Barrie & District Association of Realtors v. Information Technology of Systems Ontario et al., 2025 ONSC 3388

Court File No.: CV-23-609
Date: 2025-06-09
Ontario Superior Court of Justice

Between:
Barrie & District Association of Realtors, Applicant
– and –
Information Technology of Systems Ontario, Brett Barker, Mat Clancy, Ray Ferris, Ryan Gilmour, Deanna Gunter, Geoff Halford, Don Lea, Doug Lytle, Jeff Mahannah, Don McColl, Susan Nosko, Bob Parson, Jim Sexsmith, Diane Snell, Wendy Webb, Charlotte Zawanda, William Cattle, Blair Campbell, Allison McLure and Lyle McNair, Respondents

Applicant Counsel: Gavin Tighe, Michael Citak and Dara Hirbod
Respondent Counsel: John Polyzogopoulos and Amelia Philips Robbins
Heard: March 25-27, 2025, and June 6, 2025

Reasons for Judgment
Justice Sunil S. Mathai

Overview

[1] In the real estate business, access to multiple listing service data (“MLS data”) is imperative. To get access to larger pooled data, real estate brokers and agents join local real estate associations that serve specific geographical regions. One such local real estate association is the Applicant, the Barrie & District Association of Realtors® (“BDAR”).

[2] Membership in a local real estate association comes with rewards – brokers and agents gain access to the MLS listings of the association’s members. With access to larger data, real estate brokers and agents can search more properties and thus better serve their clients. That said, accessing data from just one local association has its limitations.

[3] To address these limitations, several local real estate associations came together to form the Respondent corporation, Information Technology Systems Ontario (“ITSO”). Through ITSO, member associations including BDAR pool data into one large database and pay a fee to ITSO so that its members can access the pooled data.

[4] ITSO is not the only corporation that provides access to pooled MLS data. The Toronto Regional Real Estate Board (“TRREB”) also provides this service. ITSO believes that it is in competition with TRREB for users and listings.

[5] This competition is at the heart of this application.

[6] In January 2023, BDAR announced an “integration” with TRREB. In March 2023, another ITSO member, Quinte and District Association of Realtors® (“QDAR”), announced its partnership with a TRREB related entity. ITSO’s board viewed these developments as a threat: TRREB was the proverbial fox in the hen house.

[7] In response, the board amended ITSO’s by-law concerning membership criteria. As a result of the amendment, ITSO members were required to maintain the same corporate structure and control as when the local association first became a member. Where there was a change in corporate structure or control, ITSO’s board retained the right to decide whether the association would remain a member.

[8] BDAR viewed the amended by-law as a first step to its removal as a member association and feared that its members would lose access to ITSO’s MLS data. To prevent this outcome, BDAR brought this application challenging the validity of the amendment, pursuant to s. 191 of the Not-for-Profit Corporations Act, 2010, S.O. 2010, c. 15 (“ONCA” or “Act”).

[9] BDAR makes three arguments in support of its position. First, BDAR alleges that the amendment amounts to a retroactive breach of contract. Second, BDAR argues that the amendment is impermissibly vague and inconsistent with s. 48 of ONCA. Third, BDAR alleges that the amendment was initiated in bad faith to target BDAR. ITSO denies these assertions.

[10] For the reasons that follow, I dismiss the application. I find that the impugned amendment does not amount to a retroactive breach of ITSO’s contractual obligations to BDAR and that the amendment is neither impermissibly vague nor inconsistent with ONCA. Finally, I find that the amendment was made to keep ITSO’s perceived competitor, TRREB, from obtaining de jure control over its members associations and, as a result, play a governance role in ITSO’s affairs. This is not an improper purpose. In making the amendment, the board was acting in the best interest of ITSO and some of its association members that raised concerns about TREBB’s involvement with other member associations.

Summary of Facts

(i) Context – Access to MLS Data

[11] What follows below is a summary of the facts relevant to the application. These facts are not contested. In the following sections of these reasons, I make specific findings of fact in relation to issues that are contested.

