COURT FILE NO.: CV-16-3460-00

DATE: 2020 09 18

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Sat P. Malik, Dinesh Chander, Som Kapoor, Anuradha Sharma and Bipen Kakkar, Plaintiffs

AND

Hindu Sabha, Parveen Sharma, Prabhat Kapur, Sharwan Kumar Agarwal, Ashok Kapoor and Ashwani Joshi, Defendants

BEFORE: Doi J.

COUNSEL: Bhupinder Nagra, for the Plaintiffs (Moving Parties)

Mark A. Klaiman, for the Defendants (Responding Parties)

HEARD: July 17 and 20, 2020

ENDORSEMENT

Overview

[1] A protracted dispute continues to exist between different factions of Hindu Sabha, a non-profit religious temple, over the management of its affairs. The Plaintiffs represent a faction that seeks the interim appointment of a monitor to manage the temple’s financial affairs due to alleged governance and financial irregularities. On behalf of Hindu Sabha and its incumbent directors, the Defendants submit that the temple is being reasonably managed under difficult circumstances, and that any irregularities are not sufficiently serious to warrant the appointment of a monitor.

[2] For the reasons that follow, I decline to appoint a monitor to manage the temple’s affairs. In my view, the incumbent directors at Hindu Sabha serve on properly constituted governance boards, and have acted in good faith to serve what they believed were the temple’s best interests. Although I accept that certain irregularities at Hindu Sabha should be addressed and rectified, I am not satisfied that the nature and character of these irregularities is sufficiently serious to warrant having a third-party monitor to manage the temple’s financial affairs on an interim basis.

Background

[3] On January 5, 1976, Hindu Sabha was provincially incorporated by letters patent as a not-for-profit corporation under the Corporations Act, R.S.O. 1990, c. C.38. Following its inception, Hindu Sabha has become a landmark temple in Brampton where devotees come together to worship and participate in other social and cultural activities.[^1]

[4] Hindu Sabha is a registered charity. The temple’s members and congregants contribute generous donations to fund the temple’s various activities.

[5] On September 20, 2007, Hindu Sabha enacted its General Operating By-Law No. 7 (the “By-Law”) which is the temple’s current constitution. Significantly, the By-Law established a three (3) board governance structure for Hindu Sabha, consisting of: a) a Board of Management; b) a Board of Trustees; and c) a Collective Board. The Board of Management has eleven (11) directors who are responsible for managing the temple’s day-to-day affairs. The Board of Trustees consists of five (5) directors who approve certain decisions by the Board of Management and also exercise other prescribed powers. The Collective Board is comprised of all directors serving on the Boards of Management and Trustees, respectively. The directors are volunteers who serve the temple without remuneration. Under the By-Law, the directors are to be elected to fixed terms by the temple’s voting membership at a general body meeting.

[6] Regrettably, Hindu Sabha’s history includes longstanding disputes between opposing factions who have disagreed over the management of the temple’s affairs. The disputes led to animosity and heightened mistrust between the factions that continues to this day. In addition, the disputes spawned years of litigation that began in 2003 over governance issues related to Hindu Sabha’s ability to call elections for directors to serve the temple. To explain the context of the current factional dispute, I shall briefly trace some of this history.

[7] On July 26, 2014, the opposing factions at Hindu Sabha resolved their litigation at the time by formally settling all outstanding governance disputes. This paved the way for Hindu Sabha to call a general body meeting of its members in order to present its audited financial statements and elect new directors. Unfortunately, Hindu Sabha’s long-serving Treasurer, Purshottam Dhupar, suffered a debilitating stroke and required a lengthy period to recuperate. As Mr. Dhupar had dealt personally with Hindu Sabha’s financial records and auditors, the temple’s efforts to prepare the required audited financial statements were hampered by his illness.

[8] In December 2015, Hindu Sabha competed its audited financial statements and scheduled a general body meeting for February 25, 2016. To ensure that the election of its directors was conducted fairly, Hindu Sabha retained MNP, a national audit and consulting firm, to supervise the election. MNP was tasked to control the nominations and proxies, determine the membership lists of eligible voters, and oversee the conduct of the election.

[9] Unfortunately, the election could not take place on February 25, 2016 as scheduled. As it turned out, twenty-four (24) individuals put their names forward to be nominated as directors for the Boards of Management and Trustees, respectively. But only two (2) candidates had completed their 2016 membership applications and paid their membership fees as required to stand for election as a director.[^2] As twenty-two (22) of the candidates were ineligible to stand for election, MNP’s lead auditor, Veronica Bila, determined that an election could not proceed then due to an insufficient number of eligible candidates. By notice dated February 23, 2016, Ms. Bila postponed the election and advised temple members that it would be rescheduled at a later date.

[10] Once the election was postponed, the incumbent directors on the Board of Management could not agree on when to return the election. Some wanted to call the election sooner, while others wanted to delay its return. Over time, insufficient numbers of directors attended the Board of Management’s scheduled meetings, which left the board without a quorum. As such, it became impossible for the board to call an election.

[11] After the Board of Management failed to call an election, the Board of Trustees called an election on their own by exercising their By-Law authority to do so.[^3] On July 14, 2008, the temple formally scheduled a general body meeting for August 8, 2016 in order to have an election. Once again, MNP was retained to supervise the election process.

[12] On August 3, 2016, MNP posted an election nominations list featuring ten (10) candidates for the Board of Management and five (5) candidates for the Board of Trustees. The candidates were vetted by MNP, which confirmed their eligibility to stand for election and serve on the boards.

[13] On August 4, 2016, the Plaintiffs commenced this action and unsuccessfully brought an urgent motion on August 5, 2016 to stay the August 8, 2016 election as well as the activities of the Boards of Management and Trustees (i.e., except to deal with regular operating expenses) over alleged irregularities with how the election had been called. Lemon J. dismissed the motion after finding that the Plaintiffs had not proven the alleged irregularities.

[14] Thereafter, the Plaintiffs made little effort to meaningfully progress this action. I shall return to this point later in addressing some of the challenges that Hindu Sabha has faced in trying to manage its affairs as a result of the glacial pace of this litigation.

[15] On August 8, 2016, Hindu Sabha conducted the general body meeting and election. As the number of candidates did not exceed the number of board vacancies, all fifteen (15) candidates were acclaimed to serve as directors on the Boards of Management and Trustees, respectively, without a vote. The only voting that occurred was to elect the President and Vice President of the temple, as required under the By-Law.[^4]

Applicable Principles for the Relief Sought

[16] Hindu Sabha was incorporated as a charitable corporation for a religious purpose. Its revenue consists of charitable donations from members and congregants who make their donations for a charitable purpose. As a result, the temple is subject to the Charities Accounting Act, R.S.O. 1990, c. C.10 and is considered to be a trustee under ss. 1(2) (Charitable corporations, etc., brought within Act) of the statute which states:

Any corporation incorporated for a religious, educational, charitable or public purpose shall be deemed to be a trustee within the meaning of this Act, its instrument of incorporation shall be deemed to be an instrument in writing within the meaning of this Act, and any real or personal property acquired by it shall be deemed to be property within the meaning of this Act. [Emphasis added]

[17] It follows that Hindu Sabha is answerable for its activities and the disposition of its property as though it were a trustee: OSPCA v. Toronto Humane Society, 2010 ONSC 608 at para 36, citing Ontario (Public Trustee) v. Toronto Humane Society (1987), 1987 CanLII 4192 (ON SC), 60 OR (2d) 236 (HCJ) at 243-244; Donald J. Bourgeois, The Law of Charitable and Not-for-Profit Organizations, 5th ed. (Toronto: LexisNexis Canada Inc., 2016) at pp. 136 and 138. In addition, its directors have a fiduciary obligation to Hindu Sabha to carry out the trust for a charitable purpose: OSPCA at para 36; OPT at 247. These obligations call for directors to act with reasonable prudence, diligence, good faith, honesty and loyalty, and to avoid conflicts of interest: Bourgeois at pp. 140-141.

