PG Farmers Market v. Stojkovic Date:, 2015 BCPC 389

Citation: PG Farmers Market v. Stojkovic Date: 20151214 2015 BCPC 0389 File No: 1445911 Registry: Prince George IN THE PROVINCIAL COURT OF BRITISH COLUMBIA (SMALL CLAIMS) BETWEEN: PRINCE GEORGE FARMERS MARKET ASSOCIATION CLAIMANT AND: LEAH STOJKOVIC DEFENDANT REASONS FOR JUDGMENT RE: APPLICATION TO DISMISS COUNTERCLAIM OF THE HONOURABLE JUDGE S. K. KEYES Counsel for the Claimant: K. Pavao Counsel for the Defendant: No one appearing Place of Hearing: Prince George , B.C. Date of Hearing: August 21 2015 Date of Judgment: December 14, 2015

[1] Prince George Farmers Market Association (“PGFMA”) is a society incorporated under the Societies Act of British Columbia. On October 20, 2014, PGFMA filed a Notice of Claim against Leah Stojkovic, formerly a member of PGFMA, claiming that Ms.Stojkovic had wrongfully retained property belonging to PGFMA after she was not re-elected to her position as Secretary on March 14,2014. Ms. Stojkovic filed a Reply on November 4, 2014 denying the Claim and filed a Counterclaim alleging that PGFMA had removedher right to vend without a hearing or due process.

On November 19, 2014 PGFMA filed a Reply to the Counterclaim denying Ms.Stojkovic had suffered any losses or damage, but also alleging in paragraph 10 that the PGFMA had suspended Ms. Stojkovic’s vendingrights without a hearing in accordance with PGFMA rules. On July 30, 2015 PGFMA filed an Application to a Judge seeking to have theCounterclaim dismissed for failure to state a reasonable cause of action or on account of the Provincial Court lacking jurisdiction to hearMs. Stojkovic’s Counterclaim. On August 5, 2015 Ms.

Stojkovic was served with the Application and Affidavit in support but did notappear at the hearing on August 21, 2015. At the hearing, the Application was argued solely on the basis that the Provincial Court lacksjurisdiction to hear the Counterclaim. This is my decision. [2] Ms. Stojkovic’s Counterclaim alleged simply “removed my right to vend without a hearing or due process” and sought a varietyof damages. Ms. Pavao, appearing on behalf of PGFMA, argued that the Counterclaim triggers the application of s. 85 of the SocietiesAct, which states: Court may remedy irregularities 85

(1) Despite anything in this Act, if an omission, defect, error or irregularity occurs in the conduct of the affairs of a society by which (

a) a breach of this Act occurs, (

b) there is default in compliance with the constitution or bylaws of the society, or (

c) proceedings at, or in connection with, a general meeting, a meeting of the directors of the society or an assembly purporting to besuch a meeting are rendered ineffective, the court may (

d) either of its own motion or on the application of an interested person, make an order (

i) to rectify or cause to be rectified or to negate or modify or cause to be modified the consequences in law of the omission, defect,error or irregularity, or (ii) to validate

an act, matter or thing rendered or alleged to have been rendered invalid by or as a result of the omission, defect, erroror irregularity, and (

e) give the ancillary or consequential directions it considers necessary.

(2) The court must, before making an order, consider the effect of it on the society and its directors, officers, members and creditors.

(3) An order made under subsection (1) does not prejudice the rights of a third party who has acquired those rights for valuableconsideration without notice of the omission, defect, error or irregularity cured by the order. [3] The argument by PGFMA is that because Ms. Stojkovic’s Counterclaim alleges that her right to vend was removed “without ahearing or due process” that her Counterclaim should be construed as an allegation that there has been “a default in compliance with theconstitution or bylaws of the society” under s.85(1)(b).

The only court which has jurisdiction under the Society Act, s.1, is the SupremeCourt of British Columbia. [4] Ms. Pavao drew my attention to Fink v. Shalom Branch #178 Building Society 2011 BCSC 1120 (“Fink”) which states, atparagraph 60, that s. 85 of the Society Act gives jurisdiction to the Court (the Supreme Court that is) to with deal complaints arising fromthe expulsion of members from a society because it gives the court the power to rectify an irregularity or defect in compliance with theBylaws.

