Court File and Parties

COURT OF APPEAL FOR ONTARIO DATE: 20231208 DOCKET: COA-22-CV-0276

Roberts, Miller and Coroza JJ.A.

BETWEEN

Alem Birhane, Fekre Gabreselassie and Yohannes Ghebremedhin Applicants (Respondents)

and

Medhanie Alem Eritrean Orthodox Tewahdo Church, Andeberhan Kidane, Futzum Aitzegheb*, Samuel Tekie Kelete*, Michael Tekeste and Kaleab Kelit Araia** Respondents (Appellants*)

Counsel: David Sischy and Yona Gal, for the appellants Allan Morrison and Elham Beygi, for the respondents

Heard: May 3, 2023

On appeal from the order of Justice Marie-Andrée Vermette of the Superior Court of Justice, dated October 11, 2022, with reasons reported at 2022 ONSC 5732.

B.W. Miller J.A.:

[1] The individual parties are all members of Medhanie Alem Eritrean Orthodox Tewahdo Church (the “local Church”). The present litigation arises from a conflict between two groups. The individual appellants are members of the local Church who have also served as volunteer board members. There is a dispute as to whether they continue to serve in that capacity. The respondents are also members of the local Church and claim broad support from within its membership. The immediate dispute is over various internal governance issues, particularly whether the board is properly constituted, whether the local Church can be ordered to hold an overdue Annual General Meeting (“AGM”), and the impact of canon law – specifically 2016 diocesan resolutions (the “Canon Law Promulgation”) - on the procedural rules governing the AGM. The appellants argue that these issues are all matters of canon law and are accordingly non-justiciable.

[2] Beneath the immediate dispute is a more fundamental conflict between the two groups. It has to do with the respondents’ challenge to the authority of two bodies within the church hierarchy to which the local Church is subordinate. First is the Eritrean Orthodox Tewahdo Church Diocese of North America (the “Diocese”), the ecclesiastical district to which the local Church belongs. Second is the Holy Synod Eritrean Orthodox Church (the “Synod”), the governing ecclesiastical council in Asmara, Eritrea. The respondents objected to a decision of the Synod to excommunicate their former priest, and object to financial obligations that the Diocese have imposed on the local Church. It appears that the respondents would prefer to withdraw from the Diocese. None of these broader issues are before this court on appeal and they are likely non-justiciable in any event.

[3] The application judge ordered that an AGM be held, as required by both the local Church’s bylaws and statute. As explained below, she did not err in so doing. However, two aspects of the order below create unnecessarily conflict with canon law and must be set aside. Specifically, the order stipulates that the AGM must be held in accordance with the bylaws that came into effect on January 1, 2014 and that it must have a court-appointed neutral chair. The order thus prevents the local Church from calling a special or emergency meeting to vote on whether the next AGM ought to be held in accordance with the Canon Law Promulgation, including any canon law requirements with respect to the AGM chair, as its bylaws would otherwise entitle it to do. Accordingly, and as explained in more detail below, I would uphold the order but strike these conditions. The local Church may convene a special or emergency meeting before the next AGM for the purpose of voting on the proposed amendments to the bylaws. The AGM is to be held in accordance with whatever bylaws result.

Background

[4] Under canon law, the local Church is part of a greater hierarchy and, as noted above, it takes direction from the Diocese and, above the Diocese, the Synod.

[5] The local Church was incorporated as a not-for-profit corporation under the Ontario Corporations Act, R.S.O. 1990, c. C.38. It is governed in part by internal bylaws. There was a dispute as to whether bylaws adopted in 2014 (the “2014 Bylaws”) were validly amended in 2019. The application judge found that there was insufficient evidence to conclude that the 2014 Bylaws were properly amended, and she concluded that the 2014 Bylaws continued to govern.

[6] In 2016, the Diocese promulgated canon law resolutions (the “Canon Law Promulgation”) that stipulated: (1) the Diocese must review church bylaws prior to a church’s AGM to ensure compliance with the covenant of the Diocese; (2) a representative of the Diocese must attend the AGM to verify the election process; and (3) the chair of the board of directors of the church must be a priest.

[7] The last AGM was held in 2018, and the last election of the board of directors was held in 2016. Since the bylaws provide that board members are to serve a term of three years, there ought to have been elections at a 2019 AGM. But the 2019 AGM was not held, and the application judge was not persuaded that a 2019 vote that the appellants claim extended their term, in fact, took place. Matters were later complicated by the Covid pandemic.

