the Rogue Board, the Rogue Director - Association of Condominium ...

cause they allowed him to continue
working despite knowing that he
was not trustworthy.
In re Brazilian Rubber Plantations
and Estates, Ltd., [1911], the
court held that the directors of a
rubber importing company could
“undertake the management of a
rubber company in complete ignorance
of everything connected with
rubber, without incurring responsibility
for the mistakes which may
result from such ignorance.”
The definitive statement on the
subject in Canadian law is from the
Supreme Court of Canada in the
Peoples Department Stores Inc. case
in 2004 which affirmed:
“Directors and officers will not
be held to be in breach of the duty
of care under s. 122(1)(b) of the
CBCA if they act prudently and
on a reasonably informed basis.
The decisions they make must be
reasonable business decisions in
light of all the circumstances about
which the directors or officers knew
or ought to have known. In determining
whether directors have
acted in a manner that breached the
duty of care, it is worth repeating
that perfection is not demanded.
Courts are ill-suited and should be
reluctant to second-guess the application
of business expertise to
the considerations that are involved
in corporate decision making, but
they are capable, on the facts of
any case, of determining whether
an appropriate degree of prudence
and diligence was brought to bear
in reaching what is claimed to be a
reasonable business decision at the
time it was made.”
The current standard quoted
above from the Peoples case shows
how much the law concerning director
liability has evolved.
■ Conclusion
Attending all possible board
meetings, acting prudently and on
a reasonably informed basis, participating
in decisions, noting opposition
when appropriate and not
acting outside meetings of the board
of directors should keep a condominium
director out of the courts
and indemnified by the corporation
and its insurance.
As referred to in the first sentence
of this article, it is safest for directors
to act in reliance on professionals
and properly presented financial
statements – when in doubt get good
advice and rely on it.■
John A.A. Deacon, BA, LLB, is a senior
partner in the law firm Deacon,
Spears, Fedson & Montizambert.
This article has been prepared with
the assistance of law student Ananthan
Sinnadurai.
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■ 52 ■ CM Condominium Manager Magazine, Fall 2008