A Vote of No Confidence for the CFC President

[Victor Itkin]

I am not going to help you call a special meeting to remove me.

Fair enough, and good to know.

Also, it would be good to know other Directors’ position on organizing Special Meeting as per our request: will the remaining Directors fulfil their fiduciary duty to the CFC and cooperate with our group of VM? Or we are on our own in organizing the Special Meeting?

We have called a meeting which will address these issues. Once we have called a regular meeting which was previously scheduled you are not allowed to call a special meeting even if you met the statutory requirements which you have not. This is not a process which is purely internal to the CFC.

This is not a proof. At most, this statement can be called your personal opinion (IMHO), where “H” may stand for “humble”, but by no means for “honest”. As it was already stated above, the ONUS to prove your opinion that we “are not allowed to call a special meeting” is on you (just for clarity - the definition of word “ONUS” by Merriam-Webster dictionary is "BURDEN OF PROOF").

Since it seems, you yourself are not capable to operate with factual arguments, you may obtain an Opinion Letter signed by an independent lawyer -- this will suffice for the purpose of our dispute.

[Vladimir Drkulec]

Fair enough, and good to know.

Also, it would be good to know other Directors’ position on organizing Special Meeting as per our request: will the remaining Directors fulfil their fiduciary duty to the CFC and cooperate with our group of VM? Or we are on our own in organizing the Special Meeting?

Ob Princess Bride pop reference: "I don't think that word means what you think it means."

This is not a proof. At most, this statement can be called your personal opinion (IMHO), where “H” may stand for “humble”, but by no means for “honest”. As it was already stated above, the ONUS to prove your opinion that we “are not allowed to call a special meeting” is on you (just for clarity - the definition of word “ONUS” by Merriam-Webster dictionary is "BURDEN OF PROOF").

Since it seems, you yourself are not capable to operate with factual arguments, you may obtain an Opinion Letter signed by an independent lawyer -- this will suffice for the purpose of our dispute.

As may you. Since it is you who is trying to upset the status quo the burden of proof is on you and not me.

[Victor Itkin]

As may you. Since it is you who is trying to upset the status quo the burden of proof is on you and not me.

It is irrelevant, who is trying to upset what. What matters - which party is trying to claim that another party’s action is wrong.

FIRST SITUATION

Our VM group is about to convene a Special Meeting, exercising our fundamental right. We justify our action with the unconditional wording prescribed in the CFC bylaw: “… If the directors do not call a meeting within twenty-one (21) days of receiving the requisition, any member who signed the requisition may call the meeting.”

In response, you claimed: “You are simply wrong on what the law provides.” These are just empty, unsubstantiated words that cannot in any way affect our intention to convene a Special Meeting.

Also, you claimed: “Once we have called a regular meeting which was previously scheduled you are not allowed to call a special meeting even if you met the statutory requirements which you have not. This is not a process which is purely internal to the CFC.” These are also empty, unsubstantiated words. You maybe alluding to the Section 162 of the NFP Act, but why should we be guessing?

Anyway, for the organizational conduct (like elections, meetings, and so forth) bylaw concretizes some provisions of the NFP Act for application in our case exclusively to the CFC. The NFP Act is the general law, while the wording in the CFC bylaw is a specific instruction for action.

Accordingly, the burden of proof in this FIRST SITUATION is on you. You need to prove that our intention to convene a Meeting is wrong (if it is really wrong). You may not bother yourself to do this. We are fine with it. We’ll just convene a Special Meeting.

SECOND SITUATION

You have called the Spring Quarterly Meeting which should take place from April 11 to April 18. In the agenda of this meeting you included your Motion:

5B Motions
Motion 1:
In the event that Nikolay Noritsyn is able to comply with CFC bylaws and requirements of the NFP Act and is able to put together a legal motion to ask for a special meeting of the voting members in order to remove President Vladimir Drkulec at a special meeting, I would vote:


A. No, I am against holding a special meeting for the purpose of removing President Vladimir Drkulec
B. Yes, if Nikolay Noritsyn manages to present a legal motion, I would be in favour of holding a special meeting for the purpose of removing CFC President Vladimir Drkulec.

Attachments: First email from Noritsyn.
Second email from Noritsyn.

In response, we claimed that your Motion is not legal, that, according to the law, this issue (whether or not to convene a Special Meeting), cannot be the subject of a vote. Accordingly, we claimed that if this vote will take place, its results will be null and void. Finally, we urged you to remove your Motion from the Spring Quarterly Meeting’s agenda.