[8] An AGM was scheduled for December 4, 2021. The appellants claim that their predecessors on the board (including some of the respondents) did not inform them of the Canon Law Promulgation. They allege that they did not learn about the Canon Law Promulgation until December 1, 2021, when they received a letter from the Diocese requiring the local Church to comply with it. In that letter, the Diocese reminded the board of the requirement that the Diocese review the bylaws of the local Church prior to the AGM and the election of church officers. In an effort to comply, the appellants vacated the AGM to facilitate the Diocese’s review.

[9] In response, on December 24, 2021, the respondents brought the application now under appeal.

[10] On December 31, 2021, the Diocese wrote to the local Church advising that its bylaws were approved, subject to revisions to incorporate four points of canon law:

i. A priest would be chair of the congregation; ii. The school’s youth representative would be selected by the Sunday School and would be a member of the congregation; iii. The Diocese would resolve disagreements within the congregation that, for whatever reason, the local priest could not resolve; and iv. A representative of the Diocese should observe elections in the congregation.

[11] After multiple court appearances in early 2022, all parties agreed that an AGM would be held, and the Church rescheduled the AGM to February 26, 2022. In the weeks prior to the scheduled AGM, the parties discussed how the AGM should be conducted. The appellants, in accordance with the Canon Law Promulgation, had invited a Diocesan priest to attend as a religious witness. The respondents objected that the attendance of a Diocesan priest was contrary to Church bylaws, which restricted attendance to active members. The respondents demanded a neutral chair for the AGM, but the parties could not agree on who that should be. The respondents requested that the appellants produce church meeting minutes, resolutions, and active membership lists. The appellants did not receive these items prior to the AGM.

[12] The appellants made preparations for the AGM, renting a hall to have sufficient space to comply with Covid restrictions. The attendees queued outside as one of the appellants – without whom the AGM could not proceed – arrived late. There was no screening for membership and all persons were admitted into the hall. A Diocesan priest, who was not a member of the local Church, attended and was invited to recite a short prayer at the commencement of the meeting. The respondents objected. There was a disturbance. The appellants claimed the respondents obstructed the meeting, and the appellants called the police.

[13] In the end, the AGM never took place and the parties returned to court.

[14] The part of the Application relating to the holding of the AGM was heard by the Application Judge, who ordered the local Church to hold an AGM pursuant to the Not-for-Profit Corporations Act, 2010, S.O. 2010, c. 15 (the “NFPCA”) and the 2014 Bylaws, with a court-appointed neutral chair. The appellants appealed to this court.

Issues

[15] The appellants raise four issues on appeal. The application judge is said to have erred by:

1. Finding that the respondents, by virtue of their membership in the local Church congregation, were also members of the Church as an incorporated entity (the “Incorporated Church”), and therefore had justiciable legal rights under the NFPCA;
2. Holding that the interpretation of the Canon Law Promulgation was justiciable;
3. Holding that the respondents were not required to exhaust alternative remedies available within the Eritrean Orthodox Church, and that the respondents nevertheless satisfied this requirement; and
4. Finding that the individual appellants failed to satisfy their obligations as volunteer directors of the Church.

Analysis

(1) The respondents are members of the Incorporated Church

[16] The appellants argue that the application judge erred by failing to respect the distinction between the local Church qua congregation and the Church qua corporation, per Ethiopian Orthodox Tewahedo Church of Canada St. Mary Cathedral v. Aga, 2021 SCC 22, 163 O.R. (3d) 719, at paras. 41-42. In that case and others, courts have cautioned that although a congregation can have an associated incorporated entity – which is often necessary for the purposes of holding title to lands – a court should not conflate the congregation, which is a voluntary association, with the incorporated entity: Ukrainian Greek Orthodox Church v. Ukrainian Greek Orthodox Cathedral of St. Mary the Protectress, [1940] S.C.R. 586, at paras. 23, 70, and 72-73. These two organizational aspects must be kept distinct in order to preserve the autonomy of the congregation to choose to be governed by canon law and to avoid the encroachment of the state into religious matters.

[17] The appellants argue that the application judge conflated membership in the Incorporated Church, which is governed by the NFPCA, with membership in the local Church congregation, which is an unincorporated voluntary association.

[18] They argue further that the respondents are not members of the Incorporated Church, and cannot rely on either the NFPCA or the bylaws, which govern only the Incorporated Church.

[19] The appellants’ argument that the respondents are not members in the Incorporated Church is based in part on s. 121 of the Corporations Act, which provides that the incorporators of a charitable corporation are its original members. As the respondents were not incorporators named in the Incorporated Church’s letters patent, they were thus not original members. And per, Rexdale Singh Sabha Religious Centre v. Chattha, absent evidence of specific resolutions to the contrary, the incorporators remain the corporation’s sole members.

