Alberta Court of Appeal Weighs-in on Battle for Control of Charity Board

In Sandhu v. Siri Guru Nanak Sikh Gurdwara of Alberta (released in March 2015), the Alberta Court of Appeal weighed-in on a battle for control of the governing board of a religious organization incorporated under the Alberta Religious Societies Land Act, affirming the lower court ruling in the case.

1. Facts

The society was incorporated in 1990 and owned operated a Sikh temple located in the Edmonton area.  Incumbent insiders in control of the committee that approved new memberships in the society admitted 15 new memberships who were all supporters of the insider group but, at the same time, denied memberships to approximately 80 applicants, all of whom were supporters of a dissident faction.

The chambers judge found that there was a power struggle among the incumbent control group and the dissident group (i.e., the applicants) whose efforts to unseat the incumbents was being thwarted by denial of admission of any of its supporters as members of the society.  The dispute did not arise from religious disagreement such as the interpretation of scripture or dogma:

All that is before me is a power struggle which the insider group, who control the Society, will continue to win so long as the court does not interfere in the membership process.  The dispute is a temporal one.

He found, as a fact, that the society rejection of the 80 applications for membership showed bias and was either a breach of the society's internal rules or an act of bad faith.

2. Judicial Solution

The chambers judge observed that membership disputes relating to Sikh Gurdwaras were no strangers to the courts, citing cases in both Alberta and especially British Columbia. He lamented that:

It may well be that the problem lies in the fact that in Sikh incorporated societies, there is no body or group of Sikhs to whom members aggrieved by how governance is handled can appeal, leaving the courts as the only avenue of redress.

He declined to wind up the society.  Instead, he directed that:

  • A new membership list be prepared, which would initially include all persons currently on the list of members of the society.
  • The establishment of a process to admit new members, calling it an "arbitration board".   First, the two sides would jointly name a person (or odd-numbered group of persons) of the Sikh faith to decide upon and process new membership applications. If the parties fail to agree on this person or panel, then each side would nominate one person (who is a member of the Sikh faith) as a member of the panel.  The two persons so selected shall select a third member.  The decision of the panel shall be by majority vote.
  • The qualification for membership shall be as set out in the society by-laws.
  • No new applications for membership can be received until the arbitration board has settled the initial list of members as of the date of the judgment.
  • New membership applications be received within a time period to be set by consultation between the arbitration panel and the court.
  • Once the date for new membership applications has passed, the arbitration panel will evaluate the applications and either accept or reject applications.
  • The arbitration board will then fix the membership list, which will be the list of members allowed to vote at the election of the governing board (actually called the executive committee in this society).
  • The by-laws be amended to ensure that the will of the majority expressed at a meeting of members is not thwarted.

3.   Court of Appeal Decision

The court of appeal methodically considered six grounds of appeal raised by the society, rejecting each and affirming the decision of the chambers judge.  In particular, the court of appeal stated that:

The chambers judge had statutory authority to restructure the society's election process and otherwise amend its by-laws upon finding that it had engaged in acts of oppression of its members.

4. Key Observations

We make the following observations on the Sandhu case in the broader context in which it appears:

  • Battles for control of organizations that own and operate places of worship are plentiful, if not an epidemic, in Canada.
  • Battles for control of Sikh Gurdwaras ( i.e., Sikh temples) are particularly hard-fought and numerous.  Our limited research shows at least 30 such cases in Ontario, British Columbia and Alberta in recent years, with at least seven of these cases resulting in full decisions of a provincial court of appeal.
  • Many of these cases endure for years.  The expenses incurred in each of these pitched battles for control are rarely set out in the court judgments, but they must be enormous.
  • All of the cases involve certain common elements: a dispersed membership base; warring factions within the membership base, with each faction seeking to control a majority of the board and raising every conceivable legal argument.
  • The outcome of the dispute ultimately turns on which side can stack the membership with the greatest number of supporters. This battleground involves issues such as the qualification of members, interpretation of the by-law provisions, how members are admitted and who controls the admission process.

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