22/05/2016 – Jurisdiction Ontario
Part 62 published on 01/06/2018
Court declines to make special orders respecting procedures applying to requisitioned meeting for removal of Directors
The respondent had delivered requisitions, in each condominium, for removal of the Boards of Directors. The condominium corporations did not call the meetings. Instead, they brought these applications to Court.
The two condominium corporations applied for orders:
- to enjoin the respondent or other owners from holding meetings of the owners to vote on whether to remove the current board members;
- to require the boards to call meetings of the owners to consider whether to remove the current board members; and,
- to regulate procedures in relation to the meetings of the owners, including prohibiting the use of proxies, limiting communication with and between owners of units in the condominiums leading up to the vote (i.e., to regulate campaigning), and setting procedures for the conduct of the meetings.
The condominium corporations asserted that the respondent had engaged in misleading communications to owners in order to garner support for removal of the Boards.
The Court dismissed the Applications. The Court said:
The statutory criteria for a meeting to be requisitioned under s. 46 (of the Condominium Act, 1998) were met. The boards should have called the meetings. If they felt that there was misleading information circulating about the issues underlying the call to remove members of the boards, the boards were free to communicate with owners of units and provide whatever information they felt residents should have to make an informed decision about the issues. They are still free to do so.
…
In all of the circumstances, I am not persuaded that the communications by the respondent, and circulating in the community generally, are such that I should remove the right to vote by proxy, a right which is provided for in both the Condominium Act, 1998, and the by-laws of these condominium corporations. The purpose of making proxies available under the Act is to allow owners to participate in a vote who may not be able to attend a meeting. I find that the importance of that purpose for proxies is heightened in these condominium corporations, because by their structuring documents they are vacation condominiums, and owners must have another primary residence. As such, I accept that proxies take on increased importance in this community, where owners may, as a matter of their primary residence, live elsewhere.
I note that the boards of directors of the condominium corporations, or any owners who support the current boards and the special assessment are not without means to address what they perceive as propaganda and misinformation. The boards are free to communicate with the owners and send them information about the boards’ positions in the debate, and whatever documents or evidence they want to send in support of those positions. It will be up to the owners, once they consider all the information at their disposal, to decide how they want to vote.
…
The order sought by the applicants limiting communication to an official mail-out containing the positions of each side, and banning all other communication with and among unit owners prior to the meetings, is such a confined view of communication between the owners that it is not consistent with the democratic model in the Condominium Act, 1998. I decline to make an order regulating communication with and among owners of units leading up to the meeting.
As I have noted above … if the boards are concerned about what they view as misinformation, they are free to communicate with the owners and seek to persuade them to support the boards’ position.
The Court also said:
I would add that although the parties did not agree on whether I should make orders about how the meeting should be conducted, they did agree that time to speak should be allocated in a balanced manner between the opposing sides in the debate about the special assessment and whether the boards should be removed. In argument, counsel for the applicants argued that as part of the time allocation for speakers, each of the incumbent board members should be given an opportunity to speak. In light of the fact that the incumbent board members are facing a vote on their removal, in my view fairness dictates that they should each be allowed to speak at the meeting if they wish. However, given that the sole issue underlying the call for removal is the special assessment, the time for the incumbent board members to speak should be considered as part of the time allotment for the side supporting the special assessment and opposing removal of the current boards of directors.
The Court confirmed that the requisitioned meetings should proceed. On consent of the parties, the Court appointed an agreed chairperson for the meetings, who was perceived by all to be independent.
The Court also awarded costs to the Respondent, but declined to order that any of the costs be payable by the Directors personally.