“Name” when used in the expression “if the use ofthat name would be likely to deceive” used in clause 9(1)(b) of the Act, includes, (a) A name that would lead to the inference that thebusiness or activities carried on or intended to be carriedon by the corporation under the proposed name and thebusiness or activities carried on by any other person are one business or one activity, whether or not the nature of the business or activity of each is generally the same; (b) A name that could lead to the inference that thecorporation bearing the name or proposed name is or would be associated or affiliated with a person if thecorporation and such person are not or will not be associated or affiliated is prohibited whether or not the owner of the name is deceased.
Gammie v Jordan, 2017 ONSC 124 (CanLII)
Date:
2017-01-05
File number:
Walkerton 106/14
Citation:
Gammie v Jordan, 2017 ONSC 124 (CanLII), <http://canlii.ca/t/gwz9x>, retrieved on 2019-07-13
CITATION: Gammie v. Jordan, 2017 ONSC 124
COURT FILE NO.: Walkerton 106/14
DATE: 2017-01-05
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
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CRAIG GAMMIE
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Self-represented
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Applicant
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DOUG JORDAN
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Leigh Fishleigh, for the Respondent
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Respondent
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HEARD: July 21, 2016,
at Owen Sound, Ontario
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Price J.
Reasons For Order
NATURE OF MOTION
[1] Craig Gammie (“Mr. Gammie”) was a member of a ratepayers association known as the Amabel Property Owners Association (“APOA”). Amabel was a township in Ontario that in 1999 became part of the town of South Bruce Peninsula. Because of conflict within its Board, the APOA was inactive for two years or more, neither taking any action, nor collecting annual dues from its members, nor electing members to its board of directors, all of which its Constitution and By-laws required to be done on an annual basis.
[2] When Doug Jordan (“Mr. Jordan”) formed aratepayers association for Sauble Beach, whichcomprises half of the former Amabel Township, the Sauble Beach association began welcoming members from beyond Sauble Beach, including from the former Amabel Township. The Sauble Beach association then proposed to adopt thename Amabel Property Owners Association (APOA). Some of former APOA board members voted to cease the old association’s operations and agreed to permit the new association to carry ontheir activities and adopt their name. Mr. Gammie, who disagreed with the decision and wanted to continue APOA with himself as President, brought the present application to prevent the newly incorporated APOA from using the former Association’s name.
[3] Mr. Gammie argues that the CorporationsAct, R.S.O. 1990, C. c-38 should be construed as preventing the newly incorporation association from using the name of the former association, onthe basis that doing so would likely deceive the public, and cause them to confuse the old association with the new one. For the reasons thatfollow, Mr. Gammie’s application will be dismissed. The old association ceased to exist during the prolonged period when it was inactive and failed to take the steps which its Constitution and By-laws required. It therefore had no further use for thename, and its former President and signing officer, who became trustee of its name and property, was entitled to transfer them to the newly incorporated Association in trust for the property owners of former Amabel Township.
BACKGROUND FACTS
The Amabel Property Owners Association (APOA)
[4] In 1999, a number of townships, including Amabel Township and several nearby towns and villages, were amalgamated into the Town of South Bruce Peninsula. Sauble Beach was the main community in Amabel Township. The Amabel Property Owners Association (APOA) was anunincorporated association of ratepayers in Amabel Township.
[5] Craig Gammie, who became a director of APOA in about 2004, states in an affidavit sworn June 8, 2015:
The association was formed in or around the 1950’s or 1960’s, but the name may have changed a bit since the start. I believe that the Amabel Property Owners Association has been in existence since at least 1990 underthat name.
[6] APOA’s board of directors met several times between 2000 and 2008, and successfully opposed proposals by the Municipal Council of South Bruce Peninsula to build a communal sewage system for Sauble Beach, and a communal water system for Sauble Beach and surrounding areas. In 2008, APOA held approximately $13,000, received either as membership dues or as subscriptions for projects. This money has not been spent.
