COURT OF APPEAL FOR BRITISH COLUMBIA

Citation:

Grewal v. Guru Nanak Sikh Gurdwara Society,

 

2012 BCCA 430

Date: 20121102

Dockets: CA039653 & CA039654

Docket: CA039653

Between:

Jassa Grewal, Karm Samra and Kulwant Dhesi

Respondents

(Petitioners)

And

Guru Nanak Sikh Gurdwara Society

Appellant

(Respondent)

- and -

Docket: CA039654

Between:

Balwant Singh Gill

Respondent

(Petitioner)

And

Guru Nanak Sikh Gurdwara Society

Appellant

(Respondent)

Before:

The Honourable Mr. Justice Hall

The Honourable Madam Justice D. Smith

The Honourable Mr. Justice Hinkson

On appeal from: Supreme Court of British Columbia, January 27, 2012
(Grewal v. Guru Nanak Sikh Gurdwara Society, 2012 BCSC 131,
Vancouver Registry Nos. S114949 and S117827)

Counsel for the Appellant:

Stein K. Gudmundseth, Q.C.
Jonathan Tweedale

Counsel for the Respondents:

Gurpreet S. Badh
Ludmila N. Marenco

Place and Date of Hearing:

Vancouver, British Columbia

August 16, 2012

Place and Date of Judgment:

Vancouver, British Columbia

November 2, 2012

 

Written Reasons by:

The Honourable Mr. Justice Hall

Concurred in by:

The Honourable Madam Justice D. Smith

The Honourable Mr. Justice Hinkson


 

Reasons for Judgment of the Honourable Mr. Justice Hall:

[1]             This is an appeal from the judgment of Gerow J. pronounced January 27, 2012.  The case can be found at 2012 BCSC 131, B.C.L.R. (5th) 127.  The petitioners, who are respondents on this appeal, are members of the Guru Nanak Sikh Gurdwara Society (the “Society”), which Society is the appellant.  The respondent petitioners brought an action in the Supreme Court of British Columbia seeking to set aside certain resolutions approved at a meeting of the Society held on June 26, 2011 (the “meeting”).

[2]             The petitioners submitted before the learned chambers judge and this Court that the notice of the meeting was inadequate and that as well there was not a quorum present at the meeting.  The respondents also complained about the procedure used in counting votes at the meeting.

[3]             The respondent Society was established in 1973 for the purpose of building a structure that would cater to the religious needs of the Sikh population in Surrey and adjoining areas.  The Society membership has greatly expanded over the years and at the time of the hearing it was said that the respondent Society had in excess of 30,000 members.  It is obviously a large organization.

[4]             This case appears to involve at its heart a controversy between what might be termed certain of the “old guard” members of the Society and some younger members.  The chambers judge noted that the current executive of the Society, known as the Sikh Youth Executive, had been elected to office in November 2009.  The members of this executive are baptized Sikhs.  It appears that a majority, or at least a large number of members of the Society could be described as non-baptized.  After taking office in January 2010, the new executive took steps to modernize the methodology by which the Society communicated with members.  Prior to this, the bylaws of the respondent Society had required the executive to give notice of general meetings or annual general meetings by providing notice in writing at least 14 days in advance.  Notices were to be mailed to the address where a member lived and there was a provision that if more than one member resided at an address, then only one notice needed to be sent to that address.

[5]             At a general meeting held in the summer of 2010, the new executive received approval from members that notice might effectively be given by publishing such notice in one issue of two English language Indo-Canadian newspapers with circulation in the Greater Vancouver Regional District, at least one of which must have a general circulation of 10,000 and by publishing such notice in one issue of two Punjabi language Indo-Canadian newspapers with circulation in the Greater Vancouver Regional District, at least one of which must have a general circulation of 10,000.  As well, provision was made for publishing notice on the website of the Society and posting a copy of such notice at a bulletin board located in the hall of the temple maintained by the Society in Surrey.

[6]             In June 2011, the Sikh Youth Executive gave notice of the respondents’ 2011 annual and special general meeting pursuant to the process prescribed by the Amended Notice Bylaw.  At the meeting there were a number of resolutions to be voted upon including one relating to significant construction expenses.  Another dealt with qualifications for the Executive Committee.  The latter provided new qualifications for election to the Executive Committee, in that it limited eligibility for election to the Executive Committee to those who were baptized.  As the chambers judge observed about this qualification resolution, “there is no issue that this is a significant change to the bylaws and would result in the majority of the members of the society being ineligible to run for election for the executive”.  Eventually there came to be no serious issue about the building bylaw but the qualification resolution was quite controversial.

