In another blog article ("Religious Corporations under the CNCA"), we stated that the Canada Not-for-profit Corporations Act (the CNCA) provides that religious corporations enjoy an exemption from court-ordered liquidations, derivative actions and oppression proceedings if:
- the impugned act, omission, conduct or exercise of powers is based on a tenet of faith held by the members of the corporation; and
- it was reasonable to base the act, omission, conduct or powers on the tenet of faith, having regard to the corporation's activities.
The CNCA does not, however, attempt to define what constitutes a "religious corporation" or a "tenet of faith". Instead, these concepts have been intentionally left to the courts.
The recent case of Sandhu v. Siri Guru Nanak Sikh Gurdwara of Alberta (released in March 2015) (Sandhu) afforded an opportunity for the Alberta Court of Appeal to examine this issue - albeit in a case decided under the Alberta Religious Society Land Act (RSLA).
It is submitted here that, while the meaning of a tenet of faith under the CNCA remains untested, there is already a body of law on the same concept and that courts are likely to apply the existing body of law to the analogous concept under the CNCA. Stated differently, courts are likely to find that the CNCA has adopted the common law meaning of the term.
2. The Sandhu Case
As discussed in another blog article on the Sandhu case ("Alberta Court of Appeal Weighs-in on Battle for Control of a Charity Board"), Sandhu involved a battle for control of a Sikh Gurdwara in which the incumbents were found to be blocking the dissidents by refusing to admit any of their supporters as members. In the course of its reasons, the court dealt with the argument that the test for oppression differs where it involves the actions of a religious organization. The court stated that:
- The test for oppression may differ where the nature of a dispute among members of a religious organization is, at its heart, religious.
- However, membership in an organization is not fundamentally a religious one - even where the organization exists or spiritual purposes.
- Therefore, not all disputes within a religious organization are religious. A religious organization that choose to incorporate is required to abide by its constating documents and procedural fairness.
- Simply because an organization exists for religious purposes does not give it carte blanche to deny membership to those to whom its by-laws would extend members.
- Indeed, it is not uncommon for courts to intervene in the workings of religious corporations in order to ensure compliance with their constating documents and fair election process where elections are required and where the heart of the dispute is not religious differences.
The court found the Sandhu case did not reveal a dispute was founded on religious differences and, therefore, declined to speculate on whether and when a court can or should get involved in acts arising from a fundamental mandate of a religious organization or should even pass comment on decisions or actions truly grounded in or taken for religious reasons.
3. Cases Involving Religious Disputes
In the course of its reasons, the court in Sandhu cited several cases serving as examples of disputes that are religious in nature:
- Actions triggering a schism within the membership of a religious organization by authorizing a rite for the clergy to bless same-sex unions (a British Columbia case).
- Oppression conduct arising from the manifestation of religious belief by worship, practice, teaching or dissemination (citing, among others, decisions of the Supreme Court of Canada rendered in 1940, 1985 and 2007).
4. Hart v. Roman Catholic Episcopal Corporation of the Diocese of Kingston
Also cited in Sandhu, this case (which involved dismissal of a priest for reasons resting on canon law), the Ontario Court of Appeal held that a court will interfere in the internal affairs of a self-governing organization only where:
- the organization's internal process are unfair or do not meet the requirements of natural justice; or
- the aggrieved party has exhausted the organization's internal processes, in which case, the court will not consider the merits of the internal decision but will determine only whether it was carried out in accordance with the organization's rules and the requirements of natural justice.
It is noteworthy that, in the various judgements on disputes within religious organizations, courts have borrowed heavily from decisions of courts in other jurisdictions decided at different times and under entirely different corporate legislation. For example, the court in Sandhu cited a dispute involving a Sikh temple that was decided by the Supreme Court of the United Kingdom in 2014 (namely, Shergill v. Khaira). This suggests that the courts are likely to apply established principles when deciding cases under the CNCA. There is nothing in the CNCA that would allow a court to distinguish the established line of authority in this area.
Thus, religious corporations incorporated or continued under the CNCA will not be entirely immune from the disciplinary effects of the liquidation, derivative action and oppression remedies. The exclusion for disputes based on tenets of faith is likely to be construed narrowly so as not to oust the continued supervisory jurisdiction of the courts. In that regard, future courts are unlikely to deviate from the approaches taken by the appellate courts in cases such as Sandhu and Hart.