Condo Law Digest – January 2016

Escalators Canary Wharf.jpgCouture v TSCC No. 2187, 2015 ONSC 7596
Decision Date: December 4, 2015
http://canlii.ca/t/gmcxq

Ms Couture owned a unit in TSCC 2187. The building has 44 residential units, but only 32 parking spots. According to the Declaration, the parking spots are leased to owners, and cars parked in the garage must be insured, have valid license plates and be in good working order. At the end of January 2012 the Board sent Ms Couture a letter, informing her that the vehicle in her parking spot did not meet the criteria set out in the Declaration; if she failed to bring her car into good standing by the end of February, the car would be towed and the parking spot leased to another owner. The Board did not receive a response and sent a second letter, extending the deadline to March 31. When she received the second letter, Ms Couture sent the car to the shop. The Board also returned Ms Couture’s postdated monthly maintenance cheques in the amount of $780, on the grounds that they included the parking fee of $50.

At this point, reasonable attempts on both sides to sort out the issues seem to have broken down. On March 29 the Board sent a “disrespectful and dismissive” letter (Justice Myers’ words) to Ms Couture, telling her that the parking spot would be reassigned April 1 and that they considered the matter closed, and again returning her monthly maintenance cheques. Then followed (as the judge summarized): “name-calling, hyperbole, failure to listen, taking extreme positions, wasting time, money and effort, and causing themselves and each other distress.” The Board began demanding that Ms Couture pay its legal fees and added a $250 “administrative fee” to her tally of monies owed; they refused her offer to resolve the matter in mediation and placed liens against her unit, eventually totaling over $14 000 (a combination of unpaid maintenance fees, legal costs and administrative fees).

Ms Couture sued the Corporation in Sept 2013, asking that the amounts of the liens not applicable to maintenance fees be discharged, for $10 000 in damages because of the Board’s treatment of her, and for costs on a substantial indemnity basis. In the next two years, Ms Couture would pay the liens on her unit and sell it; and her husband would be accused of assault in disputes with neighbours and arrested. When this matter came before Justice Myers in 2015, he ordered that the Corporation pay Ms Couture over $15 000, including $1000 as nominal damages for oppression.

Comments: Where to begin? I’ve omitted many details for the sake of brevity. This dispute could serve as a textbook example of how conflict escalates. Some lessons learned:
1) The parking leases were not written down. This led to confusion over unit owners’ rights to spaces and conditions of use.
2) Although Justice Myers ruled in favour of Ms Couture, he stresses throughout his judgment that both parties contributed to the escalation of the conflict. (He even quotes the “ancient legal expression” that “it takes two to tango.”) This is certainly consistent with what I see as a mediator.
3) The Board’s refusal to mediate was extremely short-sighted. But don’t take it from me; here is what the judge had to say: “So much of the escalated hostilities could have been avoided had the condominium corporation engaged in mediation in response to the applicant’s notices.”

Carleton Condominium Corporation No. 22 v MacQuarrie, 2015 ONSC 7719
Decision Date: December 11, 2015
http://canlii.ca/t/gmjcw

This is a dispute over costs, concluding a 25-year history between Mr. MacQuarrie and CCC 22. Mr. MacQuarrie lives in a unit owned by his mother. He is alleged to have engaged in conduct that risked the health and safety of other residents. Many of the incidents seem to have involved parking and traffic violations. In 2007 an altercation between Mr. MacQuarrie and another resident resulted in charges against the former. Mr. MacQuarrie pled guilty to some of the charges and was sentenced to a conditional sentence to be served in the community, followed by probation. He was not found to be a danger to the community. In January 2014, CCC 22 brought an application against Mr. MacQuarrie and his mother, seeking “various items of relief” and his removal from the premises if he failed to comply. The matter was adjourned so that Mr. MacQuarrie could find a lawyer. In the meantime, he was formally diagnosed with various mood and personality disorders and other disabilities. He is now under the care of a psychiatrist and following a treatment plan. There have been no further incidents.