[12] Access to MLS data is the lifeblood of Realtors®. Real estate brokers and agents use MLS data to compile listings for their clients and to derive educated estimates of the value of property being sold or being purchased. Without access to MLS data, Realtors® cannot satisfy their fiduciary duty to their clients.

[13] To get access to MLS data, Realtors® join local real estate associations. In 2023, there were 29 local real estate associations in Ontario. Voluntary membership with an association comes with several benefits, including access to pooled MLS data through an MLS system. To become a member of a local association, the Realtors® must meet the criteria set out by the local association and pay an association fee.

[14] MLS systems are member-to-member cooperative selling systems for the purchase, sale and leasing of real estate. The system is wholly owned and controlled by one or more real estate associations that are members of the Canadian Real Estate Association (“CREA”). MLS systems include an inventory of listings of participating Realtors®.

[15] For many years, local real estate associations across Ontario maintained their own MLS systems. These systems were inherently limited by the geographical areas where the local association’s members conducted business.

[16] A fictional example helps demonstrate this limitation. A real estate association in Hamilton operates an MLS system that is populated with data from its members’ listings. Most of the members purchase and sell homes in the Hamilton area. As a result, members of the association have access to robust data for that geographical area. That data, however, would not be useful if the member wanted to sell a client’s property in Niagara. To get access to quality data about the Niagara market, the real estate agent would also have to be a member of a local association that operates in Niagara. This would require the member to pay two association fees.

[17] As the above example demonstrates, there are limitations to an MLS system run by a single local association. To address this, real estate associations have come together to pool data into regional MLS systems. One such regional MLS system is operated by ITSO (“ITSO MLS System”).

(ii) The Parties

[18] BDAR is a local not-for-profit association of real estate agents and brokers in the Barrie & District area. It provides opportunities and professional development to the local real estate community and the public at large.

[19] ITSO is a not-for-profit, nonshared capital corporation under ONCA. In 2023, ITSO was made up of 18 local real estate associations and the ITSO MLS System had approximately 23,296 users. Use of the ITSO MLS System is governed by a services agreement to which ITSO and all ITSO members are parties (“ITSO MLS Agreement”). BDAR is a party to the ITSO MLS Agreement.

[20] The individually named respondents were either directors and/or officers of ITSO at the time of the impugned amendment.

[21] TRREB is a local real estate association. It is not a party to this application but its involvement with ITSO members is at the center of this application. TRREB is the largest local real estate association in Canada with nearly 73,000 members. TRREB is not a member of ITSO nor is it a party to the ITSO MLS Agreement. TRREB operates its own MLS system called PropTx through a for-profit wholly owned subsidiary.

(iii) ITSO’s By-laws

[22] In 2020/2021, ITSO enacted by-law No. 1B which addresses, amongst other things, ITSO’s operative and administrative functions, member requirements, voting rights, meeting requirements, the process to ratify amendments, and to pass resolutions.

[23] In accordance with article 2.1, ITSO has two classes of members. The first class consists of member associations (i.e., local real estate associations). This class is a voting member. The second class are ITSO’s board of directors who are non-voting members.

[24] Article 2.2 contains the criteria to qualify for ITSO membership and the criteria to maintain membership. To maintain membership in ITSO, all members must:

• (i) comply with ITSO’s by-laws, rules and policies;
• (ii) through their own by-laws and rules, require members of their association to comply with ITSO’s by-laws, rules, and policies; and
• (iii) pay all other fees required by the ITSO MLS Agreement or as established by ITSO’s board from time to time.

[25] In accordance with article 2.4, ITSO’s board can terminate membership of member associations and directors for various reasons, including when a member does not comply with the conditions for maintaining membership set out in article 2.2 (see article 2.4(a)(iii)). Article 2.4(a)(iv) permits ITSO’s board to terminate a member association for any reason by way of a Special Resolution.

