It is quite exciting to learn of a case that touches on so many important principles of administrative law as it applies to the governance of sport associations. This recent ruling documents the nightmare that can happen when leaders of sport associations don’t get along and resort to convoluted legal remedies to try to solve their interpersonal problems.
This case arose due to an “unfortunate fracturing of a provincial society (the Alberta Soccer Association), resulting in the paralysis of organization and uncertainly in the activities of 80,000 members who joined for the joy and happiness of participating in amateur sport” (these are the Judge’s words). In August 2010, Judge Tilleman of Edmonton received and considered three different applications to the Court: one from the ASA board asking that caretakers be appointed and that the court order a new board election, one from the ousted ASA board asking that they be declared the proper board, and one from a number of district associations asking that the ASA board be recognized as the proper board or in the alternative that the court order a new election or order that the ASA be dissolved.
The Judge appeared most inclined towards the third application, noting that “The ASA was on a path of bickering and adversarial management such that their corporate implosion was imminent and a winding up of the board almost assured.”
Multiple parties went to great expense to hire lawyers and submit evidence to the Court in August 2010. At that time, the Judge appointed external managers to keep the organization running until his decision was released. Recently, the Judge published a 16-page ruling that detailed extensive analysis of the arguments, addressed a number of key principles of administrative law that are important to all sport people, and interpreted a number of bylaw and governance issues. Some conclusions:
- Internal remedies must be exhausted before a court can intervene in judicial review. This is not new. One individual in this drama, Chris Billings, was sent away by the Court to avail himself of the internal remedies available to him through the ASA and its policies and rules.
- Judicial review is rarely an appropriate remedy to redressing a non-profit corporation’s problems. Private disputes require private remedies, and scarce judicial resources should not be expended in such a process.
- Members’ meetings must be convened and run in the manner prescribed by bylaws. In this case, a Special General Meeting was held but the Court found that it was not properly called (in terms of who called it), there was insufficient notice, voting delegates were not properly accredited and quorum was not achieved (in part because quorum was determined on the basis of amended bylaws which, unfortunately, no one had bothered to submit for registration under the Societies Act).
- Non-payment of member dues is alone not sufficient to automatically revoke membership in a voluntary association. This repeats a court judgment dated 1897!
The Judge also had some withering words for the Canadian Soccer Association (CSA) in this matter, which has in its rules a provision that its members may not pursue litigation to resolve their issues. He wrote: “I find it difficult to believe an organization like the CSA … is the sole adjudicator (due to its exclusionary clause) not merely of an internal discipline matter, but the stability and continuance of a statutory body itself created under Alberta’s corporate laws.” The Judge concluded that it was contrary to public policy to have the CSA exist entirely outside the jurisdiction of the Superior Courts.
The end result is that the ASA is ordered to convene an AGM in January 2011 and elect a Board of Directors. The Judge retained his jurisdiction to intervene if this process does not run smoothly. He also stated that if the current Board (elected in January 2010) wished to have an order to wind up the ASA, he would provide it. He also observed that the ASA’s 80,000 members deserved better than the fractious leadership they had received in 2010.
[Edit: The judge ended up providing additional insight late in the year].
Originally published: Centre for Sport and Law Newsletter (2010) Vol. 6(4)