The corporation spent nearly $22 000 in legal fees on the matter and sought the full amount of their costs. Justice Beaudoin found that the extensive application record that CCC 22 provided was not necessary, and that costs should be limited to those of “preparing a reasonable and proportionate application record.” He ordered Mr. MacQuarrie and his mother to pay $5000 within five years.

Comment: Although mediation was not “technically required” the judge hints that the parties should have tried it.

About the Image:Escalators Canary Wharf” by Gordon JolyOwn work. Licensed under CC BY-SA 3.0 via Wikimedia Commons.

Condo Law Digest – December 2015

The fireplace-RS.jpgMetro Toronto Condominium Corporation No. 634 v Adamo, 2015 ONSC 6730
Decision Date: October 30, 2015
http://canlii.ca/t/gm0dh

This is a dispute over costs of enforcement. All owners of units with fireplaces in MTCC No. 634 were required to bring their fireplaces into compliance with fire regulations. Mr. Adamo resisted, arguing that the problem was caused by the corporation’s failure to perform annual maintenance. He told the Board that they would have to obtain a court order if they wanted to make him fix the problem.

The corporation asked for partial indemnity costs in the amount of $30,000 (which included disbursements and HST.) Judge Corbett awarded costs of $9000. He reasoned that the Mr. Adamo “had only himself to blame” that the Corporation had incurred costs and that the Board showed “real patience” with him before initiating litigation.  On the other hand, the Board is entitled only to the costs reasonably necessary for litigation, not for costs related to the extra-litigation attempts to solve the problem.

Comment: Another case where an owner seems not to have sought legal advice (Mr. Adamo was unrepresented in this action) and as a result the dispute has been longer and more expensive than necessary.

Chen v. Del Property Management Inc., 2015 HRTO 1512
Decision Date: November 10, 2015
http://canlii.ca/t/gm39k

Mr. Chen has owned a unit in MTCC 901 for five years. In October 2013 he began to be bothered by a loud thumping noise coming from the unit above. It would bother him during the day and awaken him at night. He complained to the property management company and was told that the tenant of the suite above had suffered a leg injury and could move only by using crutches or hopping around. Allegedly one of the property management’s employees told him there was nothing they could do to solve the problem. Then followed more complaints, a letter to the Board, calls to police, and more stress and sleepless nights for Mr. Chen. In February 2015 the property management company, in an effort to resolve the problem, scheduled a noise test by an acoustic engineer; Mr. Chen declined to cooperate.

In this application to the HRTO, Mr. Chen claims that he has a disability, that this disability was made worse because the noise prevented him from sleeping, and that the property management company has discriminated against him by refusing to address his complaint. The adjudicator dismissed the complaint because it is not within the property management company’s power to have the offending occupant removed or to otherwise enforce a solution.

Comment: I suspect that an attempt at mediation in the very early stages of this dispute would have saved the parties time and aggravation.

Seto v Peel Condominium Corporation No. 492, 2015 ONSC 6785
Decision Date: November 12, 2015
http://canlii.ca/t/gm232

This dispute, settled by an application, is between PCC 492 (known as Dixie Park Mall) and three owners of units in the Food Court. The applicants charge that: 1) the corporation has over-charged them for common expenses since 2012 when a new Board made the Food Court unit owners responsible for about 70% of the Corporation’s waste disposal costs; 2) the Corporation has permitted or enabled breaches of its declaration; and 3) the Corporation’s actions amount to oppressive conduct.

Justice Diamond found that: 1) PCC No. 492 had indeed overcharged the applicants for their share of the common expenses. The expense of waste disposal is to be shared by all unit owners (not just those in the Food Court). He ordered damages of over $54,000. 2) PCC No. 492 had permitted a breach of a “designated use” provision in its Declaration, in that it had permitted a second business to sell dim sum. Finally 3) the Corporation’s actions do not amount to oppressive conduct. Their actions were not unreasonable, but rather based on a poorly drafted Declaration. Furthermore, PCC 492 did not unjustly ignore or treat the applicants’ interests as being of no importance.

