By Ryan M. Prendergast

The Supreme Court of British Columbia released its decision in Fusion Football Club Soccer Association v Vancouver Youth Soccer Association on July 8, 2021 concerning a dispute between two societies incorporated under the British Columbia Societies Act. Fusion Football Club Soccer Association (“FFCSA”) had petitioned for orders permitting it to operate as an affiliated member of the Vancouver Youth Soccer Association (“VYSA”), arguing that certain VYSA board decisions limiting the number and type of youth soccer teams was oppressive and unfairly prejudicial pursuant to s 102(1)(a) and (b) of the Societies Act, and further in breach of VYSA’s bylaws.

VYSA is a youth district soccer association and governing body for youth soccer in Vancouver. VYSA had seven affiliated clubs prior to January 2021 offering youth soccer programs. Its bylaws require VYSA to be a member of the British Columbia Soccer Association (“BC Soccer”), and to be subject to the published bylaws, rules, regulations, and policies of FIFA (the international governing body of soccer), the Canadian Soccer Association, and BC Soccer. In 2009 VYSA had established an affiliate, Vancouver Football Club (“VFC”), to harmonize the boys’ and girls’ elite-level programs under the BC Coastal Soccer League’s Metro division. However, in 2021, VFC amalgamated with another soccer club, Fusion Soccer, which played at the highest level of the BC Soccer Premier League, to form FFCSA, with the stated objective of “expand[ing] its soccer programs beyond what was previously offered by VFC and Fusion.”

VYSA was not in support of the amalgamation, indicating in a letter from the board to FFCSA that VFC was “created and affiliated for the sole purpose of operating Metro teams at the discretion of the VYSA.” It further stated that it retained the right to modify or terminate the program and VFC’s affiliation rights, and that VFC was neither intended as a grassroots club, nor permitted to expand its mandate without complying with VYSA’s new club member admissions policies. VYSA then indicated that if FFCSA complied with the VYSA governance going forward, it would not revoke the affiliation of team currently playing in the Metro division under the VFC affiliation until the end of the 2020/2021 season, but that it would not affiliate any other FFCSA teams.

FFCSA filed an appeal with BC Soccer, which found that its authority did not extend to law, including the Societies Act, but otherwise generally sided in favour of VYSA, including a decision that the VYSA board decisions were not oppressive or unfairly prejudicial to FFCSA or its officers. FFCSA then brought its petition to the Supreme Court of British Columbia, arguing that upon amalgamation, FFCSA retained VFC’s previous rights as an affiliated club of VYSA and was entitled to exercise the same rights as other affiliated clubs. On this basis, it submitted that VYSA’s decision violated FFCSA’s reasonable expectations and was oppressive and/or unfairly prejudicial under section 102 of the Societies Act.

The court found that pursuant to paragraph 90(1)(d) of the Societies Act, the rights and interests of the amalgamating societies became the rights and interests of the new society upon amalgamation. It also found that the relationship between a society and its members is contractual in nature and that “FFCSA’s rights and interests vis-à-vis VYSA are thus rooted in the contractual relationship between the two entities”. Further, reviewing case law concerning voluntary associations, including the recent Supreme Court of Canada decision in Ethiopian Orthodox Tewahedo Church of Canada St. Mary Cathedral v Aga, the court also outlined the principle that courts have jurisdiction to intervene in a voluntary association’s decisions or affairs of voluntary associations only where a legal right is affected, requiring a legal or proprietary right to have been harmed.

With respect to the oppression claim, the court found that VFC was established “for the specific and limited purpose of entering teams in the Metro divisions”, and that there was nothing in VFC’s history, structure, operations, relationship with VYSA, or the policies and practices of the parent organizations (to which it was subject, pursuant to its bylaws) that supported FFCSA’s alleged expectations. As such, FFCSA had not established a reasonable expectation that it would be permitted to register its teams in all BC Coastal divisions as affiliated teams with VYSA, and VYSA’s actions were therefore not oppressive.

FFCSA also argued that VYSA had violated its bylaws, which provide that member clubs may “register players and team officials with BC Soccer and the Association” and “be a Member of and register their teams with BC Soccer sanctioned Leagues”. Given the contractual nature of societies’ relationships with their members, the court interpreted the terms of the contract by determining the parties’ intent and scope of their understanding. It found that the intention of all the parties when VFC was formed with the specific and limited purpose of fielding teams in the Metro division, and that there was no evidence that the parties ever intended to permit VFC to unilaterally expand its mandate. The court again stressed that VFC was subject to BC Soccer’s and VYSA’s bylaws and policies, which “have always recognized that programming decisions relating to Metro division play, as well as play at other levels, rests with the youth district soccer association.” It therefore found that YVSA’s decision did not contravene the Societies Act or YVSA’s bylaws to warrant court intervention.

This case is a reminder of the importance of charities and not-for-profits understanding and following one’s bylaws and the other rules and regulations that organizations are subject to. This is particularly the case where inter- and intra-organizational relationships are complex, such as in the case of affiliates and amalgamated organizations.

Read the November 2021 Charity & NFP Law Update