A successful requisition

YCC # 70, an older condo corporation in Etobicoke, held a requisition meeting on 27 December 2013. The requistionists were aiming to remove one director and were successful in removing two.

History
YCC # 70 consists of two apartment towers and a townhouse complex with a total of 299 units owned by individual owners and two superintendent units owned by the corporation.

The condo has the distinction of being the last condo corporation to hire Channel Property Management.

After a disagreement over the workmanship of a major project, the board fired their property management company and signed a contract with Channel Property Management. The very next day, Manzoor Khan, the owner of Channel, was on the front page of the Toronto Star accused of stealing $20 million from a half-dozen condo corporations and fleeing the country.

Over Khan's daughter's protests, YCC #70 immediately canceled the contract and hired a different management company. They remained the management company until the end of October 2013.

Over several months, a split in the board developed over concerns that the president was making decisions and signing contracts without the full board's approval.

Lawsuit
Prior to the new management company coming on board, an engineering company wrote the specs for a $2.1 million contract to install replacement risers and a boiler. The board raised $1.4 million by a special assessment.

There was a dispute over the quality of the work that one contractor performed and so the condo withheld $649,000 from the $1.3 million contract.

The contractor sued and in the fall of 2013 the president appointed himself the sole negotiator to try to come to an agreement with the contractor. He came to an agreement, withdrew a $525,000 draft from the bank, with only his signature and settled the suit.

The two minority directors were shocked that he could withdraw that much money with from the corporation's account with only a verbal agreement from the treasurer and without a second signature or a resolution from the board.

There were further issues about the quality of work that some of the contractors were doing and there was a feeling that some of these contractors were unqualified, lacked proper licences and the costs were too high.

The board decisions were being decided by a vote of three to two. The board was divided and the minority directors were becoming very concerned with the direction that the majority was taking.

Terminating the management company
The majority of the board terminated the management company and hired a new company. On 01 November 2013, a man who previously worked for Channel Property Management, became the new property manager.

Whether for good cause or not, some of the owners were very concerned about yet another change in management companies. After the change in management companies, they received a series of anonymous e-mails making unsubstantiated claims of wrong doing by the condo's president. That fanned the flames.

Petition for a requisition meeting
A group of owners collected a requisition petition requesting a meeting to hold a vote on the removing the president from the board of directors.

The requisitionists figured that if the president was replaced, the majority on the board would shift from the present majority to being the minority directors so replacing just the one director would suffice.

This petition was rejected by the board on the advice of the corporation's lawyer. It contained an error but the requisitionist were not informed what the error was. (It seems that the requisitionists stated that the president held the owner-resident board position but he did not.)

The second requisition
The owners hired a lawyer from a condominium law firm and submitted a second requisition on 24 November 2013. When the requistionists tried to give it to the secretary, he threw it on the hallway floor and threatened to call the police. However, the corporation lawyer advised the board that this was a valid requisition and to call an owners meeting.

By now, the two minority directors had openly announced that they were siding with the requistionists.

Time limits
The requisition was delivered to the board on 24 November 2013. The board had until 29 December to call an owners meeting. The owners needed the information package at least 15 clear days before the meeting, that is by 13 December 2013.

If the board ignored these time limits, the requistionists would have been free to call an owners meeting and bill the corporation for all reasonable expenses.

Notice for the meeting
The meeting package was mailed to the owners. The resumes that the interested candidates submitted to the property manager were not included in the information package. The manager first said that he did not receive them in time and when that didn't hold up, he said he withheld them on advice from the corporation's lawyer. (That was not true.) Then he said he withheld them on his own accord.

The campaign
The requistionists worked hard talking to the owners and going door-to-door informing the owners of the issues, urging them to come to the meeting and to give them a proxy if they thought that they could not make it.

They wrote and distributed flyers throughout the condo community.

In response, the president put out a two-page flyer which stated:

•	The accusations against him were lies and allegations.
•	He lowered the condo fees and improved unmaintained. (sic)
•	He would keep the fees low and there would be no special assessments.
•	Owners should not sign proxies but go to the meeting in person.
•	If you were going to vote by proxy vote No and give the proxy to the management office or to him.
•	The requistionist were wasting the corporation's money.
•	He denounced a director's wife for going door-to-door to collect proxies.

 
The requistionists had the difficult job of persuading 50% plus one of all the owners to support them while Deen just had to just get enough support to deny the requisitionists a simple majority. Theirs was the more difficult task.

Language issues
The condo corporation has owners from many different cultures, many who are recent arrivals to Canada. The requistionists had language barriers to overcome and they did this by having people from the major cultural groups help them communicate with the owners and win their support.

Required effort
The requisitionists worked very hard to inform the owners of the issues, urged them to attend the meeting and collected proxies. They used their available day and evening hours for canvassing and distributed their last flyer in the middle of the night.

Time of the meeting
The meeting was called for 5:00 pm on Friday 27 December 2013. Registration started at 4:00 pm. Many people work and this meeting was held on a work day. It is unusual for a condominium owners' meeting to be held so early.

There was no attempt by the manager or the majority of the board to ask the requistionists if they would agree to hold the meeting at a more convenient time during the weekend.

Location


The meeting was held at the Jane/Sheppard branch of the Toronto Library. This branch closes on Friday's at 6:00 pm. (The meeting, which started at 5:20 pm, went longer than that with no interference from the library staff.)

