In a recent case, the court was asked to rule on the fairness of an upcoming condo election. The takeaway is that courts are not likely to entertain theoretical potential issues but prefer to deal with actual breaches (if any), after the meeting.
Facts of this case
As is often the case, the parties involved have a lengthy litigation history but this last round dealt with an upcoming AGM, at which one of the owners wanted to run for election. This candidate, who was campaigning on a platform to repeal a very large special assessment, brought the corporation to court over the fairness and lawfulness of the election process put in place by the corporation.
Specifically this owner asked the court to proactively appoint a neutral and disinterested person to chair the AGM.
[This candidate also challenged the Corporation’s decision to prevent owners from downloading their own proxies forms from the CAO’s website, instead requiring that owners pick up pre-approved proxies at the management’s office. We will cover this in a later post.]
Of interest in this case, the candidate did not appear to raise any actual issues with the chair. She instead was concerned with potential problems and perceived biases. For this reason, she wanted the court to appoint a different (and neutral) chair rather than allow the president to chair the AGM, as provided for in the corporation’s governing documents.
While the court accepted that having a neutral chair is preferable, it is not a mandated requirement. By way of example, the court referred to cases where a person who was actually running for election was allowed to chair the meeting. In the current case, the condo’s by-law expressly provided that the president was to chair the meetings. Absent proven, serious risk of illegality or harm, the court was not prepare to proactively intervene in the process or change the chair.
Specifically, in this case, the court concluded that the evidence did not support the existence of a high degree of likelihood that illegality or unfairness would occur.
The court indicated that it was not prepared to rule on the neutrality of the chair in a vacuum. After all, the chair may not be called upon making any ruling at the meeting or the outcome of the vote may be so clear that any alleged partiality may turn out to be inconsequential. Stated otherwise, the court was not prepared to proactively rule on what may happen but prefer to rule, after the meeting, on actual issues (if any). The fact that a chairperson is seen to be a political ally to some of the candidates or a foe to another is not a sufficient basis for the court to overtake the corporation’s ability to appoint its meeting chair.
Having said this, the court did seem to suggest that it is preferable to appoint a chair who is neutral, disinterested, prudent and opened to criticism. Not having a neutral chairperson may attract criticism and complaints. There is, after all, hardly any downsides to the appointment of a neutral chair.
You can read the case here.
Best practices when appointing a chair
The following are somes tips to keep in mind when appointing a chairperson:
- Check your governing documents on who can chair a meeting or how the chair is appointed.
- Consider having a chair who is respected and perceived to be neutral.
- Consider retaining a third party to chair the meeting (many of the electronic voting platforms offer the use of their chair).
- If you are running for election, consider either not chairing the meeting or delegating to someone else the election portion of the meeting.