Metmeke v. Yigzaw, 2023 ONSC 6557

COURT FILE NO.: CV-22-00090825-0000

DATE: 2023/11/20

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

KIDUS METMEKE YOHANNS ERITREAN ORTHODOX TEWAHDO CHURCH Plaintiff

– and –

PHILIPOS YEMANE YIGZAW AND RBC ROYAL BANK OF CANADA Defendant

Sean Taylor, Counsel for the Plaintiff

David Contant, Counsel for the Defendant

HEARD: July 18, 2023 (Ottawa)

ENDORSEMENT

H.J. Williams, J.

Overview

1This motion arises from a governance dispute that has divided an Ottawa church.

2Philipos Yemane Yigzaw seeks to overturn the election of members of the board of directors of the Kidus Metmeke Yohanns Eritrean Orthodox Tewahdo Church.

3The current board of directors of the Church says an election took place on October 23, 2022.

4Yigzaw, who has been a member of the Church since 2007 and was a director until October 23, 2022, says the results of the election are invalid. Yigzaw says not all members of the Church received notice of the election. Yigzaw says members were told that only men would be elected. Yigzaw says that because of a fight that broke out just before the vote was to take place, several people who would have voted were forced to leave, because they or family members required urgent medical care. Yigzaw also says that people who assumed the election had been cancelled because of the fight did not vote and that people who were not members of the church did vote.

5Yigzaw brings his motion under the Not-for-Profit Corporations Act, 2010, S.O. 2010, c. 15 (“the NCA”). In his notice of motion, Yigsaw cites sections 31(1), 51(1), 55 and 61 of the NCA.

6In his notice of motion, Yigzaw sought removal of the priest assigned to the Church. At the outset of the hearing, Yigzaw’s counsel said Yigzaw would not be seeking removal of the priest and that the only issue to be decided was the validity of the election.

7There were no cross-examinations on affidavits.

8Neither party requested an adjournment of the motion.

9The defendant RBC Royal Bank of Canada did not participate in the motion.

Some key facts

10The parties have provided conflicting accounts of the events that precipitated the Church’s action and Yigzaw’s motion. Each questions the motives of the other and accuses the other of having acted in bad faith.

11The following facts, however, are not in dispute:

• That the Church is incorporated under the NCA;

• That notice of the October 23, 2022 election was sent to the membership of the Church by way of a message to two groups of Church members via the “Whatsapp” messaging service; and

• That on October 23, 2022, in the meeting room where the election was to take place, a fight broke out and the police were called.

12What happened following the fight is very much in dispute. Yigzaw says several people, including himself, a female former board member whose arm was broken in the fight and some of their family members, left the meeting to seek medical attention at a hospital. Yigzaw says the police did not allow anyone to remain in the meeting room. The Church says that after the fight, most people returned to the meeting room where a peaceful and orderly election proceeded, supervised by the police.

The position of the Church

13The Church argues that Yigzaw’s motion should be dismissed. The Church submits:

1. That Yigzaw has no legal basis for requesting the relief he is seeking on a motion;

2. That the October 23, 2022 election was carried out in accordance with the by-laws of the Church and is therefore valid; and

3. That there are too many facts in dispute for the validity of the election to be determined on a motion.

Discussion

Issue #1: Is Yigzaw entitled to request the relief he is seeking on a motion?

14The Church argues that Yigzaw has no basis for asking this court, on a motion, to declare the October 23, 2022 election invalid.

15The Church submits the declaration requested by Yigzaw is properly characterized as a mandatory order or a request for summary judgment. The Church argues that Yigzaw has failed to address the applicable tests for obtaining relief of this nature and has not provided sufficient evidence in support of his request.

16In my view, the Church’s argument is flawed in that it ignores Yigzaw’s reliance on s. 31(1) of the NCA. This section of the NCA allows a member of a corporation, such as Yigzaw, to ask this court to determine “any controversy with respect to an election or appointment of the director of a corporation” and provides the court with a broad discretion to make orders to address the situation:

Court review of election or appointment of director

31 (1) A corporation or a director or member of the corporation may apply to the court to determine any controversy with respect to an election or appointment of a director of the corporation. 2010, c. 15, s. 31 (1).

Powers of court

(2) On an application under this section, the court may make any order that it thinks fit, including an order,

(a) restraining a director whose election or appointment is disputed from acting pending determination of the dispute;

(b) declaring the result of the disputed election or appointment;

(c) requiring a new election or appointment, and including in the order directions for the management of the activities and affairs of the corporation until a new election is held or appointment made; and

(d) determining the voting rights of members and of persons claiming to hold memberships. 2010, c. 15, s. 31 (2).

