Condominium Boards: Reviewing Your By-Laws is Vital to Running Your Condominium Effectively

Condominiums have registered by-law(s) setting out important corporate governance matters, including:

  1. Directors and officers: elections and appointment, qualifications, length of terms of office, the number of directors and officers, etc.
  2. Board meetings: quorum, voting, etc.
  3. Borrowing money for the corporation
  4. Assessing and collecting common expenses
  5. Standard unit definitions and insurance deductible responsibilities
  6. Maintenance and management of the property and corporation’s assets

and the list goes on.

But does the Board of Directors truly need to read these by-laws? YES!

By-laws are not documents of legal jargon that can be filed away – by-laws contain important information with an ongoing impact on the condominium. The by-laws must be followed in order to run the condominium effectively.

For example, how many directors are you required to have on your Board at any given time? If your by-law requires at least 5 directors, but you only have2, then your Board has not met its quorum requirements and cannot properly carry out Board business.

Understanding your by-laws is also important when sending information to owners, such as a Notice of Meeting. If you are electing directors at your next Annual General Meeting, you should always review your by-laws before stating in the Notice of Meeting the number of director positions up for election and the length of the terms of each director position. The by-laws may also prohibit nominations from the floor, which the owners should be told of in advance of the meeting.

During the COVID-19 pandemic, many condominiums have started holding electronic meetings, which may include electronic voting. As condominiums have been forced to adopt electronic methods, they are realizing these new methods can be highly effective and would like to continue in this manner after the pandemic ends.

Before passing a new by-law to permit electronic meetings and voting, we recommend reviewing your current by-law(s) to see if electronic meetings and voting are already permitted, and to ensure compliance with the by-law’s terms. If your current by-law(s) do not meet your condominium’s needs, they can be amended.

If reviewing your by-laws seems like a daunting task, we would be happy to assist you to ensure your condominium is operating as effectively, efficiently, and happily as possible.

New to the Condominium Way of Life?

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A Post for those New to the Condominium Way of Life

If you have never lived in a condominium (“condo”) before or have recently moved into one, you may find that you have some questions about matters such as your condo fees and the authorities that the condo’s board of director has. This is the first in a series of interview-style posts that seek to answer some of those questions so that you can navigate through the condo world (hopefully) without any issues. 

We hope that you find these Q and A style posts helpful!

Q: Where do my condo fees go? To whom do I pay them?

A: All payments for condo fees, including monthly fees, special assessments, or other charges, should be payable to the condo. Payments should not be payable to the superintendent, a director, officer, manager or the management company for the condo. The condo’s by-laws may describe the permitted payment options, such as post-dated cheques or electronic funds transfer (EFT) (which is sometimes called pre-authorized payments (PAP)). Most condos do not accept cash payments. The payments are usually delivered to the manager to deposit to the condo’s bank accounts.

Q: What are the condo fees used for?

A: The fees collected from owners are used to pay for the common expenses of the condo, such as maintenance and repairs, utilities (if individual meters are not installed for the units), and professional fees (i.e. for the condo manager, lawyer, engineer, and auditor). The condo’s declaration and by-laws should describe the common expenses in detail.

Q: What happens if I do not pay my condo fees?

A: A condo’s primary source of revenue is from monthly fee payments from its owners. If owners do not pay their share of the costs the condo may not have sufficient funds to pay its bills as they become due.

Q: What are the repercussions of not paying my condo fees?

A: If an owner does not pay their share of the common expense the condo may register a lien against their unit under section 85 of the Condominium Act, 1998. A lien is similar to a mortgage as it permits the condo, like a mortgage lender, to sell the unit if the owner defaults in their obligations. The condo is also entitled to collect interest on the arrears, collection costs (i.e. manager’s fees to send notices of arrears), and legal costs. The lien is not discharged until the condo receives payment in full.

Q: What if I can’t pay right now simply because of COVID?

