Court File and Parties

Court File No.: CV-20-644562-0000 Date: 2021-03-16 Superior Court of Justice - Ontario

Re: Kanagasabapathy Chandrasegaram, Applicant And: Canadian Tamil Medical Association and Thanu Ruban, Respondents

Before: J.T. Akbarali J.

Counsel: Vitali Luchko, for the Applicant John Aruldason, for the Respondents

Heard: March 12, 2021

Endorsement

Overview

[1] The applicant, Dr. Kanagasbapathy Chandrasegaram, was, for about ten years, a member of the board of directors of the respondent, the Canadian Tamil Medical Association (“CTMA”), a non-profit organization with a membership comprised principally of Sri Lankan Tamil medical professionals licensed to practice in North America.

[2] In early 2020, Dr. Chandrasegaram’s three-year term as Vice Chairman (or Vice Chairman/Chairman Elect [1], as it is sometimes described in CTMA’s bylaws) was coming to an end, as the CTMA’s annual general meeting approached. He expected to occupy the position of Chairman for a three-year term beginning at the AGM on February 8, 2020.

[3] However, Dr. Chandrasegaram was not elected to the office of Chairman. In an election process that he argues was contrary to the by-laws of the CTMA, the respondent Dr. Thanu Ruban was elected Chairman. Dr. Chandrasegaram argues that there were irregularities that go to the heart of the electoral process, and which lead to a result that does not reflect the wishes of the majority. He seeks relief including an order immediately removing Dr. Ruban as Chairman, and an order immediately appointing him Chairman for a term of no less than three years.

[4] The respondents argue that the electoral process was conducted appropriately, and in accordance with CTMA’s past practices, and in any event, the evidence indicates that the election result reflects the wishes of the majority of the CTMA. They argue there is no basis for the relief Dr. Chandrasegaram seeks.

Brief Background

[5] The CTMA is a non-share corporation incorporated to act as a non-profit community charitable organization to which Sri Lankan Tamil medical professionals licensed to practice in North America, and others, may belong for purposes of advancing the CTMA’s objectives. CTMA’s objectives include educating its members and providing medical aid and supplies during humanitarian crises.

[6] Dr. Chandrasegaram was a member of the CTMA for more than 16 years, and a board member for approximately 10 years. He was elected to the position of Vice Chairman in early 2017. He deposes that the Vice Chairman position was a three-year position that served as a training period, after which the Vice Chairman would take over the Chairman role for a three-year period.

[7] The CTMA, like many volunteer organizations, historically had difficulty filling all the vacancies on its board. In the history of the CTMA, there had never been a contested election for a position on the board. Sometimes, at the annual general meetings, members had to be nominated from the floor to fill positions because no one had earlier indicated an intention to stand for the position.

[8] Dr. Chandrasegaram deposes that he learned just two days before the February 8, 2020 annual general meeting that Dr. Ruben was contesting for the Chairman position. He argues that her nomination was not in accordance with the by-laws, that the knowledge of her candidacy was withheld from all but a few people on the board in order to surprise him and leave him unprepared for a contested election, and that new members were admitted in a manner inconsistent with the by-laws, and permitted to vote, calling the results of the election into question.

[9] The evidence is that the election was decided in Dr. Ruben’s favour by 30 votes to 15. Dr. Chandrasegaram was offered the opportunity to continue in the role of Vice Chairman, but he declined the position. He brings this application seeking to be installed as Chairman of the CTMA for a three-year period.

Preliminary Evidentiary Issue

[10] At the outset of the hearing, Dr. Chandrasegaram raised objection to a document that the respondents had uploaded to caselines that purports to show amendments to CTMA’s bylaws made in 2018. This document was not attached to any affidavit filed on the application. It was not produced to Dr. Chandrasegaram in advance of his cross-examination, but was only provided by the respondent following the cross examinations of their first witness, in re-examination.

[11] The respondents state that they did not have the amended bylaws at the time affidavits were prepared. The witnesses put forth by the respondents include Dr. Ruben, the current Chairman, and Dr. Rajendran, the past Chairman. There is no explanation for why, in a case where the bylaws are obviously relevant, the amendments were only produced after Dr. Chandrasegaram had given all his evidence.

