Baseless Claim Against Canadian Hearing Society Dismissed by Superior Court
On November 29, 2017 the Canadian Hearing Society (CHS) was notified of legal action against the organization brought forward by a corporation known as CIDHH.
Yesterday the Ontario Superior Court of Justice dismissed the application by a corporation and two former members alleging that a series of decisions that resulted in CHS becoming a closed corporation (meaning the only members of CHS are its Board of Directors) were oppressive. Individuals involved in the suit against CHS included former staff members whose roles were eliminated during organizational restructuring.
The court found no issue with the actions of the CHS Board, and in dismissing the application, the court held that:
- In 2014, CHS faced a serious financial challenge that required it to review its operations and corporate governance, including an inconsistent approach to membership;
- The Board of CHS has a responsibility to ensure the corporation fulfills its charitable purposes, and the membership does not impose its own priorities over the stated purposes of the corporation or restrict the provision of services to a narrow segment of the community;
- CHS membership carries only the right to approve annual financial statements and elect directors on an annual basis;
- There are several other means by which CHS can and does consult with the Deaf and hard of hearing community;
- The majority of the Deaf and hard of hearing community have never been members of CHS;
- The corporation that sued did not have the authority to represent the various segments of the Deaf and hard of hearing community;
- Legal proceedings would be meaningless unless the corporation also intended to replace the CHS Board (despite denying that it was engaged in a power play); and
- It was seriously doubtful that the actions of the Board could be characterized as oppressive, unfairly prejudicial, or unfairly disregarding of the interests of the members or former members of CHS.
The court also stayed the claims of the individuals, finding their claims were based on issues between them and the Board regarding the way CHS conducts its business.
The court awarded costs of the application to CHS, stating "there is no reason why charitable funds should be diverted to pay for the judicial resolution of an unmeritorious claim of standing."
CHS is extremely proud of its accomplishments in recent years.
In early 2014, the CHS Board identified significant risks to the sustainability of the organization. Several consecutive years of financial deficits caused CHS to deplete its financial reserves to meet payroll. CHS was not financially viable and required an updated governance model to comply with new federal legislation.
The board and management team, on the advice of counsel and independent experts, took necessary steps to update the organization’s governance and eliminate the financial deficit. Today, CHS is financially strong and has adopted best-in-class governance and operating policies and procedures.
CHS Board Chair, Timothy Andrade stated, “we are very pleased with the Superior Court’s decision and continue to be proud of the governance work we have done to set CHS on a path toward a barrier-free society.”
"Transformational change is always difficult," said Julia Dumanian, President and CEO of CHS. "And we will continue at CHS to serve those who need us most. Canadians who are Deaf and hard of hearing are already seeing the impact of a refocused, mission-driven CHS."
The Board and management of CHS have ensured the sustainabilty of the organization through enhanced corporate governance, financial viability, and a new strategic plan. The number of Deaf and hard of hearing Canadians that CHS serves has steadily increased and the effectiveness of its programs has improved.
About the Canadian Hearing Society
Trusted since 1940, the Canadian Hearing Society provides industry-leading services and products that enable Deaf and hard of hearing Canadians to overcome barriers to participation. It is an independent, registered non-profit organization that reinvests proceeds from product and program sales back into community services, the focus of the organization. For more information about CHS services, visit www.chs.ca
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Canadian Hearing Society
Voice or Text: 416-919-1324