Societies: Resolving Internal Disputes
Societies are independent, democratic organizations that are required to operate in a manner that complies with the Societies Act and their own constitution and bylaws. The Corporate Registry does not supervise or investigate the conduct of a society and has no powers to intervene in its internal affairs. If members are unhappy with how their society conducts its affairs, they may exercise their rights through the remedies available under the Act.
Dispute Resolution and Mediation
Where a dispute arises in the operation or governance of a society, the Corporate Registry encourages the members and directors to work cooperatively to try and resolve the dispute, before resorting to the legal remedies described below. Such an approach is aimed at resolving disputes more quickly and with less cost. It is also more likely to result in a solution that is acceptable to a majority of the parties involved.
To be successful, participants in the dispute resolution process should be prepared to listen to the other parties' positions with an open mind. Discussions should focus on resolving the essence of the dispute, rather than any unrelated personal disagreements between the parties. In some cases, it may be helpful to have a neutral third party assist in the discussions. Members of the Mediate BC Society are prepared to mediate disputes between society members for a fee.
Access to Records
A member or other person who feels they are entitled to have access to, or copies of, a record that a society is required to keep can apply to the registrar for assistance under section 107 of the Societies Act. The registrar will begin a process to facilitate access to the records, or clarify why access had been denied. In some cases, an order of the Supreme Court of B.C. may be required for a person to obtain access to a society record.
Agenda Items for Annual General Meetings
The Societies Act contains a new provision that allows members to put forward proposals for consideration at the next annual general meeting (AGM). Under section 81 of the Act, five percent of voting members (or lesser number set out in the society’s bylaws) can propose a matter to be discussed at an AGM. At least two members of the society must sign the proposal, which cannot be longer than 200 words in length. If the society receives the proposal at least seven days before it sends out notice of the AGM, the proposal must be included in the notice of meeting.
Under section 75 of the Societies Act, 10 percent of the voting members (or lesser number set out in the society’s bylaws) can requisition a "special" general meeting. Upon receiving such a requisition, the directors are required to hold a general meeting within 60 days. If they fail to call the meeting within 21 days of receiving the requisition, the requisitionists themselves may call the meeting. At such a general meeting, the members may consider resolutions put forward and for which appropriate notice has been given under the Act and the society's bylaws. This includes a special resolution, pursuant to Section 50 of the Societies Act, to remove one or more of the existing directors.
Note: Fourteen days' notice is required for a special resolution, unless the society’s bylaws provide for a shorter period of not less than seven days’ notice.
Court-ordered General Meetings
As an alternative to requisitioning a general meeting, a member or director may apply to the Supreme Court of BC for an order that a general meeting be called, held and conducted in the manner the court directs.
Other Court Remedies
There are a number of court remedies under the Societies Act. In all cases, application is made to the Supreme Court of B.C. Legal advice is recommended before seeking any of these remedies.
Complaint by Members
Under section 102 of the Societies Act, an application can be made to the court where the member alleges that the society or its directors are acting in a manner oppressive to the member or where a resolution was passed or is proposed that would be unfairly prejudicial to the member. The court has authority to provide various forms of relief under this section.
Under section 103, an application can be made to the court by a member, a director or another person the court considers appropriate, to allow them to act on behalf of the society to enforce a right or duty owed to the society or to defend a legal proceeding brought against the society.
Compliance or Restraining Orders
Under section 104, an application can be made to the court by a member, a director or another person the court considers appropriate, for an order directing a person to comply with the Act, regulations or bylaws of the society, or directing the society to refrain from carrying on activities that are inconsistent with or contrary to its purposes.
Under section 105 of the Societies Act, the court, on its own motion or on application of any person the court considers appropriate, may make an order remedying an "omission, defect, error or irregularity in the conduct of the activities or internal affairs of a society".
Relief in Legal Proceedings
Under section 106, a director may apply to the court for relief from being held liable for negligence or other default in duty. The court may excuse the director if, in light of the circumstances, the director acted honestly and reasonably and ought fairly to be excused.
Correction or Reconstruction of Records
Under section 108 and 109, an application can be made to the court by the society, a member, a director or another person the court considers appropriate for the correction of records (for example, a register of members) or for the “reconstruction” of records that have been lost or destroyed.