Ontario Church Unsuccessful in Bid for Interim Injunction Against COVID-19 Regulation

by Dev User | Jan 28, 2021 | Expertise, Real Estate Law

January 2021 Charity & NFP Law Update

The Toronto International Celebration Church (the “Church”) brought an application to strike down Ontario Regulation 82/20, Rules For Areas In Stage 1 (the “Regulation”) to the extent that it restricts in-person attendance of religious services to a maximum of 10 people, arguing that the Regulation infringed freedom of religion under section 2(a) of the Canadian Charter of Rights and Freedoms (“Charter”). The Church is a large evangelical church with 1500 members and a place of worship that can hold 1000 people. Although the Church was situated in a region subject to the Stage 1 Regulation, it also sought an interim injunction pending the hearing of its Charter challenge to permit it to hold religious services subject to a 30% capacity restriction in compliance with Ontario’s Stage 2 regulation. The Ontario Superior Court of Justice dismissed the application for an interim injunction in Toronto International Celebration Church v. Ontario (Attorney General) on December 18, 2020.

With respect to the interim injunction, the court stated that the Church had to establish that it would be in the interests of justice, which would require balancing the interests at stake. Following the Supreme Court decision of RJR-MacDonald Inc v Canada, the court considered the application for the interim injunction in light of three questions: (1) whether the Church’s Charter application had merit; (2) whether the Church and its members would suffer irreparable harm if the injunction were to be refused; and (3) whether the balance of convenience was in favour of granting the injunction.

As for the merit of the Charter application, the court considered whether the Church could establish that there was a “serious issue to be tried.” Ontario conceded that the Regulation restricted the freedom of religion of the Church and its members, but the court found that it was still to be determined whether it was a reasonable limit on freedom of religion. While it was not for the court to decide the Charter matter in this application, it found that there was a serious issue to be decided, that being whether the Regulation was tailored to impair freedom of religion no more than reasonably necessary, and whether the government’s chosen means to minimize the spread of COVID-19 fell within a range of reasonable alternatives.

The court then turned to whether the Church would suffer irreparable harm as a result of the prohibition on religious services with more than 10 people. Although the Regulation does not entirely prohibit in-person religious services, the court found that the Church nonetheless would suffer irreparable harm, particularly given that its regular services include 600 congregants or more, and because “the vast majority of the members of the Church are unable to participate in congregational prayer and fellowship, which is central to their religious beliefs.”

With regard to the balance of convenience, i.e. which party would suffer greater harm from the granting or refusal of the injunction, the court asked whether it would be equitable to deprive the public from the protection offered by the Regulation before the Regulation’s validity was determined in the Charter application. It found that there was a “strong” public interest both in protecting public health during the COVID-19 pandemic and in protecting religious freedom. However, it held that granting the injunction would cause greater harm to public safety than the harm to religious freedom caused by dismissing the injunction. To this point, the court stated that granting the Church the exemption from the Regulation would set a precedent that would likely lead to other religious organizations seeking similar exemptions, which was a factor in weighing the public interest. The court therefore found that the balance of convenience favoured public health, and dismissed the Church’s application, indicating that courts “should not lightly interfere with the government’s ability to enforce laws duly enacted for the public good before a full hearing on the constitutionality of the provisions.”

In view of the court’s findings, religious organizations will need to wait for the court’s separate ruling on the Charter challenge, which will undoubtedly be of interest to the sector. For now, this decision makes it clear that religious organizations will need to comply with the restrictions on religious services in Ontario’s regulations until and unless the Charter challenge proves successful.

Read the January 2021 Charity & NFP Law Update

COVID-19 Corporate Update

by Dev User | Jan 28, 2021 | Expertise, Real Estate Law

January 2021 Charity & NFP Law Update

Order Extending AGM Deadlines for Federal Corporations Now Ended

Corporations Canada published a reminder to federal corporations on December 30, 2020, that the Order Respecting Time Limits and Other Periods Established By or Under Certain Acts and Regulations for which the Minister of Industry is Responsible (COVID-19) (the “Order”) has now ended. The Order previously extended the deadline for federal corporations, including those under the Canada Not-for-Profit Corporations Act (“CNCA”), to call annual general meetings (“AGMs”) and present financial statements, and applied during the period between March 13, 2020 and December 31, 2020.

Commencing on January 1, 2021, federal corporations will therefore return to “business as usual” with respect to the timing of their AGMs, following the normal rules set out in their incorporating legislation. For CNCA corporations, this means holding an AGM no later than 15 months after the previous AGM, and no more than six months after the last financial year-end.

Corporations Canada’s announcement states that it is unsafe to hold in-person AGMs during the COVID-19 outbreak because it would contradict public health advice to practice physical distancing and self-isolation to prevent the spread of the virus.

Corporations Canada reminded corporations that depending on the by-laws, a corporation could have two possibilities to hold electronic AGMs:

• Virtual meetings where all participants attend exclusively through a digital channel that allows participants to communicate adequately with each other during the meeting. Virtual meetings must specifically be in the corporation’s by-laws.

• Hybrid meetings (i.e., partially virtual meetings) where some participants attend in-person and others participate through a digital channel that allows participants to communicate adequately with each other during the meeting. A hybrid meeting may be held if (i) they are not prohibited by by-laws, or (ii) the by-laws are silent and thereby may be held by default under the CNCA.

Corporations Canada then states that “if the corporation’s by-laws prohibit virtual meetings or are silent on holding them, the board of directors may change the by-laws with the change effective until the next meeting of shareholders or members (when the change can be confirmed or rejected).” However, Corporations Canada fails to point out that this option does not apply to those corporations that have a provision in their articles requiring by-law changes be subject to a special resolution of members before the by-law changes may take effect.

Corporations Canada also points out that for those corporations that have a small number of members, they can have the members sign a written resolution approving business items in lieu of holding an AGM. However, since this option requires the written resolution to be signed by all members in order to be valid, the practical application of this option is fairly limited.

Lastly, Corporations Canada points out that not-for-profit corporations may also apply to Corporations Canada to delay the calling of their AGM where calling the AGM within the normal timeframe would be detrimental. The application must be made at least 30 business days before notice calling the AGM is required to be sent to members online or by email to [email protected].

Read the January 2021 Charity & NFP Law Update

Ontario Stay-at-Home Order and New Rules for Areas in Stage 1

by Dev User | Jan 14, 2021 | Expertise, Real Estate Law

By Carters, January 14, 2021