six-owners

The owners vs. the Administrator

Since the courts appointed Mr. Atrens as administrator, the owners could only fight the administrator in the courts as you can’t requisition a Special Owners Meeting to remove an administrator.

It was clear that early in his administration, Mr. Atrens lost the confidence of some of the owners.

Motion for Injunctive Relief
In May 2007, Nicoló Fortunato, a unit owner, brought an injunction proceeding against the corporation. He and a number of other unit owners object to the contracts with USRL as well as the administrator’s proposal to borrow $12 million to fund the costs of such work and the other expenditures.

Mr. Fortunato relied on a report of another engineering firm, Trillium Inspection Testing and Consulting Services Limited that was prepared a year earlier with respect to the work required to comply with the City work orders at two of the three buildings.

The Trillium Report estimated the restoration costs to be approximately $1.52 million for 320 Dixon Road and $1.42 million for 330 Dixon Road; a lot cheaper than what the contractor, USRL, would be receiving.

However, the work described in the Trillium Report was never put out for tender so there was no confirmation of the accuracy of those estimates.

The Board of Directors of YCC #42 at the time approved the Trillium Report. However, a borrowing by-law for the purposes of financing this work was rejected by the unit owners at a meeting held on 29 June 2006, leading to the appointment of the Administrator.

Nicolo Fortunato also wanted the appointment of a forensic engineering firm to advise as to the minimum cost required to comply with the city work orders and an interim injunction suspending all work under the USRL contracts pending receipt of the report of the forensic engineering firm.

Mr. Fortunato’s purpose was to have the USRL contracts declared invalid. At the hearing of this motion, he sought leave to assert an oppression action against Mr. Atrens. This was denied on the basis that the administrator had no notice of this claim.

The application for an injunction was adjourned to give Mr. Fortunato the opportunity to assert a proper claim.

Application dismissed
Justice Lax dismissed Mr. Fortunato’s application on 03 July 2007 to replace Andrew Atrens as administrator. In February 2008, the Appeals Court dismissed Mr. Fortuno’s appeal.

Partial win
Nicoló Fortunato and the Association of Condominium Owners (ACO) did spike the Administrator's attempt to raise a loan to pay the cost of the work orders, a feat which he estimates saved the owners a fortune in interest payments.

Approving the Administrator’s accounts
On 17 March 2008 Justice Hoy approved the Administrator’s accounts. One unit owner, Nicolo Fortunato made an oral presentation.

Approving the Administrator’s accounts
On 04 March 2009 Justice Hoy approved the Administrator’s accounts. Three unit owners were heard and made written submissions.

Selling the east parking lot

The east parking lot that sits right on Dixon Road

In 2009, Andrew Atrens had the idea of selling a piece of land, the east parking lot, to a developer. The proceeds of that sale would be distributed to the owners of YCC #42 with the hope that they could use that cash to pay off their special assessments.

The rival political groups active in the corporation were united in their opposition to this proposal, so it was obvious that Mr. Atrens would not get 80% of the owners to approve. By the end of the 2009 AGM held in June 2010, that idea was dead.

Approving the Administrator’s accounts
Over two days in late October 2010, Justice WiltonSiegel heard the Administrator’s motion to approve his accounts. This time eight owners submitted affidavits and made oral presentations.

In his decision released in December 2010, the Justice ruled that there were no grounds to conclude that the Administrator did not perform the work set out in is accounts and that the hours he charged the corporation were unreasonable.

Similarly, it was ruled that there was no basis in the record before the Court for denying approval in respect of the fees of the Administrator’s legal counsel.

Restricting the Administrator’s powers
At this hearing, Justice WiltonSiegel ruled that Mr. Atrens required the Court’s approval before proposing or levying any more special assessments. He also ruled that should the City of Toronto issue any further work orders, the Administrator should allow the owners to make presentations to the appropriate city committees.

Road map
Justice WiltonSiegel also wrote a road map that the corporation had to follow for the court to return management of YCC #42 to an elected board of directors.

Order to terminate administrator’s mandate
On 10 March 2011, four unit owners, A.J. Karim, M. Bhuiyan, Shah Jahan Khan and Anver Karim, moved for orders terminating the mandate of the court appointed administrator, Andrew Atrens, and placing the management of YCC #42 into the hands of themselves; the “Elected Board of Directors”.

Justice Brown dismissed the motion holding that it completely ignored the judicial “road map” clearly set out by Justice WiltonSiegel.

