Alberta Soccer Association v. Charpentier, 2010 ABQB 715

Court of Queen ’ s Bench of Alberta Citation: Alberta Soccer Association v.

Charpentier, 2010 ABQB 715 Date: 20101210 Docket: 1003 11662, 1003 11792 Registry: Edmonton Between: Docket: 1003 11662 Alberta Soccer Association, Chris Billings, Shauna Aab, Danny Bowie, Les Hodges, and Mike Troke Plaintiffs (Respondents) - and - Mario Charpentier, Christine Chater, Jeff Du Berger, Robert Hayne, Colin Innes, Chris Jossy, and Fred Kern Defendants (Applicants) - and - Between: Docket: 1003 11792 Sunny South District Soccer Association, Edmonton District Soccer Association and Central Alberta Soccer Association Applicants - and - Alberta Soccer Association and Alberta Soccer Association as represented by the purported Board of Directors, Mario Charpentier, Jeff Du Berger, Fred Kern, Colin Innes, Robert Hayne, Christine Chater, and Chris Jossy ( “ Board No. 1 ” ) and Alberta Soccer Association as represented by the purported Board of Directors, Chris Billings, Danny Bowie, Mike Troke, Les Hodges and Shauna Aab ( “ Board No. 2 ” ) Respondents Corrected judgment: A corrigendum was issued on December 10, 2010; the corrections have been made to the text and the corrigendum is appended to this judgment.

_______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice W.A. Tilleman _______________________________________________________ [1] This case involves an unfortunate fracturing of a provincial sports society, resulting not only in the paralysis of the governingBoard but also the consequence of uncertainty in the games and activities of some 80,000 members who joined for the joy and happinessof participation in amateur sport.

For a variety of reasons, the leadership of the Alberta Soccer Association has been unable to get alongin 2010, grinding the Association and the happiness of the soccer players to a halt. [2] On August 25, 2010 I heard three applications arising out of the complex and contentious dispute among these parties, all insome way responsible for or associated with the organization of games and tournaments in the Province of Alberta. [3] One application was brought by the Plaintiffs in Action No. 1003 11662, the Alberta Soccer Association (“ASA”), ChrisBillings, Shauna Aab, Danny Bowie, Les Hodges and Mike Troke (“the Billings Board”).

The relief sought therein was for theappointment of interim caretakers to oversee the day to day operations of the ASA and for an Order directing a Court-supervised SpecialGeneral Meeting of the ASA for the purpose of electing a Board of Directors. [4] A second application was brought in Action No. 1003-11662 by Mario Charpentier, Christine Crater, Jeff Du Berger, RobertHayne, Colin Innes, Chris Jossy and Fred Kern (“the Charpentier Board”).

The relief sought therein was for an Order striking or in thealternative staying certain portions of the Statement of Claim in Action No. 1003 11662, and further for an Order declaring a SpecialGeneral Meeting allegedly convened by the ASA at 9 am on April 24, 2010 a nullity, thereby quashing all resolutions made. TheCharpentier Board further sought a declaration that the individuals comprising the Charpentier Board are the directors of the ASA andthat, since April 24, 2010, the individuals comprising the Billings Board are not. [5] The third application was brought in Action No. 1003 11792.

That application has been brought by the Plaintiffs, the SunnySouth District Soccer Association, the Edmonton District Soccer Association and the Central Alberta Soccer Association. The reliefsought therein is a declaration that the suspension of Chris Billings as President of the ASA by the Charpentier Board was improper andof no legal force and effect, a declaration that the Special General Meeting held at 9 a.m. on April 24, 2010 was validly called, therequirements of quorum met and the resolutions passed lawful and in effect.

In the alternative, the applicants sought an Order compellinga Special General Meeting, or in the further alternative, an Order that the ASA be wound up. [6] It is this last request for relief that caught my attention for a couple of reasons.

First, because that is the only mechanism forthis court to have jurisdiction over a society under the legislation applicable to both the Business Corporations and Society’s Act; andsecond, because the ASA was on a path of bickering and adversarial management such that their corporate implosion was imminent anda winding-up of the Board almost virtually assured. [7] In the interim period while my decision was under reserve, by Order of the Court, I continued the day-to-day management ofthe ASA under the hands of external managers.

With respect to that matter, this Court had inherent jurisdiction as it was interlocutoryrelief, and there was a total absence of any alternative remedy: see e.g. Brotherhood of Maintenance of Way Employees CanadianPacific System Federation v. Canadian Pacific Ltd., (SCC), [1996] 2 S.C.R. 495. Background

[ 8 ] The ASA held an Annual General Meeting in January 2010. Following that meeting, the duly elected directors of the ASA were Mario Charpentier, Christine Chater, Robert Hayne, Colin Innes, Chris Jossy, Bill Malone, Fred Kern, Kim Letkeman, Jeff DuBerger, Danny Bowie and Chris Billings. [ 9 ] On February 21, 2010, for reasons that are not relevant to these applications, the individual members of the Charpentier Board (essentially all of the directors of the ASA at that time, minus Mr. Bowie and Mr. Billings) purported to suspend Mr. Billings for misconduct. A resolution purporting to suspend Mr.