[18] The court has broad jurisdiction under the Charities Accounting Act and its inherent equitable jurisdiction to supervise the activities of charitable corporations: Crossroads Christian Fellowship (Trustees of) v. Highfield, 2011 ONSC 6518 at para 214. This jurisdiction is exercised by the court to intervene when a charitable corporation’s conduct is not in accordance with its charitable purposes, or when charitable funds are misapplied: OSPCA at paras 37-39; Ontario (Public Trustee) at 244-245; Ontario (Public Guardian and Trustee) v. AIDS Society for Children (Ontario), [2001] OJ No 2170 (SCJ) at para 26. The court will act to protect charitable property and to ensure that an organization may carry out its charitable activities. In doing so, the court will examine the exercise of authority by the organization and consider whether the authority was exercised appropriately by its directors: Bourgeois at p. 140.

[19] The Plaintiffs seek the interim appointment of a monitor to manage Hindu Sabha’s financial affairs until a final determination is made in this litigation. The relief sought is intrusive by effectively seeking to place the interim management of the temple’s financial activities in the monitor’s hands for a period that may well be lengthy (i.e., given the unhurried pace of this action, which has not yet proceeded to discoveries). The relief sought is akin to an appointment by the court of an interim receiver over the affairs of a corporation: OSPCA at para 40. The court may grant such an order where it would be “just or convenient to do so” under ss. 101(1) (Injunctions and receivers) of the Courts of Justice Act, RSO 1990, c. C.43.[^5] In addition, the court may make “such order as it considers just” under ss. 10(1) (Application for order re carrying out trust) of the Charities Accounting Act.[^6]

[20] In determining whether to order the interim appointment of a monitor, I must find that doing so would be “just or convenient” under ss. 101(1) of the Courts of Justice Act, while having regard to ss. 10(1) of the Charities Accounting Act under which the court may make “such order as it considers just.” In analysing this tandem authority, I adopt the three-part test that D.M. Brown J. (as he then was) applied in OSPCA (at para 41) in determining whether to grant similar relief:

Given the nature of the relief sought, I conclude that I must review the evidence: (i) to determine whether the allegations of a breach of trust made by the applicants give rise to serious questions to be tried; (ii) to assess and compare the nature and degree of the harm that would result from granting or not granting the relief sought, taking into account any need to preserve the assets, undertaking or activities of the [entity] in order to enable it to continue pursuing its charitable objectives; and (iii) to consider any other factor in the context of the court's supervisory jurisdiction over charities.

[21] The Plaintiffs also seek relief under s. 332 of the Corporations Act, which provides:

332. Where a shareholder or member or creditor of a corporation is aggrieved by the failure of the corporation or a director, officer or employee of the corporation to perform any duty imposed by this Act, the shareholder, member or creditor, despite the imposition of any penalty and in addition to any other rights that he, she or it may have, may apply to the court for an order directing the corporation, director, officer or employee, as the case may be, to perform such duty, and upon such application the court may make such order or such other order as the court thinks fit.

[22] This is a broad remedial power akin to an oppression provision that enables the court to make orders that it finds to be just and necessary in the circumstances: Jacobs v Ontario Medical Association, 2016 ONSC 4977 at para 80; Singh v. Sandhu, 2013 ONSC 3230 at para 116; Noori (Re), 2011 CanLII 91855 (ONSC) at para 23.

[23] Although it is open for the court to exercise its remedial authority under s. 332 of the Corporations Act, judicial intervention in the affairs of a corporation without share capital is rarely done: Singh at para 2. The fundamental policy of the Corporations Act is to view those who come together to form the corporation as being capable of self-governance, which is the operating norm. Continued supervision by the court of any such corporation is not consistent with the policy intent of the Corporations Act: Singh at para 3. Moreover, the court will not interfere unduly in the affairs of religious or non-profit organizations: Bala v. Scarborough Muslim Association, 2008 CanLII 63179 (ONSC) at para 20; Lee v. Lee’s Benevolent Association of Ontario, [2004] OJ No 6232 (SCJ) at para 12, aff’d 2005 CanLII 1072 (ON SCDC), [2005] OJ No 194 (Div Ct) at para 4; Scharafanowicz v. Hamilton Regional Indian Centre, 2011 ONSC 6953 at paras 18-19. Finally, in fashioning a remedy, the court will generally use the least interventionist method to achieve its objective by adopting a minimalist approach to the extent necessary to regularize or restore a situation: Bourgeois at pp. 264 and 266, citing Singh at paras 121-122.

Analysis

[24] The Plaintiffs have two (2) central submissions for the interim appointment of a monitor to manage Hindu Sabha’s affairs. First, they submit that its current Board of Management is improperly constituted and lacks authority for its decisions. Second, they submit that its directors are responsible for certain irregularities that, in their view, show that the temple’s financial affairs have been fundamentally mismanaged. Respectfully, I disagree with these submissions.

[25] As explained below, I find that the Board of Management remains properly constituted despite several changes to its composition and constraints imposed by an interim injunction which temporarily precluded the temple from electing new directors. I also find that the impugned irregularities do not reflect a fundamental mismanagement of the temple’s finances to warrant the interim appointment of a monitor to manage the temple’s affairs.

a. The Board of Management is Appropriately Constituted

[26] As explained earlier, Hindu Sabha’s last general body meeting was held on August 8, 2016, when an election was called to elect new board members for the temple. During that meeting, the following ten (10) candidates were acclaimed as directors for the Board of Management:

1. Parveen Sharma (also elected as President)
2. Varinder Saili (also elected as Vice President)
3. Raj Kaicker
4. Bhushan Malhotra
5. Kewal Sehgal
6. Kashmiri Lal
7. Ghansham Vania
8. Sham Sharma
9. Ashok Sharma
10. Yogesh Kamal

[27] In addition to being acclaimed as board directors, Parveen Sharma and Varinder Saili also were elected to serve as the temple’s President and Vice President, respectively.[^7] As set out earlier, MNP vetted each candidate and confirmed that all were qualified under the By-Law to stand for election. The directors were formally installed on the Board of Management and ratified by the Board of Trustees in September 2016.

[28] On September 22, 2016, a quorum of directors of the Board of Management unanimously appointed Ajay Sharma to fill the one remaining board vacancy pursuant to ss. 3.06(a)(ii) of the By-Law, which states:

3.06 Filling Vacancies of Directors

(a) Filling Vacancies of the Board of Management

So long as a quorum of Directors remains in office, any vacancy occurring on the Board of Management shall, as much as possible, be filled for its unexpired term within ninety (90) days from the date on which the Board of Management declares the seat vacant, either:

(i) By election if an annual Meeting of Members falls within the ninety (90) day period; or

(ii) Where no annual Meeting of Members falls within the ninety (90) day period, by having those Members of the Board of Management remaining in office by Resolution, which must be ratified by a two-thirds (2/3rds) resolution of the Members of the Board of Trustees then in office, designate a suitable Person from among the voting members to fill the vacancies for the remaining period of the term, provided that such person fulfils all the qualifications to be a Member of the Board of Management as set out in Section 3.01(d). Such Voting Members who are designated to fill a vacancy on the Board of Management in accordance with this section will not be required to pay the necessary fees to be nominated as a Director of the Corporation.

