After months of turmoil, the Humane Society Yukon’s legal troubles made it to the Supreme Court on Thursday.
Fred Pretorius, registrar of societies, wants the court to order the society to grant memberships to six individuals it had illegally denied memberships to this summer and hold its annual general meeting so a new board can be elected. The registrar also wants the court to decide where this meeting will happen, and to allow the registrar, or someone he appoints, to moderate the meeting.
In September, the registrar ordered the society to re-instate the six members and hold its annual general meeting by Oct. 5 to elect a new board. It hasn’t, and is now facing charges in territorial court for failing to comply with the registar’s orders under the Societies Act. The society has also not produced financial records.
The registrar only came to the Supreme Court as a “last resort,” said Philippa Lawson, the government’s lawyer. Prosecuting a society in territorial court for failing to obey an order is “exceedingly rare,” she said.
But the court needs to do this to send a message to all societies across the territory, she said.
The society’s continued non-compliance is running the not-for-profit “into the ground,” said Lawson.
The society is losing money. Its continued defiance of the order and failure to produce financial statements has caused it to not receive half of its annual government funding. And donations have dried up. As a result, it’s laid off most of the shelter staff. There are only five people working at the Mae Bachur Animal Shelter.
The government wants the annual general meeting to be held Dec. 20 at 7 p.m. at a location chosen by the government.
“Things are really serious right now at the shelter,” said Lawson. A new board will restore the public’s faith in the charity and allow it to raise more money, she said.
An email sent from society president Shelley Cuthbert this past weekend said the shelter may not be able to pay staff after the end of December, even if the shelter receives money from the government, Lawson told the judge.
The society tentatively scheduled its annual general meeting for Nov. 23, exactly 15 months after its last annual general meeting in August 2011. Under the Societies Act, that’s the longest a society can go without holding a meeting. On Nov. 19, the court ordered that meeting cancelled. A new date can only be made once this case is heard.
The registrar also wants the court to order the society to grant memberships to people whose memberships have been denied or applications not dealt with, unless they are younger than 19 or haven’t paid the membership fees. That can be done at or before this meeting.
Rebeka Breder, lawyer for the society, said she does not object to the meeting being held.
But it’s not necessary to grant the new memberships before the meeting, she said.
“Nothing will turn on those memberships themselves,” she said. The society can run without the new members, said Breder.
Gower disagreed. New members could be elected to the board and help correct the society, he said. It doesn’t make sense to wait until after the meeting to process these membership requests, he said.
He will make his decision about the meeting this afternoon, he said.
But this may not be the final word in the case. The government also wants the court to declare that the board members did not fulfill their fiduciary duties to the society’s members. The registrar’s investigation found the society had illegally refused to let members see the membership list. It also refused to hold a special meeting to elect a new board, even after over 20 per cent of members petitioned for one.
By refusing to let members see the list, the board was not acting in good faith, out of loyalty to the organization or avoiding a conflict of interest, said Lawson. The only power members have is the power to elect directors, she said.
“Members are essentially hostage to the directors who have the power to decide if they can hold the meeting or not,” Lawson told the judge. The Humane Society Yukon has no guidelines for rejecting membership requests, she said. There are generic bylaws that let boards make screening processes for members, but the society has omitted those parts from its bylaws, she said.
Instead, the board denied memberships based on assumptions and suspicions that members would harm animals, said Lawson. Some members who had their requests denied had publicly criticized the board’s management and its decision to bring up dog trainer Brad Pattison for a fundraiser.
Other members were accused of conflicts of interest. One of the people whose membership was denied is Madeleine Girard. Her brother, Paul, owns Ovation Construction. His company is suing the humane society for failing to pay a contract.
But only directors have a duty to avoid conflicts of interest, said Lawson. Girard had resigned from her position as director before her request for membership renewal was denied, she said, so there was no more conflict of interest.
When the board denied memberships, it did so with the society’s best interests at heart, said Breder.
The board believed certain people could harm animals and that would contradict the society’s mission statement, she said.
But Gower didn’t appear convinced.
“Good faith includes an element of reasonableness,” he said. And he’s not convinced the board acted reasonably, he said.
That the president acted on mere suspicions puts her credibility into question, he said.
And it’s a “double standard” for the board to make accusations about former members based on assumptions when it won’t allow criticism of its own operations, said Gower.
The judge will make his statement about whether or not the board breached its fiduciary duties another time, he said. The territorial prosecution will continue next week.
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