The burden of proof in this SECOND SITUATION is on us. And we immediately provided our reasoning and legal grounds on the subject (see post #8 in this thread, paragraphs 3, 4, and 5).

[Christopher Mallon]

Vlad, you are very clearly in the wrong here. You have admitted that you are in receipt of an email with 5 voting members requesting a special meeting, and including a motion to be voted on at that meeting.

Of course nobody can *force* you and the board to call the meeting, but any of those 5 members would be perfectly within their rights to call the meeting at the conclusion of the waiting period. So it seems the meeting will happen, whether you like it or not.

[Victor Itkin]

I have an important question to the CFC Directors that indirectly is related to the topic in this thread.

In the CFC archive, I accidentally came across Les Bunning’s post, in which his status is indicated as a CFC Voting Member. I understand that Les is a respected member of the Canadian chess community, and that he was previously even CFC President (1979 – 1981 and 1990 – 1992). Les is currently practicing law in Ottawa at the law firm Bunning & Farnand LLP.

At the same time, as the current CFC President Vladimir Drkulec has repeatedly informed us, Les Bunning is the official lawyer of the CFC. His legal advice has been used many times by Vlad in critical situations in making important fundamental decisions. In particular, for instance, on the basis of Les Bunning’s legal advice (at least, Vlad claims so), Vlad Drkulec single-handedly cancelled the unanimous decision of the CFC Board of Directors to dismiss the CFC Officer for inappropriate behaviour.

My question to the CFC Directors is: how can a CFC Voting Member be an official lawyer of the CFC?
In my view, there is an obvious conflict of interest that is not tolerated by the Law Society of Ontario.

[Vladimir Drkulec]

I have an important question to the CFC Directors that indirectly is related to the topic in this thread.

In the CFC archive, I accidentally came across Les Bunning’s post, in which his status is indicated as a CFC Voting Member. I understand that Les is a respected member of the Canadian chess community, and that he was previously even CFC President (1979 – 1981 and 1990 – 1992). Les is currently practicing law in Ottawa at the law firm Bunning & Farnand LLP.

At the same time, as the current CFC President Vladimir Drkulec has repeatedly informed us, Les Bunning is the official lawyer of the CFC. His legal advice has been used many times by Vlad in critical situations in making important fundamental decisions. In particular, for instance, on the basis of Les Bunning’s legal advice (at least, Vlad claims so), Vlad Drkulec single-handedly cancelled the unanimous decision of the CFC Board of Directors to dismiss the CFC Officer for inappropriate behaviour.

My question to the CFC Directors is: how can a CFC Voting Member be an official lawyer of the CFC?
In my view, there is an obvious conflict of interest that is not tolerated by the Law Society of Ontario.

Les Bunning is not the official lawyer of the CFC. He is a lawyer who gives very good advice to the CFC from time to time when required on a purely voluntary basis without charge.

You guys are really starting to be too much. You are going after Les Bunning now for the sin of giving free advice to the CFC? At the Meeting you were going after the CMA, FIDE and the FQE.

Will anyone be stupid enough to want to involve themselves in the CFC by the time you are done?

[Victor Itkin]

Les Bunning is not the official lawyer of the CFC. He is a lawyer who gives very good advice to the CFC from time to time when required on a purely voluntary basis without charge.

You guys are really starting to be too much. You are going after Les Bunning now for the sin of giving free advice to the CFC? At the Meeting you were going after the CMA, FIDE and the FQE.

Will anyone be stupid enough to want to involve themselves in the CFC by the time you are done?

Vlad, govern yourself accordingly. The question about Les Bunning's status with the CFC was asked by me personally. I never ever went against CMA, or FQE, or Les Bunning whom I respect a lot. Maybe I was lightly criticizing FIDE in one of my posts, which is what many do. If Les Bunning is not the official lawyer of the CFC, then he obviously could give you free friendly advice. So, one more time: this is not about CMA or FIDE or FQE or Les Bunning. This is about you, and we are going against you.

With the episode related to Les Bunning's advice, you have misled (and not for the first time) the CFC Voting Members. It was you who informed us that based on the long term CFC lawyer advice, you single-handedly cancelled the unanimous decision of the CFC Board of Directors to dismiss the CFC Officer for inappropriate behaviour. Perhaps, you had the right to do this, if you received the legal advice from the official CFC lawyer. That's exactly how your statement sounded. And now it appears, that you did this just because one of the CFC Voting Members, who is a lawyer, gave you such informal friendly advice. Based on such an informal advise, you did not have any right to overturn the unanimous decision of the Board of Directors. This is violation of your fiduciary duty to the CFC.

