ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO: CV-11-432639
DATE: 20120106
B E T W E E N:
Main-Gerrard Community Development Co-Operative Inc. Applicant
- and -
Fadumo Dualeh Respondent
Bruce D. Woodrow, for the Applicant
Stewart Cruikshank , for the Respondent
HEARD : December 20, 2011
B. O’Marra J.:
Nature of Application
[ 1 ] This is an application to declare membership and occupancy rights in a Cooperative terminated as well as other relief.
Facts
[ 2 ] The respondent has been a member of the Cooperative since August 1, 2007. She occupied Unit 312 until May 1, 2009 when she relocated to Unit 310 (the “Unit”). She currently resides there with her two children, ages 12 and 14 years.
[ 3 ] Pursuant to an agreement with Canada Mortgage & Housing Corporation, the Cooperative is able to provide subsidies to some members so that their monthly housing charge is geared to their income.
[ 4 ] On September 27, 2007, the respondent signed an occupancy agreement wherein she acknowledged that her relationship with the Cooperative was governed by the bylaws of the corporation. She was given a copy of the bylaws.
[ 5 ] The Cooperative is a non-profit corporation that depends on its members for revenue. It has a large mortgage payment due on the first of each month and needs its members to pay their monthly charge promptly so that it can meet its financial obligations.
[ 6 ] The occupancy bylaw provides that the monthly housing charge for the Unit is due and payable in advance to be delivered to the Cooperative by the close of business on the first day of the month.
[ 7 ] The occupancy bylaw provides that the Board of Directors (the “Board”) may evict a member if the member is in arrears or has repeatedly failed to pay monthly charges in full and on time.
[ 8 ] Auditors for the Cooperative have expressed concern about the high level of total arrears and the need to deal more promptly with missed payments.
[ 9 ] As of August 11, 2011 the respondent was in arrears in the amount of $6,572.78 for the period ending August 31, 2011. In the period from May of 2009 through June of 2011, she has breached her obligation to pay in full and on time as follows:
a) Late payment – 19 months
b) No payment – 5 months
c) Partial payment – 8 months
In that time period she paid her housing charges in full and on time in only two months.
[ 10 ] On May 9, 2011, the respondent was served with a Notice to Appear with a proposed termination date of May 31, 2011. The Notice alerted her that she could appear at a meeting of the Board on May 19, 2011 and make representation with respect to the proposed termination. The grounds for the proposed termination were the arrears and repeated failure to pay in full and on time.
[ 11 ] The Board meeting was rescheduled from May 19, 2011 to June 2, 2011. The respondent was advised of the change of date by letter dated May 19, 2011.
[ 12 ] The Board meeting was held on June 2, 2011 which the respondent did not attend. She did not submit any written submissions, nor send anyone her behalf. The Board deferred a decision to June 15, 2011 to allow the respondent additional time to submit required income verification information.
[ 13 ] On June 15, 2011 the respondent was reminded in person by the manager of the applicant that the Board meeting was set for that evening. The respondent said she would attend.
[ 14 ] The Board met on June 15, 2011 but the respondent did not attend. She also did not submit any income verification information. The Board considered the matter and decided by a majority vote to terminate the membership and occupancy rights of the respondent effective June 30, 2011.
[ 15 ] On June 16, 2011 the respondent was served with a Notice of Board of Directors Eviction Decision terminating her membership and occupancy rights as of June 30, 2011 along with a copy of the decision dated June 15, 2011.
[ 16 ] The Act and bylaws allow a member to appeal an eviction decision by the Board to a general meeting of the members of the Cooperative. A request for such an appeal must be in writing and received by the Cooperative within 7 days of service of the eviction decision.
[ 17 ] No request for an Appeal was received within 7 days, nor later.
[ 18 ] The respondent remains in the unit. This application seeking orders for payment of arrears, a writ of possession and costs was issued August 11, 2011.
[ 19 ] The respondent filed a statement of dispute dated August 22, 2011 wherein she claimed the following:
• That she received a subsidy until March 2011 when the Cooperative, without warning, retroactively cut off her subsidy starting February 1, 2011.
• That she tried to work with Cooperative concerning the subsidy.
• That she completed an annual subsidy application in May 2011, as usual.
• That she was denied a subsidy without due process.
• She wants to dispute the decision.
• She has provided all information that can be expected of her to the Cooperative and is being denied a subsidy.
• She believes the Cooperative is acting in bad faith.
• She states that the Cooperative claims the only thing missing is the Notice of Assessment from Revenue Canada for her sister who has stayed with her as a visitor in the past.
• She claims her sister has no income and the respondent has no control over whether her sister has not filed tax returns with Revenue Canada.
• She no longer allows her sister to stay with her.
• She claims the Cooperative is being unreasonable with their demands.
[ 20 ] On September 10, 2011, Justice Low of this court ordered the respondent to file any responding material by October 21, 2011. As of November 18, 2011, no responding material had been filed by or on behalf of the respondent.
[ 21 ] The applicant filed an affidavit of Robert Wiseman, manager of the applicant, sworn November 18, 2011 in response to the issues raised by the respondent in her dispute.
[ 22 ] He swore that the respondent’s subsidy was terminated as of March 1, 2011 for failure to provide complete income verification and denies it was done without warning or due process. He referred to several letters sent to the respondent between September 15, 2010 and May 19, 2011 advising her of the following:
• Some of her income verification was outstanding and her subsidy would be cancelled as of March 1, 2011 if not provided by then.
• How to go about appealing the subsidy cancellation.
• The documentation required to reinstate her subsidy.
[ 23 ] The respondent eventually supplied all of the required income verification and the Cooperative retroactively reinstated her subsidy back to March 1, 2011.