Billings was presented and ratified by the Board of the ASA on March 6, 2010. Mr. Billings took the position that his suspension by the Board was invalid because of the failure by the Board to follow procedures set out in ASA Bylaws. Specifically,

Article 31(

g) of the Bylaws provides: 31(

g) Any Director who, by personal or business conduct violates any part of

Article 31 may be suspended from the Board of Directors by a two-third majority vote of the entire Board of the Association concerned after an investigation has been made at which the director concerned has been given a proper hearing with a full opportunity to explain his/her action. When such a hearing is being initiated, notice of such hearing shall be given to all concerned in writing, not less than 7 days before such hearing. Such suspension will remain in effect until ratified by the membership of the Association concerned at its next general meeting. [ 10 ]

Article 18 of the Bylaws sets out the duties of the Board of Directors. Article 18(3) provides: 18(3) The Board shall have power to make rules, regulations and arrangements as to all matters of business, duties, management, regulation or otherwise, so far as it is not already herein expressly provided for.

In keeping with their duty to enforce all the laws all the time, and without waiting for an official protest, or appeal, the Board shall immediately inquire into the circumstances of any alleged irregularity which may be brought to their attention by a duly responsible officer of any Member and take appropriate action without delay. This in no way shall enable to complainant to gain anything personally therefrom. [ 11 ] It is the position of the Charpentier Board that Article 18(3) provides all the authority it required for the interim suspension of Mr. Billings, while Mr.

Billings contends that, as a Director, he could only be suspended by the Board in accordance with the provisions of

Article 31(g). [ 12 ] The ASA is affiliated with and subject to the rules and regulations of the Canadian Soccer Association (CSA). The CSA Memorandum of Association provides:

(8) To provide by rules, regulations or otherwise, for deciding and settling all differences that may arise between soccer Associations, clubs or players, or any persons, who are members of or alleged to be members of, or are employed or engaged by, any such Associations, or clubs, or any other persons in reference to due compliance with the laws of the game, or the rules and regulations of the Association, or to contracts or to any other matter of dispute or difference arising between such Associations, clubs or persons, or any of them, and whether this Association is concerned in such dispute or difference or not, and to make such provisions for enforcing any award or decision as may seem fit. “Member” is defined, for the purpose of the CSA Memorandum of Association, as including any individual, team, group or association involved in or representing the sport of soccer at any level or in any capacity. [ 13 ] The CSA Bylaws provide, inter alia : 6.3 The CSA shall provide the necessary institutional means to resolve any internal dispute that may arise between Members, clubs, officials and players of the CSA. 53.1 The CSA, its members, players, officials and match and player’s agents will not take any dispute to the Ordinary Courts unless specifically provided for in these By-laws and FIFA regulations...

53.2 The CSA shall have jurisdiction on internal national disputes, i.e. disputes between parties belonging to the CSA... [ 14 ] On March 31, 2010, a Petition was submitted to the ASA by the Edmonton District Soccer Association (“EDSA”). The EDSA Petition was signed by twelve active member organizations of the ASA and requested a Special General Meeting to consider resolutions to remove the members of the Charpentier Board from the ASA Board of Directors and to call for new nominees and a vote to elect new Directors. In response to the EDSA Petition, Mr.

Billings, purporting to act in the capacity of President of the ASA, circulated a Notice of a Special General Meeting for 9:00 a.m. on April 24 (“the 9 a.m. meeting”), at the Capri Hotel in Red Deer, Alberta, by email to persons representing the Active and Associate Members of the ASA, and by registered mail to two Life Members of the ASA. [ 15 ] On April 1, 2010, Mr.

Charpentier, in his capacity as First Vice-President of the ASA, circulated a different Notice of a Special General Meeting, scheduled for 1:00 p.m. on April 24, 2010 (“the 1 p.m. meeting”). [ 16 ] Rule 9 of the ASA Rules and Regulations sets out the jurisdiction of the ASA with respect to matters of discipline. At Rule 9(b)(f), the ASA purports to exercise jurisdiction over “any other matter directly related to the Association, by which the Association, in its sole discretion, deems should be dealt with by it”. On April 8, 2010, Mr.

