Society disputes may now be settled by BC Civil Resolution Tribunal

Effective July 15, British Columbia’s Civil Resolution Tribunal (CRT) expanded its jurisdiction to include claims against societies incorporated under the Societies Act (British Columbia), changing the forum for dispute resolution for many types of claims made against a society or its directors.

The CRT itself is not new. Established in 2015 under the Civil Resolution Tribunal Act (the CRT Act), the CRT is Canada’s first online dispute resolution tribunal. It aims to provide timely, accessible and affordable dispute resolution services on legal matters that fall within its jurisdiction. The CRT allows individuals to engage in an online dispute resolution system that streamlines processes of negotiation and facilitated mediation. As an administrative tribunal, the CRT also has jurisdiction to make enforceable decisions to resolve submitted disputes. The CRT is designed to be used without representation by lawyers and with the goal of minimizing barriers that individual complainants face in accessing the traditional court system.

Prior to July 15, the CRT possessed limited jurisdiction to decide strata property disputes, small claims matters of up to $5,000 and certain motor vehicle injury disputes pertaining to damages and fault up to $50,000. As a result of certain CRT Act amendments, the CRT’s jurisdiction has been expanded to now include certain matters involving “society claims” (as defined in the amended CRT Act).

A society claim is generally eligible to proceed through the CRT if it relates to any of the following:

• the interpretation or application of the Societies Act or its underlying regulations;
• the interpretation or application of a society’s constitution or bylaws;
• requests to inspect, or to receive a copy of, a society’s records;
• an action or threatened action by the society or its directors in relation to a member; and
• a decision of the society or its directors in relation to a member.

Notably, certain categories of claims are excluded from the CRT’s jurisdiction over society disputes. Certain judicial remedies available under Part 8 of the Societies Act (such as oppression claims, derivative actions, compliance or restraining orders) remain within the Supreme Court of British Columbia’s exclusive jurisdiction. In addition, certain claims categories fall outside the CRT’s jurisdiction, including without limitation:

• the qualifications, liability and indemnification of directors and senior managers;
• member-funded societies and occupational title societies;
• any matter relating to the termination of membership;
• matters involving the liquidation, dissolution or restoration of a society;
• the corporate reorganization of a society, such as amalgamations, disposal of undertakings, continuations and arrangements;
• matters involving a society’s auditors or audited financial statements; and
• disputes governed by an agreement to arbitrate under the Arbitration Act (British Columbia).

The jurisdictions of the CRT and the Supreme Court of British Columbia over disputes involving societies overlap. For example, a matter involving a society decision on a member may fall within the jurisdiction of either the Supreme Court of British Columbia (under Part 8 of the Societies Act) or the CRT. Determining which decision-maker is best suited to address these types of disputes will likely be a learning experience for claimants, societies and the CRT itself.

If the CRT’s negotiation and facilitated mediation processes do not settle a dispute, the CRT will hear and render a final and binding decision on the parties. The CRT may make orders requiring a party to take a certain action, refrain from a certain action or pay money. If a party to a society claim does not respond in a timely fashion to CRT proceedings, the CRT may issue a default order against the nonresponsive party. Such orders may be enforced upon being filed with the Supreme Court of British Columbia.

For most disputes, society claims may only be pursued through the CRT by societies and their members. The exception is that a non-member individual or organization is eligible to pursue a claim via the CRT if it asserts an entitlement to inspect or receive copies of society records (including annual financial statements) required to be kept under section 20 of the Societies Act. Unless a society’s bylaws say otherwise, access to society records is generally limited to the society’s members and directors. However, the financial statements of most societies (other than member-funded societies) are publicly accessible.

The simplicity, speed and relatively low cost to commence a society claim through the CRT may result in more societies facing more claims. And while easier access to such dispute remedies will be viewed positively, societies must now consider how to manage their resources in response to CRT proceedings.

We recommend societies review their bylaws and other policies and procedures to ensure the language addressing membership eligibility, membership admissions and access to society records is clear and drafted as desired. Societies should also ensure the records required to be maintained under the Societies Act, including the register of members, are organized, accurate and up-to-date.