Executive Summary: Key Legal and Evidentiary Issues

• At the heart of this dispute is a governance conflict over who constitute the legitimate directors of a federal non-profit corporation, the East Coast First People's Alliance.
• Central to the claim is whether the defendants, Alfred Chiasson and Jean-Claude Boudreau, effectively resigned as directors when they filed forms with Corporations Canada stating they were no longer board members.
• Disputed, too, is whether the defendants lawfully readded themselves to the board following their attempted resignations, and whether that process complied with the Canada Not-for-profit Corporations Act, S.C. 2009, c. 23.
• Validity of the notices of meeting and resolutions adopted at various meetings held by the defendants is also genuinely contested.
• Conflicting affidavit evidence — including Domitien Paulin's claim that the defendants' resignations were accepted at a November 23, 2019 meeting — makes it impossible to resolve key factual questions without a trial.
• The defendants' counterclaim for damages arising from alleged breaches of fiduciary duty and statutory obligations cannot succeed on summary judgment because the threshold question of their legitimate directorship remains unresolved.

Facts of the case

The East Coast First People's Alliance (l'Alliance) is a federal non-profit corporation incorporated on March 4, 1999 to advance the interests of members with Métis or Indigenous heritage. Membership is voluntary, subject to annual membership fees, and the board of directors must be composed of at least seven members, with three or four serving on the executive bureau.

Tensions began in 2016 when Alfred Chiasson, then serving as treasurer, expressed dissatisfaction with the financial information he was receiving about the corporation's affairs. By the autumn of 2018, Chiasson formally asked Domitien Paulin to explain significant withdrawals from the corporation's bank account — specifically, $61,400.00 drawn between 2014 and November 30, 2018. Paulin responded that he had personally lent money to the corporation and was entitled to reimbursement, an explanation Chiasson rejected, noting that any repayments required prior board authorization.

From 2018 onward, Paulin ceased attending board meetings and the annual general meeting. Following a request by board members, Jean-Claude Boudreau convened a board meeting on April 7, 2019, which proceeded and was duly minuted. Paulin did not attend; instead, he held a self-styled "founders' meeting" at his own home and thereafter continued to act as though he remained president, convening separate meetings with individuals he recruited to his own group. Since 2019, both factions have held their own board and membership meetings, each claiming to be the duly authorized representatives of the Alliance.

On or around January 11, 2020, the defendants and others held a board meeting at which a resolution was adopted to remove Domitien Paulin from the position of president, citing his failure to attend five consecutive board meetings and his unauthorized cancellation of two annual general meetings.

Contractual and statutory provisions at issue

The proceedings engaged several provisions of the Canada Not-for-profit Corporations Act, S.C. 2009, c. 23. The plaintiffs alleged, among other things, that amendments to the by-laws were not made in accordance with the Alliance's own by-laws and were not filed with the Director of Corporations Canada as required by sections 152(1) and 197(1) of that Act. They further alleged that a certificate issued on November 1, 2019 at Alfred Chiasson's request — purporting to change the minimum number of directors from 18 to a range of 7 to 18 — was invalid because it was not obtained in accordance with subsection 197(1). The plaintiffs also contended that, under Article 9 of the Administrative By-laws, board meetings must be convened by the president or upon the request of a majority of board members, and that the defendants convened meetings without proper notice to all members, contrary to subsections 198(1) and (2) of the Act. Regarding the resignations, the plaintiffs relied on subsection 129(1) concerning the manner of resignation, and subsection 132(1) concerning the process for a director to return to the board.

Court's reasoning and analysis

Justice Cloutier first addressed the plaintiffs' preliminary argument that the summary judgment motion was premature because discoveries had not yet been completed. Citing Canada (Attorney General) v. Lameman, 2008 SCC 14, and Graysbrook Capital Ltd. v. Viva Development Inc. et al., 2023 NBBR 193, the Court rejected this argument, noting that nothing in Rule 22 requires discoveries to be completed before a summary judgment motion may be brought, and that the plaintiffs had not demonstrated by clear and convincing evidence that there was relevant information they could only obtain through discovery. The Court observed, for example, that Paulin could have attached financial records to his affidavit to support his claim of personally financing the Alliance but chose not to do so.

Turning to the merits, the Court applied the two-step framework for summary judgment under Rule 22 of the New Brunswick Rules of Court, as clarified in O'Toole v. Peterson, 2018 NBCA 8, and Russell et al. v. Northumberland Co-Operative Limited, 2019 NBCA 70, as summarized in Estephan v. Dykeman et al., 2020 NBBR 65. The sole criterion for granting summary judgment is whether there is a genuine issue requiring a trial; the burden rests on the moving party to establish on a balance of probabilities that no such issue exists.

The Court identified three genuine issues requiring a trial: (a) whether the defendants resigned as directors; (b) if so, whether they readded themselves in contravention of the Canada Not-for-profit Corporations Act; and (c) whether the notices of meeting and resolutions adopted at the defendants' various meetings are valid. Justice Cloutier found irreconcilable contradictions in the evidence — most notably between the defendants' joint affidavit, in which they acknowledged attempting to resign but claimed to have reversed that decision, and Paulin's affidavit, which included signed forms filed with Corporations Canada stating that the defendants were "no longer members of the board of directors," along with minutes of a November 23, 2019 meeting at which their resignations appeared to have been accepted. The Court declined to accept the defendants' characterization of those filed forms as merely an "intention to resign," pointing to the plain language of the forms and the warning beneath the defendants' signatures that making a false declaration constitutes an offence.

On the question of a "mini-trial" under Rule 22.04(2), the Court determined it would not be in the interests of justice to proceed that way, as a mini-trial on the issues in dispute would require substantially the same time and resources as a full trial, including extensive cross-examinations. Neither party had requested oral testimony, and no party had demonstrated how such testimony would assist the Court.

As for the defendants' counterclaim — seeking damages for losses caused to the corporation and its members, as well as for abuse of power and breach of statutory obligations under the Canada Not-for-profit Corporations Act — the Court held that it could not succeed on summary judgment either. The counterclaim's viability depended entirely on a finding that the defendants were the legitimate directors of the Alliance, which was itself one of the unresolved genuine issues requiring a trial. The Court also noted a preliminary pleadings obstacle: the defendants were joined to the proceedings in their personal capacity, yet were seeking, through their counterclaim, to recover losses on behalf of the very corporation that was also claiming damages against them.

Ruling and overall outcome

Justice Cloutier dismissed the summary judgment motion in its entirety. Both the defendants' application to dismiss the plaintiffs' action and their application to dismiss the counterclaim were rejected, as the evidence before the Court was insufficient to resolve the central factual and legal questions in a just and equitable manner without a full trial. The plaintiffs were the successful party on the motion. Costs of $2,500.00, inclusive of HST, were ordered payable to the plaintiffs.