NPOs’ internal procedures are subject to judicial review

Within the microcosm of a not-for-profit organization, where internal bylaws and rules are generated and enforced by the organization itself, it can be easy to lose sight of the fact that there is always an external source of recourse in the form of judicial review. The officers of an organization must adhere to procedural fairness when carrying out administration functions. If they violate or misapply the bylaws, they may find themselves in court having their actions scrutinized by a judge.
A nice reminder of this concept comes to us in the form of Khan v. Students’ Society of McGill. A university students’ society is a great example of the kind of self-governing organization with a clearly defined sphere of influence that behaves like a small legal-political system unto itself. In this case, Tariq Khan broke the local fourth wall by asking an actual court of law to rule on a dispute between himself and SSMU.
Khan, a student at McGill University, had run for and won the election for President of SSMU in April 2014. Ten days after his win, SSMU’s Chief Electoral Officer issued a decision disqualifying the new President for violations of the campaign process. Khan appealed to SSMU’s Judicial Board, as allowed in the bylaws, and the Judicial Board upheld his invalidation. Although this was the procedural end of the line within SSMU, it was open to Khan to appeal these decisions to the Superior Court of Québec – and he did so. Khan argued before the Court that his rights to due process and provision of full defence were breached, and requested that he be reinstated pending a judgment on a permanent injunction.
The Court agreed to consider his request for an injunction because it found that this case met the threshold criteria of urgency and irreparable harm, the former because of the one-year term limitation on the Presidency and the latter because it would be a lost opportunity that could not be compensated monetarily.
In evaluating Khan’s alleged right to be reinstated as President, the Court relied heavily on SSMU’s bylaws. The Court ultimately ruled against Khan on the basis that the elections officers and the Judicial Board had adhered to the processes outlined in the bylaws.
This case should serve as a reminder to all NPOs of the importance of understanding and following their own bylaws. It should also bring home the importance of having bylaws and policy papers that are up-to-date, well-constructed, transparent, accessible, and accurately reflective of the organization’s procedures and governance requirements.
If you have any concerns about your organizations by-laws or governance procedures, Drache Aptowitzer LLP would be pleased to assist you.

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By Alexandra Tzannidakis B.A., LL.B. practices tax, corporate and charity law. Her practice focuses on creating, structuring, and maintaining corporations at both the federal and provincial levels, securing and defending charitable registrations, assisting in tax disputes, and conducting continuances to the new federal not-for-profit legislation. She is dedicated to working closely with her clients to identify their needs and offer practical, effective solutions.