Billings was provided notice that a discipline hearing would be convened on April 23, 2010, under Rule 9(

d) of the ASA Rules and Regulations. Under Rule 9(d), inter alia , a discipline hearing committee is to be made up of three members, the accused may be accompanied by legal counsel only with the permission of the ASA, and failure to appear at a discipline hearing will result in final suspension of the accused, until the accused requests and attends another hearing. The discipline committee was made up of Jim Leighton, Gary Duncan and Dean McLean. [ 17 ] Rule 11 provides for appeals: 11

E) Any member or person aggrieved by a decision of this Association may, with the leave of the Canadian Soccer Association’s National Executive Board, appeal from said decision provided that:

i) the said Appeal involved only an

interpretation of this Association’s Constitution; ii) all appeals to the CSA shall be in accordance with the current CSA Constitution, the appropriate information from which can be obtained from the CSA and ASA office; iii) the CSA will not accept appeals on an ASA decision unless the ASA is in deviation of the ASA or CSA Constitutions; [ 18 ] Mr. Billings declined to attend the hearing scheduled for April 23, 2010. His suspension was therefore continued pursuant to Rule 9(d). [ 19 ] The 9 a.m. meeting proceeded as scheduled on April 24, 2010.

The meeting was chaired by Alan Beattie, Q.C., a prominent counsel in Alberta. A sign in sheet for the meeting indicates that at least thirteen Active Members of the ASA were in attendance, plus two of the Edmonton constituent associations (the EDSA and EIYA) and one of the Calgary constituent associations (CWSA). Mr. Beattie determined that quorum was achieved and a resolution was approved (with one abstention), removing the members of the Charpentier Board from the Board of the ASA and (unanimously) calling for nominees to replace the Charpentier Board.

A letter on ASA letterhead, dated April 24, 2010, and signed by representatives of all of the Active Members of the ASA at the 9 a.m. meeting indicates that Les Hodges, Shauna Aab and Mike Troke had been appointed First Vice President, Second Vice President and Director of Finance, respectively. [ 20 ] Prior to the 1 p.m. meeting, Mr. Beattie informed Mr. Charpentier of the outcome of the 9 a.m. meeting. The 1 p.m. meeting was attended by only three Active Members, plus the Calgary Soccer Federation and its three constituent leagues (the CMSA, CUSA and CWSA) and the EMSA.

Quorum was not achieved and no resolutions were passed.

[ 21 ] In early May, 2010, the Charpentier Board brought an action in this Court seeking a declaration regarding the validity of the 9 a.m. meeting. On May 4, 2010, the Charpentier Board received a letter from the CSA stating that the CSA recognized Mr. Billings’ suspension and further recognized that the duly elected and confirmed Board of the ASA continued to be the one elected in January, 2010. The CSA further advised that all litigation is contrary to CSA bylaws. As a result, the Charpentier Board elected not to proceed with its application. On June 3, 2010, Dr.

Dominique Maestracci, the President of the CSA, again wrote to the Charpentier Board and to Mr. Billings, demanding that Mr. Billings recognize the legitimacy of the CSA and calling for “a hearing of Mr. Billings at the provincial level under the ASA Board recognized by the CSA...”. A second ASA hearing was held on June 19, 2010, which Mr. Billings again declined to attend. Consequently, on July 5, 2010, Dr. Mastraecci again wrote to the Charpentier Board and to Mr. Billings to advise that Mr.

Billings was suspended from all soccer activity in Canada until he attended an ASA hearing and that the CSA would commence independent proceedings against Mr. Billings. [ 22 ] The Charpentier Board contends that the 9 a.m. meeting is a nullity for failure to give proper notice, failure to properly call the meeting, failure to properly handle delegate accreditation and failure to achieve quorum, all in accordance with ASA Registered By- Laws.

The Edmonton Minor Soccer Association (“EMSA”) and the Calgary Minor Soccer Association (“CMSA”), having been granted intervener status in Action No. 1003 11662, similarly take the position that the 9 a.m. meeting was not properly called, proper notice was not given, and quorum was not achieved. Analysis [ 23 ] At the Queen’s Bench hearing in Edmonton, there was some debate as to whether it would be appropriate to dispose first of the motion to strike the Statement of Claim, or the various applications to determine the validity of the 9 a.m. meeting.

In my view the event precipitating the confusion and ensuing crisis in leadership at the ASA was the disciplinary action commenced against Mr. Billings in February, 2010. It is Mr. Billings’ claim in respect of his suspension that the Charpentier Board seeks to strike. Accordingly, I will address this matter, along with jurisdiction, first. The Motion to Strike or Stay the Statement of Claim [ 24 ] Rule 129(1) of the Alberta Rules of Court provides: 129(1) The court may at any stage of the proceedings order to be struck out or amended any pleading in the action, on the ground that (

a) it discloses no cause of action or defence, as the case may be, or (

b) it is scandalous, frivolous or vexatious, or (

c) it may prejudice, embarrass or delay the fair trial of the action, or (

d) it is otherwise an abuse of the process of the court, and may order the action to be stayed or dismissed or judgment to be entered accordingly.

(2) No evidence shall be admissible on an application under clause (

a) of subrule (1).