[7]             The petitioners were concerned that the qualification resolution would deleteriously affect the ability of a great many of the members of the Society to be elected to the Executive Committee.  They, through counsel, corresponded with the Executive of the appellant setting out their concerns regarding whether proper notice of the meeting had been given, and they requested inter alia, the adjournment of the meeting so that a fair and transparent process could be put in place.  The Executive did not accede to the requests of the petitioners.

[8]             The June meeting was quite heavily attended and scrutineers appointed by the Executive announced that there was a quorum present on this occasion.  It appears that due to the layout of the site of the meeting, there was some difficulty in attendees at the meeting hearing all that went on.  This, along with other matters arising from conduct of the meeting, is at issue in the present litigation.

[9]             The learned chambers judge framed the issues as follows:

1.         Were there irregularities with the Meeting sufficient to engage the Court’s intervention under s. 85 of the Society Act?

2.         If so, what is the appropriate relief under s. 85 of the Society Act?

[10]         Certain provisions of the Society Act, R.S.B.C. 1996, c. 433 [the Act], require consideration:

60        A society must give not less than 14 days’ written notice of a general meeting to those members entitled to receive notice of a general meeting, but those members may waive or reduce the period of notice for a particular meeting by unanimous consent in writing.

...

85        (1)  Despite anything in this Act, if an omission, defect, error or irregularity occurs in the conduct of the affairs of a society by which

(a)  a breach of this Act occurs,

(b)  there is default in compliance with the constitution or bylaws of the society, or

(c)  proceedings at, or in connection with, a general meeting, a meeting of the directors of the society or an assembly purporting to be such a meeting are rendered ineffective,

the court may

(d)  either of its own motion or on the application of an interested person, make an order

(i)  to rectify or cause to be rectified or to negate or modify or cause to be modified the consequences in law of the omission, defect, error or irregularity, or

(ii)  to validate an act, matter or thing rendered or alleged to have been rendered invalid by or as a result of the omission, defect, error or irregularity, and

(e)  give the ancillary or consequential directions it considers necessary.

(2)  The court must, before making an order, consider the effect of it on the society and its directors, officers, members and creditors.

(3)  An order made under subsection (1) does not prejudice the rights of a third party who has acquired those rights for valuable consideration without notice of the omission, defect, error or irregularity cured by the order.

[11]         After making reference to those sections, the chambers judge found that the method used to give the notice of the meeting, namely publishing notice in certain newspapers, did not meet the requirement in s. 60 of the Act, that written notice be afforded to members entitled to receive it.  The judge found that there was no evidence that the newspapers containing notices had been delivered or given to members of the Society entitled to receive notice.  She noted that the evidence was that at least one of the newspapers in which the notice was published was not delivered but was given away at various locations.

[12]         After referring to a number of cases that had held that publishing a notice of a meeting in a newspaper or bulletin of general circulation was insufficient and constituted a defect or irregularity in the affairs of the Society, the judge found that the substantive requirements of s. 60 of the Act had not been met.  She rejected the argument advanced on behalf of the Society that the cases referred to were distinguishable as in those cases there had not been in existence a bylaw allowing notice to be given by that methodology.  The judge observed:

[35]      A society cannot pass bylaws that violate the Society Act. Societies are creatures of statute, and cannot pass bylaws which are inconsistent with the empowering statute. If the bylaw is repugnant to the Society Act, it is ultra vires the powers of the society to adopt it: B.P.Y.A. 1163 Holdings Ltd. v. Strata Plan VR2192, 2008 BCSC 695 at paras. 78-84.

[36]      I disagree with the respondent that the substantive requirements of s. 60 of the Society Act have been met. Section 60 is mandatory, and not only requires that the notice be in writing 14 days before the meeting, but also requires that the notice be given to members entitled to receive notice. As stated earlier, there is no evidence that the newspapers in which the notice was published were given to the members entitled to receive notice. As such, I am of the opinion that the Amended Notice Bylaw is repugnant to the empowering act and is ultra vires the Society. [Emphasis in original.]

[13]         The judge as well went on to hold that there were deficiencies of procedure relative to another aspect of the meeting, namely proof of a quorum being present.  She stated her conclusions and grant of remedy as follows:

[58]      As stated above, I have concluded that the lack of notice and lack of quorum are defects and irregularities in the conduct of a society for which remedies under s. 85 of the Society Act are appropriate. Accordingly, I am making the following orders:

·        The special resolution dated June 26, 2011, approving the qualification for designated offices amendment, will be set aside or negated;

·        The special resolutions dealing with the approval and funding will be given effect to;

·        The Amended Notice Bylaw, allowing notice to be given to members by way of newspaper, will be struck;

·        Members will be allowed to vote by way of secret ballot on any proposed amendment for qualifications for designated offices;

·        Quorum for the meeting will be determined by members signing against his or her name on the roster of membership.

[59]      Given the divisiveness of the issue, it is my view that it is also appropriate to order that any proposed amendment to the qualifications for designated offices be overseen by an independent observer.

