Appeal from a lower court judgement - action to cancel the decisions of the assembly of the co-owners - ratification of a resolution of the Board of Directors - applicability of articles 1103 and 1097 C.c.Q. to the decision of the assembly of co-owners authorizing the institution of injunction proceedings and to approve a special assessment for legal expenses.
• The Court of Appeal rules on the incidental appeal of a judgement rendered on April 6, 2009 by the Superior Court, district of Montreal (the honourable Jean Frappier), which rejected Club Tremblant Inc's. request to cancel the decisions of the syndicate of co-owners, with costs.
• Club Tremblant Inc. seeks the nullity of resolutions adopted by the syndicate concerning 1) resolutions ratified on July 31, 2008 by their Board of Directors and authorizing the institution of these procedures in injunction as regards divided co-ownership; 2) resolutions taken on October 18, 2008 authorizing the continuation of these procedures, and 3) of resolutions adopted the same day and approving a special assessment for “legal expenses”.
• Club Tremblant Inc. seeks the cancellation of these decisions, and the dismissal of the Syndicate's action.
• Club Tremblant pleads:
? that one of its directors had not been convened to the Board meeting of the syndicates held to authorize the legal proceedings, thus rendering the decision null;
? that these illegal decisions could not be ratified at a later meeting of the Board held by conference call on July 31, 2008, in which the director participated;
? that the directors were then in a situation of conflict of interest, being likely to be legally prosecuted personally for the expenses rising from the prosecutions carried out. The decision Côté v. Lévesque is refrred to in support of these arguments;
? that the introductory action deals with a matter of the acquisition or sale of an immovable within the meaning of article 1097 (1) C.c.Q. and that, consequently, the authorization required a vote by the majority of the co-owners, representing the three quarters of the votes of all the co-owners, which was not obtained;
? that the required modification would modify the declaration of co-ownership, and specifically the description of the fractions, an operation governed by 1097 (4) C.c.Q. and which requires, there again, the approval of a “double qualified majority” of the co-owners;
? that the judge of the lower court should have cancelled the resolutions of the general meeting of the co-owners for the reason that they are partial and were taken with the intention to harm Club Tremblant Inc., or were taken in contempt of its rights (art. 1103 C.c.Q.).
The Court of Appeal dismissed Club Tremblant Inc.'s appeal for the following reasons:
• Club Tremblant Inc did not show that the first judge erred in law when he found that Club Tremblant Inc was wrong to raise article 1103 C.c.Q. The Syndicates made decisions which were supported by several of their members and reflected their desire to solve problems which were prejudicial for them, in the short and long-term. There is, here, neither abuse of legal right nor malicious intention, although the interests of the Club and of the other co-owners of units are, obviously, quite difficult to reconcile.
• The first Judge did not dwell of the question of the board meetings for the reason that the resolutions of the general meetings of the syndicates validly ratified the decision to take the present action. The simple majority was sufficient since article 1097 C.c.Q does not apply to the present case.
• Even if the director in question had taken part in the original meeting, the decision would have been similar, which does not militate in favour of an automatic intervention of the Courts.
• The resolutions of the Board of Directors were made by the majority of the votes of the directors, and nothing would prevent the Board of Directors, at the regularly held meeting on July 31, to re-affirm the decision of the syndicates to take part in the present action.
• At the time of the annual general meeting of the co-owners of the Syndicates, held on October 18, 2008, it was decided, by the majority, “to continue the legal steps in order to clarify the servitude…”. In the circumstances, the annual general meeting, the legality of which is not disputed, could validly decide as it did. The same applies to resolutions approving the assessments regarding the legal expenses. One can, meanwhile, note that the legal steps taken were justified since the lower court judgement, as modified by the Court with the consent of the parties, settled an important dispute which had existed for some time..
• The decision in Côté v. Lévesque on which Club Tremblant Inc. relied cannot be applied to the present case.
• In this case, the decisions taken at the beginning could be validated by the Board of Directors and by the general assembly, at regularly held meetings, and they actually have been.
• The applicants seek only a change in the situs of a servitude to allow them to have access to the hotel's beach. The decision to bring this case has nothing to do with the acquisition or sale of an immovable within the meaning of article 1097 C.c.Q. This recourse is thus instituted only to safeguard and make possible the use of a real servitude already created by the declaration of co-ownership and the title deeds of each co-owner.
• A change of situs, which cannot affect the object of the servitude itself, cannot constitute a modification of the declaration of co-ownership or of the description of the fractions within the meaning of article 1097 C.c.Q. and Club Tremblant Inc. has not shown that an error in law was made which would justify our intervention.
• The irregularity resulting from the absence or irregularity of the authorization can be corrected, even retro-actively, at any stage.