About the image: “The fireplace-RS” by Robbie Sproule from Montreal, Canada – Flickr.comimage description page. Licensed under CC BY 2.0 via Wikimedia Commons.

Condo Law Digest – November 2015

Boundary wall, south of Moel Famau - geograph.org.uk - 1410171.jpg1483677 Ontario Ltd. v Howard, 2015 ONSC 6217
Decision Date: October 9, 2015
http://canlii.ca/t/glmff

The plaintiffs are Kevin and Deborah Purdy; the defendant is their former solicitor. The Purdys retained Howard in 2004 to handle a joint venture agreement between themselves and the owners of a 73 unit apartment building in Perth, Ontario (the “Crain Group”) to convert the apartments to condominium units and sell them for a profit. Howard was also retained by the Crain Group on the transaction. He drafted a joint venture agreement which both parties signed. In 2006 a new agreement superseded the joint venture. The Crain Group agreed to sell the building to the plaintiffs for $5.85 million, which was to be financed by the sale of condominium units. The Purdys sold 26 units to John Rivington, an acquaintance, and an additional 11 units to two other investors. Before the closing sale date, Rivington, followed by the other investors, advised that he would not close on their purchases because of misrepresentations made regarding the state of the building and the rental revenues. After negotiations, Rivington agreed to purchase 46 units at a reduced price. The Crain Group agreed to extend the closing date and provided a vendor take back mortgage to the Purdys for $1.1 million on the 14 unsold units. The Purdys were unable to pay the mortgage in full and so the Crain Group initiated a Power of Sale. The Purdys brought an action against the Crain Group, Rivington, and Howard. In 2009 the claims against the Crain Group and Rivington were dismissed after a motion for summary judgment.

In this action the Purdys claim that Howard was in a conflict of interest and that his negligence caused them to suffer damages of over $2 million in lost profits. Between 2004 and 2007, the Purdys had a number of conflicts with the Crain Group over the building and Howard advised both sides. In the trial, Gavin MacKenzie, a lawyer who is an expert in the area of conflict of interest for lawyers, testified that Howard had breached Rule 2.04 of the Rules of Professional Conduct when he failed to advise that he was acting for both the Purdys and the Crain Group. Howard concedes breaching the rule, but denies negligence or that his actions caused damages to the Purdys. Madame Justice Wilson agreed. She found that the Purdys failed to establish a link between Howard’s actions and their financial loss.

Comment: Howard said that he was engaged in “shuttle diplomacy” between the Purdys and the Crain Group – something more appropriately done by a neutral third party. While parties to an agreement should be aware of the need to protect their interests by seeking independent legal advice, lawyers also need to be careful of appropriate boundaries. (For more on this topic see I’m in Mediation – Why do I need a lawyer?)

TSCC No. 2130 v York Bremner Developments et al., 2015 ONSC 6370
Decision Date: October 15, 2015
http://canlii.ca/t/gllxr

I hope readers will forgive me for not attempting to summarize this complicated ongoing dispute. The plaintiff is TSCC 2130, a residential condominium in the “Maple Square” complex. The defendants are York Bremner Developments (the condominium’s declarant and the owner of the commercial and retail lands in the same complex), and Cadillac Fairview Co (appointed by York Bremner as the shared facilities manager).

I mention this case so that I can draw attention to the words of Justice Myers:

There has to be an end to these cases.  They will be resolved by the parties or by the court.  Resolution has to be as efficient, affordable, and proportionate as possible.  Both parties seem to be unwilling to move forward by narrowing the issues so that an early and efficient resolution can occur.  Yet, they are neighbours.  They have to live with each other for years to come so that the idea of arriving at a modus vivendi and ending the legal blood-letting must represent the win-win outcome.  But they are sophisticated parties and they have determined that an all-out legal war is a better strategy than a consensual resolution.  […] In any event, it is the parties’ right to choose to litigate.  But it is incumbent on the court and counsel for that matter to get the war ended as efficiently as possible despite the parties’ strategies and tactics.  If nothing else, these parties are not entitled to the free use of a disproportionate amount of court time to hammer away at each other in their private war of attrition.   Neither will the court abide tactical steps that may make perfect sense to clever tacticians, but serve to impede the goals of timely and efficient resolution on which the civil justice system is based. [Emphasis added.]

