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Court Refuses to Block Meeting of Members

In Deol v. Ontario Khalsa Darbar (released October 2015), Justice Molloy, presiding in her capacity as a one-judge panel of the Ontario Divisional Court, affirmed a lower-court ruling refusing to enjoin a meeting of the members of a religious corporation operating a Sikh temple (Gurdwara).

1. Facts

Ontario Khalsa Darbar is a charitable corporation formed under the Ontario Corporations Act that operates a large Sikh place of worship and cultural centre in Brampton.  Its current board was last elected in 2003.  The directors remained in office even though their terms are three years.  There was deep divisions on the board. Disputes between the parties had resulted in no elections being held since 2003.

Litigation among the board members started in 2006.  In 2007, an order was made setting out a process for determining the validity of members.  Six years later, that process had not been completed.  In 2013, the court tried to streamline the process so that membership issues could be resolved within 90 days.  More litigation ensured.

Finally, Justice Edwards issued an order in late July 2015 stipulating that the election would proceed on October 4, 2015 (just over two months away) and listing certain individuals entitled to vote.  A total of 2,728 members were entitled to vote.

Three minority brought a fresh application, seeking the right to vote in the upcoming election despite not being on the list of validated voters. Edwards J. also heard this application, viewed it as a collateral attack on his July 2015 order requiring the election to proceed on the fixed dated and dismissed the application.

The applicants then appealed this decision to the Ontario Court of Appeal and sought a stay of the election of the board of directors pending the appeal.  However, the applicants had appealed to the wrong court.  Under s. 329 of the Corporations Act, appeal lies to the Divisional Court, not the Court of Appeal.  Hence, Molloy J. heard the application on an emergency basis two days before the election was to be held.

2. Ruling of Divisional Court

Molloy J. dismissed the appeal because the balance of convenience weighed heavily in favour of holding the election on time.  The balance of convenience is one of the three tests (in addition to satisfying the court that there is a serious issue to be tried and that there would be irreparable harm if the injunction or stay is not granted) that must be met before the court will issue an interlocutory injunction or stay.

While her ruling turned on the balance of convenience, it is worthwhile considering how the learned judge addressed each of the three tests.

  • Serious Issue to be Tried.  While Molloy J. clearly saw little substantive merit in the arguments advanced by the applicants, she held that the threshold for this test is a low one.  If the appeal cannot be said to be frivolous or vexatious, the standard is met. However, she was not prepared to dismiss the application based solely on the merits of the appeal, unable to conclude that the appeal was completely without merit or that it is frivolous or vexatious.
  • Irreparable Harm. Molloy J. held that the loss of a right to vote in an election is not quantifiable and, therefore, the second test for a stay was met.
  • Balance of Convenience.  This was the deciding factor in favour of holding the election rather than postponing it.  Twelve years had elapsed since the previous election.  Directors had overstayed their terms by nine years.  The corporation had been mired in litigation since 2006.  Keeping the current split and dysfunction board in office was unacceptable. There were 2,728 voters on the list and only three who were seeking to prevent the court-ordered election. She held that harm that would ensure if she were to prevent the election from proceeding would far outweigh any harm to those limited number of individuals whose right to vote may not have been recognized.  Under all the circumstances, the balance of convenience strongly favoured allowing the election to proceed. A small group of potentially eligible voters should not be entitled to hold up the entire process so that their votes can be registered.

3. Key Observations

Deol is another case involving a battle for control of a Sikh temple. The courts are to be applauded in this case for taking a pragmatic approach to running board elections and developing processes to determine membership lists.  To allow a few members to derail the whole process would make holding meetings of members almost interminable.  The faction who knows or senses that it does not have enough votes to will continue to seek ways to derail or stall an election until it can stack the meeting with its supporters.  Requiring perfection in voting lists can be the enemy of the democratic process.  The courts need to continue to be pragmatic in their approach to resolving battles for control.  Otherwise, they effectively encourage more and more litigation.

However, 12 years without a board election and nine years of litigation is far more than enough for any organization.  It points to the need to explore other ways to resolve recurring disputes without incurring enormous costs in terms of money, time and fractured relations that litigation entails.

In communities where litigation over control has become epidemic, perhaps community leaders need to look at the issues holistically.  Would arbitration afford a quicker, better way to resolve disputes involving membership lists and contested elections?   Can leaders within the community be enlisted to guide the warring factions to a peaceful resolution that comports with standards of democratic decision-making and respect for majority rule?

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