CAT to Expand Jurisdiction into Owners Meetings
By Victor Yee
On January 24, 2025, the Ontario government announced public consultations regarding the potential expansion of the matters that the Condominium Authority Tribunal (the “CAT”) can handle to include adjudicating disputes about owners’ meetings.
This expansion of the CAT’s jurisdiction is currently anticipated to occur on July 1, 2026.
But with the continued rise of civic mistrust in democratic elections, the CAT’s foray into condominium owners’ meetings is fraught with real risks and obvious pitfalls.
Increasing Legal Costs for Condominiums, Which Increases Cost of Housing
Perhaps the most obvious consequence is that if the CAT allows any unit owner in a condominium to challenge the validity of the notices of meeting, the decisions of the Chair, the business dealt with at the meeting, the voting rights and the thresholds needed, as well as the outcome of the Board elections, for only a $25 filing fee to the 24/7 online Tribunal, then condominium communities throughout Ontario will likely have to drastically increase their legal budgets to defend against CAT claims each year.
A single disgruntled unit owner, among the hundreds in a condominium corporation, could submit a CAT claim on any of the items set out above. However, unless the CAT starts awarding legal costs against unsuccessful litigants for frivolous applications, the financial burden will fall heavily on condominium communities.
Most condominiums in Ontario budget only a few thousand dollars each year for legal costs. Unless the CAT awards full legal costs (or close to full costs) to the condominium that is successful in defending against a unit owner’s CAT Application, even one CAT case can blow the community’s budget out of the water by several thousands, if not tens of thousands, of dollars.
If the CAT is given jurisdiction over owners’ meetings, then condominiums throughout the province will have even more difficulty planning their budgets.
Perhaps a solution could be, similar to the 15% threshold for a requisition or to include new materials in a meeting notice package, that before a CAT Application can be accepted for filing or proceed past Stage 1 Negotiation, at least 15% of the units in that condominium must sign in support of the complaint. At least that way, by requiring some broader support in the community for the issue being submitted by an owner, CAT Applications that are frivolous or isolated complaints about an owners’ meeting can be prevented from draining the resources of the Tribunal and the non-profit condominium corporation.
Alternatively, if multiple owners are bringing CAT Applications about the same owners’ meeting, then the CAT should implement a front-end screening procedure for consolidating them together and having a “lead” Applicant chosen, so that the condominium does not have to defend multiple CAT cases brought by multiple unit owners about what might be mutually-shared complaints.
The unpredictable nature and number of potential CAT Applications about owners’ meetings, and the CAT’s current presumption against awarding condominiums with their legal costs, will force condominiums to allocate more of their limited funds toward legal expenditures instead of physical maintenance, capital improvements, or other community benefits. Increased legal costs will naturally lead to higher monthly common expenses for unit owners, and make the cost of living in Ontario even more unaffordable.
Interrupting Meeting Timelines, Causing Uncertainty of Meeting Results
It remains to be seen whether a unit owner commencing a CAT Application regarding the Preliminary Notice or the Notice of Meeting package for an upcoming owners’ meeting will require the meeting to be paused for everyone, or if the meeting can proceed while the CAT undergoes its 3-stage process of Negotiation, Mediation, and Adjudication.
If a CAT Application automatically pauses the owners’ meeting, there could be delays in essential decision-making about time-sensitive governance matters, such as the election of Board members, passing By-laws, or voting on Rules. Given the volatility of financial markets, one serious consequence of delaying an owners’ meeting on a Borrowing By-law for months while parties go through a CAT Application could lead to significant differences in interest or borrowing costs; in addition to delaying a much-needed project.
Conversely, if the commencement of a CAT Application does not automatically pause the owners’ meeting, the CAT may invalidate the entire owners’ meeting resulting in uncertainty and confusion among owners. Condominiums might need to re-run meetings and owners may have to re-vote on crucial issues, thereby wasting time and resources.
The courts of Ontario have held that unless a unit owner’s challenge to an election will lead to a different outcome, the court will not interfere. A unit owner’s CAT Application might yield only one or two more votes being counted for the unsuccessful candidate in a Board election, after months of negotiation, mediation, and adjudication in the CAT. But if the margin of victory in the Board election was over a hundred votes, was it really worth the legal fees and the drastic deterioration of communal relationships between neighbours?
Hindsight is 20/20, so Reasonableness Must be the Standard
At an in-person AGM or a contentious owners’ meeting, the duties of the Chairperson are numerous and fast-moving. It can take years for a condominium lawyer to gather enough experience to comfortably chair a meeting. Even then, the Chairperson must rely on support from key personnel they might meet for the first time that evening, such as the Condominium Manager who is manning the registration table, the minute-taker who is recording the Minutes, or the Superintendent who is setting up the chairs and the A/V equipment.
Sometimes, a unit owner will bring a stack of new, never-before-seen proxies that must be reviewed on the spot by the Chairperson, while hundreds of unit owners are in the room waiting to get on with the business of the meeting. Other times, a unit owner might call for a secret ballot vote on a matter that is usually routine procedure, necessitating a scramble to create ballots, distribute pencils, and collect votes with proper weighting to account for proxy-holders and owners of multiple units. The pressure on the Chairperson to make quick, yet accurate, judgment calls during an owners’ meeting can be enormous.
Chairpersons are imperfect human beings. Chairpersons are supposed to know the Condominium Act and its various regulations, and be familiar with each condominium’s unique Declaration, By-laws, and Rules. Where gaps exist in those governing documents, Chairpersons must also be familiar with Nathan’s Rules of Order. But no human being can, on the spot, perfectly recite every provision that might apply to an owners’ meeting.
Some industry professionals, who might not, themselves, have ever chaired a contentious owners’ meeting, argue that a standard of perfection or near-perfection should be required. But it is all too easy for a reviewer, after the fact, to scrutinize in painstaking detail what a Chairperson could have done better in the heat-of-the-moment.
The standard required of a Chairperson presiding over an owners’ meeting should instead be closer to reasonableness. Like the business judgment rule that gives deference to the condominium’s Board of Directors chosen by the community, so too should deference be given to a Chairperson who was selected by the Board (and usually accepted by a majority of the attendees) to run the meeting.
If the Ontario government proceeds with giving the CAT jurisdiction over owners’ meetings, we hope that the CAT Members reviewing owners’ meetings will receive adequate on-the-ground training about what it is actually like to chair a contentious owners’ meeting, before mediating or adjudicating these disputes.