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As 2021 comes to a close, BC societies should be aware of recent changes in the law that will affect their bylaws and processes.
Farrish v. Delta Hospice Society and virtual meetings
In May 2021, the BC Government amended the Societies Act [SBC 2015] Chapter 18 (the “Act” or the “Societies Act”) to add rules and reflect changes governing virtual meetings for BC societies.
Among the changes to the Act:
- any member of a society may participate in an electronic or telephone meeting called by a society “unless the bylaws of a society provide otherwise” (s. 83(1)); and
- if a society wishes to conduct voting by mail or by another means of communication (including fax, email or other electronic means), the society’s bylaws must authorize, and set out rules governing, such voting method (ss. 84(5)-(6)).
A July 2021 BC Supreme Court decision confirms that general meetings and voting over electronic platforms will not be available for societies with bylaws that contemplate in-person meetings only and that do not explicitly permit and set out rules governing electronic voting.
In Farrish v. Delta Hospice Society, 2021 BCSC 1374, the Delta Hospice Society (the “Society”) sought a declaration that its bylaws permitted electronic meetings.
The bylaws of the Society were made in 1991 at a time when membership was small and local. General meetings were held in person.
As a result of competing membership drives (2020 BCSC 968), the Society had grown from 620 members in 2019 to 8,810 members by the time of the 2021 hearing. The geographical reach of members had also grown beyond British Columbia.
The Society had argued that s. 83(1) of the Societies Act allows the Society to call an electronic meeting of members and that the Society’s bylaws, made in 1991, did not contain any express prohibition on electronic meetings.
The BC Supreme Court disagreed. Justice Shelley Fitzpatrick held that the usual contract principles apply when interpreting bylaws. Specifically, the intention of the Society’s originals members must be determined by reading the bylaws as a whole and must be informed by circumstances as they were in 1991, and not by subsequent developments or the Society’s current wishes.
Reading the Society’s bylaws as a whole, Justice Fitzpatrick concluded that the original members of the Society had intended that meetings be held in person. Parts of the Society’s bylaws that supported the court’s conclusion included references to:
- Meetings being held in a “place,” which denotes a physical location;
- A member being “present,” which implies physical attendance at the “place”;
- A vote at the meeting by a “show of hands,” which is consistent with a member being physically present at a physical location and which is inconsistent with telephone voting or an electronic “show of hands” through platforms such as Converso or Zoom;
- Voting by proxy being “not permitted,” which is consistent with a person being present at the meeting and being able to vote personally; and
- Corporate representatives “speaking” and voting at the meeting, which implies physical attendance by those representatives.
Moreover, Justice Fitzpatrick pointed to the absence of any explicit authorization of, and rules governing, electronic voting, as required by the amended ss. 84(5)-(6) of the Societies Act.
As such, Justice Fitzpatrick ruled that the Delta Hospice Society’s bylaws “provide otherwise” for the purposes of s. 83(1) of the Societies Act and prevented the Society from holding electronic meetings.
Ultimately, due to continued public restrictions on in-person gatherings, Justice Fitzpatrick used the court’s discretionary powers to allow the Society to hold a limited electronic meeting.
Nevertheless, Farrish v. Delta Hospice Society serves as a cautionary tale to other societies which may have similar language in their bylaws as the Society’s and which have not updated their bylaws during the pandemic or since the May 2021 Societies Act amendments.
Like the Delta Hospice Society, many of these BC societies continue to have bylaws that contemplate in-person meetings only. During the COVID-19 pandemic, in spite of what their bylaws said, these societies could hold electronic or telephone meetings, as permitted under the April 21, 2020 Emergency Order and for as long as the Order remained in place.
With the Emergency Order no longer in effect, and with the amended Societies Act now in force, many BC societies might unknowingly think they can still hold meetings over Zoom or by phone, when, in fact, their bylaws continue to “provide otherwise.”
In light of Farrish, BC societies wishing to hold electronic or telephone meetings should have their bylaws carefully reviewed and amended to ensure they conform with both the revised Act and these societies’ current wishes.
If you have any questions about these recent or upcoming changes or would like a lawyer in our Social Impact Group to review and update your bylaws, please contact Sarah Fitzpatrick or Stephen Hsia in our Vancouver office.
