Condo owners at a downtown Toronto tower are on the hook for almost $100,000 in increased costs after the board they elected signed an energy contract that appears to benefit a board member's associate.

The contracts, one signed in February and the other in October 2013, paid thousands of dollars in commissions to Toronto company Perfect Clarity Inc. Perfect Clarity acts a broker, pairing up businesses, condos and other large consumers of hydro with fixed-price energy providers.

The sole director of the company is businessman Darryl McGregor. 

A CBC Toronto investigation revealed McGregor is one of several men accused of taking aggressive steps to gain control of condo boards that hand out millions of dollars in contracts on behalf of residents.

In a brief phone conversation, McGregor told CBC Toronto these are "complicated issues." He did not answer a series of specific questions sent to him.

CBC Toronto obtained a copy of a contract signed between McGregor's company, The Element condos at 20 Blue Jays Way, and Sunwave Gas and Power. The deal was supposed to provide fixed-rate hydro costs and save condo owners at The Element tens of thousands of dollars. Instead, the documents suggest the deal has cost the owners $94,069 in increased hydro costs.

Ontario law says each condominium must have a elected board of directors that makes decisions on behalf of the owners. Board members must "act honestly, in good faith and exercise due diligence" and "disclose conflicts of interest in writing."

There are "no training requirements" to become a board member.

While Ontario's Condominium Act doesn't forbid board members from signing contracts that benefit friends or family, board members do have fiduciary duties to act in the best interests of the condo owners they represent.

Residents examine damaged ballots

Residents at 20 Blue Jays Way examine what they call 'irregular proxy ballots' submitted in a condo board election. This image was provided by a source at The Element who does not wish to be identified. (CBC)

The first of the energy contracts was signed on Oct. 9, 2013 by Kaive Wong, a Toronto real estate broker and, until recently, vice-president of The Element's condo board.

It wasn't until a day later, though, that Wong seemed to seek the approval of his board colleagues for the contract he had already signed. CBC News obtained an email Wong wrote on Oct. 10, 2013 in which he tells his fellow board members that: "I think it is a no-brainer to accept this proposal."

Referring to McGregor, Wong added, "I think it is time the [condo] corporation bring on a real energy consultant instead of haphazardly trying to do it ourselves ...I would like to put forward a motion to engage Perfect Clarity on the above noted terms."

In an email sent to CBC News Tuesday, after this story was first published, Wong denied signing the contract prior to the board's approval. "This is simply false," he said.

Wong and McGregor's paths would soon cross again.

In 2015, Wong and McGregor were elected to the condo board at the L Tower on The Esplanade. In December 2016, McGregor and Wong ran as candidates for the board at the Icon condos at 270 Wellington St. West.

Wong declined to be interviewed by CBC Toronto but responded to emails about the contract and his relationship with McGregor. He wrote, "It was clearly communicated and declared to the board I did know Mr. McGregor prior to the signing of the energy contract in 2013. …The fact that Mr McGregor chose to run for the L Tower board in August 2015, where he has ownership (as I do), is a coincidence."

CBC Toronto reached out to Sean Ramnarine, who was the president of the board at The Element from about 2011 until March. He said the energy contract was "a unanimous vote of confidence by all five board directors."

 'All electricity prices have gone up in condos … as implemented by the premier.' — Sean Ramnarine, former board president at The Element

He also said a natural gas contract the board signed saved condo owners $20,000, but the hydro contract cost them more because "unfortunately, with the last coal-fire power plant closing, and as we move to cleaner forms of energy, all electricity prices have gone up in condos … as implemented by the premier."

He insisted he and his fellow board members were instrumental in keeping costs and maintenance fees low at the condo.

Ramnarine said he wasn't aware, though, of another energy contract signed by a board member in 2017.

This past February The Element's board entered into the contract with Perfect Clarity again. Weeks earlier a man named Ray Blanchard had been appointed to the board. Blanchard was re-elected to The Element's board in December 2016, in an election fraught with allegations of voting irregularities.

Proxy signed by a dead owner?

In one case, a condo owner who had died years earlier was supposedly able to sign a proxy ballot. Other residents claim their signatures were forged.

Despite not living in the building or owning a condo at 20 Blue Jays Way, Blanchard was elected almost solely through the use of proxies, a process whereby condo owners signed over their vote to someone else. Blanchard submitted more than 90 such proxies.

Some residents demanded an audit of the proxies and ballots but were told many had been destroyed by a flood after the election. Some that were recovered allegedly showed irregularities.

In March, four of the five members of the board at 20 Blue Jays Way resigned or were voted off the board just before angry condo owners held a meeting to oust them.

Condo ballots tied to election irregularities

The residents were told some of their ballots were destroyed by a flood. This image was provided by a source at The Element who does not wish to be identified. (CBC)

Condo board allegedly left unpaid bills

In an email to residents, the current board at 20 Blue Jays Way accuses the past board of  leaving "us with very poor records, a stack of unpaid invoices dating back to October 2016 and 58 cheques requiring validation and signatures. As well, we found out [the property management] has not been paid since they came on board in September."

CBC Toronto has reached out to the people who have been accused of this behaviour. Those who have replied have denied involvement in any wrongdoing.

Blanchard also sits on the board of the L Tower with Wong, McGregor, George Laczko and Anastasia Mustafina. Mustafina's online biography says she's a consultant at Perfect Clarity.

Blanchard also sits on the board at the Five Condos on St Joseph Street with McGregor and Laczko. He did not respond to questions from CBC News. Neither did Laczko or Mustafina.

John Lancaster can be reached at 416-205-7538 or john.lancaster@cbc.ca.

Corrections

  • An earlier version of this story quoted Kaive Wong as saying he "did not know" Darryl McGregor prior to the signing of the energy contract in 2013. In fact, he wrote that he did know Darryl McGregor.
    May 16, 2017 1:17 PM ET