After unit owners requisitioned a meeting of owners to vote to remove the directors of two condominium corporations, the corporations commenced legal proceedings (Simcoe SCC Nos. 431 and 434) to request that the Court prohibit the use of proxies at the requisitioned meetings and limit communications between owners leading up to the vote.
The owners requisitioned a meeting to remove the directors after a special assessment was levied by both corporations that had the effect of doubling the common expenses.
The corporations argued that the Respondent who initiated the meeting requisitions had provided misleading information to owners to induce them to sign the requisitions and that there is a risk that proxies will also be obtained based on misleading information. For that reason, the corporations were seeking a court order disallowing the use of proxies at the meeting.
After noting that the Condominium Act creates a right for owners to vote by proxy, the Judge was not convinced that he had the authority to deny owners the statutory right to vote by proxy. In any event, even though the Judge noted that the Respondent’s communications were unconstructive, mean-spirited and contained personal insults directed at various individuals, he concluded that the substance of the communications was that the special assessments were unwarranted and that the board members should be removed – consequently there was nothing to warrant preventing the use of proxies. The Respondent’s communications were not misinformation but rather “the other side of the debate on an issue of importance to the community where clearly there are strong opposing views.” The Judge also noted that the need for proxies was heightened in this case as the condominiums were vacation properties and not the primary residences of the owners.
The corporations also requested that the Court limit communications to the owners to written submissions by each side to be sent to the owners with the notice of meeting, with no further direct or indirect communications being permitted prior to the meeting. The corporations justified this request once again on their allegation that the Respondent had engaged in misleading communications with owners. As the Judge had already concluded that the Respondent had not engaged in misleading communications, this request was also refused by the Court. “A necessary companion to the right to vote is the right to discuss important issues that will be the subject of a vote.”
Although both the request to disallow the use of proxies and to limit communications to the owners was denied, the Judge noted that prior to the meetings the boards were at liberty to communicate with the owners and present their positions of the contentious issues to persuade them to support the boards’ positions.
In the decision the Judge stressed the importance of the democratic process in the governance of condominiums and the need for all owners to participate, particularly in the case of contentious issues:
“Strongly held opposing views are not unusual in democratic governance, but rather, are often part of the process . . . . I urge all members of the community to keep in mind that the purpose of the meetings, the votes, and any discussion leading up to the meetings is to allow members of the community to inform themselves, to discuss the substance of the issues, and then to exercise their right to vote in accordance with the democratic model set up under the Condominium Act, 1998.”