{"id":15731,"date":"2026-04-30T13:28:45","date_gmt":"2026-04-30T13:28:45","guid":{"rendered":"https:\/\/temp.carters.ca\/?p=15731"},"modified":"2026-04-30T19:12:24","modified_gmt":"2026-04-30T19:12:24","slug":"ontario-court-invalidates-by-law-for-bad-faith-and-failure-to-meet-onca-approval-requirements","status":"publish","type":"post","link":"https:\/\/temp.carters.ca\/?p=15731","title":{"rendered":"Ontario Court Invalidates By-Law for Bad Faith and Failure to Meet ONCA Approval Requirements"},"content":{"rendered":"

In Chifor, et al v Windsor\/Essex County Humane Society<\/em><\/a>, decided on February 4, 2026, the Ontario Superior Court of Justice declared a by-law adopted by a registered charity to be of no force and effect after finding that the Board had acted in bad faith and failed to comply with the Ontario Not-for-Profit Corporations Act, 2010<\/em> (ONCA).<\/p>\n

The directors of the Windsor\/Essex County Humane Society (the Society) passed a resolution to adopt a By-law in June 2024 to move from an open to a closed membership governance structure. The June 2024 By-law was not to take effect until the Society\u2019s Articles of Amendment were approved later in the fall, which required a two-thirds majority vote (i.e. a special resolution of members). Shortly after the controversial termination of the Society\u2019s long-serving Executive Director, 224 individuals applied for membership in the Society through an online portal, paid the required membership fees, and were advised that they would have voting rights at the next meeting. Contrary to their 2019 By-law, the Society had historically treated applicants as members without formal Board approval, but the Board \u201cdeferred\u201d the approval of these new members and barred them from voting at an October 4, 2024 special meeting, where a revised version of the June 2024 By-law was approved by a simple majority of a significantly reduced group of 27 recognized members. The October 2024 By-law came into immediate effect as it removed the stipulation that it would not take effect until Articles of Amendment were issued. The applicants challenged both the exclusion of the new members and the validity of the October 2024 By-law.<\/p>\n

On the first issue, the court held that the directors acted in bad faith in refusing to approve the new members. While the 2019 By-law contemplated Board approval, that requirement had been \u201chonoured in its breach.\u201d The June 2024 By-law was not going to have retroactive effect and therefore could not justify the Board\u2019s pre-emptive disenfranchisement of the new members. The court found the Board\u2019s conduct to be arbitrary and driven by an improper purpose, namely, to prevent individuals it perceived, without proof, to be aligned against the Board from voting on the By-law. The directors acted on assumptions about the applicants\u2019 motives rather than any criteria set out in the By-laws, and did not make inquiries to verify those assumptions. The court emphasized that denying membership on \u201cideological or collateral grounds\u201d is contrary to the duty of good faith under section 43 of the ONCA, and that the Board could not stack \u201cthe deck to reach the desired outcome.\u201d All individuals who met the membership criteria and paid their dues prior to the record date were therefore deemed to be members entitled to vote.<\/p>\n

On the second issue, the court concluded that the June 2024 By-law was not validly approved because it required confirmation by a special resolution of the members rather than a simple majority, and because many members were improperly excluded from voting, it \u201cceased having any force and effect no later than October 4, 2024.\u201d In coming to this conclusion, the court interpreted the interplay between subsections 17(1) and 103(1) of the ONCA. The court held that By-law amendments affecting the transfer of membership in paragraph 103(1)(g), changing the manner of giving notice to members in paragraph 103(1)(k), and method of proxy voting in paragraph 103(1)(l) fall within a category of \u201cfundamental changes\u201d that attract enhanced member approval requirements.<\/p>\n

Although section 17 generally permits By-laws to be confirmed by ordinary resolution, the statutory \u201ccarve-out\u201d for matters listed in the enumerated exceptions mentioned above requires confirmation by special resolution. This interpretation was found to be most consistent with the scheme and goals of the ONCA, including its objectives of \u201cenhancing corporate governance and accountability\u201d and \u201cmember democracy.\u201d Since the court held that the June 2024 By-law ceased having any force and effect no later than October 4, 2024, it also declared subsequent member meetings and corporate actions void ab initio<\/em>, ordering that a new annual general meeting of members be held with the full and final membership list.<\/p>\n

This decision underscores that courts will intervene in the internal affairs of charities where directors act in bad faith or contrary to statutory requirements, particularly where member rights are affected. For charities and not-for-profits, the case underscores the importance of applying membership criteria consistently as set out in their By-laws, avoiding decisions based on ideological or collateral grounds, and ensuring that changes to By-laws, especially those that affect fundamental changes, comply with the heightened approval thresholds under the ONCA, reinforcing that Boards must not manipulate procedure to predetermine outcomes.<\/p>\n","protected":false},"excerpt":{"rendered":"

In Chifor, et al v Windsor\/Essex County Humane Society, decided on February 4, 2026, the Ontario Superior Court of Justice declared a by-law adopted by a registered charity to be of no force and effect after finding that the Board had acted in bad faith and failed to comply with the Ontario Not-for-Profit Corporations Act, […]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"off","_et_pb_old_content":"","_et_gb_content_width":"","inline_featured_image":false,"footnotes":""},"categories":[18],"tags":[],"class_list":["post-15731","post","type-post","status-publish","format-standard","hentry","category-charity-not-for-profit-law"],"yoast_head":"\nOntario Court Invalidates By-Law for Bad Faith and Failure to Meet ONCA Approval Requirements - Carters<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/temp.carters.ca\/?p=15731\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Ontario Court Invalidates By-Law for Bad Faith and Failure to Meet ONCA Approval Requirements - 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