The AGM that never happened

If you are the president and you have just lost re-election at the AGM, what can you do? Why not just ignore the results?

Joe was/is the president of a small 41-unit industrial condominium north of Toronto. A property management company managed this condo and the three-man board of directors got together for a board meeting about once a year and they held yearly AGMs.

The president and the secretary are friends and they would meet and talk about issues and usually the treasurer, a newly elected outsider, would be told by the manager by phone or e-mail what was going on.

Then the treasurer became concerned about the cost of some of the work contracts that were being awarded. When he told the management company that he wanted to see the financial records, it took a lot of requests and a couple of months before he was granted access. He didn’t like what he saw.

The property manager chaired the fiscal 2011 AGM. The corporation lawyer was not present. The treasurer questioned the auditor why his audited financial report did not match the actual receipts. He did not get satisfactory replies.

Next came the election. The president was up for re-election and he had a credible opponent.

As the ballots were being collected, the treasurer said that he had proxies. The president stated that he would not accept them as they were not handed in at the start of the meeting. The treasurer stated that they were legitimate proxies and the owners had the right to vote.

The president storms out of the room saying the meeting is over. The treasurer follows the secretary out and retrieves the ballots and he then laid them out on a table.

The chair says nothing! The meeting was not formally closed or terminated; it just ended.

In front of everyone, the ballots favouring the president were laid to the left and his opponents were laid out on the right. It was obvious that the president lost before the counting of the proxies.

It looks like it was a landslide for the challenger

What happened?
The next day the treasurer tries phoning the corporation lawyer. No response. he tries continually for a couple of weeks. There is no reply to his phone calls and e-mails to the property management company.

About a month later, the corporation’s lawyer talks to him on a conference call. He says that he has been talking to the president and the manager and they have been asking him if there is any way to remove the treasurer off the board as he is not an owner, just a tenant. Unfortunately, that was not possible.

No registration
The lawyer then says that the meeting was not legal because there was no registration. The treasurer replies: “You mean a sign-in sheet?” Yes, the lawyer says. But there was, the treasurer tells him, I took a scan of it with my cellphone. That seemed to set the lawyer back. The treasurer sends the lawyer a scan of the sign-in sheet.

After a struggle by phone calls and e-mails, the treasurer got the property manager to say that they would not recognize Joe or the winning candidate as president and they will run the condo as if there were only two board members.

No minutes
The lawyer then stated that there was a problem with the AGM because the property management company did not take minutes. (If there is no minutes, there was no meeting. It sounds to me that the management company was either extremely incompetent or, along with the lawyer, in collusion with the losing candidate.)

More lies
For months there is no news. There are no board meetings and there is no second AGM called for the 2011 fiscal year. Yet a budget was distributed, bills were getting paid and a fee increase was announced. How could this be?

The treasurer and an owner hire a lawyer who requests a status certificate. It shows that Joe is still listed as the condo corporation’s president. So Joe and the secretary are signing cheques and making decisions without holding board meetings or involving the treasurer.

So what now?
If the fiscal 2011 AGM did not happen there is no guarantee that the fiscal 2012 AGM, when the secretary is to be re-elected along with the president, will be held.

So the treasurer, or any other owner, can take the corporation to court to force an AGM or they can requisition an owners meeting to remove the president.

How did it work out
The treasurer figured that instead of spending time and money fighting the management company and the law firm, he'd spend his time growing his business. His father sold the unit and the treasurer moved his business to another location. He had enough of condos.

Different angle/same result
At a different condo, before the start of a court-ordered AGM, the property manager manned the registration desk. When registration was complete, he left the room to converse with the board who were waiting in a nearby room.

It was obvious that the two incumbents would not be re-elected so the manager returned to the meeting room and told the owners that the meeting was cancelled because the president, despite being protected by four security guards hired for the occasion, was afraid for his personal safety.

So, no meeting, no vote, no change.

The owners had to go back to court and get another court order for the AGM to be held under the guidance of an independent lawyer who hired paid-duty policemen to provide security and to supervise the complete election process including the registration.

At the second meeting, the two incumbents lost the election.

top  contents  chapter  previous  next