[7] On September 20, 2008, Mr. Gammie’s brother, Robert Douglas Gammie (“Doug Gammie”), was elected President of the APOA by the only member who attended the Annual Meeting. In 2008 and early 2009, there was infighting within the APOA board of directors. In particular:
a) Two of the ten board members complained about a newsletter that Doug Gammie had written and a letter to the Municipal Council which he had drafted. Those members regarded the letter as incorrect and insulting and threatened to resign if Doug Gammie sent it. They called him a “weekend visitor” to the community.
b) Doug Gammie told the two members that he would not tolerate “permanent resident snobbery” and said “It seems I will meet your condition to resign”.
c) Another of the board members wrote to the board, stating that he fully supported the departing board members.
d) Another of the board members wrote to the board, referring to Doug Gammie as a“backstabber”.
[8] While one of the dissident board members called a meeting for March 15, 2009, the meeting was deferred until April 14, 2009, and ended up notbeing held. There followed a period of two years or more when there was no activity by the board or the Association. No membership dues were collected during that period, and no members were elected to the board.
The Sauble Beach Residential Property Owners Association (SBRPOA)
[9] On May 10, 1978, the Sauble Beach Property Owners Association (SBPOA) registered its namewith the Government of Ontario. One of its directors was Ernest Powers. The SBPOA was inactive for many years.
[10] In 2011, Janice Jackson, a member of the Municipal Council of the Town of South Bruce Peninsula, spoke with Mr. Jordan. She noted thatnative land claims were being made that could affect the property owners of Sauble Beach. She suggested that the property owners form anassociation.
[11] Mr. Jordan organized a number of volunteers, who incorporated the Sauble Beach Residents Association (SBRA) on June 5, 2013, and formed its first executive. Mr. Jordan became one of its first directors and its President.
[12] On July 14, 2013, Mr. Jordan, obtained the signed permission of Mr. Powers, formerly adirector of the Sauble Beach Property Owners Association, to allow the newly formed Sauble Beach Residential Property Owners Association to use its name, ‘The Sauble Beach Property Owners Association’, or any derivative of that name. The document that Mr. Powers signed stated:
I Ernest Powers hereby grant permission for the officers of the NEW “Sauble Beach Residential Property Owners Association (formed summer 2014) to cease any and/or all old officers and directors of “The Sauble Beach Property Owners Association”, registered on or about May 10, 1978, hereafter known as the OLD association.
This document also grants permission for the NEW officers to add themselves and any new officers/directors using thename “The Sauble Beach Property Owners Association” or any derivative of that name that was or may have been used, as the association performed business through the years.
[13] On August 1, 2013, The Sauble Beach Property Owners Association (SBPOA) officially changed its name to the Sauble Beach Residential Property Owners Association (SBRPOA) by applying to the Ontario Ministry of Government Services for Supplementary Letters Patents, pursuant to a resolution confirmed by members of the Association on June 27, 2013.
The dispute between members of the two Associations
[14] On September 18, 2012, Mr. Jordan wrote to Mr. Gammie, introducing himself as the current President of the newly formed Sauble Beach Residential Property Owners Association. In his letter, he referred to the Amabel Property Owners Association as “the last association”. Mr. Gammie replied to Mr. Jordan’s letter, stating that the APOA had never been wound up.
[15] Several past members of the APOA joined the SBRPOA, and two of them joined the SBRPOA’s board of directors. It was Mr. Jordan’s view thatthere was no longer a lawful board of directors of the APOA, as there had been no meetings of the executive and the association had not conducted any business, such as renewal of annual memberships, since approximately April 2009.
[16] On September 21, 2013, the SBRPOA’s board of directors met and discussed “monies held by the previous APOA”. The question was raised as to whether those funds could be transferred to the SBRPOA. The Board authorized one of its members, John Carter, to attempt to contact “the previous officers” of APOA for clarification.
