CITATION: Bose v. Bangiya Parishad Toronto, 2021 ONSC 59
DIVISIONAL COURT FILE NO.: DC-19-525
DATE: 2021/01/06
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Sachs, Backhouse and G. King JJ.
BETWEEN:
Basu Deb Bose, Dr. Prasanta Kumar Sarkar, Ranendra N. Ghoshi, Sunil Sengupta, Asish Kumar Ghosh, Sailesh K. Roy, Swapan Kumar Ghosh, Rupa Dutta, and Basanti Roy
Applicants (Respondents in Appeal)
– and –
Bangiya Parishad Toronto (also known as Bangiya Parishad)
Respondent (Appellant in Appeal)
AND BETWEEN:
Rathin Ghose, Sanjib Mukherjee, Subhra Sur, Apurba Mukherjee, Kobi Banerjee, Anirban Kargupta, Prabasi Bengali Cultural Association and Bangiya Parishad Toronto
Applicants (Respondents in Appeal)
-and-
Jnan Chowdhury also known as Ananda Chowdhury, also known as Ananda Jnan Chowdhury, Ashoke Neogi, also known as Ashok Neogi, Arpita Mukherjee, Partha Banerjee, also known as Bapi Banerjee, also known as Partha Bapi Banerjee, Mrinmoy Bhakta, Ujjal Chowdhury, Nirmal De, Ruby Mukherjee, and Sandip Goswami
Respondents (Appellants in Appeal)
Angela Assuras, for the Appellants
John Lo Faso, for the Respondents Rathin Ghose et al
Wade Morris and Elizabeth DeYoe, for the Respondents, Basu Deb Bose et al
HEARD at Toronto by videoconference: November 26, 2020
H. Sachs J.
Introduction
[1] Prabasi Bengal Cultural Association (the “Cultural Association”) promotes and hosts Bengali cultural events. It is a not-for-profit corporation under the Corporations Act, R.S.O. 1990, c. C.38. In 1987, the Cultural Association purchased a property known as the Tagore Centre, which it used to host its events. In 1992, the Tagore Centre was transferred to the Bangiya Parishad Toronto (the “Religious Corporation”). The Religious Corporation is also a not-for-profit corporation under the Corporations Act. Unlike the Cultural Association, it is a registered charity.
[2] It is accepted that until recently the two corporations operated as one. Members of the Cultural Association were considered members of the Religious Corporation. The same group of members elected a common board of directors for both corporations.
[3] In 2016, a dispute arose that resulted in a minority of the board of directors of the Religious Corporation taking action to nullify the election of that board and forming a new board of directors (the “New Board”). The New Board began to govern the Religious Corporation independently of the Cultural Association and eventually took steps to change the locks of the Tagore Centre so that the members of the Cultural Association could no longer access the centre.
[4] The Cultural Association commenced two applications in the Superior Court – one to regain access to the Tagore Centre (the “Lease Application”) and the other to resolve the issue of who were the lawful directors of the Religious Corporation (the “Governance Application”).
[5] Both applications came before Belobaba J. (the “Application Judge”) on August 26, 2019. Belobaba J. ordered that an election be held within 30 days for a new common board of directors and that the persons entitled to vote at that election would be the paid-up members of the Cultural Association. Belobaba J. also ordered that the Religious Corporation deliver up keys for the Tagore Centre to the Cultural Association. Finally, he awarded costs in favour of the applicants in the Lease Application in the sum of $20,000.00 and in favour of the applicants in the Governance Application in the sum of $35,000.00.
[6] This is an appeal from that order. The Appellants submit that the Application Judge made the following errors: he had no jurisdiction to make an order that the members of the Cultural Association elect a board of directors for the Religious Corporation; he breached procedural fairness when he made the order he did; and his reasons for his order were inadequate. They also argue that the costs awarded were excessive.
[7] For the reasons that follow I would dismiss the appeal.
Did the Application Judge Have Jurisdiction to Make the Order?
