Saturday, July 26, 2014

Beyond removing Board Members at a Special Meeting; Establishing and applying a Board Code of Ethics

The Ontario Court of Appeal recently considered a situation where a Board of Directors of a Condominium Corporation removed a Director for breach of the Code of Ethics adopted by the Board of Directors; Gordon v. York Region Condominium Corporation No. 818, 2014 ONCA 549.

In the Gordon case the bylaws contemplated the removal as a consequence of three breaches of the Board approved of Code of Ethics.  The removal of the subject Board member was done in accordance with the Rules of Natural Justice.  Accordingly, the Ontario Court of  Appeal upheld the resolution of the Board to remove the subject Board member.  

This decision sheds light on a mechanism which allows condominium Boards to control their own decorum.  As was the case in Gordon, the subject Board member had become obstructionist and somewhat intransigent.  It is in exactly these circumstances that a Code of Ethics may, if supported by the  bylaws, create a more civil Board environment. Though not binding on our Alberta Courts the decision of the Ontario Court of Appeal in Gordon is highly persuasive and may well be adopted.  Alberta condominium corporations may wish to amend their bylaws to add breach of a Board adopted Code of  Ethics as an additional basis for removal of a recalcitrant Board member.