[12] In the result, I declined to admit the evidence on the application because it was adduced in a fashion that allowed Dr. Chandrasegaram to meaningfully address it.

When will the court interfere in the internal workings of a charitable organization?

[13] The parties agree on the jurisprudence that is relevant to this application.

[14] In Lee v. Lee’s Benevolent Assn. of Ontario, [2004] O.J. No. 6232 (S.C.J.), at para. 12, aff’d, [2005] O.J. No. 194, at paras. 4-5 (Div. Ct.), Nordheimer J., as he then was, held that courts should be reluctant to interfere in the internal workings of a charitable organization. He wrote:

Non-profit organizations such as the Association should not be required to adhere rigorously to all of the technical requirements of corporate procedure for their meetings as long as the basic process is fair. Nor should the court be too quick to grant relief in such circumstances that may only serve to encourage a disgruntled member of such an organization to seek such relief. 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.

[15] I must thus consider whether the evidence demonstrates any irregularities that went to the heart of the electoral process or lead to a result which does not reflect the wishes of the majority.

Alleged Irregularities in the Election

[16] Dr. Chandrasegaram argues that, under the bylaws of the CTMA, upon his election as Vice Chairman/Chairman Elect, he had been elected for three-year term as Vice Chairman, and, immediately following, to a further three-year term as Chairman.

[17] In support of this argument, Dr. Chandrasegaram points to bylaw 6.0 which describes the structure of the organization. It provides that the Board of Directors shall appoint officers of the organization that include the Chairman and Vice Chairman/Chairman Elect. He argues that, on the plain meaning of the term “Chairman Elect”, the Vice Chairman is expected to become the Chairman when their term as Vice Chairman is up.

[18] Dr. Chandrasegaram notes that the Vice Chairman’s obligations, set out in bylaw 6.3b), are to perform the duties assigned by the Chairperson, chair meetings in the absence of the Chairperson and represent the organization in the absence of the Chairperson. [2] He argues that the bylaws contemplate that the Vice Chairman’s term is a training period to prepare them to take over as Chairman.

[19] Dr. Chandrasegaram also notes that the Vice Chairman is, according to bylaw 6.6, to chair a five-member nomination committee, which is charged with the obligation of calling and receiving nominations for various posts of the board for the coming year. He argues that it makes sense that the Chairperson Elect, who does not expect to contest for the position of Chairperson, be charged with the responsibility of chairing the nomination committee.

[20] Dr. Chandrasegaram also deposes that in the history of the CTMA every Vice Chairman has gone on to assume the Chairman position at the end of their three-year term.

[21] On Dr. Chandrasegaram’s theory, upon his election as Vice Chairman, he had been elected to a six-year term and did not require re-election each year. This is inconsistent with bylaw 6.5i) which provides that all officers shall be elected annually at the annual general meeting. The minutes of the annual general meeting for 2019 and 2018 disclose that all board members, including all officers, were elected to their positions at the annual general meeting.

[22] Bylaw 6.2 sets out when the board can terminate a board member for cause. There are only three, limited, circumstances when removal is permitted: non-attendance of three consecutive meetings without a valid reason; declaration of bankruptcy; and “if disciplinary action decision is rendered by their respective professional governing bodies.”

[23] In my view, the failure to automatically elevate Dr. Chandrasegaram to Chairman is not an irregularity. The bylaws are drafted assuming that, in most circumstances, the Vice Chairman will become the Chairman. However, it is not reasonable to interpret the bylaws to provide for a six-year term to commence on the election of someone to the position of Vice Chairman in view of the very limited circumstances under which a board member can be removed from the board. On Dr. Chandrasegaram’s interpretation, as long as the Vice Chairman/Chairman was solvent, and undisciplined by their professional body, the CTMA would be stuck for six years without recourse with someone whose sole contribution to the organization was to attend every third directors’ meeting.

[24] In any event, the bylaw providing for re-election of “all officers” is clear – all officers, including the Chairman and Vice Chairman, are elected annually. In this respect, CTMA has acted in accordance with the bylaws, as the minutes document the annual re-election of officers.

[25] Dr. Chandrasegaram also alleges that Dr. Ruben’s failure to declare her candidacy 28 days in advance of the annual general meeting is an irregularity. He refers to bylaw 6.6 which establishes the five-member nomination committee and provides that nomination form shall be sent to all members at least 28 days before the annual general meeting.