[17] At the same meeting, SBRPOA’s board also discussed the possibility of shortening the nameof that association by adopting the name formerly used by the APOA. The Minutes of the meeting state:
Along that line, discussion was held regarding the possibility of shortening, changing, or adapting our current name, as several of us were approached at the barbecue and have been separately as well, asking if we were a reorganization of the old property owners’ organization. There appears to be some confusion over this issue as there has been more than one organization in the past. Two of the board members used to belong to the APOA and are of the impression that the organization simply ceased to be in the last several years. We have already consolidated one old association name into our organization and will pursue avenues to do the same with APOA. Contact of previous officers will be attempted to clarify this. We may wish to expand boundaries at a future date, possibly to the ‘Amabel Township’ geographic footprint, and that past organization’sname appears to be most familiar with the public. [Emphasis added]
[18] The APOA board of directors did not meet from April 14, 2009 until 2014. Mr. Gammie called for a meeting of the APOA board to take place May 3, 2014. On that date, five of the seven APOA board members from its last (2008-2009) term met. They discussed their desire to discontinue operating as an association and discussed the new SBRPOA as their possible successor. One of the board members made a motion that the APOA be permanently dismantled, effective immediately. The motion was passed by 4 votes to 3.
[19] Mr. Gammie complains that the motion passed by the APOA board of directors on May 3, 2014 was unlawful, as there was no prior noticethat it would be made. Mr. Gammie asserts thattwice during the meeting on May 3, 2014, he tried to pay his membership dues to the Treasurer and was refused. The third time, he paid his membership dues to himself, and declared that he was a member of the restored association. He then declared that APOA had at least one member, and was therefore an ongoing organization.
[20] Following the meeting on May 3, 2014, Craig Gammie and another APOA board member, who had not attended the meeting on that date, opened a new bank account in the name of APOA.
[21] At a community meeting on July 5, 2014, organized to discuss a First Nations land claim to the beach at Sauble Beach, Mr. Gammie and his wife set up a table with information about the APOA, sold APOA memberships, and issued APOA membership cards. When Mr. Jordan stated to Mr. Gammie’s wife that he thought the APOA was defunct, Mr. Gammie stepped up and stated that it was not defunct.
[22] Mr. Gammie states that on July 10, 2014, there was a further meeting of the APOA board of directors at which the May 3 “dissolution” of the Association was reversed. At a meeting on July 12, 2014, attended by Mr. Jordan and Doug Gammie, Craig Gammie asserted that on May 3, 2014, the APOA had improperly transferred the approximately $13,000 which the APOA held in 2009.
[23] Craig Gammie later called a general meeting of the APOA, to take place August 23, 2014, towhich “APOA members and potential members” were invited. Notices of the meeting, according to Mr. Gammie, were “posted broadly”. Those who attended the meeting on that date elected Craig Gammie and four others as directors. Mr. Jordan did not attend the August 23rd meeting.
[24] On August 27, 2014 the SBRPOA incorporated the “Amabel Property Owners Association” by Letters Patent from the Ontario Ministry of Government Services. The 6 first directors of the new APOA were identical to the 6 first directors of the SBPROA , with the exceptionthat James Thomas Darby, a first director of the SBRPOA, who was replaced by Paul Bernard McCulloch in the incorporated APOA.
[25] At a public meeting that the SBRPOA heldon August 29, 2014 to discuss the First Nations land claim in relation to Sauble Beach, Mr. Gammie set up a table outside the building where the meeting took place, with a sign that said “Amabel Property Owners Association”. Mr. Jordan asked Mr. Gammie what he was doing and Mr. Gammie replied that he was signing up members to APOA. Mr. Jordan asked Mr. Gammie what he was doing with the money he collected for memberships and added that the APOA was “not registered”, andthat what Mr. Gammie was doing was illegal.
[26] On October 4, 2014, Mr. Gammie was informed that the SBRPOA website had endorsed several municipal election candidates. Mr. Gammie, who was a member of the Municipal Council for the Town of Bruce Peninsula, was notamong those endorsed on the website. He asked Mr. Jordan for a meeting to discuss the Association’s failure to endorse him. A meeting was held on October 11, 2014, at the Sauble Beach home of a SBRPOA director. Later the same day, Mr. Jordan advised Mr. Gammie that the SBRPOA had “begrudgingly decided that we will add Craig Gammie’s name to the recommended slate of candidates posted on our webside.” He added:
We do this solely for the benefit of the residents of TSBP [Town of South Bruce Peninsula] and Janice Jackson’s ability to run [council] as mayor as we understand Mr. Gammie’s ability to back her position in council. This action is taken in spite of Mr. Gammie’s history within the town which may cause us members and the disregard he has shown toward [yo]ur Association over time.