[20] The appellants claim that there is no evidence that the Incorporated Church passed any resolutions that changed its membership after incorporation. While the 2014 Bylaws stated that the board would approve membership applications and the appellants have produced a list of active church members, the 2014 Bylaws concern membership in the congregation, not the Incorporated Church.

[21] On this basis, the appellants argue that the respondents are not members of the Incorporated Church that is subject to the NFPCA and, therefore, the respondents have no justiciable rights thereunder. Whatever governance rights the respondents have (whether to an AGM or an election of directors) as members of the congregation are governed by canon law, as adjudicated by the church’s own institutions, and not the civil courts.

[22] I disagree that the application judge made a reversible error in this respect. She found that there was an absence of evidence to support the appellants’ claim that there were two organizations (an unincorporated congregation and an associated corporation). She drew an adverse inference from the failure of the appellants to adduce evidence to the contrary – records that she found would have been under their control as directors. She also found that the record before her did not support the conclusion that membership in the Incorporated Church is restricted to the three original applicants:

It is clear that prior elections held under the 2014 Bylaws were considered to be elections of the board of directors of the incorporated Church as the names of the directors elected by the active members appear on the Church’s Corporate Profile Report.

If the members of the Church as a corporation were limited to the three Original Applicants … the directors of the incorporated Church would have had to be elected by these three Original Applicants, pursuant to section 287 of the Corporations Act. There is no evidence of any meeting or vote of the Original Applicants to elect directors of the incorporated Church.

[23] Further, the application judge found that if there were two separate entities and the 2014 Bylaws only governed the unincorporated congregation, it would be impossible to make sense of many of the Bylaws’ provisions. For example, there are provisions that address the directors’ responsibilities for church property, which can only be held by the Incorporated Church. Other provisions address statutory duties that only apply to the directors of incorporated charities, such as those under the Charities Accounting Act, R.S.O. 1990, c. C.10.

[24] The application judge’s conclusions are reasonable inferences from her reading of the 2014 Bylaws and the factual record before her. There is no basis on which this court should interfere. It was not unreasonable to conclude, as the application judge did, that the 2014 Bylaws were drafted to govern a single church entity, that entity was organized using a corporate structure, and the respondents are members of the entity.

[25] However, as explained below, the determination that the local Church’s organizational structure is corporate does not resolve the question of whether and how canon law applies to this dispute, or the extent to which the dispute over the governance issues is justiciable.

(2) There is some conflict between the AGM procedure and canon law

[26] The finding that the local Church is organized as a single incorporated entity and is accordingly subject to the obligations imposed by corporate governance statutes is not dispositive of the key matters in dispute on this appeal. As the appellants argue, there is an apparent inconsistency in the application judge’s reasoning. On the one hand, she found that the local Church is organized as an incorporated entity and that there is no parallel unincorporated entity. On the other hand, she found that the Canon Law Promulgation applies only to the Church congregation and thus has no bearing on the governance questions in issue.

[27] This is an inconsistency, as the appellants argue, but the more significant problem is the assumption that canon law does not apply to the Incorporated Church. Whether a church is organized by way of incorporation has no bearing on whether it is also subject to canon law. The act of incorporation creates an additional set of legal obligations that need to be reconciled with ecclesiastical obligations, but it does not oust canon law categorically. The relationship between canon law and civil law can be a difficult matter, and courts have been reluctant to become involved in the internal affairs of religious organizations for several reasons.

[28] First is the “real risk of misunderstanding the relevant tradition and culture” of the religious organization in question: Ivantchenko v. Sisters of Saint Kosmas Aitolos Greek Orthodox Monastery, 2011 ONSC 6481, at para. 6. This includes the risk of misunderstanding both the content and the authority of written documents, and a tendency to artificially inflate the importance of any legal documents, with which courts are more comfortable: Lakeside Colony of Hutterian Brethren v. Hofer, [1992] 3 S.C.R. 165, at para. 63.

[29] Second is the concern of inadvertently straying into non-justiciable matters of religious doctrine: Syndicat Northcrest v. Amselem, 2004 SCC 47, [2004] 2 S.C.R. 551, at para. 50.

