The AGM that never happened
If you are the president and you have just lost re-election at the AGM,
what can you do? Why not just ignore the results?
Joe was/is the president of a small 41-unit industrial condominium
north of Toronto. A property management company managed this condo and
the three-man board of directors got together for a board meeting about
once a year
and they held yearly AGMs.
The president and the secretary are friends and they would meet and
talk about issues and usually the treasurer, a newly elected outsider,
would be told by the
manager by phone or e-mail what was going on.
Then the treasurer became concerned about the cost of some of the work
contracts that were being awarded. When he told the management company
that he wanted to see the financial records, it took a lot of requests
and a couple of months before he was granted access. He didn’t like
what he saw.
The property manager chaired the fiscal 2011 AGM. The corporation
lawyer was not present. The treasurer questioned the auditor why his
audited financial report did not match the actual receipts. He
did not get satisfactory replies.
Next came the election. The president was up for re-election and
he had a credible opponent.
As the ballots were being collected, the treasurer said that he had
proxies. The president stated that he would not accept them as they
were not handed in at the start of the meeting. The treasurer stated
that they were legitimate proxies and the owners had the right to vote.
The president storms out of the room saying the meeting is over. The
treasurer follows the secretary out and
retrieves the ballots and he
then laid them out on a table.
The chair says nothing! The meeting was not formally closed or
terminated; it just ended.
In front of everyone, the ballots favouring the president were laid to
the left and his opponents were laid out on the right. It was obvious
that the president lost before the counting of the proxies.
It looks like it was a landslide
for the challenger
The next day the treasurer tries phoning the corporation lawyer.
response. he tries continually for a couple of weeks. There is no reply to his
phone calls and e-mails to the property management company.
About a month later, the corporation’s lawyer talks to him on a
conference call. He says that he has been talking to the president and
the manager and they have been asking him if there is any way to remove
the treasurer off the board as he is not an owner, just a tenant.
Unfortunately, that was not possible.
The lawyer then says that the meeting was not legal because there was
no registration. The treasurer replies: “You mean a sign-in sheet?”
Yes, the lawyer says. But there was, the treasurer tells him, I took a
scan of it with my cellphone. That seemed to set the lawyer back. The
treasurer sends the lawyer a scan of the sign-in
After a struggle by phone calls and e-mails, the treasurer got the
property manager to say that they would not recognize Joe or the
winning candidate as president and they will run the condo as if there
were only two board members.
The lawyer then stated that there was a problem with the AGM because
the property management company did not take minutes. (If there is no
minutes, there was no meeting. It sounds to me that the management
company was either extremely incompetent or, along with the lawyer, in
collusion with the
For months there is no news. There are no board meetings and there is
no second AGM called for the 2011 fiscal year. Yet a budget was
distributed, bills were getting paid and a fee increase was announced.
How could this be?
The treasurer and an owner hire a lawyer who requests a status
certificate. It shows that Joe is still listed as the condo
corporation’s president. So Joe and the secretary are signing cheques
and making decisions without holding board meetings or involving the
So what now?
If the fiscal 2011 AGM did not happen there is no guarantee that the
fiscal 2012 AGM, when the secretary is to be re-elected along with the
president, will be held.
So the treasurer, or any other owner, can take the corporation to court
to force an AGM or they can requisition an owners meeting to remove the
How did it
The treasurer figured that instead of spending time and money fighting
the management company and the law firm, he'd spend his time growing
his business. His father sold the unit and the treasurer moved his business to another
location. He had enough of condos.
At a different condo, before the start of a court-ordered AGM, the
property manager manned the
registration desk. When registration
was complete, he left the room to converse with the board who were
waiting in a nearby room.
obvious that the two incumbents would not be re-elected so
the manager returned to the meeting room and told the owners that the
meeting was cancelled because the president, despite being protected by
security guards hired for the occasion, was afraid for his personal
So, no meeting, no vote, no change.
The owners had to go back to court and get another court order for the
AGM to be held under the guidance of an independent lawyer who hired
paid-duty policemen to provide security and to supervise the complete
election process including the registration.
At the second meeting, the two incumbents lost the election.