) ) HERVE LACROIX Applicant – v. –, 2013 ONSC 8012

CITATION : Lacroix v. 1723445 Ont. Inc., 2013 ONSC 8012 COURT FILE NO.: 13-57709 DATE: 2013 Dec 31 ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: ) ) HERVE LACROIX Applicant – and – 1723445 ONTARIO INC., c.o.b. OTTAWA FARMERS’ MARKET ASSOCIATION Respondent ) ) ) ) ) ) ) ) ) ) J. Lalonde, for the Applicant R. Ghignone, for the Respondent ) HEARD: November 21, 2013 at Ottawa Belch, J.

APPLICATION DECISION [ 1 ] Herve Lacroix, the Applicant, is a member of 1723445 Ontario Inc., carrying on business as the Ontario Farmers’ Market Association, Respondent, and had renewed, for a $56.50 fee, his membership as a full season vendor for the 2013 market season. In addition to his membership fee, his full season stall fees payment were due by April 25, 2013 in the form of three post -dated cheques. The total stall fee for 2013 was $5130.57 and on April 5, 2013, the Applicant submitted his full season application together with a cheque in the amount of $1710.19, one third of the stall fees.

The cheque was post-dated to April 30, 2013. [ 2 ] Although the Stall Payment Form requires full season payment by April 25, 2013, a full season member is permitted to pay by three post-dated cheques, April 30, May 30, and June 30. It seems it is the delivery rather than the payment itself which is required by April 25. The failure to deliver by April 25 was significant because it resulted in loss of seniority and the allocation of stalls.

The Applicant claims the volume of sales is highly dependent on the location of the stalls, and the stalls he occupied, A35, A36, and A37, he believed were more favourable than others. [ 3 ] The general manager of the association notified all full season members of the requirement to deliver the cheques by April 25.

The manager wrote to the Applicant on April 17, 2013 to remind him he was at risk of losing his full season status and seniority should he fail to deliver the cheques, but the Applicant did not retrieve this registered letter. [ 4 ] On May 7, 2013, the board of directors met and were advised of the failure to deliver and decided to reject the Applicant’s full season application and terminate his seniority.

On May 8, the Applicant received a letter from the president of the association advising him of the rejection, the loss of seniority, and the fact he was no longer entitled to use the stalls mentioned earlier. [ 5 ] The Applicant seeks a declaration the board breached its own bylaws, rules and regulations and requested recognition of his seniority, the return of the stalls identified earlier, and his costs of these proceedings. [ 6 ] The Respondent submits the Applicant remained a member of the association and could have returned as a full season vendor for the 2013 by paying the requisite stall fees, albeit, from different stalls, however, the Applicant refused to do so and instead, commenced this Application.

Also, the Applicant did not ask the board to address his concerns regarding the rejection of his application or loss of stalls. [ 7 ] In his material, the Applicant states he met with the manager on May 10, 2013 and offered and in fact, did write three cheques for the full season stall fees, but it was suggested it was unlikely he would again get a corner stall and he was advised if he wished to appeal the board’s decision, the board was meeting on June 4 and he should send a letter to the board informing them of his wishes.

On May 12, the Applicant met with a director of the board who also advised him to write a letter to the association. On May 16, the Applicant’s lawyer wrote the association advising it had always been the Applicant’s intention to pay the entire stall fee and he was prepared to make full payment immediately in order to be reinstated. [ 8 ] On May 17, the same director replied the Applicant was in good standing and three other market stalls were available for his use, provided he presented three cheques to the market manager on Sunday, May 19, 2013. Evidently, these stalls are located in a

remote area of Brewer Park and considerably further from the parking lot, and the Applicant was of the view he would sell considerably less from those stalls than the ones he originally occupied. Analysis and Conclusion [ 9 ] The 2013 Stall Fee Payment Form on page 2 states “you may pay with three equal postdated cheques, one dated April 30, one May 30 and one June 30, totalling the full fee [and opposite the designation full season is written]… full season payment due by April 25, 2013 (three postdated cheques)”. On the Applicant’s form, it is noted he paid $1710.19 on April 15, 2013 and still owed the May and June payments. [ 10 ]

Section 17 of the association’s Bylaw No.1 entitled “Dues” contains the following sentence, “the secretary shall notify the members of the dues or fees (my emphasis) at any time payable by them and, if any are not paid within 30 days of the date of such notice, the members in default shall thereupon automatically cease to be members of the Association, but any such members may, on payment of all unpaid dues or fees, be reinstated by the board of directors.”