[30] The appellants are right to caution about the danger of courts straying into non-justiciable matters of church doctrine when addressing matters of church governance. However, it is settled law that the civil law may impose obligations on the governance of religious bodies where, as here, such bodies have brought themselves within the civil law’s authority. The rules for resolving perceived conflicts between canon law and civil law in such situations might be underdeveloped from the perspective of civil law, and expert evidence may be needed to understand the relevant canon law: Ivantchenko, at para. 8. Courts will nevertheless require religious organizations to uphold their obligations to their members in property and governance disputes: see Pankerichan v. Djokic, 2014 ONCA 709, 123 O.R. (3d) 131, at paras. 52-64. When the assistance of courts has been sought, courts have required religious organizations to follow their internal rules: see e.g., Lakeside Colony. Incorporated religious bodies like the local Church are subject to, among other civil obligations, the general governing procedures established by the NFPCA (subject to constitutional considerations of which none have been advanced in this case), and their own internal rules such as bylaws providing, for example, the requirement that an AGM be held and directors be elected. These obligations apply in addition to these bodies’ canon law obligations, and the two do not necessarily conflict.

[31] The appellants are thus wrong to suggest that civil law obligations that bear on matters also governed by canon law obligations necessarily trespass into non-justiciable territory. But even where courts must enforce civil law obligations, they should take care to ensure that the discretionary elements of their orders do not encroach upon matters of canon law. Here, the question arises as to whether the discretionary elements of the order below conflict with canon law. On the record before us, there is some conflict.

[32] The appellants submit that the order conflicts with canon law because the Canon Law Promulgation requires the local Church to amend its bylaws as a precondition to any AGM taking place. The appellants appear to assume that the local Church could only have made these amendments during or after the AGM.

[33] To the contrary, under the terms of the 2014 Bylaws, an AGM is not required to amend the 2014 Bylaws. Article 18.1 provides that the Bylaws “may only be amended by the Church members at any Members’ Meeting”. Article 3.12 defines a “Members’ Meeting” to mean not just an AGM, but also to include “Special Meeting[s] and Emergency Meeting[s].” Article 6.2 then stipulates the conditions under which special and emergency meetings may occur. Both may be called by the board of directors. While the local Church is overdue for an election, s. 24(5) of the NFPCA provides that the appellants retain their offices as board members “until their successors are elected.” Accordingly, the appellants have retained the power to bring the 2014 Bylaws in line with the Canon Law Promulgation to the extent that the two conflict. Before the issuance of the order below, nothing stopped them from calling a special or emergency meeting at which they could have put the relevant amendments to a vote of the local Church’s members.

[34] The order below, however, requires that the local Church hold an AGM “in accordance with … the bylaws of the Church that … came into effect on January 1, 2014.” It thus requires the local Church to hold the court-ordered AGM in accordance with its old bylaws, and not any new bylaws approved at a special or emergency meeting before the AGM.

[35] This aspect of the order creates unnecessary conflict with canon law. It is reasonably clear from the Diocese’s letters that the Canon Law Promulgation conflicts with the 2014 Bylaws as to the requisite procedure for the next AGM. The local Church would ordinarily be able to amend the 2014 Bylaws to resolve this conflict before the next AGM. There is no statutory obligation that would prevent this. The only legal impediment is the order below. That aspect of the order fails to respect the priority afforded to canon law by the common law in internal church matters, even over procedural matters (see Highwood Congregation of Jehovah’s Witnesses (Judicial Committee) v. Wall, 2018 SCC 26, [2018] 1 S.C.R. 750, at para. 38; Mathai v. George, 2019 ABQB 116, at paras. 10-13), and the deference owed to interpretations of canon law provided by a church’s internal governing structure: Rex Ahdar & Ian Leigh, Religious Freedom in the Liberal State, 1st ed. (Oxford: Oxford University Press, 2005) at pp. 329-34; Lakeside Colony, at paras. 63-64. The local Church ought instead to have been afforded an opportunity to bring its bylaws in line with the Canon Law Promulgation at a special or emergency meeting.

[36] The issue of whether there is conflict between canon law and the application judge’s order that the AGM have a court-appointed neutral chair is less clear. The position of the appellants at case conferences – that a neutral chair would be acceptable to them – is inconsistent with their current position that canon law requires the chair to be a priest. Their current position is likewise inconsistent with their actions at the failed AGM, where they simply had a visiting priest open the AGM in prayer and attend as a Diocesan witness to the meeting.

[37] Nevertheless, the local Church’s bylaws ordinarily dictate who must chair its AGMs. As the local Church should be allowed to vote to amend its bylaws before the next AGM, it should be allowed to vote on who will chair the AGM, too.

[38] In sum, the conditions in the order below stipulating that the AGM is to take place in accordance with the bylaws as they came into effect on January 1, 2014 and that it will have a court-appointed neutral chair should be struck. The local Church should be permitted to hold a special or emergency meeting, in accordance with the 2014 Bylaws, for the purpose of determining whether to revise the Bylaws to conform to the Canon Law Promulgation. The 2014 Bylaws do not indicate who must chair the local Church’s special and emergency meetings. Neither is there any evidence of a canon law requirement on this point. This meeting should therefore have a court-appointed neutral chair. The local Church must then hold an AGM and should do so in accordance with whatever bylaws result from the vote at the special or emergency meeting.

