“… simply following the rules of governing bylaws to get rid of a member may not be sufficient. The member could retain his or her status, accuse the board of acting in bad faith, and the organization could suffer extensive costs if a court finds that the bylaws relied upon in expelling the member fail to meet certain minimum requirements.”
In many organizations with large membership bases, there are often one or two troublesome members who always seem to be the source of conflict for everyone else. Usually, these members are simply ignored. Sometimes, however, their behaviour reaches such a problematic level that the board of directors is left with no choice but to expel the member in question.
The recent decision of the Superior Court of Quebec in Girard c. Yacht Club de Québec, 2016 is a reminder that simply following the rules of governing bylaws to get rid of a member may not be sufficient. The member could retain his or her status, accuse the board of acting in bad faith, and the organization could suffer extensive costs if a court finds that the bylaws relied upon in expelling the member fail to meet certain minimum requirements.
In Girard, the board of directors of the Yacht Club de Québec (the “Club”), which has been in existence since 1861, decided to expel a member of the Club. The precise details of what provoked the decision are not provided, but what is clear is that the board considered the behaviour to be inexcusable with expulsion the only option available.
The board followed the Club’s governing bylaws and expelled the member. The bylaws did not require that the board provide the member with: (1) notice of the board’s intention prior to its decision nor (2) the opportunity to present his arguments as to why he should remain a member. He was only invited to make representations after he was notified of the decision to expel him.
The court found that the procedure set out in the bylaws did not provide the member with a fair hearing. Given that the member had invested a significant amount of money in the purchase of his yacht and that, without access to the Yacht Club, he had no way to sail his yacht in Quebec City, the court held that he was entitled to be notified of: (1) the Club’s intention to revoke his membership; (2) the reasons behind such intention; and (3) the right to make representations prior to the decision being made. As a result, the court ordered that the member’s membership be reinstated.
The difficulty now faced by the Club is what to do next. If the member’s behaviour was such that expulsion was warranted, presumably the board should institute expulsion proceedings along the lines of those directed by the court. However, post-judgment, the question then becomes whether the board is sufficiently impartial to provide the member with a fair hearing. The court raised this question in its decision.
The takeaway from this decision for all organizations (whether or not they have a broad membership base) is to review your disciplinary procedures to make sure that, at a minimum, members have the right to be made aware of the case against them and the right to be heard before the decision is rendered. Further, it may be prudent to consider whether a separate disciplinary committee is warranted.
By: Troy McEachren and Éloïse Gagné, Miller Thomson LLP
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