COURT FILE NO.: 12-53721

DATE: 2012/09/07

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

BENOIT KANDOLO, RACHEL SITA-MENGA, SOPHIE OLANGI, VIVIANE LESEYA et FONDATION OLANGI WOSHO

Applicants

– and –

JEAN VENANCE KABELU ET DEBORAH ETSHOKO KABELU

Respondents

Ronald F. Caza/Marcia A. Green, for the Applicants

François Kabemba, for the Respondents

HEARD: May 17, 2012

REASONS FOR DECISION

R. Smith J.

Overview

[1] The main issue to be decided to in this case is whether Pastor Jean Venance Kabelu and his wife, Deborah Etshoko Kabelu (“Mr. and Mrs. Kabelu”), were able to resign as Directors of the Olangi Wosho Foundation and then revoke their resignations, after they had been accepted by the Board of Directors of the Foundation.

Issues

[2] The following issues must be decided:

1. Were Mr. and Mrs. Kabelu’s resignations as Directors of the Foundation effective when they were sent on or about October 4, 2011 or when they were accepted by the Board?

2. Were the resignations of Mr. and Mrs. Kabelu validly accepted by the majority of the remaining Directors of the Board?

3. Could Mr. and Mrs. Kabelu unilaterally revoke their resignations by giving written notice after their resignations were accepted by the Board?

4. Who were the Directors of the Foundation following the resignations of Mr. and Mrs. Kabelu, and in any event, after October 22, 2011?

5. Were Mr. and Mrs. Kabelu the owners of the Foundation?

6. Relief sought in application and cross-application.

[3] Both parties have brought applications to have similar issues determined namely, whether Mr. and Mrs. Kabelu could unilaterally revoke their resignations as Directors and as a result, I infer that both parties agree that these matters may be determined by way of application. Also, I find that the relevant facts are not in dispute, namely that Mr. and Mrs. Kabelu resigned as Directors, that their resignations were accepted at a Board meeting where three members of the Board were present, and that subsequently Mr. and Mrs. Kabelu gave notice revoking their resignations as Directors. I therefore find that a trial is not required to decide the issues before me.

Facts

[4] The Olangi Wosho Foundation, both in Canada and in the Congo, is a Christian spiritual organization whose objects are to promote the spiritual teachings of the Christian faith and to promote peace with God and among men.

[5] The original Olangi Wosho Foundation (the “Congolese Foundation”) was started in the Congo in Africa in 1993 by Mr. Joseph N’koyi U’De and Ms. Elisabeth Onyumbe Wosho (the “Founding Couple”).

[6] In 1995, an Olangi Wosho Foundation (the “Canadian Foundation” or the “Foundation”) bearing the same name was incorporated in Canada as a non-share capital corporation under the Canada Corporations Act, R.S.C. 1970, c. C-32 (“CCA”). The Foundation was subsequently registered as a charitable corporation. There are 134 Olangi Wosho Foundations in different countries throughout the world.

[7] In 2009, the Canadian Foundation collected money to purchase a building for the congregation to use for meetings and prayers. Jean Venance Kabelu and Deborah Etshoko Kabelu were the pastors of the Canadian Foundation who had previously been trained by the Congolese Foundation in Kinsasha, Congo.

[8] Mr. and Mrs. Kabelu allege that they advanced $249,000.00 of their personal funds to the Foundation to assist it to purchase the building located at 2586 St-Joseph Boulevard, Ottawa, Ontario (the “property”).

[9] The applicants dispute the amount claimed by Mr. and Mrs. Kabelu but acknowledge that they advanced approximately $101,000.00 to the Foundation. The issue of how much is owing to Mr. and Mrs. Kabelu is to be determined at a later date.

[10] Each year, the Foundation sent an Annual Summary (Form 3) to Industry Canada, Corporations Canada. On or about March 11, 2011, Faith Fuamba, a Director of the Foundation, sent Form 3 to Industry Canada listing the following seven Directors of the Foundation, which she stated were elected at the last annual meeting of members held on February 1, 2011:

• Jean Venance Kabelu, President

• Deborah Etshoko Kabelu, Vice-President

• Benoit Kandolo, Secretary

• Viviane Leseya-Kintuba, Treasurer

• Sophie Olangi, Member

• Rachel Sita-Menga, Member

• Faith Fuamba, Member

[11] The parties do not dispute that the seven Directors listed above were in fact the Directors of the Foundation in 2011 and that the Directors held the offices opposite their names. Faith Fuamba was cross-examined and agreed that Jean Venance Kabelu was in agreement with the seven persons named as Directors on February 1, 2011 which she listed on the Form 3. The process for electing the Directors at the annual meeting appears to have been informal with Pastor Kabelu selecting and announcing who would become a Director each year. There was informal approval and no objections to the individuals named as Directors at the annual meeting.

