Court File and Parties
COURT FILE NO.: CV-22-678393 DATE: 20220328 ONTARIO SUPERIOR COURT OF JUSTICE
RE: JASPER DEVELOPMENTS CORP., Applicant -and- YORK CONDOMINIUM CORPORATION NO. 82, Respondent
BEFORE: FL Myers J
COUNSEL: Victor Yee, for the Applicant Derrick M. Fulton, for the Respondent
HEARD: March 22, 2022
Endorsement
The Application
1These parties have a lengthy litigation history. Their disputes continue to evolve in real time. This application deals with an upcoming Annual General Meeting scheduled for March 30, 2022. As there will likely be further proceedings launched following the meeting, I will say as little as possible today to impact ongoing issues.
2The applicant owns three units in the condominium. Its owner has been trying to prevent a very large special assessment that the board has levied due to the dilapidated physical condition of the building. Justice Chalmers made comments about the physical state of the premises previously that I do not need to repeat.
3The applicant’s principal is running for election to the board of directors on a platform of repealing the special assessment. The applicant has paid its assessments, but it is somewhat artificial for Mr. Yee to submit that this application is simply about the fairness of the upcoming election rather than the next salvo in the applicant’s arsenal. I do agree with him however that the question of how much needed repairs are to be made and paid for is for the corporation and is not before me.
4This application deals with two issues raised by the applicant with the fairness and lawfulness of the election process put in place by the respondent corporation for the upcoming meeting. First, the applicant asks me to appoint a neutral or disinterested chair for the meeting. Second, it asks me to rule that the election requirement that proxy forms must be obtained from the respondent and cannot simply be downloaded from the internet is unlawful.
5For the reasons that follow the application is dismissed.
6Condominium corporations are governed through unitholder democracy. A board of directors is elected by the unitholders. The statute provides many specific requirements for the holding of unitholder meetings and annual general meetings. But, otherwise, like any other corporation, the details of the election process are left to the governing documents of the condominium.
A Neutral Meeting Chair
7I have no doubt that it is always appropriate to have a neutral chair for a shareholder or unitholder meeting. But “appropriate” is not the same as “mandatory”. There are cases that have recognized that corporate meetings my be chaired by an interested person including the majority shareholder who is personally running for re-election. See: Blair v. Consolidated Enfield Corp..
8Whether this corporation’s documents and the governing law for this election allow an interested chair was not really argued before me. Rather, counsel simply seeks to avoid a potential problem by asking the court to act prophylactically to prevent an issue from arising.
9Here the condominium’s general by-law provides for the President to chair the meeting.
10I do not think it is appropriate corporate governance for the court to direct a corporation how to proceed with a meeting process set out in its governing documents in advance absent a proven, serious risk of illegality or harm. The test for a quia timet injunction (an order to prevent anticipated harm in advance) is well understood. See, for example, DCR Strategies Inc. v Gomez, 2021 ONSC 5404, at para. 33.
11This case falters on the merits. I do not see a high degree of likelihood that illegality or unfairness will occur - yet.
12Moreover, even if the chair should be totally disinterested, if the chair makes no rulings at the meeting and the vote outcome is clear, it may be that any alleged breach will turn out to have been inconsequential.
13A judge who hears a challenge after the meeting will have a full fact base on which to analyze the relevant issues.
14Practically speaking, if the chair is not disinterested then he or she leaves themselves open to criticism and invites a risk of complaint. This will particularly be the case in the event that the chair is called upon to make decisions at the meeting that could prejudice someone with an adverse interest.
15On the other hand, practical prudence is not necessarily the only factor of relevancy to the corporation. I agree with Mr. Fulton that it is up to management to manage the corporation. It cannot yield to every possible critique without risking fettering its discretion or effectively yielding management to its critics.
16On the other hand, prudent managers accept valid critique regardless of the source. It is hard to see any prejudice by the appointment of a neutral chair unless the ability to use the chair’s authority to favour one side is sought.
17Like Tevye contemplating important and multifaceted decisions in Fiddler on the Roof, I have run out of other hands. I accept that in a proper case the court may well have to weigh-in before a meeting. But simply because the chair set out in the corporate documents is seen to be a political ally of some of the incumbent candidates and a foe of the applicant’s principal is not a basis for the court to take a decision out of the hands of the corporation at this time.
Blue and Pink Proxies
18Subsection 52 (4) of the Condominium Act, 1998, SO 1998, c 19, provides for the use and form of proxies for unitholder meetings:
(4) An instrument appointing a proxy shall be in writing under the hand of the appointer or the appointer’s attorney, shall be for one or more particular meetings of owners, shall comply with the regulations and shall be in the prescribed form. [Emphasis added.]
19Subsection 1 (1) of the statute provides that “prescribed” means prescribed by the regulations promulgated under the statute.
20Section 13 of Ontario Regulation 48/01 says:
- An instrument appointing a proxy to vote at a meeting of owners shall be in a form specified in the Table to section 16.1. [Emphasis added.]
21Subsections 16.1 (1) and (2) of the regulation provide:
16.1 (1) A form referred to in the Table to this section shall be, (a) in English or French; (b) and in a form that, (i) has the title set out in the Table, and (ii) is in the form specified by the condominium authority and approved by the Minister. [Emphasis added.]