[8] The record before the Application Judge disclosed the following uncontroverted facts, all taken from the Factum of the Appellants that was before him on the applications:
Until recently, the Cultural Association and the [Religious Corporation] operated as a unity. The Cultural Association was properly organized as a corporation, but the Congregation was not. However, members of the Cultural Association by default were considered de facto members of the [Religious Corporation], which technically did not enroll its members or organize its corporate affairs as did the Cultural Association. The By-Laws for the Cultural Association were adopted in 1987. Up until June 2016, the by-laws do not mention being applicable to the [Religious Corporation].
Since 1980, the members of the Cultural Association, who are the de facto members of the [Religious Corporation], have elected a common board of directors. The members of the Cultural Association also elected the presidents of both corporations. The common Board of Directors would then appoint from the Board Members the officers for the two corporations. They produced consolidated financial statements for the [Cultural Association] and for the [Religious Corporation].
The [Religious Corporation] is the registered owner of a property at 140 Millwick Drive in Scarborough known as the Tagore Centre. The Tagore Centre had originally been purchased by the Cultural Association in 1987, but in 1992, the property was transferred to the [Religious Corporation] to benefit from its charitable status.
It is alleged that pursuant to a two-page lease dated February 6, 1995, the [Religious Corporation] leased part of the Tagore Centre to the Cultural Association. There was no rent charged. In the Lease Application, the [Appellants] dispute that the Lease actually exists and challenge whether it is enforceable. Up until the corporate internecine conflict, described below, the Cultural Association and the [Religious Corporation] peacefully shared the Tagore Centre.
[9] Thus, for approximately 30 years, the two corporations had functioned as one entity. The members of the Cultural Association were considered to be the members of the Religious Corporation. It was those members who elected one board for both corporations and elected their presidents. The Tagore Centre had been purchased by the Cultural Association, but transferred to the Religious Corporation to benefit from its tax status as a registered charity. For those same 30 years the Tagore Centre was shared peacefully by both corporations.
[10] The Appellants’ Factum filed before the Application Judge goes on to detail the “internecine conflict” that arose in 2016. It reveals that in 2016, the members elected a board of eleven directors and elected Rathin Ghose (one of the Respondents in this appeal) to be the President of the Cultural Association. He proposed a slate of officers, all of whom were approved by the elected directors. The members also elected Ananda Chowdhury (one of the Appellants in this appeal) to be the President of the Religious Corporation. He proposed a slate of officers, but a majority of the elected directors opposed the appointment of his selection.
[11] It is at that point that difficulties arose. Mr. Chowdhury and a minority of directors were upset. They organized a separate membership enrollment for the Religious Corporation, nullified the directors that had been elected according to past practice, and formed the New Board. This left the Religious Corporation with two rival boards of directors: the one that had been originally elected by the members who had been considered members for 30 years, and the New Board. Conflict ensued, with the result that the New Board changed the locks on the Tagore Centre so that the members of the Cultural Association were no longer able to enter. As put by the Appellants in their factum filed before the Application Judge:
- Unable to enter the Tagore Centre on July 17, 2016, the members of the Cultural Association went to another location…
[12] In the face of these facts, the Application Judge found that the New Board had no lawful authority to function as the board for the Religious Corporation. On the appeal before us, counsel for the Appellants did not concede that this finding was correct, but could point to no legal authority for the New Board’s existence. She argued that the New Board acted in good faith when it did what it did.
[13] Faced with a situation where the Religious Corporation was being run by a board with no authority, the Application Judge took steps to fill the gap. Instead of accepting that the Religious Corporation should be run by the board that had been elected originally and that had been a party to the conflict giving rise to the two applications, he ordered that there be a new election by all of the members so that the members could decide afresh whom they wished to govern their organizations. In terms of who those members were, he found that the membership who was entitled to vote at that election should be the membership that had voted in elections for approximately 30 years: the paid-up members of the Cultural Association.
[14] With respect to access to the Tagore Centre, he did not decide whether the Cultural Association had a valid lease, but he did decide that its members should be given access to the centre that they had paid for and used from the time of its purchase in 1987 to 2016. To that end, he ordered that a key to the centre be delivered up to the Cultural Association.