The Court in Fink also noted: [61] Cases involving expulsion from non-profit societies, clubs and charitable organizations rarely come before the courts. Therehave been some, including Struchen v. Burrard Yacht Club, [2008] B.C.J. No. 1178, 2008 BCCA 271 , cited by the Petitioner. Accordingly, the principles of natural justice to be applied are most often derived from cases involving professional governing bodies,labour unions, and housing cooperatives.

The three fundamental principles engaged in all of these situations are the same - therequirement for adequate notice to the person affected of the “charges” he or she is facing; the opportunity to make representations; andan unbiased tribunal or decision-maker. [5] It seems to me that these remarks appear to apply to the claim by Ms. Stojkovic that her right to vend was removed “withoutdue process.” If she were seeking reinstatement, it seems to me that the court’s power to rectify errors and modify the consequences ofthe error under s.85 would clearly be triggered. [6] However, Ms.

Stojkovic is seeking damages, not reinstatement or correction of the irregularity. Does s.85 of the Society Actapply where the remedy sought is damages rather than reinstatement? In Homelife Glenayre Realty v. F.V. Real Estate, 2013 BCPC 198, 2013 BCPC 0198, (“Glenayre”) the Honourable Judge Skilnick considered this question: [15] In the Claims now before the court, the Claimant alleges that the Defendant is in breach of its contract with the Claimant, thecontract being the constitution and bylaws of the Defendant society.

Specifically, it is the suspension of the Claimant’s membership bythe Defendant which the Claimant alleges was not done in compliance with the bylaws of the Defendant Society, and from which any

economic loss flows. Deciding this question requires a determination of whether or not the Defendant has conducted itself in breach of its constitution and bylaws. This is precisely the situation that the legislature has contemplated in

section 85 of the Society Act . No matter how the Claimant labels or dresses up its claims, it must first be found that the Defendant has not complied with its constitution and bylaws before it can be said to be in breach of the “contract” as the Claimant refers to them. If the Defendant has played by the rules as set out in the constitution and bylaws, then the Claimant has no remedy, no matter how unfair the result, because it too has agreed to play by those rules.

But if there has been an “omission, defect, error or irregularity” on the part of the Defendant that has led to a breach of the constitution or bylaws (which the Claimant calls the “contract”), then the law requires that the issue is one which must be decided by the Supreme Court, according to

section 85 of the Society Act . [16] I find that the Defendant’s

interpretation of

section 85 is the correct one, and the subject matters of these two claims are ones which are within the jurisdiction of the Supreme Court of British Columbia and outside of the jurisdiction of this court. [ 7 ] I agree with my brother Judge Skilnick, that in order to seek damages, Ms. Stojkovic must first establish that the denial of her right to vend was made in contravention of the bylaws of PGFMA. That question is one which can only be decided in Supreme Court. The Provincial Court does not have jurisdiction to hear this Counterclaim. The Counterclaim by Ms. Stojkovic is therefore dismissed.

COSTS [ 8 ] I also note that PGFMA has applied for fees and expenses pursuant to Rule 20 of the Small Claims Rules . Ms. Pavao asked that the issue of costs be adjourned to the date of trial on the lead matter - that is, the date of the trial of the Claim and Reply.

Although it is proper that the issue of costs generally be determined by the trial judge, and although the application for costs by PGFMA did not specify whether costs under Rule 20(5) were sought, I draw to the attention of the parties the remarks of Judge Skilnick in Glenayre , also dealing with the issue of costs under Rule 20(5), as follows: Application for Costs under Rule 20(5) [19] The Defendant seeks costs of up to $2500 pursuant to Rule 20(5) of the Small Claims Rules . That provision reads as follows:

(5) A judge may order a party to pay the other party up to 10% of the amount claimed or the value of the claim or counterclaim if the party made a claim, counterclaim or reply and proceeded through trial with no reasonable basis for success. (Emphasis added). [20] This rule allows an award of these punitive costs where the claim has proceeded through trial with no reasonable chance of success. In reviewing the jurisprudence concerning this rule, costs under this

section have been allowed only where the matter has proceeded to trial. The phrase “proceeded through trial” has not been interpreted to include situations where the claim has been dismissed prior to trial. Because this issue has now been determined prior to trial, the Defendant may not be awarded these costs. [ 9 ] It seems to me that since this portion of the litigation, that is, the Counterclaim, has obviously not proceeded through trial (since it has been hereby dismissed prior to trial) to will not be proper to seek costs under Rule 20(5) with respect to the counterclaim. ________________________ S. K. Keyes Provincial Court Judge Province of British Columbia