Canada, Quebec Law (Not for profit Organizations Law)

Order Description Question 1 (10 marks) Ms Karana Cashme is the president of a NPO called Jeunes en santé de Montréal (JSM). The NPO is designed at preservin" rel="nofollow">ing the health of children in" rel="nofollow">in the Montreal community. Bein" rel="nofollow">ing concerned with the lack of in" rel="nofollow">insurance for medication and services offered by the government, the NPO wants to offer a better coverage at a discounted price and offer health and proper diet counsellin" rel="nofollow">ing to its members. The NPO is extremely popular and has 2000 family members. The relevant structure of the NPO found in" rel="nofollow">in their by-laws is: Excerpt from By-Laws of JSM: Members: All families can become members by registerin" rel="nofollow">ing one or more of their children under the coverage program offered by the NPO and payin" rel="nofollow">ing the annual fee. Annual Fee: The annual fee is set at $50 and is payable by March 31st of each civil year. This fee does not cover the cost of the extended in" rel="nofollow">insurance coverage that will be billed separately. For humanitarian reasons the board can waive the annual fee for a family. They cannot, however, waive the fee for the in" rel="nofollow">insurance coverage. Board of Directors: The Board shall consist of five (5) directors elected by the members at the Annual General Meetin" rel="nofollow">ing for a mandate of one (1) year or until their replacements are elected. (number is fixed at 5 in" rel="nofollow">in the letters patents as well) Votin" rel="nofollow">ing at board meetin" rel="nofollow">ing: Each director is allowed one (1) vote. In case of a tie the president has a second vote to break the tie. Chairperson and Secretary: At the first meetin" rel="nofollow">ing followin" rel="nofollow">ing the election of directors the board will elect a chair and secretary. Should these in" rel="nofollow">individuals not be directors of the corporation they will not have the right to vote at meetin" rel="nofollow">ings of the board of directors. Officers: The officers of the corporation shall consisit of the president, the vice-president, the secretary and the chairperson of the board of directors. Arbitration committee: Any disputes regardin" rel="nofollow">ing the By-Laws or the functionin" rel="nofollow">ing of the NPO must be brought to the arbitration committee. This committee will consist of three (3) members elected for a three years mandate at the Annual General Meetin" rel="nofollow">ing. The election is staggered so that one arbitrator is elected every year. Arbitrators cannot be directors. Note that the letters patents or the By-Laws do not give the power to members to remove directors from office. Facts: The board of directors that was elected at the AGM in" rel="nofollow">in September 2008 and completed at the first meetin" rel="nofollow">ing of the board followin" rel="nofollow">ing the election was composed of the followin" rel="nofollow">ing: Karana Cashme: President and Director Harim Goldprick: Vice-President and Director Terry Chivin" rel="nofollow">ini: Secretary and Director Stéphane Hosenshein" rel="nofollow">in: Director Louis Birdshaw: Director Brendon Harrin" rel="nofollow">ington: Chairperson (elected at first meetin" rel="nofollow">ing followin" rel="nofollow">ing the AGM) The extended in" rel="nofollow">insurance coverage offered to the members is part of a long term contract with the in" rel="nofollow">insurance company Taxa that expired on June 30th 2009. (Taxa has been the in" rel="nofollow">insurance provider for the last 17 years) In April of 2009, Brendon Harrin" rel="nofollow">ington, who works for the NYHN (National youth health network), saw a busin" rel="nofollow">iness opportunity in" rel="nofollow">in the renewal of the contract. He contacted Karana Cashme and told her that he could fin" rel="nofollow">ind a better deal for the members. He said he knew someone who could advise the board in" rel="nofollow">in light of the renewal and recommended Jocelyn Dufferin" rel="nofollow">in, who accepted to work as a consultant for free (actually for the symbolic sum of $1). At the board meetin" rel="nofollow">ing on May 3rd 2009 Cashme announced that a report was happenin" rel="nofollow">ing and would be tabled at the next meetin" rel="nofollow">ing where a decision would be made about the renewal of the contract. The next board meetin" rel="nofollow">ing was scheduled for June 5th 2009. Louis Birdshaw was taken by surprise because he never heard complain" rel="nofollow">ints from the current arrangements and decided to in" rel="nofollow">investigate further. He found out the followin" rel="nofollow">ing around May 25th 2009 : -Jocelyn Dufferin" rel="nofollow">in is a former colleague of Harrin" rel="nofollow">ington and worked for NYHN for 13 years. He retired April 15th 2009. -For every contract signed through NYHN (NYHN does not provide in" rel="nofollow">insurance coverage directly), NYHN receives a cut representin" rel="nofollow">ing about 4% of the value of the contract. -Stéphane Hosenshein" rel="nofollow">in worked previously for a Summer in" rel="nofollow">internship (in" rel="nofollow">in 2007) for NYHN. He worked directly for Harrin" rel="nofollow">ington and uses Harrin" rel="nofollow">ington as a reference on his CV. On June 5th 2009, Dufferin" rel="nofollow">in presented the followin" rel="nofollow">ing recommendation: Insurance renewal for families with TAXA: $300 Insurance renewal for families with NYHN : $295 He therefore recommended to accept the lower quote at $295 and sign a four years contract. The vote was all in" rel="nofollow">in favor with one opposition (Birdshaw) who was not at ease with the whole process and felt that NYHN had an undue advantage in" rel="nofollow">in that process. Followin" rel="nofollow">ing the board meetin" rel="nofollow">ing the contract with NYHN was signed June 10th 2009. Followin" rel="nofollow">ing that board meetin" rel="nofollow">ing Birdshaw contin" rel="nofollow">inued his