(iii) The Filling of Vacancies shall meet all conditions in accordance with Section 3.02. [Emphasis added][^8]

[29] On September 23, 2016, the Board of Trustees unanimously ratified Mr. Sharma’s appointment to the Board of Management pursuant to ss. 3.06(a)(ii). As a result, the Board of Management had a full complement of eleven (11) directors.[^9]

[30] According to the Plaintiffs, discord amongst its directors led to a meeting of the Board of Management on January 17, 2018, when resolutions allegedly were passed to remove President Parveen Sharma and Treasurer Raj Kaicker from their roles at Hindu Sabha.[^10] During this alleged meeting, the Board of Management also purported to terminate the retainers that Hindu Sabha had with its lawyers, Mark Klaiman and Joel Levitt. Mr. Klaiman has acted for Hindu Sabha since 2007 and serves as its counsel of record in this action. Mr. Levitt was counsel for the temple in a separate action (CV-17-3595-00) involving some of the same Plaintiffs in this action who sued Parveen Sharma, Raj Kaicker and Mr. Klaiman based on similar, if not identical, allegations that arise in this proceeding. In an affidavit, Pradeep Malik purports to produce handwritten minutes of this alleged Board of Management meeting when these resolutions were made.[^11] However, I do not believe that this alleged board meeting ever took place. Based on the Defendants’ unchallenged evidence, I find that Mr. Malik arranged to fabricate these meeting minutes to change the temple’s leadership and legal representation by using false evidence to gain a dishonest litigation advantage.

[31] To call a meeting of the temple’s Board of Management, temple President Parveen Sharma and Secretary Bhushan Malhotra followed a practice of calling meetings by email or occasionally by word of mouth. According to Mr. Sharma, neither he nor Mr. Malhotra called a board meeting on January 17, 2018, directors were not asked to attend a board meeting that day, and no authorized meeting of the Board of Management took place on that date. Neither Mr. Malik nor any of the other Plaintiffs adduced any records to show that notice was sent to directors of the Board of Management to attend a board meeting that day.[^12]

[32] Two directors, Sham Sharma and Ashok Sharma, purported to sign the minutes for the alleged January 17, 2018 meeting of the Board of Management. But at the time, both were ineligible to serve on the Board of Management or in any other capacity at Hindu Sabha as they had been suspended by the Board of Trustees on December 12, 2017 over allegations of financial misappropriations and other misconduct at the temple.[^13] As a result, neither Sham Sharma nor Ashok Sharma could have participated at a Board of Management meeting on January 17, 2018.

[33] Varinder Saili, Ghansham Vania, Yogesh Kamal and Kashmiri Lal were directors of the Board of Management who signed the purported minutes for the alleged January 17, 2018 meeting. But each later signed a declaration that no board meeting actually took place on January 17, 2018. In addition, Mr. Saili and Mr. Vania both swore affidavits in which they confirm that the Board of Management never met on January 17, 2018, and that none of the purported board resolutions as recorded in the alleged minutes had been made.

[34] Importantly, the Plaintiffs did not cross-examine Mr. Saili or Mr. Vania on their affidavits. The Plaintiffs claim that they were unable to conduct cross-examinations because the Defendants served the affidavits and other responding materials on June 25, 2020 shortly before the motion first returned on July 7, 2020. But at the July 7, 2020 return, the motion was adjourned to a long hearing on July 17, 2020 which afforded time for the Plaintiffs to cross-examine on the affidavits in the Defendants’ record, had they sought to do so. In any event, the Plaintiffs did not ask to adjourn or reschedule the July 17, 2020 return date to conduct cross-examinations. As such, I am satisfied that the Plaintiffs had adequate time to cross-examine, but chose not to do so.

[35] In his affidavit, Mr. Vania reveals that he prepared false minutes for the fictional January 17, 2018 meeting of the Board of Management by transcribing longhand notes that Pradeep Malik dictated to him on February 27, 2018 in order to fabricate minutes for this fictional meeting that never took place. Mr. Vania swears unequivocally that his handwritten minutes are a “made-up document” that is entirely false and inaccurate. He acknowledges that his participation in the scheme to prepare false records was improper and has expressed remorse for his conduct.

[36] Mr. Saili admits in his affidavit that he signed a letter on February 23, 2018, ostensibly on behalf of the Board of Management, to terminate Hindu Sabha’s legal retainers with Mr. Klaiman and Mr. Levitt. But Mr. Saili had resigned from the Board of Management on January 25, 2018 and clearly lacked authority to sign the February 23, 2018 letter or anything else for the board, which he candidly acknowledges. Mr. Saili also states that Mr. Malik had prepared the February 23, 2018 letter which he signed at Mr. Malik’s insistence even though the board had not terminated the temple’s retainers with Mr. Klaiman or Mr. Levitt. Mr. Saili admits that he acted improperly by signing the letter and has apologized for his conduct.

[37] From the unchallenged evidence given by Mr. Vania and Mr. Saili, I find that Mr. Malik orchestrated the creation of forged records for a fictitious board meeting to falsely claim that the Board of Management was improperly constituted and the temple’s counsel were improperly retained. This was a clear attempt to gain a litigation advantage and undermine the court’s findings using false evidence to help his faction acquire control of Hindu Sabha dishonestly.

[38] On January 19 and 23, 2018, Ashok Sharma and Sham Sharma tendered their formal letters of resignation from the Board of Management. This left the board with nine (9) directors.

[39] On January 23, 2018, the Board of Management appointed Rajiv Agnihorti and Vipul Sharma as directors pursuant to ss. 3.06(a)(ii) of the By-Law. On January 24, 2018, the Board of Trustees ratified their appointments which returned the Board of Management to a full complement of eleven (11) directors.

[40] On January 25, 2018, Kashmiri Lal, Yogesh Kamal, Ghansham Vania and Varinder Saili resigned from the Board of Management. Their resignations reduced the board’s complement to only seven (7) directors.

[41] On January 28, 2018, the Board of Management appointed Rita Mago, Ram Murti Joshi, Vinod Aggarwal and Surinder Khosla under ss. 3.06(a)(ii) of the By-Law to fill its vacancies. On January 29, 2018, these appointments were ratified by the Board of Trustees. The appointments brought the Board of Management back to its full complement of eleven (11) directors.

[42] By letter dated February 1, 2018, Bhushan Malhotra resigned as a director and the secretary to the Board of Management as of February 15, 2018. Although the Plaintiffs claim that he resigned on November 5, 2017, his letter of resignation states that his resignation from the board would take effect on February 15, 2018. Mr. Malhotra’s resignation left the board with ten (10) directors.

[43] On April 18, 2018, the Board of Management appointed Liyara Lal Sharma as a director to the board under ss. 3.06(a)(ii), which the Board of Trustees ratified later that day. This restored the Board of Management to its full complement of eleven (11) directors.

[44] On May 1, 2019, Parveen Sharma resigned as temple President and as a director of the Board of Management. Since then, the board has continued with only ten (10) directors.

[45] Currently, Hindu Sabha does not have a President or Vice-President as Parveen Sharma and Varinder Saili both resigned from these respective roles by 2019. These officers must be elected by the temple’s voting membership.[^14] As such, the Board of Trustees appointed Ashok Kapoor, one of its directors, to be Chair of the Board of Management pursuant to ss. 3.11(q)(iii) of the By-Laws which permits the appointment to be made if both the President and Vice-President are absent.[^15]

[46] The directors currently serving on the Board of Management are as follows:

1. Ajay Sharma
2. Vipul Sharma
3. Raj Kaicker
4. Rajiv Agnihotri
5. Vinod Aggarwal
6. Kewal Sehgal
7. Rita Mago
8. Surinder Khosla
9. Ram Murti Joshi
10. Piyara Lal Sharma

[47] The directors currently serving on the Board of Trustees are:

1. Kuldip Gupta
2. Ashok Kapoor
3. Ashawni Kumar Joshi
4. Mohan Mago
5. Rajesh Mohan

[48] Sometime in 2019, Kuldip Gupta updated Hindu Sabha’s corporation profile report in the Ontario Business Information System (“OBIS”) that is maintained by the Ministry of Government Services. Although the list of directors in Hindu Sabha’s corporate profile report is largely correct, there are several inaccuracies. The profile accurately lists all directors on the Board of Trustees. In addition, nine (9) of the Board of Management directors are properly listed, but Piyara Lal Sharma is omitted from the profile. For reasons that are unclear, the profile also has multiple entries for certain directors of the Board of Management and incorrectly lists several of their start dates. The Defendants cannot explain these irregularities or inaccuracies that apparently caused some confusion when the Plaintiffs tried to verify the current directors serving on the temple’s governance boards. The Plaintiffs are highly critical of the inaccuracies, and see them as evidence of serious mismanagement. However, having regard to the overall content of Hindu Sabha’s profile, I accept that Mr. Gupta tried in good faith to diligently update the temple’s corporate profile, albeit with some errors that are relatively minor and likely resulted from inadvertence.

