Lease, Shopping Centre, Reservation of Parking Spaces for One Tenant; Special Resolution of a Society, Spoiled Ballots #145

By Gerry Neely
B.A. LL.B.

A real estate agency with more than 40 licensees leased ground level offices in a small shopping centre containing retail and office space as well as two restaurants, one of which is a McDonalds. One day the manager of the agency looked out of his office to see a tow truck driver preparing to tow his car away. A quick dash and a brief confrontation with the driver disclosed that his car was parked in a space the landlord had set aside for McDonalds. Further investigation revealed that 45 of the 72 car parking spaces had been reserved for McDonalds.

The agency brought an action for an injunction to prevent the landlord from reserving these spaces. It claimed that the landlord had represented that it would not designate parking spaces for the use of one tenant only. The 38 page lease defined parking areas as part of the common property, for the benefit of the tenants, their officers, employees, agents, customers and other invitees. The landlord had the right to establish and enforce reasonable rules regarding the use and operation of the common areas. The lease also gave the landlord the right to designate certain areas for employee parking. It also had the right to change the use of the common areas, provided the change did not result in a material and permanent interference with access to the tenant's office by the tenant's customers.

There was no covenant in the lease by the landlord with respect to the setting aside of parking spaces for one tenant, and in the proceedings the landlord denied that it had agreed not to do so. The landlord acknowledged that it had given McDonalds the right to prohibit tenant and employee parking within the McDonald parking area, in order to provide spaces for customers of McDonalds and other tenants, including the customers of the real estate agent. McDonalds further agreed that as long as customer use was not prejudiced, short term parking by tenants and employees within the parking area would be permitted.

The Judge refused the real estate agency's request for an injunction and for a declaration that the landlord was in breach of the landlord's covenant for quiet enjoyment. The decision is being appealed.

Many real estate agencies have their offices in shopping centres. All agencies need parking, not just for customers but for their licensees. Many shopping centre leases allow the landlord to prohibit employee parking. The case is important primarily as a reminder to find out the powers of the landlord with respect to the use of parking areas and to do what McDonalds apparently did; establish your parking rights in the lease if they are important to you.¹

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Assume that you are the Chairperson of a general meeting of your Board, called for the purpose of amending the bylaws by special resolution. The proposed amendment is contentious and a vocal minority have been lobbying against its acceptance. You expect the vote to be close, and check the Society Act to confirm that a special resolution is one which is passed by "a majority of not less than 75% of those members, who, being entitled to do so, vote in person or where proxies are allowed, by proxy."

100 members are present and vote. 74 votes support the resolution, 24 oppose it, and 2 votes are spoiled. Your dilemma is that the resolution appears to have been defeated because only 74% of the members who voted supported it, and yet only 24% of the members opposed it. Are the spoiled ballots to be counted as no votes to defeat the resolution, or to be disregarded in calculating the percentage required to determine the number of affirmative votes? If the spoiled votes are ignored, the resolution passes by a 75.5% majority.

This question was examined in a case concerning a society which operated a lakeshore mobile home park for its members. It had been involved in a simmering dispute over a long period of time with members who failed to maintain their properties in accordance with the rules and regulations of the society. All members were asked to resolve the dispute at a general meeting by a special resolution.

Passage of the special resolution would mean that the members who had ignored the rules would lose their right to live in the park. The vote was close and would have been defeated if spoiled ballots were counted. The Judge decided that the special resolution passed by ruling that only valid ballots were to be counted in calculating the percentage of yes votes.²

	1.	Firth et al. v. B.D. Management Ltd. et al., SCBC Registry 956/88 April 4 1989.
	2.	Shawnigan Lake Recreation Association v. Hansen et al.,1989 B.C.D.C. 3989-01.

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