Les Bunning could give any friendly advise. He hasn't done anything wrong. You've done it.

[Vladimir Drkulec]

Vlad, govern yourself accordingly. The question about Les Bunning's status with the CFC was asked by me personally. I never ever went against CMA, or FQE, or Les Bunning whom I respect a lot. Maybe I was lightly criticizing FIDE in one of my posts, which is what many do. If Les Bunning is not the official lawyer of the CFC, then he obviously could give you free friendly advice. So, one more time: this is not about CMA or FIDE or FQE or Les Bunning. This is about you, and we are going against you.

With the episode related to Les Bunning's advice, you have misled (and not for the first time) the CFC Voting Members. It was you who informed us that based on the long term CFC lawyer advice, you single-handedly cancelled the unanimous decision of the CFC Board of Directors to dismiss the CFC Officer for inappropriate behaviour. Perhaps, you had the right to do this, if you received the legal advice from the official CFC lawyer. That's exactly how your statement sounded. And now it appears, that you did this just because one of the CFC Voting Members, who is a lawyer, gave you such informal friendly advice. Based on such an informal advise, you did not have any right to overturn the unanimous decision of the Board of Directors. This is violation of your fiduciary duty to the CFC.

Les Bunning could give any friendly advise. He hasn't done anything wrong. You've done it.

It was not a unanimous decision of the board since I voted against it. The decision was that I do something which I and the board could be sued for. There was nothing that prevented someone else from making the same request. I am an unpaid volunteer, and am not required to do things that put the CFC or myself at financial risk and in fact it is my duty to refuse such demands. The will to take this action collapsed after it was established that it was against Les's advice.

For better or worse you are going to be lumped in with the company you keep.

Good luck defending your position.

[Victor Itkin]

It was not a unanimous decision of the board since I voted against it. The decision was that I do something which I and the board could be sued for. There was nothing that prevented someone else from making the same request. I am an unpaid volunteer, and am not required to do things that put the CFC or myself at financial risk and in fact it is my duty to refuse such demands. The will to take this action collapsed after it was established that it was against Les's advice.

For better or worse you are going to be lumped in with the company you keep.

Good luck defending your position.

I never refuse to argue my position. And although this does not directly relate to the stated in our Motion reason for your removal from office, I think, that Voting Members would be interested to compare my and your positions before deciding how to vote. So, in order:

1. At the CFC Board of Directors, a vote was taken on the intention to ask CFC Publicity Officer Vadim Tsypin to resign due to his unworthy behaviour and an attempt to bribe. Note: the vote was not for the dismissal of the Officer, but just for asking him to resign himself. Hal Bond was saying that the vote for asking the Officer to resign originally was unanimous, but later you changed your vote after receiving legal advice. From your post it sounds like you voted against from the beginning. I’ll give you the benefit of the doubt here. Let’s assume that the Board of Directors voted for asking Officer to resign not unanimously, but by a majority. This also corresponds with Fred McKim’s statement made on this Forum:
“While the majority of the Executive voted for an action, President Vlad Drkulec declined to move forward after seeking legal advice from Les Bunning, our long time lawyer.”

2. Your explanation above is that you voted against because “The decision was that I do something which I and the board could be sued for.” So, you are telling us that if the board would ask Vadim Tsypin to resign, he could sue the board. Hypothetically, of course, anyone can sue anyone, and for anything. However, in this particular situation, it sounds like nonsense to me. First, it was not in Vadim’s interests to make this story public - and if suing, it would become public immediately; second, if employees are suing organizations for wrongful dismissal – this is always about financial compensation - while in our case CFC Publicity Officer is a volunteer position; and third, even if Vadim sued, his chances of winning would be close to zero, because the bribe attempt was alluded to in the letter to CFC. Furthermore, CFC bylaw clearly states that: “In the absence of a written agreement to the contrary, the board may remove, whether for cause or without cause, any officer of the Corporation”. Accordingly, in my view, the board could safely not only ask Vadim to resign, but could simply fire him without any problem.

3. Now my main point. Suppose the advice you received from lawyer was really weighing you down – I’ll continue to give you the benefit of the doubt – and you genuinely feared being sued. Then, you should have raised your concern to the board, and should have tried to convince them to change their decision. Apparently, you did just that, and even managed to convince one of the Directors to vote with you. We can learn this from the following Fred McKim’s post on this Forum: “As one of the original movers, I subsequently conferred with Les and then agreed that it was not in the best interests of the CFC to move forward. There is nothing else to be said at this point”. Thus, your attempt to persuade the Board of Directors failed (there were 7 Directors in CFC at that time), and the majority decision to ask Vadim Tsypin to resign remained in force. In such a situation, you could only act in two legal ways:

a) to obey the majority decision
OR
b) to resign yourself due to disagreement with this decision; by the way – this is exactly what Hal Bond did in a similar situation – when he disagreed with the majority decision to endorse Diana Tsypina’s application.