[26] Article 3.2 provides for the conduct of directors’ board meetings, notice, quorum and procedure. Article 3.8 governs the procedure for amending by-laws. Article 4 governs the procedure for special general meetings, notice, quorum and the voting process.

(iv) Relevant Provisions of the ITSO MLS Agreement

[27] Pursuant to s. 5.4 of the ITSO MLS Agreement, each member association is required to comply with ITSO’s by-laws. If a member defaults under the agreement, ITSO can terminate the agreement with the member. Upon termination, the member association could lose use, access, and license to the ITSO MLS System; however, the member association is entitled to retain its own MLS data.

[28] Not all parties to the ITSO MLS Agreement are members of ITSO. For example, the Northumberland Hills Association of Realtors® (“NHAR”) became a party to the agreement in 2019 but did not apply to become a member of ITSO. NHAR terminated the ITSO MLS Agreement in July 2020, but ITSO continued to provide NHAR with access to the ITSO MLS system until February 2021.

(v) Events Leading to the Impugned Amendment

[29] In the past, ITSO and TRREB explored ways to share data from their respective MLS systems. The parties could not come to an agreement and negotiations ended in June 2022.

[30] After negotiations between ITSO and TRREB ended, BDAR began discussing potential integration with TRREB. Those discussions began in July 2022. On January 6, 2023, BDAR issued a press release announcing that its board of directors was recommending “integration” with TRREB to become a “single MLS® database”.

[31] After the public announcement, ITSO asked BDAR whether it intended to terminate its membership in ITSO and its participation in the ITSO MLS Agreement. BDAR responded that it had no intention to cancel its membership or its participation in the ITSO MLS Agreement.

[32] ITSO obtained a copy of the notice of BDAR’s special general meeting held on February 16, 2023. The notice sought approval from BDAR’s members to create a new class of member who would receive 10,000 votes to every 1 vote that other BDAR members enjoyed. At that time, BDAR had 1,500 regular members. Appended to the notice of the special general meeting is a document detailing the proposed revisions to BDAR’s by-law. The document indicates that the new class of membership was expected to be a “Class B Special member” and that TRREB would be the only Class B Special member. The document also suggests TRREB would select four of BDAR’s seven board seats.

[33] ITSO also obtained the Articles of Amendment filed by BDAR with the (then) Ministry of Public and Business Service Delivery. The Articles of Amendment, dated March 31, 2023, confirms that a Special Class B member was created.

[34] BDAR concedes the authenticity of the notice of special general meeting, the documents appended to the notice and the Articles of Amendment.

[35] On March 29, 2023, QDAR announced its amalgamation with a partner board of TRREB, the Durham Regional Association of Relators®, now known as Central Lakes Association of Realtors® (“DRAR/CLAR”). DRAR/CLAR is not a member of ITSO.

[36] TRREB’s “integration” with BDAR and QDAR’s amalgamation with DRAR/CLAR caught the attention of ITSO’s board and some of ITSO’s member associations.

(vi) The Impugned Amendment

[37] Concerned about TRREB’s partnership with its member associations, ITSO’s board called a meeting on April 11, 2023. There is no dispute that the board followed the procedures set out in ITSO’s by-law in calling the April 11th meeting.

[38] Based on documents from the April 11th board meeting, it appears that the board discussed the concerns raised by member associations being controlled by a non-member. One such concern was the potential that the partnerships could offend the one-member, one-vote principle. If TRREB had de jure control over any ITSO members, then it would effectively have a vote in the governance of ITSO despite not being a member.