[39] It appears that some members of the congregation would prefer to leave the Diocese and, as a result, it is not certain that the local Church will vote to amend the Bylaws to adopt the Canon Law Promulgation. However, whatever effect that result would have from the perspective of canon law is not for this court to decide. The evidence on the application on canon law and church institutions is thin. The Diocesan letters do not address the issue of how the 2014 Bylaws were to be amended procedurally, or what the consequences of a breach of canon law would be. Although the dispute between the respondents and the Diocese is at the root of the current proceeding, the Diocese was not joined as a party to the proceeding and provided no evidence. Better evidence as to canon law and institutions would have been useful.

(3) The Appellants have failed to prove the existence of alternative remedies within the Church hierarchy

[40] The appellants had an obligation to schedule an AGM in 2019 and to hold an election for directors. They were derelict in this responsibility. The respondents were entitled to seek a remedy through the civil courts.

[41] It is true that this court has accepted the general rule that where “the rules of a self-governing organization, especially a religious organization, provide an internal dispute resolution” to a person “who has been aggrieved by a decision of that organization”, that person “must seek redress in the internal procedures of that organization”: Hart v. Roman Catholic Episcopal Corporation of the Diocese of Kingston, in Canada, 2011 ONCA 728, 344 D.L.R. (4th) 332, at para. 18.

[42] Again, however, the problem faced by the appellants is an evidentiary one. Quite simply, if there is an internal dispute mechanism by which the respondents could have objected to the failure of the appellants to hold the AGM, they did not provide evidence as to what it is, beyond a general reference to “the Diocese”. In the absence of such evidence, the application judge made no error in ordering that an AGM be held.

(4) The appellants’ compliance with their duties as board members

[43] The appellants are volunteer board members. They argue that the application judge erred in subjecting them to an overly stringent standard regarding the extension of election terms and record-keeping and should have afforded them more latitude for technical deficiencies.

[44] The appellants submit that their faults were only technical, and that they should be judged against the historical practices of the previous boards of directors of the local Church (including the respondents), rather than according to the strict administrative requirements applied in other corporate contexts. They contend that the application judge erred by using administrative deficiencies as a reason to conclude that Church members have corporate rights.

[45] I disagree that the application judge held the respondents to an overly strict standard or that her criticisms of the respondents affected the outcome.

[46] The application judge was entitled to draw an adverse inference against the appellants for failing to adduce evidence for their defences when such evidence, such as corporate records, if it existed, would have been in their control. For the reasons explained above, it was also open to her to determine that the corporate by-laws and canon law required that an AGM be held.

[47] Nevertheless, some of the application judge’s comments on this issue seem to be a product of her inadvertently straying into non-justiciable matters of religious doctrine. For example, when considered through the lens of the appellants’ argument that the matters before the application judge were non-justiciable matters of religious doctrine, the application judge’s denunciation of the individual appellants as “obstructionist” and “less than candid” for asserting arguments that supported their position appear unjustified. So too were the application judge’s comments that the evidence “raises serious issues” about whether the individual appellants had “discharged their duty to exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances”, particularly when, as the application judge acknowledged in her reasons, it was not necessary for her to determine these issues.

Disposition

[48] The appeal is allowed in part. The court-ordered AGM must still take place, but the conditions stipulating that the AGM must accord with the 2014 Bylaws and have a court-appointed neutral chair are struck. The local Church must hold a special or emergency meeting, in accordance with the 2014 Bylaws, for the purpose of voting on whether to amend the Bylaws to adopt the Canon Law Promulgation. This meeting will have a court-appointed neutral chair. The parties are free to agree on a neutral chair subject to court-approval. They are to return to the application judge with a proposed name on consent for the court-appointed neutral chair, or, if there is no agreement, they will return with proposed names, and the application judge will appoint the neutral chair. The local Church must then hold an AGM in accordance with whatever bylaws result from the meeting.

[49] If the parties are unable to agree on the costs of the appeal within two weeks of the release of these reasons, they may each make brief written submissions not exceeding 5 pages exclusive of bills of costs. The appellants’ submissions are due within 4 weeks of the release of these reasons, and the respondents’ submissions within 1 week thereafter.

Released: December 8, 2023 “L.B.R.” “B.W. Miller J.A.” “I agree. L.B. Roberts J.A.” “I agree. Coroza J.A.”