Charity and Not-For-Profit Law

The Jewish Foundation of Greater Toronto (Foundation) moved to dismiss or stay a bankruptcy application brought by The Joseph Lebovic Charitable Foundation (JLCF).

JLCF alleged the Foundation was indebted to it for over $15 million from a Donor Advised Fund (DAF) and had failed to meet its liabilities.

The court found no debtor/creditor relationship, as the funds were irrevocable gifts, not debts.

It also found no evidence the Foundation was unable to pay its debts, noting its excellent financial health.

The court determined that no act of bankruptcy occurred and that the JLCF's application, brought as a single creditor, lacked special circumstances.

The court further found the bankruptcy application to be an abuse of process, brought for the collateral purpose of pressuring the Foundation to distribute funds, rather than for a legitimate bankruptcy purpose.

The Foundation's motion to dismiss was granted, and the bankruptcy application was dismissed.

The applicant, Gregory Zentner, sought certification of a class action against GFA World and related entities, alleging fraud and misappropriation of charitable donations.

The defendants brought a cross-motion for summary judgment to dismiss the claim on limitation grounds.

The court dismissed Zentner's motion for certification, finding that the pleadings did not disclose a cause of action because the donations were unencumbered gifts, meaning donors did not suffer a compensable loss recoverable through civil action.

The court also found insufficient factual basis for common issues, particularly regarding reliance and causation.

However, the defendants' summary judgment motion was also dismissed, as there remained a genuine issue requiring a trial concerning when Zentner discovered, or reasonably ought to have discovered, the material facts of his claim for limitation purposes.

The applicants, co-founders of a not-for-profit organization, sought declarations and orders against the primary respondent and others for corporate governance breaches and misappropriation of corporate property.

The primary respondent unilaterally declared herself president, installed a new board, and locked the applicants out of corporate accounts, claiming the organization and its assets were part of her PhD study.

The court found the respondent breached corporate legislation, improperly removed directors, and misappropriated corporate property.

The court ordered the return of all corporate property and accounts to the organization and permanently enjoined the primary respondent from holding herself out as president, director, or member, or from using the organization for funding applications or making website changes.

This endorsement provides reasons for granting an initial order under the Companies’ Creditors Arrangement Act (CCAA) to Trinity Ravine Community Inc., a registered charitable organization developing a senior citizens' life lease community project.

The applicant faced insolvency due to escalating construction costs and demands for deposit refunds from purchasers.

The court found the applicant met the CCAA requirements, including insolvency and good faith, and that a CCAA process was appropriate despite it being a real estate development, given its charitable purpose and the potential for maximizing creditor recoveries through a dual-track sale and investment solicitation process (SISP).

An initial administration charge was also granted to secure professional fees.

This trial concerned governance of an unincorporated association, disputed terminations of membership, and control over a 16-acre association property.

The court held it had jurisdiction to intervene because the dispute engaged proprietary and contractual rights connected to the property, distinguishing the voluntary-association principles in Aga.

The purported termination of members and subsequent efforts by the 2010 board to control or sell the property were found inconsistent with the association's Constitution, unsupported by reliable evidence, and beyond the board's expired mandate.

The court found there were no current members because dues had not been paid for years, dismissed the defendants' claims in full, and ordered a process for new or restored memberships, an AGM, election of a new executive board, and a temporary prohibition on transfer or encumbrance of the property pending completion of that process.

The appellant appealed a decision upholding the election of the respondents' board of directors and officers at an annual general meeting.

The appellant argued that as the incumbent Vice-Chair, he was automatically entitled to become Chair, and that the election of the respondent Chair was irregular due to nomination and membership admission procedures.

The Court of Appeal dismissed the appeal, finding the application judge's holistic interpretation of the poorly drafted bylaws and historical governance practices was reasonable and free from palpable and overriding error.

The applicant, a not-for-profit corporation, sought declarations validating the election of its board of directors and the subsequent removal of two former directors.

The respondent former directors challenged their removal, arguing that the board's temporary retirement at the annual general meeting left the corporation without members to re-elect them, and that they were denied procedural fairness.

The court rejected the respondents' literal interpretation of the by-laws to avoid commercial absurdity, finding the board was properly elected.

The court also held that the respondents received adequate notice and were not denied natural justice.

The applicant's application was granted.

Dr. Chandrasegaram, a long-standing board member of the Canadian Tamil Medical Association (CTMA), brought an application challenging the election of Dr. Ruban as Chairman.

He alleged irregularities including non-compliance with bylaws regarding automatic elevation to Chairman, late declaration of candidacy, and improper admission of new members.

The court dismissed the application, finding that while some irregularities existed, they did not go to the heart of the electoral process or alter the majority's wishes, especially given the organization's past practices and the significant vote margin.

Costs were awarded to the respondents.

The appellants appealed an order directing an election for a new common board of directors for two related not-for-profit corporations and ordering the delivery of keys to a shared property.

The Divisional Court dismissed the appeal, finding that the application judge had jurisdiction under the Corporations Act to order the election, did not breach procedural fairness, provided adequate reasons, and awarded reasonable costs.

The applicant sought to be reinstated as a member and director of a not-for-profit religious corporation after being removed for allegedly misappropriating donation funds.

The respondents terminated his membership following an investigation and video surveillance.

