Part 52 published on 01/11/15
Director entitled to be indemnified by condominium corporation in the absence of dishonesty or bad faith
This case involved applications between a condominium corporation and a former director.
[See Condo Cases Across Canada Part 39, August 2012 and Part 40, November 2012]
The condominium corporation was largely successful and received an award of costs against the former director in the sum of $45,000. The question was whether or not the former director was entitled to be indemnified by the condominium corporation in relation to the costs payable by the former director. The Court said:
If the (former director) were found to have acted in bad faith – dishonestly or fraudulently, in the language of the by-law – he would be disentitled to the protection of the indemnity (in so far as it otherwise applies). By contrast, a finding of negligence alone would mean that the (former director) was protected by the indemnity (again, in so far as it otherwise applies).
The Appeal Court ordered the matter returned to the application judge for determination of the issue.