The owners’ opinions
In April 2011, Justice Brown held a hearing where he responded to the written submissions he received from, or on behalf of 261 unit owners. One was a petition signed by 185 unit owners. The petition obviously was circulated by the Bhuiyan/ Khan/ Karim/ Karim group.

The submissions revealed a significant difference of views amongst unit owners about what next steps should be taken regarding the governance of YCC #42.

About 67 unit owners favoured the continuation of an administrator, although not necessarily the present Administrator.

A total of 188 owners, including the petitioners, called for the termination of the Administrator and the restoration of “orderly self governance through transparent independent elections within two months”.

Six submissions took a middle ground.

Administrator's performance
Some submissions thought the Administrator had done a good job; many did not. Some thought the repairs undertaken by the Administrator were too expensive; others did not.

Property values
Many unit owners expressed strong concerns about the reduction in their property values over the past decade.

Security
All unit owners voiced fears and concerns about the lack of adequate security at YCC #42. Many referred to a murder that took place two months earlier in one of the buildings.

Failure to enforce Declaration
A number of the submissions criticized the Administrator for not monitoring and enforcing the occupancy requirements contained in YCC #42’s Declaration and Bylaws. Article XII(a) of the Declaration states: “No unit shall be occupied by more than a single family and shall be used only as a residence for such single family and for no other purpose.”

Several unit owners complained that some who rented out their units were renting them to lessees who brought several families to live together in one unit, in violation of the Declaration.

Several unit owners questioned the leasing practices of other unit owners. Article XX(b) of the Declaration provides that if an owner wishes to lease his unit, “he shall furnish to the Corporation an undertaking signed by the Lessee that the Lessee and other residents of the unit will comply with the provisions of the Act, the Declaration, the Bylaws and the rules and regulations relating to the use of the unit and common elements.” It is unclear whether the Administrator has enforced this provision of the Declaration.

Maintenance
Several unit owners complained about the poor maintenance of the common elements, including widespread graffiti in the corridors and the lack of lighting in portions of the underground garage.

Communications
Some owners stated that the Administrator was not accessible, communicated poorly and did not respond to owners’ complaints.

Proxy fraud
Some owners expressed concern that in past elections proxies had been misused and, as a result, fair elections had not been held. One unit owner recommended abolishing the use of a “manual proxy system”. A number of owners voiced disappointment about strong divisions that had appeared in the YCC #42 community along ethnic and religious lines.

ACO
Some of the unit owners are members of the Association of Condominium Owners (ACO). Evidently it is an informal owners group. Some submissions supported A.C.O., others criticized it.

Mr. Fortunato, the President of A.C.O., filed an affidavit in which he made the following points:

1.	The Administrator should retire;
2.	Political instability still permeates YCC #42 and the condominium is not yet ready for self-governance;
3.	The use of proxies in elections has been misused and abused. Mr. Fortunato described this as “one of YCC #42’s biggest dilemmas”. This year competing meetings of unit owners were held, one hosted by ACO, the other by the unit owners represented by Mr. Fulton (The Core Group). According to Mr. Fortunato, more than 100 unit owners attended the ACO meeting, while only 26 were present at the other meeting, although a proxy count brought the total representation up to 322 unit owners;
4.	The court should appoint Mr. Robert Buckler as the new Administrator of YCC #42 for a period of one year. Mr. Buckler filed an affidavit deposing that at present he acts as administrator of YCC #385, a 211 unit condominium in Toronto and he would be willing to act as the administrator of YCC #42 for a one-year term. Thirty-five unit owners signed a submission supporting the appointment of Mr. Buckler as administrator.

The Core Group
The “Core Group” made the following proposal:

1.	A special meeting of unit owners should be held by the end of May, 2011 for the purpose of electing directors. The meeting should be conducted by an independent person who should be responsible for preparing and distributing meeting materials, including proxies;
2.	The Administrator should hold five meetings with the new Board during the month of June;
3.	By the end of June the new Board should file with the Court a financial and operational plan;
4.	The Administrator should file a final report with the Court by July 8; and,
5.	The Court should hold a hearing by the end of July to determine whether the governance of YCC #42 can be returned to the Board of Directors.

(Note: The Karim-Core Group racked up $80,000 in legal fees that appears were not paid.)

Finally, one unit owner recommended that qualified inspectors ensure that all the units comply with the occupancy requirements in the Declaration, that only one family occupies a unit.

Justice Brown concluded that the Court would have to decide how long the administrator should remain in place and whether another administrator should replace him or if the corporation should return to management by a board of directors.

He also concluded that the owners should be given the opportunity of advising the court what their wishes were.

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