by Dev User | Nov 30, 2017 | Charity & Not-for-Profit Law, Faith-Based Organizations
Nov 2017 Charity & NFP Law Update
The Court of Appeal for Ontario released its decision in ET v Hamilton-Wentworth District School Board on November 22, 2017 (the “Appellate Decision”). This case was an appeal of a 2016 trial court judgement in the application that upheld the Hamilton-Wentworth District School Board’s denial of the appellant’s (“ET”) request for accommodation on religious grounds. While the Court of Appeal’s decision reached the same result as that of the trial court, it held, contrary to the trial court, that ET’s freedom of religion under s. 2(a) of the Charter was not violated and ultimately dismissed the appeal for evidentiary reasons. In its analysis, the Court of Appeal considered issues surrounding parental authority over the education of children, as well as ET’s s. 2(a) freedom of religion under the Charter. This Bulletin focuses on the Appellate Decision only as it concerns freedom of religion in a summary fashion.
For the balance of this Bulletin, please see Church Law Bulletin No. 52.
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by Dev User | Nov 30, 2017 | Charity & Not-for-Profit Law
Nov 2017 Charity & NFP Law Update
On October 30, 2017, the Ontario Superior Court of Justice released its decision in Amir-Afzal Watto v ICC concerning allegations that a not-for-profit’s by-laws were oppressive. Amir-Afzal Watto (the “Applicant”) was a member of the not-for-profit regulatory body, Immigration Consultants of Canada Regulatory Council (the “ICC”). After numerous efforts to oppose and have amendments to the ICC’s by-laws set aside, the Applicant sought an order under s. 253 of the Canada Not-for-profit Corporations Act (“CNCA”) declaring that the amendments were oppressive, unfairly prejudicial and unfairly disregarded his interests as a member.
In the fall of 2013, the Applicant campaigned to become an elected director, and in doing so, published defamatory comments relating to ICC, its directors, officers and staff. He was not voted to the board. Four separate actions were launched between 2013 and 2015 by ICC against the Applicant for his defamatory comments, and by the Applicant against ICC. In the spring of 2014, ICC amended its by-laws to include paragraph 45.1(m) and (n), which provided that no individual member would be eligible to be on the Board of Directors if they institute or have instituted any suit, action or proceeding against ICC or vice versa. These new provisions were passed through a resolution on May 22, 2014 and voted favourably upon by a majority at ICC’s 2014 Annual General Meeting (“AGM”), which the Applicant attended.
Although the Applicant had brought the case more than two years after the by-law amendments, he argued that inter-jurisdictional immunity prevented the provincial Limitations Act from regulating entities that fell within matters exclusively assigned to federal government and, in this case, governed by the CNCA. The court found that the Limitations Act did apply to CNCA corporations, as it does not encroach upon the “core” of a federal undertaking, that being not-for-profit corporations. It noted that the CNCA “is not tied to the regulation of rights and obligation of corporation members” and that the Applicant’s right to pursue a statutory remedy was not an essential part of not-for-profit law. Rather, the purpose of the CNCA is to “allow the incorporation of, or continuance of bodies corporate as, corporations without capital for the purpose of carrying on legal activities throughout Canada.” Having found that the Limitations Act applied to CNCA corporations, the court then noted that the Applicant was presumed to have known that legal action was the appropriate means to remedy his injury at the latest by late 2014 at the AGM. With this, the court held that the Applicant’s cause of action was barred, as it was not commenced within two years of that time.
This case provides a reminder to the members and directors of charities and not-for-profits incorporated under the CNCA that provincial legislation of a general nature will continue to apply to them, and that if they want to challenge, or are concerned about corporate by-laws being subject to challenge, the legal remedies under the CNCA should be pursued on a timely basis. In particular, federal organizations and members contemplating litigation should be aware that they will be subject provincially instituted limitation periods to bring legal claims.
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by Dev User | Nov 30, 2017 | Charity & Not-for-Profit Law, Privacy Law & Anti-Spam
Nov 2017 Charity & NFP Law Update
In the case of Vanderveen v Waterbridge Media Inc., released on November 20, 2017, the Ontario Superior Court of Justice Small Claims Court considered a claim under the tort of intrusion upon seclusion when the plaintiff was filmed jogging on a walking trail without her consent. The court awarded the plaintiff the sum of $4000 in damages after her image was used for commercial purposes without her knowledge or consent. This recent decision highlights the increasingly shifting and fluid boundaries between being public and being private and expands the elements of the tort of intrusion upon seclusion recently recognized in Ontario.
For the balance of this Bulletin, please see Charity & NFP Law Bulletin No. 413.
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by Dev User | Nov 30, 2017 | Charity & Not-for-Profit Law
Nov 2017 Charity & NFP Law Update
In October 2017, Imagine Canada submitted its Review of Canada’s Anti-Spam Law (the “Review”) to the House of Commons Standing Committee on Industry, Science and Technology, along with its recommendations concerning the regulations under Canada’s Anti-Spam Law (“CASL”), particularly as they affect registered charities and other not-for-profits.
