Members can bring claims against an association if they feel
like their rights are being oppressed by the association.
The oppression remedy is an equitable remedy under the
Canada Not-for-profit Corporations Act ("CNCA")
that also gives a court broad powers to intervene in the internal
affairs of an association. Whereas a
derivative action addresses harm done to an association, an
oppression remedy is meant to address harm done to the complainant
by an association.
Upon application by a "complainant," which has the
same definition as in the context of derivative actions discussed
above, a court may make an order if it is satisfied that (1) any
act or omission, (2) the conduct of the activities or affairs, or
(3) the exercise of the powers of the directors or officers of the
association is oppressive or unfairly prejudicial to or unfairly
disregards the interests of any shareholder, creditor, director,
officer or member.
Whether association conduct will attract the oppression remedy
depends on the specific surrounding facts. Circumstances that may
attract the oppression remedy include: mismanagement; self-dealing
and self-interested transactions; appropriation of corporate
opportunities; changes to membership structure; violation of
procedural rules and laws; discrimination between members of the
same class; or breach of the articles or by-laws of the
association. In other words, there are a large number of
association actions that could attract review!
The CNCA sets out the oppression remedies that a court may
order, which include: requiring the amendment of the articles or
by-laws or the creation or amendment of a unanimous member
agreement; appointing additional or replacement directors;
directing an association to pay a member all or part of the amount
that the member paid for their membership; varying, setting aside
or annulling a transaction or contract to which an association is a
party and compensating the association or any other party to the
transaction or contract; or liquidating and dissolving an
Note that in assessing an oppression remedy claim, a court will
apply the "business judgment rule". Courts recognize that
it is impossible satisfy all stakeholders and, therefore, will
defer to the responsible business decisions of directors, without
In our next corporate governance post we will discuss how to
respond to member claims and reduce the likelihood of receiving
Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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