Perper v. York Region Condominium Corporation No. 860 (Ontario Superior Court)

Two directors were removed from the Board in January, 2012. They then “began a campaign to remove members of the Board”. In February, 2012, they delivered a Requisition for removal of three members of the Board. The Requisition was signed by the owners of 23% of the units. 

The Court said that the Requisition and accompanying letter contained the following false and misleading statements: 

1. The Board had unilaterally obtained a lawyer’s opinion on the validity of proxies (even though the former directors had supported the idea of obtaining the opinion).
2. A budget surplus of approximately $16,000 was “gone” (even though it had clearly been carried forward into the next year).
3. The sum of $167,000 was “illegally taken from the Reserve Fund” (for upgrades to the security system, which the Court found were properly within the Board’s mandate, and could properly be funded from the Reserve Fund). and
4. The Corporation would have insufficient funds in the Reserve Fund (which the Court found was not accurate). 

The Condominium Corporation applied for an Order declaring the Requisition invalid and seeking injunctive relief preventing: 

i)                    any meeting from being held;

ii)                   further dissemination of certain information by the former directors; and

iii)                 canvassing or soliciting by the former directors for any election or owners’ meeting of the Condominium Corporation (for a period of time). 

As a result of the false and misleading information provided by the former directors to all owners, the Court declared the Requisition invalid. The Court said: 

I accept (the Condominium Corporation’s) submission that a meeting of unit owners under the Condominium Act is analogous to a shareholders’ meeting. A notice must not only sufficiently state the purpose of the meeting but it must not be misleading. The misleading information in the Requisition in this case would not permit unit owners to form a reasoned judgment as to whether or not a meeting should be requisitioned.

The Court also ordered the following: 

• a permanent injunction restraining any meeting from being called or held pursuant to the Requisition;
• a permanent injunction restraining the former directors from further dissemination of the Requisition, the accompanying letter, or the allegations therein;
• an interim injunction restraining the former directors from canvassing and/or soliciting, directly or indirectly, in respect of, or for, any election or owners’ meeting of the Condominium Corporation until December 31, 2012. 

[Editorial Note: In the course of the decision, the Court also considered upgrades to the security system. The Condominium Corporation had added cameras and an interphone system because increased security was necessary to address a number of the unit owners’ safety and security concerns, such as thefts, use of intravenous drugs in common areas, vandalism and the presence of unauthorized individuals within the building. The Court said that those upgrades were part of the Condominium Corporation’s obligation to repair and maintain the common elements. The Court said: “They were properly made without notice in that the addition was necessary to ensure the safety or security of persons using the property” (in accordance with s. 97(2)(b) of the Condominium Act, 1998).