The Review recommends an exemption for registered charities from the requirements under CASL for consent. While CASL provides a limited exemption for commercial electronic messages (“CEMs”) sent by or on behalf of charities when their primary purpose is to raise funds for the charity, the Review stated that there is currently uncertainty over the existing exemption and the degree to which registered charities must comply with CASL, which has led to compliance costs. These includes costs incurred by charities that do not sent CEMs but that nonetheless believe they must comply with CASL. The Review does not recommend an exemption from the prescribed information requirements of CASL, i.e., including an unsubscribe mechanism or sender identification, where a charity sends a CEM that is not otherwise exempt.
The Review also recommends an exemption for certain other not-for-profits, which it refers to as “public-benefit nonprofits”, as no such exemption currently exists, as some entities that are not registered charities provide the same or similar community services as do charities.
Finally, the Review recommends an exemption to private rights of action against registered charities and other not-for-profits under CASL. Although the coming into force of the provisions in CASL concerning private rights of action has been temporarily suspended, their eventual coming into force may expose charities to the risk of private claims and class actions.
The Review provides insight into some pitfalls of CASL as it pertains to charities and not-for-profits, and into some of the liabilities that these organizations may face. Organizations sending CEMs may be interested in reading the recommendations under the Review to better understand various pitfalls, and should consult with legal counsel to discuss compliance with CASL.
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by Dev User | Nov 30, 2017 | Charity & Not-for-Profit Law, Counter Terrorism Law
Nov 2017 Charity & NFP Law Update
Facilitation Payment Exemption in Corruption of Foreign Public Officials Act Repealed
As reported in our February 2013 Charity Law Update and further discussed in Charity Law Bulletin No. 323 dated October 29, 2013, Bill S-14, An Act to amend the Corruption of Foreign Public Officials Act received Royal Assent on June 19, 2013, and introduced important amendments to the Corruption of Foreign Public Officials Act (“Act”). One amendment included the repeal of subsection 3(4) that had established the “facilitation payment” exemption on a date to be fixed by order of the Governor in Council. On October 26, 2017, Global Affairs Canada published an order fixing October 31, 2017 as the day on which this exemption would be repealed and facilitation payments would be prohibited.
While the Act prohibits bribery of foreign public officials, the facilitation payment exemption had previously allowed for “facilitation payments” to be made in order to “expedite or secure the performance by a foreign public official of any act of a routine nature that is part of the foreign public official’s duties or functions.” The Explanatory Note accompanying the order explains that the intent of the four-year delay in the repeal was, in part, to give Canadian organizations operating abroad sufficient time to transition their internal policies and procedures to ban facilitation payments in their day-to-day operations abroad. Now that the exemption has been repealed, charities operating abroad that have made use of the exemption may now be exposed to potential criminal liability in instances where they continue to make facilitation payments. For charities which operate in conflict zones, developing countries, or those which deliver disaster relief, “facilitation payments” were and continue to be a consistent reality and charities need to understand the consequences, which under the Act may include imprisonment for a term of not more than 14 years. Charities that have not stopped such practices yet should take immediate steps to amend internal policies and procedures to ensure that no facilitation payments are made by themselves, or by their agents, in the future. This should also be of note to for-profit businesses too, especially those with divisions that operate internationally, particularly those in the developing world.
FATF Adopts Guidance on AML/CFT Measures and Financial Inclusion
The Financial Action Task Force (“FATF”) held its November 2017 plenary meeting (“Plenary”), where it adopted a supplement to the 2013 FATF Guidance on AML/CFT Measures and Financial Inclusion on customer due diligence (“Supplement”). While the Supplement is not intended specifically for charities and not-for-profits, it recognizes that the due diligence required of financial institutions by the FATF standards can have unintended consequences of excluding legitimate participants, including charities and not-for-profits, from the regulated financial system. The Supplement states that its objective is “to encourage countries to implement the FATF Recommendations and the [risk-based approach] in a way that responds to the need to bring the financially excluded into the regulated financial sector.” The Supplement also provides country examples of customer due diligence measures adapted as incentives to financial inclusion, such as entry-level types of financial products and limitations on certain product’s functionality or availability. The Plenary also published a statement expressing its support for responsible financial innovation in line with FATF Standards (“FinTech Statement”). The FinTech Statement builds on the principles that were discussed by the participants of the 1st FATF FinTech & RegTech Forum held in May 2017, namely to:
- Fight terrorism financing and money laundering as a common goal;
- Encourage public and private sector engagement;
- Pursue positive and responsible innovation;
- Set clear regulatory expectations and smart regulation which address risks as well as allow for innovation; and
- Fair and consistent regulation.
These developments show that financial inclusion continues to be a top priority for the FATF. However, the Supplement does not specifically address the concerns of charities and not-for-profits working in remote areas where only limited or no formal financial infrastructure exist. In addition, charities need to be aware of the ultimate consequences of a multi-national financial services information collection and sharing regime, organized by multi-national policy making institutions like the FATF, which can potentially have unintended consequences, particularly for those working in conflict zones or disaster areas where prohibited organizations may operate.
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