[49] Having regard to Hindu Sabha’s internal governance records, I am satisfied that the Board of Management remained properly constituted throughout the various changes to its composition that occurred over time. For the reasons set out earlier, I find that the board properly exercised its authority under ss. 3.06(a)(ii) of the By-Law to appoint replacement directors to fill board vacancies as they periodically arose. I find that these board appointments were made by sufficient numbers of serving directors that constituted a proper quorum of the board, and also find that the Board of Trustees properly ratified all of these appointments. Where the content of Hindu Sabha’s internal governance records diverge from the information found in its OBIS corporation profile report, I prefer the temple’s internal governance records as they were made contemporaneously as directors joined and left the Board of Management to accurately detail and memorialize changes to the board’s composition over time. That said, I recognize that Hindu Sabha should update its corporation profile report so that it correctly reflect the names and details of the temple’s directors pursuant to its internal governance records.

[50] On August 2, 2018, the Board of Management met to approve a general body meeting on September 10, 2018 for the purpose of holding an election. Although the previous election had been held on August 8, 2016, the board tried to bring out more voters by picking the September 10, 2018 date when temple members would have returned from their summer vacations. By notice dated August 13, 2018, the Board of Management formally advised temple members of the September 10, 2018 general body meeting and election. As in prior years, Hindu Sabha retained MNP to supervise the election process.

[51] Shortly thereafter, the Plaintiffs returned to court and successfully obtained an interim injunction on September 4, 2018 to stay the September 10, 2018 election so that their motion for injunctive and other relief, returnable the week of November 19, 2018, could be heard and determined. The Plaintiffs’ record on the interim injunction motion included a petition signed by congregants and devotees who claimed that the election process was flawed because they had been denied membership application forms that were needed to become eligible voting members. Anuradha Sharma, a Plaintiff in this action, similarly claimed in her affidavit that she had been denied a membership form. On this evidence, Daley RSJ granted an interim injunction on September 4, 2018 to stay the election and preserve the status quo until the issues were heard and determined on the November 19, 2018 injunction motion: Malik v. Hindu Sabha, 2018 ONSC 5317 at paras 17, 20 and 24-28.

[52] Following Daley RSJ’s order of September 4, 2018, the Plaintiffs did little to progress this litigation. They did not return their November 2018 injunction motion or advance this proceeding, apart from unsuccessfully bringing a motion to remove Mr. Klaiman as Hindu Sabha’s solicitor of record in this action which Emery J. dismissed on March 20, 2019 with a $7,500.00 costs award payable to the Defendants by the Plaintiffs. Although the Plaintiffs later proposed a discovery plan, the Defendants balked at the proposal because the Plaintiffs refused to produce a record and repeatedly refused to pay the costs award from their unsuccessful removal motion.[^16]

[53] The Plaintiffs submit that the Board of Management’s initial two (2) year term expired on August 8, 2018 (i.e., on the two-year anniversary of the August 8, 2016 general body meeting when the ten (10) candidates standing for election to the board were acclaimed as its directors). Directors serving on the Board of Management generally are elected for two-year terms.[^17] In addition, directors may serve a maximum of two (2) terms, subject to becoming eligible for re-election after a one-year absence.[^18] In this case, the two (2) year term for the incumbent directors arguably expired on August 8, 2018 (i.e., two years from the last election held on August 8, 2016) despite the Board of Management’s decision to schedule an election for September 10, 2018, which Daley RSJ noted: Malik at para 29. It follows that the two-year term arguably expired before the interim injunction motion returned before Daley RSJ on August 30, 2018. However, in granting the interim injunction, Daley RSJ stayed Hindu Sabha’s election of directors, “on the basis that maintenance of the status quo is in the interests of all of the parties, including the defendant temple, so as to allow the questions raised on the plaintiff’s motion to be resolved in November, 2018” [Emphasis added]: Malik at para 28. By preserving the status quo, Daley RSJ’s interim injunction maintained the incumbent directors on Hindu Sabha’s boards to temporarily continue managing the temple’s affairs until the injunction motion returned in November 2018 and was decided. This was clearly intended to be a short-term arrangement. However, as mentioned earlier, the Plaintiffs never returned their November 2018 injunction motion or meaningfully progress this action thereafter. Although the Plaintiffs claim that the injunction was overtaken by settlement discussions, I am not persuaded that the Plaintiffs have explained satisfactorily their failure to meaningfully advance this action over several years. For its part, the temple’s Board of Management did not call another election after forming the view that it was restrained from doing so by the interim injunction, which remains in effect.

[54] In my view, the Board of Management has remained duly constituted under the status quo. In any event, to avoid a governance vacuum at the temple, I would exercise my discretion under s. 332 of the Corporations Act to direct the incumbent directors to continue performing their duties as directors of the Boards of Management and Trustees, respectively, on an interim basis subject to further court order or agreement by the parties. As set out below, it is also my intention to timetable this proceeding so that Hindu Sabha may hold an election for directors to serve on its governance boards at the earliest reasonable opportunity without excessive or undue delay.

b. Management of the Temple’s Financial Affairs

[55] In addition to alleging that the temple’s Board of Management is improperly constituted, the Plaintiffs have raised several allegations of financial mismanagement at Hindu Sabha. They allege that temple funds are improperly being used to pay legal fees incurred by directors and former-directors of the Board of Management who are personally named as Defendants in this litigation. In a related submission, they claim that temple funds improperly have been used to pay the legal costs that Parveen Sharma, the former temple President, incurred to defend an unrelated criminal matter. They further allege that cash donations from temple members and congregants are properly accounted for by Hindu Sabha, which has not prepared audited financial statements as required. In addition, the Plaintiffs claim that temple cheques are not being properly signed by duly authorized individuals.

[56] In alleging financial mismanagement, the Plaintiffs claim that their underlying concern is the lack of a validly constituted Board of Management as its incumbent directors were not properly elected at a general body meeting after their two-year term lapsed. To this end, they submit that the incumbent directors continue to make financial and other decisions without proper authority as the board is improperly constituted. However, as set out earlier, I am satisfied that the Board of Management remains validly constituted. Accordingly, I am not persuaded by this submission.

[57] From the evidence before the court, I am satisfied that the Defendants have shown that the incumbent directors on the Board of Management tried in good faith to exercise reasonable care and diligence in managing the temple’s financial affairs, albeit with some irregularities. Although I find that remedial action is needed to address certain irregularities, I find that these irregularities do not justify placing Hindu Sabha’s interim management into the hands of a monitor.

[58] The Defendants openly acknowledge that Hindu Sabha’s funds are being used to pay the legal bills of its directors who have been personally named in litigation involving the temple. The authority to use temple funds for this purpose is provided under ss. 7.01(b) (Indemnity to Directors, Officers and Others) of the By-Law which broadly confers this indemnification.[^19] As such, I see nothing improper with Hindu Sabha using its funds to indemnify current and former directors for this purpose. Indeed, a number of the Plaintiffs in this action, including Sat Pradeep Malik, Dinesh Chander, Anuradha Sharma and Bipen Kakkar, similarly had their legal costs paid for by the temple after they were personally named as defendants (i.e., in their roles as temple directors) in litigation relating to Hindu Sabha.