(3) This Rule, so far as applicable, applies to an originating notice and a petition. [ 25 ] The Statement of Claim in Action No.1003-11662 alleges that the suspension of Mr. Billings was of no force and effect by reason of non-compliance with the bylaws, and that the 9 a.m. meeting was duly convened and effectively removed the members of the Charpentier group from the Board of the ASA. It seeks declarative relief to this effect. [ 26 ] The ASA is incorporated pursuant to the Societies Act , R.S.A. 2000, c. S-14.

The Societies Act provides, at s.22 : 22(1) The bylaws of a society may provide that a dispute arising out of the affairs of the society and between any members of the society or between

(

a) a member or a person who is aggrieved and who has for not more than 6 months ceased to be a member, or (

b) a person claiming through the member or aggrieved person or claiming under the bylaws of the society, and the society or a director or officer of the society, shall be decided by arbitration, which shall be under the Arbitration Act unless thebylaws prescribe some other method. [27] The Billings Plaintiffs contend that s.22 of the Societies Act is irrelevant, because there is no reference in the ASA bylaws toarbitration or the Arbitration Act.

With respect, s.22 provides for statutory arbitration in the event that there is no internal mechanism forsettling disputes in a society’s bylaws and the bylaws of the society provide instead for arbitration. A mechanism for resolving disputesis provided for in the ASA bylaws and Rules.

The effect of s.22, in the case at bar, is that a dispute arising out of the affairs of the ASAis to be decided by the method set out in the ASA bylaws. [28] The Billings Plaintiffs further contend that the matter at issue is not the merits of a decision made by the ASA, but theauthority to make a decision and the process by which the decision was made. Specifically, they contend that: (

a) the only means bywhich a director may be suspended are those set out at

Article 31(g); (

b) the March 10, 2010 meeting wherein Mr. Billings wassuspended was not properly conducted; and (

c) the suspension by the Board and the subsequent suspensions imposed after Mr. Billingsfailed to attend the disciplinary hearings are in violation of the principles of natural justice. They point to the decision of the SupremeCourt of Canada in Lakeside Colony of Hutterian Brethren v. Hofer, (SCC), [1992] 3 S.C.R. 165, wherein Gonthier J.held for the majority, at para.10: It is not incumbent on the court to review the merits of a decision to expel.

It is, however, called upon to determine whether thepurported expulsion was carried out according to the applicable rules, with regard to the principles of natural justice, and without malafides. [29] In Knox v. Conservative Party of Canada, 2007 ABCA 295 , [2007] ABCA 295, [2007] A.J. No. 1046, leave toappeal refused: [2007] S.C.C.A. No. 567, the Alberta Court of Appeal considered whether the decisions of private bodies are subject tothe public law remedy of judicial review.

The matter arose as a result of a dispute between the Conservative Party of Canada and theCalgary West Conservative Association about the nomination process in the riding of Calgary West. At para.20, the Court held: ...if a tribunal is exercising powers that do not accrue to private organizations, and that are vested only in the tribunal by statute for thebenefit of the public, then it is subject to judicial review. Otherwise it is a private consensual tribunal and prima facie subject only toprivate law remedies.

And, at para.27: When arranging for the nomination of their candidate in Calgary West, the Party and the Association were essentially engaged in privateactivities, and their actions, in this case, are not subject to judicial review. They are, however, subject to private law remedies that may beengaged. Like many private organizations, the Appellants in this case have constitutions, bylaws and rules. Members are entitled to havethose documents enforced in accordance with their terms and the proper

interpretation of those terms. The remedies available are,however, private law remedies… [30] Further, in St-Coeur v. Conseil Récréatif de Bois Blanc Inc., 2010 NBCA 61 , [2010] N.B.J. No. 272 (NBCA) theNew Brunswick Court of Appeal pointed out, as did our Court of Appeal in Knox, that judicial review is rarely an appropriate remedy forredress of a non-profit corporation’s problems. In St-Coeur the New Brunswick Court of Appeal said, at para. 6: 6 In the present case, we are not satisfied that the judge committed this type of error in his decision to dismiss the application. In our

view, he correctly relied on Warren and McMenamon to find that judicial review was not available to the applicants in the circumstancesof this case. According to those decisions, the court must not interfere with the internal functioning of organizations such as therespondent except in the rarest of circumstances. This was not a case where an applicant's property or civil rights turned on a question ofmembership in an organization, as was the case in Lakeside Colony Hutterian Brethren v. Hofer, (SCC), [1992] 3S.C.R. 165, [1992] S.C.J.

No. 87 (QL). [31] It follows from Knox that, to the extent that the Billings Plaintiffs challenge whether the suspension of Mr. Billings wascarried out in accordance with the bylaws, with regard to the principles of natural justice and without mala fides, any remedy is to beachieved by way of private law, not by way of judicial review. Even in respect of those matters, this is a private dispute arising out of theactivities of the ASA and consequently one that must be resolved in accordance with the internal dispute resolution processes mandatedby the bylaws of the ASA and CSA.