[ 24 ] This motion was returnable November 29, 2011. On that date, Justice Low adjourned the matter to December 20, 2011 over the objection of the applicant. The court noted that the subsidy had been reinstated. The respondent was ordered to pay not less than $800.00 on or before December 1, 2011 toward the December housing charges. The respondent filed a further affidavit affirmed by her on November 29, 2011 wherein she claimed the following:
• She is aware that the Cooperative requires income verification in order to process claims for subsidies and she has done so over prior years.
• Her sister, Ehsan, age 20, helped her by babysitting her children while she worked. Ehsan was reported by the respondent as a long term guest but was not accepted as a Cooperative member.
• She has never received child support from her husband.
• From February through June of 2011 she was unable to provide information related to her sister’s financial situation which led to the termination of her subsidy as of March 1, 2011. In July of 2011, the respondent finally provided the required information and the subsidy was reinstated retroactive to March 1, 2011.
[ 25 ] A further affidavit of Robert Wiseman, Manager of the applicant and sworn December 12, 2011 was filed on this application. In it he advises as follows:
• With the reinstated subsidy the effective housing charge is now $829.00 per month ($27.63 per diem).
• The arrears owed as of November 30, 2011 were $1,112.68. As a condition of the adjournment granted to the respondent on November 29, 2011, she was ordered to pay $800.00 towards the December housing charge. This total payment was made on December 1, 2011.
• As of December 31, 2011 the amount now owed is $1,116.36.
• The respondent was served with the initial Notice of Appear on May 5, 2011 before the Board because of her history of late payments.
• After this application was filed on August 11, 2011, the respondent continued to breach her obligation to pay in full and on time.
• The respondent has a long history of partial, late or no payments going back to July of 2008.
[ 26 ] On December 20, 2011, counsel for the applicant advised this court that the arrears are now paid.
Position of the Parties
[ 27 ] The respondent claims that the real issue and concern giving rise to the application is the dispute regarding subsidy. Her counsel advises that the issue has now been rectified retroactively and arrears have now been paid. Based on that, the respondent seeks dismissal of this application.
[ 28 ] The applicant’s position is that the issue here is not the subsidy, but rather a long standing history of late, partial or non-payment of housing charges.
Analysis
[ 29 ] The occupancy bylaw provides that the Board may evict a member who is in arrears or has repeatedly failed to pay monthly charges in full and on time. The subsidy dispute between the parties was finally resolved with retroactive credit to March 1, 2011. This was obviously an important accounting issue for both parties. The protracted exchange of correspondence on that issue and the delay in making the subsidy retroactive was caused by the failure of the respondent to provide the income verification required by the Cooperative.
[ 30 ] Notwithstanding the ultimate rectification of the subsidy issue, the Board was entitled to seek eviction based on the longstanding and recent history of late, partial or non-payment of housing charges.
[ 31 ] The fact that arrears have finally been paid does not determine the application in favour of the respondent. See Athol Green Co-Operative Homes Inc. v. Prince, [2007] O.J. No. 4456 at para. 5 (O.S.C.).
[ 32 ] The applicant is a non-profit housing cooperative and has been advised by auditors that late payments and accumulated arrears are a serious issue for the viability of the corporation.
[ 33 ] Courts will defer to an eviction decision made by a non-profit housing Cooperative because of its democratic self-governing nature. Windward Cooperative Homes Inc. v. Shuster , 2007 ON SCDC 8010 , [2007] O.J. 967 at para. 11 (Ont. Div. Crt.).
[ 34 ] The standard of review of a decision of a board of a cooperative is whether the decision is unreasonable. David B. Archer Cooperative Homes Inc. v. D’Oliveira , 2003 ON SCDC 21004 , [2003] O.J. No. 1469 paras. 5 & 17 (Ont. Div. Crt.).
[ 35 ] I find the Cooperative’s decision to evict the respondent was reasonable. The process followed, including notices to the respondent of the hearing and appeal process was fair. The respondent was effectively allowed to file disputes even after the appeal period had expired. The Board fairly engaged the respondent in efforts to clarify the subsidy issue. I do not view the conduct of the Board on the subsidy issue as a waiver of its right to seek eviction for longstanding late or partial payment of housing charges.
[ 36 ] Section 171.21(1)(A) of the Act gives the court equitable jurisdiction to refuse an eviction in exceptional circumstances. Tamil Cooperative Homes Inc. v. Arulappoh , [1996], O.J. No. 768 at paras. 2 & 59 (Ont. Gen. Div.).
[ 37 ] The unfortunate fact is that most evictions cause financial and emotional hardship to those evicted. Without evidence of further exceptional circumstances this cannot be a basis for a claim of unfairness. There would be little basis for an eviction for non-payment or late payment of rent were that the case. See Fieldstone Cooperative Homes Inc. v. Rodriguez et al (2010), ONSC (Sept 23/10) per: Allen J.
Disposition
[ 38 ] Application granted. Order to go as follows:
The respondent’s membership in the Cooperative is terminated as of the date of the release of this judgment.
Writ of possession is to issue, not to be effective before February 29, 2012.
The respondent is ordered to pay all rent owing for every day of further occupancy after January 1, 2012 until she delivers up vacant possession at the rate of $27.13 per day.
Post-judgment interest on any outstanding charges at the rate of 4% per annum.
Costs
[ 39 ] I will consider brief written submissions (no more than 3 pages, plus itemized Bill of Costs) to be received at Judicial Administration by January 16, 2012.
B. O’Marra J.
Released: January 6, 2012
COURT FILE NO: CV-11-432639
DATE: 20120106
ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N:
Main-Gerrard Community Development Co-Operative Inc. Applicant
- and -
Fadumo Dualeh Respondent
JUDGMENT
B. O’Marra J.
Released: January 6, 2012