Non-Profit & Charity Dispute Resolution

When a board splits, an election is contested, a member is expelled or charitable funds are questioned, most disputes are best resolved without a courtroom.

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Courts are often the slowest way to settle these disputes, and sometimes they will not hear them at all.

The Short Answer

How are non-profit and charity disputes resolved?

Usually by reading the governing documents first, then negotiating, mediating or arbitrating. Court is kept for cases where a legal right must be enforced. For Ontario non-profits that is often the better route in any event: the Not-for-Profit Corporations Act gives members narrower court remedies than business corporations have, and courts decline to review many membership decisions of voluntary associations at all.

WHY IT MATTERS

Why Court Is Often the Wrong Forum

Members of an Ontario not-for-profit corporation can apply for a compliance order requiring directors and officers to follow the Act, the articles and the by-laws, and can remove a director by ordinary resolution at a special meeting. What ONCA does not contain is the broad oppression remedy found in the Business Corporations Act and the federal not-for-profit statute. In a 2024 decision the Superior Court confirmed that the most ONCA offers in that situation is an order for an investigation, not an order undoing the decision.

For unincorporated groups, including many congregations and community associations, the position is narrower still. The Supreme Court of Canada has held that courts intervene in a voluntary association’s decisions only where a legal right is at stake, and that a written constitution does not automatically make membership a contract.

A negotiated or arbitrated outcome is therefore often the fastest route to a decision everyone can live with, and sometimes the only one available.

WHAT WE HANDLE

Disputes We Resolve

Board deadlock and director removal: split boards, contested removals and who controls signing authority in the meantime.
AGM and election disputes: contested results, proxies, member lists and requisitioned meetings.
Member discipline and expulsion: whether the by-law procedure was followed and what an expelled member can do.
Faith and cultural organisations: churches, mosques, gurdwaras, temples and community associations.
Charitable property and donor gifts: restricted funds, misuse allegations and complaints to the Public Guardian and Trustee.
By-law dispute clauses: using the clause your by-laws already contain, or adding one.

OUR APPROACH

How We Resolve It

Read the documents. Articles, by-laws, constitution, minutes and notices of meeting. The answer is usually in them, and a clear written reading often ends the dispute on its own.

Steady the organisation. Interim arrangements for signing authority, records and property, so programs continue while the disagreement is resolved.

Resolve it. Negotiation first, then mediation or arbitration. We act for your side, prepare you, and help choose a qualified independent mediator or arbitrator.

Stop it happening again. By-law amendments, election procedures and a dispute-resolution clause that suits the organisation.

WHO WE ACT FOR

Boards, Members, Donors and Staff

We act for boards and organisations, and for members, directors, donors and staff who are in dispute with one. We check for conflicts before discussing any detail, because in a close-knit organisation the other side is often someone the firm could already know.

We serve incorporated non-profits under ONCA and the federal Act, registered charities and unincorporated associations, from four GTA offices and in 13 languages. For grant and funding questions, see our non-profit funding pages.

WHEN TO CALL

Signs a Dispute Needs Outside Help

Most organisations try to resolve disagreements internally first, and they should. Outside help becomes worthwhile when the internal route has stopped working, usually in one of these ways:

The board cannot make decisions because votes split evenly or directors refuse to attend.
Two groups each claim authority over the bank account, the building, the records or the website.
A meeting is disputed: members say it was improperly called, or the board refuses to call one members have requisitioned.
Allegations involve money: restricted funds, payments to directors, or missing records.
Members or donors threaten to complain to the Public Guardian and Trustee, the Canada Revenue Agency or the media.
Someone has retained a lawyer or sent a formal demand.

Early advice is usually cheaper than late advice. A written opinion on what the governing documents require, delivered before positions harden, resolves a surprising number of these disputes on its own.

BEFORE YOU CALL

What to Gather

The answer to most non-profit disputes is in the paperwork. Gathering it first makes the first conversation far more useful:

Governing documents: articles or letters patent, current by-laws, any constitution or policies, and every amendment.
Membership records: the register of members, and how and when it was last updated.
Meeting records: notices, agendas, minutes and any proxies or ballots for the meetings in dispute.
Financial records: recent financial statements and, where money is in question, the relevant bank records and gift documents.
Correspondence: emails, letters and messages that show how the dispute developed.