[12] During the summer of 2011, the relationship between the Founding Couple and Mr. and Mrs. Kabelu deteriorated and the Founding Couple indicated that they wanted the Foundation to sell the building and they wanted Mr. and Mrs. Kabelu to leave.

[13] On September 30, 2011, the Foundation signed an Agreement to sell the building to Garlic King with a closing date of December 28, 2011.

[14] In September of 2011, Mr. and Mrs. Kabelu met with Mr. Kilongozi, the lawyer acting for the Foundation in the sale of the property, and asked him to represent them to collect money owed to them by the Foundation. Mr. Kilongozi advised them that he had a conflict of interest and could not act for them. He advised them to obtain independent legal advice.

[15] Mr. Kilongozi states in his affidavit that Mr. and Mrs. Kabelu told him that they were going to resign and start a new ministry. This is denied by Mr. and Mrs. Kabelu who blame Mr. Kilongozi for their decision to resign as Directors of the Board of the Foundation, even after they obtained independent legal advice from their own lawyer, Mr. Kabemba.

[16] On October 4, 2011, Mr. Kabemba sent a letter advising the Foundation that Mr. and Mrs. Kabelu had resigned from the Board of Directors of the Foundation. He advised the Foundation to remove their names from any obligations, and to advise the government and others that had dealings with the Foundation that the names Jean Venance Kabelu and Deborah Etshoko Kabelu were removed from any responsibility.

[17] In addition, both Mr. Jean Venance Kabelu and Mrs. Deborah Etshoko Kabelu signed letters of resignation as members of the Board of Directors of the Foundation dated October 4, 2011 which were enclosed with Mr. Kabemba’s letter to the Foundation.

[18] On the same date, Mr. Kabemba sent a demand letter on behalf of Mr. and Mrs. Kabelu requesting payment of $249,000.00 from the Foundation within ten days failing which he would commence legal action against the Foundation.

[19] On October 7, 2011, Faith Fuamba sent a letter to Mr. and Mrs. Kabelu asking them to reconsider their resignation. She stated that her letter was written on behalf of the Board of the Directors of the Foundation but, in cross-examination on her affidavit, Ms. Fuamba agreed that she was part of the group of individuals who had remained loyal to Mr. and Mrs. Kabelu. She agreed, at page 20 of her cross-examination that she had never returned to any meetings of the Foundation at the building located at St-Joseph Boulevard after September 1, 2011.

[20] Her letter of October 7, 2011 is very similar to her letter of December 18, 2011 where she purported to accept the revocation of Mr. and Mrs. Kabelu’s resignation from the Board of Directors of the Foundation.

[21] Faith Fuamba’s October and December letters are contradicted by the Minutes of the extraordinary meeting of the Board of Directors of the Foundation dated October 22, 2011 which states that the resignations of Mr. and Mrs. Kabelu were specifically accepted by the Board.

[22] Benoit Kandolo, the Secretary, sent a letter to Industry Canada, which was received by the Corporations Branch on November 30, 2011, stating that Mr. and Mrs. Kabelu had resigned from the Board of Directors of the Foundation on October 4, 2011. This letter corroborates the applicants’ evidence that the Board of Directors of the Foundation accepted the resignations of Mr. and Mrs. Kabelu as Directors.

[23] On December 5, 2011, a letter was received from Garlic King seeking an extension of the closing date for the sale of the building from December 28 to December 29, 2011. At that time, there was uncertainty about whether the sale of the premises would be completed.

[24] On December 12, 2011, Mr. and Mrs. Kabelu issued a Statement of Claim against the Foundation claiming the sum of $249,000.00 and requesting that a Certificate of Pending Litigation be issued. Paragraph 4 of their Statement of Claim confirms that they resigned as Directors of the Foundation on October 4, 2011.

[25] Mr. Kilongozi sent a copy of the Statement of Claim to the purchaser, Garlic King, who proposed to extend the closing. The proposed extension was refused by the Foundation and as a result, the closing of the sale was in doubt.

[26] On December 15, 2011, Mr. Kabemba, the solicitor for Mr. and Mrs. Kabelu, sent a letter on behalf of Mr. and Mrs. Kabelu revoking their resignations as Directors of the Board of the Foundation. He attached a Notice of Withdrawal of Resignation signed by Mr. and Mrs. Kabelu.

