Ethiopian Orthodox Tewahedo Church of Canada St. Mary Cathedral v. Aga, 2020 ONCA 102021 SCC 22 (39094)

“Five church members were expelled from the congregation of the Ethiopian Orthodox Tewahedo Church of Canada St. Mary Cathedral. They brought an action against the church and members of its senior leadership, seeking, among other relief, a declaration that their expulsion was null and void, as it violated the principles of natural justice. The church and members of its leadership brought a motion for summary judgment seeking to have the action dismissed, on the basis that the court had no jurisdiction to review or set aside the expulsion decision. They argued that there is no free‑standing right to procedural fairness absent an underlying legal right, and the expelled members had no underlying legal right. The motion judge granted summary judgment and dismissed the action, determining that the expelled members failed to allege or provide evidence of an underlying legal right. The Court of Appeal allowed the appeal by the expelled members, holding that the written constitution and bylaws of a voluntary organization constitute a contract setting out the rights and obligations of the members and the organization. It concluded that the parties entered into a mutual agreement to abide by the governing rules and that whether there had been a breach of contract on the basis of failure to comply with the rules was a genuine issue requiring a trial.”

The SCC (9:0) allowed the appeal and restored the order of the motion judge.

Justice Rowe wrote as follows (at paras. 3, 20, 27-30, 37, 42, 49):

“Jurisdiction to intervene in the affairs of a voluntary association depends on the existence of a legal right which the court is asked to vindicate. Here, the only viable candidate for a legal right justifying judicial intervention is contract. The finding of a contract between members of a voluntary association does not automatically follow from the existence of a written constitution and bylaws. Voluntary associations with constitutions and bylaws may be constituted by contract, but this is a determination that must be made on the basis of general contract principles, and objective intention to enter into legal relations is required. In this case, evidence of an objective intention to enter into legal relations is missing. As such, there is no contract, there is no jurisdiction, and there is no genuine issue requiring a trial. I would therefore allow the appeal and restore the order of the motion judge granting summary judgment and dismissing the action.

The only issue before this Court is: did the Court of Appeal err in holding that there is an underlying contract and therefore a genuine issue requiring a trial? For the reasons below, I conclude that it did. This disposes of all the issues as framed by the appellants. I would also dismiss the fresh evidence motion, for reasons explained below.

Courts have jurisdiction to intervene in decisions of voluntary associations only where a legal right is affected. This proposition is not new. In Dunnet v. Forneri (1877), 25 Gr. 199, the Ontario Court of Chancery held that religious bodies are “considered as voluntary associations; the law recognizes their existence, and protects them in their enjoyment of property, but unless civil rights are in question it does not interfere with their organization”: p. 206 (emphasis added). In Ukrainian Greek Orthodox Church of Canada v. Trustees of the Ukrainian Greek Orthodox Cathedral of St. Mary the Protectress, [1940] S.C.R. 586, at p. 591, Crocket J. wrote that “unless some property or civil right is affected thereby, the civil courts of this country will not allow their process to be used for the enforcement of a purely ecclesiastical decree or order”. The point was reiterated in Lakeside Colony of Hutterian Brethren v. Hofer, [1992] 3 S.C.R. 165, at p. 174, and most recently in Wall, at para. 24, where this Court held that “[j]urisdiction depends on the presence of a legal right which a party seeks to have vindicated”.

Thus, while purely theological issues are not justiciable (Wall, at paras. 12 and 36), where a legal right is at issue, courts may need to consider questions that have a religious aspect in vindicating the legal right. As this Court explained in Bruker v. Marcovitz, 2007 SCC 54, [2007] 3 S.C.R. 607, at para. 41, “[t]he fact that a dispute has a religious aspect does not by itself make it non‑justiciable”. Rather, as the trial judge in that case correctly held, “a claim for damages based on a breach of a civil obligation, even one with religious aspects, remains within the domain of the civil courts”: Bruker, at para. 32. For example, courts adjudicating disputes over church property may need to consider adherence to the church’s internal rules, even where those rules are meant to give effect to religious commitments: Wall, at para. 38.

The legal rights which can ground jurisdiction include private rights ⸺ rights in property, contract, tort or unjust enrichment ⸺ and statutory causes of action: Wall, at paras. 13 and 25. This is borne out by the cases in which courts have intervened in voluntary associations. In Lakeside, this Court provided relief to members of a religiously‑based agricultural colony who had been expelled and thus deprived of their right to live in the colony and to be supported by it. Gonthier J. noted, at p. 174, that these rights had both proprietary and contractual aspects. Similar rights were at stake in Hofer v. Hofer, [1970] S.C.R. 958, as well as a claim for a division of the colony’s assets. Courts also have the jurisdiction to determine whether the deprivation of a person’s ability to earn their livelihood was a breach of contract, as in McCaw v. United Church of Canada (1991), 4 O.R. (3d) 481 (C.A.), and to decide between competing claims to property, as in Polish Alliance of Association of Toronto Ltd. v. The Polish Alliance of Canada, 2017 ONCA 574, 32 E.T.R. (4th) 64. By contrast, in Wall, because there was no legal right attached to the plaintiff’s membership in his religious congregation, the courts had no jurisdiction to determine whether he was properly expelled.

It follows that, as this Court held in Wall, at para. 24, “there is no free‑standing right to procedural fairness with respect to decisions taken by voluntary associations”. In other words, natural justice is not a source of jurisdiction. Rather, where there is a legal right at issue, natural justice may be relevant to whether that legal right was violated. In Lakeside, the plaintiffs’ contractual rights to remain in the colony were at issue; the colony’s failure to provide natural justice was a basis for finding that those contracts had been breached. Similarly, in Senez, the plaintiff stood in a contractual relationship with the corporation of which he was a member. As a result, the corporation’s failure to adhere to the terms of this contract in expelling him ⸺ which included an obligation to observe natural justice ⸺ constituted a breach. While Senez concerned a corporation, not a voluntary association, the role of natural justice in the contract is nonetheless instructive.

The test for an intention to create legal relations is objective. The question is not what the parties subjectively had in mind but whether their conduct was such that a reasonable person would conclude that they intended to be bound: Kernwood Ltd. v. Renegade Capital Corp. (1997), 97 O.A.C. 3; Smith v. Hughes (1871), L.R. 6 Q.B. 597, at p. 607. In answering this question, courts are not limited to the four corners of the purported agreement, but may consider the surrounding circumstances: Leemhuis v. Kardash Plumbing Ltd., 2020 BCCA 99, 34 B.C.L.R. (6th) 248, at para. 17; Crystal Square, at para. 37.

The upshot is this. Courts must have jurisdiction to give effect to legal rights ⸺ including legal rights held by members of religious associations and impermissibly affected in the operation of such associations (as the intervener Egale Canada Human Rights Trust observed). However, courts should not be too quick to characterize religious commitments as legally binding in the first place (as the intervener the Association for Reformed Political Action (ARPA) Canada observed).

In sum, courts can only intervene in the affairs of a voluntary association to vindicate a legal right, such as a right in property or contract. Membership in a voluntary association is not automatically contractual. Even a written constitution does not suffice. Membership is contractual only where the conditions for contract formation are met, including an objective intention to create legal relations. Such an intention is more likely to exist where property or employment are at stake. It is less likely to exist in religious contexts, where individuals may intend for their mutual obligations to be spiritually but not legally binding. A voluntary association will be constituted by a web of contracts among the members only where the conditions for contract formation are met.”