[14]         The appellant argues that the judge erred in her interpretation of s. 60 of the Act, which alleged error affected the validity of her decision that proper notice of the meeting had not been afforded to members of the Society.  It is said she conflated the concepts of “giving notice” and “delivering notice”.  The statute requires the giving of notice.

[15]         In the modern electronic world we inhabit, the giving of notice of something might properly be given in a more innovative manner than mailing.  It was obviously in pursuit of such an objective that amendments concerning methodologies of notice were proposed and approved in 2010.  I consider that courts must be alive to the times in which we live and give a measure of deference to new methods for giving notice adopted by organizations such as the Society.

[16]         However, that said, it is an underlying theme of cases going back to the 19th century that where a notice is required, it ought to be effective notice: Hong v. Oung Kwang Presbyterian Church of Vancouver, 2002 BCSC 1503; Gill v. Johal, 2002 BCSC 449; Russell v. Toronto (City) (1907), 15 O.L.R. 484, 9 O.W.R. 288 (H. Ct. J.), aff’d (1907), 15 O.L.R. 484 at 496, 11 O.W.R. 23 (C.A.); Ross et al v. Machar (1885), 8 O.R. 417 (C.A.); Angled Enterprises Limited v. Quesnel (City) (1988), 27 B.C.L.R. (2d) 59 (C.A.).

[17]         As I interpret the amended notice bylaw passed by the Society in 2010, it is envisaged that the prime method of effective notice to members shall be notice via newspaper notification.  I consider it was permissible here on the evidence for the chambers judge to conclude that there was a deficiency of proof that proper and effective notice had been given via newspaper advertising.  There was evidence that certain of the newspaper notices were contained in papers not circulated but given away at certain locations.  It seems to me that it would be difficult to demonstrate that such a methodology could ever be the type of notice contemplated to be given to members of a society pursuant to s. 60 of the Act.  It would, in my view, have to be shown that a notice of meeting was contained in a paper with a large circulation being delivered and available for sale in the area where a significant number of members of the Society reside.  This should provide reasonable assurance that such notice would come to the attention of those entitled to notice.

[18]         I observe that this particular bylaw may be fatally flawed by its reference to newspapers having “a general circulation of 10,000” when it appears the Society has a membership in excess of 30,000 persons.  A provision for notice in a large daily newspaper circulating in the lower mainland would, on the face of matters, appear likely to be a more efficacious methodology for the giving of notice to Society members.  I need reach no final conclusion on this however as I have observed that the evidence demonstrated that it was most unlikely that effective notice was ever given via the newspapers chosen as a notice vehicle.  A “giveaway” paper is obviously a wholly inadequate vessel for the giving of proper notice.  I would accordingly sustain what I see as the largely factual decision of the judge to invalidate the passage of the resolution for inadequacy of notice of the meeting at which the qualification resolution was presented.

[19]         This conclusion would strictly speaking not require the Court to deal with the alternate basis, namely the quorum issue, given by the judge for invalidating the proceeding but since the matter was fully argued, I have considered that it may be helpful for the Court to express its views on this conclusion of the judge and as well on certain aspects of her proposed remedial order.

[20]         I consider the judge to have fallen into error on the quorum issue when she considered some rather dated correspondence from a fire prevention officer about building capacity.  It seems to me that this information would lack probative force in demonstrating the modern capacity or dimensions of the building.  The methodology utilized to determine a proper quorum may have fallen short of perfection but I consider some measure of deference must be shown to procedural choices made by a Society like the respondent.  Since I consider the approach of the judge to this issue was flawed by her consideration of the aforesaid correspondence, I would set aside her finding on the quorum issue.

[21]         I also doubt whether it was appropriate to order that “any proposed amendment to the qualifications for designated officers be overseen by an independent observer”.  Such an order immediately raises the query of how the term “independent” should be construed?  One party’s “independent observer” might be considered highly biased by another party.  If an order of this sort is to be made, I consider it could only be made after a process wherein respective parties put forward suggestions as to who might properly be chosen to undertake such a function.  By such procedure, a court would be enabled to properly assess who might be appointed to perform such a function.  I venture to observe that if proper notice of a meeting were to be afforded to members of the Society and a transparent methodology adopted for conduct of a meeting, no “observer” should be required.

[22]         As I said, I consider the largely factual conclusion of the judge that there was demonstrated a significant deficiency in the giving of notice of the meeting of June 2011 to be one that ought not to be interfered with by this Court.  I would on this basis uphold her decision invalidating the passage of the qualification resolution at the meeting.  The appeal ought to be dismissed.

“The Honourable Mr. Justice Hall”

I agree:

“The Honourable Madam Justice D. Smith”

I agree:

“The Honourable Mr. Justice Hinkson”