Governance

July 13, 2023 Published by Golden Horseshoe Chapter - By Stephanie Sutherland

Q&A: Procedures, Harassment and Shared Facilities

From the Volume 16, Summer 2023 issue of the CCI GHC Condo News Magazine

Q: If a Corporation has a 5 member Board, and their documents say that 3 board members at a meeting make quorum, and at a duly called Board meeting 3 members only attend, and a topic on the Agenda is voted upon yielding a 2 to 1 vote, do the 2 votes count as the “decision” or do all 3 Board members have to agree in unison to a decision?

A: If there is quorum an in-favour vote by a majority of Board members present at the meeting allows the motion to pass, unless the Corporation’s bylaws provide otherwise.

Q: If a Board doesn’t use an engineer when a project really should have one (for example, removal and replacement of EIFS system) what is the potential repercussion of that Board decision?

A: Section 37(1) of the Condominium Act requires officers and directors of a condominium corporation to “act honestly and in good faith, and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances”. Section 37(3) provides that director of a Board will not be found liable for breaching that duty if the director has relied on the opinion of an expert relevant to the issue.

For a project that ought to have an engineer involved, if an engineer is retained and provides an opinion, the directors (and Board as a whole) are entitled to rely on that opinion. If an opinion is not sought, or is sought but then disregarded by the Board, the directors are potentially personally liable for any damages that may occur if something goes wrong with the project.

Q: If a Manager is being “harassed” or defamatory comment being made against a Manager, by an owner, contractor, or other Corporation representative, what is the Board’s obligation in this situation and what can happen if nothing is done?

A: For the purposes of the Occupational Health and Safety Act, a condominium corporation is an ‘employer’ and a property manager is a ‘worker’, even though the property manager is generally an independent contractor rather than an employee from an employment law perspective. An employer has a duty to provide a workplace that is free from harassment, and to protect the health and safety of all workers. As the representative of the condominium corporation, the Board has the duty to take steps to protect its workers from harassment. What those steps may be will depend on the circumstances of the particular situation, and legal counsel should be consulted to guide the Board on the best approach. Defamation is a separate matter. While some defamatory comments may also constitute harassment, an employer does not have a duty to protect its workers from defamatory statements made against them. Defamation is a civil matter between the individual who has made the statements, and the individual or company about whom the statements have been made. If harassment and defamation are occurring together, it will still likely be in the condominium corporation’s best interests to consult legal counsel to determine how best to approach the overall situation. 

Q: If someone approaches owners with the signature page of a requisition meeting form only, (the signature page) and not the reasons why they are requisitioning, only verbally tells owners, then submits the full form with the written statements that were different from the written reasons told to owners, is the requisition valid? What does a board do to ensure that the owners that signed in fact knew what they were signing.

A: An owner is entitled to the correct and accurate information as to why a requisition is being made, and should be presented by the requisitioner(s) with the full requisition form rather than just the signature page. If an owner who signed a requisition makes a complaint that the form does not represent what that owner believed they were signing in some way, then the Board may consider whether it wishes to deem the requisition itself invalid, or whether just that particular owner’s signature should not be considered as a signatory of the requisition. This is a complicated question, and due to the importance of owners’ rights to requisition a meeting and vote on certain matters, a Board should seek legal advice to confirm how it will approach a situation where a requisition signatory’s validity is called into question. In the absence of a complaint from one of the signatory owners, the Board does not have a duty or obligation to confirm that the owners who signed the requisition knew what they were signing, and should not interfere with the requisition process. 

Q: How can Corporations settle shared facility disputes? What methods are binding?

A: Section 132(1) of the Condominium Act states that certain types of agreements are deemed to contain a provision requiring the parties to submit disputes to mediation/arbitration. This is applies regardless of whether the agreement specifically states that mediation/arbitration is required. Section 132(2) lists shared facilities agreements, or “an agreement between two or more corporations” as one of the types of agreements that fall under this section. Therefore, shared facility disputes must proceed to mediation/arbitration to be resolved.

Stephanie Sutherland is a condominium lawyer at the Kitchener office of Cohen Highley LLP. Stephanie assists condominium boards, unit owners, and managers with day-to-day governance matters, compliance issues, drafting and registration of new and amended condo governance documents, court and CAT proceedings, and mediations and arbitrations. She sits on several Grand River, Golden Horseshoe, provincial, and national CCI committees, and is on the Golden Horseshoe Board. Stephanie also regularly speaks at CCI events, and contributes articles to condo industry publications.