About the image:

Boundary wall, south of Moel Famau – geograph.org.uk – 1410171” by Roger Cornfoot. Licensed under CC BY-SA 2.0 via Wikimedia Commons.

Can this Partnership be Saved? (3)

7K0A0938(This is the third in an occasional series.)

Liz and Monica have a successful partnership doing all aspects of design and social media marketing. So far their clients have been small-to-medium sized businesses, but they’re eager to work with bigger organizations. Both women are hard-working and good at what they do. They’re equally committed to the success of the business and both put in long hours. On a personal level they get along well but sometimes see things differently.

For example, they were recently approached by one of the big national payday loan firms to put together a proposal for a complete re-branding project. Liz feels that the payday loan business harms the community. She doesn’t want to bid on the project because she feels that, by working for them, she would be complicit in the harm. Monica believes that “a dollar is a dollar” and that they’re not in a position to be so picky. This job might be their stepping stone to bigger projects. She wants to bid on the job. The two women are at an impasse and it seems there is no way to resolve it.

To my mind, shared core values are the single most important factor in a successful business partnership. Partners don’t need to be best friends; they don’t need to have similar personalities or even much of a shared history. But if they don’t share some basic values, the partnership is doomed.

Can Liz and Monica’s partnership be saved?

Maybe: If Monica is comfortable selling their services to anyone who can afford them, and Liz isn’t, then they two women won’t be in business together much longer.

Yet while Monica might have no problem with the payday loan business, there are likely to be at least some types of organizations she wouldn’t want to support. For example, she might not be comfortable working for certain political parties, or for businesses that test products on animals, or tobacco companies. But thinking this out before every new project and having to debate about every potential client is simply not efficient.

Liz and Monica need to have a conversation and come to an agreement about their business practices. Will they refuse to work with certain kinds of clients? Will they accept all potential business until they reach a certain level of success, and then start to be more choosy? The same causes that are important to Liz might not be important to Monica. They might have different priorities and different moral intuitions. That’s OK – as long as they present a united front, agree to support one another, and jointly reject clients on their “disapproved” list.

For more about business partnerships, see:

Can this Partnership be Saved (1) –  Martin & Eli have different management styles

Can the Partnership be Saved (2)Sam’s idea; John’s work. How will they share the profits?

Condo Law Digest – October 2015

Hands ondiamonds 350.jpg384125 Ontario v The Diamond at Don Mills Developments, 2015 ONSC 5581
Decision Date: September 4, 2015
http://canlii.ca/t/gl108

The 25 plaintiffs are small business owners who purchased condominium units in “The Diamond at Don Mills,” a retail/commercial development. The defendants are the vendor and developer of the condominium in question, and Parallax Investment Co., who initially owned the land and transferred title to Diamond before the Agreement of Purchase and Sale was entered into. The plaintiffs are suing for about 7 million dollars, charging that their purchases were induced by misrepresentations, that they were burdened with unjustified price increases at closing, and that they were overcharged on occupancy fees. The value of the defendants’ assets, as known to the plaintiffs, is about $500,000. According to evidence, the funds from the sale of the last unit were paid out by Diamond to its creditors and investors. In this action the plaintiffs seek an order preventing Diamond Inc. from in any way disposing of or mortgaging their remaining assets.

Justice Mew noted that the law has “a strong disinclination” to permit execution before judgment. The order that the plaintiffs seek requires strong prima facie evidence that the defendant is about to dispose of its assets in a manner distinct from its usual course of business. In the absence of such evidence, the plaintiffs’ motion is dismissed and they are to pay costs of $22,000, fixed on a partial indemnity scale.

Comment: Justice Mew notes that it is an “everyday risk” of civil litigation that a defendant will be unable to satisfy a judgment against it.

