Link: Case Summary Document
Citation:  BCSC 968
Acknowledgement:The Pemsel Case Foundation thanks The Australian Centre for Philanthropy and Nonprofit Studies for its contribution in the drafting of this Case Note.
Oral ruling on a petition brought pursuant to the Societies Act seeking relief with respect to a proposed meeting.
The petitioners in this case are members of the respondent Delta Hospice Society (the Society). The Society, which was founded in 1991, is a not‑for‑profit community-based organisation that offers compassionate care and support for persons in the last stages of living, primarily through the operation of the Irene Thomas Hospice. The Society also provides support for individuals dealing with life threatening illness, and for grieving loved ones, through the Harold & Veronica Savage Centre for Supportive Care. The Society operates its facilities on lands leased from the Fraser Health Authority (FHA) in Delta, British Columbia.
The petitioners brought the hearing of the petition on an urgent basis because they sought relief with respect to a proposed meeting of the members of the Society scheduled for next Monday 15 June 2020 at 7:00 p.m. (the Meeting). The petitioners sought relief under sections 80, 104 and 108 of the Societies Act, S.B.C. 2015, c. 18 (the Act) to obtain an order cancelling or postponing the Meeting. They also sought various declaratory and ancillary relief relating to certain actions taken by the Society with respect to the Meeting.
The fundamental issue underlying this petition was “Medical Assistance in Dying” (MAiD), or euthanasia, which became lawful in Canada in 2016 by federal statute. In July 2019, Ms Farrish became executive director of the Society. At that time, there were approximately 160 members in the Society. At some point in 2019, there was an increasing view that MAiD should be offered by the Society. Previously the board of the Society had expressed its opposition to euthanasia/MAiD.
On 28 November 2019, the Society held its Annual General Meeting. The AGM was initially adjourned from late October, by which time the Society had received a number of new membership applications. By 1 October 2019 the Society had approximately 400 members, but by the time of the AGM the membership had grown to approximately 620 members. The clear inference was that the MAiD issue caused substantial interest in the community, and motivated people to get involved in the Society so that they could express their views at the AGM as members of the Society.
At the AGM, amidst some contention, a new Board was elected. The new Board took a different view of the MAiD issue, opposing any change to allow MAiD at its facilities. Following the AGM, Ms Farrish’s services as executor director were terminated. However, there was also a change in FHA’s position with respect to the Society. FHA advised the Society that it was required to offer MAiD, failing which FHA would withdraw its support for the Society and, importantly, the significant funding that it provided for the Society’s operations. In February 2020, the Board continued to maintain that it would not offer MAiD. Accordingly, FHA advised the Society that it would terminate its support, after a one‑year grace period, in February 2021.
The Constitution and Bylaws of the Society have been in place for some time. Clause 2 provides that its purposes are:
2.1 To provide compassionate care and support for persons in the last stages of living, so that they may live as fully and comfortably as possible.
2.2 To utilize and co-ordinate community services, professionals, volunteers and family to care for the needs of the patient.
2.3 To support and counsel family members in their bereavement.
2.4 To recruit volunteers and provide training in palliative care. In addition, screen, supervise and support volunteers as well as co-ordinate volunteer/patient interaction.
2.5 To educate the community and provide resource material about hospice/palliative care and the aims of the society.
2.6 To promote public awareness about the society for the purpose of acquiring financial support.
On 22 May 2020, the new President proposed two changes to the purposes clause as follows:
2a To function as a Christian community that furthers biblical principles governed by the Triune God.
2.1 To provide compassionate care and support for persons in the last stages of living, so that they may live as fully and comfortably as possible, until their natural death.
There were also substantial changes proposed to the Bylaws including:
a) Mission & Values: The Society’s mission was to be a “Christian Society” and to value the “dignity and sanctity of all human life in all its stages until its natural end”; the values of the Society were to provide support services “until life’s natural end”;
b) Definitions: Include “euthanasia” and “palliative care”;
c) Members (Part 2):
i. Article 2.3 refers to “Eligibility for Membership” and requires, in part that a person is only eligible as a member if he or she:
d) is committed to advancing the purposes as defined in the Constitution and supporting the activities of the Society;
ii. Article 2.8, “Acceptance of Membership Application”, states that acceptance of new members and renewal of existing members is at “the sole discretion of the Board of Directors”;
iii. Article 2.9 states that the Board may refuse or postpone an application for membership:
. . . for any reason, which, in the Board’s view, is necessary or prudent to protect the reputation and integrity of the Society.
e) General Meetings of Members (Part 3): Article 3.20 deals with “Methods of Voting” and specifically allows the Board to use its discretion to decide which method will be allowed, including by “mail‑in ballot” (one of the issues addressed on this application);
f) Society’s Value Statements (Part 9): Principles include:
9.3 The Society upholds and defends the expert opinion that euthanasia, known as Medical Assistance in Dying (MAID), is not one of the treatments in the practice of palliative care. The Society therefore prohibits the provision of euthanasia on its premises.
The definition of “Special Resolution” in the proposed bylaws refers to any resolution at an AGM as requiring a 2/3 vote; save and except that any amendment, repeal or replacement of Article 9.3 (above) would require 100% of the votes cast.