(2) The condominium authority shall publish the forms listed in the Table to this section, (a) on its website and in any other way described in its administrative agreement; and (b) in any other format that the condominium authority considers advisable
22Item #12 in the table that follows in s. 16.1 lists proxies referred to in s. 13 of the regulation. That means that one is directed to the website of the Condominium Authority of Ontario to find the prescribed proxy form. On its website, the Authority instructs:
The Government of Ontario has created a number of forms to be used under the Condominium Act, 1998. Some of these forms are mandatory and must be used and some are optional.
Condo forms can be accessed through two separate links, either as a fillable form or as a non-fillable form.
The fillable form can be filled out on your computer, which you can then save and print.
The non-fillable form cannot be filled out online and must be printed, and then filled out by hand. For best results, please save the form to your computer, and then print it. [Emphasis in original.]
23The title of the proxy form on the website is “Proxy Form (mandatory)” and says:
This form must be used by owners or mortgagees if they wish to be represented by proxy at a meeting of owners, including for the purposes of voting on any matters at the meeting.
24It then provides hyperlinks to:
Proxy Form (mandatory) Fillable
Proxy Form (mandatory) Non Fillable
25Without tracing through all of the applicable sections, there is also a mandatory form required by the statute and the regulation for a condominium corporation to give notice of owners’ meetings. That form was used by the respondent to give notice in this case. Paragraph 7 of the prescribed form deals with proxies as follows:
If you wish to be present at the meeting by proxy (for purposes of quorum) or to vote on any matters by proxy, you must use the mandatory proxy form. The form is available on the Condominium Authority of Ontario website. It may also be available from your corporation. [Emphasis added.]
26The rules adopted for the meeting by the condominium corporation in this case require owners to pick up proxy forms from the condominium office. The forms have been printed on blue and pink paper as a security measure to avoid the submission of forged proxy forms. The condominium corporation says it has no record of owners’ signatures that it could use to try to validate proxies otherwise.
27Although not in evidence, counsel for the applicant advises that the applicant’s principal has collected about 40 proxies from owners. She therefore objects to the requirement that those or any owners have to go to the office to use the official blue and pink forms.
28Like many owners, the applicant’s principal does not live in the building. The applicant submits that off-site owners are oppressed by making them attend at the condominium to obtain a form of proxy instead of just printing off their own forms. The applicant also argues that at a prior meeting, the condominium corporation had imposed a requirement for use of its forms of proxies but at the meeting the Chair relented and accepted any proxy submitted in a valid form.
29The applicant also submits that in this election, owners who do not live in their units can vote for the board positions reserved for owners who live in their units. This flows from an interpretation of ss. 51 (5) and 83 (3) of the statute. The applicant therefore challenges the condominium corporation’s alleged failure to deliver proxies for all positions to all owners.
30Finally, the applicant argues that owners should not be subject to electioneering from management when they go to the office to pick up their proxies. The condominium corporation argues the exact opposite – that requiring everyone to attend the office protects them from intrusive electioneering by candidates knocking at their doors to try to sign-up proxies.
31There is no question that a proxy must be in the prescribed form. The statute and the regulation say so at least three times. As the Condominium Authority website allows for proxies to be filled-in and then printed, it would appear that the Authority thinks that doing so is sufficient. On the other hand, it allows for printing of the form and for forms to be made available by the condominium corporation.
32A regulatory requirement to use a particular form usually just refers to the look and content of the document. It does not generally dictate how the documents are to be obtained. For example, forms of government election ballots are prescribed by law and no one suggests that in a general election people can print off their own forms of ballots. Rather, other laws set out how ballots are obtained.
33If the statute or regulation had a clear requirement that condominium corporations must accept proxies that are printed from the website or a clear prohibition against requiring forms of proxies being adopted for security measures, I may well consider this application as a matter of statutory or regulatory compliance rather than oppression.
34But I cannot find today, in advance, that the applicant has made out a case of oppression.
35Once again, I am loathe to make a decision that is less clear and has no factual matrix. I do not know what will happen at the meeting or whether whatever happens will matter. If, for example, the chair accepts all forms of proxies at the meeting (as happened previously) and the incumbent candidates win by a majority of all owners (not just those voting) then it may not matter that the applicant’s principal might have obtained more proxies if off-site owners did not have to go to the office to obtain a pink or blue forms.
36Absent a ruling on the legal right of the condominium corporation to require security measures for proxies, I see no reasonable expectation being violated. Moreover, while I have previously noted that voting is the most important ownership right, that does not mean that all limits are unfairly prejudicial or that requiring people to go to the building in which they own units is oppressive or prejudicial. Similarly, while candidates are entitled to electioneer before an election is called, that does not assure them that everything that they do will be accommodated by the rules of the election.
37On this issue too, the application is premature. The chair may have to rule on acceptable proxies. The chair may have to rule on efforts by off-site owners to vote in the race for a seat reserved for owners who occupy their units. There can be any number of permutations and combinations of rulings and outcomes. Absent a clear compliance issue, I would not grant quia timet relief or find a case of oppression made out.
Order
38The application is dismissed.
39Counsel agreed that costs should follow the event. Modest costs were sought by both sides. The costs sought by the condominium corporation are reasonable and are less than the costs that were sought by the applicant. Therefore I have no access to justice concern.
40The applicant shall pay costs to the respondent fixed in the amount of $7,165. Costs are payable forthwith as this application is over.
FL Myers J
Date: March 28, 2022