Ronald S. Segal

Two competing applications concerned governance of a national non‑profit organization and ownership of real property administered by one of its local branches.

The court considered whether a trust agreement purporting to grant beneficial ownership of property to the branch was valid and whether the organization’s executive board lawfully removed the branch president and dissolved the branch.

Interpreting the organization’s constitution, the court held that branches could not own property and that all real property was owned beneficially and legally by the national organization.

The purported trust agreement was therefore invalid.

However, the executive board’s decisions removing the branch president and dissolving the branch were quashed for breach of natural justice because adequate notice and opportunity to respond were not provided.

Following earlier reasons granting relief in a dispute involving charitable corporations and trust‑like obligations over charitable assets, the successful applicants sought substantial indemnity costs against the respondent foundation.

The court considered allegations that the respondent had advanced reckless and unfounded accusations of dishonesty, breach of trust, and misappropriation during the proceedings.

It also reviewed the applicants’ unaccepted Rule 49 offer to settle and the complexity and importance of the litigation concerning charitable corporations, fiduciary duties, and the Charities Accounting Act.

The court concluded that the respondent’s conduct, including unsupported allegations and misrepresentations of fact, justified an award of substantial indemnity costs.

Costs of $454,686.19 were awarded to the applicants, and additional costs were awarded to the Public Guardian and Trustee.