Law Times

Law Times • OcTOber 17, 2016 Page 5 www.lawtimesnews.com NEWS Court of Appeal decision stems from dispute at Ottawa building Business judgment rule applies to condo corp boards BY ALEX ROBINSON Law Times T he Court of Appeal has ruled that the business judgment rule should apply to condo corpo- ration board decisions. Ontario's top court sided with an Ottawa building's board in a dispute over a condo owner's proposal to start charg- ing hourly for parking spaces in the property's garage. e owner filed a claim against the condo corporation in 2014 aer the board rejected the proposal, which would con- vert monthly parking spaces into a "pay and display" hour- ly system and would require changes to the building's com- mon elements. e board cited security con- cerns, insisting the owner em- ploy a security guard to oversee the operation. A Superior Court justice sided with the owner, but the Court of Appeal ruled that the board's de- cision should be given deference. "e question in such cir- cumstances is not whether a reviewing court would have reached the same decision as the board," Associate Chief Justice Alexandra Hoy wrote in the de- cision. "Rather it is whether the board reached a decision that was within the range of reason- able choices. If it did, then it cannot be said to have unfairly disregarded the interests of a complainant." e Condominium Act al- lows for unit owners to file what are called oppression actions in court if they feel a certain board decision is unfairly prejudicial. e Court of Appeal deci- sion — 3716724 Canada Inc. v. Carleton Condominium Corporation No. 375 — could make it harder for these applica- tions to be successful in the fu- ture, condo lawyers say. "It's a high hurdle to over- come," says condo development lawyer Harry Herskowitz, of DelZotto Zorzi LLP. Herskowitz was not involved in the case. "e fact that this board makes a decision against the in- terests of the unit owner doesn't necessarily mean that the unit owner is going to be able to suc- ceed in court in overturning that decision." In the past, courts have is- sued decisions that agree condo board decisions are entitled to deference, but this was one of the first that applied the busi- ness judgment rule, lawyers say. e rule maintains the auton- omy of corporations and the fact that their directors are in a better position to make decisions con- cerning their company rather than courts are aer the fact. "As long as there's some ratio- nal reason they made that deci- sion and it's not just coming out of the blue sky, it should be given some type of deferential treat- ment, because they're in a better position to evaluate what's in the best interests of the condomini- um as a whole and the collective unit owners as a whole than the courts are," says Herskowitz. While it's predominately applied in cases concerning for-profit businesses, it has also been applied to not-for-profit corporations as well. Christy Allen, the lawyer who represented the condo cor- poration in the case, says apply- ing the corporate principle lays out the test for courts asked to review a board decision. "It's one thing to say your de- cision is entitled to deference, but it's another thing to say this is the line at which you're enti- tled as a court to step in and re- view that decision," says Allen, a lawyer at Nelligan O'Brien Payne LLP. She adds that applying the rule is important so that condo corporations can act without fear that every decision they make will be reviewed in court. "It enumerates what the stan- dard is and what the test is that should be applied by courts when they're reviewing deci- sions of boards, especially when there's a claim of oppression," she says. e unit owner in the case originally requested approval from the board to make the changes in May 2012. e owner required approval from the condo board as the new system would require changes to the common elements. In addition to asking the owner to employ a security guard, it decided to treat the proposal as "substantial," mean- ing it would need approval from a vote of all condo owners in the building. e owner agreed to pay for a security guard to watch over the parking facility, only if they would not have to pay security fees that all unit owners were required to pay, or if the board would share the costs of the employee. e board rejected this re- quest and the owner filed the oppression application. e application judge ac- knowledged that while having a full-time security guard was the best option, it was not viable. e Court of Appeal, how- ever, determined that the board had acted reasonably, "honestly and in good faith." In the decision, the Court of Appeal said that as elected representatives of the unit own- ers as a whole, the directors of the board were better placed to make judgments about their building than the courts. e decision also said that the board was transparent in voicing its concerns. Nadia Authier, the lawyer who represented the owner on the appeal, declined a request for comment. LT Executive Director NOVA SCOTIA LEGAL AID COMMISSION All applications must be submitted before midnight, October 21, 2016. While we appreciate all applications, only applicants selected for an interview will be contacted. All applications held in confi dence. Halifax, Nova Scotia The Nova Scotia Legal Aid Commission (NSLAC) is an independent Commission legislatively mandated to provide legal representation to vulnerable Nova Scotians. Our focus is criminal, family and social justice law. The Commission works collaboratively with other justice stakeholders to increase the effi ciency and effectiveness of our criminal and family justice systems. The mandate of the Nova Scotia Legal Aid Commission, to the extent that Government funding permits, is: (a) To deliver quality legal services to qualifi ed applicants with priority for matters involving the liberty and civil rights of individual clients and for matters involving the integrity and protection of an individual's family; (b) Such other legal services as Government may contract with the Commission to provide to individuals or groups. The NSLAC is seeking an Executive Director to serve as the Commission's executive head. Accountable to the Commission you will be responsible for the general administration of the legal aid plan and staff in accordance with the Nova Scotia Legal Aid Act and the Regulations. As the Executive Director, you will provide strategic direction and management to an organization of 176 staff (of which 97 are lawyers), offi ces across the province and a total budget of $25million. You are a champion of excellence in client service and will, through sound operational and fi nancial stewardship, enhance the organization's ability to improve access to justice for vulnerable Nova Scotians. You bring strategic vision and management acumen to this leadership position as the organization undergoes change to support the sustainability of access to justice in Nova Scotia. You are comfortable working with key stakeholders including: clients, agencies, courts, justice offi cials and various government departments. The NSLAC seeks a leader with demonstrated experience in a complex, dynamic and client centre environment. You have held positions of leadership with the need to balance and represent various interests in a fair and equitable manner. You hold yourself to the highest standards of professional service using collaboration, innovation, equity and honesty. You are committed to supporting and contributing to the maintenance and development of an effi cient and effective justice system that protects the constitutional rights and due process of individuals and promotes their economic stability and social wellbeing. Being a barrister in good standing; having knowledge of the Statutes of NS, criminal law, constitutional law, family law, administrative law and civil litigation procedures; experience in legal aid and ability to communicate in both English and French will be considered assets. If you are interested in this opportunity, submit your application / resume by email at astewart@wickwireholm.com or by mail to the attention of Audrey Stewart, Wickwire Holm, PO Box 1054, Halifax, NS B3J 2X6. ExecutiveDirectorPosition_LT_Oct3_16.indd 1 2016-09-28 2:11 PM Christy Allen says applying the business judgment rule is important so that condo corporations can act without fear that every decision they make will be reviewed in court.

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