Section 16 is entitled “Termination of Membership” and provides “any member of the Association considered by the Board of Directors to be in violation of the Association’s bylaws or any provision of its rules and regulations or its inspection protocol or any other provision or requirement as the Association may, from time to time, enact (my emphasis) to which such member is subject, may be given notice of such violation and if default continues during a further period of 30 days from the giving of such notice, his membership together with all privileges attached thereto, shall be liable to termination….

In the event that the member wishes to appeal the decision of the Committee, he shall deliver a notice of appeal within seven days of the date of the Committee’s decision….” [ 11 ] Under

section 24 entitled “membership fees”, failure to submit fees results in membership and seniority being cancelled and then having to reapply as a new member. Any disputes will be addressed by the Board of Directors. [ 12 ] In view of sections 16, 17, and 24, it might be asked what did the manager or director feel was required when they spoke of writing a letter to the board or failing to appeal the decision? The Stall Payment Form does not say anything about membership and seniority being cancelled. Only

section 24 addressing non-payment of membership fees talks about membership and seniority being cancelled and the need to reapply as a new member. Here, the Applicant had paid the 2013 membership fee of $56.50 on February 19, 2013 and that payment was acknowledged as received by the Association on February 26, 2013. [ 13 ] The Stall Payment Form is silent as to the repercussions of not paying (delivering) the three post-dated cheques by April 25, 2013.

Is the failure to deliver a violation of any provision of its rules and regulations or any other provision or requirement (my emphasis) as the Association may, from time to time, enact? If so, the member may be given notice of such violation and if default continues during a further period of 30 days from the giving of such notice, his membership together with all privileges shall be liable to termination. [ 14 ] Or is the failure to deliver fees payable by April 25

an act whereby a member shall thereupon automatically cease to be a member of the Association? Under

section 17, it seems a member is allowed 30 days after notice to address the default. [ 15 ] Under either scenario, it appears a member, and the Applicant was a member, is entitled to 30 days’ notice to address the default, in this case, to deliver the post-dated cheques which would seem to be two rather than three as one had been delivered and accepted April 15, 2013. [ 16 ] Did the Applicant address the default? To determine this question, one must first determine when notice was given.

It could be argued the Applicant received notice of the default on April 17 although he did not retrieve that letter until some unidentified date. It could also be argued the Applicant received notice on May 8, 2013 when he received the letter from the President of the Association. Applying these dates, he would have needed to correct the default by May 16 or June 7. The materials before the court indicate he wrote the three cheques on May 10 and in a letter from his lawyer, offered to pay the amount in full on May 16.

Taking the earliest date of May 16, the Applicant’s providing of three cheques on May 10 predates that deadline and the later date of June 7 is met by his actions both of May 10 and May 16. [ 17 ] The Respondent argues that sections 16 and 17 deal with membership, not the failure to pay stall fees on time.

This may be the case, however, what authority did the board have for rejecting the Applicant’s application, removing his seniority, and the use of the stalls he previously rented? [ 18 ] This court is satisfied that given the confusion of the bylaws, rules and regulations, the Stall Payment Form, and the messages delivered by the general manager and director, coupled with the responses of the Applicant to address any default, the Association’s rejection of his full season application, the removal of his seniority, and the reallocation of his stalls to other members, was premature. [ 19 ] The content of the Respondent’s factum questions the court’s jurisdiction to hear a matter involving a corporation’s internal workings, but this argument was not pursued in detail at the hearing of the Application.

Given the issue addresses a property interest, the rental of stalls, the court elected to entertain this Application. [ 20 ] Having found the action premature, the question becomes what can be done to remedy the present situation. The assigning his stalls to other members created a domino effect not easily addressed after the fact. To remedy the problem, the court orders the Applicant’s seniority be reinstated, that for the 2014 season, he be offered first choice of any vacant stalls, and with the passage of time perhaps he will once again be able to occupy stalls A35, 36, and 37. Costs

[ 21 ] The court is not aware of either party’s position on costs or whether offers were delivered prior to the hearing of this Application. In the event the Applicant bettered any offer, or no offers were exchanged, he is entitled to his costs which the parties, with counsel, may be able to settle. Failing settlement, the court remains seized of the cost issue which must of necessity be addressed at a later date with arrangements made through my Kingston office.

If no submissions are received by May 30, 2014, it will be assumed the parties have settled the costs issue themselves and the court will not remain seized of the costs issue. Belch J. Released: December 31, 2013 CITATION : Lacroix v. 1723445 Ont. Inc., 2013 ONSC 8012 COURT FILE NO.: 13-57709 DATE: 2013 Dec 31 ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: HERVE LACROIX Applicant – and – 1723445 ONTARIO INC., c.o.b. OTTAWA FARMERS’ MARKET ASSOCIATION Respondent APPLICATION decisIon Belch J. Released: December 31, 2013