10/02/2020
Shangri-La Hotel update from Globe and Mail
A long struggle for control at the condos topping Toronto’s luxury Shangri-La Hotel has ended with the election of a new board of directors and the departure of a controversial board president.
The five-person board of Toronto Standard Condominium Corporation No. 2258 had seen five directors resign or be removed in less than a year, as well as three different property management firms and three corporate lawyers come and go over roughly the same time period. Residents in the exclusive building, where units often sell for upward of $3-million, had described a culture of fear and intimidation around complaints about the direction of the corporation. At one point, residents were threatened with legal action if they leaked details of meetings.
The vote – the subject of fierce legal wrangling earlier in the summer – was held by paper proxy on August 24, although results could not be certified until four days later by meeting chair Brian Horlick, a partner in Horlick Levitt Di Lella LLP, in part owing to difficulties verifying the list of qualified voters in the building. On August 28, he issued a report saying 29 of more than 150 paper proxies were disqualified and the sole remaining elected member of the previous board, board president Mario DaMicheli, failed to be re-elected to the new three-year term he sought.
Among the urgent issues the new board must sort through are demands from the City of Toronto that it remediate renovations to a fire pump room that were done without a permit, demands that it pay outstanding bills connected to the Shangri-La Hotel, and unresolved questions over demands that some condo owners must pay legal bills relating to complaints about the building management.
“At present we are hard at work absorbing a lot of information and ensuring a smooth transition,” wrote Jim Tadeson, CEO and founder of real estate investment fund manager Carttera, who defeated Mr. DaMicheli 68 votes to 52 to win a three-year term. “It’s a process, as I’m sure you can appreciate, and we are still in the midst of it, so we believe it would be premature to provide a reaction at this early date.”
There were 29 proxy votes disqualified, according to Mr. Horlick’s report, including nine individuals who didn’t have the documentation to show they were the legal representatives for corporations that owned units in the building and eight by individuals whose claims to be owners of units were determined to be false.
“I find that based on the margin of success, and based on the voting preferences set out on the disqualified proxies, had any group of the disqualified proxies been accepted, it would have increased the successful candidates' margin of success, and therefore would not have altered the outcome of the election,” Mr. Horlick wrote in his report on the election.
Warren Irwin, an original resident of the Shangri-La, and initial board president, said “I could not happier to have the very solid and capable new group of people running the board.”
Mr. DaMicheli didn’t respond to requests for comment.
“I think it’s too early to make any judgments. There is a lot of work to be done and they all seem like very capable people,” said William Waldman, who was a board member until his June resignation created a governance crisis that compelled a group of the building’s owners to seek an order from Ontario Superior Court for new elections or an administrator to take over management of the corporation.
Justice Benjamin Glustein dismissed the owners' application on July 29, with the proviso that if there were serious concerns with the management of the August 24 AGM, he might review the issue.