If records are held by the other side, note what exists and who holds it. Members have rights of access to certain records, and requesting them properly is often the first step.

COSTS

Who Pays

Non-profit disputes are unusual in that the organisation’s money is often at stake on both sides of the argument. Donated funds spent on a dispute are funds not spent on the organisation’s purposes, which is a strong reason to choose the least expensive route that will actually resolve the problem.

Directors should find out early whether the by-laws provide for indemnification and whether the organisation carries directors’ and officers’ insurance, because both affect who pays for legal advice and whether a director is personally exposed. Mediation fees are usually shared between the parties unless they agree otherwise.

AN EXAMPLE

A Board Split in Two

A community arts organisation has a nine-member board. After a disagreement about moving to a new building, four directors stop attending meetings, leaving the remaining five without a quorum under the by-laws. Cheques cannot be signed, and staff wages are due in two weeks.

The first step is a reading of the by-laws and the bank mandate, which shows who can sign in the meantime and what the quorum rules actually require. The directors agree to an interim arrangement so that payroll is met, then to a one-day mediation about the building decision. The agreement they reach includes a members’ meeting to confirm it, which gives the outcome legitimacy with the wider membership.

An illustration only. The organisation, people and details are invented, and every real dispute turns on its own documents and facts.

WORKING WITH US

How an Engagement Works

We start with a conflict check, because in a close-knit organisation the other side may be someone the firm already knows. Once that is clear, an initial consultation lets us understand what has happened and what you need.

We then agree the scope of the work and the fees in writing before anything else is done. For many non-profit disputes, the first step is a defined piece of work: a review of the governing documents and a written opinion on what they require. That often shows whether the dispute can be resolved quickly or needs mediation, arbitration or court.

We meet clients at our Toronto, North York, Mississauga and Oakville offices or by video, and we work in 13 languages. Boards often prefer video meetings so that several directors can attend together.

Sources

Where This Comes From

Last updated September 2026. Published by Lexaltico LLP, Toronto.

General information

This page is general information about Ontario and Canadian law published by Lexaltico LLP. It is not legal advice, it does not account for the facts of any particular situation, and reading it does not create a solicitor-client relationship. Rules change, and whether any option is available to you depends on your own circumstances.

Non-profit and charity disputes

Common Questions

Frequently Asked Questions

Our by-laws say disputes go to mediation. Do we have to use it?

Often, yes. Many federal non-profits adopted Corporations Canada’s model by-law, which sends disputes among members, directors, officers, committee members and volunteers to mediation and, if needed, arbitration. What your clause requires depends on its wording.

Can members remove a director?

Under ONCA, members can remove a director by ordinary resolution at a special meeting. The by-laws and the notice requirements still have to be followed, and procedural error is the usual reason a removal fails.

Is there an oppression remedy for Ontario non-profits?

Not in the broad form business corporations have. A 2024 Superior Court decision confirmed that ONCA provides for an investigation rather than an order undoing the decision. Compliance orders and other routes remain available.

Is mediation confidential?

Mediation is generally conducted on a confidential, without-prejudice basis, set out in a mediation agreement the parties sign at the start.

Do you act for the board or for the members?

Either, but never both sides of the same dispute. We run a conflict check before discussing details.

How long does a mediated non-profit dispute take?

Many resolve within weeks of the parties agreeing to mediate, once the documents have been gathered. Court proceedings typically take much longer.

Can the organisation pay for a director’s lawyer?

Sometimes. It depends on the by-laws, any indemnification provisions, the statute and whether insurance applies. It should be checked before costs are incurred.

What if the dispute has already gone to the CRA or the Public Guardian and Trustee?

Regulator involvement does not prevent the parties from resolving the underlying dispute, and a resolution may make regulatory action unnecessary. We advise on both at once.

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Non-Profit & Charity Dispute Resolution Ontario: Start My Enquiry

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Lexaltico LLP

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Toronto, ON M5J 2H7

North York

2 Sheppard Ave East, Suite 303, Toronto, ON M2N 5Y7

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Related Pages & Guides

Faith & Cultural Organisation Disputes AGM & Election Disputes Member Discipline & Expulsion Board Deadlock & Director Removal Charitable Property & Donor Gifts By-Law Dispute Resolution Clauses

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