Legal

May 16, 2019 Published by Vancouver Chapter - By Shawn M. Smith

Council Decision Making in the 21st Century Are Email Decisions Alright?

From CCI Vancouver Condo News, Spring Issue 2019

The Standard Bylaws under the Strata Property Act (SPA) contemplate decisions being made by the strata council at a face-to-face meeting, scheduled in advance and which owners can attend. By and large, that works for most strata corporations and in most cases. However, there are times when that more conventional arrangement isn’t practical. People have busy lives and can’t always meet on short notice to deal with urgent issues. For strata corporations which are vacation properties, the council may be in distant places, unable to actually get together in person. In such cases, new practices and amendments to the bylaws may be necessary to allow for these situations.

The Standard Bylaws contain the following provisions with respect to calling and holding council meetings:

Calling council meetings

14

(1) Any council member may call a council meeting by giving the other council members at least one week's notice of the meeting, specifying the reason for calling the meeting.

(2) The notice does not have to be in writing. (3) A council meeting may be held on less than one week's notice if

(a) all council members consent in advance of the meeting,

or (b) the meeting is required to deal with an emergency situation, and all council members either

(i) consent in advance of the meeting, or

(ii) are unavailable to provide consent after reasonable attempts to contact them.

(4) The council must inform owners about a council meeting as soon as feasible after the meeting has been called.

Council meetings

17

(1) At the option of the council, council meetings may be held by electronic means, so long as all council members and other participants can communicate with each other.

(2) If a council meeting is held by electronic means, council members are deemed to be present in person.

(3) Owners may attend council meetings as observers.

(4) Despite subsection (3), no observers may attend those portions of council meetings that deal with any of the following:

(a) bylaw contravention hearings under section 135 of the Act;

(b) rental restriction bylaw exemption hearings under section 144 of the Act;

(c) any other matters if the presence of observers would, in the council's opinion, unreasonably interfere with an individual's privacy.

"Electronic means" is not defined but undoubtedly includes mediums such as conference calls and internet based platforms like, Skype. It can also arguably include decisions be email.

There are, however, several practical problems which can arise with respect to making decisions by email:

• How are the notice requirements to be complied with? (Standard Bylaw 14 requires at least 7 days notice of a meeting be given).
• In order for council to conduct business there must be a quorum. How does one establish a quorum in an email conversation?
• Standard Bylaw 17(2) requires council members and other participants to be able to communicate with each other. (Does email allow for the same degree of discussion and debate as an in person meeting)?
• How do you notify the owners of an electronic meeting done through email?
• How to accommodate the requirement that owners be permitted to observe council meeting?
• What if not every council member has email?

The practice of making decisions by email is not expressly provided for in the Standard Bylaws. Nonetheless, decisions made by email have been upheld on more than one occasion: Azura Management (Kelowna) Corp. v. The Owners, Strata Plan KAS 2428 2009 BCSC 506; Yang v. Re/Max Commercial Realty Associates 2016 BCSC 2147.

In Kayne v. The Owners, Strata Plan LMS2374 [2007] BCJ (QL) 2381 (BCSC) the court didn’t approve the process but noted that:

“…In any organization, there will be occasions when people who are members of a council or an executive will meet informally to discuss matters of relevance to the organization. Those are not meetings of the council and it would be unrealistic to expect minutes to be kept of such meetings. Of course no decision that may be taken at any such meeting has any validity unless and until it is taken or ratified by a properly constituted and minuted meeting of the council.”

This passage would suggest that email decisions amount to nothing more an informal discussion and should not be acted upon. The CRT was of a similar view in The Owners, Strata Plan VR 942 v. Thompson, 2018 BCCRT 4 where it held that hiring a lawyer based on discussions with some, but not all, council members did not constitute proper approval. Acting on the email responses of some, but not all, council members is arguably no different.

The practice of making decisions by email was recently given attention by the Civil Resolution Tribunal (CRT) in its recent decision in Mueller v. The Owners, Strata Plan LMS2195 2018 BCCRT 773. It said the following with respect to it:

While decisions of the strata council are generally made at strata council meetings, the law also recognizes that there will be situations where decisions will need to be made between meetings. For example, decisions may have to be made in emergencies. There may also be situations where day to day decisions may need to be made to move issues along and so that the business of the strata does not grind to a halt between periodic strata council meetings…I note it is important that the strata council should ratify any decisions at the next strata council meeting and ensure the ratified decision is recorded in the strata council minutes. Whether the strata council has acted appropriately will depend on the facts. Where the strata council has substantially followed the requirements of the SPA and the strata bylaws, the strata has some flexibility and leeway in its process and procedures.

It is important to note the conclusion that the decision should subsequently be "ratified" at the next strata council meeting. However, "ratification" is different than merely recording the decision in the next set of minutes. Ratification requires a further vote to approve the decision made. This is what makes the practice inherently dangerous. What if someone changes their mind and votes differently? What if council members who did not participate in the original decision, participate in the ratification and skew the vote? What if that changes the outcome?

In Mueller the CRT addressed some of the initial concerns outlined above, noting that:

• All council members must be given the opportunity to communicate in council meetings (but need not actually do so);
• Communication need not be simultaneous (as it is in a conversation);
• Not every strata council member has to cast a vote in order for there to have been a decision reached (otherwise each council member is effectively given a veto power through not voting);

In the end, the CRT held that any irregularities in relation to compliance with the bylaws can be overcome by ratification at the next council meeting.

Despite both the court and the CRT having given their blessing to the practice of making decisions by email, it remains an inherently dangerous practice. Decision making by email should be the exception and not the norm. Where it is the norm, then the bylaws should be amended to establish a framework for making decisions by email without the need for ratification and address the concern that such exchanges are not formal meetings. A bylaw permitting decisions by email should:

• Provide a time frame for providing a response, giving all council members an opportunity to respond and persuade their fellow council members to their point of view;
• Require that all council members (except those excluded under s.32 of the SPA) be included in the original email;
• Require the decision be recorded (but not ratified) in the next set of minutes and a copy of the email chain kept as a record of the strata corporation;
• Exclude the right of owners to be present as observers for that particular "meeting";
• Eliminate the need to notify owners of the impending meeting;

Even with such a bylaw, email decisions should still be restricted to matters which are of lesser importance or more routine in their nature. Significant decisions should still be dealt with in a formal meeting in to avoid allegations later on that a decision was not properly made; which is an easy way to attack a decision one does not like. The more structure to the process, the better is chance to withstand attack.

This article is intended for information purposes only and should not be taken as the provision of legal advice.

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Shawn M. Smith is lawyer whose practice focuses on strata property law. He frequently writes and lectures for a variety of strata associations. He is a partner with the law firm of Cleveland Doan LLP.

Cleveland Doan, LLP
Shawn M. Smith
Tel: (604) 536-5002
www.clevelanddoan.com
shawn@clevelanddoan.com

From The Strata Experts articles are written by CCI Vancouver Business Partner and Professional Members who are service providers to the strata industry. For a list of member service providers go to the Service and Business Members directory on our website or page 20 in Condo News.