[26] Although the bylaws are silent as to whether the role of the nomination committee goes beyond calling and receiving nominations for various posts of the board, the parties seem to agree that the idea behind nomination committee is that it would be responsible for vetting candidates.

[27] In practice, bylaw 6.6 was not followed. The board discussed candidates among the board members at large and if more than one person was interested in the same position, the board reached a consensus about how to proceed. No nomination committee had ever been established. Moreover, both Dr. Chandrasegaram and Dr. Ruben were already members of the board, so presumably their suitability as directors had already been determined.

[28] In early February 2020, when it became apparent there was a contest for at least one board position, there was some discussion about Dr. Chandrasegaram establishing and chairing a nomination committee. However, there was not enough time to constitute one before the annual general meeting, and the board agreed it was not possible to postpone the annual general meeting. The nomination committee never went ahead.

[29] The nomination of Dr. Ruben was thus inconsistent with bylaw 6.6. However, the CTMA’s past practice was also inconsistent with bylaw 6.6. Dr. Chandrasegaram did not object to the CTMA conducting itself in a manner inconsistent with its bylaws during his 16 years as a member, including ten years as a director. His objection arose only after he lost the election for the Chairman position.

[30] In my view, the inconsistency between bylaw 6.6 and the manner in which Dr. Ruben was nominated for the Chairman position does not go to the heart of the electoral process. While Dr. Chandrasegaram alleges that Dr. Ruben was able to take advantage of the late disclosure of her candidacy to hold campaign events and amass support, leaving him unprepared to contest the election, there is no reliable evidence to support this allegation. Dr. Chandrasegaram deposes that Dr. Ruben held campaign events but he does not explain how he knows that she did. At the hearing, his counsel indicated that Dr. Chandrasegaram attended those meetings, but he does not depose that he did, and in any event, if he had attended campaign events organized by Dr. Ruben, he would have known of her candidacy, and he insists that he did not know she was running for Chairman until two days before the annual general meeting. For her part, Dr. Ruben denies holding campaign events.

[31] Both Dr. Ruben and Dr. Chandrasegaram had the opportunity to make a speech at the annual general meeting. Dr. Chandrasegaram alleges that Dr. Ruben also had prepared a campaign video, but the evidence suggests this was not a campaign video, but a video of some of the CTMA’s activities over the prior year. There is no evidence that the failure to follow bylaw 6.6 rendered the election unfair.

[32] Dr. Chandrasegaram also raises concern with respect to new members who were permitted to join at the annual general meeting and permitted to vote. Bylaw 4.3 requires all applications for membership to be submitted to the board which has the right to approve or reject the applications. Dr. Chandrasegaram argues that allowing these purported new members to vote is an irregularity that goes to the heart of the electoral process.

[33] I disagree that the mere fact that members were enrolled at the annual general meeting is an irregularity that goes to the heart of the electoral process. The evidence indicates that members were often enrolled at the annual general meeting without vetting by the board. Enrolling members at the annual general meeting is inconsistent with bylaw 4.3 but it is not inconsistent with the past practice of the organization. As I have noted, Dr. Chandrasegaram did not object to the CTMA conducting itself in a manner inconsistent with its bylaws during the 16 years he was a member of the organization, including the ten years he sat on the board. It is only once he lost the election that he objected to the organization’s failure to follow the bylaws.

[34] The list of people who registered at the annual general meeting, and presumably voted, raises some questions. The respondents identify eight new members from the list of 45, and state that some of those eight, most notably Dr. Chandrasegaram’s daughter, would have cast their vote in support of Dr. Chandrasegaram. Dr. Chandrasegaram states that his daughter was not a new member, and thus he questions the reliability of the list. Dr. Chandrasegaram was a member of the CTMA for 16 years, and on the board for 10 years. He gives no evidence that any of the other voters identified as newly registered were already members, or that any of the voters identified as members prior to the annual general meeting were in fact new to the organization.