[27] On the same day, Mr. Jordan wrote an e-mail to Craig Gammie, asserting that the SBRPOA had the sole right to use the name Amabel Property Owners Association from that day forward.
[28] On November 24, 2014, Mr. Gammie commenced the present proceeding. He seeks anorder requiring Mr. Jordan to change the name of the corporation, Amabel Property Owners Association to one that “is distinct from the (unincorporated) association called Amabel Property Owners Association and that is acceptable to the Applicant.”
[29] In a statement signed September 27, 2015, Doug Gammie, in his capacity as the last serving President of the APOA, wrote the following to Mr. Jordan, President of the SBRPOA :
In my capacity as President for the 2008-2009 annual term (last serving president) on the board of directors of the Amabel Property Owners Association, I assign all the rights and responsibility for the name Amabel Property Owners Association to the newly incorporated Suable Beach Residential Property Owners Association.
The former Amabel Property Owners Association has notconducted any business or taken any membership dues (new or recurring) since approximately 2009.
On May 3, 2014, the former Amabel Property Owners Association executive, met at the Sauble library. Present atthat meeting were: Doug Gammie, Orma Lyttle, Rick Lyttle, Pat Varley, Gerry Varley, Ken Graham, Craig Gammie.
In our former bylaws, the number of directors required was 10 and a quorum was 5. We had seven former board members present at the June (sic) 2014 meeting. All eight of the former board members who had any interest were notified in advance of the date and location of this meeting. There was no membership roll, it had not existed for several years as of the June date. The meeting was conducted informally since there were no elected officers or members. Since support for shutting the organization down was demonstrated it was decided that we would vote on it. Oneperson, Craig Gammie, objected to the vote but all others present wished to proceed. Five of the seven former board members present voted to close the Amabel Property Owners Association down and cease operations. Those former board members in favour of shutting it down included: Orma Lyttle, Rick Lyttle, Pat Varley, Gerry Varley, Ken Graham.
ISSUES
[30] The court is required to determine whether the Sauble Beach Residential Property Owners Association (SBRPOA), may continue to use thename Amabel Property Owners Association (APOA), which they incorporated on August 27, 2014.
PARTIES’ POSITIONS
[31] Mr. Gammie argues that the SBRPOA’s use of the name APOA will cause the public to confusethat entity with the former APOA. He asserts that he revived the former APOA before the new APOA was incorporated. Mr. Gammie argues that the permission given by a number of the former APOA’s board members to the SBRPOA and Doug Jordan a year after the latter incorporated the new APOA is invalid. Further, Mr. Gammie submits thatMr. Jordan incorporated the APOA name for animproper purpose, namely, to harm the advocacy efforts of the legitimate APOA members and to get control of their assets. Mr. Gammie seeks anorder directing Mr. Jordan to change the name of the incorporated APOA to something that will notdeceive the public, and that is acceptable to Mr. Gammie.
[32] Mr. Jordan argues that the incorporated APOA will cause no confusion to the public because the former APOA has ceased to exist. It was not active from April 14, 2009, when its last board meeting was held amidst serious controversy and animosity, until September 2013. Further, Mr. Jordan states that on May 3, 2014, the majority of the APOA’s last serving board members voted to formally cease the operations of the Association.
[33] Mr. Jordan argues that the SBRPOA, through its Board of Directors, incorporated the APOA onAugust 27, 2014, with objects similar to those of the former APOA, and for the benefit of the same community of property owners. He argues that Mr. Gammie convened what purported to be a meeting of the APOA board on July 12, 2014, in order to get access to the former Association’s funds that were still controlled by the dissolved APOA’s executive. He argues that the decision made at that meeting, purporting to reverse the dissolution of the former Association, was invalid. Because the $13,000 was paid to the original APOA only for some specific cause in the Sauble Beach area, and that cause can only be implemented by the SBRPOA, Mr. Jordan argues that the SBRPOA can properly operate under the name APOA (incorporated) and use the funds for the purpose for which they were intended. Mr. Jordan therefore submits that Mr. Gammie’s application has no merit and should be dismissed.
