Executive Summary: Key Legal and Evidentiary Issues

• The court assessed whether a by-law amendment imposed retroactive contractual obligations on a member association.

• BDAR challenged the amendment’s validity under the Not-for-Profit Corporations Act, 2010 (ONCA), citing vagueness and inconsistency with the Act.

• The amendment imposed conditions requiring member associations to maintain their original corporate structure and control unless approved by ITSO’s board.

• BDAR argued the by-law was passed in bad faith to target it for partnering with a competitor, the Toronto Regional Real Estate Board (TRREB).

• The court found ITSO acted in good faith to preserve its governance integrity and the one-member-one-vote structure.

• The application was dismissed and ITSO was awarded partial indemnity costs of $120,202.96.

Background and facts

The dispute in Barrie & District Association of Realtors v. Information Technology of Systems Ontario et al., 2025 ONSC 3388 arose from tensions between local real estate boards over access to multiple listing service (MLS) data, a cornerstone of the real estate industry. The applicant, Barrie and District Association of Realtors (BDAR), is a member of Information Technology of Systems Ontario (ITSO), a not-for-profit entity that pools and manages MLS data for several Ontario real estate boards.

In 2023, BDAR began pursuing an integration with the Toronto Regional Real Estate Board (TRREB), a competing MLS provider. Around the same time, Quinte and District Association of Realtors (QDAR), another ITSO member, also announced an affiliation with a TRREB-aligned entity. Concerned that TRREB, a non-member, was gaining control over ITSO members and potentially influencing governance, ITSO’s board amended its by-laws. The amendment required that member associations maintain the same corporate structure and control as when they joined ITSO, unless approved by the board. Control was defined as the ability to cast more than 50% of voting rights.

BDAR feared the amendment was targeted and would lead to its removal. It launched a court application challenging the validity of the amendment under the ONCA, arguing it retroactively breached contractual obligations, was impermissibly vague, and was passed in bad faith.

Issues before the court

The court examined three core issues: whether the by-law amendment retroactively breached ITSO’s contractual obligations to BDAR; whether the amendment was vague or inconsistent with ONCA; and whether the amendment was passed in bad faith with the intent to remove BDAR from ITSO.

The court's findings and analysis

Justice Mathai dismissed all of BDAR’s arguments. On the issue of retroactivity, the court held that there was no lifetime membership or guarantee that the membership terms would remain static. Since the by-laws always allowed for amendments, the new provision did not amount to a retroactive breach. The court also clarified that the revised language—requiring approval of changes in corporate control—did not operate retroactively, as it applied to changes regardless of timing, but only required board approval going forward.

On vagueness, the court rejected the argument that the term “corporate structure and control” was unclear. The by-law explicitly defined “control” in voting terms, and the requirement to maintain the original structure was sufficiently intelligible for legal interpretation. The court further ruled that it is not necessary under ONCA for the by-law to set out all the factors the board might consider in evaluating changes.

The court also dismissed the bad faith claim. While it acknowledged that the amendment was motivated by BDAR’s and QDAR’s affiliations with TRREB, it found that this motivation was legitimate and aimed at preserving ITSO’s governance integrity. The court emphasized that the board acted transparently, in response to concerns raised by member associations, and in line with democratic and statutory processes. The fact that ITSO’s concerns did not fully materialize over time did not negate their genuine belief in the need for the amendment at the time.

Outcome and costs

The court dismissed BDAR’s application, finding that the by-law amendment was valid, procedurally fair, and consistent with ITSO’s rights under its governing legislation. It declined to issue a declaration about the current state of the by-law, noting that such changes should go through proper governance channels.

ITSO, as the successful party, was awarded $120,202.96 in partial indemnity costs. This reflected the complexity of the matter and aligned with the parties’ expectations.