[59] After the Plaintiffs’ alleged that temple funds had been used improperly to pay for Parveen Sharma’s legal bills for an ineligible matter, Kuldip Gupta and Ashok Kapoor conducted a review of the legal accounts that Hindu Sabha had paid. From their review, Mr. Gupta and Mr. Kapoor concluded that the Plaintiffs’ misappropriation allegations were unfounded as records confirmed that Hindu Sabha appropriately paid for eligible legal costs in accordance with the indemnification provisions under the By-Law. They provided their findings to the Board of Management in a report dated February 26, 2019. In his unchallenged affidavit, Mr. Gupta set out the findings that he and Mr. Kapoor reached and unequivocally confirmed his conclusion that the Plaintiffs’ allegation that temple funds were misused is completely inaccurate. The Plaintiffs disagree with Mr. Gupta’s evidence on this point but did not cross-examine him or adduce any evidence to substantiate their allegations apart from an unsupported assertion in Mr. Malik’s affidavit. Accordingly, based on the evidence before the court, I find that the misappropriation allegations are unproven.

[60] I am not persuaded by the Plaintiffs’ allegation that Hindu Sabha does not properly account for its cash donations. Dating back to 2008, the temple adopted a procedure to account for cash donations from members and congregants. Every Sunday or second Sunday, temple volunteers count and record cash and cheque donations with supervision by one or more directors. Count forms record the source of the funds (i.e., donation box, priests, school fees), itemize the cash and cheques or other payments received, and identify the volunteers who performed the count. Priests have a receipt book to document any cash donations they receive and issue receipts to donors. The cash and records are then provided to the temple’s Treasurer who deposits the funds in the temple’s banking institution. This procedure has been followed since 2008.

[61] After the Plaintiffs raised concerns over the temple’s cash count procedures, Hindu Sabha investigated the matter by reviewing a sample of cash counts taken from March 30, 2018 to March 2, 2020 and comparing them to corresponding bank deposit slips. Its review examined twenty (20) cash counts and bank deposits by Hindu Sabha and confirmed that the counted funds matched the corresponding funds that were deposited to the temple’s bank accounts. This was verified by the records filed by the Defendants on this motion. Without disputing this, the Plaintiffs submit that the sample size of the review was too narrow to allow for a proper determination of the adequacy of the cash count procedures. Respectfully, I disagree. In my view, the Defendants undertook a reasonable and proportional review of its donation counting procedures over a two-year period, and transparently produced all of its records from the review. The Plaintiffs did not cross-examine the Defendants’ affiant on the review, did not seek any further production of records, and raised no meaningful concerns with the review until this motion was argued. The Plaintiffs did not lead any evidence that donated funds had been miscounted or misappropriated by temple volunteers, despite making vague and unsubstantiated assertions of the potential for such improprieties.

[62] The Plaintiffs fairly observe that some of the cash count forms lack full or legible names or signatures of all volunteers and directors who performed and supervised those counts. In view of this missing information, the Plaintiffs question whether count protocols actually were followed and submit that the integrity and accountability of Hindu Sabha’s counting process for donations has been compromised. Although I agree that some content is missing from certain count forms, I am not prepared to broadly infer that serious mismanagement has occurred. The Plaintiffs did not cross-examine Mr. Gupta on his affidavit which sets out the temple’s donation count forms and procedures, led no evidence of their own to indicate that volunteers or directors are responsible for any missing donations, and did not identify any missing funds from the cash counts.

[63] Pointing to a substantial theft of temple donations in 2018, the Plaintiffs initially suggested that the Defendants had ignored the thefts and failed to diligently address them. But both sides agreed that Hindu Sabha promptly reported the matter to police and fully cooperated in the criminal investigation. Although the stolen funds were not recovered, the Plaintiffs concede that Hindu Sabha’s directors acted reasonably by reporting the thefts to police and facilitating the criminal investigation. Accordingly, I am satisfied that the temple acted reasonably in addressing the theft.

[64] The Plaintiffs correctly state that the Board of Management has not provided audited financial statements for the temple since 2014. Instead, the board prepared unaudited financial statements for Hindu Sabha’s fiscal years ending from March 2015 to March 2019, which the Defendants produced on this motion. By way of explanation, the Defendants state that the board decided not to prepare audited financial statements after forming the view that order to stay the election under the interim injunction of September 4, 2018 prevented them from calling a general body meeting when audited statements would normally be presented to the temple’s members. As such, the board opted to not spend money on audited statements until this litigation is resolved when an election may be called and audited statements may be presented to members at a general body meeting. To this end, the Defendants undertook to present audited financial statements at a general body meeting once the Board of Management is able to call an election.

[65] Respectfully, I find that the course of action taken by the Board of Management was flawed as it failed to satisfy Hindu Sabha’s obligation under the Corporations Act to provide annual audited financial statements to its members.[^20] This duty is embodied in ss. 11.02 and 11.03 of the By-Law, which require the temple Treasurer to prepare an annual budget and financial statements for approval by the Collective Board before presenting the financial statements at the annual meeting for approval by the voting membership.[^21] In addition, the temple’s auditor is required to report on its financial statements at the annual meeting of members of the corporation.[^22] An annual meeting is expressly required under the By-Law to receive a report from Hindu Sabha’s auditor on the financial statements for the corporation in accordance with the Corporations Act.[^23]

[66] Based on the foregoing, I find that Hindu Sabha did not fulfill its obligation to schedule an annual meeting and provide its membership with audited financial statements. By conflating the requirement to call an election of directors with its obligation to schedule an annual meeting, the Defendants submit that Hindu Sabha was unable to schedule a general body meeting and present audited financial statements as its ability to call an election was stayed by the interim injunction ordered on September 4, 2018. I respectfully disagree. The requirement for the Collective Board to call an annual meeting under ss. 2.07(a) of the By-Law is clearly separate and independent from the requirement under ss. 3.01(c)(iii)(2)(C) for the Board of Management to call an election, or for the Board of Trustees to call one if the Board of Management fails to do so.[^24] In my view, Hindu Sabha could and should have called an annual meeting to present audited financial statements to its members, notwithstanding its inability to call an election.

[67] The Defendants also submit that Hindu Sabha decided to defer expenditures for preparing audited financial statements until a general body meeting could be called when audited statements could be provided to members. However, the duty to provide its members with audited financial statements on an annual basis prevented Hindu Sabha from deferring this obligation.

[68] I accept that Hindu Sabha took some steps to provide a measure of transparency with its financial affairs by preparing unaudited financial statements for its fiscal years ending March 2015 to March 2019, which the Defendants have produced. I am also satisfied on the evidence before me that Hindu Sabha’s governance boards acted in good faith to conduct Hindu Sabha’s affairs in what they felt were the temple’s best interests. Unfortunately, the course of action they took was not permitted by legislation or its By-Law.

[69] The Plaintiffs claim that Hindu Sabha has shown financial mismanagement as a result of the Collective Board’s decision to have Kuldip Gupta and Vipul Sharma co-sign cheques that are issued by the temple. They submit that this arrangement breaches ss. 12.02(b) (Cheques) of the By-Law which stipulates the following:

All cheques, drafts or orders for the payment of money and all notes and acceptances and bills of exchange shall be signed by any two of three officers namely President, Vice-President, and Treasurer. If Board of Management cease to exist, any two members of the Board of Trustees as appointed by a two-thirds (2/3rds) resolution of the Board of Trustees.

[70] As mentioned earlier, Hindu Sabha currently has no President or Vice-President as the former incumbents resigned. Their replacements are required to be elected by the temple’s voting members.[^25] But the interim injunction ordered on September 4, 2018 stayed the temple’s ability to call an election to replace these positions. In these unique circumstances, I accept that it became impossible for Hindu Sabha to comply with the cheque signing requirements under ss. 12.02(b) of the By-Law after its President and Vice-President resigned leaving the temple without two of the three designated officers able to co-sign cheques.

[71] To manage the situation, the Collective Board approved an interim arrangement by which Kuldip Gupta and Ajay Sharma were designated to co-sign the temple’s cheques. Mr. Gupta is the Chair of the Board of Trustees and Ajay Sharma is the Chair of the Board of Management.