ANALYSIS AND EVIDENCE
Legislative framework
[34] The Corporations Act provides, in part:
13(1) A corporation shall not be given a name,
(a) That is the same as or similar to the name of aknown corporation, association, partnership, individual, orbusiness, if its use would be likely to deceive, except where the corporation, association, partnership, individual orperson consents in writing that its, his or her name in whole or in part be granted, and, if required by the Minister,
(ii) In the case of an association, partnership or individual,undertakes to cease to carry on its, his or her business or activities, or change its, his or her name, within six months after the incorporation of the new corporation.
(3) `A person who feels aggrieved as a result of the giving of a name under subsection (1) or the changing or refusing to change a name under subsection (2) may, upon at least seven days’ notice to the Minister and to such other personsas the court directs, apply to the court for a review of the matter, and the court may make an order changing thename of the corporation to such name as it considers proper or may dismiss the application.[1] [Emphasis added]
Jurisprudence
[35] In Unity Insurance Brokers (Windsor) Ltd. v. Unity Realty & Insurance Co., in 2005,[2] the Divisional Court considered the meaning of the phrase “would be likely to deceive”. The Divisional Court noted that section 2 of Ontario Regulation 62,[3] made under the Business Corporations Actof Ontario, provides:
2(1) “Name” when used in the expression “if the use ofthat name would be likely to deceive” used in clause 9(1)(b) of the Act, includes,
(a) A name that would lead to the inference that thebusiness or activities carried on or intended to be carriedon by the corporation under the proposed name and thebusiness or activities carried on by any other person are one business or one activity, whether or not the nature of the business or activity of each is generally the same;
(b) A name that could lead to the inference that thecorporation bearing the name or proposed name is or would be associated or affiliated with a person if thecorporation and such person are not or will not be associated or affiliated; or
(c) A name whose similarity to the name of a personwould lead someone who has an interest in dealing withthat person, to deal with the corporation bearing the namein the mistaken belief that they are dealing with the person. [Emphasis added]
[36] The Divisional Court cited with approval the words of Schatz J. in Re Cole’s Sporting Goods Ltd. and C. Cole & Co. Ltd. and Coles Book Stores Ltd., in 1965:
… it is not the duty of the Court to make any order for the sole purpose of removing a grievance in so far as it affects the person complaining, but the Court must act for the benefit of the public who are likely to be deceived, the grievance of a party being an entirely secondary result. Under the Act this is a matter respecting the public primarily, i.e., if the public likely to be deceived, and therefore in my opinion the principles of a passing-off action are notapplicable…[4]
Applying the legislative framework to the present case
[37] Mr. Jordan submits that the use of the name“Amabel Property Owners Association” (APOA) isnot likely to deceive the public because the former APOA ceased to exist before August 27, 2014, when he and other members of the SBRPOA incorporated the name APOA. He makes this argument on the following grounds:
a) The former APOA ceased to carry onactivities, including collecting membership dues and electing board members, for four years prior to the incorporation of APOA Inc.
b) The former APOA board voted on May 3, 2014, to dissolve the Association, and the subsequent decision made at a meeting convened by Craig Gammie on July 10, 2014, whichpurported to reverse the May 3 dissolution, was invalid.
c) The former APOA board, in its decision to dissolve, gave its permission to the SBRPOA to use its name and transferred the funds from its treasury to the SBRPOA.
[38] Mr. Gammie argues that the use of the nameAPOA by the incorporated entity will cause confusion to the public because the former APOA was still active when the new APOA was incorporated. He makes this argument on the following grounds:
a) The former APOA board, of which he was amember, never formally wound up the Association;
b) The APOA last-serving board members’ decision on May 3, 2014 to dissolve the Association was invalid, as no notice was given prior to the meeting that the motion to dissolve would be made.
c) Mr. Gammie paid his membership dues to himself, as Secretary of the APOA, on May 3, 2014, after the Treasurer twice refused to accept them. He was therefore a member in good standing and entitled to convene the meeting on July 10, 2014,which reversed the dissolution of the Association, and he was properly installed as President of the Association at the General Meeting which he convened on August 23, 2014.
