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#18951
BOMBSHELL: Does AMBIGUITY (?) validate SHORT-VOTED By-law process ? - LAFRAMBOISE v YCC # 365 2019/03/24 14:44  
Legal articles are emerging about a Toronto legal decision reported to validate a condo ( borrowing ) by-law despite its having FAILED TO RECEIVE owner ratification ( present or proxied at Owners meeting ) from 50 % of ALL VOTABLE UNITS plus one vote.

One of the articles is by a counsel involved. It describes the Owner Meeting vote as getting YES from merely 40 % of the total number of votable units. Not 50 % plus one vote ( present or proxied ) of ALL units !

The Borrowing By-law was approved by a simple plurality of the quorumed vote at an Owners Meeting. ( Gotta ask then : IF such lowered threshold would mean that 40 % approval vote is enough to pass it out of merely quorumed attendors/proxied, then is 39 % enough ? Is 38 % enough ? etc . . .

The Toronto condo corporation was reportedly under judicially-appointed Administratorship.

The Administrator brought forward for review to the supervising judge, what for decades would have been been widely seen in Ontario as merely a short-voted, un-approved Borrowing By-law PROPOSAL.

Supervising judge is reported to have ruled that the Ontario Condo Act's By-law approval formula is ambiguous ( to him ).

And thus that the approval level could or should be construed no differently from any other vote at a properly quorumed Owners Meeting !

Bottom line : Respectfully Directors should consult with qualified counsel before reliance about next by-lawing . .

Also can one now consider PRIOR SHORT VOTES to have become now valid retroactively if they now get dusted off & registered ?

( Is this an illustration of the ambiguous ancient saying "Hard cases make bad law" ? )

Again this is not legal advice.

Laframboise et al. v. York Condominium Corp. 365, 2019 CarswellOnt 680 ( Not at canlii.org )

Judge reportedly justifies as construing “liberally” for governancers' powers, what the judge is persuaded is an ambiguity created within the wording of s 56(10) of Ontario's Condominium Act 1998 as amended.

At least three underlying issues appear to arise :

1 - Regardless of whether there really ( ? ) is such a loophole or ambiguity in current or past wording of Ontario's Condominium Act 1998 as amended, what about contrasting bottom line principles of “strict construction of ambiguities” in favour of property co-owners & individual property rights ?

ie What about broad lines of judgments following Anderson v. Dickie (1915), 84 L.J.P.C. 219 (H.L.) http://www.bailii.org/uk/cases/UKHL/1915/52SLR0563.html ). Could condo owners actually actually have fewer property rights than even Building Scheme owners ! ?

2 - Wider, a type of basic governance document - having wide scopes within the hierarchy - suddenly becomes a lot easier to create, amend or revoke ! LOWER approval thresholds / easier to pass by-laws

? But did owners buy into this ? Did lenders accept this enhanced risk ? Is this lower by-lawing threshold what Ontario's Legislature ever intended ?

Hasn't Ontario's Condo Act periodically been judicially described as intended to be consumer-protection ?

Regardless of whatever difficult Administratorship issues at this particular site, IF - IF - the judgment gets deference, WHAT THEN for the rest of Ontario's condo universe outside YCC # 365 ? ?

AND does it retroactively now revive historically past short votes too if such can get themselves back on track ? ?

3 - Given whatever the Administrator’s specific court-granted powers, was the bylaw clearly required if there was already in place an Administratorship - a Court appointed governance backed by judicial discretion about financing etc - at Y.C.C. # 365 ?

Could Administratorship remedial financing have instead been empowered to detour around the Owner Vote level protections of Ontario's Condo Act 56(1) & 56(3) ?

Some very interesting articles :

Feb 27/19 Antoni Casalinuovo LLB Elia Associates PC “Has The Court Lowered The Threshold For Approving By-laws?” https://www.elia.org/resources/articles/view/1088/has-the-court-lowered-the-threshold-for-approving- by-laws

March 13/19 Rod Escayola LLB Gowling WLG “Court Approves a Borrowing By-law Despite the Absence of a Majority Supporting it” http://condoadviser.ca/2019/03/court-approuves-a-borrowing-by-law-despite-the-absence-of-a-majority- supporting-it/condo-law-blog-Ontario
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#18953
decide for yourself : Laframboise v YCC # 365 ? 2019/03/25 12:26  
( This is not legal advice. Consult the corporation's LSO- licensed counsel )

From Ontario's Condo Act 1998 as proclaimed 3rd reading 1998 :

When by-law effective

(subsection) 56 (10) A by-law is not effective until,

(a) the owners of a majority of the units OF the corporation vote in favour of confirming it, with or without amendment; and

(b) a copy of it is registered in accordance with subsection (9).

Current wording at March 24 2019 :

When by-law effective

56 (10) A by-law is not effective until,

(a) the owners of a majority of the units IN the corporation, or such other number of owners that is prescribed, vote in favour of confirming it, with or without amendment; and

(b) a copy of it is registered in accordance with subsection (9). 1998, c. 19, s. 56 (10); 2015, c. 28, Sched. 1, s. 52 (13).

* * *

Among special provisions as to “Borrowing by-laws" - old Dec 1998 to borrow for currently unbudgeted expenses :

old : 56 (1) e “(e) subject to subsection (3), to authorize the borrowing of money to carry out the objects and duties of the corporation;

old - Borrowing by-law

ss 56 (3) A corporation shall not borrow money for expenditures not listed in the budget for the current fiscal year unless it has passed a by-law under clause (1) (e) specifically to authorize the borrowing. 1998, c. 19, s. 56 (3).

at March 24/19 shown at e-laws site awaiting implementation : same as 56(3) above but

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection 56 (3) of the Act is repealed and the following substituted: (See: 2015, c. 28, Sched. 1, s. 52 (11))

Borrowing by-law

(3) A corporation shall not borrow money unless it has passed a by-law under clause (1) (e) specifically to authorize the borrowing or unless the regulations provide otherwise. 2015, c. 28, Sched. 1, s. 52 (11).
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