A Stitch in Time Saves Nine: Paying Attention to Bylaw Details
By: Adam Aptowitzer
In our experience, organizations (usually small but sometimes large as well) generally ignore their bylaws or otherwise harbor delusions about what is actually written there. This is particularly true regarding the definition of membership. For example, membership generally requires an application and admission as such by the directors but we have seen circumstances where the board considered anyone who regularly attended weekly church services a member of the church; where anyone who made a donation to a charity was considered a member; or even that anyone who attended an Annual General Meeting was a member – just to be able to hold the necessary votes.
A recent Court of Appeal Ontario decision dealing with the split within the Anglican Church underlines the importance of abiding by the bylaws of the organization. It is no secret that certain congregations of the Anglican Church of Canada have split off in opposition to certain theological changes which took place within the Anglican Communion. In several circumstances this split has resulted in disputes over property. The recent decision (Delicata v. Incorporated Synod of the Diocese of Huron) was ostensibly a case about the property in dispute but it turned on the definition of parish.
In coming to its decision, the Court of Appeal looked to specific documents within the canons (i.e. the bylaws) of the Anglican Church. This approach, rather than relying on the historical or even practical situation by which the organization may have operated is in line with other decisions of the courts where non-share capital Corporations are involved. In the result, the court decided that a parish or congregation is not a fluid understanding of the people who may form a congregation at a specific time; rather it refers to a specific entity within the Anglican Church.
In another case, Warriors of the Cross Asian Church v. Masih, a dispute arose as to who are the members of the congregation. One group consisted of regularly attending worshippers at this particular Church and another group were the original founders of the Church. Historically, the only people admitted as members were the original founders of the church (it would seem that the lack of additional members was due to a lack of good governance). At the end of the day rather than hand control of the church to the legal members who had no involvement with the church over the last fifteen years or a group of regular attendees who did not have legal control over the Corporation, the Court ordered the corporation dissolved.
Taken together there is a distinct line of thinking regarding the technical requirements of a corporation’s governing documents. Corporations cannot afford to ignore their bylaws in any respect. In both of the above cases the courts simply read the organizing documents and applied them. Corporations who avoid these documents are risking an unhappy result should the corporation’s members become involved in a dispute. It would be wise for charities and not-for profits to review their bylaws prior to each Annual General Meeting, at the very least, to understand what is written there. Only by following the bylaws can members ensure the affairs of the Corporation can be conducted in a legal manner.
 2013 ONCA 540