[15] The Appellants object to the Application Judge’s jurisdiction to make this order. They assert that since, formally, the Religious Corporation had no members, the Application Judge could not order that the members of another corporation (the Cultural Association) act as its members for the purpose of electing a new board of directors. The only authority the Application Judge had in the circumstances (a board of directors that had no lawful authority to be the board) was to appoint a new board of directors pursuant to s. 288(4) of the Corporations Act. Section 288(4) reads as follows:
If a corporation to which Part III applies but to which Part V does not apply has neither directors nor members, the court may, on the application of an interested party, make an order appointing the required number of directors…
[16] In other words, instead of allowing the de facto members to elect a board of directors, the Appellants argue that the Application Judge should have appointed the directors himself. This would have required him to find that the Religious Corporation had no members (ignoring the fact that for approximately 30 years the members of the Cultural Association had been treated as the members of the Religious Corporation) and to take a position on the conflict that had arisen in the organizations about who should be the directors instead of allowing the community affected by that conflict to make the decision.
[17] I agree with the observations of Myers J. on the stay application in this case (Bose v. Parishad Toronto, 2019 ONSC 5625) that “[c]orporate law is practical law meant to help business people organize and conduct themselves. It is not applied based on the most technical analysis that leads to the most impractical outcomes” (at para. 29). Likewise, “[c]orporate law is also premised on the construct of shareholder or member democracy. That is, it is for the members to decide how they wish their corporation to be governed” (at para. 31).
[18] Section 297 of the Corporations Act provides the court with authority to direct that a meeting of members be held and to direct the manner in which that meeting is held. It states as follows:
If for any reason it is impracticable to call a meeting of shareholders or members of the corporation in any manner in which meetings of shareholders or members may be called or to conduct the meeting in the manner prescribed by this Act, the letters patent, supplementary letters patent or by-laws, the court may, on the application of a shareholder or member who would be entitled to vote at such a meeting, order a meeting to be called, held and conducted in such manner as the court thinks fit, and any meeting called, held and conducted in accordance with such an order shall for all purposes be deemed to be a meeting of shareholders or members of the corporation duly called, held and conducted.
[19] In this case it was not possible to call a meeting of the members of the Religious Corporation in accordance with the Act, by-laws or letters patent, because the Religious Corporation had not taken the formal steps necessary to enact its own by-laws or admit its own members. That does not mean, however, that the Religious Corporation did not have members. For decades it had treated the members of the Cultural Association as its members, and the members of the Cultural Association had regarded themselves as members of the Religious Corporation. Thus, the reality was that the Religious Corporation did have members (the paid-up members of the Cultural Association) and s. 297 gave the Application Judge the authority to have those members hold a meeting to determine whom they wished to run their organizations. This was both the most practical and democratic option.
[20] Section 332 of the Corporations Act also gives a court the authority to “make such order or such other order as the court thinks fit” in the face of an application by a member who is aggrieved by the failure of a director “to perform any duty imposed by this Act.” In this case, it could be argued that the New Board had acted contrary to its duties in electing itself and in denying the members of the Cultural Association access to the Tagore Centre.
[21] For these reasons I find that the Application Judge did have the jurisdiction to make the order that he did.
Was There a Denial of Procedural Fairness?
[22] A full day had been set aside for the hearing of the matter before the Application Judge. Extensive affidavits had been filed and cross-examinations had been conducted. At the outset of the hearing, the Application Judge opined that having read the record he could not deal with the issues raised without a trial. After further submissions from counsel for the applicants on the Governance Application urging him to find a way to avoid a trial, the Application Judge stated that he could see no reason why a key to the Tagore Centre should not be delivered up to the Cultural Association. The respondents on the application initially consented to delivering up a key and then withdrew their consent. The Application Judge then began writing up the endorsement that is the subject of this appeal. In the course of writing up his endorsement, he also allowed the applicants to make some amendments to their request for relief in the application record.
[23] Given this history, I can understand why the Appellants were surprised by the result of the application. They had expected a full day hearing and then, as a result of the Application Judge’s first expressed impressions, a trial of the issues. Instead, the matter was disposed of in half a day and no trial of an issue was ordered. This surprise, however, does not mean that there was a lack of procedural fairness in the conduct of the hearing.
