Election For President Of Association Declared Invalid

• Published date: 08 March 2022
• Subject Matter: Corporate/Commercial Law, Litigation, Mediation & Arbitration, Corporate and Company Law, Contracts and Commercial Law, Trials & Appeals & Compensation
• Law Firm: Gardiner Roberts LLP
• Author: Mr Stephen Thiele

Election law is not confined to political elections. Under corporate law, incorporated companies and voluntary membership associations are generally required to hold elections to choose, among other things, boards of directors. When those elections are held contrary to the governing documents or by-laws of a corporation or a voluntary association, the disputes can be resolved by a court.

In Hon v. Liao, 2022 ABQB 43, an Alberta court was required to determine whether it had jurisdiction to resolve a dispute over an election of the Hakka Tsung Tsin Association of Edmonton (the "Association"). This Association was registered under the Societies Act.

The Association was described in its by-laws as a non-profit organization to promote friendship, unity and welfare of members. As well, the purpose of the Association was to uphold the values of peace and democracy and to promote Chinese culture.

In March 2020, an election was held to select new executive members for the Association. However, contrary to the Association's by-laws, rather than electing a new executive the election simply was held to choose a new President. In addition, all ballots were marked with the voter's membership number.

After the election, the chosen President appointed all members of the Association's two separate Executive and Supervisory Boards.

The Executive Board consisted of the positions of president, vice-president, secretary, treasurer, and various other positions responsible for organizing the Association's activities. The Supervisory Board served as a check and balance. It was responsible for monitoring the Executive Board and consisted of a chairman (who was the Association's president), vice-chairman and auditing supervisor.

As a result of the way in which the election was held and the appointments were made, applicant members contended that they had been oppressed and that the election should be declared invalid.

The applicants argued that the Association's by-laws constituted a contract between the Association and its members and that the applicants had a justiciable civil right to have the by-laws enforced by the Court. In the alternative, the applicants argued that the Court could grant an oppression remedy under the Alberta Business Corporations Act.

The applicants showed that the Association was governed by by-laws, that there were three different categories of members in the Association, that members were required to pay dues and that the Association funded its...