A: While it is unfortunate that some owners may struggle to pay their condo fees because of the pandemic, it does not change the fact that they are legally required to pay according to the Condominium Act, 1998 and the Declaration. The courts have confirmed that an inability to pay condo fees is not a defence to an action by a condo trying to sell an owner’s unit. A condo may agree to a payment plan with an owner to give them more time to pay their condo fees, but this should not be expected by an owner as it is rarely an option. In short, the owner must find sufficient funds to pay the condo on time or the condo could sell their home.

Special thanks to Zach Powell, summer student at Robson Carpenter LLP, for asking the questions owners want to know and preparing this post.

Have a question you think new owners need to know? Send it to us and you may see it in a future post.

Can You Arbitrate Oppression Claims Between Condos?

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Today’s post is about a recent Court of Appeal decision regarding arbitration in condominiums. The facts are straightforward. Two condominiums were parties to a cost-sharing agreement. There was a dispute about the amounts owing under the cost-sharing agreement. The parties participated in a mediation, which was unsuccessful. One of the condominiums sought to arbitrate the dispute. The other disagreed that aribtration was appropriate and commenced an application to the Superior Court of Justice seeking various relief, including an order that the conduct of the first condominium was oppressive, unfairly prejudicial or unfairly disregards the interests of the condominium pursuant to section 135 of the Condominium Act, 1998.

In response to the application, the other condominium brought a motion to stay the application in favour of arbitration. The motion judge found that the entire matter should proceed before the court, despite finding that some matters were within the jurisdiction of an arbitrator under section 132 of the Act. The decision was appealed.

For context, section 135 of the Condominium Act, 1998, permits certain parties to bring an application to the Superior Court of Justice if the conduct of another owner, the condominium, a declarant, or a mortgagee of a unit “is or threatens to be oppressive or unfairly prejudicial to the applicant or unfairly disregards the interests of the applicant”. Previous court decisions have found that disputes involving oppression claims do not require mediation and arbitration under section 132 of the Act and the claim could proceed in the Superior Court according to section 135 of the Act.

The Court of Appeal reviewed a recent decision where the Supreme Court of Canada made it clear that a court did not have discretion to refuse to stay claims that were dealt with in an arbitration agreement. The Court of Appeal found that the dispute between the condominiums was clearly covered by the arbitration clause and the motion judge should have stayed that portion of the application.

With respect to the oppression claim, the Court of Appeal did not agree with the motion judge that the “pith and substance” of the dispute was oppression. The core of the dispute was the interpretation and application of the cost-sharing agreement and these sorts of disputes required mediation and arbitration under section 132 of the Act. The Court of Appeal cautioned courts reviewing these sorts of claims at paragraph 25:

In our view, courts should generally be cautious in their approach to oppression claims of the type asserted here. In particular, courts should be wary of allowing such claims to overtake, and potentially distort, the dispute resolution process that lies at the heart of the Condominium Act, 1998, a central aspect of which is a preference for arbitration over court proceedings. In other words, courts should be alert to the possibility that persons, who are party to an arbitration agreement, are attempting to avoid that process by “piggybacking” onto claims made against others: see e.g. MTCC No. 965 v. MTCC No. 1031 and No. 1056, 2014 ONSC 5362, at para. 18; see also TELUS, at paras. 76, 98.

The Court of Appeal stated that oppression claims may be determined by arbitrators if the claim relates to a dispute that falls within the terms of the arbitration clause (in the cost-sharing agreement) or section 132 of the Act. At paragraph 29:

The language of s.135(1) is permissive, not mandatory. It contemplates that, in certain circumstances, it may be necssary to have resort to the Superior Court of Justice to obtain relief. However, s.135(1) does not oust the jurisdiction of an arbitrator to consider the same relief, if that relief is part of the dispute in question that properly falls within the terms of the arbitration provision or within the terms of s.132. In this case, we have already noted the broad language of the arbitration clause. There is nothing, in our view, that would preclude an arbitrator, acting under the authority of that arbitration clause, from considering the alleged oppressive conduct advanced by the respondent in appeal, at least as it relates to the actions of TSCC1636.

The Court of Appeal allowed the appeal and granted a stay of the application. The two condominiums will need to participate in arbitration.

