Written by Ranjan Agarwal, Dylan Gibbs and Dylan Murray
In Ethiopian Orthodox Tewahedo Church of Canada St. Mary Cathedral v Aga, 2021 SCC 22 [Ethiopian Orthodox] the Supreme Court of Canada elaborated on the circumstances in which courts will intervene in the affairs of voluntary associations, including religious congregations. To enforce the rules of a voluntary association, or hold the association to standards of procedural fairness, a court must conclude that the plaintiff's claim depends on an established legal right such as a contract. That is true even if the association maintains written bylaws or a constitution.
In this case, the Court ruled that mere membership in a voluntary association with governing rules does not automatically create contractual rights against the association. While voluntary associations with constitutions and bylaws may be constituted by contract, that is a determination that must be made based on general contractual principles. Specifically, the parties must objectively intend to enter into contractual relations, which—as a result of the Court's decision—will be difficult to establish in a religious context.
The Ethiopian Orthodox Tewahedo Church of Canada St. Mary Cathedral is a corporation under the Corporations Act, RSO 1990, c C.38.
The Church's congregation is an unincorporated association. Members of the congregation must complete and submit an application form. The Church's constitution and bylaws permit it to cancel memberships.
In 2016, several members of the congregation were appointed to a committee to investigate a movement that some within the Church considered heretical. The committee produced a report with its findings and recommendations, which were to be reviewed and considered by the Archbishop of the Church. The Archbishop declined to implement the committee's findings, which led five members of the committee to express their dissatisfaction with this decision. The members continued their criticism and were consequently removed from the congregation.
The five expelled members sued the Church alleging that their expulsions violated the principles of natural justice because the Church did not provide the members with written reasons for their expulsions, a chance to respond, or any internal mechanism for an appeal. They also argued that their expulsions did not comply with the Church's own bylaws and constitution.
The Church brought a motion for summary judgment for dismissal of the claims. The Church argued that, as a voluntary association, the Court did not have jurisdiction to review or set aside the expulsion decision because the members were not seeking to enforce an existing legal right.
The motion judge agreed with the Church, finding that the members failed to allege or provide any evidence of an underlying legal right. The statement of claim did not allege any contract between the parties. The judge found that the Church's constitution and bylaws did not, on their own, create a contract.
The Court of Appeal of Ontario disagreed with the motion judge. It found that while voluntary associations do not always have constitutions and bylaws, when they do exist, such documents necessarily constitute a contract setting out the rights and obligations of the members of the association. In the Court of Appeal's view, the fact that the members applied for their membership and offered monthly payments provided a sufficient basis to find the existence of a contract upon the approval of their applications.
The Supreme Court of Canada allowed the Church's appeal, finding that its recent decision of Highwood Congregation of Jehovah's Witnesses v Wall, 2018 SCC 26 [Wall] the issue before it.
In Wall, the Court explained that a court's jurisdiction over a voluntary association depends on whether the claimant is seeking to enforce an existing legal right. In Ethiopian Orthodox, the only viable candidate for a legal right was in contract.
Wall makes clear that the general principles of contract law govern the determination of whether a contract exists as between a voluntary association and its members. Under general contract principles, a contract exists only where the parties' conduct displays an objective intention to form a contract. The question is not what the parties subjectively had in mind, but whether a reasonable person would conclude that the parties intended to make an enforceable agreement.
In Ethiopian Orthodox, the Court explained that courts should not be too quick to characterize religious commitments as binding. The Court emphasized that, satisfying the test for contract formation in the context of a voluntary religious association will be an uphill battle.
On the facts before it, the Court found that the parties did not objectively intend to enter into contractual relations. The members did not know about the Church's constitution or bylaws and the mere assent to certain rules in a religious association does not, without more, show an intention to create a legal relationship. The Court therefore allowed the appeal and dismissed the action.
Based on the Supreme Court of Canada's decision in Ethiopian Orthodox, members of voluntary associations should know that a voluntary association's bylaws and written constitution are generally not enforceable. Courts will interfere only if there is an enforceable legal right, such as a contract, and the creation of a contract requires something more than just written rules.
Members of religious voluntary associations should take particular notice, as it will be challenging to establish the existence of a contract in the religious context. While it is possible for members of a voluntary religious association to have enforceable contractual rights against each other or the association, religious commitments will generally be seen as non-binding.
If you would like more information about the issues discussed here, please contact a member of our Commercial Litigation group.