Small Claims Court Dismisses Claim for Disclosure of Draft Minutes

A unit owner recently brought a condominium corporation to court for the alleged failure of the corporation to disclose records of the corporation pursuant to section 55 of the Condominium Act in Stewart v. Toronto Standard Condominium Corporation No. 1591. In particular, the owner claimed (under section 55) for the following:

  • Production of the minute-taker’s personal notes from the corporation’s AGM;
  • That the AGM minutes were inaccurate and the minute-taker’s draft minutes had been improperly revised by the Board;
  • A penalty of $500.

After a full trial on the matter, the claim was dismissed by the Court. The Court said that “the notes of the note-taker are a work-product and not a record” for the purposes of Section 55. The Court also said that the term “records” does not include “drafts, work in progress, rough copies, et cetera”.

The Court also said that the Board’s minor adjustments to the draft minutes were not improper. The Court added the following; “the minutes are intended to be an accurate summary of the events that took place not a verbatim transcript.”

This case confirms that documents that are considered to be in draft form, or that are otherwise a “work in progress”, do not constitute “records” of the Corporation within the meaning of section 55 of the Act. This would appear to suggest that only once a document is in “final” form does it constitute a “record” of the Corporation. This being said, in our view, it is nonetheless possible that some types of “draft” documents (such as draft reserve fund studies) might be considered to be records of the Corporation. This however, would depend upon the situation.

The Court in this case also took issue with the fact that, “it also became evident that being critical and looking for ways to find the board to be negligent has become a sport for (the owner)”. The Court said that the plaintiff’s requests amounted, in this case, to a “pure fishing expedition, without evidence to support his suspicion of impropriety by the members of the board of revising, to their benefit, the minutes that were taken at the annual general meeting held on June 22nd, 2011”.

The Court awarded costs to the condominium corporation that were higher than the normal costs permitted in Small Claims Court. The Court took particular issue with the plaintiff’s behavior and conduct towards the condominium corporation in the context of the claim and otherwise, and found the following:

“They have the luxury of time to do nothing but find ways to criticize the actions of the board. You know what, instead of criticizing I would have had more respect for the plaintiff if he had taken the initiative and perhaps had become a board member, or come up with solutions on how to better run the board than to stand on the sidelines and do nothing but criticize. So given that, I am going to use my discretion to impose a higher amount than is typically awarded because I do not want this behavior to continue… I think it does interfere with the functioning and the proper running of the board….”

The Court clearly decided to send a message to the plaintiff that further unfounded and unsupported allegations against the board would not be tolerated by the court.

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Educating Condominium Directors

It becomes apparent when the regular insurance replacement cost valuation is completed that condominium complexes are multi million dollar assets. As well, quite often condominium budgets are in the many hundreds of thousands of dollars. Being a director of such an enterprise is not for the faint of heart.

Having said this, being a condominium director is a rewarding experience. Taking on this role however, without understanding what is involved, and what liability can occur is a mistake. A person who wishes to become, or has been elected as a director should have an understanding of the Condominium Act, 1998 (the “Act”), their own condominium documentation and best practices of how their condominium corporation should operate.

The easiest way to reach this threshold is through education. Becoming a member of the Canadian Condominium Institute (CCI) is one such avenue. Once you are a member of CCI, you will have access to many articles and newsletters written by both condominium professionals as well as condominium directors through the CCI website. As well, the CCI Ottawa Chapter offers a two-day weekend Directors course twice a year (November and April) at the Nepean Sportsplex. The course covers such topics as an Overview of the Act; Reserve Fund Studies; Insurance; Accounting; Management; and Enforcement. This is in addition to the programs offered by CCI Ottawa throughout the year. CCI Ottawa can be contacted at www.cci.ca/ottawa.

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Majority Vote

Many condominium decisions can be made by the Board alone. But some decisions require owner involvement. When owner involvement is required, the Condominium Act indicates what sort of owner involvement is necessary.

For example, a by-law requires a particular kind of “majority vote”. Section 56(10) of the Act says that a by-law must be confirmed by a vote with the owners of a majority of all units voting in favour of the by-law.

But if the Condominium Act doesn’t say otherwise, when a decision requires owner involvement, an “ordinary vote” is required. This is governed by Section 53 of the Act, which states:

53. Unless otherwise provided in this Act, all questions proposed for the consideration of the owners at a meeting of owners shall be determined by a majority of the votes cast by owners present at the meeting in person or by proxy if there is a quorum at the meeting.

So, an “ordinary vote” is a majority of the votes cast, provided there is a quorum. As an example, suppose at a meeting of owners fifty units are represented either in person or by proxy and this is sufficient for a quorum. Suppose there is a motion requiring an ordinary vote (such as re-appointment of the auditor). Suppose the vote is called and the results are as follows: there are two votes in favour; there is one vote opposed; and all other voters (forty-seven) abstain from voting. Under this scenario, the motion is “carried”, two votes to one (ie. a majority of the votes cast).

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James Katz Joins Condominium Litigation Team

Nelligan O’Brien Payne’s Condominium Law Group is thrilled to welcome the newest member of our condominium litigation team: James Katz.

As a member of our condominium litigation team, James’ practice focuses on litigation in the condominium context, such as: building deficiency actions, applications for compliance with the Condominium Act, 1998, or the Corporation’s Declaration, By-Laws or Rules, first year budget shortfalls, private arbitrations related to breaches, and any other dispute which may, and can, arise in a condominium setting.

James is fluently bilingual and looks forward to assisting the condominium community in both official languages.

Click here to view James’ firm profile, and click here to view other members of our Condominium Law Group and condominium litigation team.

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The Role of the Chair

A recent Court decision has confirmed the important role played by the Chair at a meeting of condominium owners.

In the case of Davis v. Peel Condominium Corporation No. 22 (June 7, 2013), a meeting of owners had been held to consider removal of the Board.  At the meeting, the Chair was required to consider whether or not certain proxy votes should be excluded pursuant to Section 49 of the Condominium Act on the grounds that the owners (who signed the proxies) were at least thirty days in arrears (and therefore were not entitled to vote at the meeting).

The Chair determined that the owners in question were not in arrears, and therefore accepted the proxy votes. The removal vote was held, and the Board was removed. One of the owners then applied to Court for an order declaring the vote invalid on the grounds that the Chair had improperly accepted certain proxy votes.

The Court said that the Chair had acted properly, and upheld the vote. The key aspects of the Court’s decision were as follows:

  • The Court confirmed that it is the role of the Chair, at least at first instance, to determine an owner’s right to vote.
  • The Court found that the Chair might have erred in relation to three of the proxy votes. In other words, the Court found that perhaps three proxy votes should have been excluded, but since the three votes did not in any event influence the result, the Court declined to overturn the vote.
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