[72] The Plaintiffs submit that the Collective Board’s co-signing arrangement with Mr. Gupta and Mr. Sharma cannot stand as it does not comply with ss. 12.02(b) of the By-Law. However, ss. 12.02(b) cannot be applied in the rather unusual situation that arose in this case. Hindu Sabha tried to call an election, but the Plaintiffs obtained an interim injunction to stay the election until their injunction motion could be determined. After the Plaintiffs failed to return their injunction motion and the incumbent President and Vice-President resigned, Hindu Sabha faced its current predicament. Its ongoing inability to elect a President and Vice-President effectively foreclosed Hindu Sabha from having its cheques signed by those corporate officers under ss. 12.02(b).

[73] Hindu Sabha needed to arrange for its cheques to be signed and issued so its many activities and operations could continue. In the circumstances, I find that the Hindu Sabha directors acted responsibly and in good faith by convening as the Collective Board to consider the issue and by approving the Chairs of the Boards of Management and Trustees, respectively, to co-sign the temple’s cheques. In my view, the Collective Board made a thoughtful and sensible decision to entrust two senior directors to co-sign cheques as a control measure to help manage the temple’s finances responsibly and in its best interests. I find that the Collective Board’s co-signing decision was reasonable and fell within the scope of its business judgment, which is entitled to deference: Peoples Department Stores Inc. (Trustee of) v. Wise, 2004 SCC 68 at para 65; Maple Leaf Foods Inc. v. Schneider Corp. (1998), 1998 CanLII 5121 (ON CA), 42 OR (3d) 177 (CA) at 192; Ottawa Humane Society v. Ontario Society for the Prevention of Cruelty to Animals, 2017 ONSC 5409 at para 37. The record discloses no basis to suggest any misappropriation of funds, or any effort by the directors to put their personal interests ahead of, or in conflict with, the temple. As such, I am satisfied that the directors acted honestly and loyally without any breach of their fiduciary duty to Hindu Sabha: London Humane Society (Re), 2010 ONSC 5775 at paras 19-21

[74] To successfully challenge a business decision, a challenger is required to establish that the directors acted: (i) in breach of the duty of care; and (ii) in a way that caused injury to the challenger: Peoples Department Stores at para 66.

[75] From the evidence before the court, I find that the Collective Board acted prudently and diligently by adopting the cheque co-signing arrangement. In my view, this arrangement was a reasonable business decision to take given Hindu Sabha’s predicament. Courts are reluctant to second-guess or usurp corporate decisions by directors who are familiar with the corporation’s affairs and exercise an appropriate degree of prudence and diligence, which does not call for perfection: Peoples Department Stores at para 67; Ottawa Humane Society at paras 37-38. In my view, the Hindu Sabha directors met this standard of care. Moreover, the Plaintiffs have not shown that the Collective Board’s decision to approve the co-signing arrangement caused any injury to Hindu Sabha’s members, congregants or devotees. Although the Plaintiffs submit that the board’s co-signing decision breached ss. 12.02(b), I am not persuaded that this provision necessarily applied to limit the Collective Board’s discretion in the unique circumstances that arose in which ss. 12.02(b) simply could not be applied in the absence of both a President and Vice-President. In any event, even if the board’s decision amounts to an irregularity, I see no basis to suggest that the decision caused any injury to the Plaintiffs or others at the temple.

[76] Accordingly, I am satisfied that the Plaintiffs have not demonstrated a proper basis to successfully challenge the Collective Board’s decision for temple cheques to be co-signed by the respective board chairs. To this end, the Plaintiffs have not proposed another decision that the directors could or should have taken, apart from suggesting that they could have asked the court for directions. Had they done so, I expect that the court would have given serious consideration to the co-signing arrangement adopted by the Collective Board. Regardless, I am not persuaded that the directors were obliged to return to court for directions. Hindu Sabha’s governance boards were properly constituted and its directors were entitled to conduct the temple’s affairs by making fair, reasonable and good faith decisions. In my view, the Collective Board arrived at its co-signing decision in this fashion.

[77] I parenthetically note that Hindu Sabha’s Treasurer, Raj Kaicker, developed health issues that curtailed his activities at the temple. As such, Vipul Sharma, a Board of Management director, was appointed as Assistant Treasurer under ss. 4.01(c) of the By-Law to help fulfill the Treasurer’s duties.[^26] When the Treasurer is unavailable, ss. 4.02(d)(x) of the By-Law contemplates that the duties of the Treasurer shall be performed by the Assistant Treasurer.[^27] I accept that Mr. Sharma was appropriately appointed, and that the directors of the Board of Management acted reasonably in doing so to manage the temple’s financial affairs in good faith.

Serious Question to be Tried

[78] Based on the foregoing, I am not persuaded that the Board of Management at Hindu Sabha was improperly constituted, that temple funds were improperly used to indemnify directors, that donations to the temple have been unaccounted for, or that cheques were signed inappropriately. Accordingly, I find that none of these allegations raise serious issues to be tried. However, I accept that the Board of Management has failed to provide audited financial statements for several years. This reflects non-compliance with legislation and the By-law, and raises a live issue.

Nature and Degree of Harm

[79] In my view, Hindu Sabha’s directors made good faith efforts to prepare unaudited financial statements (i.e., for the temple’s fiscal years which currently lack audited statements) in an attempt to exercise prudent management over Hindu Sabha’s financial affairs. Although I find that their efforts were insufficient to discharge their obligations under legislation and the By-Law to provide audited financial statements to temple members, I accept that the governance boards acted honestly and in what they considered were Hindu Sabha’s best interests. The Plaintiffs did not allege any errors or irregularities in the figures that appear in the unaudited financial statements that the Defendants produced, or otherwise suggest that these unaudited statements are false or misleading.

[80] On the facts of this case, I am not persuaded that a useful purpose would be served by appointing a monitor to manage Hindu Sabha’s affairs. From the evidence before the court, I see no basis to believe that temple assets need to be protected, preserved or managed by a third-party to safeguard the temple’s ability to continue pursuing its charitable objectives. I am satisfied that Hindu Sabha’s incumbent directors serve on properly constituted governance boards that are duly authorized to manage the temple’s financial affairs. Subject to my comments below regarding the need for audited financial statements and updates to its corporation profile report, I am satisfied that Hindu Sabha is being managed by directors who are acting in good faith in an effort to serve the best interests of the temple’s members and congregants. In my view, the evidence does not justify appointing a monitor to manage the temple’s affairs at this time.

Other Factors

[81] I am satisfied that the irregularities with Hindu Sabha’s records or record-keeping practices may be adequately addressed by directing the temple to: a) prepare audited financial statements for its outstanding and future fiscal years; b) accurately update and maintain its OBIS corporation profile report; and c) provide volunteers with refresher training on procedures for counting donations. Doing this would, in my view, give temple members and congregants an adequate alternate remedy to rectify oversights or inaccuracies in Hindu Sabha’s statements, corporate profile and donation count forms that resulted from mistakes or inadvertence by directors and volunteers acting in good faith to fulfill the temple’s best interests. As I see no reason to expect any non-compliance with the court’s direction by the Defendants or other volunteers at Hindu Sabha, I accept that these remedial measures would sufficiently resolve any irregularities with its statements and records now and in the future.

[82] In determining whether to grant the relief sought on this motion, I was influenced by the Defendants’ submission that this motion for injunctive relief should be denied as the Plaintiffs did not come forward with clean hands: Morguard Residential v. Mandel, 2017 ONCA 177 at paras 27-28. As set out earlier, I find that the Plaintiffs relied on false evidence sworn by Pradeep Malik, who orchestrated a scheme to fabricate minutes of a fictitious Board of Management meeting to deliberately create a false narrative and mislead the court into believing that the board had been improperly constituted. This was a blatant and direct effort to deceive the court with false evidence which implicates the clean hands doctrine.

