Feb 2023 Charity & NFP Law Update
Where charities and not-for-profits follow their own by-laws and the applicable governing legislation, the courts may afford them a wider range of discretion concerning how, in particular, they carry out their meetings, even where some directors may find themselves excluded from in camera meetings. Howley v. Cape Breton University Board of Governors is a February 6, 2023 decision from the Supreme Court of Nova Scotia where Mr. Howley, a member of the Board of Governors (the “Board”) of Cape Breton University, sought judicial review of two decisions that excluded him from an in camera portion of the Board’s meeting on October 22, 2021. Ultimately, the court dismissed Mr. Howley’s motion for judicial review, concluding that the two decisions were reasonable and that Mr. Howley had been afforded the required extent of procedural fairness and natural justice that he was owed.
Cape Breton University was established by the Cape Breton University Act, with the Board of the university serving as the incorporated entity governing the university. The Act provides the Board with several powers, including the power to make by-laws, rules and ordinances for “the regulation of the Board’s own meetings and the procedure and order of business to be followed thereat”. Further the Board’s by-laws state that certain topics will be treated in camera (such as personnel issues) and that certain portions of each meeting will be in camera. This in camera process was subsequently modified by a policy adopted by the Board in March 2021, which stated that after a regular in camera session with the entire Board, there should be a modified in camera session where only the President and “external board members” (being those board members that were not faculty, staff, or students at the university) could be present. Meeting notes would reflect the general topics discussed at such sessions, but further details would not be provided.
Mr. Howley, as a board member and the President of the Cape Breton University Faculty Association was not an “external board member” and was told by the Board’s executive committee and the Board itself in two separate decisions that he would not be permitted to attend a portion of the October 22, 2021 board meeting that was a modified in camera session that would deal with human resources, personnel and labour issues. Mr. Howley brought a motion to the court challenging these decisions to exclude him from a portion of the meeting as unreasonable and not procedurally fair, in part because he believed he should be provided with more information as to the topics of discussion so that he could determine for himself if he had a conflict of interest. However, in its analysis, the court noted that there was a distinction to be made between being asked to review these decisions of the Board to exclude Mr. Howley and reviewing the earlier decision of the Board to adopt a policy where modified in camera sessions that excluded some board members could be held. In this case, the court was only reviewing whether the decision to exclude Mr. Howley from a portion of the Board meeting was reasonable and procedurally fair. It was not possible to review the earlier decision to adopt a modified in camera policy since the time limit to bring a motion for judicial review had already passed.
Since the Board was acting in accordance with the board policy which it had passed to allow modified in camera sessions, and since the Act gave the Board the power to regulate its own meetings and meeting procedures, the court found that the Board’s decision to follow its own policy was reasonable. The court stated that “[i]t is not for this Court to impose its views on the Ethics Committee, or the Board for that matter, in terms of what is a ‘best practice’ around in camera sessions involving topics such as human resources and labour and personnel issues.” As the Board did not violate the Act or any of its by-laws when it made its decisions, the court found its decisions to be reasonable. Further, in applying the tests from the Supreme Court of Canada’s decisions in Vavilov and Baker with regard to the duty of procedural fairness owed to Mr. Howley in this circumstance, the court concluded that while Mr. Howley was owed a duty of fairness, this duty was met when he was given the opportunity to voice his concerns at the October 21, 2021 Board meeting.
This case is a reminder to charities and not-for-profits that acting in accordance with the governing legislation and the corporation’s own by-laws is essential as a prerequisite if a court is going to be asked to find that the corporation was acting reasonably and fairly when disputes over procedural matters arise, including the protocol to be followed for in camera meetings.