[27] On December 23, 2011, Mr. Kabemba sent a fax to Mr. Kandolo, the Secretary of the Foundation, Mr. Kilongozi, the solicitor for the Foundation, and Mr. Coulson, the lawyer for the purchaser, advising them that he had been appointed to represent the Foundation in the pending transaction of purchase and sale of the property. Mr. Kabemba also enclosed an authorization from Mr. and Mrs. Kabelu to pay the proceeds from the sale of the property to François Kabemba in Trust. He also enclosed a Notice of Change of Lawyer appointing himself as lawyer of record for the Foundation in the sale of its property.

[28] On December 28, 2011, Mr. Kabemba sent a notice to the Secretary of the Foundation advising him that he had extended the closing of the sale with Garlic King to February 1, 2012.

[29] The sale of the Foundation’s property ultimately closed in early February of 2012 and the proceeds of sale were paid into Court.

Analysis

Issue # 1 – Were Mr. and Mrs. Kabelu’s resignations as Directors of the Foundation effective when they were sent on or about October 4, 2011 or when they were accepted by the Board?

[30] In Nigerians in Diaspora Organization Canada (NIDO) v. Ozemoyah, 2011 ONSC 4696, the Court held that when a question arises in court proceedings to determine whether the directors of a corporation have been validly elected, that this issue is governed by the general by-law of the corporation.

[31] In the Nigerians in Diaspora Organization Canada (NIDO), supra, decision, Wilton-Siegel J. further held at para. 14 that whether or not “…the meeting convened on May 21, 2005 was validly conducted or that the Directors elected at the meeting were validly elected. These matters are governed by the CCA and the by-laws of the corporation.” I agree with the above statements of Wilton-Siegel J. and find that the seven Directors listed in para. [10] above were validly elected at the annual meeting held on February 1, 2011.

[32] In Saskatchewan WTF Tae Kwon Do Association Inc. v. WTF Tae Kwon Do Association of Canada, 2011 ONSC 4982, at para. 31, the Court stated that it was generally reluctant to get involved in the governance of non-share capital corporations incorporated under the CCA and stated as follows: “… absent some demonstrated evidence that any irregularities went to the heart of the electoral process or lead to a result which does not reflect the wishes of the majority, the court should be loathe to interfere in the internal workings of such groups:…” I also agree with this statement.

[33] Article 8 of the 2009 General By-law of the Foundation (the “By-law”) states that “[t]he affairs of the Corporation shall be managed by the board consisting of not less than 5 Directors, each of whom ... shall be a member of the corporation.”

[34] Article 8.1 of the By-law states that “[e]ach Director shall be appointed /elected to hold office until the first annual meeting after he has been elected or until a successor shall have been duly elected and qualified.”

[35] Article 10 of the By-law states that the Board of Directors can fill a vacancy on the Board.

[36] Article 11 of the By-law states that “[a] majority of more than 50% of the members of the Board present shall form a quorum for the transaction of business by the Board. In no case can any meeting be held unless there are more than 50% of the members of the Board in person.”

[37] The Board of Directors of the Foundation, elected at the annual meeting held on February 1, 2011, were Mr. Kabelu, Mrs. Kabelu, Mr. Kandolo, Ms. Fuamba, Ms. Leseya-Kintuba, Ms. Olangi and Ms. Sita-Menga. The parties do not dispute that the above seven individuals were elected as Directors of the Foundation as of February 1, 2011.

[38] The resignation of Mr. and Mrs. Kabelu from the Board of Directors of the Board of the Foundation was prepared by their lawyer, Mr. Kabemba. The Notice of Resignation was dated October 4, 2011 and was intended to be effective from that date, as Mr. and Mrs. Kabelu gave notice that they had no further responsibility for any obligations of the Foundation as of that date.

[39] In addition to the Notice from their lawyer, both Mr. and Mrs. Kabelu signed individual letters of resignation from the Board of Directors of the Foundation. Those resignations were also dated October 4, 2011 and addressed to the Foundation.

[40] After Mr. and Mrs. Kabelu resigned as Directors on October 4, 2011, there were five remaining Directors on the Board. On October 22, 2011, an extraordinary meeting of the Board of Directors was held. The Minutes of the Board meeting confirm that the Board accepted the resignations of Mr. and Mrs. Kabelu. Three of the “Directors” of the Board were present at this extraordinary meeting. The three Directors constituted a quorum of more than 50 per cent and a majority of the remaining Directors of the Foundation, after Mr. and Mrs. Kabelu had resigned.

[41] I do not give any weight to the letters signed by Faith Fuamba dated October 7, 2011 and December 18, 2011 for the following reasons:

(a) Faith Fuamba was loyal to Mr. and Mrs. Kabelu and, in cross-examination, admitted that she had not returned to the Foundation since September 1, 2011 and therefore did not attend any Board meetings after this date;

(b) there is no evidence that she was authorized by the Board to write either the letter dated October 7, 2011 asking Mr. and Mrs. Kabelu to reconsider their decision to resign as Directors or her letter dated December 18, 2011 welcoming with great joy Mr. and Mrs. Kabelu’s decision to return to the Foundation; and

(c) the letters indicate Ms. Fuamba’s support for Mr. and Mrs. Kabelu and are contradicted by the Minutes of the Board of Directors dated October 22, 2011, where the resignations of Mr. and Mrs. Kabelu were accepted by the Board of the Foundation.