This is an interesting decision. I have had debates with other lawyers about mediation/arbitration for oppression claims. Many take the position that only the Superior Court of Justice has jurisdiction to hear these sorts of claims. It is nice to have a decision that brings some clarity to the issue.

The CAT Rules on Parking Dispute

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The Condominium Authority Tribunal (CAT) has released a few decisions related to parking issues in condominiums in the last six months. We summarized one of the previous decisions in post last month. The CAT has released another one this month that is interesting in what is says about rule enforcement, delays in enforcing by condominiums, and the available remedies to condominiums.

In a recent case the tenant was parking a motorcycle beside the parking space where he parked his car. The space where he parked the motorcycle was not a parking space. The condominium informed him that he was prohibited from parking in the area as it was contrary to the rules, but the tenant refused to move the motorcycle. The condominium started a case with the CAT. The tenant did not participate, but the landlord did participate.

Rule Enforcement

The CAT first reviewed the rules to determine if there was a violation, and if so, if there were any reasons it should not be enforced in the case.

The condominium had a rule that prohibited owners from placing, locating, keeping, installing, or maintaining any item on the common elemens. The rule authorized the condominium to remove any item left on the common elements by an owner and store the items at the owner’s expense. The CAT determined that the tenant violated the rules by parking the motorcycle on the common elements. The landlord did not dispute the tenant was violating the rules by parking his motorcycle in the area next to his car.

The tenant argued that parking his motorcycle in the spot did not violate a fire safety rule, contravene the by-laws, or impede access to the property, so he should be able to continue parking the motorcycle in the space. The landlord supported the tenant’s position. The condominium conceded that it was not a fire safety issue and did not impede access. The condominium argued the tenant parking his motorcycle in the space was a violation of the rules.

The tenant and landlord also argued that the tenant should be able to park in the space as he had been doing so for many years. They argued that the rule was unreasonable and should not be enforced. They also argued that the condominium’s failure to enforce the rule for many years prevented it from doing so now. The CAT disagreed. The rule was not, on its face, unreasonable:

The fact that [the tenant’s] use of the space is not interfering with any critical infrastructure is not persuasive evidence that a prohibition of his use of that space is unreasonable. The Rule is not aimed at that corner of the parking garage or at him personally. The Rule appears to fall within a range of what is reasonable. I conclude that the Rule is not unreasonable.

The CAT found that there was some unexplained delay in enforcing the rule by the previous manager, but there was no evidence the condominium acquiesced in the tenant’s parking arrangements or led him to believe that he was parking in a permitted space. The CAT said “The lapse in enforcing the Rules might require some additional notice of the change in policy but this was provided by the numerous notices during the fall of 2020.”

Remedies

The condominium had several parking spaces for rent for motorcycles, but all spaces were being used at the time of the hearing so the only option was for the tenant to remove the motorcycle from the parking garage. The CAT gave the tenant 21 days to remove the motorcycle from its location. If the tenant fails to do so, the condominium is entitled to take any lawful action available to it to enforce its rules against the landlord and tenant and it will be entitled to charge those expenses to the owner or tenant, or both.

Owner’s Meritless Challenge to Lien Results in Big Win for Condo

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A recent case demonstrates the possible consequences when owners choose not to pay their monthly common expenses on time and the condominium is forced to take steps to lien the unit and sell it. The unit owner had not paid her common expenses since June of 2018. The Condominium registered a lien against her unit on January 31, 2019. The owner did not pay to discharge the lien, so on May 14, 2019 the Condominium issued a statement of claim seeking to obtain possession of the unit so it could sell it. The owner filed a statement of defence and counterclaim in which she claimed to have paid her common expenses to the manager. She also sought $11,350 in damages for a flood in her unit.

The condominium brought a motion for summary judgment so it could continue its efforts to sell the unit. At the hearing the owner offered to pay the outstanding common expenses. The parties could not agree on the amount of legal costs the owner should pay to the condominium. The condominium sought all of its legal costs ($56,000) from the owner. The owner argued no more than $15,000 would be reasonable.

