ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-12-00451199-0000
DATE: 20120717

BETWEEN:

TERRACE HOUSING CO OPERATIVE INC. Applicant/Co-operative – and – ANDRIAN OUSTIANTSEV Respondent/Member

Paula Boutis, for the Applicant

HEARD: July 13, 2012

goldstein j.

REASONS FOR JUDGMENT

1The Applicant is a non-profit corporation that owns and operates a housing co-op at 88 Mutual Street in Toronto pursuant to the Cooperative Corporations Act , R.S.O. 1990, c. C.35 (“the Act”). The Respondent is a member of the co-op (I refer to “the Applicant” and “the co-op” interchangeably in these Reasons). The Respondent has failed to pay rent. He and his guests have indulged in destructive and disruptive behavior, including dealing drugs and vandalizing co-op property. The Applicant sought, inter alia , the following:

• a declaration that the Respondent’s membership and occupancy rights are terminated;

• a writ of possession in favour of the Applicant;

• payment of arrears;

• its costs.

2The Respondent did not appear. After reviewing the material and hearing submissions from counsel for the Applicant, I granted the application and indicated that reasons would follow. What follows are my reasons for hearing the application in the absence of the Respondent and granting the application.

3The Respondent did not attend the hearing. He was duly served. He attended motion scheduling court with a community legal worker on May 14, 2012 when the date was selected. I was informed by Ms. Boutis that she spoke to the Respondent the day before the hearing. She indicated that he was aware of the time and place of the hearing.

4The record is replete with failures by the Respondent to attend to matters relating to his membership of the co-op.

5The Respondent was receiving a subsidy for his membership in the co-op. This subsidy is known as a rent-geared-to-income (“RGI”) subsidy. On June 24, 2011, the co-op staff wrote to the Respondent reminding him that he was required to fill out his RGI form by August 4, 2011, so that the government would continue to provide the subsidy. He did not respond. On August 10, 2011, the co-op staff wrote to him again reminding him to fill out his RGI form and extending the deadline to August 19, 2011. The co-op staff wrote to him again on August 23, 2011, and extended the deadline to August 29, 2011. The Respondent did not respond.

6On December 13, 2011 the co-op staff again wrote to the Respondent regarding the loss of the RGI subsidy. The Respondent attended at the office of the co-op staff on February 17, 2012, indicating that he did not want to pay market rent. The co-op staff indicated that he needed to provide some additional information. The staff followed up with a letter that day, giving the Respondent another ten days to provide the information. The Respondent never provided that information and the increase to market rent took effect on March 1, 2012.

7On February 3, 2012, the Respondent was served with notice that the Board of the co-op would consider whether to terminate his membership on February 15, 2012. The Board did meet, and did vote to terminate the Respondent’s membership. The Respondent did not attend, although the notice indicated that he could do so and make submissions. It is important to note that this was not the first time the Board of the co-op had met to consider whether to terminate the Respondent’s membership. The Respondent had previously attended such meetings, so he was familiar with the process.

8As I indicated at the hearing, I was satisfied that the Respondent was aware of the hearing date and made a deliberate decision not to attend. No purpose would have been served by adjourning the matter to another date as there was no more likelihood that the Respondent would attend that date either.

9As of March 19, 2012, the Respondent has failed to pay rent and costs of $881.00 per month, and arrears have accumulated.

10Failure to pay rent is not the only reason the co-op seeks termination of the Respondent’s membership and possession of the unit. The Respondent and his guests have been the subject of numerous complaints over the years, and the subject of several hearings of the co-op board over the years. Some of the complaints have included:

• lack of cleanliness in the unit;

• loud, violent, and aggressive behavior of his guests;

• repeated attendances by the police at the unit for disturbances;

• the beating of a female in the unit;

• vandalism, including pulling fire alarms and locks being broken;

• threats and intimidation to other members of the co-op;

• permitting drug dealing from the unit.

11I am aware that the complaints are contained in an affidavit, that the complaints are hearsay to this Court, and that the Respondent was not present to refute them or test them. At the same time, on a hearing of this nature I am permitted to receive evidence as long as it is relevant to the subject matter of the hearing. Section 171.20 of the Act specifically provides:

171.20 (1) Subject to subsections (2), (4) and (5), a judge of the Superior Court of Justice may admit any oral testimony or any document or thing as evidence at a hearing under section 171.13 or 171.14 and may act on such evidence.