[17] In Birhane v. Medhanie Alem Eritrean Orthodox Tewahdo Church, 2022 ONSC 5732, Vermette J. was asked to order an annual general meeting for a church incorporated under the NCA. The respondents in Birhane argued the court did not have jurisdiction to make the requested order, in part because the applicants had not established an underlying legal right for the relief they were seeking. Vermette J. considered s. 31 of the NCA and also s. 61, which allows a party to request the court to order a meeting. Vermette J. concluded that the NCA accorded her jurisdiction to grant the relief sought by the applicants and that the issue before her was justiciable. Vermette J. granted the requested relief and ordered the meeting.

18In Vietnamese Association, Toronto v. Duong, 2023 ONSC 731, Steele J. declared the election of directors of a charitable organization to be invalid. The vote took place after the association’s annual general meeting was disrupted and adjourned, and all of the existing board members but one had left. Steele J. provisionally reinstated the board that was in place before the election, ordered a further AGM and set out several protocols for the meeting. Steele J.’s decision was recently upheld by the Divisional Court (2023 ONSC 6203.)

19I am satisfied: (1) that there is a controversy with respect to an election in this case; (2) that s. 31(1) of the NCA authorizes Yigzaw, as a member of the Church, to ask the court to determine the controversy; and (3) that the court’s determination of the controversy may include a declaration of the result of the election or an order that a further election be held. I am also satisfied that Yigzaw was not required to commence an application to seek relief under s. 31(1) and that he was entitled to do so by way of a motion in the Church’s action. Counsel for the Church was clear that the Church was not arguing that, because s. 31(1) of the NCA says that a person may “apply” to the court for the available relief, Yigzaw was required to bring an application instead of a motion. I would not have endorsed such an argument in any event, as it was rejected by Ontario’s Court of Appeal in 56 King Inc. v. Aviva Canada Inc., 2017 ONCA 408, albeit in the context of a motion under a different statute.

20The Church also argues that Yigzaw should not be permitted to challenge the election on a motion because he had requested the same relief in his statement of defence and counterclaim. The Church argues that having chosen to raise the issue in an action, Yigzaw must now proceed to discovery, mediation, a pre-trial conference and a trial. I find the Church is being a bit creative in saying that Yigzaw “chose” to raise the issue in an action, when he raised the issue in his defence to an action commenced against him by the Church. Regardless, I see no reason why having raised the validity of the election as an issue in the action should deprive Yigzaw of recourse to the statutory remedy that is available to him, as a member of the Church, under s. 31(1) of the NCA. The legislature chose to make the relief under s. 31(1) available on application and must have intended that not-for-profit corporations such as churches not be forced to wait for actions to work their way up trial lists for governance disputes to be resolved. Further, as I discuss under Issue #3, below, I am not of the view that material facts are in dispute in this case such that a trial would be required to determine whether the election was valid.

21For these reasons, I am satisfied that Yigzaw is entitled to proceed by way of a motion to request a declaration that the October 23, 2022 election was invalid.

Issue #2: Was the election carried out in accordance with the Church’s by-laws?

22The Church argues that the October 23, 2022 election was carried out in accordance with its by-laws.

23The by-laws relied upon by the Church, both in the original Tigrinya and in English, were attached as exhibits to the affidavit of the Church’s secretary-general Yosief Tsegai.

24The parties do not agree that these by-laws were in force. However, assuming, without finding, for the purpose of this motion that they were in force, the Church has not satisfied me that the election was compliant.

25Article 3.1 if the by-laws provides that a member “shall be one who is at least eighteen years of age, follower of the Orthodox Tewahdo faith, bound by the laws and ordinances of the church, pays and contributes the appropriate monthly and other benefits.”

26Article 4.2 provides that a general election of the Parish Council may be held “if up to 51% of the membership is present.” I can only assume that this is a poor translation, and that the intention of the article is that “at least” 51% of the membership must be present for the election to be held. This assumption is supported by Tsegai, who said in his affidavit that Article 4.2 required “a majority” of the members of the Church to be present.

27The Church has not satisfied me that 51 per cent of the membership was present for the October 23, 2022 election. The Church also has not satisfied me that it knows how many members it has, or how many people, members or otherwise, were present for the election.

28In his affidavit, Tsegai said he was the secretary-general of the Church at the time of the election. The by-laws relied upon by the Church require the secretary-general to keep and preserve church records and documents, to register members, when a meeting is required to make calls to members and, during meetings, to record decisions made on the issues at hand.

29Tsegai said he kept the Church’s membership list.

30Tsegai said any membership lists maintained by Yigzaw are not recognized by the Church, as Yigzaw did not have authority to determine membership. Tsegai said that, as treasurer, Yigzaw had access to the membership list. Tsegai obviously had serious concerns about the way Yigzaw was recording members.

31Tsegai said the Church’s electoral committee determined that the Church’s official member list, the one kept by him as secretary-general, would be the list used for purposes of the election.

32Significantly, this list was not in evidence at the motion.

33In his affidavit, Tsegai said that on October 23, 2022, after the fight was broken up by the police, “all or nearly all the Church’s members remained in the Church” and that “a majority of members of the Church remained for the election as was required by Article 4.2 of the Church’s by-laws.”