The judge reviewed the relevant provisions of the Condominium Act, 1998, including section 85(3) which states the lien includes interest and “all reasonable legal costs and reasonable expenses” incurred to collect the outstanding amount. The judge stated that the phrase “all reasonable legal costs” signals that condominiums ought to be entitled to more than partial indemnity costs. Subject to the court’s overriding discretion to determine costs, the condominium is entitled to recover all of its legal costs when enforcing a debt owed by an owner so long as those costs are reasonable.

The judge acknowledged the fees sought by the condominium were high, but found them reasonable in the circumstances of the case. The owner had repeatedly defaulted in her fees in the past, which resulted in liens and power of sale proceedings. The owner was well aware of the consequences of not paying common expenses and the legal steps the condominium would take to recover any unpaid amount. The legal work done by the condominium was necessary to collect from the owner as the owner refused to pay the amount owing to the condominium. The judge also felt the owner’s litigation strategy was to delay the matter to avoid her obligation to pay her share of the common expenses. The judge found that she was not entitled to complain about costs incurred as a result of her own litigation strategy. Lastly, the owner made no efforts to settle the matter and refused reasonable settlement offers from the condominium until just before the hearing.

The case is an interesting one. While I agree that the owner’s own litigation strategy appears to have greatly increased the condominium’s costs, some of the time claimed by the condominium seems unreasonable. For example, spending almost 5 hours to register a lien, seems excessive. A lien usually takes less than an hour to prepare and register. Even including a notice of lien would not bring the time to close to 5 hours. Similarly, 38 hours to review and reply to a responding motion record that, according to the judge, did not contain any evidence to substantiate the claim seems extreme.

Spring Break Reading: Courts Edition

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As described in our post on Wednesday, the Condominium Authority Tribunal (CAT) has been busy so far in 2021 releasing at least 30 decisions. Well, the Superior Court of Justice is no slouch either. There have been dozens of decisions in 2021 that are relevant to condominiums in Ontario. The Court of Appeal has also released some interesting decisions. Today, we briefly review a few of the key decisions.

2021 ONSC 2616: a condominium brought an application against a unit owner claiming that he “terrorized the community”. Other allegations included harassment of contractors, not permitting his unit to be inspected for fire safety purposes, threatening to send asbestos to others’ homes, and playing audio recordings loud enough for the whole condominium to hear on a repeating loop for hours at a time. The condominium sought various orders, including an order prohibiting the owner from communicating with the directors, agents, and contractors. The owner claimed that the condominium had to accommodate him. The court found the condominium had done all that it could to accommodate him and his communications constituted harassment. At paragraph 43 the court summarized the situation as follows:

[43]         A demand for accommodation is only one side of the community living equation. People are required to recognize [the owner’s] disabilities and aid him accessing their goods and services to the point of undue hardship. But the duty to accommodate does not eliminate altogether the other parties’ rights and the need for [the owner] to obey the law and the rules of the condominium. A right to accommodation to participate in the community is not license to harass, oppress, or unilaterally dictate rules for how the condominium community behaves.

2021 ONSC 2575: an owner brought an application against its condominium to set aside part of an arbitration award. The owner only owned parking units and wanted to access the corridors and other common elements. The arbitrator found this was an “absurd result” and found the board’s interpretation of its documents to be reasonable. As a result, the arbitrator determined the owner was not entitled to access the corridors and other common elements. The court set aside the arbitrator’s award. The judge felt the arbitrator had no authority to make the decision it did with respect to the access issue as the arbitrator “cross the line” and purported to amend the declaration to correct perceived inconsistencies or errors. I do not agree with this decision, but it appears the matter is not over given the judge has referred it back to arbitration on the issue of access. We will see what happens with it.

2021 ONCA 191: an owner brought an application against her condominium claiming it had failed to maintain and repair the property and acted oppressively. The owner complained of noise from fans above her unit, which the condominium removed. She claimed the condominium did not resolve the problem in a timely manner. The application was dismissed. The owner appealed. The court of appeal dismissed the appeal. The judge properly considered the test for oppression under section 135 of the Act: was there a breach of the owner’s reasonable expectations and, if yes, the conduct complained of amounts to oppression, unfair prejudice, or unfair disregard of the owner’s interests. The judge was satisfied that the condominium addressed her complaint in a reasonable manner by meeting with her, communicating with her, visiting her unit multiple times, retaining experts to investigate, and in following the recommendations of the experts. The judge’s decision was entitled to deference on appeal.

