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
by Dev User | Feb 22, 2018 | Uncategorized
Feb 2018 Charity & NFP Law Update
The Ottawa Region Charity & Not-for-Profit Law Seminar, hosted by Carters in Ottawa, on February 15, 2018, was attended by over 400 leaders from the charity and not-for-profit sector. The Honourable Justice David Brown of the Court of Appeal of Ontario, and Tony Manconi, Director General of the Charities Directorate of CRA, were guest speakers. The Seminar was designed to provide practical information to assist charities and not-for-profits in understanding and complying with recent developments in the law. All handouts and presentation materials are now available at the links below:
Read the February 2018 Charity & NFP Law Update