This is not to say that the Court is entirely powerless to intervene, but in my view it may only do soafter all internal processes have been exhausted, and its jurisdiction is limited to private law remedies, not to prerogative relief. Ofcourse, the exhaustion of internal remedies is not necessary where it would be ineffective or impractical, but neither of these tworoadblocks exist here. [32] As a matter of public policy, the exhaustion of internal remedies[1] is first needed before the parties bring their disputes tocourt.

There are several reasons why this is the case: 1) First, the board (or society) can finish its process, enabling a comprehensive and full record to be placed before a reviewing court; 2) it is more efficient as it does not interrupt the board’s internal process; 3) if a mistake is made along the way, the board can self-correct after input from others; 4) the interests of the entire constituency (in this place 80,000 soccer players) need not be discomposed by a myriad of courtmotions or lawsuit and judicial reviews - all because of an individual’s particular dispute; and 5) it is a misapplication of scarce judicial resources, particularly, to have a private board or society bring its internal problems tocourt. [33] It was open to Mr.

Billings to internally challenge the interim suspension - on jurisdictional grounds or on the merits - at theApril 23 and June 19, 2010 hearings, but he declined to appear, thereby providing argument for suspension under Rule 9(d). It was alsoopen to Mr. Billings to challenge the membership of the discipline committee, or to raise the complaints he has made before me inrespect of the disclosure of information, before that committee. Had the committee decided against Mr. Billings on the merits or on theprocedural grounds he has raised, an appeal mechanism existed.

As I said above, this Court will entertain a private remedy only if allinternal dispute mechanisms have been exhausted, and then only if one of the three factors in Hofer has been convincingly established orthe tests set out in paras. 41 and 43 infra are met. [34] To put the matter shortly, this Court will not interfere in the internal dispute resolution processes of the ASA unless it can beestablished, once all internal appeal mechanisms have been exhausted, that the process was not carried out according to the applicablerules, that the process disregarded the principles of natural justice or that it was otherwise not bona fide.

Because Mr. Billings has to dateelected to not appear before or make representations to the Independent Review Committee appointed to investigate the complaintsagainst him, the internal procedures of the ASA have not been exhausted. [35] For these reasons, I will stay those portions of the Statement of Claim in Action No. 1003-11662 in regard to the suspensionof Mr. Billings. But I also wish to repeat for the benefit of the discussion that follows: this Court has no interest in the merits of hisdisciplinary hearing(

s) nor has it found on the same. That is an internal matter. The Validity of the 9 a.m. Meeting

[36] In addition to the application by the Charpentier Board to strike the Statement of Claim in Action No. 1003-11662, the partieshave sought orders variously declaring the 9 a.m. meeting valid, thereby upholding the removal of the members of the CharpentierBoard, or declaring the 9 a.m. meeting invalid, thereby confirming that the members of the Charpentier Board are the proper Directors ofthe ASA. [37] In its communications with the parties, the CSA has taken the position that: (

a) it recognizes the Charpentier Board as the dulyelected Board of the ASA, and (

b) the Court does not have jurisdiction to hear any application regarding the 9 a.m. meeting and theproper constitution of the ASA Board because all litigation is contrary to CSA Bylaws. At the hearing of this matter, I expressedmisgivings regarding this Court’s jurisdiction to interfere in the internal matters of the ASA. Counsel quickly directed me to s.35(1) ofthe Societies Act, which provides: Winding up 35(1)

Part 17 of the Business Corporations Act applies to a society under this Act as if it were a corporation. [38]

Part 17 of the Business Corporations Act, R.S.A. 2000, c.B-9 sets out the grounds upon which the Court may order acorporation liquidated or dissolved, and the Court’s powers in this regard. The first two applications did not seek the immediateliquidation or dissolution of the ASA - at least not de jure, but de facto given the fractured Board, this is the effect of what all sides seekor at least where all sides are heading, and that is clearly what gives this court jurisdiction. [39] Because of the Court of Appeal ruling in Knox v.

Conservative Party of Canada, I repeat the difficulty for judicial review tolie in the disputes of a private organization like the ASA. Conversely, I find it equally difficult to believe an organization like the CSA,or by extension, the FIFA, is the sole adjudicator (due to its exclusionary clause) not merely of an internal disciplinary matter, but thestability and continuance of a statutory body itself created under Alberta’s corporate laws.

Where the latter fact situation arises, i.e. areview of the very existence of a society - as it does here, it is contrary to public policy to have the CSA, or any other body withoutlegislative powers, to entirely oust the jurisdiction of the Superior Courts. [40] I note our Queen’s Bench has previously entertained judicial reviews of a society.[2] I also note Superior Courts of otherjurisdictions have proceeded by way of a limited, cautious, review of the decision of an unincorporated association. In the case of Vancouver Hockey Club Ltd. v. 8 Hockey Ventures, Inc., (BC SC), 47 D.L.R. (4th) 51, the B.C.

