By Sean S. Carter and Mitch Goldenberg

On November 13, 2025, the Ontario Superior Court of Justice (the “Court”) in Fodjo v. NufiCanada (“Fodjo”), underscored the need for charities and not-for-profits (“NFPs”), as well as any other corporate entities, to pass clear and direct resolutions that identify their choice of legal counsel in court proceedings. The Court in Fodjo ordered NufiCanada (the “Respondent”) to retain new legal counsel after finding that the Respondent’s legal counsel was being instructed by two individuals suspected of financial misconduct, creating a conflict of interest, finding these individuals were not properly authorized to appoint legal counsel. Fodjo is an important reminder that both the authorizing resolution and the retainer agreement are equally essential elements of properly retaining counsel. 

Alain Fodjo, (the “Applicant”), who is a member of the Respondent’s corporation, brought an application against the Respondent under s. 310(1) of the Ontario Corporations Act (the predecessor to the current Ontario Not-for-Profit Corporation Act, 2010) to begin an investigation into suspected misappropriation of finances by two individuals, an officer and a director of the Respondent. In response, the Respondent passed a resolution at its general assembly of members to hire legal counsel to defend the application.

The issues before the court were whether the Respondent’s legal counsel should be removed based on both a conflict of interest, and crucial flaws in the resolution concerning the officer and the director’s authorization to instruct counsel. Specifically, the Court noted that the resolution failed to specifically name which legal counsel was being retained. Further, the Court found that the resolution did not appoint specific directors or officers with the requisite authority to retain and give instructions to legal counsel on behalf of the corporation.

Several issues arose regarding the retainer agreement that adversely affected the Respondent’s representation. First, the same officer and director suspected of misappropriating the funds were the two individuals who were authorized to hire legal counsel to represent the Respondent, and they chose a lawyer with whom they had a longstanding professional relationship. Second, the retainer agreement they signed granted those same individuals exclusive authority to issue instructions to legal counsel on behalf of the Respondent, which went beyond the authority granted by the resolution of the general assembly. 

The Court found that the two individuals retaining and instructing legal counsel on behalf of the Respondents were in a conflict of interest. Even though the lawyer for the Respondent was not personally representing the instructing director and officer, the Court concluded that the retainer agreement created a substantial risk of “impaired representation” because legal counsel was receiving instructions from the very people who were the subjects of the application to commence the investigation. The Court ultimately held that the Respondent must appoint new counsel or seek leave for non-lawyer representation in the legal proceedings, and to ensure that instructions are provided by those who do not have personal conflicts on behalf of the Respondent.

Fodjo underscores the importance for charities, NFPs and other corporate entities to ensure the proper authorization is obtained in order to retain and instruct counsel. This means that board members voting to retain legal counsel need to be free of potential conflicts when doing so, as well as when instructing legal counsel. The decision is also a reminder that organizations need to pass a clear and specific board or member resolution naming the legal counsel to be retained, and to provide authority to named individuals to instruct legal counsel. Failure to do this may result in the Court ordering a variety of remedies, including but not limited to striking the charity or NFP’s application; statement of claim; or statement of defense depending on the situation; and with potential costs payable to the opposing parties.

​Read the November 2025 Charity & NFP Law Update