by Dev User | Mar 29, 2018 | Uncategorized
Mar 2018 Charity & NFP Law Update
On February 26, 2018, three judgments were released by the Ontario Superior Court in Arriola v. Ryerson Students’ Union, Naggar v. The Student Association at Durham College and UOIT, and Zettel v. University of Toronto Mississauga Students’ Union. The three applications were argued together and the judgements were released simultaneously.
The background facts for the three cases were very similar. The applicants in each case were students at a publicly funded university who were members of their university’s student union or association (“Student Unions”). Each of the Student Unions were not-for-profit corporations that were separately incorporated and independent from the respective university. In each of the three cases, the applicants applied to have their student group officially recognized by their Student Union, which would have resulted in the group receiving funding from the respective university, as well as other minor benefits. In each of the three cases, the applicants applied for judicial review of the decisions of their respective Student Unions to deny their application to obtain status as official student groups and also sought orders quashing the decisions of the Student Unions.
In the Arriola v. Ryerson Students’ Union case, the applicants sued Ryerson Students’ Union for refusing official student group status to their student group known as “the Men’s Issues Awareness Society”, which had the purpose of bringing social awareness to issues that disproportionately affect men and boys, such as higher rates of suicide, homelessness, workplace injuries and failure in school. In the Naggar v. The Student Association at Durham College and UOIT and Zettel v. University of Toronto Mississauga Students’ Union cases, the respective Student Unions denied official student group status to pro-life student groups.
The court noted that the applicable laws and the legal analysis to be applied were identical in all three cases. The court affirmed that the “private law of groups” applied and further confirmed that a court has limited jurisdiction to review the conduct and decisions of an organization, including enforcement of contracts and limited jurisdiction to carry out judicial review over the decisions of an organization. The court affirmed it is not the role of the courts to review the merits of an organization’s conduct or decision but instead courts are to review whether the procedure followed by an organization in arriving at its decision was done in accordance with the organization’s own rules, in accordance with natural justice and without bad faith. The court noted that courts may decline to exercise their judicial review jurisdiction when the internal dispute resolution mechanisms of an organization have not been exhausted.
In each of the cases, the applicants sought declarations on a number of grounds, including an allegation that the Student Union’s decision was ultra vires because the Student Unions exceeded its jurisdiction and its decision was contrary to its own policies and rules; the decision was made contrary to the principles of natural justice and done in bad faith; and that the decision was unreasonable and contrary to the Canadian Charter of Rights and Freedoms by failing to respect the students’ freedom of association and freedom of expression. Orders were also sought prohibiting the Student Unions from limiting access to services on account of a student’s beliefs and directing the Student Unions to recognize each applicant as a student group.
While there were some differences in the background facts of the three cases, based on the court’s review of the facts in each individual case, all three applications were dismissed. Firstly, the court held that public law does not apply, since the Student Unions are all private student organizations on a university campus (as opposed to a federal, provincial or municipal government actor). In Arriola v. Ryerson Students’ Union, the court confirmed that it has the jurisdiction to review the activities of the Student Union since the applicants had exhausted all of the internal remedies at the Student Union. The court also found in each case that the Student Unions did not violate their own rules and regulations in exercising their discretion to refuse to grant student group status to the applicants.
The court found that the principles of natural justice were not violated in the three cases. In that regard, the court stated, as follows:
The content of the principles of natural justice are flexible and depend on the particular circumstances of the association, but the minimum requirements are: (a) adequate notice of what is to be determined and the consequences; (b) an opportunity to make representations; and (c) an unbiased tribunal. The scope of the requirements of natural justice depend on the subject-matter that is being dealt with, the particular legislative or administrative context, the circumstances of the case, the nature of the inquiry, and the rules under which the tribunal is acting, and the ultimate question is whether the procedures adopted were fair in all the circumstances.
The court found there had been no interference with the applicant’s freedom of association or freedom of expression because the applicants were free to gather and express their views on campus, even without being officially recognized by the Student Union. In that regard, the court stated that the funding given to recognized student groups is a discretionary privilege, as opposed to being an entitlement. The court also found no evidence of bad faith by the Student Groups after reviewing the facts of each case.
This case affirms previous case law which reflects the reluctance of the courts to become involved in the internal affairs of a charity or not-for-profit organization where steps taken by an organization vis-à-vis its members, reflects the requirements of natural justice. This case also affirms that the requirements of natural justice that apply to a given situation may be flexible depending on the background facts involved.
Read the March 2018 Charity & NFP Law Update
by Dev User | Mar 29, 2018 | Uncategorized
Mar 2018 Charity & NFP Law Update
Bill C-25 Passed
On March 22, 2018, federal Bill C-25, An Act to amend the Canada Business Corporations Act, the Canada Cooperatives Act, the Canada Not-for-profits Corporations Act and the Competition Act (“Bill C-25”) received third reading and was passed “on division”, meaning that it was supported by a majority, though not unanimously. A majority of Bill C-25’s provisions will come into force upon assent. As reported in the October 2016 Charity & NFP Law Update, Bill C-25 introduces technical amendments to the Canada Not-for-profit Corporations Act (“CNCA”), including the addition of a definition for an “incapable” person and a requirement for the Director to publish notices of any decision he or she has made in respect of applications made under various sections of the CNCA. As well, new regulations have also been proposed to correspond with changes to sections 238 and 283(3) of the CNCA.