Supreme Court dealtwith the decision of the National Hockey League as it related to coach Patrick Quinn. As it related to that Superior Court’s jurisdiction,the Court said this at para. 13: [13] The review by the court of orders made by an unincorporated association such as the N.H.L. through its president and chiefexecutive officer (a domestic tribunal as it were) is limited. The power in no way includes the right in the court to substitute its decisionfor that of the domestic tribunal. The court is not a court of appeal.

Rather, its power is narrow and it may only interfere If the order wasmade without jurisdiction (or against the rules) or if it was made in bad faith or contrary to the rules of natural justice. In addition, thecourts will be reluctant to interfere with the decisions of a domestic tribunal where it is shown that internal remedies have not beenexhausted. And there is even greater reluctance to interfere if the decision .is based upon opinion regarding the standards of propriety andconduct appropriate for members of a particular association. Dawkins v. Antrobus (1881), 17 Ch. D. 615 (CA); Lee v.

Showmen's Guildof Great Britain, [1952] 2 Q.B. 329, [1952] 1 All E.R. 1175 (CA); Harelkin v. Univ. of Regina, (SCC),(S.C.C.), [1979] 2 S.C.R. 561, [1979] 3 W.W.R. 676, 96 D.L.R. (3d) 14, 26 N.R. 364 [Sask.]. These well-known principles provide thefoundation for the court's review. [41] I have pointed out judicial review of a private body is very difficult to initiate, and even more limited once it begins. However,the following tests, if both are met properly, lead to judicial review at least of a society incorporated in Alberta.

You will see that firsttest is premised on Hofer: First Test: 1) Did the society violate one of its own rules or by-laws? 2) Did the society’s rules (as applied) violate a law?

3) Are the society’s rules (as applied to individuals) unreasonable, arbitrary or capricious? or 4) Do the society’s rules jeopardize a matter of public policy so significant it has province-wide or national effect? [ 42 ] I will not decide the fourth part of the first test, except to say this: while the ASA has no stand-alone “public” statutory power, the ASA’s power nonetheless stands alone as a monopoly in that every amateur soccer player in Alberta either accepts the ASA’s control or they are excluded from participation. [ 43 ] Alternative to both tests, (and while this next point does not apply in our case) does the society’s breach under the second part of the First test violate a fundamental right under the Constitution of Canada (e.g. s.15 of the Canadian Charter of Rights and Freedoms )?

If so, the Superior Court has jurisdiction, period. Second Test: Is the breach of the rule or law or the consequence of the same, so serious that the society is no longer able to function, meaning its status should be examined through Alberta’s Society’s Act winding-up provisions? [ 44 ] Little time need be spent analysing the second test. It is evident to even a dispassionate observer that the ASA is in a state of administrative collapse. The ASA could not function without the help of external managers and that is why I confirmed that appointment in September.

In my view, this collapse of the ASA warrants judicial intervention under the combined auspices of the Societies Act and the Business Corporations Act . The second test has been met. [ 45 ] Anticipating that counsel may press me on the winding-up motion and whether it is necessary, I will spend more time examining the first part of the First Test - did the ASA violate its own rules or by-laws.

As I examine this matter, I point out at issue is not the fairness or merits of decisions made by the ASA vis a vis a member, it is the potential violation of a rule that I am concerned with, breaking down the governing structure for the ASA itself. [ 46 ] It is, therefore, with the above tests in mind that this Court assesses the validity of the 9 a.m. meeting as it, and the 1 p.m. meeting, dealt with the very existence of the Board of the ASA.

The 9 a.m. meeting is challenged on the basis that it was not properly called, that proper notice was not given, that delegates were not properly accredited, and that quorum was not achieved. [ 47 ]

Article 8 of the ASA Bylaws provides: 1. A Special General Meeting may be called by the Board of Directors by its own motion. 2. A Special General Meeting shall be called within thirty (30) days following the receipt of a written request signed by not less than one- third (1/3) of the Active and Associate members. 3. All members shall receive at least three weeks written notice of the date, time and location of any Special General Meeting. 4. Only the business for which a Special General Meeting has been called will be dealt with, except with the unanimous consent of those present. Authority to Call a Meeting [ 48 ] There are two ways, set out in

Article 8 of the ASA Bylaws, that a Special General Meeting may be called: by the Board on its own motion, or within 30 days following the receipt of a written request signed by not less than 1/3 of the Active and Associate

Members of the ASA. The Charpentier Board and the EMSA and CMSA contend that the proper

interpretation of

Article 8 of the Bylaws is that the Board of Directors may call a Special General Meeting at any time, and must do so in response to a valid petition of the members, but in any event there is no authority for the members themselves, or the President of the ASA, to call a Special General Meeting. [ 49 ] The powers of the President of the ASA are set out in various Articles contained within the ASA Bylaws. They include the right to preside at all general meetings, to cast a deciding vote in the event of a tie, to be an ex officio member of all committees and to co-chair the Standing Committee on Finance.