[42] Mr. and Mrs. Kabelu allege that the solicitor for the Foundation, Mr. Kilongozi, was part of a conspiracy that caused them to resign as Directors of the Board of the Foundation. Mr. Kilongozi has sworn an affidavit stating that when Mr. and Mrs. Kabelu consulted him about recovering money from the Foundation, that he never represented either Mr. or Mrs. Kabelu.

[43] Mr. and Mrs. Kabelu acknowledge that Mr. Kilongozi advised them to obtain independent legal advice and they did so when they consulted Mr. Kabemba.

[44] I completely reject the respondents’ submission that Mr. and Mrs. Kabelu resigned as Directors of the Board of the Foundation due to the influence of Mr. Kilongozi as there is no evidence to support this allegation. I find that Mr. Kilongozi’s actions were completely appropriate in refusing to act for Mr. and Mrs. Kabelu in a claim against the Foundation for $249,000.00, while he was acting for the Foundation in the sale of the property. Mr. Kilongozi recommended that they obtain independent legal advice. Mr. and Mrs. Kabelu obtained independent legal advice from Mr. Kabemba and after obtaining his advice they resigned as Directors. Therefore, I find Mr. and Mrs. Kabelu cannot blame Mr. Kilongozi for their decision to resign as Directors of the Board of the Foundation.

[45] In Adams v. Association of Professional Engineers, 2012 ONSC 3850 (“Adams”), the Divisional Court considered the question of when the resignation of a Director of a non-share capital corporation became effective and whether it could be withdrawn without the consent of the remaining Directors.

[46] In Adams, supra, Dr. Hogan was a Director of the Association of Professional Engineers (“APE”) who sent an e-mail to all members or Council advising them that he was resigning from Council. The following day he sent a second e-mail stating that his resignation would not be effective until the next annual meeting. Ten days after he sent his original letter of resignation, Dr. Hogan sent an e-mail retracting his resignation from Council. Council subsequently voted to accept Dr. Hogan’s resignation.

[47] The Professional Engineers Act, R.S.O. 1990 c. 28, (“Act”), the regulations passed thereunder, and the By-law of the Association are all silent on when the resignation of a director becomes effective or whether a resignation as director can be withdrawn after it is received by the Corporation. The Divisional Court considered Section 121(2) of the Ontario Business Corporations Act, R.S.O. 1990, c. B. 16 (“OBCA”) which states as follows: “A resignation of a director becomes effective at the time a written resignation is received by the corporation or at the time specified in the resignation, whichever is later.” [my emphasis]

[48] In the text Canadian Commercial Corporations (Montreal: Southam Press Limited, 1916) at p. 1022, the author Victor E. Mitchell stated as follows: “The prevailing opinion appears to be that in the absence of any statutory or other provision to the contrary, a Director may resign his office when he pleases.”

[49] In the case of Glossop v. Glossop, [1907] 2 Ch. 370 (Ch. D.), the Court held that the resignation of a Director does not have to be accepted to be effective and cannot be revoked or withdrawn without the consent of the other Directors. The rationale for not requiring the acceptance of the Board is to provide certainty to a Director as to when his or her liability ends. The rationale for not allowing a Director to revoke a resignation is to avoid uncertainty and confusion for the corporation, which would result if a resignation could be revoked at will by a Director.

[50] In Adams, supra, the Divisional Court held that there was nothing in the APE’s governing legislation or by-laws requiring that a resignation as a director be accepted by the Board before it became effective. The Court held that his resignation became effective when it was received by the corporation as is the case under the OBCA and that Dr. Hogan could not withdraw his resignation after it had been received by the Council without the consent of Council.

[51] The CCA is also silent on when a resignation of a Director of a non-share capital corporation becomes effective. Section 108(2) of its successor, the Canada Business Corporations Act, R.S.C., 1985, c. C-44, (“CBCA”) states that a Director’s resignation becomes effective when it is sent to the corporation as opposed to when it is received, by the corporation which is the case for the OBCA. These two provisions provide guidance on when a director’s resignation becomes effective absent a specific term in the by-law to the contrary.

