Smith et al. v. Toronto Police Association

• Jurisdiction: Ontario
• Court: Court of Appeal (Ontario)
• Judge: O'Connor, A.C.J.O., Gillese and Watt, JJ.A.
• Citation: (2008), 234 O.A.C. 1 (CA),2008 ONCA 5
• Date: 19 November 2007
• Subject Matter: COMPANY LAW

Smith v. Police Assoc. (2008), 234 O.A.C. 1 (CA)

MLB headnote and full text

Temp. Cite: [2008] O.A.C. TBEd. JA.040

Stephen Smith, Rod Lawrence, Dale Carter and David Deviney (applicants/respondents) v. The Toronto Police Association (respondent/appellant)

(C46785; 2008 ONCA 5)

Indexed As: Smith et al. v. Toronto Police Association

Ontario Court of Appeal

O'Connor, A.C.J.O., Gillese and Watt, JJ.A.

January 9, 2008.

Summary:

In 1991, the members of the Toronto Police Association (TPA) adopted the Legal Assistance Plan to provide financial assistance to members of the Association who incurred job-related legal expenses. The Plan was to be administered by the Legal Assistance Plan Board (the Plan Board). On January 25, 2007, the Board of Directors of the TPA (the TPA Board) passed a resolution purporting to dissolve the Plan Board. Members of the Plan Board applied for an order setting aside the resolution and a declaration that the TPA Board exceeded its authority in passing the resolution.

The Ontario Superior Court, in a decision reported at [2007] O.T.C. 467, declared that the TPA Board did not have the authority to dissolve the Plan Board and ordered that the resolution be set aside. The court also ordered the TPA Board to return the files and materials it had taken from the Plan Board after passing the resolution, and it restrained the TPA Board from using such files or material for any purpose whatsoever. The TPA appealed from both orders.

The Ontario Court of Appeal allowed the appeal in part. The court agreed with the application judge that the resolution passed by the TPA Board was of no force and effect. However, the court set aside the portion of the application judge's order that restrained the TPA Board from using the files and materials of the Plan Board for any purpose whatsoever.

Company Law - Topic 6565

Nonprofit corporations (incl. charities) - Bylaws - Amendment - The Toronto Police Association (TPA) was a corporation without share capital created by letters patent - The members of the TPA adopted the Legal Assistance Plan (Regulation 7) to provide financial assistance to Association members who incurred job-related legal expenses - The Plan was to be administered by the Legal Assistance Plan Board (Plan Board) - The Board of Directors of the TPA (TPA Board) subsequently passed a resolution purporting to dissolve the Plan Board - The Ontario Court of Appeal held that the TPA Board did not have authority to amend Regulation 7, which the court held had the same legal status as a bylaw - Section 10.1.1 of the TPA Constitution set out three requirements to amend Regulation 7: approval by the Plan Board, approval by the TPA Board and approval by a majority vote of two-thirds of the members - As neither the Plan Board nor the members approved the resolution it was of no force or effect - Section 283(1) of the Corporations Act also did not provide the necessary authority for the TPA Board to amend Regulation 7 - Section 283(1) was a general statement of the powers of the board of directors of a non-share capital corporation - It did not address how the Board could exercise those powers and it did not speak of the requirements for enacting or amending bylaws of a corporation - Nor was the TPA Board acting pursuant to s. 129 of the Corporations Act when it passed the resolution as it did not intend to seek members' approval of the resolution as contemplated by s. 129(2) - See paragraphs 1 to 55.

Statutes Noticed:

Corporations Act, R.S.O. 1990, c. C-38, sect. 129 [para. 45]; sect. 283(1) [para. 43].

Counsel:

R. Rueter and G. Temelini, for the appellant;

T. Curry and D. Varah, for the respondents.

This appeal was heard on November 19, 2007, before O'Connor, A.C.J.O., Gillese and Watt, JJ.A., of the Ontario Court of Appeal. The following judgment of the Court of Appeal was delivered by O'Connor, A.C.J.O., and was released on January 9, 2008.