Article 15 provides that the business of the ASA shall be conducted by the Board of Directors. I agree with the submission of the EMSA and CMSA that, even if Mr. Billings’ status as President of the ASA had not been in question at the time of the 9 a.m. meeting (an issue this Court will not resolve), Mr. Billings’ authority did not extend to calling the 9 a.m. meeting in response to the petition. The calling of Special General Meeting is “business of the ASA”, to be conducted by the Board of Directors. For this reason, the proper

interpretation of

Article 8.2 is that it is the Board that must call a Special General Meeting in response to a petition, not the President. It follows, for this reason alone, that the 9 a.m. meeting was a nullity. I will, however, consider the other grounds raised. Accreditation [ 50 ] A similar issue arises with respect to the accreditation of delegates to the 9 a.m. meeting.

Article 13(3) provides: The names of accredited delegates and alternates must be filed with the Association not later than seven (7) days prior to the general meeting. [ 51 ] The Notice circulated for the 9 a.m. meeting directed that delegate forms be returned to Mr. Billings. These delegate forms were not circulated to or filed with the ASA itself. I appreciate that Mr.

Billings’ rationale was that, under the circumstances, he did not trust the existing Board to deal appropriately with the delegate forms, but it is worth noting that, prior to the 9 a.m. meeting, there was no issue with regard to the membership of the Board, and had the Board declined to proceed in accordance with the Bylaws, remedies were available. Notice [ 52 ] Article 8(3) mandates that all members of the ASA shall receive three weeks written notice of the date, time and location of any Special General Meeting.

Angus Smith, president of the Calgary Soccer Federation ("CSF") has sworn that he did not receive notice of the Billings Board meeting, and as a result the CSF did not send a delegate to the meeting. Mr. Smith swears that ASA practice was to provide notice of meetings to the Presidents of the District Associations. [ 53 ] Notice of the 9 a.m. meeting was provided to three directors of the CSF as well as its treasurer. Under the circumstances, I would conclude that adequate notice was provided to CSF.

Quorum [ 54 ] The parties have put forward a number of different means by which quorum should properly be calculated.

Article 12 of the Bylaws provides: A two-third majority of Active and Associate members in good standing shall form a quorum at all general meetings. [ 55 ] The ASA has prepared a more recent version of its Bylaws, by which quorum would be achieved by a two-thirds majority of Active Members in good standing only, but these amended bylaws have never been registered and, as a result, have no effect: Societies

Act , s.15(2). [ 56 ] Pursuant to

Article 6(b)(

i) of the bylaws, Associate Members wishing to renew their status are required to pay membership fees prior to the Annual General Meeting.

Article 27 provides: 27 (

a) All monies owing to the Association shall be due and payable within thirty (30) days of invoicing unless otherwise stipulated. (

b) Penalties for late payments or non-payment or monies due shall be established by the Board. [ 57 ] The position of the Billings Plaintiffs, which is consistent with Mr. Beattie's conclusion at the meeting, is that there are 18 Active Members of the ASA, and that the three Associate Members, who did not attend, were not in good standing as a result of the non-payment of fees. [ 58 ] The position of the Charpentier Board is that the non-payment of fees, without more, does not automatically remove the Associate Members from good standing.

They point to the past practice of the ASA, specifically the fact that none of the Associate Members were held to be in bad standing in the 2009 and 2010 January annual meetings despite the status of their fees, which were not paid until the following March or August; to the fact that nothing in the bylaws results in an automatic loss of standing; and to Dale v. Weston Lodge , [1897] O.J.

No. 40 (C.A.) wherein the Ontario Court of Appeal concluded that the non-payment of fees was insufficient to automatically revoke membership in a voluntary association. [ 59 ] The EMSA and CMSA contend that there are 24 Active Members and 3 Associate Members of the ASA for the purpose of calculating quorum. They point out that, while the ASA is divided into 18 Districts,

Article 4(

a) of the Bylaws provides that District Associations and Provincial Leagues (not Districts), are Active Members of the ASA. The EMSA and CMSA contend that the Districts of Calgary and Edmonton are in fact represented by 7 local associations, which are Provincial Leagues and therefore Active Members of the ASA.

They point to a consent arbitration award made in July 2006, between the EMSA, ASA, CSA and CMSA, wherein it was determined that the local associations within the Calgary and Edmonton districts are entitled to vote independently at general meetings of the ASA. [ 60 ] With respect to the arguments of the EMSA and CMSA, while the consent arbitration award is binding upon the ASA and would certainly have implications for voting, there is nothing in that award that speaks to the issue of quorum.