Williams Estate v Carleton Condominium Corporation No. 66, 2015 ONSC 5479
Decision Date: September 3, 2015
http://canlii.ca/t/gl104

In 2012 the executor of the Estate of George Williams sued The Carleton Condominium Corporation No. 66 for water damage to the estate’s condominium unit. The water damage originally dates to December 2009. The statement of claim did not specify ongoing problems with water leaks. In this action, the plaintiff seeks to amend substantially the original statement of claim to include ongoing problems and to make claims under the Condominium  Act for breach of fiduciary duty and for an oppression remedy. The defendant resists these amendments on a number of grounds.

Justice Maranger gave permission for the claim to be amended, saying that the core of what is being claimed – the ongoing water damage – should not be a surprise to the defendant, and that denying the amendment could have the result of multiple lawsuits involving the same parties arising from the same issues. He was “strongly inclined” to order no costs.

About the image:
A miner searches his pan for diamonds.
Hands ondiamonds 350” by USAID Guinea. – USAID Guinea.. Licensed under Public Domain via Wikimedia Commons.

Workplace Conflict: The Good, the Bad, and the Ugly

- fighting red kangaroos 2

Although I work in conflict resolution and prevention, I know that not all conflict is bad. In fact healthy, productive conflict is a sign of a flourishing workplace. Conflict can be an engine of creativity and an open, respectful exchange of opinion can bring people together, even if they ultimately disagree with one another.

But how do you know if your workplace is involved in a healthy conflict or a dysfunctional one? Here are some things to consider:

1. First, don’t be fooled by outward appearances: A healthy conflict isn’t necessarily one with calm tones and hushed voices and dysfunctional conflict doesn’t have to mean shouting. What matters more is the level of engagement. If everyone is engaged more-or-less equally, that is a sign that the issues are important to everyone and that people are confident that their opinion matters. If there is an imbalance – if some are passionate about the issues while others seem reluctant to share their views or to “tiptoe” around the problem – then you may have a problem. It could be that people don’t care that much. Even worse, it could be a sign that they don’t feel that their opinion, if they share it, will be valued.

2. The subject matter of a conflict reveals a lot. In a healthy conflict, people have differences of opinion over problems and issues, whether this means small day-to-day matters or an organization’s overarching vision. Dysfunctional conflict, on the other hand, is more likely to be focused on people, their personalities, and on (real or alleged) personal shortcomings.

3. A sense of proportion is often the first casualty of dysfunctional conflict. Comments and small incidents take on an outsize significance. In healthy conflict, people are better able to keep things in perspective.

4. I’m not sure whether this is a cause or an effect, but I’ve noticed that dysfunctional conflicts are more likely to be marked by information asymmetries. That is, parties have different access to information (or believe that they do). When there is an information void, gossip, rumours and confusion are likely to fill it, leaving everyone worse off. In a healthy conflict, there is sharing of information, even if full transparency isn’t possible.

5. In dysfunctional conflicts, phrases like “You always…” or “They never …” are commonly heard. Healthy conflicts focus on specific incidents.

6. A “post-mortem” conversation – in which people examine a failure or worse-than-expected results to see what went wrong – can quickly become a conflict. People tend to see their own possible errors and shortcomings differently than others see them. This is only natural. After all, we know our own intentions, how hard we worked and the difficulties we faced, and we don’t necessarily know the challenges that others have faced. In a healthy post-mortem conflict, the focus is on understanding: Where did things go wrong and what can I do differently in the future?

7. In fact, it is a general feature of healthy conflict that people take responsibility for their actions, past and present. In contrast, scapegoating is a prominent feature of dysfunctional conflict: People work hard to deflect responsibility from themselves and onto other individuals or groups.

It isn’t possible (or desirable) for life and relationships to be conflict-free. However we can always strive to make sure that we’re having healthy and productive conflicts.