Interpretation of Section 6.3 of the Foundation’s General By-law

[52] The Adams, supra, decision held that the resignation of a Director of a non-share capital corporation did not have to be accepted by the Board before it became effective, unless there was a specific term in the by-laws of the corporation. The question to be determined is whether Section 6.3 of the Foundation’s General By-law, which deals with resignation by a member, refers to members of the Foundation or to members of the Board of Directors of the Foundation?

[53] Article 6 of the By-law is titled “Memberships” and is followed by several subsections. A non-share capital corporation is a legal structure typically used for clubs or other organizations which have members instead of shareholders. The By-law has a separate Article (No. 8), titled “Boards of Directors”, under which there are several subsections applicable to Directors.

[54] Section 6.3 of the By-law states that “[m]embers may resign by resignation in writing, which shall be effective upon acceptance thereof by the Board” [my emphasis]. This section is immediately followed by Section 6.4 which states that “[i]n case of resignation, a member shall remain liable for payment of any assessment or other sum levied or which became payable by him to the corporation …” In a non-share capital corporation, assessments or levies to raise funds for some purpose would be made against all members of the non-share capital corporation or, in this case, the Foundation, and not only against members of the Board of Directors. I therefore find that the reference to resignation of a “member” in section 6.4 is referring to a member of the Foundation and not to a member of the Board of Directors of the Foundation.

[55] Section 6.3 of the By-law is located under the heading “Memberships”. When Section 6.3 and Section 6.4 are read together, I find that Section 6.3 is referring to the members of the Foundation and not to members of the Board of Directors of the Foundation for the following reasons:

(a) Section 6.3 of the By-law is located under Article 6 which it titled “Memberships” which generally deals with the rights of members of the Foundation. Article 8 of the By-law is a separate Article which it titled “Board of Directors”;

(b) Sections 6.0, 6.4 and 6.6 of Article 6 deal with the rights of members of the Foundation and not with members of the Board of Directors;

(c) Section 6.4 immediately follows 6.3 and I have previously found at para. [54] that the “members” used in Section 6.4 refers to a resignation of a member of the Foundation.

(d) Section 6.2 states that “[m]embership on the Board shall continue from the time of admittance until a member has resigned or is expelled in accordance with the provisions of the by-laws.” Section 6.2 refers to the length of time membership on the Board continues. This Section mentions resignation but does not state that acceptance by the Board is required before the resignation of a Director becomes effective.

[56] I find that Article 6 of the By-law and the Sections thereunder should be interpreted in context and in accordance with the approach outlined by Professor Driedger which applies to statutory interpretation but I find also applies to interpreting a corporation’s General By-law, namely; “the words of an Act [By-law] are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament”.

[57] I find that interpreting “member” in Section 6.3 to mean “a member of the Foundation” would be consistent with the intention of the members and the objects of the By-law to allow a Director to end any liabilities by resigning without requiring the consent of the Board, whereas the resignation of a member of the Foundation would only become effective upon acceptance by the Board. This interpretation would allow me to follow the ratio set out in Adams, supra, and hold that the resignation of a Director of the Board would become effective when it was irrevocably sent (Adams held “received” as is the case under the OBCA) to the corporation and would remove the absurd situation of requiring Directors to attend a further Board meeting in order to accept their own resignations. This interpretation would be harmonious with the scheme of the CCA and the General By-law, and with the intention the Directors and members of the Foundation who approved the General By-law.

[58] If I am mistaken in finding that Section 6.3 was intended to refer to the resignations of members of the Foundation as opposed to “members of the Board of Directors” then I would interpret Section 6.3 as follows: When a Director gives written notice that he or she has resigned from the Board effective immediately, in this case on October 4, 2011, it would be subject to acceptance by the remaining Directors of the Board on a nunc pro tunc basis. This would be consistent with the Director’s intent and also allow the Board to accept the resignations effective when it was made and would not require any further attendance by Directors who had resigned from the Board to form a quorum to accept their own resignations.

[59] As a result, I find that the resignations of Mr. and Mrs. Kabelu became effective when they were irrevocably sent to the Foundation on or about October 4, 2011 and, in any event, when their resignations were accepted by the Foundation on October 22, 2011 effective on October 4, 2011 for the following reasons:

(a) The Notice of Resignation indicates that Mr. and Mrs. Kabelu were resigning as Directors of the Foundation effective immediately as they stated that they were no longer responsible for any further obligations as of October 4, 2011;

(b) Mr. and Mrs. Kabelu resigned and delivered Notice of their resignation with the benefit of independent legal advice from Mr. Kabemba;

(c) The CCA which continues to apply to federally incorporated charitable non-share capital corporations, is silent as to when a Director’s resignation becomes effective;

(d) Section 108(2) of the CBCA deals with when a Director’s resignation becomes effective and reads as follows:

108. (2) A resignation of a Director becomes effective at the time a written resignation is sent to the corporation, or at the time specified in the resignation, whichever is later. [Emphasis added.]