[35] Dr. Chandrasegaram notes that at least one member, Dr. Rajendran, was present at the annual general meeting but does not appear on the list of those who registered to vote at the annual general meeting. Dr. Rajendran states that he did not vote at the meeting. Dr. Chandrasegaram also deposes that at least one or two people left the meeting before the voting occurred. However, the registered voting list shows 45 people registered, and 45 ballots were counted. Dr. Chandrasegaram thus raises concerns about the reliability of the vote count.

[36] The evidence is that Dr. Ruben carried the vote by two to one margin. The concerns Dr. Chandrasegaram raises are insufficient to establish that the irregularities led to a result which does not, or even may not, reflect the wishes of the majority of the organization. This conclusion is supported by the fact that not a single other member of CTMA has filed an affidavit in support of Dr. Chandrasegaram’s application.

[37] Moreover, it is not necessary to consider Dr. Chandrasegaram’s argument that granting membership to eight new members at the annual general meeting was a violation of section 124(1) of the Corporations Act, R.S.O. 1990, c. C.38, because, even if it were, the number of new members admitted were too few to have impacted the results of the election.

[38] I thus conclude that, to the extent that there were irregularities in the election at the February 8, 2020 annual general meeting of CTMA, the irregularities did not go to the heart of the electoral process and did not lead to a result which does not reflect the wishes of the majority of the organization. Dr. Chandrasegaram’s application is dismissed.

Costs

[39] At the hearing of the application, parties agreed to provide me with their costs outlines to allow me to determine costs on the basis of the outlines only. The parties confirmed there were no offers to settle.

[40] The three main purposes of modern costs rules are to indemnify successful litigants for the costs of litigation, to encourage settlement, and to discourage and sanction inappropriate behaviour by litigants: Fong v. Chan (1999), 46 O.R. (3d) 330, at para. 22.

[41] Subject to the provisions of an Act or the rules of court, costs are in the discretion of the court, pursuant to s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43. The court exercises its discretion taking into account the factors enumerated in r. 57.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, including the principle of indemnity, the reasonable expectations of the unsuccessful party, and the complexity and importance of the issues. Overall, costs must be fair and reasonable: Boucher v. Public Accountants’ Council for the Province of Ontario, 71 O.R. (3d) 291, at paras. 4 and 38. A costs award should reflect what the court views as a fair and reasonable contribution by the unsuccessful party to the successful party rather than any exact measure of the actual costs to the successful litigant: Zesta Engineering Ltd. v. Cloutier, 2002 CarswellOnt 4020, 118 A.C.W.S. (3d) 341 (C.A.), at para. 4.

[42] The respondents were the successful parties. Costs generally follow the event.

[43] I recognize that the costs of litigation are burdensome for all litigants, and no less so for community charitable organizations who depend on volunteer hours and volunteer dollars for their existence. While I appreciate that what unfolded at the annual general meeting in February 2020 felt very unfair to Dr. Chandrasegaram, as Nordheimer J. found in Lee, courts should not be too quick to interfere with the internal workings of such organizations. Litigation is often the wrong way to address the kinds of perceived transgressions that take place between members of community charitable organizations. An award of costs is appropriate to discourage disgruntled members from turning too readily to the courts to seek redress for slights or disappointments that are better understood as part of life’s vicissitudes than as questions about the fairness of a charitable community organization’s basic processes.

[44] The respondents’ costs outline indicates that they have incurred partial indemnity costs, plus HST and disbursements, of $20,356.84. The applicant’s costs outline indicates total partial indemnity costs of $21,475.21.

[45] In determining a fair and reasonable quantum of costs, I note that the issues raised in the application were not complex, but they were important to the parties. Respondents’ counsel’s hourly rate was reasonable. The application included cross-examinations of three witnesses, in addition to the preparation of the written record and factums. The time spent by respondents’ counsel was less than the time spent collectively by the lawyers, clerks, and students involved in the applicant’s case. Given that the applicant’s costs were slightly higher, the respondent’s costs would have been within his reasonable expectations.

[46] I conclude that the respondents’ costs are fair and reasonable. The applicant shall pay costs of $20,356.84 to the respondents within thirty days.

Released: March 16, 2021 J.T. Akbarali J.

Footnotes

[1] For ease of reference, except when dealing directly with the argument regarding the title of this role, I will refer to it as Vice Chairman.

[2] The bylaws sometimes refer to the Chairman and sometimes refer to the Chairperson.