About the image: By Dellex (Own work) [GFDL (http://www.gnu.org/copyleft/fdl.html) or CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons

Condo Law Digest – September 2015

Balkong, Nordisk familjebok.pngPaus v Concord Adex Developments Corp., 2015 ONSC 5122
Decision Date: August 14, 2015
http://canlii.ca/t/gknk1

In Ontario, a Class Action suit must be “certified” by a judge before it can proceed. In this ruling Justice Perell has allowed a Class Action suit by owners at “The Matrix” (361 & 373 Front St. W. in Toronto). When the railing fell off the balcony of a unit in spring 2011 it was discovered that all the balconies needed remedial work. Engineers engaged by the Corporation determined that the railings as installed did not meet the requirements of the Ontario Building Code then in force and recommended that all existing railings be replaced. Access to the balconies was restricted until September 2014. Paus, an owner since 2002, is one of the proposed representative plaintiffs in this action for damages. The Defendants, the condominium developer (declarant), the general contractor responsible for construction, and the condominium Corporation (TSCC No. 1438) consented to the certification.

Ballingall v Carleton Condominium Corporation No. 111, 2015 ONSC 4129
Decision Date: August 19, 2015
http://canlii.ca/t/gknk5

This is a decision on costs in Ballingall v. Carleton Condominium Corporation No. 111 (which I summarized in the May 2015 Condo Law Digest.) The successful applicants asked for costs in the amount of $76,523 on the basis of substantial indemnity, with 60% assessed against the Corporation and 40% against John Macmillan, one of the Board members. Justice Aitken noted that the Applicants made four offers to settle before trial, when the Respondents made none. He ordered costs to the Applicants in the amount of $50,000 with the Corporation responsible for $35,000 and Macmillan for $15,000.

The judge made two remarks in closing: First, that “being stubborn and unwilling to compromise” is costly and unwise; and second, that condominium owners must seek leaders who can work constructively and effectively with all owners.

Comment: I do not know if mediation was attempted in this case. Had the parties worked together to come to a collaborative solution, it is likely that costs would have been significantly lower.

About the image:
Balkong, Nordisk familjebok“. Licensed under Public Domain via Wikimedia Commons.

Can this Partnership be Saved? (2)

(This is the second in an occasional series. Don’t miss the first installment.)

Sam and John are working together on an app they hope will dominate in its category on iTunes. Actually, John is doing most of the work. Sam is more an “ideas” guy. He also put up some capital to seed the project. Besides, Sam doesn’t have the time to do the actual development work. He has a family, a full-time job, and plays guitar in a pick-up band on the weekends. This collaboration with John is just one of several side projects. John is the “execution” guy. He’s single, has a part-time job to pay the bills, and spends the rest of his time on the app.

At the start, Sam and John agreed that they would share future profits from the app on a 50/50 basis. A couple of months in, both are unhappy about the arrangement although neither has said anything to the other. Sam is frustrated that the app isn’t ready yet and feels that John hasn’t worked hard enough. He also believes that, since the idea for the app was his and he put up the initial investment, his profit share should be greater than 50%. John feels like he is the one doing all the work and that Sam is treating him like an employee rather than a partner. He doesn’t see why Sam should be eligible for half of the profits, based solely on the strength of his idea and a little start-up money. Neither has any idea that the other is unhappy with the arrangement.

Can Sam and John’s partnership be saved?

Probably not, and almost certainly not without some drastic change or an outside intervention. Sam and John have two major challenges to overcome: Differing ideas as to what is “fair” and a pattern of conflict avoidance.

The perception of unfairness is one of the main sources of workplace conflict that I see. The idea that one person is working less hard or less effectively than someone else in the same role, or that rules are being applied in an arbitrary manner, can be corrosive of workplace relations. Similarly, the perception that a partnership structure is unfair, if not addressed, is likely to result in the dissolution of the partnership.

Sam and John are making different kinds of contributions to their business, and different kinds of contributions are notoriously difficult to measure against one another. Each of us has a bias towards thinking that our own contribution is the more valuable. So Sam thinks that ideas are the core of a successful business, and John thinks that the elegant software  development is the key to success. And if they were to join forces with a designer or marketer, that person would likely believe that her contribution was the most significant. This is only natural. Each of us knows how hard we’re working and what kind of a contribution we’re making. And we all too often have little insight into the work that goes into contributions made by others.