(e) A majority of the remaining Directors of the Board of the corporation accepted Mr. and Mrs. Kabelu’s resignations as Directors on October 22, 2011;

(f) Mr. Kandolo, as Secretary of the Foundation, gave written notice to Corporations Canada on November 30, 2011 that Jean Venance Kabelu and Deborah Etshoko Kabelu had resigned as Directors of the Foundation effective on October 4, 2011.

Disposition of Issue #1

[60] For the above reasons, I find that Mr. and Mrs. Kabelu resigned as Directors and that their resignations became effective on October 4, 2011 when they were irrevocably sent to the Foundation and, in any event, their resignations were accepted by the Board of the Foundation on October 22, 2011, effective on October 4, 2011.

Issue #2 – Were the resignations of Mr. and Mrs. Kabelu validly accepted by the majority of the remaining Directors of the Board?

[61] Mr. and Mrs. Kabelu argue that the acceptance of their resignations by the Board of the Foundation on October 22, 2011 was invalid because Mr. and Mrs. Kabelu were not present at the meeting and therefore the meeting lacked a quorum. I do not agree with this argument as I have held under Issue #1 that the resignations of Mr. and Mrs. Kabelu were effective when they were irrevocably sent to the Foundation on October 4, 2011 and that Section 6.3 of the By-Law did not apply to members of the Board but rather to members of the Foundation. As a result, the resignations of Mr. and Mrs. Kabelu from the Board did not have to be accepted by the Board to become effective.

[62] If the Board’s consent was required before the resignation of a Director became effective, I find that the remaining members of the Board could accept the resignations of the Directors, effective when the resignations were irrevocably sent to the Board. This would be consistent with the intention of the Director who has resigned. Requiring the Directors, who have given notice of their immediate resignation to attend a further meeting of the Board, to form a quorum to accept their own resignations, would not be consistent with the scheme and objects of the CCA, the By-law of the Foundation or the intention of the members and Directors who approved the By-law.

[63] I find that Mr. and Mrs. Kabelu were no longer Directors of the Foundation as of October 4, 2011 and, as a result, the Foundation did not have to give notice to them of the meeting as they had no right to be present. I also find that the three of the remaining five Directors constituted a quorum for subsequent meeting of the Board including the acceptance of the resignations of Mr. and Mrs. Kabelu effective on October 4, 2011.

Disposition of Issue #2

For the above reasons, I find that a majority of three (3) of the five (5) remaining Directors of the Board of the Foundation constituted a quorum and validly accepted the resignations of Mr. and Mrs. Kabelu at the meeting of the Board held on October 22, 2011.

Issue #3 – Could Mr. and Mrs. Kabelu unilaterally revoke their resignations by giving written notice after their resignations were accepted by the Board?

[64] Mr. and Mrs. Kabelu sent a notice that they were resigning as Directors on October 4, 2011 and I have held that their resignations were validly accepted by the Board on October 22, 2011.

[65] On December 15, 2011, Mr. and Mrs. Kabelu’s solicitor, Mr. Kabemba, sent a further letter to the Foundation revoking their resignations as Directors of the Board of the Foundation. Mr. and Mrs. Kabelu also signed a written Notice stating that they were revoking and annulling their resignation as Directors of the Board of the Foundation.

[66] On December 17, 2011, the Secretary of the Foundation responded and stated that the Foundation did not accept the revocation of their resignations and Mr. and Mrs. Kabelu were invited to rejoin as members of the Foundation.

[67] Neither the CCA nor the General By-law of the Foundation authorize a Director to unilaterally revoke his or her resignation after it was delivered to the corporation’s Board of Directors and especially after the Board has accepted the resignation. I find that allowing a Director to unilaterally revoke a resignation at any time after the resignation was delivered to the corporation and accepted by the corporation would be unworkable and lead to chaos in the commercial world.

[68] In Adams, supra, the Divisional Court held that a Director whose resignation has been received by the Board was not permitted to revoke the resignation without the consent of the Board. I agree with the reasons in Adams, supra, and find that it also applies to the Foundation which was incorporated under the CCA. Mr. and Mrs. Kabelu have not provided me with any statutory authority, case law or any principle of corporate or contract law that would allow a Director who has resigned, to unilaterally revoke their resignation after it has been received by the Board and especially after it has been accepted by the Board.

[69] Following Adams, supra, I find that in order for a Director to revoke his or her resignation from the Board, which had previously been sent to and received by the Board, the consent of the Board would be required. This has not occurred in this case.