2021 ONSC 2071: a condominium brought an application against two owners who refused to wear masks while on the common elements. The owners claimed they were exempt due to medical conditions and they were not required to provide proof of their exemption. The condominium argued the owners refusal was deliberate and in defiance of the legislation, municipal mask by-law and the condominium’s mask by-law. The condominium submitted photographs of the owners wearing anti-mask signs and posting anti-mask posters in the building. The condominium was concerned that the refusal to wear masks put the other residents at greater risk. The court had to balance the competing rights of the owners and the rest of the community. The court summarized the balancing at paragraphs 37 and 38:

[37]                 Condominium corporations indeed constitute a form of micro-community, in which the residents partake in a form of social contract. As with living in any community, condominium owners and their guests must enter a social contract which relinquishes their absolute interests to do as they please with their real property, and instead balance their interests with those of the other owners and tenants.  Condominium corporations are mandated to be self-regulated.  Condominium boards have a duty to control, manage and administer their community.  In doing so, they may make rules and policies that are more restrictive than the general law applicable to all persons and premises in the province or in a particular municipality by operation of provincial statutes or regulations, or municipal by-laws: for example, restricting the sorts of pets that residents may keep, or restricting the access of contractors to do non-essential work during the pandemic, as in TSCC 1704 v. Fraser, supra

[38]                 The efforts of the HCC77 board to develop and promulgate a mask policy were not only reasonable, but necessary in the circumstances.  But, in respect of the interplay between provincial and municipal legislation and condominium policy, a condominium board may not promulgate policies that are contrary to law of general application in the province or municipality.  They may make policies that are more restrictive in areas where the law of general application has not already occupied the field, but they cannot be inconsistent.

The court was not prepared to require the owners to wear a mask given their claim of being exempted and the clear language in the legislation and municipal by-law not requiring proof of the exemption. The court did make an order limiting their use of the common elements to essential purposes only (i.e. ingress and egress to their unit, collecting their mail) to protect the other residents. As a result, the owners can no longer walk around on other floors for exercise or visit other residents without wearing masks.

2021 ONSC 1306: an owner refused to replace Kitec pipes in his unit. The condominium notified him that it would replace the pipes at the owner’s cost. The owner refused to permit access to his unit. The condominium commenced mediation proceedings in an attempt to secure his cooperation. He did not participate in mediation. The condominium commenced arbitration proceedings, but the owner did not participate in any meaningful way (other than to object to the arbitrator’s appointment). The arbitrator made an award ordering the owner to permit the condominium to access his unit to replace the Kitec pipes in his unit and ordered $60,000 in costs. The owner continued to refuse, so the condominium sought a court order enforcing the award. The owner brought an application to set aside the arbitration award. The owner’s application was out of time and dismissed. The condominium’s application was granted, so judgment would be issued enforcing the arbitration award.

Spring Break Reading: The CAT Edition

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The Condominium Authority Tribunal (CAT) has been busy so far in 2021. As of April 13, 2021, the CAT has released 30 decisions. Many of the decisions still relate to record requests, but there have been a few about other issues that it now has jurisdiction to hear, like pets and parking. Some cases were about procedural matters, like the application of the CAT rules. Some cases were about the jurisdiction of the CAT when other courts or tribunals also have jurisdiction over the dispute.

2021 ONCAT 27 : the CAT heard two motions from a condominium requesting the CAT dismiss or merge four cases and rule that the conduct of the applicants was vexatious. The CAT did not dismiss the cases, but the CAT ordered the applicants to choose which of their cases would proceed. The CAT also found that one of the representatives had repeatedly violated the CAT’s rules. He was not qualified to be a representative because he was not a lawyer, paralegal, or condo manager, and the CAT was not convinced he was a “friend” of the corporate applicants. Despite a ruling by the CAT that he was not qualified, he continued to monitor email, reply for the applicants, and submit documents for them. The CAT ordered the applicants to change their representative and provide updated email addresses to the CAT that the “friend” could not access.