Bill C-25 also introduces various changes to the Canada Business Corporations Act (“CBCA”), including changes to electing directors of public CBCA corporations; facilitating electronic communication; diversity reporting requirements for prescribed corporations which, according to the proposed regulations, would be distributing corporations; and an expanded concept of affiliation under the Competition Act.
Read the March 2018 Charity & NFP Law Update
by Dev User | Mar 29, 2018 | Uncategorized
Mar 2018 Charity & NFP Law Update
On March 16, 2018, the Supreme Court of Newfoundland and Labrador released its decision in John Doe (G.E.B. #25) v The Roman Catholic Episcopal Corporation of St. John’s, concerning an action launched by four representative plaintiffs (collectively “Plaintiffs”) who are former residents of the Mount Cashel Orphanage (“Mount Cashel”). The Plaintiffs claimed that the defendant, The Roman Catholic Episcopal Corporation of St. John’s (the “Archdiocese”) was liable for sexual and physical abuse committed against them at Mount Cashel by teachers of The Christian Brothers Institute Inc. (“Christian Brothers”) during the late 1940’s and 1950’s.
The Archdiocese and Mount Cashel were separate corporate entities. However, the Plaintiffs argued that the Archdiocese was liable on the grounds that the Archdiocese had sufficient control over Mount Cashel to make it vicariously liable for the actions of the Christian Brothers; that the Archdiocese was vicariously liable for the failure of Mount Cashel’s parish priest (chaplain) to intervene to prevent the abuses based on his knowledge of the abuses; and that the Archdiocese was negligent through its inaction in light of the abuses of which it had knowledge. It was accepted between the parties that there was no employer/employee relationship between the Archdiocese and the Christian Brothers. The Archdiocese did not dispute the physical and sexual abuse of the Plaintiffs, but took the position that the Christian Brothers, several of whom had already been tried, convicted and served time in prison, were responsible for the abuse because they, rather than the Archdiocese, operated Mount Cashel and were responsible for its personnel. It further argued that it had appropriately discharged its responsibility when it became aware of abuse.
After reviewing the evidence, the court found that the Archdiocese and the Christian Brothers were separate organizations with little connection or interaction on a daily basis, that they were not a joint venture, that the Archdiocese was not involved in the management of Mount Cashel, and that its role was limited to advocacy on its behalf and assisting with financial support. It stated that, “[v]icarious liability for the actions of an employee or subordinate requires that there be a close connection between the intended defendant and the enterprise which gave rise to the tortious conduct.” Therefore, having found that there was insufficient evidence of control over operational matters or the assumption of responsibility for the day-to-day affairs of the orphanage, the court held that there was no vicarious liability on the part of the Archdiocese. It further stated that the Christian Brothers would have been found vicariously liable but for the fact that it was not part of these proceedings, as it had liquidated its assets through bankruptcy proceedings to satisfy similar sexual abuse proceedings.
The Court also found that the Archdiocese was not vicariously liable for the inaction of the parish priest assigned to Mount Cashel who may have heard about the allegations of abuse in the confessional. It was held that there was insufficient evidence to establish a duty of care between the parish priest and the plaintiffs given that as chaplain he had no role in management. The court assessed the duty of care in the context of the particular time period of the case, and found that there was also no evidence of breach of the duty of care because the misconduct was unforeseeable. The court stated that “at the time in question, the misconduct with which we are concerned would have been unthinkable. Therefore, any disclosure made to the priest would have been assessed as to its credibility on the basis of what he knew at the time. At that time, in my view, it would not have been foreseeable that these acts could have taken place.” The court accordingly found that the parish priest not to have a duty of care in respect of the boys, as he had no fiduciary relationship with them.
Concerning the Archdiocese’s direct negligence for its failure to act in the face of continued abuses of which it had knowledge, the Plaintiffs argued that confessions made to the parish priest amounted to notice to the Archdiocese. The parish priest who took the confession at issue was not the individual who carried out the assaults against the plaintiffs, which differentiated this case for the court. While the court held that under both civil and Canon law, notice of abuse could in some circumstances, including the context of the ‘seal of the confessional’, constitute a duty to respond with respect to a breach of the duty of care, the court did not consider or comment on any issue of common law privilege with respect to the confessions. The court held that there was insufficient evidence to find that the confessions amounted to notice, which is relevant to whether a duty of care has been breached to constitute negligence. Given the court’s findings, it ultimately held that the Archdiocese was not liable for the Christian Brothers’ abuse of the Plaintiffs. At press time, there was no formal indication of whether the Plaintiffs would appeal.
This case is significant because the court recognized that the Archdiocese and Mount Chapel were two separate corporate entities that operated as such without blurring their boundaries. Having a common faith is insufficient basis for vicarious liability. Charities and not-for-profits that deal directly with children and other vulnerable people should treat this case as a reminder of the potential for both direct and vicarious liability for abuse, and seek legal counsel to ensure that they have the proper policies and protections in place.
Read the March 2018 Charity & NFP Law Update
