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Associations - Continuation After Incorporation. Carcillo v. Ontario Major Junior Hockey League
In Carcillo v. Ontario Major Junior Hockey League (Ont CA, 2025) the Ontario Court of Appeal dismissed a plaintiff appeal where class proceeding certification had been denied.
The court favourably assesses the plaintiff-appellants' theory of 'unincorporated associations', here in the class proceeding certification appeal context (where the standard is “some basis in fact”):[25] An unincorporated association arises when individuals bind themselves together by agreement to pursue a shared purpose, other than profit, under agreed-upon rules. Such associations are not corporations, lack independent legal personality, and exist only through their members. Nonetheless, they often adopt corporate-style governance structures such as boards, constitutions, and formal rules: Organization of Veterans of the Polish Second Corps v. Army, Navy & Air Force Veterans in Canada (1978), 1978 CanLII 1606 (ON CA), 20 O.R. (2d) 321 (C.A.), at p. 337; Astgen v. Smith, 1969 CanLII 488 (ON CA), [1970] 1 O.R. 129 (C.A.), at pp. 133–35.
[26] Importantly, the creation of a corporation to administer some of an association’s affairs does not necessarily extinguish the association. As the Supreme Court explained in Lakeside Colony of Hutterian Brethren v. Hofer, 1992 CanLII 37 (SCC), [1992] 3 S.C.R. 165, at pp. 189–90, an unincorporated association may continue to exist alongside a related corporation if the members intended it to remain distinct. This undermines the respondents’ claim that the existence of the league corporations precludes the existence of league-level unincorporated associations.
[27] Here, the appellants allege that each league’s corporation and its participating teams (and in the CHL’s case, the three regional leagues as well) contractually bound themselves under their constitutions to pursue shared purposes and follow common rules. These facts, if true, could establish the essential elements of an unincorporated association. The appellants also point to specific constitutional provisions from each league, incorporated by reference into the pleadings, which make these allegations concrete rather than conclusory. Far from being implausible, the claim is consistent with how other professional sports leagues have been legally characterized: for example, the Canadian Football League, the National Football League, and the NHL have all been recognized as unincorporated associations.[2]
[28] Nor is it plain and obvious that the league corporations preclude the coexistence of such associations. On the contrary, the OHL Constitution itself distinguishes between the OHL as an “association” and the corporation that administers it, while the WHL Constitution (until 2002) explicitly described that league as an association. While it would have been preferable for the pleadings to expressly reference these provisions, we read them generously to allow for this drafting deficiency since the parties agree that they incorporate the constitutions by reference. The appellants also pled that each regional governor is the direct agent of the team that appointed them and can be dismissed by that team at will — a feature inconsistent with corporate directorships under not-for-profit law, where directors are not agents of members and cannot be summarily removed by them: Maple Leaf Foods Inc. v. Schneider Corp. (1998), 1998 CanLII 5121 (ON CA), 42 O.R. (3d) 177 (C.A.), at pp. 190–91; Not-for-Profit Corporations Act, 2010, S.O. 2010, c. 15, s. 26.
[29] Accordingly, the appellants’ theory does not necessarily require “piercing the corporate veil” of the league corporations, as the motion judge suggested. That issue would only arise if the appellants failed to prove that the leagues function as unincorporated associations. Because such questions are highly fact-dependent and hinge on the interpretation of non-standard constitutional documents, they are inappropriate for resolution at the pleadings stage: Organization of Veterans, at p. 343; Bowman, at paras. 40–41.
[30] By rejecting the unincorporated association theory outright, the motion judge exceeded his limited role at certification. He should have read the pleadings generously, treated the pleaded facts as true, recognized that the allegations were not doomed in law, and left the factual determination of the leagues’ status for trial.
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