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Ontario Court Takes Surgical Approach to Requisitioned Meeting of Members

In Jacobs v. Ontario Medical Association. (released August 2016), Justice Perell of the Ontario Court of Justice used a scalpel to cut through the various demands of a dissident group of members of the Ontario Medical Association, finding merit only in the OMA's form of proxy and making adjustments to the proxy to address the court's concerns.

1. Facts

The OMA represents Ontario's 42,000 physicians and acts as the exclusive representative of all Ontario physicians in contract negotiations with the Ontario Ministry of Health and Long Term Care. The most recent physician services agreement in Ontario expired in March 2014. Since then, the Ministry had made unilateral cuts to physician services.

The OMA's executive continued to work toward reaching a new agreement with the Ministry. However, these efforts were opposed by the Ontario Association of Radiologists, about 1,000 members of which were also members of the OMA. Some members of the OMA petitioned to hold a general meeting of the members of the OMA seeking to ratify or reject the new Agreement with the Ministry. The OMA called the requisitioned meeting. However, litigation ensued in connection with the four issues arising out of the calling of that general meeting.

2. Rulings

(a) Dissident Request for Another Notice of Meeting

The dissidents submitted that the notice of meeting sent to OMA members contravened the by-laws of the OMA because the notice included a resolution to be voted on by the members that had not been part of the petition requisitioning the meeting, the OMA's notice omitted a schedule to the dissident's notice of meeting and, finally, the OMA notice included the stock phrase "to transact such further or other business as may properly come before the meeting".

Justice Perell quickly cut through each of these arguments, finding that the dissidents had no cause for complaint about the notice of meeting distributed by the OMA and that there was no reason to require another notice of meeting. In particular, the OMA was not confined to only including resolutions that were part of the petition. The OMA is entitled to exercise its authority to call a general meeting and to state what matters are to be considered by the membership. Further, there was nothing improper in including the boilerplate language "to transact such further or other business as may properly come before the meeting" which, by its own meaning, only gives notice of "other business that may properly come before the meeting".

(b) Dissident Request for Member Phone Numbers

The dissidents received a membership list from the OMA that included the names, addresses and email addresses of all OMA members. However, the dissidents sought another list that also included the phone numbers of OMA members.

Justice Perell rejected this request, finding that the OMA had complied with its statutory obligations and was not obliged to provide the telephone numbers of its members. There was no reason for the court to intervene to require the OMA to do more.

(c) Dissident Request for the Appointment of a Neutral Chair

Under the OMA by-laws, the chair of council, which consists of approximately 270 delegates from the OMA's designated geographical districts and practice sections, presides as chair at any meeting of members. However, the dissidents sought the removal of the designated chair, Dr. Hudac, for purposes of the requisitioned general meeting, arguing that it could be foreseen that he would not fairly and properly conduct the meeting.

However, again, Justice Perell dispatched these arguments, stating that Dr. Hudac was qualified to chair the general meeting and that no case had been made out for his disqualification and for the appointment of a neutral chair. While there are cases where an independent chair has been appointed, the jurisdiction to do so is exercised cautiously. Courts are highly reluctant to intervene unless a strong case for intervention is demonstrated, which was not the case here.

(d) Dissident Request for New Form of Proxy

The dissidents obtained some success, however, in persuading the court that a new form of proxy should be circulated to members.

What troubled the court about the OMA's form of proxy was that it included a recommendation to ratify the new agreement with the Ministry but did not include a recommendation with respect to the other two resolutions included in the notice of meeting (a requirement that future negotiations with the Ministry provide for binding arbitration and a requirement for apprising OMA section chairs of negotiations and providing meaningful opportunities for input). Both of these resolutions are soft, in the sense that that they cannot validly fetter the discretion of the OMA's board and management. The initial OMA form of proxy made no recommendation. However, if the member did not indicate a choice, the proxy holder would vote as recommended by OMA management.

Justice Perell found that it would have been fairer and less confusing to provide instructions and no recommendations for all three resolutions. Therefore, he removed any recommendation to vote in favour of ratification of the new agreement, and added instructions to vote "for" or "against" all three resolutions.

3. Key Observations

One could quarrel with the need to amend the original OMA form of proxy. The critical issue for the OMA membership was ratification or rejection of the new Ministry of Health agreement. Management was entitled to use the form of proxy to make a recommendation on that critical issue. More importantly, the OMA's 42,000 members were entitled to know what management recommended on that key issue.

Arguably, the two remaining resolutions were non-binding and innocuous. Management may not have cared, or cared enough, to make recommendations on any non-binding resolutions. That said, the language of the form of proxy did suggest that (a) members ought to have been given an opportunity to instruct the proxy holder on each separate resolution and (b) management's recommendation on each resolution ought to have been transparent from the face of the proxy.

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