UVSS triumphs over CFS in dispute over petition to withdraw membership
The University of Victoria Students’ Society celebrated (UVSS Chairperson’s Blog) last week’s decision (CanLII) of the Supreme Court of British Columbia overturning the decision of the National Executive of Canadian Federation of Students to decline to accept the petition of a student at the University of Victoria calling for a referendum at the school about continued membership. Leaving aside the political issues, this case is interesting because it shows that the essential legal matter related to student representation has to do with procedure and the laws of societies.
As a brief background, all undergraduate students at UVIC, like the person behind the petition, are automatically members of the UVSS, a registered not-for-profit corporation or “society” under the Society Act (BCLaws). The CFS is a national post-secondary student lobbying organization consisting of post-secondary student societies, including the UVSS. Legally, the CFS is a registered society under the Canada Corporations Act (Department of Justice). Since student organizations are distinct legal entities that act for social and not profit-driven purposes, they use the legal structure of a society, incorporating either under federal or provincial legislation. This lets them own property, make contracts, have employees, and so on – just like regular corporations – but there are no shareholders (only “members”) and nothing that can be bought or sold like shares reflecting any ownership position. Societies, either federal or provincial, are often confused with “registered charities” – that is, organizations registered with the Canada Revenue Agency and empowered to issue tax receipts for donations – but those are separate statuses.
Within the structure of the CFS, associations like the UVSS are “voting members” and the students within those associations, like the student behind the petition, are “individual members”. Individual members pay an annual fee to their association, which passes the funds on to the CFS. Students can’t opt out of membership in the CFS; this has to happen collectively by popular vote or referendum to end an association’s membership.
The story in this case is that while the student behind the petition was busy getting signatures, a separate group of students was preparing another petition effectively with the opposite purpose – to avoid any question about continued membership in the CFS. This second petition played a significant role in the CFS deciding to reject the main petition. The court, in this case, was asked to interpret the bylaws of CFS and decide whether the National Executive was able to decline to accept the main petition.
Conventionally, courts don’t touch disputes dealing with internal affairs of private organizations. Here’s what courts generally consider when deciding whether to intervene:
- the potential for courts to be clogged with disputes about the internal business of voluntary organizations (see Street v. B.C. School Sports [CanLII]);
- whether the dispute deals with the substance of an organization’s activities, or with processes of an organization’s activities (the latter the court will deal with); and
- whether the dispute is “of sufficient importance to deserve the invention of the court and whether the remedy sought is susceptible of enforcement by the court” (see Lakeside Colony of Hutterian Brethren v. Hofer [CanLII]).
In this case, the court found it was important to intervene because “the interests at stake are sufficiently important”, pointing to, among other things, the amount of money being sent from the UVSS to the CFS in membership fees. The court relied on the following passage from North Shore Independent School Society v. B.C. School Sports Society (CanLII) when scrutinizing the conduct of the National Executive, like any other decision-making in voluntary associations:
36 The narrow scope for judicial review of the decisions of a domestic tribunal were noted by Dohm J. in Vancouver Hockey Club Ltd. v. 8 Hockey Ventures Inc. 1987 CanLII 2461 (BC S.C.), (1987), 18 B.C.L.R. (2d) 372 (B.C. S.C.) at 375:
The review by the court of orders made by an unincorporated association such as the N.H.L. through its president and chief executive officer (a domestic tribunal as it were) is limited. The power in no way includes the right in the court to substitute its decision for that of the domestic tribunal. The court is not the court of appeal. Rather, its power is narrow and it may only interfere if the order was made without jurisdiction (or against the rules) or if it was made in bad faith or contrary to the rules of natural justice. In addition, the courts will be reluctant to interfere with the decisions of a domestic tribunal where it is shown that internal remedies have not been exhausted. And there is even greater reluctance to interfere if the decision is based upon opinions regarding the standards of propriety and conduct appropriate for members of a particular association. Dawkins v. Antrobus (1881), 17 Ch. D. 615 (C.A.); Lee v. Showmen’s Guild of Great Britain,  2 Q.B. 329,  1 All E.R. 1175 (C.A.); Harelkin v. Univ. Of Regina, 1979 CanLII 18 (S.C.C.),  2 S.C.R. 561,  3 W.W.R. 676, 96 D.L.R. (3d) 14, 26 N.R. 364 (Sask.]. These well-known principles provide the foundation for the court’s review.
37 These cases show that the courts are prepared to interfere with the decision of a domestic tribunal where it can be shown that the tribunal exceeded its jurisdiction or failed to comply with the rules of natural justice or otherwise acted in bad faith. What these cases also demonstrate is the reluctance of the courts to intervene by substituting the court’s judgment for the judgment of the tribunal on a matter of substance within the tribunal’s jurisdiction.
The court found against the CFS, arguing that it had no basis for considering the second petition in deciding whether to accept the main petition.
The important lesson to draw from this one: student organizations, particularly ones with lots of student power or money, should be very cautious to follow their own procedures and any other legal requirements, particularly rules of good faith and natural justice. Whether any student actually has the time or money to sue them is a different matter.
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