By Esther S.J. Oh and Urshita Grover

In Mississauga Majors v. Provincial Women’s Softball Association, the Applicant, the Mississauga Majors Baseball Association, a not-for-profit corporation that offers baseball and softball leagues exclusively for youth and young adult females (the “Majors”), sought a declaration from the court directing the Respondent, the Provincial Women’s Softball Association (“PWSA”), which is the governing body for women’s softball in Ontario, to comply with its by-laws. The Majors also sought an order compelling the PWSA to grant membership to the Majors. The case was heard before the Ontario Superior Court of Justice, which released its decision on September 20, 2024.

The PWSA is a not-for-profit corporation that operates a softball association in Ontario, and in 2024, had 58 association members which field 220 rep teams in Ontario. Since the PWSA is the organization that sanctions Ontario provincial qualifiers and championships and selects the Women’s Ontario Softball Team, the Majors took the view that its membership in the PWSA was essential to attract and retain players who hope to have a future in softball. The Majors alleged that it loses players each year to other softball associations that offer rep programs (which provide advanced training and competition to players who wish to develop their skills at a higher level) because the Majors is not a member of the PWSA, even though the Majors is a member of a number of other associations including Baseball Ontario, the Central Ontario Baseball Association, and other regional baseball associations and leagues.

The Majors applied for association membership with the PWSA twice. However, both applications were denied, leading the Majors to seek a court order compelling the PWSA to grant membership.

The key issues in the case were as follows: (1) whether the Majors met the criteria for association membership as set out in the PWSA by-laws, and if so, whether the PWSA had discretion to refuse it, and (2) whether the Majors (as a non-member of the PWSA) had legal standing to bring the application under section 191 of the Ontario Not-for-Profit Corporations Act, 2010 (“ONCA”), which allows a “complainant” to seek a compliance order against a not-for-profit corporation to comply with the Act, its regulations, or the corporation’s articles or by-laws, or restraining the corporation from acting in breach of them. 

On this point, after reviewing applicable case law to confirm that the Majors has standing to bring an application for a remedy under section 191 of the ONCA, the court stated as follows:

Under the ONCA, the purpose of s.182(3) is to allow “a proper person” who is not a member, director or officer of a corporation but who, like the Majors, is closely related and dependant on that not-for-profit corporation, to apply for remedial protection to the court under the ONCA. The Majors have a strong interest in how the PWSA is managed, but no recourse except under the ONCA to ensure that the PWSA complies with its by-laws. This is especially so when their appeals of the decisions refusing membership were not heard by the PWSA. I have no evidence before me of any other appeal route to any other organization or body.

Subsection 48(1) of the ONCA requires that “the by-laws of a corporation must set out the conditions required for being a member of the corporation, including whether a corporation or other entity may be a member.” In reviewing the wording of section 2.1 of the PWSA by-laws, the court noted that the language of the by-laws states that an association or team that meets the criteria must have its membership recognized “and does not confer any discretion on the PWSA to reject members. It explicitly states that an association or a team will be a member if the preconditions are satisfied.” In this regard, the court found that the Majors met the criteria for association membership at the time of the applications.

While it is beyond the scope of this article to provide detailed comments on the background facts that arose in this case, the court noted that there were other omissions and areas of uncertainty in the PWSA by-laws and procedures, including the fact that the PWSA by-laws did not set out a membership application process. There were also areas of confusion in the communications between the Majors and the PWSA in the steps leading up to the denials of Majors’ membership applications. In addition, while the PWSA purported to reject the Majors’ application for membership on the authority of rule 1.02, the court found nothing in the PWSA by-laws expressly incorporating the operating rules as being part of the membership requirements. Therefore, in applying rule 1.02 to assess the Majors’ application, the PWSA did not comply with its own by-laws. On this point, the court stated as follows:

More specifically, while r.1.02 allows the PWSA to form a committee and conduct a hearing in order to assess and grant membership, it does not confer the power to disregard the membership criteria listed within its by-laws. The PWSA must utilize its operating rules within the confines of its by-laws.

In conclusion, the court found that based on the clear wording of Article 2.1 of the PWSA by-laws and subsection 48(1) of the ONCA, the PWSA did not have discretion to deny membership to the Majors. The court then issued an order to compel the PWSA to comply with its by-laws and grant association membership to the Majors forthwith.

The case is of particular interest as the court has confirmed that a non-member can be a complainant who can request a compliance order under section 191 of the ONCA. In this regard, as reflected in the case, the court was not aware of any prior court decisions concerning section 191 of the ONCA or the scope of the exercise of the court’s discretion under subsection 182(3) to grant status as a complainant under the ONCA.

This case also underscores the importance of carefully drafting by-law provisions that are of particular importance within the governance of a not-for-profit corporation, such as membership qualifications and admissions procedures. In most cases, not-for-profits will likely want to ensure their by-laws make it clear that admission of members will remain at the discretion of the board, while at the same time ensuring the approach being taken reflects fairness and transparency to the parties involved. In this regard, this case also highlights the importance of properly drafting provisions in by-laws and policies in a coordinated and integrated manner, and ensuring that the provisions are properly followed.  

​Read the November 2024 Charity & NFP Law Update