[39] Ultimately, the board voted to pass an amendment to by-law 1B. The amendment, underlined below, had the effect of changing the criteria for maintaining membership in ITSO:

2.2 Member Associations
a) To qualify for membership as a Member Association in ITSO an association must:
i) Be a real estate association that is a member of The Canadian Real Estate Association; and
ii) Have their head office in the Province of Ontario.
b) To become a Member Association an association must:
i) Enter into the MLS® Services Agreement with ITSO;
ii) File an application for membership with the Board; and
iii) Pay the applicable membership fee in such amount and by such method as established by the Board from time to time.
c) The Board will review the application and shall grant membership to the association unless any condition for approval has not been met.
d) In order to maintain membership in ITSO all Member Associations must:
i) Comply with the By-laws, rules and policies of ITSO and, through their by-laws and rules, require members of their association to comply with ITSO’s By-laws, policies, and rules;
ii) Pay all other fees required by the MLS® Services Agreement or as established by the Board from time to time;
iii) Maintain the same corporate structure and control as when the Member Association first became a Member Association, unless notice of the proposed change is provided to the Board and approved by the Board. For the purposes of this section “control” means the right to cast more than 50 percent of the votes that may be cast by any class of members of shareholders at a meeting of the Member Association’s members or shareholders.

[40] Pursuant to article 3.8(a) of by-law 1B, the amendment came into immediate effect but was subject to ratification or amendment by a two thirds majority of the members associations at a special general meeting.

[41] The board scheduled a special general meeting for April 26, 2023 (“SGM”). The purpose of the meeting was to call a vote on a Special Resolution that would ratify the amendment passed by ITSO’s board. Again, there is no dispute that the board complied with the process set out in ITSO’s by-law in scheduling the SGM.

(vii) BDAR Commences This Application

[42] On April 14, 2023, BDAR’s counsel wrote to ITSO expressing concern over the amendment. BDAR suggested, amongst other things, that the amendment was, “hastily proposed in bad faith” and was intended to target BDAR or any other member association that has experienced a change of control in their corporate history.

[43] ITSO’s counsel (not counsel on this application), responded on April 17, 2023. In that correspondence, ITSO states that the amendment was not intended to target BDAR as it was passed shortly after QDAR’s announcement and provided the following explanations for the amendment:

• (a) ITSO was concerned that TRREB’s control over BDAR would offend the one-member, one-vote governance structure. Similarly, if other member associations integrated with TRREB or TRREB partner boards (e.g., QDAR), then TRREB could control more than one vote at ITSO member meetings, which is also contrary to the one-member-one vote foundational principle;
• (b) ITSO’s members were demanding action as they were suffering a decline in their membership due to members departing for BDAR to take advantage of joint access to both PropTx and the ITSO MLS System; and
• (c) BDAR had breached its duty to perform its obligations under the ITSO MLS Service Agreement by, “effectively granting ITSO’s primary competitor in the provision of MLS Services in Ontario access to ITSO membership.”

[44] Given ITSO’s position, BDAR commenced this application and moved for an interim injunction. At the injunction hearing, the parties agreed that the SGM could proceed but the proposed by-law amendment would be further amended to include a temporary exemption for BDAR. A consent order was issued by Lavine J. that permitted the SGM to proceed and a vote to be taken on a modified version of the amendment (edits included in Lavine J.’s order):

Maintain the same corporate structure and control as when the Member Association first became a Member Association, unless notice of the proposed change is provided to the Board and approved by the Board. For the purpose of this section “control” means the right to cast more than 50 per cent [sic] of the votes that may be cast by any class of members or shareholders at a meeting of the Member Associations’ members of or shareholder. BDAR is temporarily exempted from the application of this By-law section pending determination of the injunction application filed in Court File No. CV-23-609.

[45] Clause 3 of Lavine J.’s order makes it clear that the order is without prejudice to the rights of either party to raise any issues related to the application.

[46] At the SGM, the amendment was ratified by a two-thirds majority of ITSO’s members. As a result, ITSO’s by-law was amended to include the impugned article 2.2(d)(iii) (as reflected in Lavine J.’s order). The amendment is now included in ITSO By-law 1C (the “By-law”).

(viii) Events After April 26, 2023

[47] In May 2023, ITSO’s board approved three separate amalgamations of member associations pursuant to s. 2.2(d)(iii) of the by-laws.

[48] In October 2023, ITSO’s board terminated the membership of QDAR because QDAR chose not to submit their change of corporate structure and control to the board. Instead, QDAR terminated its membership under article 2.4(a)(ii).