The petitioners contended that the Meeting to consider these changes was improperly convened, impermissibly required two special resolutions, and including a mail-in ballot. They also argued that there was a breach of the directors’ duty to act in good faith pursuant to s. 53 of the Act.
The Society’s Bylaws did not permit a mail-in ballot, though they were permitted under the Act. Under Bylaw 22, voting was to be in person or by proxy. However, the Covid-19 pandemic intervened. Section 3(3) of British Columbia Ministerial Order MO116 provides:
Despite anything in a corporate enactment, a corporate meeting may be held solely by telephone or other communications medium if:
a) in the case of a corporate meeting with respect to which notice must be given under a corporate enactment, notice of the meeting provides instructions for attending at or participating in the meeting by the communications medium, including, if applicable, instructions for how to vote at the meeting,
b) all of the persons participating in the meeting are able to communicate with each other and, if applicable, vote at the meeting, and
c) the person responsible for holding the meeting facilitates the use of the communications medium at the meeting. (emphasis added by the court)
The court took the view that, despite MO116, mail-in ballots were still not permissible for the Society (at ) as MO116 did not refer to the means of voting. Recourse had to be had to the Act and Bylaws to determine what method of voting ‘at the meeting’ the Society had approved. The President should have considered other means (at -):
As petitioners’ counsel pointed out, the conduct of many annual general meetings, some involving thousands of participants, have been approved by this Court within the context of addressing the unique challenges that have arisen from the COVID‑19 pandemic. I am aware from having granted previous orders that there are many Internet based platforms that allow alternative means of participating in meetings and voting at meetings. It does not appear to be the case…that the Board made any investigation in that respect. There is no evidence that a mail‑in ballot is the only method to address present circumstances. Accordingly, I conclude that the Notice, as reflecting the Board’s decision to utilize mail-in ballots as a method of voting, was in violation of the Bylaws and the Act. On that basis alone, I conclude that the meeting scheduled for June 15, 2020 cannot proceed. It is necessary that the voting process for the Meeting be clearly set out to the members so that they are aware of how they may exercise that very important right. At this late stage, I am unable to see any basis on which I can salvage the process to the point that the Meeting could possibly proceed next Monday.
Therefore, the meeting could not proceed as proposed. The fact that the Board had spent $11,500 in organising the meeting was, in the court’s view, an ‘unfortunate outcome [that] can only be laid at the feet of the Board’ (at ).
On the issue of membership, the petitioners argued that the Board had wrongly refused membership to many persons, while granting membership to others, in breach of the Bylaws and the Act. The petitioners’ contention was that this conduct was again sufficient grounds to justify interference by the court. It was.
There were clearly two ‘camps’ within the Society – those who supported MAiD and those who did not. Both ‘camps’ had organised to gain members. At least 310 members organised by Ms Farrish had been rejected as members. Meanwhile, the membership grew steadily from 600 (March 2020) to 1400 (April 2020) and about 1500 (May 2020). The evidence of the new President was that these members had been permitted to join only if they upheld the Constitution and Bylaws.
Previously, the Society had had ‘open’ membership, in that anyone could join who paid the relevant fee. Membership did not depend on any particular viewpoint. However, now membership applications were being screened for relevant viewpoints. The court held that the Board had no discretion to do this as the Constitution and Bylaws did not set out any criteria for membership (at -):
In my view, this is not the open and democratic process that is the objective for the Society as evidenced by the Act and the Bylaws. Simply, the clear inference from the circumstances here is that the Board has been attempting to manipulate the membership for voting purposes at the Meeting. I conclude and find that the Board has acted contrary to the Bylaws and the Act. In addition, if the Board has any discretion under the Bylaws in respect of membership, I also find that the Board has acted with an improper purpose in determining membership and the Board’s actions lacked good faith…
Therefore, the petitioners were successful on all their contentions. The Meeting was cancelled, the Notice of Meeting was set aside, and the court ordered the rectification of the membership register to include the names of those persons whose applications had previously been rejected. Further, it was ordered that the Society seek the directions of the Court before calling a further meeting.
Implications of the Case:
The written purpose and objects of a society are important and require careful consideration upon initial adoption to capture the spirit and essence of the motivations of the corporators. It may assist in guiding the path of the society when faced with shifting community attitudes and public policy. There are many societies that have a faith-based origin and substratum that have been taken for granted in a different era, and these are not implicit in their constitutions.
Further, there is the issue of whether the purposes of an organisation, particularly when its property is impressed with a perpetual charitable purpose, ought to be altered only in accordance with charity law concepts of cy près and statutory trust amendment schemes which have some barriers to changing purposes or simply by the will of the majority from time to time. Could it descend to an outcome decided by which faction could muster the most new members? Could the result be reversed at the next AGM if the member balance shifts? What happens if the majority doubly entrenches a purpose provision making it extremely difficult to ever alter the constitutional purpose?
The Courts are generally reluctant to intervene in membership disputes and often order only that necessary to have the membership decide the issue. However, in this instance, there was ample evidence of unfair play in the admission of members and conduct of the AGM for the Court to significantly intervene and supervise the next meeting of the Society.
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