The court dismissed the application, finding that the respondents had the authority to terminate the membership under the corporate by-laws and acted with procedural fairness.

Furthermore, relying on Supreme Court precedent, the court held it lacked jurisdiction to intervene in the membership decisions of a religious organization absent an underlying legal right.

The plaintiffs, representing a faction of a non-profit religious temple, brought a motion seeking the interim appointment of a monitor to manage the temple's financial affairs due to alleged governance and financial irregularities.

The court found that the incumbent directors served on properly constituted governance boards and acted in good faith.

Although the court identified certain irregularities, such as the failure to provide audited financial statements, it concluded that these did not warrant the intrusive appointment of a monitor.

The motion was dismissed, but the court directed the temple to prepare audited financial statements, update its corporate profile, and provide refresher training on donation counting procedures.

The Estate Trustee brought a motion to determine the wording of a release for an interim distribution of the estate's assets.

The charitable beneficiaries opposed the motion, arguing that an interim distribution could not occur until their objections to the passing of accounts were resolved.

The court found no principled basis to object to the interim distribution, as sufficient funds would remain in the estate to cover potential liabilities.

The court directed the parties to exchange materials and attend a case conference to resolve the remaining disputes and finalize the form of release.

Cricket Canada brought an application under section 17(8) of the Arbitration Act, 1991, to challenge the jurisdiction of the Sports Dispute Resolution Centre of Canada (SDRCC) and its appointed arbitrator.

The underlying dispute involved the Alberta Cricket Council (ACC) seeking membership in Cricket Canada, which Cricket Canada argued was outside the SDRCC's jurisdiction.

The court upheld the arbitrator's decision, finding that the SDRCC had jurisdiction over the dispute, interpreting "Sports-Related Dispute" broadly to include disputes among sport organizations concerning participation and membership entitlements.

The Estate Trustee sought court direction regarding the residue of a will, as the named charitable beneficiary, Paroisse Sainte-Therese-de-L’Enfant-Jesus, had dissolved before the testator's death.

The court applied the cy-près doctrine, finding a general charitable intention on the part of the testator.

The residue was directed to La Fabrique de la Paroisse Sainte-Sophie, which continued the work of the original parish the testator had strong ties to, thereby honouring the testator's wishes.

The appellant cemetery group appealed a decision declaring that its directors were invalidly appointed under 1849 legislation, that its funeral home and visitation centre businesses exceeded its statutory objects, and that it was a charitable purpose trust subject to the Charities Accounting Act.

The Court of Appeal allowed the appeal, finding that an 1871 Act fundamentally changed the cemetery's governance to a corporate model, displacing the pioneer public election process.

The Court also held that the ancillary funeral operations were within the cemetery's objects and that the cemetery was a statutory trust, not a charitable purpose trust.

The respondents' cross-appeal seeking an investigation by the Public Guardian and Trustee was dismissed.

The applicant, Le Congrès Hellénique du Québec (CHQ), sought declarations that the respondent, Canadian Hellenic Congress (CHC), had improperly adopted its 2016 Constitution, invalidly created the Quebec Regional Council (QRC), and conducted void 2016 elections.

The court found that the 2016 Constitution was not properly adopted due to significant procedural defects and non-compliance with the 1999 Constitution's amendment procedures, which constituted a breach of contractual obligations to its constituent organizations.

The QRC was also declared improperly created as a provincial organization already existed in Quebec and no valid by-law was passed for its establishment.

While irregularities in the 2016 elections were noted, the court declined to nullify them due to lack of specific evidence impacting the result and the impracticability of the requested relief.

Certain provisions of the 2016 Constitution were declared of no force or effect until properly amended, with the corresponding 1999 Constitution provisions applying in the interim.

The Ryerson Students' Union (RSU) moved for an interlocutory injunction to prevent Ryerson University from terminating an operating agreement and to compel the release of withheld student fees.

The University had terminated the agreement citing financial mismanagement by a previous RSU executive.

The court found that the RSU had taken prompt corrective actions, establishing a strong prima facie case that it had not repudiated the agreement.

The withholding of fees constituted irreparable harm, as it would force the RSU to cease operations.

The balance of convenience favored the RSU, as the University's proposed new governance process was initiated after the RSU's claim and its arguments regarding financial control were not substantiated.

The motion was allowed, ordering the University to comply with the agreement and release the funds.

The appellants, former directors of a non-profit daycare centre, appealed the dismissal of their application for leave to commence a derivative action against a former director and administrator for alleged misappropriation of funds.

The Court of Appeal upheld the application judge's finding that the action was bound to fail, noting that the board of directors and the Public Guardian and Trustee had already investigated the allegations and taken no action.

The appeal and leave to appeal costs were dismissed.

This application and counter-application concerned ownership of a 95-acre scout camp property acquired through historical transfers dating back to 1960.

The court held that the unincorporated association lacked legal capacity to be either settlor or beneficiary of a private trust and therefore could not claim a beneficial or proprietary interest in the land.

Applying trust principles, the court found the 1960 conveyance created a valid charitable purpose trust for the promotion of youth welfare through scouting, but held that the 1983 transfer vested absolute legal title in the respondent incorporated body.

In the alternative, the court held that, if absolute title had not passed, the charitable purpose trust continued.

The application was dismissed and the counter-application was allowed in part.