[83] The Defendants further submit that the Plaintiffs come to court without clean hands by citing a March 2, 2018 incident when two Plaintiffs and others from their faction allegedly tried to improperly assume control of Hindu Sabha. But given the limited evidence of that incident, I am not persuaded that the Defendants have shown that the Plaintiffs engaged in self-help that amounts to bad faith conduct.[^28] I also see an insufficient connection between the Plaintiffs’ conduct during that incident and the relief sought on this motion to apply the clean hands doctrine: BMO Nesbitt Burns Inc. v. Wellington West Capital Inc. (2005), 2005 CanLII 30303 (ON CA), 77 OR (3d) 161 (CA) at para 28.

[84] There is no reliable evidence before the court as to how the proposed monitor would actually manage the temple’s affairs, what the costs of this would likely be, or how these costs would be paid for. Although the Plaintiffs proposed an accounting firm to act as the monitor, they led no evidence of how the firm would manage the temple, or whether the cost of its services would be practicable or feasible for Hindu Sabha to pay. In addition, the Plaintiffs did not provide an undertaking to pay costs if they ultimately fail in this litigation. As such, my ability to undertake a meaningful cost benefit analysis is quite limited on this record. In my view, these are important considerations as the monitor’s costs could well be significant given the intrusive nature of the proposed interim appointment and its likely duration (i.e., given the limited progress in this litigation over the past few years) until a final adjudication is reached in this case.

[85] Ultimately, having regard to the unique situation that arose in this case, I am persuaded to not interfere in the internal working of Hindu Sabha at this time. In arriving at this, I am mindful of the court’s general disposition to not interfere unduly in the activities of religious organizations: Bala v. Scarborough Muslim Association, 2008 CanLII 63179 (ONSC) at para 20 and 2010 ONSC 6834 at paras 21-22; Scharafanowicz at paras 18-19.

[86] Accordingly, I decline to order the interim appointment of a monitor to manage the temple’s financial affairs pursuant to ss. 101(1) of the Courts of Justice Act or ss. 10(1) of the Charities Accounting Act.

[87] Similarly, I decline to appoint an interim monitor to manage Hindu Sabha’s affairs under s. 332 of the Corporations Act. However, for the reasons set out above, I find that it is appropriate to exercise my authority under s. 332 to grant alternate relief by directing Hindu Sabha to prepare audited financial statements for its outstanding and future fiscal years, to update its corporation profile report on OBIS with corrected information, and to provide refresher training to temple volunteers on procedures for counting donations.

Outcome

[88] Based on the foregoing, I make the following orders:

1. Hindu Sabha shall forthwith prepare audited financial statements for its outstanding and future fiscal years for presentation to temple members at annual meetings;
2. Hindu Sabha shall amend its corporation profile report in the Ontario Business Information System with the Ministry of Government Services so that its profile accurately contains correct information and content, which shall be done and completed within 30 days;
3. Hindu Sabha shall provide refresher training to temple volunteers involved in counting donations on procedures for doing so, which shall be done and completed within 60 days; and
4. with regard to the other relief sought, the motion is dismissed.

[89] Following the release of this decision, my judicial assistant shall canvass the availability of counsel to attend a brief video conference call before me for the purpose of setting a timetable for this litigation. If the parties are unable to settle the matter of costs for this motion, I will also entertain costs submissions during that video attendance.

Doi J.

