By Esther S.J. Oh

In Birhane v. Medhanie Alem Eritrean Orthodox Tewahdo Church, the Applicants, members of the Church, sought a court order requiring that a general membership meeting and election of the board of directors of the Respondent, Medhanie Alem Eritrean Orthodox Tewahdo Church (“Church”), take place. While it is beyond the scope of this article to describe all of the events leading up to the court case, some of the more cogent background facts are summarized below.

The Church was incorporated as a not-for-profit corporation under the Ontario Corporations Act (“OCA”) on December 8, 1997 with letters patent that listed three applicants for incorporation / first directors. From 2000 to 2018, the Church held annual general meetings (“AGMs”) every year and elections of the board of directors every three years. No AGM or elections of directors were held in 2019 or 2020 and the directors who were elected at the last election held in 2016 (for the term starting on January 1, 2017) continued in office and were named as individual respondents (the “Individual Respondents”) in the action that resulted from the following situation.

On July 18, 2021, more than 90 Church members signed a petition asking, among other things, that an AGM be called and that an election of directors be conducted within three weeks. The board acted contrary to the provisions of the Church’s own bylaw by failing to respond to the petition from the members. The chair of the board at the time advised that a general meeting was held “by the end of November 2019” and that all the members in attendance at the meeting extended the term of the members of the board of directors “indefinitely to finish the renovation of the church”.

On November 11, 2021, the Respondents announced to Church members through automated calls that an AGM and board elections would be held on December 4, 2021. They also advised that they would hold a members’ meeting on November 20, 2021. Approximately 165 Church members attended the meeting on November 20, 2021. While the issue of whether the AGM and elections should have been postponed was discussed, no conclusive decision was made at the meeting. While the board later did call other membership meetings, the manner and form in which the meetings were called and held were not in compliance with corporate law requirements, but instead reflected a number of irregularities and were not otherwise done in an orderly manner.

The Individual Respondents took the position that the court did not have the jurisdiction to determine the issues before the court, claiming that the Applicants were members of a voluntary religious association (i.e. an unincorporated congregation) and were not members of the Church (a corporation incorporated under the OCA). Citing previous case law, the Individual Respondents argued that since voluntary religious associations are not governed by corporate statutes, and that the Ontario Not-for-Profit Corporations Act (which replaced the OCA on October 19, 2021) does not apply to the Church as a congregation. In making this assertion, the Individual Respondents argued that the only members of the Church corporation were the original three persons who applied to incorporate the Church in 1997. The Church also argued that the bylaw before the court was the bylaw of the congregation (a voluntary religious association), but not the Church corporation.

The court found these arguments did not make any sense when reviewing the background facts and history of the Church. The corporate records of the Church clearly reflected elections of directors by members of the Church corporation, with no evidence indicating there was ever any intention to distinguish between the Church (as a corporation) and an alleged unincorporated association. In addition, there was only one bylaw for the Church corporation and there was no separate bylaw for an alleged unincorporated association. The court also noted that the Church has registered charity status, receives and issues official donation receipts and holds title to the Church property.

In arguing that the court lacks jurisdiction, the Individual Respondents attempted to rely upon two relatively recent decisions of the Supreme Court of Canada involving religious organizations that were unincorporated associations. One of the cases was Ethiopian Orthodox Tewahedo Church of Canada St. Mary Cathedral v. Aga (“Aga”), discussed in Charity & NFP Law Bulletin No. 494, in which members of the congregation of the church brought an action against the church and members of its senior leadership after being expelled from the congregation. The second case was Highwood Congregation of Jehovah’s Witnesses (Judicial Committee) v. Wall, discussed in Church Law Bulletin No. 54, which also considered issues involving the expulsion of a member from an unincorporated religious organization.

The court in Birhane distinguished its circumstances from those in the two cases. Firstly, the court in Birhane noted that both Supreme Court cases dealt with reviewing decisions made on the basis of procedural fairness or issues involving the expulsion of members and disciplinary actions against them, which were not at all relevant to the issues in the Birhane case. Secondly, the court in Birhane noted that the Supreme Court in Aga had expressly distinguished cases involving corporations from cases involving voluntary associations that were not incorporated. Other determinations were also made.

The court disagreed with the Individual Respondents’ positions and confirmed that it did have the jurisdiction to review issues involving rights conferred on members of a corporation governed by the ONCA. In making its decision, the court noted that the case did not involve “the bonds of religion” but instead involved issues relating to proper corporate governance and compliance with Ontario and Canadian law. Based on the lack of cogent and consistent evidence, the court found that the directors’ terms had not been extended by a valid vote of the Church members and that a new meeting needed to be called. The court then ordered that the Church hold an AGM under the supervision of a neutral chair in order to elect a new board of directors in accordance with the ONCA and the Church’s own bylaw.

This case affirms the principle in previous cases that insofar as matters of corporate procedures and laws are concerned (as opposed to issues involving pure religious doctrine), incorporated religious organizations are required to comply with the requirements set out in the corporate statute and their respective bylaws. The case also reflects the willingness of the courts to intervene in situations where necessary to ensure election processes are followed, where directors’ failure to adhere to bylaws and corporate law requirements interfere in the fundamentals of the election process.

​Read the October 2022 Charity & NFP Law Update