Playing Fair (Your Parents Were Right)

There is a wide spectrum of voluntary associations in British Columbia. They range from social clubs to sporting organizations to religious groups to professional associations. But how are the members of these voluntary associations supposed to be treated? A recent decision of the British Columbia Supreme Court confirms that your parents were right – you must play fair, or the courts will intervene.

Dr. Caroline Wang was a member and director of the British Columbia Medical Association (BCMA), which is a society created under the British Columbia Society Act. It exists to promote the medical profession in British Columbia and is a voluntary association that is open to all members of the College of Physicians and Surgeons of British Columbia.  Over 90% of physicians in British Columbia are members.

A debate arose within the BCMA on how it should be governed, with one side advocating a top-down corporate approach and the other a representative, grassroots approach. Central to the debate was how much information the Board of Directors could share with the membership and whether individual directors were allowed to broadcast a dissenting viewpoint that was contrary to a decision made by the majority of the Board.

In an attempt to resolve this issue, the Board established a Code of Conduct for its directors that would govern the conduct of directors. Included within the Code was a non-compliance provision that set out a procedure for investigating a complaint of non-compliance and what the potential consequences may be.

Dr. Wang used an online discussion forum called DOCLOUNGE, whose members are primarily members of the BCMA, as a means to communicate matters that the Board of the BCMA was considering and to solicit feedback. Other directors on the Board did not appreciate this and when Dr. Wang refused to leave a Board meeting where this matter was being discussed, the Board formed a committee, supposedly under the Code of Conduct, that would investigate her conduct which they viewed as “insubordination, improper and/or unethical.”

The Court found, however, that the problem with the Board’s actions was that “based on the explicit terms of the Code of Conduct” a committee could only be formed in one discrete instance only – when a “complaint of non-compliance with [the] Code of Conduct” was made.

Simply put, because no formal complaint about Dr. Wang’s conduct had been made, the Board could not set up a committee under the Code of Conduct to investigate her. Ironically, the Court found that by Board’s failure to comply with the Code of Conduct itself, was itself in breach of the Code!

In reaching their decision the Court reaffirmed that the relationship between the members of a voluntary association is contractual, the terms of which may be express or implied. The Court found that while the express terms of the contract are to be found, at a minimum, in the constitution and properly enacted bylaws, the contract can be much broader depending on the nature of the implied contractual terms that stem from the parties’ reasonable expectations.

Other cases have found the following to be implied terms, which require a voluntary association to:

  • Operate with procedural fairness;
  • Observe the principles of natural justice;
  • Give someone adequate and timely notice of a charge brought against them with a reasonable opportunity of respond before an unbiased decision-maker; and
  • Not act in bad faith.

It is important to bear in mind, however, that the courts are not a court of appeal on the substantive merits of the decision that an association make. They generally will only intervene if the process by which an association reaches a decision breaches the express or implied terms of the contract, or were matters of livelihood or property interests are at stake, or a young person has been prohibited from playing sports.

What this means for voluntary associations is that they must strictly follow not only their constitution, bylaws, and policies, they must also comply with the reasonable expectations of their members, which includes those mentioned above and possibly others. If they don’t, they will have breached the contract they have with their members and the courts can intervene – forcing them to play fair.

 

This article was written by Ian C. Moes, a lawyer who practices in charity law at the law firm of Kuhn LLP.  It is only intended as a guide and cannot cover every situation. It is important to get legal advice for specific situations. If you have questions or comments about this case or other charity law matters, please contact us at 604-864-8877.