[24] Procedural fairness involves affording parties the opportunity to present their case fully and fairly and to have the decision affecting their case made in a fair, impartial, and open manner. In this case, the parties had filed an extensive record before the Application Judge and written factums detailing the facts and law they were relying on. The Application Judge had reviewed that record. Included in that record were the uncontested facts that the Application Judge relied on to make his decision – a decision that in my view was the fairest and most expeditious path forward for these parties. The parties did make some oral submissions, as a result of which the Application Judge was able to change his view that a trial of an issue was necessary. Instead, he found that there was a just and fair way for the court to intervene without making any findings on the contested facts. As already alluded to above, this decision put the power back into the hands of the people who were entitled to use it – the affected members of the community who for 30 years had peacefully operated the Cultural Association and the Religious Corporation. The fact that this Application Judge had the skill and insight to see his way forward to the order he made without extensive oral submissions from the parties does not make his process an unfair one. It made it an expeditious one that saved the parties and the affected members (who all belong to one community) the expense and further emotional toll of a long trial over issues that, in the end, would not need to be decided by the court. Once a new board was lawfully elected, that board could make the necessary decisions.
[25] In terms of the amendments that were permitted, those amendments did not alter in any material way the relief that the applicants had been requesting and no prejudice was caused to the Appellants by the fact that they were granted.
[26] While it would have been preferable (as it turned out) for the Application Judge to have conducted the whole proceeding in open court, it is clear that he went into chambers because he thought that the respondents’ concession that they were prepared to give the applicants a key meant that he could possibly intervene to settle the matter. Once that concession was withdrawn, it was clear to the Application Judge that he could not settle the matter and so he went on to decide it. He wrote out his endorsement, which was immediately available for all parties to review.
[27] For these reasons I find that there is no merit to the Appellants’ submission that they were denied procedural fairness.
Were the Application Judge’s Reasons Inadequate?
[28] In Tarko et al v. Metropolitan Condominium Corporation 626 et al, 2015 ONSC 982, Marrocco A.C.J.S.C. dealt with the issue of adequacy of reasons. In that decision he cited R. v. Sheppard, 2002 SCC 26, [2002] 1 S.C.R. 869, where at para. 42, the Supreme Court quotes with approval the following statement by Major J. in R. v. R.(D.), 1996 207 (SCC), [1996] 2 S.C.R. 291:
[W]here the reasons demonstrate that the trial judge has considered the important issues in a case, or where the record clearly reveals the trial judge’s reasons, or where the evidence is such that no reasons are necessary, appellate courts will not interfere.
[29] In addition, it is trite law that the reasons of a decision maker must be capable of meaningful appellate review (see Sheppard at para. 46).
[30] In this case the reasons do demonstrate that the Application Judge had considered the important issues in the case. He does this in the following manner:
(a) He states that he is familiar with the background facts, which are set out by Perell J. in another decision on this matter (Bose v. Bangiya Parishad Toronto, 2018 ONSC 7639). All of the parties on the appeal referred us to Perell J.’s decision for an extensive review of the facts.
(b) He states that he has read and reread the factums and has heard submissions.
(c) He correctly identifies that there are “disputed facts and credibility issues re lease validity, transfer of building and custom + practice of President appointing their own officers”.
(d) He identifies correctly that there is one fact that is clear – that “the actions of Mr. Chowdhury after July 10/16 to lock out the [Cultural Association]/ to constitute the [Religious Corporation] with its own officers and additional directors/ to conduct the [Religious Corporation] in disregard of decades of common understanding was contrary to law and wholly unauthorized.”
As already noted in these reasons, the Appellants were unable to outline on the appeal how the actions leading to the election of the New Board could be legally justified.
[31] In addition to this, the record before the Application Judge contained a number of undisputed facts that I have already detailed. Given these facts, the Application Judge concluded correctly that the “fairest and most reasonable outcome” was to hold an election as outlined above. This outcome can also be legally justified. The fact that the Application Judge does not specifically advert to s. 288 of the Corporations Act does not make his reasons inadequate.
[32] With respect to the Lease Application, the Application Judge found that “[t]here is no good or legal reason for the [Religious Corporation] to retain complete control of the Centre”. This finding did not flow from a determination that the Lease was valid (which the Application Judge recognized was a disputed issue), but from the fact that the Cultural Association had purchased and used the Tagore Centre until the New Board – a board that had been unlawfully elected – decided to lock them out.
