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.

Solicitor-Client Privilege Waived by Discussing Bills with Owners

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A few weeks ago I spoke as part of a panel at CCI National’s Conference. The case that I spoke about was a decision of the Ontario Condominium Authority Tribunal (CAT) about solicitor-client privilege. Given the frequency at which I see clients inadvertently waive solicitor-client privilege, I thought it might be good to review the case in this post.

The Facts

The case was an appeal from a decision of the CAT. The owner requested copies of all legal bills referencing his own unit. He made the request after the condominium wrote a letter to all owners concerning legal expenses that it had incurred. In the letter the condominium suggested that a “small group of owners” was responsible for the increased legal fees. The Tribunal adjudicator found that, given the size of the building, it was reasonable to assume many if not most of the unit owners knew the members of the small group who caused the legal costs to be incurred.

The letter described the board’s efforts to manage the increased legal costs for record requests since the amendments were made in November of 2017. It blamed the small group for trying to micromanage and undermine the efforts of the board by “abusing their right to records”. The letter explained that each of the 28 requests required input from legal counsel and suggested that the condominium had spent $17,698.71 in legal costs to review the records requests that could have been used on other projects. The board acknowledged the right to request records, but strongly objected to fishing expeditions.

Tribunal

The condominium denied the request on the basis of common law solicitor-client and litigation privilege. It also relied upon s.55(4)(b) of the Condominium Act, 1998, which relates to records related to actual or contemplated litigation. The Tribunal concluded that the condominium was required to disclose the requested records because it had waived privilege by sending the letter to all owners. The Tribunal adjudicator ordered the condominium to produce the legal invoices but it could redact any reference to the substance of legal advice.

Appeal

The condominium appealed the decision. The Divisional Court concluded that the CAT adjudicator did not err in law when she determined that the condominium waived privilege to the legal invoices. The appeal was dismissed and the condominium paid the owner $10,000 toward his legal costs.

The Divisional Court decision focuses primarily on waiver of privilege. It reaffirmed basic principles about solicitor-client privilege, such as solicitor-client privilege resides in the client and may only be waived by the client. Waiver of part of a communication may be held to be waiver of the entire communication. Given the scope of information contained in the condominium’s letter to all owners, it was appropriate to conclude that the condominium had waived privilege over the individual bills documenting the legal expenses incurred. By permitting redaction of the legal advice contained in the bills, the adjudicator protected the privileged advice itself.

The Divisional Court also upheld the decision in relation to the Condominium Act, 1998, finding that subsection 55(6) of the Act should be read as consistent to common law principles of waiver. This includes the principle that when some disclosure of a protected document has occurred, fairness and consistency may require that the remainder of a communication be disclosed.

Takeaways

Condominiums must be careful when discussing or disclosing anything related to advice sought from the condominium’s lawyer, including invoices or the subject-matter of advice sought. This is especially true where there is ongoing litigation or contemplated litigation.

I still see clients sending entire unredacted invoices to owners when charging the costs back to the owner for non-compliance of some sort. Stop that. Condominiums should either redact the entries that contain the privileged information or ask the lawyer to provide an invoice without any detail (i.e. just the total owing). Once you send that invoice out you will have waived privilege to it and possibly any advice described within the invoice. If you have any doubts about which records and information may be privileged ask the lawyer involved.

Summer Reading: Condominium Authority Tribunal (CAT) 2020

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The courts might have slowed down because of the pandemic, but the Condominium Authority Tribunal (CAT) appears to be unaffected by the pandemic. The CAT is predominantly online with less rigid rules than traditional courts, so this makes a lot of sense. It is relatively easy for online processes to continue in most cases. Here are some of the highlights from the CAT this summer. Continue reading

Can Unit Owners Examine Opinions or Invoices from the Condominium’s Lawyer?

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Owners are entitled to examine records of the condominium. Subsection 55(3) of the Condominium Act, 1998, gives owners the right to examine or obtain copies of the condominium’s records, subject to certain limits described in subsection 55(4). Subsection 55(4) excludes certain records, including records related to other owners or units and records “relating to actual or contemplated litigation”. These provisions are designed to balance the competing interests of the owners and protect the condominium’s interests. Continue reading

CAT Says Being Self-Managed is Not an Excuse

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In a recent decision the Condominium Authority Tribunal (CAT) was asked to rule on an owner’s request for records. The owner requested several records, including audited financial statements, budgets, board meeting minutes, AGM minutes, the most recent PIC, by-laws, employment agreements with any directors, and management contract. The condominium suggested that many of the issues raised by the owner were due to the condominium being self-managed. Spoiler: this was not a reasonable excuse for not providing records. Continue reading

Summer Reading: Condo Authority Tribunal (CAT) Edition

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On April 11, 2019, I wrote about some of the Condo Authority Tribunal (CAT) decisions so far. Some of the highlights include the dismissal of claims that were vexatious, the adoption of the “open book” principle enumerated in previous case law, and confirmation that owners may access the list of owners. You can read the post here. The CAT has been busy since my previous post, releasing another 16 decisions in the last four months! Here are some of the highlights for these recent cases: Continue reading

Ready, Set, Action: Are In-Camera Minutes a Record of the Condo?

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Many condominiums have private sessions during board meetings where they discuss more sensitive issues involving unit owners, employees, or litigation. These are often referred to as “in-camera” sessions. Owners, apart from the directors and officers, would not be eligible to attend these portions of the meetings. Are owners entitled to access the minutes from in-camera sessions of the meetings of the board? A recent CAT decision answers the question. Continue reading

Are emails between directors a record of the condominium? The CAT says…

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Can owners request copies of emails between directors? Can the condominium refuse a record request because the owner’s reason for requesting the records is apparently unrelated to their ownership interests? Must the owner prove their reason is related to their ownership interest, or is the onus on the condominium to prove the reason is unrelated to the owner’s interests? These are only a few of the questions recently answered by the Condominium Authority Tribunal (CAT).

Kai Sin Yeung v. Metropolitan Toronto Condominium Coporation No. 1136 

An owner requested emails related to the renewal of a gas contract referenced in board meeting minutes. The owner wanted a penalty and costs of the hearing. The condominium claimed that the emails do not exist, but even if they existed the owner would not be entitled to them. Continue reading

CAT says no to owner’s request to see email addresses

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The CAT released a decision confirming that owners are not entitled to receive email addresses provided by owners and mortgagees to the corporation. The case includes an interesting review of the relevant provisions of the Act and regulations related to the record of owners and mortgages and the exceptions to the right to examine records. The full case can be found on CanLii: https://www.canlii.org/en/on/oncat/doc/2019/2019oncat9/2019oncat9.html?resultIndex=3

Some highlights include: Continue reading

Lessons from the CAT

legal caseOn April 5, 2019 I attended the ACMO / CCI 1-day Conference in Kitchener. I was asked to speak during the round table discussions and on the legal panel. My topic for the round table discussion was the Condominium Authority Tribunal (CAT). Today I thought that I would share some of the lessons that we have learned so far from the CAT’s first twenty or so decisions. Continue reading