Societies Act lawyers often rely only on the statutory language. It is useful to regularly consult recent court cases to determine if BC judges have considered the modernized act and either incorporated prior leading case law or common-law principles into the jurisprudence. A list of three cases from 2017, all notable, are below.
Reading this case is overall a great entry point into Societies Act disputes due to its summary of many cases and multiple complaints from members. It also stands out for concisely stating the following principles:
- Directors must always act fairly, even in the absence of an express obligation in the society bylaws to do so. It is never in the best interests of the society to act unfairly (at paras 62-63);
- A duty to act fairly arises in a membership drive, including in establishment of an election committee and in analyzing membership applications (at paras 65-66);
- Where a long-term member is to be deprived of membership, either through the non-renewal of membership or through termination, a hearing must be held to provide a proper foundation for such a decision (at para 84, 91);
- The principles of contractual interpretation apply in reading bylaws, which includes that parts of the bylaws must be interpreted in the context of the intentions of the parties as evident from the bylaws as a whole (para 64, citing Bhandal v. Khalsa Diwan Society of Victoria, 2014 BCCA 291 at para 25-29);
- Member expulsion decisions and complaints should be deal with within a reasonable time. Where a Society takes no active steps with regard to offending behaviour until long afterwards (in this case, more than six months), the failure to address the issue promptly is a denial of natural justice. It may also require, depending on the importance of the membership to the individual (in this case, religious identity), some evidence advanced to show a full and proper consideration by the decision maker. This includes comprehensive reasons (at paras 83, 88, 93);
- Where a society has a specific provision for the expulsion of members, but chooses not to invoke it at the time the dispute arose, and instead chooses an alternative route to expel a member, the failure to adopt the most logical tool available to the society colours the membership renewal process and is a breach of procedural fairness (at para 83).
This case summarizes the following:
- Section 81 of the new Act allows Special Resolutions, which include those for removal of members or directors, to be placed on the agenda of a scheduled members meeting by a 5% signature requirement of the membership (at para 4);
- Though the bylaws can set a lower threshold than 5%, there is no requirement on a society with a large membership that the directors consider this point, or insert such a provision into the bylaws. It does not result in wrongdoing to rely on the language of the new Act and the court will not legislate a lower threshold (at para 10, 11, 13, 15)
- The appropriate remedy where a subset of members disagree with the bylaws as written or an action of the board is to participate in the democratic process and vote for a new executive, when this is available to them (at para 15, 16); and
- The member-funded statement in a society’s constitution does not automatically give rise to a need for directors to operate the society in the interest of only a small subset of the membership — it is a statement under the new Act and not a “purpose” (at para 6, in argument, and in statutory language).
In this case, a society rendered a vote by a Robert’s Rules method called “general consent”, whereby the chair of the meeting asks if there is any opposition to a motion on the floor. If no member speaks up, the motion carries unanimously. If there is even a single voice in opposition, the motion goes to a vote. This method was used for a Special Resolution. Most votes of the society in the past were done by show of hands. After the close of the meeting, concerns were raised as to whether a vote had properly been conducted.
The actual method of voting by general consent was not called into question; instead, due to the length of the meeting, it was potentially unclear whether the membership knew what it was voting on at the time debate was closed and the Special Resolution was put to a vote. The Court reviewed the record, and determined that the method of voting was determined at the beginning of the meeting, was discussed throughout, and a reasonable period of time was given for voicing dissent to the voting method. No objection was voiced, and the Special Resolution passed unanimously. The Court exercised its power to remedy irregularities and concluded the Special Resolution was validly passed.