This application concerned a dispute between minority and majority factions of the board of trustees of a not-for-profit religious organization (Toronto Kalibari) over the amendment of corporate by-laws during a transition to the Canada Not-for-profit Corporation Act.
The applicant alleged irregular and improper behaviour by the respondents in retaining corporate counsel and drafting new by-laws.
The court found that the respondents acted in bad faith in retaining counsel and inviting them to a board meeting without proper notice, declaring these actions unlawful and unenforceable.
The court refused to impose the applicant's proposed by-laws or grant leave for a derivative action, instead ordering a return to the position after an earlier consent order, requiring the corporation to retain new independent counsel.