[49] On July 16, 2024, ITSO’s board approved the membership of the Cornerstone Association of Realtors® (“Cornerstone”). Cornerstone was created after three ITSO member associations amalgamated with a non-member association.

(ix) Procedural Issue – Leave to File Affidavits Sworn After Cross-Examination

[50] On this application, the parties relied upon evidence provided by two affiants. The timeline of relevant events prior to the swearing of the late affidavits is as follows:

• (a) BDAR’s CEO, Ms. Julia Price-Greig, swore an affidavit in support of the application on April 23, 2023.
• (b) ITSO’s president, Ms. Wendy Webb, swore an affidavit in response to the application on January 3, 2024.
• (c) Ms. Price-Greig swore a reply affidavit on March 11, 2024.
• (d) Ms. Webb was cross-examined on May 8, 2024,
• (e) Ms. Price-Greig was cross-examined on May 9, 2024.

[51] On November 6, 2024, ITSO filed a short supplementary affidavit sworn by Ms. Webb. On November 26, 2024, the parties appeared before Sutherland J. to timetable the remaining steps in the litigation. From the correspondence filed on the application, it appears that the parties had contemplated that BDAR would file a second reply affidavit on or before December 6, 2024. Ms. Webb was to be cross-examined on her supplementary affidavit on December 17, 2024, and Ms. Price-Greig was to be cross-examined on her second reply affidavit on December 18, 2024.

[52] Ms. Price’s second reply affidavit was executed on December 13, 2024, and was served on December 15, 2024. In oral argument, counsel for ITSO confirmed that given the contents of the second reply affidavit, it did not intend to cross-examine.

[53] ITSO argues that it should be granted leave to file Ms. Webb’s supplementary affidavit and that I should refuse to admit Ms. Price-Greig’s second reply affidavit. BDAR consents to the admissibility of Ms. Webb’s supplementary affidavit which mostly relates to ITSO’s membership following the impugned amendment.

[54] Unlike ITSO, BDAR did not bring a motion seeking leave to file the second reply affidavit. In oral argument, BDAR urged me to admit Ms. Price-Greig’s supplementary affidavit. I do not believe that BDAR has been prejudiced by the failure to bring a formal motion. In the circumstances, I find that BDAR’s failure to bring a formal motion is not fatal.

[55] Rule 39.02(2) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, prohibits a party who has cross-examined on an affidavit delivered by an adverse party from subsequently delivering an affidavit for use at a hearing without leave of the court. A court must grant leave where it is satisfied that the moving party ought to be permitted to respond to any matters raised on the cross-examination.

[56] BDAR argues that Ms. Price-Greig’s supplementary affidavit is responsive to Ms. Webb’s cross-examination and to undertakings produced by ITSO following Ms. Webb’s May 9, 2024, cross-examination. I find that parts of Ms. Price-Greig’s supplementary affidavit are responsive to Ms. Webb’s cross-examination and to undertakings. That said, there are several paragraphs that should not be admitted. As such, I grant leave to admit the affidavit subject to the following caveats:

• (a) Paragraph 12 describes ITSO’s “super subscriber” fee. This is not relevant to the application.
• (b) Paragraphs 17-18, 20 and 22 include inadmissible opinion evidence.
• (c) Paragraphs 22-24, 25-27, 30, 32-34, 38-41 and 46-47 include impermissible argument.
• (d) Paragraphs 42-45 include hearsay.

[57] Frankly, very little turns on the supplementary affidavit or second reply affidavit. Both affidavits primarily relate to events that occurred after the impugned amendment. As will be discussed in greater detail below, to the extent that BDAR challenges whether the amendment was made in good faith, the focus of the analysis is ITSO’s concerns at the time of the amendment and whether those concerns were genuine or reflect some oblique improper motive.

