29/05/2018 – Jurisdiction Saskatchewan
Part 62 published on 01/06/2018
Landlord loses right to vote due to failure to pay deposits in relation to rented units
Pursuant to Section 77 of the Condominium Property Act, and the by-laws of the corporation, the condominium corporation had passed a resolution requiring each owner to pay a security deposit of one month’s rent in relation to each rented unit.
The condominium corporation denied Mr. Goertz the right to attend meetings and to vote (in relation to ten of his eleven units), due to his failure to pay all “contributions”, as defined in the corporation’s by-laws, namely the demanded deposits.
Mr. Goertz challenged the rights of the condominium corporation to demand the deposits and to revoke his voting rights. He claimed that the condominium corporation’s actions were oppressive. He also asserted that a number of his units were in fact not rented. However, he had previously failed to provide proper evidence to the condominium corporation in relation to the rental status of his units.
The lower Court dismissed all of Mr. Goertz claims. Mr. Goertz appealed, and his appeal was dismissed. The Court of Appeal said:
The whole basis of the Board’s suspension of Mr. Goertz’s right to vote was the assumption that ten units were being rented. The Board was forced to make such assumption because Mr. Goertz was in breach of his statutory duties. Mr. Goertz clearly disputed numerous other issues with the Board, but did not dispute that assumption in his affidavit evidence filed with the Chambers judge. In the absence of accurate information from Mr. Goertz, the Board was entitled to make the assumption it did with respect to the number of rented units. Until it heard to the contrary, it was justified in requiring a deposit for each unit. Viewed from a business judgment perspective in the context of the Condo Corp’s and Board’s obligation to manage and administer the units, this was a reasonable decision in the face of Mr. Goertz’s obstinacy.
The suspension of Mr. Goertz’s right to vote on ten units was therefore justified at the time it was imposed by the Board, on the basis of his failure to pay the deposits alone. Mr. Goertz’s right to vote at the 2016 and 2017 AGMs was therefore validly suspended with respect to all ten units. The corollary is that the amendments to the Bylaws passed at the 2016 AGM were validly passed. In light of the foregoing, it does not matter that the Chambers judge erred as previously described by including the two units for which invoices were outstanding in his calculation of Mr. Goertz’s voting rights.