By-laws set out the governance rules of a not-for-profit ("NFP") corporation. The by-laws of a corporation incorporated, continued or amalgamated under the Canada Not-for-profit Corporations Act may include any provision relating to the activities or affairs of the corporation or the rights and powers of the corporation, its members, directors and officers. The following blog post describes the rules for making, amending and repealing by-laws under the Act.
In Chu v. Scarborough Hospital Corp. (decided 2007), the Ontario Divisional Court interpreted the by-laws of a hospital corporation such that the term of annual memberships extended for a full 12 months and were in effect at the time of the corporation's annual meeting.
By-laws set out the governance rules of a not-for-profit ("NFP") corporation. The by-laws of a corporation incorporated, continued or amalgamated under the Canada Not-for-profit Corporations Act (the "Act") may include any provision relating to the activities or affairs of the corporation or the rights and powers of the corporation, its members, directors and officers. Typical areas covered by by-laws are set out below.
In Amir-Afzal Watto v. ICC (decided October 2017), Justice Diamond of the Ontario Superior Court of Justice dismissed the fourth separate proceeding brought by a disaffected member of a non-profit corporation on an preliminary basis, finding that a two-year limitation period had expired and therefore the claim was out of time.
In its 1999 decision in Berry v. Indian Park Assn., the Ontario Court of Appeal held that the by-laws of an Ontario not-for-profit corporation did not bind non-members.
In Smith v. Toronto Police Assn. (decided in 2008), the Ontario Court of Appeal held that a regulation of the Toronto Police Association was properly characterized as a by-law under the Ontario Corporations Act and, since it had not been amended in accordance with the governing legislation or the by-laws of the association, the purported dissolution of the Legal Assistance Plan Board of the association by simple resolution of the association's board of directors was a nullity.
Senez v. Montreal Real Estate Board is a 1980 decision of the Supreme Court of Canada on the nature and effect of the by-laws of not-for-profit corporations. It continues to be an important decision today.
In Bekkari v. Islamic Society of North America (released March 2014), Madam Justice Matheson addressed an issue that arises all too frequently in the affairs of various not-for-profit ("NFP") corporations: the corporation realizes one day that it has been operating for some time (possibly years) under an invalid set of by-laws and, indeed, its current board has been elected under those by-law. What happens?
In Vaughan Community Health Centre Corp. v. Annibale (released April 2015), Justice DiTomaso found that a meeting of members of a non-share capital corporation governed by Part III of the Ontario Corporations Act (the "OCA") to reduce the number of directors and amend the by-laws was invalid because it contravened the provisions of the OCA and the corporation's by-laws. The result in Annibale may be sharply contrasted with the result that would have obtained had the corporation been governed instead by more modern not-for-profit corporate legislation such as the Canada Not-for-profit Corporations Act (the "CNCA") or the still un-proclaimed Ontario Not-for-Profit Corporations Act, 2010 (the "ONCA"), which, once proclaimed, will replace the OCA.