Did the APOA cease to exist before APOA Inc. was incorporated?
(i) The nature of an incorporated association
[39] The former APOA was an unincorporatedassociation. D.L. Bourgeois’s The Law of Charitable and Not-for-Profit Organizations, describes the nature of an unincorporated organization in the following terms:
An unincorporated organization is, essentially, anagreement among a number of persons which articulates their common purpose, establishes an organization to achieve that common purpose and sets out how thatorganization is to be operated to achieve that purpose. The relationship among the persons is contractual in nature…The constituting documents are contractual in nature and may vary by name and content…Because the relationship is contractual in nature in an unincorporated association,without an amendment provision all members must agree to the change in terms of the contract.[5] [Emphasis added]
(ii) The primacy of an association’s constitution and by-laws
[40] Where an unincorporated association’s constitution or by-laws prescribe a means of dissolution or merger, the court will oblige its members to follow them. Evans J.A., speaking for the majority of the Court of Appeal in Astgen et al. v. Smith et al., in 1969, delineated the functions ofan association’s constitution and by-laws in governing relations among members of the association:
Mine Mill is not a corporation, individual or partnership, and is accordingly not a legal entity; it is an unincorporatedgroup or association of workmen who have banded together to promote certain objectives for their mutual benefit and advantage and in law nothing is recognizable other than the totality of members related one to another by contract. The objects and purposes of the association are spelled out in the memorandum of association usually referred to as the "constitution"; the by-laws or rules provide the machinery for the proper carrying out of activities intended to advance the objectives and purposes of the voluntary association. Each member of Mine Mill, upon being granted membership, subscribed to those purposes and objects and in so doing entered into a contractual relationship with every other member of Mine Mill. Rand, J., in Orchard et al. v. Tunney,1957 CanLII 57 (SCC), [1957] S.C.R. 436 at p. 445, 8 D.L.R. (2d) 273 at p. 281, stated:
... each member commits himself to a group on afoundation of specific terms governing individual and collective action ... and made on both sides with the intentthat the rules shall bind them in their relations to each other.
I adopt also the proposition stated by Thompson, J., inBimson v. Johnston et al., 1957 CanLII 131 (ON SC), [1957] O.R. 519 at p. 530, 10 D.L.R. (2d) 11 at p. 22, which was affirmed on appeal 1958 CanLII 345 (ON CA), [1958] O.W.N. 217, 12 D.L.R. (2d) 379:
... that a contract is made by a member when he joins the union, the terms and conditions of which are provided by the union's constitution and by-laws ... The contract is not acontract with the union or the association as such, which is devoid of the power to contract, but rather the contractual rights of a member are with all other members thereof.
…
The contract of association is not between the member and some undefined entity which lacks the capacity to contract; it is a complex of contracts between each member and every other member of the union. These are individual contracts impressed with rights and obligations whichcannot be destroyed in the absence of the specific consent of each person whose rights would be affected thereby.[6]
(iii) The applicable terms of APOA’s constitution
[41] The parties tendered a document which, though unsigned, they agree is the constitution of the former APOA. Craig Gammie, in his affidavit sworn June 8, 2015, states:
10. Exhibit A is the constitution of the APOA. This one is unsigned. I believe there is a signed version somewhere. I believe that I signed it.
[42] Doug Gammie, in his affidavit sworn August 26, 2015, tendered by Doug Jordan, states, in paragraph 5:
Attached and marked as Exhibit “A” is a copy of the Amabel Property Owners Association Constitution and By-laws.
[43] There is no provision in APOA’s Constitution and By-laws for dissolving the Association. The Constitution and By-laws contain the following amendment provisions:
Article X Amendments and Ratification
• The Constitution must be voted on, signed, and approved by the Board of Directors. (must be a recorded vote)
• This document must also be read, voted on and approved at the Annual Meeting, by a simple majority of the membership.
• Amendment to the Constitution must be submitted in writing at a regular meeting of the Board of Directors. Said amendment(s) will be voted on at a subsequent meeting and read again at the next Annual Meeting to complete the ratification.
