Part 39 published on 01/08/12
No oppression. Claims of former director dismissed.
The Court found that the former director, Mr. Swan, had breached his obligations as a director under s. 37(1) of the Condominium Act, 1998. Even so, the Court declined to grant any permanent or interim injunction against Mr. Swan. [Among other things, the Corporation had applied for an Order declaring Mr. Swan a vexatious litigant and an injunction preventing him from having further contact with the Board members or the manager. Mr. Swan in turn had cross-applied for various relief, including: Damages for oppression, removal of certain Directors from the Board and reinstatement of Mr. Swan as Director and President.]
The Court held that Mr. Swan’s actions had rendered the Board divisive and dysfunctional (through “confrontational inflexibility and misguided assessment of his duties as director”). The Court said that he had failed to meet his obligation to exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. He had:
- sent a letter as President to the unit owners stating that the Board had disregarded the rules and regulations applicable to the proper management of the condominium, and stating that the Board was dysfunctional;
- commenced two separate Small Claims Court actions against the manager, in the name of the Condominium Corporation, without authorization of the Board;
- accepted service (on behalf of the Corporation) of a claim that he (as Plaintiff) had commenced against the Corporation;
- unilaterally and without authorization or knowledge of the Board, purported to terminate the management contract, and had demanded delivery of records by the manager;
- sent harassing and insulting e-mails to other Board members and the manager;
- installed and maintained, while a director of the Board, a satellite dish on the common elements without the approval of the Board. He had subsequently removed the satellite dish.
The Court said:
Swan is no longer a member of the Board. However, he remains a resident of the condominium. Despite the Court finding that he breached his duties as Director, I decline to grant the permanent and interim injunctions sought by DCC 45 that Swan refrain from having any direct or indirect contact with members of DCC 45’s Board, its employees (and others).
…
The relief as sought by DCC 45 is too sweeping and would paint Swan with a ‘scarlet letter’ while remaining a resident of the condominium. However, it should not be construed that this finding gives Swan license to disrupt the proper management of the condominium and its occupants. Should similar conduct continue, if necessary, such conduct can be appropriately addressed and deterred by this and other Courts.
The Court also declined to find that Mr. Swan was a vexatious litigant and accordingly declined to order that any further proceedings instituted by him against the defendants be barred (without leave of the Court).
At the same time, all of Mr. Swan’s cross-applications were dismissed.