Earlier this month, the Condo Authority Tribunal (CAT) ruled on whether owners have a right to get copies or review emails exchanged between directors in circumstances where these emails are the basis of board decisions. In this specific case, the CAT concluded that these emails did not form part of the corporation’s record and, as such, owners did not have a right to inspect or get copies of them. Here is how the CAT got there.
An owner sought copies of emails exchanged between the condo directors in relation to the corporation’s renewal of a gas contract. The owner based this request on the fact that board minutes confirmed that the gas contract “has already been approved by the Board via email”. The owner took the position that these emails constituted minutes of the meeting where the renewal decision took place and asked to get access to them.
The corporation appears to have taken a somewhat contradictory position, arguing that these emails did not exist (despite their reference in the minutes). It also argued that any such emails (if they did exist) formed part of an informal discussion on the contract renewal but that the decision was taken at the board meeting, through a vote by a show of hand.
The CAT concluded that, while section 55(1) of the Act imposes on corporations the obligation to keep board meeting minutes, it does not require a corporation to keep a transcripts of the discussions having taken place (regardless of whether the discussions took place orally or by email). The fact that the minutes merely referred to the existence of emails was insufficient to make them records of the Corporation. The CAT suggest that things may have been different if the emails had been attached as a scheduled to the minutes.
The emails not having been found to form part of the corporation’s records, the CAT concluded that the owner was not entitled to examine these emails and that the Corporation was not obligated to keep a copy of them.
We are left with one of two issues here:
- Either a decision on the gas contract renewal was taken by emails prior to the board meeting;
- Or the minutes failed to accurately record the existence of a vote on the question at the board meeting.
Both are problematic.
The Condo Act is clear that boards can only transact business of the corporation at a duly constituted meeting of the board – with proper quorum. Boards cannot transact corporation business by emails. A meeting of the board must allow directors to communicate concurrently. I feel a blog post coming on this question.
Having said that, directors are usually comprised of volunteers with competing employment, family duties or other obligations. They often only get to meet on a monthly basis. Unsurprisingly, some discussions take place in the context of emails between meetings. But if the decision is taken at the meeting (as argued by the corporation in this case) the minutes should reflect that accurately.
Meeting minutes are crucially important. They are the corporation’s corporate memory and are the owners’ only window into board decisions. An implied obligation in a corporation’s statutory duty to maintain minutes is the obligation to ensure they are accurate. Otherwise, what’s the point of having them.
So here are some of the lessons learned from this case:
- Emails exchanged between directors are not (in normal circumstances) records of the corporation.
- Emails attached to board minutes (and perhaps even to board meeting package) may be records of the corporation, which opens them to review by owners, subject to usual exceptions.
- Boards may not have to indefinitely keep emails exchanged between directors (although it would be wise to keep them in many (most?) cases).
- Boards should not make decisions by emails.
- Minutes should accurately reflect decisions taken at meetings.