Condo Law Digest – December 2013

Stanley Gordon v. York Region Condominium Corporation No. 818, Ed Rotman, Ahsan Zaiyouna, Harold Davis, Eugene Katz & Manfred Kapp
Decision Date:  August 21, 2013
Text of Ruling: http://bit.ly/1eWv8aC
Judgment on Costs: http://canlii.ca/t/g1qtp

Mr. Gordon, together with the named defendants, are members of the Board of Directors of York Region CC No. 818.  The corporation’s by-laws contain a provision that a Director may be removed if he or she violates the Director’s Code of Ethics on three occasions over the course of a term.  The by-laws also contain a procedure for an ethics review. In November 2011 Mr. Gordon was accused of breaching the standard of care of a corporate director and of failing to act honestly and was removed as Director following an ethics review.  Mr. Gordon asked the court 1) to have his disqualification as Director to be declared invalid; 2) to have the by-law declared contrary to section 33 of the Condominium Act and therefore invalid; 3) to be re-instated as Director; and 4) other relief.  The Respondents brought a counter-application asking for 1) a declaration that the by-law is valid; 2) a declaration that Mr. Gordon’s removal from the Board be upheld; 3) an order upholding the determination of the ethics review; or failing that 4) a finding (on the evidence before the court) that Mr. Gordon breached the standard of care of a corporate director.

Judge McCarthy ruled that while the by-law was acceptable and not contrary to the Condominium Act, the ethics review conducted by the Board did not conform to minimal standards of procedural fairness or natural justice.  Rather, it was “plain and obvious” that one of the Directors was seeking to unite the others in removing Mr. Gordon.  The judge set aside the disqualification but declined to re-instate Mr. Gordon.  The Board is at liberty to conduct a fresh ethics review within 90 days.

Comment:  I’ve written about some of these issues before, in the context of Bill 168 and workplace investigations: How to Write a Code of Conduct, Investigating Complaints under your Policy, and Investigations Gone Wrong.