Issues

[58] The overarching issue on this application is the validity of the amendment as reflected in Lavine J.’s order. In determining the validity of the amendment, I must answer three questions:

1. Does the amendment amount to a retroactive breach of ITSO’s contractual obligations to BDAR?
2. Is the amendment impermissibly vague and inconsistent with s. 48 of ONCA?
3. Was the amendment initiated in bad faith to target BDAR?

Governing Principles

(i) Not-for-Profit Corporations Act, 2010

[59] Before turning to BDAR’s challenges to the amendment, I will review the relevant provisions of ONCA and some of the jurisprudence that informs my analysis.

[60] Section 1 of ONCA defines a “corporation” as a body corporate without share capital. In this section of my reasons, I use the term corporation as it is defined in the Act.

[61] Subsections 17(1) and (2) and paragraph 103(1)(d) of ONCA provide that directors may by resolution amend any by-law that regulates the activities or affairs of the corporation, including to change a condition required for being a member. By-law amendments are subject to member ratification, with changes to conditions for membership requiring a two-thirds special members’ resolution.

[62] Pursuant to s. 21 of ONCA, directors of a corporation shall manage or supervise the management of the activities and affairs of the corporation. Section 43 of the Act sets out the “standard of care” for directors and officers of a corporation. The section requires directors and officers to, “act honestly and in good faith with a view to the best interests of the corporation” and to “exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances”.

[63] ONCA also includes provisions regarding membership, termination of membership and powers to discipline or terminate membership.

[64] Subsection 48(1) states that a by-law of a corporation must set out the conditions required for being a member. Pursuant to s. 49, the directors may issue memberships in accordance with the articles and any conditions set out in the by-laws. Section 50 sets out the events that lead to a termination of membership, which includes when the member is expelled, or the person’s membership is otherwise terminated in accordance with the articles or by-laws.

[65] Section 51 provides a corporation with the power to discipline or terminate a member. The section requires that the discipline or termination of membership be conducted in good faith and be done in a fair and reasonable manner with at least at least 15 days notice and the opportunity to be heard at least 5 days before the discipline or termination comes into effect. A member subject to termination or discipline has recourse to s. 191.

[66] Section 191 permits a “complainant” to bring an application seeking compliance with the Act, regulations, articles or by-laws of the corporation or restraining a person from acting in breach of the same:

Compliance or restraining order
191 On the application of a complainant or a creditor of a corporation, the court may make an order directing the corporation or any director, officer, employee, agent, auditor, trustee, receiver, receiver-manager or liquidator of the corporation to comply with this Act, the regulations or the articles or by-laws of the corporation or restraining any such person from acting in breach of them and may make any further order that it thinks fit.

Appeals
192 An appeal lies to the Divisional Court from any order made by the court under this Act.

[67] The Act defines a “complainant” as including a member of the corporation (see s. 182).

[68] Section 191 is broadly worded and allows for a court to make any order that it thinks fit (Dillon v. Carp Agricultural Society, 2024 ONSC 1858, at para. 42). Section 191 or its equivalent in the Canada Not-for-profit Corporation Act, S.C. 2009, c. 23 (see s. 259) has been used by “complainants” to challenge, amongst other things:

• a refusal to grant membership (Mississauga Majors v. Provincial Women’s Softball Association, 2024 ONSC 4986);
• a decision to revoke membership (Dillon);
• elections of directors (Vietnamese Association, Toronto v. Duong, 2023 ONSC 6203; Lewis v. Niagara Regional Native Centre, 2024 ONSC 5196); and
• amendments to by-laws (Bhadra v. Chatterjee, 2016 ONSC 4845).

[The remainder of the judgment continues with detailed legal analysis, findings, and conclusion as set out in the original reasons for judgment.]

Footnotes

[1] Subsequent decisions from the British Columbia Court of Appeal have cast doubt on whether the oppression remedy is available when challenging a decision of a “society” under the Society Act – see Wang v. British Columbia Medical Association, 2010 BCCA 43.

[2] Whitten J. defined “good faith” in the context of a derivative action. I see no reason for why the definition would not equally apply to the term good faith as it is used in s. 43 of ONCA.