2021 ONCAT 25: The CAT merged three cases brought by an owner against his condominium to provide the most fair, focused, and efficient process for both parties. The three cases related to: 1) parking rules; 2) pet rules; and 3) a record request for pet rules.

2021 ONCAT24: An owner requested two contracts from the condominium, which the condominium refused to provide because of the owner’s history of making complaints about the manager. The CAT found that complaining about your manager is not a valid reason for a condominium to refuse a valid request for records. The CAT awarded the owner $200 in costs and a penalty of $2,000.

2021 ONCAT 21: An owner filed a case against their condominium and a neighbour regarding a basketball net placed by the neighbour on their driveway. The condominium claimed it was not a violation of the rules and the owner asked permission to place the net on the driveway. The CAT found the basketball net was not contrary to the declaration or rules, but awarded the applicant $200 for filing fees because it was a novel issue within a new area of jurisdiction for the CAT.

2021 ONCAT 20: The owner brought a motion to defer the CAT case because they had already filed an application with the Human Rights Tribunal of Ontario (HRTO). The condominium was aware of the HRTO case when it filed the CAT case. The condominium acknowledged that it had a duty to accommodate the owner because of her disability. The condominium sought to require the dog to wear a muzzle in common areas. The CAT found the dispute was about the application and exemption of the condominium’s rules. The CAT dismissed the motion as it had jurisdiction to hear the dispute.

2021 ONCAT 18: The owner filed a case against her condominium and a neighbouring condominium about parking. The two condominiums shared a visitor’s parking area, which the owner sought to use. The case was dismissed as the time for filing the case had expired. She failed to bring an application within 2 years after the dispute arose, namely when she was denied permission to use the visitor parking area. The CAT did not rule on whether a claim by the owner for accommodation due to a disability would also be out of time under other legislation.

Scared of Holding Your AGM During a Lockdown?

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Yes. Subsection 45(2) of the Condominium Act, 1998, requires all condominiums to hold an annual general meeting (AGM) within six months of the end of the fiscal year. There are no exceptions as the AGM serves several important functions, such as presenting the audited financial statements to owners and electing directors.

The Ontario government briefly extended the time for holding AGMs for condominiums with fiscal years ending September 30, 2019 to January 31, 2020 because of restrictions on large gatherings, but no further extensions have been made. As a result, condominiums with fiscal years ending February 2020 and later must hold their AGMs within six months of the end of their fiscal year.

There continue to be restrictions on large gatherings and case numbers are increasing again. How can we safely hold our AGMs?

The Ontario government made orders (and later temporary amendments to the Condominium Act, 1998) to permit condominiums to use electronic and telephonic means to hold their meetings even if their by-laws do not permit such. This means that condominiums can hold their meetings in a variety of ways, such as:

  • with the assistance of a meeting host / provider
  • using virtual meeting platforms, like Zoom, Go-To-Meeting, Google Meet, Teams, etc.
  • using teleconference

While the last extension is set to expire on May 31, 2021, it seems likely a further extension will be made until the restrictions on large gatherings are lifted. Alternatively, there is some speculation that the Act may be amended to make these changes permanent. In my opinion, even if a further extension is not made, using electronic or telephonic means to host a meeting may still be preferable to holding an in-person meeting for some condominiums.

The amendments also permit voting by electronic or telephonic means even if the by-laws do not permit such. Depending on the size of the condominium and the nature of the votes to be conducted, the condominium may be able to use the voting features built into the platforms (i.e. polls, show of hands). In some cases, it may be preferable to use a meeting host/provider to assist with the voting process, or at least purchase a voting package to assist with the collection of e-proxies or e-votes.

Some people in the industry, including the Condominium Authority of Ontario (CAO), also support the use of proxy only meetings in some situations (i.e. non-contentious issues). A proxy only meeting is one where the owners are not permitted to attend a meeting in person and all voting must be performed by proxy. I personally question whether requiring owners to vote via proxy is in compliance with the Act, but I understand the logic behind it. As such, a proxy only meeting might be useful if the owners are agreeable to holding the meeting this way and there are no contentious issues to discuss or vote on.

