The Cassey Decision – Cassey v. The Owners, Strata Plan VR-326 – Council Decisions via Email
Earlier this year, the Civil Resolution Tribunal decided on a case that has notable implications for Strata Corporation operations here in the province of British Columbia. You can read more about the decision here, and the decision itself is available at the CRT website here. The case spins on the use of email as a means of communication and crucially, decision making, for Strata Councils.
In the Cassey decision, the CRT affirmed a fundamental principal of the Strata Property Act around decision making and disclosures- that decisions should be made at properly constituted meetings (where full and thorough discussion of matters can be held). Decisions made via email can be, according to the CRT decision, deemed invalid if there is no bylaw supporting email meetings. The decision makes explicit and identifies the challenges associated with crafting such a bylaw when the CRT adjudicator notes:
In other words, if a strata council held a formal meeting via email, and properly minuted that meeting, decisions made at that email meeting would be valid based on the reasoning in Kayne. It is unclear from those cases how an “email meeting” would operate.
There are significant challenges associated with crafting a bylaw to allow for “email meetings”- for example, how is quorum calculated? When does a meeting begin and end, if asynchronous in nature? What is appropriate notice of such a meeting? How can “observers” be included? To date, we have only seen a handful of examples of bylaws, though as a result of this decision the Strata legal community is working hard to try to answer these questions.
It should be noted that “email meetings” are entirely separate and apart from “electronic meetings” (which are real-time in nature, and which are exactly like in-person meetings save for the location being Zoom/Telephone/Google Meet/Microsoft Teams/etc.). The latter style of meeting are often covered by specific bylaws, especially in light of the changes brought about by COVID-19.
The Cassey decision concludes with this Order:
“I order the strata not to act on decisions made by email unless and until the strata council has passed a majority vote at a properly convened strata council meeting, unless there are reasonable grounds to believe that an immediate decision is necessary to ensure safety or prevent significant loss or damage, whether physical or otherwise. This order only applies to the strata’s current bylaws about strata council meetings.”
Our industry has long struggled under the weight of the “problem of email”. Property Managers receive dozens, if not hundreds of emails every single day and often these are from Strata Councils who are discussing matters of importance for their Strata Corporation. 20 years ago, before the widespread adoption of email, the norm in Strata governance was for almost all business to be conducted in person at duly convened Council meetings. Email addresses for Property Managers were withheld from the wider Ownership and only used to correspond with Councils and Vendors. With the rise of email saw practices shifting dramatically- now most business is actually conducted between Council meetings, which are increasingly a forum to simply ratify decisions made in between meetings (many of which were not the subject of full and thorough discussion as intended by the framers of the Act).
We respectfully suggest clients consider the above when initiating a decision making process via email- ask, “can this wait for our next meeting?”. More often than not, the answer is “yes”- if a decision is not so urgent as to trigger Section 98 of the SPA (clear emergencies) and it is important enough that a homeowner may challenge the decision, Councils need to be aware that those decisions can be invalidated by the courts. Instead, if you are considering a matter of serious importance that does not rise to the level of an emergency as defined under Section 98, these decisions should be deferred to a formal meeting. Short electronic meetings, duly convened, can be used in urgent but not emergent situations.
We do not propose to end the use of email for decision making- we recognize it is an indispensable tool as useful as it can be problematic. Minor decisions often should not wait for formal meetings, nor is it always practical to do so- we will always accept your majority vote instructions even if they are given to us between meetings. What we suggest is a prudent evaluation of whether or not the matter can wait for a meeting, and for Strata Councils to consider the risk of a legal challenge of their decision if acted upon before being minuted and disclosed to the Owners.
There were other elements to this decision worth review, notably the allowance for subcommittees of Council to be appointed and to be delegated certain authorities- the CRT affirmed that with a bylaw in place, this practice continues to be perfectly acceptable. They also confirmed that a Strata web portal is not a common asset and that there is no obligation to post materials provided by homeowners (such as petitions to call a Special General Meeting). Finally, they found that vague and overly broad requests for documents held under Section 35 of the SPA can be denied in certain circumstances, especially when they would be onerous on the Strata Corporation.
As always, the above does not constitute legal advice. If you are curious about email meeting bylaws, your Property Manager can solicit a formal opinion on your behalf. Otherwise, we encourage Councils to “slow down” the decision making process whenever possible so as to ensure compliance with Cassey and the other cases cited within.