34There was, however, no evidence before me with respect to how many members the Church had on October 23, 2022, how many people were present in the meeting room before or after the fight when the election is purported to have taken place or how many people voted.

35I consider it to be highly relevant that on two occasions, Yigzaw’s counsel asked the Church to produce (a) a list of the members of the Church; and (b) a list of the people who voted in the election. Although Tsegai said the membership list he maintained was the list used for the election, and although, as secretary-general, Tsegai was required to record decisions made at meetings, the Church has not produced either of the requested lists.

36I must infer from the failure of the Church to put any evidence before the court in respect how many members it had, the number of people in the meeting room following the fight or how many people voted, that the Church does not have any evidence to offer on these points or that the evidence it does have is not helpful to its position. In the absence of any such evidence in the face of two clear requests for its production, I cannot accept Tsegai’s bald and unsupported statements that all or nearly all members remained in the Church or that a majority of members was present for the election.

37While I am doubtful that in the circumstances, compliance with the by-laws of the Church would have been a full answer to the concerns about the election raised by Yigzaw, the Church has not satisfied me that the October 23, 2022 election was carried out in accordance with its by-laws. Specifically, and as noted above, the Church has failed to show that 51 per cent of the membership was present for the election.

Issue #3: Are there too many facts in dispute for the issue of the validity of the election to be determined on a motion?

37There are indeed many facts in dispute between the parties. Nonetheless, I am satisfied that I can make a just decision about the validity of the election based on the record that is before me.

38I have already found that the election was not carried out in accordance with the by-laws the Church says were in force at the time, in that there is no evidence about how many members the Church has or how many were present for the election.

39Assuming an election took place following the fight, there was no evidence of how the vote was conducted (by show of hands or secret ballot, for example) and no record of a tally or the results of the vote.

40This key evidence was missing, even though the Church, which is seeking to uphold the election, was relying on an affidavit from Tsegai, its secretary-general, who admitted it was his responsibility to maintain membership lists and to record decisions.

41There is also an issue with respect to notice of the election. The Church says notice was sent to two Whatsapp groups. Yigzaw argues that notice was insufficient, because not all Church members, particularly older members, subscribed to Whatsapp. I find the notice problem is even more fundamental: As there is no evidence of a membership list, there can be no way of knowing if all members received notice of the election.

42There was irrefutable evidence in the form of a video, photographs and hospital records that before any election took place, a fight broke out that resulted in the police being called and several people present, including Yigzaw and a fellow board member, Hajer Estifanos, being injured and taken to hospital. The Church admits a fight broke out, although it characterized the event as a “physical altercation.”

43Based on these facts, I am satisfied that the results of the election cannot stand. It would be highly unjust to uphold the results of this election in the absence of evidence of how many members the Church has or of how many members were present at the time of the vote, and when members opposed to the election, including Yigzaw and Estifanos, were injured at the meeting where the election was to take place and were required to leave. I also accept Yigzaw’s argument that, because of what had happened earlier in the meeting, some members may have been intimidated and may not have felt comfortable voting in accordance with their conscience.

Disposition

44Yigzaw’s motion is granted.

45I make the following orders:

1. I declare the October 23, 2022 election of the board of directors of the Church to be invalid; the results of the election shall be set aside.

2. The board of directors that was in place on October 22, 2022 shall be reinstated, pending the election of a new board of directors.

3. The January 27, 2023 order of Kershman J. shall remain in force until further order.

4. The election of a new board of directors shall take place in 60 days, subject to a further order.

5. If the parties cannot agree on the version of the Church’s by-laws that is currently in force, the Standard Organizational By-law under the NCA shall apply to the election and until a new board of directors has amends, repeals or replaces the Standard Organizational By-law in accordance with its provisions.

6. With the assistance of their counsel, the parties shall jointly appoint an independent lawyer who will oversee all aspects of the election process.

7. The cost of the election, which shall include the reasonable fees of the independent lawyer, the rental of space, if required and security, shall be paid from the bank account of the Church.

8. If further court intervention is required, the parties may request a case conference with me. I will remain seized, subject to a further order.

Costs

47Although Rule 57.03 provides for costs of a motion to be fixed and payable within 30 days, a different order may be made if it would be considered more just. Yigzaw is without doubt the successful party on the motion and is presumptively entitled to costs. However, Yigzaw’s motion and this order are early steps in an-going process in which the parties, who have differences and supporters, will be required to work together if they wish to preserve an institution which is obviously dear to all of them. This process is going to unfold in the shadow of an on-going legal action commenced by the Church. There are factual disputes between the parties which are not relevant to the relatively narrow issues on the motion. How the parties behave going forward and the outcome of the trial will shed light on the merits of their conduct to date. With this in mind, and as Kershman J. did in his January 27, 2023 order, I will reserve costs of the motion to the trial judge.