Condo Owners Must Pay for the Unlawful Conduct of Their Directors
Who should pay the bill when condominium directors act unlawfully and take justice in their own hand? According to the Court of Appeal it may be the owners having elected them!
We blogged already on the Ottawa case where condominium directors were found to be in contempt of court when they decided to ignore a prior court order and reinstated the condominium’s landscape to their liking.
In a later decision on costs, the Court of Appeal ruled on who should pay the legal fees of this legal saga.
The judge in first instance had ordered the Directors to pay $96,000 in legal fees. The Court of appeal slashed this amount down to $35,000 and, again, imposed on the condominium owners part of this bill for the Directors’ contempt. The Court of appeal suggests that the owners should assume part of this cost as they are the ones who elected the rogue directors.
There are two losers in this case: the condominium owners who are now left paying big dollars to fix the mess left by the former directors and the owners who dared to contest the unlawful conduct of these directors.
What are the lessons to take away from this case?
- If you are a director, ignoring a court order may not be that serious. You may be able to get away with a slap on the wrist. (I don’t recommend you act on this lesson).
- If you are an owner, it is insufficient for you to elect directors: you have to keep an eye on what they are doing because you may have to pay the bill ultimately if they decide to breach court orders.
- If your directors are acting unlawfully you may want to think twice before you do anything about it: you may be stuck with the legal bill…
See no evil, hear no evil…