In Kroczynski v. Regina Soccer Assn. (released April 2016), the Saskatchewan Court of Queen's Bench was asked to declare as nullities votes to amend the by-laws of the Regina Soccer Association Inc. and to elect directors at an annual meeting. Justice Barrington-Foote refused to do so. His reasons are instructive for other cases in which the losing party in an election or membership vote seek the assistance of the court.
The Regina Soccer Association Inc. was a non-profit corporation incorporated under the The Non-profit Corporations Act of Saskatchewan. RSA is a regular member of the Saskatchewan Soccer Association Inc. and is the governing body and regulator of soccer in the City of Regina and surrounding area. RSA is a substantial organization, having assets of more than $1 million and annual revenues of more than $2 million.
In January 2016, RSA held its annual meeting. The meeting was raucous and hostile. The applicant, Mr Kroczynski, acted as chair at the beginning but resigned during the course of the meeting. The meeting continued with another director acting as chair.
At the meeting, the members first approved by-law amendments which ensured that no director could serve simultaneously with his or her spouse on the board (a rule that immediately affected only the applicant and his wife) and that candidates serve one complete year on the board before being eligible for election to the offices of vice-president, secretary or treasurer. The members than elected a slate of directors. The applicant sought to set aside the by-law amendment and election of directors on various grounds.
To set aside an election of members, the court must be satisfied that:
● there were irregularities in the election process; and
● those irregularities were calculated to affect the outcome of the election.
An application to set aside an election is not limited to evidence relating directly to the casting of ballots. An election is more than the casting of ballots. Irregularities that might also justify the court's intervention can also extend to evidence:
● that the nomination process resulted in the exclusion of a qualified candidate;
● that qualified voters were misled as to their ability to vote or did not receive adequate notice of the meeting;
● of bribery, threats, duress or similar activity; or
● that a candidate's campaign was fundamentally disrupted through an organized campaign by those organizing the election.
Applying these standards to the case, Justice Barrington-Foote's analysis may be summarized in tabular form as follows:
Ground of Complaint
Evidence relating to by-law amendments.
Not an irregularity.
Evidence relating to the leak of confidential information, social media and website postings and internal reports.
Hostile or impolite atmosphere at annual meeting.
Not in itself an irregularity. Clear evidence would be required that the meeting was conducted in a manner that undermined a fair election, created coercion or duress. Also, Mr. Kroczynski, as chair, is hardly the one to complain about the hostile tone of a meeting that was his to control.
Two voters could not vote.
These votes could not have had any effect on the outcome of any of the votes held at the meeting given the margins of victory on each vote.
Lack of secret ballot.
No reasonable expectation of a secret ballot and no compelling evidence that it would have made any difference to the outcome of the vote.
Lack of separate votes on each by-law amendment.
No evidence to support that separate votes would have resulted in a more informed debate or, more importantly, would have had any impact on the outcome of those votes.
3. Key Observations
The court's methodical approach to dismantling common complaints of the losing side in a democratic process is commendable. Meetings of not-for-profit corporations often have irregularities that range from substantial to curable. Some post-election complaints do not rise to the level of irregularities at all. The irregularities that should matter are those that are substantial and that plausibly bear on the outcome of the vote or election.
While not articulated as such in Kroczynski, the threshold for setting aside an election or vote of members should be high. A lot of time, effort and money is spent fighting over the outcome of meetings of members that have been held. Usually, the time, effort and money could be spent instead on calling or requisitioning a new meeting of members. The majority of members can decide on the merits of the underlying issues in a new election regardless of past meeting irregularities. Even if the past meeting is successfully challenged, a new election is still required. Therefore, except in egregious cases, litigation to set aside the results of past meetings is rarely an optimal use of scarce corporate or member resources.