Keeping the Articles of Incorporation or Constitution and corresponding By-laws current with advancements in the law is never a bad decision, especially if your organization is a voluntary association. Where voluntary associations do not keep these documents current, they could be vulnerable to judicial review if a decision is taken in respect of disciplining or expelling a member. The question this post will address is, how can my organization protect itself if it has to discipline or expel a member?
Preliminary Considerations
It is important to point out that member rights may not necessarily exist in every voluntary association. In Highwood Congregation of Jehovah’s Witnesses (Judicial Committee) v. Wall (“Highwood”) the Supreme Court of Canada made it clear that membership rights in voluntary associations only exist where a property right, contractual right, or some other private law right exists.[1] In most cases, membership rights are derived from the Letters Patent, Articles of Incorporation, Constitution, and By-laws (the “Governing Documents”) of the organization which form the contractual basis for the relationship between the organization and the membership. [2]
At law, voluntary associations are considered private associations and courts are generally reluctant to interfere in their affairs. When a court is asked to exercise its review power over a private organization, the scope of that review is limited to whether the decision was taken in accordance with the principles of natural justice.[3]
Principles of Natural Justice
The Supreme Court of Canada outlined the principles of natural justice, as as they relate to voluntary associations, in the decision of Lakeside Colony of Hutterian Brethren v Hofer (“Lakeside”).[4] In that case, the Hutterite Colony of Lakeside sought the assistance of the Court to expel certain members of the Colony—Mr. Jacob Hofer and those who supported him.
The dispute between Mr. Hofer and the Colony arose because of Mr. Hofer’s concerns regarding a patent for a hog feeder. Mr. Hofer worked in the machine shop at Lakeside and had designed, and was manufacturing, a mechanized hog feeder. However, Lakeside was informed, by way of letter of enforcement, that a patent for a very similarly designed hog feeder had been registered by another Hutterite Colony. The assignee of the patent reached a settlement with Lakeside and Mr. Hofer was advised that he could continue to manufacture the feeder, but without a particular feature that his feeder had in common with the patented feeder. Mr. Hofer refused to discontinue manufacturing his feeder.
The matter of the patent dispute was considered at a general meeting of the members of the colony, and during that meeting Mr. Hofer was asked to leave after he persisted in speaking out of turn. As a result of Mr. Hofer’s behaviour, the chairperson of the meeting suggested that Mr. Hofer be shunned at meals and during worship, but Mr. Hofer refused to accept the punishment.
Eventually, a meeting was held by members of the colony and a determination was made that Mr. Hofer and his supporters were expelled, or had expelled themselves because of their conduct and the colony asked Mr. Hofer and his supporters to leave the colony. When Mr. Hofer and his supporters refused, the colony sought an order of the Court to remove the expelled members.
Considering whether the Court should assist the colony, it had to determine whether the decision to expel the members was carried out according to the principles of natural justice.[5] According to the Court natural justice required the following:
1. When a decision is to be taken by the Board or the membership concerning discipline or expulsion of another member, that member must be supplied notice and the notice must contain: a. Enough notice of the decision to be taken;
b. Details of the allegations made or that some action will be taken; and,
c. Information that the member will have an opportunity to respond to the allegations being made or the actions to be taken.
2. An unbiased tribunal.
In light of the evidence, the Court found that the notice requirements for the expulsion of Mr. Hofer and his supporters was not met, and that the members were not expelled.
Application of the Principles of Natural Justice: Decisions About Membership
When deciding to discipline or expel a member, an organization must be able to show that the decision taken complied with the principles of natural justice as described above. Case law shows that courts will only interfere where any of the following can be established:
a. The organization did not follow procedures laid out in its Governing Documents or other sources for governing the organization;
b. There was insufficient notice provided to the member that the matter of their membership was being considered;or,
c. If no opportunity was provided to the member to respond to the decision being considered.
