In a recent case, the Ontario Court of Appeal has confirmed that the “business judgment rule” applies to decisions by condominium Boards. This means that the Courts will show deference – and therefore won’t overturn a Board’s decision – as long as:
- the matter decided was within the Board’s mandate or decision-making authority;
- the Board arrived at its decision in good faith, with fair process; and
- the decision was “within a range of reasonable choices”.
To me, this means that condominium corporations must make reasoned decisions, or in other words they must have sound reasons for their decisions. If they do (and as long as a given decision doesn’t fall outside a spectrum of reasonable choices), then the Court will generally respect and uphold the decision – whether or not the Court might have come to a different decision.
3716724 Canada Inc. v. Carleton Condominium Corporation No. 375 (Ontario Court of Appeal)