This is how democracy works; this is what NFP Act provides; and this is what CFC bylaw strictly stipulates: “At all meetings of the board, every question shall be decided by a majority of the votes cast on the question”.

Lawyers don’t make decisions for organizations. Boards of directors do.

A SUMMARY OF MY POSITION ON THIS EPISODE

You did not have the right (under any circumstances) to unilaterally cancel the decision of the CFC Board of Directors. By doing this you violated your Fiduciary Duty to CFC. And that’s what Hal Bond and other Directors could really (and not hypothetically) sue you for – if they chose it – with a high chance of succeeding. I’ll end this post with a Hal Bond’s quote on this Forum: “If we can’t even object to a bribe without being sued by the person who offered it, we should close our doors. We are not an organization, we are a hostage.”


Unfortunately, this episode was not the only one where you abused your power. To be continued.

[Vladimir Drkulec]

I really don't have the time to respond to this now and then again in two weeks. This is a very busy time for me and the CFC.

I will comment on fiduciary duty which you seem to have a horribly distorted view of. While in the case of a for profit corporation some of what you are saying might apply they do not in the case of a non-profit. There is no duty to follow the dictates of the board if the board asks me to do something inconsistent with our bylaws, our handbook, or with the NFP act or any law in Canada. There is no defence possible of such acts.

Duties of directors and officers

• 148 (1) Every director and officer of a corporation in exercising their powers and discharging their duties shall
  
  
  • (a) act honestly and in good faith with a view to the best interests of the corporation; and
  • (b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.
  
  
• Marginal note duty to comply
  
  (2) Every director and officer of a corporation shall comply with
  
  
  
  • (a) this Act and the regulations; and
  • (b) the articles, the by-laws and any unanimous member agreement.
    
  
  
• Marginal note:Lawfulness of articles and purpose
  (3) Every director of a corporation shall verify the lawfulness of the articles and the purpose of the corporation.
• Marginal note:No exculpation
  
  (4) Subject to subsection 170(5), no provision in a contract, the articles, the by-laws or a resolution relieves a director or an officer from the duty to act in accordance with this Act or the regulations or relieves them from liability for a breach of this Act or the regulations.

Marginal noteirector — reasonable diligence

• 149 (1) A director is not liable under section 145 or 146, and has complied with his or her duties under subsection 148(2) and (3), if the director exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on
  
  
  
  • (a) financial statements of the corporation represented to the director by an officer of the corporation or in a written report of the public accountant of the corporation fairly to reflect the financial condition of the corporation; or
  • (b) a report of a person whose profession lends credibility to a statement made by that person.
    
  
  
• Marginal note director — good faith
  
  (2) A director has complied with his or her duties under subsection 148(1) if the director relied in good faith on
  
  
  • (a) financial statements of the corporation represented to the director by an officer of the corporation or in a written report of the public accountant of the corporation fairly to reflect the financial condition of the corporation; or
  • (b) a report of a person whose profession lends credibility to a statement made by that person.
  
  

There is absolutely no duty for a president to follow the dictates of the board especially when those dictates are contrary to the bylaws and the law. Our Handbook which we still use for most of the day to day operations of the CFC states clearly:

4. PRESIDENT: The President shall be the chief executive Officer of the Federation. He shall preside at all meetings of the Assembly of Governors, or of the Board of Directors, when he is personally present. He shall exercise constant active and general supervision of the Officers of the Federation, and the conduct of its affairs, with the exception of:

a) Those matters which are reserved to the Assembly of Governors or the Board of Directors.

b) Those matters which have already been delegated to Committees appointed by the Assembly of Governors.

The President shall have full power to take such action in the name of the Federation, as he may in his sole discretion decide.

In matters where an immediate decision is not necessary, the president shall confer with the other Officers of the Federation, but as a matter of general policy only, and not so as to limit in any way his authority. In any matter covered by his general authority and not coming within the duties specifically allotted to any other Officer or Officers, the decision of the President shall override that of any other Officer.

The President shall exercise constant and active supervision over the chief employee of the Chess Federation of Canada (commonly known as the Executive Director).