B.C. Supreme Court Rules Former Members Share $12M Surplus

The B.C. Supreme Court has ruled that former members of the B.C. Tree Fruits Co-operative are entitled to share in approximately $12 million to $15 million in surplus funds remaining after the co-operative’s liquidation. This decision, issued by Justice Miriam Gropper on Thursday, prevents current members from altering the co-operative’s distribution rules to exclude their predecessors from receiving any financial share.

In her judgment, Gropper described the proposed changes to the co-operative’s governing rules as “oppressive conduct,” stating that it represented a “burdensome, harsh, and wrongful” departure from accepted standards of fair dealing. The ruling’s impact is significant, as it halts a vote that current members intended to hold regarding the exclusion of former members from the surplus distribution.

Background of B.C. Tree Fruits Co-operative

Founded in 1936, the B.C. Tree Fruits Co-operative once represented more than 230 farming families in the Okanagan region. Over the decades, it expanded its operations to include a grower supply company and a fresh fruit market in Kelowna, as well as a craft cider company launched in 2014. However, due to declining fruit volumes and adverse weather conditions, the co-operative announced its closure in July 2024 and sought court approval to liquidate its assets.

The co-operative’s assets have since been sold, including a significant cold storage facility purchased by a pharmaceuticals group. Following the settlement of its debts, the remaining funds—estimated to be between $12 million and $15 million—are to be distributed according to the co-operative’s existing Rule 125, which allocates 68 percent to current members and 32 percent to former members, translating to around $4 million for the latter group.

Legal Dispute and Court Ruling

On July 9, 2025, 38 current members requested the co-operative’s board to convene a special general meeting aimed at passing a resolution to eliminate Rule 125. Former members contested this attempt in court, asserting their historical contributions to the co-operative justified their expectations of sharing in any surplus distribution.

Justice Gropper sided with the former members, emphasizing their clear financial interest and the reasonable expectation that they would partake in the distribution. The judgment noted that “[they] had reasonable expectations that each would share in the distribution of any surplus.”

Competing narratives emerged regarding the reasons behind the co-operative’s financial decline. Amarjit Singh Lalli, representing current members, indicated that former members’ departures led to reduced revenue and increased operational costs. He also cited instances of breaches in fruit supply agreements as contributing factors.

Conversely, the co-operative’s interim chief executive officer pointed to a notable decline in apple volumes, attributing part of the issue to current members withholding crop estimates amidst leadership disputes. Gropper concluded that the evidence did not definitively attribute the collapse to former members, identifying the situation as a “confluence of factors.”

Ultimately, the court found no justifiable reason to exclude former members from the surplus distribution beyond the desire of current members to retain more funds for themselves. The ruling mandates compliance with the existing rules, ensuring that both current and former members receive their respective shares.

As of September 2023, the B.C. Tree Fruits brand continues under the ownership of Wildstone Construction Group, with management provided by Ontario-based Algoma Orchards.