Where the above factors cannot be established, courts will remain deferential to the decision of the organization.
What Can My Organization do to Protect Itself?
The contractual instruments that form the basis for the relationship between the member and the organization are the Governing Documents and a court tasked with reviewing a decision to discipline or expel a member must decide whether the contractual terms of the relationship have been breached. [6] Failure to amend the Governing Documents for currency with the law could have unintended results. For example, if the Governing Documents are unclear or silent on the matter of discipline or expulsion of a member, a reviewing court may imply its own terms into the Governing Documents. Were this to occur, a reviewing court may imply terms that neither the organization nor the membership intended and could result in a decisions that is undesirable to the organization or its remaining members.
1. Incorporated or Unincorporated?
The first thing that must be determined is whether your organization is incorporated or unincorporated. Incorporated organizations will usually have a certificate of incorporate along with Governing Documents. If you have any questions about whether your organization is incorporated, it is recommended that you speak with legal counsel for assistance in making that determination.
If your organization is incorporated, then the decision to expel or discipline a member is a reviewable decision since it is based on the contractual relationship between the organization and the member.
2. Currency in Governing Documents
Next you should consult legal counsel to review your Governing Documents, governing policies, and guidelines to ensure that they are in line with current advancements in the law. These documents should contain detailed definitions regarding:
1. Classes of members and associated rights within the organization;
2. Procedures regarding discipline of members including:
a. Notice requirements such as;
- Enough notice of the meeting;
- Details of the allegations being made or the decision to be taken; and,
- That the member will have an opportunity to respond.
b. That those considering the decision to be taken are free from bias.[7]
Conclusion
Vulnerability to judicial review of the discipline or expulsion of a member of a voluntary association typically arises where the Governing Documents of the organization is either silent or unclear in respect of the process and procedure for such actions. Where this is the case it is open to the Court to imply the terms of Governing Documents to bring them into compliance with the principles of natural justice. Ensuring that your organization's Governing Documents are updated for currency with advancements in the law can help to protect it from potential vulnerabilities and undesired outcomes. Finally, if your organization is considering removing or disciplining a member, you should consult legal counsel to ensure compliance with the principles of natural justice.
--------------------------------------------------------------------------------------------------------DISCLAIMER: This is a summary of current legal issues provided as an information service by Leclerc Law. It is current only as of the date of the summary and does not reflect subsequent changes in the law. The summary is distributed with the understanding that it does not constitute legal advice or establish a solicitor/client relationship by way of any information contained herein. The contents are intended for general information purposes only and under no circumstances can be relied upon for legal decision-making. Readers are advised to consult with a qualified lawyer and obtain a written opinion concerning the specifics of their particular situation.
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[1] [2018] 1 SCR 750, 2018 SCC 26 (CanLII)
[2] Supra note 1 at para 8.
[3] Supra note 1.
[4] [1992] 3 SCR 165, 1992 CanLII 37 (SCC).
[5] It is important to note that (a) the members of the colony entered Articles of Association, (b) the colony was subject to the Constitution of the Hutterian Brethren Church and Rules of Community Property, and (c) the Church was incorporated by An Act to Incorporate the Hutterian Brethren Church: a private Act of Parliament.
[6] While the Court in Lakeside did not review the appropriate standard for an unbiased tribunal, it bears noting that courts have done so in previous case law. For instance, in Old St. Boniface Resident’s Association Inc v Winnipeg (City), the Supreme Court that a tribunal will be unbiased where: (a) The Tribunal maintained an open mind to being persuaded; and (b) Was free of bias, either actual or perceived. In another case, the Supreme Court of British Columbia has stated that “The standard of procedural fairness in respect of potential bias or the apprehension of bias can therefore be no higher than the requirement that the decision makers approach the proceedings in good faith with open minds.” Barrie v Royal Colwood Golf Club, 2001 BCSC 1181 (CanLII) at para 70.
[7] Supra note 1 at para 8.