
maintenance. On January 6, 2014 the applicant reported a water leak and
damage with repairs and damage with repairs which cost $4,359.52.
By May 21, 2014, the City of Markham building department had served a
Property Standards Order on the respondent with regard to the condition
of the roof and by late 2014 roof repairs had been conducted.
$217,600.00 was paid for roof repairs.
The draft Entuitive Reserve Fund Study report dated November 17, 2015
indicates more than $3 million would be required over the next 30 years
(or more than $100,000.00 per year) and the need to raise those funds
from common elements monthly fees.
The parking irregularities is based upon observations of double
parking, blocking fire routes and unauthorized parking in the visitors
lot. This resulted in amongst other things, the inability of the
snow removal contractors to properly clear the lot as required.
The parties agree the five factors to consider are outlined in Skyline
Executive Properties Inc. v. Metropolitan Toronto Condominium
Corporation No. 1385,  O.J. No. 5117 which are:
|whether there has been established a demonstrated inability to manage the corporation;
|The inactivity of the Board of Directors through its property manager
and failure to properly maintain the property including maintaining the
reserve fund has changed more recently and before this Application was
issued April 5, 2016. The steps taken include:
a) adoption of the Entuitive report recommendations to set aside
$71,000.00 for that fiscal year with rate of inflation increases at the
January 22, 2016 board meeting;
b) the repair to the roof commenced with the quotation in June,
2014 with work done and $217,600.00 paid before May 31, 2015 as
reflected in that year-end’s financial statement;
c) replacement of the property management company in the Fall of 2013;
d) the respondent retaining Ontario Parking Authority to tag
illegally parked vehicles in the lot and a security company being
retained to conduct weekly visits.
This application would have had greater success had it been returnable
in or about August, 2013. The Court should utilize the provisions of
Section 31 “only as a last
resort” given that the unit owners should govern their
own affairs. Were this the only factor to consider, I would not
the relief sought.
|whether there has been demonstrated substantial misconduct or
mismanagement or both in relation to the affairs of the corporation;
The position of the applicant is that his actions, which preceded
issuance of this Application prodded the respondent’s Board of
Directors to begin taking the steps that they were required to take and
the more recent attention and activity to the affairs of the respondent
should not be in their favour. I agree with this position. Were this
the only factor to consider, I would be inclined to grant the relief
|whether the appointment of an administrator is necessary to bring order to the affairs of the corporation;
applicant’s position is weakened by not having identified the
individual to be the administrator along with their
qualifications to do so. This was raised when initial submissions were
made on October 4 and attempted to be remedied by providing a
Supplementary Affidavit of Steve Torok on November 24 that contained
the resumes of two individuals that appeared to be qualified and
willing to be administrators.
It is important to note the
current Board of Directors is active and that the
financial affairs of the respondent is not one of any significant
debt. Further, they have adopted the recommendation of the most recent
reserve funds study. Were this the sole factor considered, I would not grant the application.
|whether there is a struggle within the corporation among
competing groups such as to impede or prevent proper governance of the
I interpret this to be more at the Board of Directors level such that
the ability of the Board of Directors to make decisions and take
necessary steps is being frustrated. That is not the case in this
situation before me. Here the Board of Directors has been capable of
making decisions and is proceeding with the business of the
situation has not reached a point where, in my view, the activity of
the Board of Directors has stopped or the market value of each unit
holder’s investment, including that of the applicant, has been
seriously compromised or is about to be seriously compromised. Were
this the sole factor, I would not grant the application.
|and where only the appointment of an administrator has any
reasonable prospect of bringing to order the affairs of the corporation.
Self-governance is the norm; administrators are the exception”. While
I would conclude the actions of this Board of Directors has been
substandard in the past, I would also note the evidence that they were
elected by the unit owners in November, 2013 for a three year term and
I was provided a copy of the Notice of Annual General Meeting to
proceed on December 6, 2016. Were this the only factor to consider, I would not grant the
Overall, while I would not consider one factor to be more or less
important than another and that one factor could overwhelm the rest, it
is my conclusion that this application should be and is dismissed.
However, it should also be stated that it is dismissed without
prejudice to a new and further Application on new and additional
evidence in order to ensure the activity and attention to the best
interests of the unit holders continues rather than any resumption of
the inactivity noted in 2011-2013.
Counsel for the applicant submitted a bill of costs indicating actual
time and fees to be charged to her client to be a total of
$35,499.72. If successful, counsel sought costs on a substantial
indemnity (90%) level for a total of $32,066.22.
This compared to the respondent’s bill of costs indicating counsel was
charging a total of $17,617.64. I also reviewed, with the consent of
applicant’s counsel, the respondent’s formal offer to settle of July 5,
2016 proposing settlement on a without costs basis (that the
application be dismissed) until July 12, 2016 with partial indemnity
costs to be paid to that date and substantial indemnity costs
thereafter. The offer also required execution of a full and final
release if accepted subsequently and was open for acceptance until the
commencement of the hearing.
The requirement to execute a full and final release (which in my view,
bars any future claim) results in the applicant being relieved of the
consequences of Rule 49.10 given my decision that the application is
dismissed is without prejudice to a new and further application on new
and additional evidence.
Alternatively, I would rely on my discretion under that Rule as well as
Rule 57.01 and Section 131 of the Courts of Justice Act. It seems
clear the efforts of the applicant resulted in the respondent Board of
Directors improving its performance and fulfilling its obligations to
act in the best interests of the unit holders.
Further, I take note of the fact that the legal costs of the respondent
will no doubt be partially borne by the applicant through its payment
of common elements fees.
Not only does section 131 of the Courts of Justice Act provide
discretion to determine by whom and to what extent costs shall be paid
but rule 57.01(2) specifically provides for awarding costs against a
party that has been successful.
As a result, I would award and fix costs payable by the respondent to
the applicant in the amount of $2,500 inclusive of fees, HST and
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