Date: September 18, 2020

[^1]: Pursuant to its Letters Patent, Hindu Sabha was founded to “organize and support activities for the practice and advancement of Hindu Dharma [and] supply and render services of a charitable and religious nature to fulfill the spiritual needs of the people and to perform cultural, humanitarian and other compassionate services.” [^2]: See ss. 3.01(d)(i) (Qualifications for Members of the Board of Management) and 3.01(e)(i) (Qualifications for Members of the Board of Trustees) of the By-Laws. [^3]: Section 3.01(c)(iii)(2)(C) of the By-Law authorizes the Board of Trustees to call an election within forty-five (45) days if the Board of Management fails to call an election within ninety (90) days of the expiration of their terms. In 2008, the Board of Trustees initially had five (5) elected directors. Although one director was removed from his role and another director passed away, the Board of Trustees had a quorum of three (3) directors, namely Sat Malik, Sharwan Kumar Agarwal and Prabhat Kapoor, per: ss. 3.11(m) (Quorum for Meetings of the Board of Trustees) of the By-Law. On June 22, 2016, and in accordance with ss. 3.06(b)(ii) (Filling Vacancies of Members of the Board of Trustees) of the By-Law, the Board of Trustees appointed two (2) new directors, Ashok Kapur and Ashwani Kumar Joshi, to return the board to its full complement until the next election. [^4]: Section 4.04(a) (Election of Officers) of the By-Law requires Hindu Sabha’s voting membership to elect the officer positions of President and Vice-President from amongst the directors on the Board of Management. [^5]: Subsection 101(1) of the Courts of Justice Act states: In the Superior Court of Justice, an interlocutory injunction or mandatory order may be granted or a receiver or receiver and manager may be appointed by an interlocutory order, where it appears to a judge of the court to be just or convenient to do so [^6]: Subsection 10(1) of the Charities Accounting Act states: Where any two or more persons allege a breach of a trust created for a charitable purpose or seek the direction of the court for the administration of a trust for a charitable purpose, they may apply to the Superior Court of Justice and the court may hear the application and make such order as it considers just for the carrying out of the trust under the law. Under ss. 10(2) of the Charities Accounting Act, an application under ss. 10(1) of the Act must be brought on notice to the Public Guardian and Trustee (“PGT”) who is entitled to appear through its counsel. Although the Plaintiffs served the PGT with notice of the relief sought under ss. 10(1), the PGT did not appear at the return of this motion or indicate an intention to participate in the matter. [^7]: Similarly, five (5) candidates were acclaimed during the general body meeting as directors for the temple’s Board of Trustees. The Plaintiffs are not challenging the composition of the Board of Trustees. [^8]: Notably, a comparable provision appears at ss. 3.06(b)(ii) of the By-Law to permit the Board of Trustees to fill its board vacancies by appointing directors. On June 22, 2016, the Board of Trustees exercised its ss. 3.06(b)(ii) power to appoint Ashok Kapur and Ashwani Kumar Joshi to fill its board vacancies at the time. [^9]: Other temple members have been appointed to serve as directors on the Board of Management. One of the Plaintiffs in this action, Anuradha Sharma, was appointed as a director by the Board of Management to fill a board vacancy under ss. 3.06(a)(ii) about three (3) months after Hindu Sabha’s election in June 2007. [^10]: However, the purported decision by the Board of Management to remove Mr. Sharma and Mr. Kaicker would clearly breach ss. 4.07(b)(iii) (Removal of Officers) of the By-Law which expressly precludes the Board of Management from removing the incumbent President or Vice President from their roles on the board: 4.07 Resignations and Removal of Officers (b) Removal of Officers An Officer shall be deemed to have been automatically removed from his or her Officer position if any of the following occur: (iii) the Members of the Board of Management adopts a two-thirds (2/3rds) majority Resolution to remove an Officer excluding President and Vice-President for any reason at a Meeting of the Board of Management duly called for that purpose, provided that such Officer is first offered an opportunity to be heard. [Emphasis added] [^11]: See paragraph 26 and Exhibit “D” to the Affidavit of Pradeep Malik sworn February 28, 2020. [^12]: Section 3.11(h) (Notice of Meetings for the Board of Management) of the By-Laws states: Notice of any regular or special meetings of the Board of Management shall set out the purpose of the meeting and shall be provided to Members of the Board of Management by any of the following means, as applicable: (i) By mail sent to each Member of the Board of Management not less than seven (7) days before the meeting of the Board of Management is to take place; (ii) By electronic notice including facsimile transfer or e-mail sent to Member of the Board of Management not less than five (5) days before the meeting of the Board of Management is to take place; (iii) By personal service to each Member of the Board of Management not less than four (4) days before the meeting of the Board of Management is to take place; or (iv) In the event of an emergency, as determined by the President, by telephone notice to each Member of the Board of Management not less than twenty-four (24) hours before the Board of Management meeting is to take place. The Board of Management may appoint a day or days in any month or months for regular meetings of the Board of Management at an hour to be named, and with regard to such meeting, no notice needs to be given. A meeting of the Board of Management may be held without notice immediately before or following the annual Meeting of Members. [^13]: Sham Sharma and Ashok Sharma both were given until January 18, 2018 to respond to the misconduct allegations against them. During a disciplinary meeting held by the Board of Trustees on January 18, 2018, both accepted the disciplinary consequences imposed by the board and resigned as directors of the Board of Management. Sham Sharma and Ashok Sharma signed minutes of the January 18, 2018 discipline meeting, along with the directors of the Board of Trustees and Parveen Sharma (i.e., who attended the meeting as the President of Hindu Sabha), to confirm the outcome of the meeting and their resignations from the Board of Management. [^14]: Section 4.04(a) (Election of President and Vice-President) of the By-Laws state: The Voting Membership shall elect from amongst the Board of Management the Officer positions of President and Vice-President. [^15]: Section 3.11(q) (Chair of the Board of Management) of the By-Laws states: The Chair of the Board of Management shall be: (i) the President; (ii) if the President is absent or unable to act, then a Vice-President; (iii) if the President and all Vice Presidents are absent or unable to act, then a Member of the Board of Trustees appointed by the Board of Trustees by Resolution; (iv) The President and Vice-President shall be elected from Members of the Board of Management by Voting Members at the general body meeting of members for the duration of his or her term in office as a Director. [Emphasis added] [^16]: On May 31, 2019, the Plaintiffs proposed a discovery plan. On June 3, 2019, the Defendants served a request to inspect the original petition that the Plaintiffs put before Daley RSJ on the interim injunction motion so that its validity could be confirmed by a document examiner. However, the Plaintiffs did not respond and never produced the petition for inspection. Subsequently, the Defendants refused to agree to a discovery plan while its costs award on the removal motion went unpaid. [^17]: Section 3.03(a) (Term for Members of the Board of Management) of the By-Law states that each Member (i.e., director) of the Board of Management shall be elected for a term of two (2) years. [^18]: Section 3.03(b) (Maximum Term for Members of the Board of Management) states: The maximum number of terms for Members of the Board of Management is two (2). Upon the completion of the maximum term for a Member of the Board of Management, a minimum of a one (1) year of absence is required before eligibility for re-election or election to either the Board of Management or the Board of Trustees. [^19]: Section 7.01(b) (Indemnity to Directors, Officers and Others) of the By-Laws states: Every Director, Officer, Member, Committee Member, Employee, Volunteer or other Person (with “Person” in this Part to include corporations, partnerships, joint ventures, sole proprietorships, unincorporated associations and all other forms of business organizations) of the Corporation, and his/her/its heirs, executors and administrators, and estate and effects, respectively, who has undertaken or is about to undertake any liability on behalf of the Corporation, shall from time to time and at all times, be indemnified and saved harmless out of the funds of the Corporation from and against the following: (i) all costs, charges and expenses whatsoever that such Director, Officer, Member, Committee Member, Employee, Volunteer or other Person sustains or incurs in or about any action, suit or proceeding that is brought, commenced or prosecuted against the Director, Officer, Member, Committee Member, Employee, Volunteer or other Person for or in respect of any act, deed, matter or thing whatsoever, made, done or permitted by them, in or about the execution of the duties of their office or in respect of any such liability; and (ii) All other costs, charges and expenses that the Director, Officer, Member Committee Member, Employee, Volunteer or other Person sustains or incurs in or about or in relation to the affairs thereof, except such costs, charges and expenses as are occasioned by their own willful neglect or default. [^20]: See ss. 96(1) (Annual audit) of the Corporations Act, which requires an auditor to report on the financial statement at the annual meeting, which applies with necessary modifications to corporations without share capital like Hindu Saba pursuant to ss. 133(1) (Application of Part II provisions to Part III corporations) of the Act. [^21]: Section 11.02(a) (Financial Statements and Annual Budget) of the By-Law states: (a) The Treasurer shall prepare prior to the annual Meeting of Members each year, the following: (i) financial Statements for the preceding year prepared in accordance with the financial reporting standards of the Canadian Institute of Chartered Accountants for Charitable and Non-Profit Organizations as may be in place from time to time; and (ii) an annual budget for the upcoming year prepared in consultation with the chair of each Committee, with such budget presenting for comparative purposes the budget and expenditures of at least the previous year. (b) The financial statements and the annual budget shall be forwarded to the Collective Board for approval at least two (2) weeks prior to the annual Meeting of Members. (c) After being approved by the Collective Board, the financial statements shall be presented at the annual Meeting of Members for approval by the Voting Members by Resolution. [^22]: Section 11.03(c) (Auditor) of the By-Law states: In addition to making a report at the annual Meeting of Members of the Corporation, the Auditor shall from time to time report, either verbally or in writing, to the Audit Committee on the audit work with any necessary recommendations. [Emphasis added] [^23]: Section 2.07 (a) (Annual Meeting) and (b) (Business of Annual Meeting) of the By-Law states: (a) Annual Meeting There shall be an annual Meeting of Members of the Corporation at such time and place as determined by the Collective Board, provided that the annual Meeting of Members shall be held within fifteen (15) months from the holding of the last annual Meeting of Members and not more than ninety (90) days after the end of the Corporation’s fiscal year end. (b) Business of Annual Meeting The annual Meeting of Members shall be held to transact such business as is required by the Act and as determined by the Collective Board from time to time, but at a minimum shall be held to do the following: (i) to receive a report or reports from the Collective Board; (ii) to receive a report or reports from the President; (iii) to receive a report from the Auditor on the financial statements for the Corporation in accordance with the Act; (iv) to elect Directors as required; (v) to appoint an Auditor for the current fiscal year and to fix or authorize the Collective Board to fix remuneration for the Auditor; (vi) to approve past actions of the Directors and Officers; and (vii) to transact any other business properly brought before the meeting. [Emphasis added] [^24]: Section 3.01(c)(iii)(2)(C) of the By-Law states: If the Board of Management fails to call election (sic) within 90 days of expiration of their term, Board of Trustees shall call an election within next forty-five (45) days. [^25]: See ss.4.04(a) Election of President and Vice-President) of the By-Law. [^26]: Section 4.01(c) (Assistant Secretary and Treasurer) provides: The Board of Management may also appoint an Assistant Secretary and/or an Assistant Treasurer to assist the Secretary and/or the Treasurer in fulfillment of their duties, but such positions shall not be Officers of the Corporation. [^27]: Section 4.02(d)(x) (Treasurer) of the By-Laws provides: In the absence of the Treasurer, the duties of the Treasurer shall be performed by the Assistant Treasurer, if applicable, or by another Member of the Board of Trustees who is temporarily appointed by Resolution of the Board of Management. [^28]: On March 2, 2018, the Plaintiffs Pradeep Malik and Dinesh Chander went to the temple with several others to take control of Hindu Sabha. When they tried to change the locks to Hindu Sabha’s office, police were called and attended the temple. After discussing the matter, police concluded that the incumbent temple directors were authorized to manage Hindu Sabha’s affairs. Police then asked those who had tried to assume control of Hindu Sabha to leave. Following the March 2, 2018 incident, certain individuals who tried to take control of Hindu Sabha that day were issued trespass notices by the Board of Trustees pursuant to its authority under ss. 3.01(c)(v) (Authority pursuant to the Trespass to Property Act (Ontario)) of the By-Law. Subsequent efforts to resolve the factional differences of congregants appear to have calmed tensions.