When a governing body in charge of students’ money abuses the bylaws that keep the organization in line, you would expect something dramatic to occur as a result. But in reality, not a lot seems to happen, as the Capilano Students’ Union (CSU) has been doing some bylaw bending recently in order to accommodate a legal retainer contract.
Previously, the CSU has paid for legal counsel on an hourly rate, and the monthly cost varied depending on how much the legal services were used. On Sept. 19, the CSU entered into a contract with law firm Heenan Blaikie indefinitely, allowing weekly meetings and unlimited contact with a lawyer at a flat rate of $2,000 per month. However, in doing this, the CSU is breaking one of their own bylaws: Bylaw 13, Section 4.
The bylaw states that “all contracts and agreements entered into by the union exceeding $1,000.00 in gross value and for duration of time exceeding one year shall be approved by the special resolution at a general meeting.” This contract was approved only by the CSU executive.
David Clarkson, Electoral Committee Chair, states, “I think there was a misunderstanding [on the part of the CSU executives] about the application of the bylaw.” The bylaw as it currently stands is challenging, according to Clarkson, because “it’s such a small amount of money and time that we can approve contracts with, it would be practically impossible for us to run the organization in compliance with it.”
“The CSU may want to consider revising that section of the bylaw because it seems to be rather restrictive,” said Titus Gregory, who has chaired a number of general meetings for the CSU in the past.
Clarkson explains, “For the CSU to act in absolute compliance with the bylaw would require us to terminate our U-pass contract, our health plan contract, [and] our lawyer contract.” As students have already paid their fees for the Health and Dental plan and have been receiving their U-Passes, cancelling these contracts may be logistically impossible.
In fact, Clarkson states, “we’re tallying up all of our contracts over $1,000 , and there are more than you could imagine.”
However, the new contract for legal counsel states, “The engagement may be ended by you or us at any time.” When it came to light that the CSU was breaching the bylaw, they had the option of terminating the legal retainer contract, or bringing it to a general meeting, albeit a bit late. The legal contract is not being brought to the next Annual General Meeting on Oct. 27 by the executive, and it appears the CSU will continue to pay for the legal contract on a month-to-month basis. The solution for the time being is, according to Clarkson, “to maintain our first priority, which is to ensure the accountability of the organization and to protect the best interests of the members, but to also allow us to operate the society, in an effective and accountable manner.”
The CSU executive has proposed Special Resolution 12 as a means of retroactively fixing the problem. The proposed bylaw
amendment will be put forth for discussion by the general membership at the AGM. The resolution will, if adopted, allow the CSU to enter into contracts up to $25,000, a jump from the $1,000 previously allotted, if those contracts are approved by a two-thirds majority vote from the executive committee. Any contract exceeding these values must be approved by special ordinary resolution at a general meeting. Bylaw 13, Section 4 will be sent to the Finance Committee for further review.
Clarkson explains that the new resolution will grant the executive more spending power, but make it more difficult internally to spend the money, because of the two-thirds vote. Contracts are currently approved by a majority vote of the general membership. If this resolution passes, it will make it so that the CSU is no longer breaking its bylaw with the legal contract. Clarkson admits there must be a limitation on these kinds of resolutions. “You don’t want a board of directors to just be able to go and spend money at will,” he says.
The CSU has not been considering the option of cancelling the contract, according to Clarkson. He states, “The facts are that the CSU needs legal counsel and we’re going to continue on the path that we’re on … We would be getting the services anyways, it’s just how we pay them at this point. We’re not going to go and cancel other contracts that we’re involved with on the account of the realization that we’ve had.”
Clarkson admits that the CSU is in a difficult place right now. He states, “It does seem to be the case that we’re not fully colouring between the lines, but examination of the facts will tell that there’s no mal-intent.” Gregory lightly adds, “Perhaps the CSU should consult their lawyer to see if it’s okay to consult their lawyer.”
Matt Todd, a former executive in the Kwantlen Student Association (KSA) and a former White Rock City Council member has experience with broken bylaws. Last year, he took the KSA to task over bylaw grievances with the KSA board. He’s found that there aren’t many legal repercussions for a society that doesn’t follow bylaws. He states, “The Society Act of BC and a society’s bylaws are not recognized by the RCMP. The Act and the bylaws are regulated by the province's Registrar of Companies.”
He explains that although the registrar could request an investigation, they typically do not choose to, due to budget restraints. As well, members could petition the court for a remedy, although Todd explains this can be expensive and courts don’t usually have the time or patience for these types of issues. “The only remaining actions are initiatives of members themselves.”
A general member has taken such an initiative, with the proposal of Special Resolution 14 to be addressed at the next AGM. It points out that the CSU has acted “outside of its authority on this matter, as laid out in the bylaws” by entering into, and failing to cancel when recognized, contracts that break Bylaw 13, Section 4. It proposes that “the retainer agreement be paid up to the current date, and subsequently the contract be immediately terminated on account of not being compliant with CSU bylaws.” It continues to suggest that the CSU executive committee be required to constantly remain compliant with its bylaws and if an item that is approved by the executive that is later found to be non-compliant, expenses are terminated and it is brought to a general meeting, with an explanation for non-compliance.
For other members who would like to address this issue, Todd has a few suggestions relating to his experience with the KSA. Members could hold discussion groups, call a special general meeting, pass resolutions, try to force a referendum, appeal to the registrar for investigation or petition the court for an investigation. He explains, “Of course, they can make sure they vote and encourage other students to vote for candidates who share their principles and values.“ It can be, according to Todd, “exceedingly frustrating,” given that students are short term members, don’t have very much money or time, and have little to no experience with these types of issues.
When asked what kind of action a society member could take if they were concerned their society was breaking a bylaw, the Societies Section of the Corporate Registry in Victoria echoed Todd in their suggestions. They stated, “You can call a meeting and talk to the director, and address it in a meeting. We don’t call for investigations. Sometimes people send letters complaining about something going on in a society but we don’t get involved in the internal workings of a society.” The representative suggested taking the executive to a small claims court, although she warns it will be “a very expensive, long proceeding.”
Todd hopes the directors will “recognize their error and seek proper authorization for their decisions – admit their error, explain the situation, then follow the procedures set out in the bylaws.”
// Photo by Natahsha Prakash
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