(iv) The requirement for unanimity in the absence ofa provision governing dissolution in the constitution
[44] Where an Association’s constitution doesnot contain a provision governing dissolution, the members in good standing of the Association must make such decisions unanimously, as they concern the continued existence or identity of the Association or of its fundamental objects. InAstgen et al. v. Smith et al., in 1969, the majority of the Court of Appeal upheld the decision of the motions judge who held that, where a local trade union’s constitution was silent as to the manner of its dissolution or merger, a decision of the majority to change its affiliation from the International Union of Mine, Mill, and Smelter Workers to the United Steelworkers of America was invalid.[7]
[45] The Court of Appeal in Organization of Veterans of the Polish Second Corps of the Eighth Army v. Army, Navy & Air Force Veterans in Canada et al., in 1978, reviewed the jurisprudence governing how an unincorporated association can dissolve and how its property can devolve to another. Inthat case, the Court of Appeal dismissed anappeal from Labrosse J., then a trial judge, who vested the property of an unincorporated local unit of a veterans' organization in the unit’s successor, and not in its national parent organization, after the parent organization cancelled the local unit’s charter. Blair J.A. stated:
Unincorporated associations are based on contract whichbinds the members together for declared common purposes and governs their relationship with each other, as Rand, J., said in Orchard et al. v. Tunney, supra, at p. 445 S.C.R., p. 281 D.L.R.:
Apart, then, from statute, that a union is held together by contractual bonds seems obvious; each member commits himself to a group on a foundation of specific terms governing individual and collective action, a commitment today almost obligatory, and made on both sides with the intent that the rules shall bind them in their relations to each other. That means that each is bound to all the others jointly.
The terms of the contract are expressed in or implied from the constitution and rules of the association which it is said:
"The courts must consider ... as they would consider any other contract": Baker v. Jones et al., [1954] 2 All E.R. 553, per Lynskey, J., at p. 558.
The contractual relationship between the members prescribes both the ambit of the activities of the association and the procedures to be followed in undertaking them. Even where the rules are silent, it is agreed that the day-to-day activities falling within its objects and purposes may be authorized by a majority vote of the members. Where, however, the activity is outside the scope of the ordinary purposes and objects of the association, and is notprovided for in the rules, it cannot be approved by a majority and requires unanimous approval of all members. In Re Int'l Nickel Co. of Canada, Ltd., 1949 CanLII 129 (ON SC), [1949] O.R. 765 at p. 780, [1950] 1 D.L.R. 381 at pp. 395-6, Gale, J. (as he then was), said:
While it is true that in all internal affairs, that is, in action taken within the boundaries of the rules and regulationswhich govern the conduct of an association, and always subject to those rules and regulations, a majority of the members can control and guide the fate of the minorityunder the authorities, that principle does not apply where the group or association is going outside of its powers by seeking to bring an end to its existence or to sever the cord through which it derives its being.
In the absence of provisions in the rules, unanimity is required where organic and fundamental changes are proposed. Examples of such changes include amendments to the constitution: Astgen et al. v. Smith et al., 1969 CanLII 488 (ON CA), [1970] 1 O.R. 129, 7 D.L.R. (3d) 657; Lloyd, Law Relating to Unincorporated Associations (1938), at p. 177; ordissolution of the association: Lloyd, supra, at p. 206;MacKenzie et al. v. Somers et al., 1953 CanLII 328 (NS SC),[1954] 1 D.L.R. 421 (N.S.S.C.). The Courts have been particularly strict, in the absence of rules permitting majority action, in requiring unanimity where the property rights of members are affected either by proposals of a majority to dispose of the association's property or to secede from aparent organization.
The interests of the members in the association or club property is a matter which is primarily to be ascertained by reference to the rules of the club: Josling and Alexander, Law of Clubs, 3rd ed. (1975), at p. 8. Unless the constitutionprovides otherwise, the rule is that the legal title to common property is vested in the members of the association for the time being: Massie & Renwick Ltd. v. Underwriters' Survey Bureau, Ltd. et al., 1940 CanLII 1 (SCC), [1940] S.C.R. 218 at p. 228, [1940] 1 D.L.R. 625 at p. 631, 7 I.L.R. 19, per Duff, C.J.; 19 Hals., 4th ed., p. 78, para. 135.
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