[70] To conclude, I find that a Director’s resignation from a non-share capital corporation incorporated under the CCA is effective on the date it was irrevocably sent to the corporation, or on the date specified in the resignation, whichever is later, unless there are contrary terms in the By-law which I have found not to be the case. This interpretation is similar to the current provision in the CBCA and is reasonable as it allows a Director to resign and to end his or her liability with certainty without requiring the consent of the Board.

[71] In this case, I have held that Mr. and Mrs. Kabelu resigned on October 4, 2011 and that their resignations were validly accepted by the Board at its meeting on October 22, 2011 effective on October 4, 2011. Therefore, Mr. and Mrs. Kabelu were no longer Directors and had no authority or ability to unilaterally revoke their resignations after they had been irrevocably sent and accepted by the Board of Directors of the Foundation.

Disposition of Issue #3

[72] For the reasons above, I find that Mr. and Mrs. Kabelu were not able to unilaterally revoke their resignations as Directors of the Board, after they irrevocably sent their resignations to the Board and after they had been received and accepted by the Board.

Issue #4 – Who were the Directors of the Foundation following the resignations of Mr. and Mrs. Kabelu, and in any event, after October 22, 2011?

[73] The 2009 General By-law required a minimum of five (5) Directors on the Board of the Foundation. Following the resignation of Mr. and Mrs. Kabelu on October 4, 2011, I find that the remaining Directors of the Foundation were as follows:

• Benoit Kandolo, Secretary

• Vivian Leseya-Kintuba, Treasurer

• Sophie Olangi, Member

• Rachel Sita-Menga, Member

• Faith Fuamba, Member

[74] I have held that Mr. and Mrs. Kabelu were not able to unilaterally revoke their resignations as Directors of the Foundation, and therefore it follows that the remaining Directors listed in paragraph [73] above were the Directors of the Foundation after October 4, 2011, and in any event, after October 22, 2011.

Members Meeting on April 12, 2012

[75] The affidavit of members of the Foundation dated April 12, 2012 indicates the attendance of approximately 44 members at a meeting and provides some evidence of a general members meeting being held. However, there was no evidence that notice was sent to all members of the Foundation, or that a quorum of members were present and elected new Directors to the Board. I also do not have any evidence of the resolutions, if any, that were passed at the meeting of members held on April 12, 2012 and as a result, I am not able to make any findings of who was elected as members of the Board of Directors of the Foundation, if anyone, at this meeting.

Disposition of Issue #4

[76] The five remaining Directors listed in paragraph [73] above were the members of the Board of Directors of the Foundation until replacement Directors were elected at the next annual meeting of members, or other special meeting of members called to elect Directors pursuant to the General By-law of the Foundation.

Issue #5 – Were Mr. and Mrs. Kabelu the owners of the Foundation?

[77] Article 157(3) of the CCA states as follows:

157. (3) In construing the sections of Part I made applicable to corporations under this Part, “shareholder” means a member of such corporation...

Individuals such as Mr. or Mrs. Kabelu can be members of a non-share capital corporation such as the Foundation, they can be an officer of the corporation, and any member could also be a Director of the Foundation if duly elected or appointed. However, since there are no shareholders in a non-share capital corporation, there is no owner of a non-share capital corporation.

Disposition of Issue #5

[78] Mr. and Mrs. Kabelu were members and also Directors of the Foundation until October 4, 2011 when they resigned as Directors of the Board. The Foundation is a non-share capital charitable corporation and as such, I find that Mr. and Mrs. Kabelu were never owners (“propriétaires”) of the Foundation as this is impossible.

Disposition of Application in Action No. 12-53721

[79] For the reasons given above, I make the following Orders:

i. A declaration is granted stating that the Directors of the Foundation as of October 4, 2011 until the next annual meeting of members of the Foundation was called in accordance with the General By-law are as follows:

(1) Mr. Benoit Kandolo, Secretary

(2) Ms. Rachel Sita-Menga, Member

(3) Ms. Sophie Olangi, Member

(4) Ms. Viviane Leseya, Treasurer

(5) Ms. Faith Fuamba, Member

ii. A declaration is granted confirming that Jean Venance Kabelu and Deborah Etshoko Kabelu resigned from the Board of Directors of the Foundation effective on October 4, 2011 and that their Notice of Revocation of their resignation as Directors is void and of no legal effect;

iii. A declaration is granted confirming that Jean Venance Kabelu and Deborah Etshoko Kabelu are no longer members of the Board of Directors of the Foundation since October 4, 2011, and have no authority to give instructions on behalf of, to speak in the name of the Foundation, or to appoint a lawyer for the Foundation since October 4, 2011;

iv. That the sum of money from the sale of the property shall continue to be held by the Court until other order of this Court or consent of the parties until the amount owing to Mr. and Mrs. Kabelu is determined or agreed;

v. That all property of the Foundation, removed by Mr. and Mrs. Kabelu on February 29, 2012, be returned to the Foundation.

