Effective July 15, 2019, a variety of society disputes (defined as “society claims” under the relevant legislation) may be resolved by the B.C. Civil Resolution Tribunal (“CRT”) instead of the B.C. Supreme Court. This new dispute resolution mechanism will have significant implications for those wishing to make a claim against a society or its directors, as well societies themselves. This information bulletin addresses the scope of the CRT’s expanded jurisdiction over “society claims” and highlights the key takeaways for those who may be impacted by these amendments.
B.C. Civil Resolution Tribunal
The CRT is Canada’s first online dispute resolution tribunal. It was initially established in 2015 under the Civil Resolution Tribunal Act (the “CRT Act”) with limited jurisdiction to decide strata property disputes. Effective June 1, 2017, the CRT’s jurisdiction was expanded to include exclusive jurisdiction over small claims matters of up to $5,000.
In adjudicating disputes and claims within its jurisdiction, the CRT’s mandate is to provide accessible, speedy, economical, informal and flexible dispute resolution services that apply the principles of law and fairness and accommodate the diversity of tribunal users. To this effect, the CRT primarily hears disputes through its online dispute resolution tools, which include an online facilitated mediation process and digital evidence submission systems. The CRT’s dispute resolution system is designed to be used without representation by lawyers and with the goal of minimizing barriers that individual complainants face in accessing the traditional court system.
On May 22, 2018, the Civil Resolution Tribunal Amendment Act (BC) (the “CRT Amendment Act”), which amends the CRT Act and expands the CRT’s subject matter jurisdiction in a variety of ways (including society claims), received royal assent. The CRT Amendment Act has been coming into force over time; those amendments which expand the CRT’s jurisdiction to include society claims came into force effective July 15, 2019.
Jurisdiction over society claims
Under the relevant provisions of the amended CRT Act, the CRT’s jurisdiction has been broadened to include a dispute over a “society claim”, defined in the CRT Act as simply a “claim over which the [CRT] has jurisdiction under Division 6 of Part 10 [of the CRT Act]”.
Generally, the CRT now has jurisdiction over claims in respect of the Societies Act (BC) which concern:
- the interpretation or application of the Societies Act or a regulation, constitution or bylaw under the Societies Act, including requests to inspect or receive copies of society records; and
- a decision, action or threatened action by a society or its directors in relation to a member (which may include, for example, discipline of a member),
and, pursuant to the CRT Amendment Act, related amendments have also been made to Part 8 [Remedies]) of the Societies Act in order to clarify and confirm the CRT’s jurisdiction over such claims.
Although the CRT now has jurisdiction with respect to the above-noted broad categories, section 130 of the amended CRT Act specifies that the CRT does not have jurisdiction in relation to a claim that may be dealt with by the BC Supreme Court under certain provisions of the Societies Act, including (without limitation):
- Part 8 [Remedies] of the Societies Act, including claims by members for oppressive or unfair treatment, derivative actions, compliance and restraining orders in respect of compliance with the Societies Act and/or a society’s purposes and bylaws; claims in respect of omissions, defects, errors or irregularities in the conduct of a society’s activities or internal affairs; and claims for access to or copies of corporate records;
- Part 7 [Corporate Reorganizations] (pertaining to matters such as amalgamations, disposal by a society of its undertaking, continuations and arrangements) and any matter relating to the liquidation, dissolution or restoration of a society;
- Certain issues relating to the directors, including their qualifications and liability for money improperly distributed;
- Court orders that a general meeting of the society be called;
- Any matter relating to the termination of membership; and
- Disputes governed by an agreement to arbitrate under the Arbitration Act, R.S.B.C. 1996, c. 55.
As with all claims brought before the CRT, the Tribunal also does not have jurisdiction to decide constitutional questions and retains discretion to refuse to resolve a dispute that is otherwise within its jurisdiction if it considers the dispute to be better suited for another legally binding process or if the issues in the dispute are too complex or impracticable for the Tribunal to resolve.
The jurisdiction of the CRT and the BC Supreme Court to address certain disputes relating to societies overlap with one another and it remains to be seen how this will be resolved. For example, a matter concerning a decision of a society or its directors in relation to a member, over which the CRT has jurisdiction, may also easily fall within a claim available under Part 8 of the Societies Act, over which the BC Supreme Court has jurisdiction.
Standing to file a Societies Act dispute
To request that the CRT resolve a society claim, the person making the request must have standing to initiate the claim. To that end, under newly adopted section 109.2 of the Societies Act, the only persons with standing to request that a society claim be resolved by the CRT are:
- the society;
- a member of the society; or
- in the case of a claim to inspect or receive copies of certain records pursuant to the Societies Act, any other person who claims an entitlement to inspect or receive a copy of such record.
Whether a person is a member for the purposes of bringing a dispute before the CRT must be determined with reference to the society’s bylaws and related corporate records, such as the register of members required to be maintained by each society.
The CRT will likely be viewed by members and other persons as a more accessible forum for bringing those disputes which are within the Tribunal’s jurisdiction. As a result, the number of society claims filed to resolve, for example, interpretation of societies’ bylaws, requests for records and/or disputes in relation to member disciplinary actions can be expected to increase. Accordingly, and in anticipation of such increased claims, societies and their directors may wish to consider taking one or more of the following steps:
- Membership. Since — for the most part — only members have standing to bring society claims, societies should ensure that their register of members is accurate and up-to-date. They should also consider reviewing their bylaws and other policies and procedures concerning membership eligibility and the process for membership admission to assess (i) whether the society routinely complies with these provisions and (ii) whether any amendments may be required or desirable.
- Membership Discipline. Societies may wish to consider reviewing their bylaws and other policies regarding membership discipline and, again, assess (i) whether the society routinely complies with these provisions and (ii) whether any amendments may be required or desirable.
- Access to Corporate Records. Since a significant source of society claims are likely to be in relation to corporate records, societies should ensure that their corporate records are being maintained in an organized manner in full compliance with the Societies Act and do not disclose more information than is required under the Societies Act (i.e. in relation to minutes of director meetings and the register of members). Societies should also review their bylaws to consider whether any amendments are required or desirable to limit access of members and third parties to certain corporate records. Finally, societies should ensure that they have clear and effective policies and process governing requests for disclosure of records and that they respond to those requests in a timely way.
- Bylaws (General). Since society claims may be brought to the CRT in respect of the interpretation of bylaws, societies should review their bylaws generally to consider if further clarity is needed with respect to the various governance matters address therein.
- Arbitration. Since any matter which parties have agreed can be resolved by arbitration is excluded from CRT jurisdiction, societies may also wish to consider amending their bylaws to include a mandatory arbitration clause under the Arbitration Act. There are additional implications to such a dispute resolution mechanism, however, and further legal advice is recommended before making such changes.
This article provides only general information about legal issues and developments, and is not intended to provide specific legal advice. Please see our disclaimer for more details.