Effective July 15, 2019, the Civil Resolution Tribunal ("CRT") becomes responsible for deciding certain disputes involving societies established in British Columbia. The CRT was established in 2016 and offers an online dispute resolution process for certain claims which have a low dollar value or are of low complexity (see: Civil Resolution Tribunal). The basic idea behind the CRT is to improve access to justice and to reduce court involvement. Initially, the CRT's jurisdiction was limited to certain strata property and small claims matters. The provisions of the Civil Resolution Tribunal Amendment Act, 2018 which come into force today expand the CRT's responsibilities to traffic accident claims, cooperative association claims and - notably "society claims".
What are "Society Claims" and what kinds of claims are not included?
The CRT has jurisdiction over "society claims". These are disputes or claims involving:
- The interpretation or application of:
- The Societies Act or its regulations
- A society's constitution or bylaws
- Requests to inspect, or to receive a copy of, a society record (including financial statements)
- Actions or threatened actions by the society or its directors in relation to a member
- Decisions of the society or its directors in relation to a member
Importantly, a long list of claim categories is excluded from the CRT's jurisdiction. Most notably, key judicial remedies offered by the Societies Act, such as oppression claims, derivative actions, compliance or restraining orders remain within the exclusive jurisdiction of the Supreme Court of British Columbia. Other matters beyond the jurisdiction of the CRT include:
- The qualifications, liability and indemnification of directors and senior managers
- Member-funded societies and occupational title societies
- Termination of membership
- The liquidation, dissolution or restoration of societies
- Corporate reorganizations such amalgamations
- Matters involving a society's auditors or audited financial statements
Parties to a dispute can also opt out of the CRT process by agreeing to arbitration under the Arbitration Act (British Columbia).
One of the early challenges that may arise with respect to society claims will involve delineating what kinds of issues may be best addressed by the CRT or need to be referred to court. This will, in large part, depend on the issues involved or the remedies sought by a claimant. By way of example, while the CRT has jurisdiction over member discipline, it cannot decide matters involving the termination of membership. The CRT has already been confronted with this issue under its small claims jurisdiction (see Compton v. Nanaimo Yacht Club, 2019 BCCRT 450), where the tribunal held that it did not have the authority to grant remedies under the Societies Act, but could decide a debt claim against a society.
The CRT offers an online solution explorer for societies claims, which is available by following this link: Solution Explorer.
Who can apply to the CRT in a Society Claim?
The CRT dispute resolution procedures for most society claims are limited to societies and their members. The Societies Act states that a "society, or a member of a society may make a request...asking the civil resolutions tribunal to resolve a dispute concerning a society claim".
Others only have access to the CRT if they claim to be entitled to inspect or receive copies of society records (which are restricted to records required to be kept under section 20 of the Societies Act), including a society's financial statements. Generally, unless a society's bylaws say otherwise, access to society records is limited to members and directors. The financial statements of most societies (other than member-funded societies) are also accessible to the general public.
With respect to access to society records, the new CRT process likely offers a less expensive, simpler and faster alternative to applications to the Registrar of Companies for British Columbia and the Supreme Court of British Columbia, which nevertheless remain available.
Are the decisions of the CRT in Society Claims binding?
If the negotiation and facilitation steps built into the CRT dispute resolution process do not lead to a settlement, the CRT will hear and decide a claim. In deciding a societies claim, the CRT may make orders requiring a party to:
- Do something (such as the society to provide access to or copies of society records);
- Refrain from doing something; or
- Pay money.
The decision is final and binding on the parties, but may be subject to judicial review in the Supreme Court of British Columbia on narrow grounds. A order of the CRT giving effect to a final decision in society claims may be enforced by filing it in the Supreme Court. It then has the same force and effect as a judgment of that court.
What is next?
Prior to the changes described in this bulletin, the high costs of court proceedings involving societies may have forced members and societies to find practical solutions outside the formal court process or may have left issues unaddressed. The relatively low fees to commence a CRT proceeding in a society claim (see: CRT Fees) may mean, at least initially, that many issues will be quickly end up before the CRT, even if the tribunal does not have jurisdiction or might not be able to offer the most effective remedy. Societies will have to respond to these claims or face default orders. It remains to be seen whether the new CRT process will put a strain on the resources of societies and their boards or whether it may contribute, in the long run, to better governance of BC's more than 19,000 societies.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.