Decision Date: February 3, 2012
Link: Case Summary Document
Citation: [2012] ONSC 716 (Ontario Superior Court of Justice, Corbett J.)

Summary:

The plaintiff in this Canadian case is a nonprofit corporation which conducts two Sikh gurdwaras (places of worship) in the city of Brampton, Ontario. The corporation was established by Letters Patent in 1996, and was governed by the Letters Patent, its By-Laws and the Corporations Act (Canada).

The gurdwaras had a long history of internal conflict. Prior to this hearing, there had been internal dissension within the membership of the gurdwaras which led to violence. The defendants alleged that the gurdwaras were run by a small clique, and that moneys had been misappropriated. They had attempted to take control of the gurdwaras and their board of directors at the 2010 annual general meeting (AGM), but had ultimately been violently repulsed. They also alleged that some 1,049 members had been illegally disenfranchised.

After the fracas at the AGM in 2010, the plaintiff obtained an interim injunction to restrain the defendants from further action. Litigation ensued, but did not resolve the matters between the parties.

In this judgement, His Honour traced at some length the history of the gurdwaras, their governance and philosophy, and the long-standing dissension, including litigation, within them. His Honour held that the defendants’ attempt to take over the temple was illegal. Moreover, their contention that members had been disenfranchised held no merit. There had been an attempt by the defendants to increase the membership which was not valid. There were 38 valid members of the gurdwaras who were entitled to vote and the defendants’ attempt to allege that there were over 700 members (in order to assume control) was improper.

His Honour had little sympathy for the defendants. He said (at [4], [11] and [12]):

The plaintiff has a long sad history of conflict. And this just has to stop. It is an embarrassment: the plaintiff is an important religious, social and cultural institution. The conflicts have been riotous, often petty, and are concerned with issues of control, and not the high-minded principles cited as justifications for this lawless behaviour… Some of the defendants have engaged in gross misconduct in the conduct of this litigation. For them apparently, the ends justify the means. It is offensive that some defendants should perjure themselves so blatantly in their evidence. The ends do not justify the means. Through their misconduct, these defendants have, in the end, only discredited themselves. Litigation is not some childish game. It is serious process of conflict resolution. It is not acceptable to lie under oath or to falsify documents to try to win a lawsuit for control of a temple.

There had also been evidence that the leader of the gurdwaras had tried to dispense with the law on the basis that wisdom and tradition were preferable to the law of Canada. His Honour was scathing (at [1]):

It is not open to anyone involved in the plaintiff to dispense with the law because they think they are wise and know what is best. ‘Tradition’ is not a basis for ignoring the law.

Some of the defendants had been founders of the gurdwaras, but as His Honour said (at [13]):

Some of the defendants have played key roles in founding and building the plaintiff. Together with some of the plaintiffs, they have built a wonderful and vibrant institution. But they do not own it. And these defendants’ past good deeds and leadership do not justify their misconduct.

His Honour also trenchantly criticised the defendants’ legal team for presenting a case without any factual basis (at [290]–[292]). The defendants were unsuccessful in all their contentions.

The case may be viewed at: http://www.canlii.org/en/on/onsc/doc/2012/2012onsc716/2012onsc716.html

Implications of this case

There is a large population of Sikhs in Brampton, and dissension within their ranks has been a frequent local news story in that city. However, the circumstances of internal conflict, particularly relating to governance and membership, are not uncommon within charitable and religious nonprofits in Australia. Judicial intervention in the internal affairs of unincorporated associations is limited by legal precedent. However, this Canadian case involved a charitable corporation. Corporate nonprofit entities now make up nearly half of all nonprofit organisations in Australia. Since the introduction or reform of incorporated associations in the 1980s, legislation has moved towards giving members remedies for breach of the rules or of the constitution.