Now, this difficulty in itself can be overcome. There are lots of successful partnerships where the partners make different kinds of contributions and they’re able to come to a distribution of profit that seems fair to all. But it is unlikely that Sam and John will be able to overcome their differences and come to a shared understanding of what is fair if they continue to avoid the issue.

I can think of at least three ways in which their story might end.

1) Sam and John continue their pattern of non-confrontation. Neither tells the other how he feels. Sam doesn’t talk about his frustration that his ideas aren’t yet a reality. John doesn’t talk about how he feels undervalued. Resentment builds on both sides. John stops working on the app and the friendship deteriorates. Sam looks for another developer and chalks up the loss of time and money to experience.

2) Sam and John continue their pattern of non-confrontation until the app gets built and is a huge success. Money starts coming in. John’s friends tell him that the deal he made for half the profits wasn’t fair and advise him to get a lawyer. The lawyer files suit. Sam is outraged and hires his own lawyer. The former friends now only speak through their lawyers. A large portion of the money that the app has brought in goes to pay legal fees.

3) John tells his girlfriend about his frustration with Sam and with bringing the app to market. She advises him to confront Sam and tell Sam what he’s been feeling. She reminds him that not speaking up has cost him in the past. John realizes that, as much as he dreads conversations like the one he needs to have with Sam, knowing how to handle them is important. Another friend puts him in touch with a coach. They work together. When Sam finds out how John has been feeling, he’s pretty taken aback. Yet the two of them are able to sit down and work out a new delivery schedule and a profit sharing agreement that works for both of them.

Which ending would you rather see?

Can this Partnership be Saved? (1)

(This is the first of an occasional series.)

Martin and Eli are co-owners of a growing software company with about twenty employees. They met in university when Eli was dating one of Martin’s room-mates. They’ve been in business together for nearly ten years and have very different management styles. Martin is very detail-oriented and sometimes impatient. He can be abrasive when he feels that someone hasn’t met his high standards. Eli is more easy-going and laid-back. He expects people to work hard, and he also wants everyone to get along and even have fun.

Martin has two young children and spends most of his free time with his family. Eli is still single; he spends his free time at the gym or socializing with other single people in the company. Sometimes, people on Martin’s team hint to Eli that Martin can be difficult to work with. Eli knows that Martin is a good guy underneath it all and that he pushes people because he wants the best for their clients and he wants the company to succeed. Still, Eli has noticed that Martin’s team has a much higher turn-over rate than his. When yet another highly skilled developer on Martin’s team gives her notice, Eli starts to feel frustrated. He wonders if Martin is really the best partner he could have. He knows he needs to discuss this with Martin, but he’s not sure how to do it. In fact, even the thought of having the conversation makes him stressed. Maybe he would do better managing the company on his own.

A business partnership can be a very intense relationship. You have to be able to depend on one another. You invest your time, skill, and perhaps some capital in a business. You succeed or fail, not just by your own actions and decisions, but by your partner’s as well. The consequences of a failed relationship are high: A ruined business, lawsuits, damage to reputations, not to mention stress that invades every aspect of your life.

Clearly, a business partnership is a relationship worth some effort. But how much effort and what kind of effort? A New York Times article about the company Genius reports that the founders have turned to “couples therapy” to help their partnership.

Can Martin and Eli’s partnership be saved?

Maybe: They respect each other and have similar values and an equal commitment to the company’s success. While they aren’t close friends, they get along well enough. Martin and Eli clearly need some kind of help but I doubt that therapy is the solution for them. Martin needs to understand that his management style is hurting the business. He needs coaching to help him find the way to get the best out of his team without alienating them. Eli, his partner and equal in the company, is the best person to give him this message.  If Eli is unable to initiate this “difficult conversation” he may also need coaching. And Eli will need to support Martin as he develops better management skills.

Do you know anyone like Martin or Eli? Tell me about it in the Comments section below.