Disposition of Application in Action #12-53877

[80] The applicants’ (cross applicants) in Court File No. 12-53877 sought the following relief:

Issue (a) Request dismissal of the application in action #12-53721

[81] This request is dismissed for the reasons give above in the other application.

Issue (b) Request for order that Benoit Kandolo, Rachel Sita-Menga, Sophie Olangi, and Viviane Leseya are no longer members of the Board of the Foundation since December 29, 2011 and have no right to represent the Foundation.

[82] The affidavit of Sylvie Betu Kabamba states that Mr. and Mrs. Kabelu retook their positions as Directors on the Board, and acted as President and Vice President respectively on December 15, 2011. I have previously held that Mr. and Mrs. Kabelu were unable to unilaterally revoke their resignations as Directors and were no longer Directors or Officers of the Foundation as of October 4, 2011.

[83] I find that Mr. and Mrs. Kabelu and any other individuals, other than the five remaining Directors I have identified previously in paragraph [73] above did not constitute a quorum of Directors and had no authority to appoint Mr. Kabemba as lawyer for the Foundation on December 23, 2011, had no authority to remove items belonging to the Foundation from the premises, had no authority to appoint new officers, had no authority to purport to remove Benoit Kandolo, Rachel Sita-Menga, Sophie Olangi, or Viviane Leseya-Kintuba as Directors of the Board, had no authority to change the General By-law of the Foundation, had no authority to change the head office location of the Foundation, and had no authority to make any decisions or changes on behalf of the Board of Directors of the Foundation because they were not Directors of the Board of the Foundation.

[84] For the same reasons, Mr. and Mrs. Kabelu and the Board of Directors which they created and which excluded the existing five Directors had no authority whatsoever to give instructions related to the sale of the property.

Disposition of Issue (b)

[85] The request for an order that Benoit Kandolo, Rachel Sita-Menga, Sophie Olangi, or Viviane Leseya-Kintuba are no longer members of the Board of the Foundation since December 29, 2011 is denied.

Issue (c) Request for an order stating that Joseph N’koyi U’De and Elisabeth Onyumbe Wosho are not the President and Vice President of the Foundation respectively.

Meeting of Directors in Kinshasa on February 17, 2012

[86] The Resolution of Directors indicates that a meeting of the Board of Directors of the Foundation was held on February 17, 2012 in Kinshasa, Congo. However, the only Director of the Board of the Canadian Foundation who was present at that meeting was Benoit Kandolo. One (1) of the remaining five (5) Directors of the Board does not constitute a quorum. The appointment of replacement Directors and officers at this meeting is therefore void and of no legal effect as there was not a quorum of 50 per cent of the directors present.

[87] I did not have evidence of any resolution where Joseph N’koyi U’De and Elisabeth Onyumbe Wosho were elected as Directors by the members of the Foundation or appointed as Directors of the Board by the Board of Directors to fill the vacancy of Mr. and Mrs. Kabelu.

[88] Section 16 of the General By-law states that the President and Vice President of the Foundation must be elected by the Board of Directors from among their elected members at the first meeting after the annual election. Since I do not have any evidence that Joseph N’koyi U’De and Elisabeth Onyumbe Wosho were ever elected or appointed as replacement Directors, they are unable to be the President and Vice President of the Foundation.

Disposition of Issue (c)

[89] There is no evidence before me that Joseph N’koyi U’De and Elisabeth Onyumbe Wosho were validly appointed as President and Vice President of the Foundation.

Other matters

[90] Further written submissions may be made on the following issues:

(a) whether a reference should be directed to be conducted by the Master to determine the amount owing by the Foundation to Mr. and Mrs. Kabelu, or if some other procedure such as a trial of the above issue, or a summary trial should be ordered;

(b) if a reference to a Master is not ordered, whether these two applications and other related motions should be case managed by the Master; and

(c) how to determine who was elected as Directors of the Foundation at the 2012 annual meeting of members.

Costs

[91] The applicants may make written submissions on costs within 15 days, the respondents shall have 15 days to respond, and the applicants shall have 10 days to reply.

R. Smith J.

Released: September 7, 2012

COURT FILE NO.: 12-53721

DATE: 2012/09/07

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

BENOIT KANDOLO, RACHEL SITA-MENGA, SOPHIE OLANGI, VIVIANE LESEYA et FONDATION OLANGI WOSHO

Applicants

– and –

JEAN VENANCE KABELU ET DEBORAH ETSHOKO KABELU

Respondents

REASONS FOR DECISION

R. Smith J.

Released: September 7, 2012