in" rel="nofollow">investigation and discovered around July 25th the followin" rel="nofollow">ing facts: -Cashme and Harrin" rel="nofollow">ington went on a vacation together from July 4th until July 11th 2009 on the boat of the president of NYHN, Anthony Accursanam. -Hosenshein" rel="nofollow">in was rehired for another in" rel="nofollow">internship at NYHN that started on June 15th 2009 and scheduled to last until August 31st 2009. -The report from Dufferin" rel="nofollow">in did not state that the current contract with the current in" rel="nofollow">insurer states that 5% of premiums paid will be distributed back in" rel="nofollow">in forms of bursaries and emergency assistance to the family members on an annual basis. (around $30,000 annually) -NYHN has a program where 2% of the premiums go back to support the youth on a national basis. (around $11,750 annually) At the AGM in" rel="nofollow">in September 2009 Birdshaw produced a document outlin" rel="nofollow">inin" rel="nofollow">ing the facts he discovered in" rel="nofollow">in May and July. The members were shocked and decided to elect a complete new board. Birdshaw was congratulated by the assembly for his diligence and despite overwhelmin" rel="nofollow">ing support decided not to run again" rel="nofollow">in after the events of this year. Followin" rel="nofollow">ing the election of the new board the new directors unanimously decided to cancel the contract with NYHN after the first year and hold a proper open tender process for a new contract to start July 1st 2010. Articles of the civil code not in" rel="nofollow">in the textbook: 1457. Every person has a duty to abide by the rules of conduct which lie upon him, accordin" rel="nofollow">ing to the circumstances, usage or law, so as not to cause in" rel="nofollow">injury to another. Where he is endowed with reason and fails in" rel="nofollow">in this duty, he is responsible for any in" rel="nofollow">injury he causes to another person by such fault and is liable to reparation for the in" rel="nofollow">injury, whether it be bodily, moral or material in" rel="nofollow">in nature. He is also liable, in" rel="nofollow">in certain" rel="nofollow">in cases, to reparation for in" rel="nofollow">injury caused to another by the act or fault of another person or by the act of thin" rel="nofollow">ings in" rel="nofollow">in his custody. 1458. Every person has a duty to honour his contractual undertakin" rel="nofollow">ings. Where he fails in" rel="nofollow">in this duty, he is liable for any bodily, moral or material in" rel="nofollow">injury he causes to the other contractin" rel="nofollow">ing party and is liable to reparation for the in" rel="nofollow">injury; neither he nor the other party may in" rel="nofollow">in such a case avoid the rules governin" rel="nofollow">ing contractual liability by optin" rel="nofollow">ing for rules that would be more favourable to them. Questions: The new board of directors (after decidin" rel="nofollow">ing to cancel the contract after one year) is analyzin" rel="nofollow">ing the conduct of past board members in" rel="nofollow">in the awardin" rel="nofollow">ing of the contract : Based on the in" rel="nofollow">information provided please provide your opin" rel="nofollow">inion (justify your answer with legislative articles or by-law articles) 1-Can the contract signed with NHYN be cancelled ? (2 marks) 2-Can Karana Cashme be held liable by JES for any damages ? (2 marks) 3-Can Stéphane Hosenshein" rel="nofollow">in be held liable by JES for any damages ? (2 marks) 4-Can Brendon Harrin" rel="nofollow">ington be held liable by JES for any damages ? ( 2 marks) 5-Can Anthony Accusanam and NYHN be held liable by JES for any damages ? (2 marks) Question 2 (8 marks) Upon startin" rel="nofollow">ing their terms on the board of directors of JES, the new board wants to look at applyin" rel="nofollow">ing to Revenue Canada for charity status. From what you know of their structure and activities: A-would they qualify ? If not what should they change and why ? (no need to refer to specific articles) B-Assumin" rel="nofollow">ing they have none of the clauses required in" rel="nofollow">in their letters patents to become a charity what should they modify in" rel="nofollow">in their letters patents ? What is the process they need to follow to modify their letters patents ? (refer to specific articles) Question 3 (8 marks) Johnny Goodboy has been workin" rel="nofollow">ing for Pharmaprix for the last 3 years as a clerk. Last year a new manager Mr. Prick took over the store and has been the cause, accordin" rel="nofollow">ing to many employees, of a serious deterioration in" rel="nofollow">in the climate at work. Johnny Goodboy and a few colleagues thin" rel="nofollow">ink that the only way to solve the situation is to start a union. There are 30 employees workin" rel="nofollow">ing at that Pharmaprix store. Johnny starts his campaign and the FTQ agrees to help him. They quickly get 17 cards signed by September 18th from employees and are preparin" rel="nofollow">ing their paperwork to file on Monday September 22nd. In the meantime Tom Twoface, Mr. Prick's nephew, who was hired two months ago, was asked to sign a card and he decided to tell Mr. Prick about it. Upon learnin" rel="nofollow">ing that, on September 18th, Prick hired 2 of Twoface's brother and got them to work on Saturday afternoon (September 20th) their first shift. He also fired 4 employees on Sunday September 21st who he suspected might have signed cards (he guessed right all 4 had signed). None of the four fired employees had more than 6 months seniority. When Johnny Goodboy found out about that he quickly filed first thin" rel="nofollow">ing on the 22nd his request for union certification. 1-Explain" rel="nofollow">in which rules under the Quebec Labour Code will apply to the certification demand and what would the commissioner decide in" rel="nofollow">in those circumstances ? (4 marks) ? 2-What would happen to the 2 dismissed and the 4 newly hired employees in" rel="nofollow">in the process (4 marks) ?