A member of a limousine drivers’ co‑operative brought an application under the Co‑operative Corporations Act seeking an order compelling the co‑operative to enforce its by‑law disqualifying members who held interests in competing airport limousine services.
Certain respondents had acquired shares in a holding company that owned a competing limousine operator.
The court held that the by‑law governing membership qualifications was validly enacted and that members were estopped from challenging its validity after years of operating under it.
However, the provision purporting to automatically terminate membership upon breach was inconsistent with the statute, which requires expulsion by board resolution after due process.
The court directed that the board may disqualify members with interests in the competing company following proper procedures but dismissed the application against a respondent who had divested his shares.