Very small condominiums might be able to conduct meetings in person so long as they can comply with the restrictions on gatherings at the time of the meeting. The most common reason for wanting to host a meeting in person is a perception that people will not be able to participate because they are not familiar with the technology. I have found this to be exaggerated. People have adapted very well and the technology is user-friendly. Holding a meeting in person could exclude people in the same way a virtual meeting may exclude those unable to use the technology as some may be unwilling or unable to attend in person due to the risks of infection.

I acknowledge that access to reliable internet or devices might be an issue for some. If this is a concern, I would encourage the condominium to consider a teleconference as many people can figure out a phone call without much trouble. Alternatively, consider a proxy-only meeting for non-contentious meetings.

As people are vaccinated (at least those who are willing and able), it will become possible to hold meetings in person again. It seems possible that certain parts of Ontario will resume more normal activities sooner than others.

If you have any questions about the best option(s) for holding your AGM you should reach out to your lawyer for an opinion.

The CAT Dismisses “Minor” Case Without a Hearing

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On March 18, 2021, the CAT released a decision on a motion made by a condominium to dismiss a case without a hearing. The owner made a record request for minutes of a board meeting and another document regarding a motion that was apparently made by a former director at the meeting for an investigation under the governance and ethics by-law. The condominium provided a copy of the minutes, but the minutes did not refer to the motion that was made by the former board member. The minutes provided by the condominium differed from the version received from the former board member who made the motion as the minutes did not include a reference to the motion. Both versions of the minutes were signed by the board.

Rule 17.1 of the CAT’s Rules allows the CAT to dismiss a case at any time in certain situations, including where the case is about issues that are so minor that it would be unfair to make the responding party go through the CAT process. The condominium made a motion to have the CAT do so in this case.

The owner argued that the official minutes should include reference to the motion and the supporting documents prepared by the former director regarding the motion should be attached. He argued the minutes were not adequate as they did not record “all proceedings and motions” even the ones that failed. The condominium argued that the issue was so minor that it would be unfair to the condominium to continue with the hearing because the owner was already in possession of both copies of the minutes, as well as the supporting documents that he wanted attached to the minutes.

The CAT’s member reviewed the requirement for the condominium to keep “adequate records” and noted the term “adequate” is not defined in the Act. The member referred to previous case law where the term was found to mean the records must permit the condominium to fulfill its duties and obligations. The accuracy of a record is a component of its adequacy.

The CAT member concluded that the minutes did not need to refer to a motion that was not seconded or discussed as no business was transacted by the Board:

There is no basis on which to conclude that a background document for an item that was not on the board’s agenda…was not discussed and therefore was not accepted by the board, should either form part of the minutes or be retained as a corporate record.

The member further stated:

If the motion in question had been seconded and discussed…the issue of accuracy and therefore the adequacy of the “official” version of the minutes provided to the Applicant by the Respondent would merit hearing evidence. However, in this case, no business was transacted and I conclude that the substance of the difference between the two versions, that is the recording of a motion that was not seconded, comprises a minor issue which does not warrant making the Respondent go through the hearing process. Whether every item raised at a board meeting that results in no transaction of business and no decision on any action should be recorded in its minutes is a decision for the board to make. Therefore, I dismiss this case. 

Notwithstanding the member’s decision to dismiss the case, she advised the condominium to rectify the issue by amending the minutes to say that an amendment was made to them.

Interesting case. It is not clear how there came to be two separate sets of minutes, but is sounds like the minutes were distributed to the board and former director for review prior to their approval at a meeting. The draft minutes were then provided by the former director to the owner requesting the minutes. The minutes were later amended to remove the motion made by the former director. This is purely speculation as I was not involved in this case. That said, I have seen similar issues with draft minutes being circulated before they are amended and approved. One way to avoid this situation would be to add a “draft” watermark to the minutes and not sign them until they are approved at a board meeting. If the minutes are later amended a note should be added to show the amendment that was made and the date it was made.