BC Court Overturns Purported Removal of Directors of BC Society 
April 2021 Charity & NFP Law Update
Published on April 29, 2021

By Esther S.J. Oh


The Supreme Court of British Columbia released its decision in Brown v Brousseau on February 2, 2021, in which it considered a dispute between two groups of directors of the Burns Bog Conservation Society (the “Society”). The dispute involved, among other things, disagreement on the validity of the purported removal of certain directors by a minority of the board. In this regard, the Society’s board had nine directors split into two factions, with five directors on one side (the “Majority Directors”) and four directors on the other (the “Minority Directors”). A dispute between the Majority Directors and Minority Directors began when, after receiving allegations of employee bullying and harassment against Ms. Olson (one of the Minority Directors), the Majority Directors voted to remove Ms. Olson from her position as executive director and limit her responsibilities as president. The Minority Directors voted against Ms. Olson’s removal. At a subsequent meeting, the Majority Directors also voted to remove Ms. Von Kish, another Minority Director, from her role as secretary.

One day prior to a board meeting scheduled for June 25, 2020, Ms. Von Kish emailed the board with notice of a motion to remove all of the Majority Directors (the “Removal Motion”). The June 25 board meeting then proceeded according to the meeting agenda, (which did not include the Removal Motion). However, during the meeting Ms. Von Kish raised the Removal Motion during a vote on a separate agenda item. Ms. Von Kish then purported to take minutes of the board meeting (despite having been removed from her role as secretary), which minutes indicated that the Removal Motion was approved. The Minority Directors then took steps to invalidate previous motions approved by the Majority Directors, remove the Society’s accountant, replacing her with Ms. Von Kish, file a notice of change to remove the Majority Directors from the BC Registries records, change the Society’s bank account signatories, and redirect the Society’s mail. This dispute resulted in the Society’s bank accounts being frozen and its mail being held by Canada Post, which prevented the Society from paying rent, staff salaries, and meeting other financial obligations.

The Majority Directors argued that they did not vote on or approve the Removal Motion. In its analysis, the court found subsection 50(1) of the British Columbia Societies Act provides that directors can only be removed by way of a special resolution, or in accordance with a society’s by-laws, which was not done. The court further found that the Society’s by-laws provided that the Society had adopted Robert’s Rule of Order Newly Revised, 11th ed (“Robert’s Rules”) as its rules of order. In accordance with Robert’s Rules, the court found that “directors were only entitled to disrupt the order of business set out in that agenda with a two-thirds vote of the directors”, and that “Ms. Von Kish simply took it upon herself to raise the Removal Motion at various random times during the meeting.” In summary, the court held that there had not been a vote in favour of the Removal Motion in contravention of the Societies Act and the Society’s by-laws. Further, even if a vote had been held validly, any such vote was not validly held in accordance with Robert’s Rules.

The court then referred to section 105 of the Societies Act, which allows courts to remedy an “omission, defect, error or irregularity in the conduct of the activities or internal affairs of a society” that results in a contravention of the Act, the society acting contrary to its purposes, non-compliance with the by-laws of the society or other problematic scenarios listed in the Act. Relying on previous case law, the court found that intervention was warranted where “significant irregularities” existed and it was “unrealistic” to suggest “that there was any real possibility that any disagreements could be worked out informally or by some internal process”. The court found that the Removal Motion caused a significant irregularity by depriving the Majority Directors of their “legitimate right” to properly govern the Society, which in turn resulted in significant disruptions to the affairs of the society. Given the animosity between both factions of directors, the court found it appropriate to intervene, making 16 separate orders and declarations, including declaring that the Removal Motion was invalid and reinstating the Majority Directors. The court ordered that the Minority Directors cease and desist from holding themselves out as the sole directors of the Society and cease and desist from stating that the Majority Directors have been removed from the board. The court also ordered the Society to hold its annual general meeting within 60 days from the date of the decision in order to elect a new board of directors.

This case serves as a reminder to charities and not-for-profits that the board of directors governs an organization by majority vote in accordance with the organization’s by-law and governing legislation, and a minority faction of directors cannot do so. While courts may be reluctant to interfere in the internal affairs of an organization, where the actions of a minority faction of the board causes significant disruption in the operations of the organization contrary to its by-law and governing legislation, the courts will exercise their jurisdiction to take remedial action.


Read the April 2021 Charity & NFP Law Update