The library branch is some distance from the condominium and is a little out of the way. It also has very limited parking so people had to park out on the street.

The insurrectionists suspected that the timing and location of the meeting may have deliberately been made inconvenient to discourage participation.

The branch's small meeting room had a capacity of only 50 people. The number of people present slightly exceeded that number but no one raised this as an objection to the chair.

The requistionists considered doing so as they believed that it would give them more time to collect more proxies but they allowed the meeting to proceed.

Security
The majority of the board hired two security guards to maintain order and everyone's safety during the meeting. It was to everyone's credit that they were not required to intervene during or after the meeting.

The chair
The majority of the board hired an independent lawyer to chair the meeting. He chaired the meeting in a fair and equitable manner.

Requistionists had support
The requistionists had their lawyer attend the meeting. She had several proxies and she kept a watchful eye over the requisition proceedings and acted as one of the scrutineers.

I also attended the meeting as a holder of seven proxies. I also carefully monitored the registration table to make sure that everything was in order.

If fact, there was a fourth person keeping a close eye on everything. One of the owners, who is also a professional condominium property manager, watched the entire registration process.

Number of units
I raised an objection when the chair ruled that the two superintendent suites would count towards the required 50% plus one to remove the director and that the corporation owned those two votes.

I argued this ruling on two points. One they should not be included in the total number of units and that there was no resolution passed by the board stating how those two units would cast their votes.

After checking the by-laws, the chair conceded that they were silent on the superintendent units having voting rights and he agreed that the board did not pass a resolution at a board meeting on how these votes would be cast so they could not be counted.

The chair stuck with his ruling that the requistionists would have to have 151 votes to remove the director, not the 149 that I suggested was correct.

Attendance
Prior to the opening of the registration desk a few owners had gathered in the library. A couple came in and told us that when they were in the lobby of their apartment building, a man who was unknown to them, approached them and asked if they were going to the meeting. When they said yes, the man in a loud voice told them that they should not go because there will be only four people there. They said they were going anyway.

When the registration desk closed, it was announced that there were forty-six owners attending the meeting in person. They were given ballots.

This was a very impressive turnout. I think that everyone was surprised at how many owners showed up.

There were 108 proxies so the meeting met quorum and as there were over 50% plus one units in attendance either in person or by proxies, the vote to remove the director could proceed.

The requistionists needed 151 out of the 154 ballots and proxies to win. The president and the secretary each had a vote so if they had only two more votes, either by ballot or proxy, the requisition would have failed.

The ballot box
During registration, I had two concerns. The manager used a large black plastic tub to hold the proxies. He put this tub on the floor beside him which kept it a little out of sight. He was dropping the registered proxies into it. I was comforted by the owner-property manager who assured me that he was keeping an eye on it.

The second concern was the number of ballots that were loose on the table and under other papers that were on the table. The chair and I both had the same thoughts and he asked the manager to keep the ballots in order.

(I like a clear plastic or Plexiglas ballot box with the single slot on top. I also think that it is important that the ballot box be in clear view of everyone at all times.)

The requistionist's lawyer told me not to worry as she would insure that the scrutineers counted the total number of ballots and compared it to the number of units that were represented in person.

The agenda
The agenda gave the majority of the board a final advantage. Before the vote, on removing the director, the president was going to give a report.

Anticipating that the president would try to discredit the terminated property manager, they arranged for him to be given a proxy so he could attend the meeting and attend he did.

The president's report
The chair announced that the president had a few words he wanted to say. He first stated that the board did not have to allow the requisition to proceed because the requisitionists had copied and pasted some of the owner's signatures. That statement was hotly challenged and the requisitionist's lawyer asked Deen if he had a legal opinion on that. He he replied that he did. (Not likely since the corporation lawyer allowed the meeting to proceed.)

However Deen said, seeing that so many owners had lost faith in his leadership, he was resigning. He then left the room.

Three birds with one stone
The chair then opened the floor to nominations for the open position on the board. At that point, the board secretary, who was one of the majority on the board, stood up and stated that he could not work with the two minority directors and therefore he too resigned. He then left the meeting.

The election for one director then took place.

Later on, the board found out that the treasurer, who did not attend the meeting, also resigned. The new board will have to decide how they would fill the two additional openings on the board.

Why did the president resign?
He lost the two votes that the Chair was going to give him for the superintendent suites but he had two for sure (the secretary's and his) so if he had just two of the proxies and/or two supporters in the room, the requistionists would have lost.

So why didn't he wait for the recall vote?

I think he decided to resign when he faced all those owners in that room. It was clear that he lost his mandate to stay in office even if he managed to hang on by the smallest of margins. It is one thing to fight against a pile of faceless proxies but to see so many of your neighbours sitting in font of you wanting you to go, is far more difficult to face.

Perhaps he had no support in the room and he had no proxies. The treasurer, did not attend the meeting so the president did not have his visible support.

Is it possible that he didn't think he needed to campaign? That's doubtful but perhaps he saw that his support was very weak.

My impressions from the meeting
The new board has the backing of the majority of the owners. It was clear that transparency, competency and ethics are what the owners will be looking for from the new board.

The owners believe that their condo corporation has a lot of potential for improvement and their units should increase in value. They are looking for leadership who will deliver.


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