[33] The Appellants also argue that the Application Judge should have made an order that the balance of the issues in the Lease Application (the main issue being the validity of the Lease) should have been adjourned to be heard by him if and when necessary. This is what the Application Judge did with the Governance Application. Theoretically, this argument appears to have merit. Practically, however, once the election of a new board was held for the Religious Corporation, that board would determine whether the Lease was valid. If they determined that the Lease was valid, there would be no need for the Lease Application. We are advised that this is, in fact, what happened. Thus, I can see no need on this appeal to amend the Application Judge’s endorsement to provide for a return of the Lease Application.
[34] For these reasons I find that the Application Judge’s reasons were capable of meaningful appellate review and were not inadequate within the meaning of the caselaw.
Costs
[35] The Appellants’ submission on this point is that the costs awarded were excessive for a hearing that only lasted half a day.
[36] Costs decisions are discretionary decisions. As such, they are awarded considerable deference by appellate courts. They will only be interfered with if the decision was made on the basis of an error in principle or if the decision was plainly wrong (Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, [2004] 1 S.C.R. 303; Falcon Lumber Limited v. 2480375 Ontario Inc. (GN Mouldings and Doors), 2020 ONCA 310). A costs award does not have to be measured with exactitude; it should reflect a fair and reasonable amount to be paid by the unsuccessful parties (Butler v. Royal Victoria Hospital, 2018 ONCA 409).
[37] In this case, the costs awarded ($20,000.00 and $35,000.00) were not excessive, taking into account the extensive affidavits and cross-examinations that were conducted prior to the hearing of the application.
Other Issue
[38] The Respondents in the Governance Application raised an issue regarding whether the Order under appeal was final or interlocutory. If the Order was not final, leave was needed and it had not been sought or obtained. Suffice it to say that this issue was not pursued in oral argument. In any event, I am satisfied that the Order finally determined two issues: that the New Board was unlawfully constituted and that a key to the Tagore Centre should be delivered up to the Cultural Association.
Conclusion
[39] For these reasons the appeal is dismissed. The Lease Application Respondents have requested their costs in the amount of $10,000.00, which includes an amount for the stay application before Myers J. (this issue was reserved to the panel hearing the appeal). The Governance Application Respondents were awarded $5000.00 in costs in the stay application. They are requesting an additional $15,000.00. Costs are awarded to the Lease
Application Respondents in the requested amount ($10,000.00, which includes the costs of the stay application) and to the Governance Application Respondents in the amount of $10,000.00 (in addition to the $5000.00 already received on the stay application.) These amounts are inclusive of disbursements and GST.
Sachs J.
I agree _______________________________
Backhouse J.
I agree _______________________________
G. King J.
Released: January 6, 2021
CITATION: Bose v. Bangiya Parishad Toronto, 2021 ONSC 59
DIVISIONAL COURT FILE NO.: DC-19-525
DATE: 2021/01/06
Basu Deb Bose, Dr. Prasanta Kumar Sarkar, Ranendra N. Ghoshi, Sunil Sengupta, Asish Kumar Ghosh, Sailesh K. Roy, Swapan Kumar Ghosh, Rupa Dutta, and Basanti Roy
Applicants (Respondents in Appeal)
– and –
Bangiya Parishad Toronto (also known as Bangiya Parishad)
Respondent (Appellant in Appeal)
AND BETWEEN:
Rathin Ghose, Sanjib Mukherjee, Subhra Sur, Apurba Mukherjee, Kobi Banerjee, Anirban Kargupta, Prabasi Bengali Cultural Association and Bangiya Parishad Toronto
Applicants (Respondents in Appeal)
-and-
Jnan Chowdhury also known as Ananda Chowdhury, also known as Ananda Jnan Chowdhury, Ashoke Neogi, also known as Ashok Neogi, Arpita Mukherjee, Partha Banerjee, also known as Bapi Banerjee, also known as Partha Bapi Banerjee, Mrinmoy Bhakta, Ujjal Chowdhury, Nirmal De, Ruby Mukherjee, and Sandip Goswami
Respondents (Appellants in Appeal)
REASONS FOR JUDGMENT
Released: January 6, 2021