Part 44 published on 01/11/13
By-law establishes procedure for removal of Director by Board resolution
York Region Condominium Corporation No. 818 passed a by-law stating that a Director ceases to be qualified to be on the Board (and is deemed to have resigned) in certain circumstances. One of the circumstances was as follows: If the Director violates the Directors’ code of ethics on three occasions during the Director’s term, and this is confirmed by the Board following an ethics review. Mr. Gordon was removed from the Board, on the basis of this provision.
The Court said that this by-law is valid and enforceable, and is not inconsistent with Section 33 of the Condominium Act, 1998, because it simply provides a further procedure by which a Director may be removed.
The Court said, however, that the contemplated ethics review process must satisfy “some minimal standard of procedural fairness and the basic principles of natural justice”, because in conducting such a review, the Board is essentially carrying out a quasi-judicial decision-making function, involving consideration of evidence and analysis of possible breaches of the code of ethics.
The Court concluded that the Board had not followed proper procedure in conducting the ethics review that culminated in the removal of Mr. Gordon. But the Court declined to undertake such a review (ie. to finally decide the matter). Instead, the Court directed the Board to conduct a fresh ethics review (using proper procedure), whereupon the Director in question might or might not be reinstated to the Board. The Court said: “I do not believe that this court should usurp the powers of the Board entrusted to it by the members of the corporation to conduct a proper ethics review of its own”.