I do not think that the consent arbitration award can, by implication, create “provincial leagues” out of the constituent members of the Alberta and Edmonton districts without clearly providing so. [ 61 ] The Charpentier Board, has the better argument, that for the purpose of calculating quorum at the 9 a.m. meeting, the Associate Members should have been included. Mr.

Billings describes an occurrence at the January 17, 2009 Annual General Meeting wherein Colin Innes, now a member of the Charpentier Board, took the position that an Associate Member was not in good standing as a result of the non-payment of fees, but the issue does not appear to have been resolved at that meeting and in any event, a review of the relevant Bylaws indicates that, while the non-payment of fees will affect the right to vote under Article 5(3), there is no similar provision that would result in the determination that the member was in bad standing.

It seems clear that the penalty under these circumstances is not the automatic revocation of good standing, but is at the determination of the Board pursuant to

Article 27(b). Conclusion [ 62 ] Those portions of the Statement of Claim in Action No. 1003-11662 concerning the internal disciplinary proceedings against and suspension of Mr. Billings are hereby stayed, pending the exhaustion of internal remedies, including appeals. [ 63 ] I must now deal with the Board and the continuation of the two external managers. For, the latter, they are discharged effective today. Regarding the “Board,” the 9 a.m. meeting was a nullity because it was not called by the Board of the ASA and because accreditation and quorum requirements were not met.

Additionally, the 1:00 meeting lacked quorum, meaning, those resulting decisions or actions taken or purported to be taken are also a nullity.

[ 64 ] In result, with the 9:00 a.m. (Billings) and 1:00 p.m. (Charpentier) meetings both being a nullity, I am vacating the actions or decisions of either “Board” and issuing a declaration that the only Board of the ASA in effect, today, is the ASA Board constituted back on January 10, 2010 Annual General Meeting . What that means is, with the exception of the external managers’ assistance, the ASA Board from the date of April 24, 2010 to today’s date, was not legally capable of accomplishing anything.

Going Forward [ 65 ] Under the ASA bylaws, an Annual General Meeting must be convened before the end of January, 2011. At that time, the membership of the ASA will have an opportunity to elect a Board and put this unfortunate period of uncertainty behind them. In view of the brief period of time between the date of this judgment and the next Annual General Meeting, I would hope and indeed expect that the Board will conduct itself judiciously, mindful of the fractured state of the Association and sensitive to the antipathies that these proceedings have provoked amongst its 80,000 members that deserve better.

In the event that difficulties arise out of the calling of the next Annual General Meeting, or the conduct of the ASA in this interim period, or should the January 10, 2010 Board wish me to rule on the ASA being wound-up immediately, the parties are directed to bring the matter back to me. [ 66 ] I also direct that these last two paragraphs be posted on the ASA website, thereby ensuring early and complete notice to all members of the ASA’s status and of the January 2011 Annual General Meeting. Heard on the 25 th day of August, 2010. Dated at Calgary, Alberta this 17 th day of November, 2010. W. A.

Tilleman J.C.Q.B.A. Appearances: Donald R. Cranston, Q.C. and Nigel J. Forster of Bennett Jones LLP for the Plaintiffs in 1003 11662 and “Board No. 2” Respondents in 1003 11792 J. Barrie Marshall, Q.C., James T. Ryan and Taryn C. Burnett of Gowling Lafleur Henderson LLP for the Defendants in 1003 11662 and “Board No. 1” Respondents in 1003 11792 Kim Wakefield, Q.C. and Hendrik Kruger of Fraser Milner Casgrain LLP for the Applicants in 1003 11792 Karen A. Smith of Parlee McLaws LLP for the Interim Caretakers Kate L. Hurlburt and Jonathon L. Westcott of Emery Jamieson LLP

for the Interested Parties, Calgary Minor Soccer Association and Edmonton Minor Soccer Association _______________________________________________________ Corrigendum of the Reasons for Judgment of The Honourable Mr. Justice W.A. Tilleman _______________________________________________________ In para. 33, line 9 should read paras. 41 and 43, not para. 39. [1] To be sure, the doctrine of exhaustion of remedies is used here by way of analogy.

Best applied, the exhaustion principle engages where a “public” body has been delegated statutory responsibilities. (Exhaustion does not apply where the courts were never supposed to intervene in the first place.) [2] In this regard, I note that the disputed election of directors of a society fell within this Court’s jurisdiction in Kim v. Kim , 2009 ABQB 608 , [2009] A.J. No. 1185, in Orr v. Alook , 2000 ABQB 477 , [2000] A.J. No. 828 and in Saggu v. Ramgarhia Gursikh Society of Edmonton , 2006 ABQB 642 , [2006] A.J. No. 1101.