(2) The evidence need not be given or proven under oath or affirmation or admissible as evidence in a court as long as it is relevant to the subject-matter of the proceeding.

(3) The judge may exclude anything unduly repetitious.

12The relaxed rules of evidence facilitate the ability of co-op members, who may, like the Applicant, be of limited means, to bring forward such information that might assist them in making their case to a judge. A co-op is obviously in a different position. That said, my main concern is not with the truth or falsity of the complaints set out in the record, but rather with the fairness of the process by which the Respondent’s membership of the co-op was terminated by the Board.

13In Forestwood Co-Operative Homes Inc. v. Blake , 2010 ONSC 1179 , Price J. set out the test on an application of this nature as follows:

16 An application under the CCA is not a trial de novo but a review of a decision of a co-operative corporation: Tamil Co-operative Homes Inc. v. Kandiah , 2003 CarswellOnt 3395 (Ont. S.C.J.) at para. 2 , aff'd [2005] O.J. No. 460 (Ont. Div. Ct.) . The standard of review is one of reasonableness. In Arulappah , Molloy J. stated:

Generally speaking, then, the Court will not intervene if a member has been dealt with in accordance with principles of natural justice and procedural fairness and if the Board had a reasonable basis for its decision in the circumstances. This, in my view, is the standard of review: Tamil Co-operative Homes Inc. v. Arulappah , 1996 CarswellOnt 748 (Ont. Gen. Div.) at para. 59 to 61 . (Although overturned on the issue of mootness, the judgment was cited with approval on the standard of review in Bomanville Bowmanville Valley Co-operative Homes Inc. v. Spicer , 2005 CarswellOnt 5902 (Ont. S.C.J.) at para. 19 ).

b) The Court's Mandated Approach to such an Application 17 The Court should generally take a hands-off approach to the review in court of the decisions of non-profit housing co-operatives: Ryegate (Tecumseh) Co-Operative Homes Inc. v. Stallard , 2000 CarswellOnt 5170 (Ont. Div. Ct.) at para. 32 to 39 . Absent compelling circumstances, co-operatives must be allowed to govern their affairs without unwarranted interference by the courts .

18 In Ryegate , the Court stated that the consensual and communitarian nature of the co-operative organization commands deference from the courts:

Absent bad faith, dishonesty, reliance on a matter outside the proper scope of consideration, failure to consider some controlling issue, or some egregious breach of public policy, it is not for the court to substitute its own view of what is reasonable for the view of those who have democratically agreed to live together under a common set of mutual obligation .

19 The Divisional Court has approved the deferential approach articulated in Ryegate with respect to the review of board decisions to terminate membership and occupancy rights.

14In Tamil Cooperative Homes Inc. v. Kandiah 2003 CarswellOnt 3395 (Sup.Ct.) , Cameron J. made the following observation:

I should not otherwise interfere in a decision of the Co-op management under the rules adopted by its members unless that decision is unreasonable, made in breach of the principles of natural justice and fairness or in bad faith, based on extraneous considerations or a failure to consider a controlling issue or constituted an egregious breach of public policy.

15Based on the record before me, the Respondent had every opportunity to provide RGI information to the co-op staff. Indeed, the staff went well beyond what was required by the rules of fairness.

16The Respondent was also provided with an opportunity to appear before the Board as it considered whether to terminate his membership. He did not. On February 15, 2012, the Board met to consider the issue. The Board did not simply render a pro-forma decision: the Board heard from other co-op members who complained about the Respondent and his guests. The Board also had regard to written complaints, as well as the Respondent’s history of nuisance and by-law violations.

17A copy of the Notice of Eviction Decision was served on the Respondent. Both the Act and the by-law of the co-op provide for an appeal of the Board’s decision. The Respondent did not appeal, although the Notice indicates that an appeal is available.

18It bears noting that on three previous occasions the Board had met to consider terminating the Respondent’s membership. The Respondent appeared each time, promised to mend his ways, and was granted a reprieve.

19I am satisfied that there was nothing unfair or unjust about the Respondent’s treatment by the Board. Indeed, it is difficult to imagine what else the Board could have done to ensure that the Respondent was given the opportunity to present his case and possibly prevent eviction.

20The co-op has incurred substantial costs in dealing with this matter. The occupancy agreement provides for the payment of costs on a substantial indemnity basis in the event legal action is necessary. I am aware that the co-op may encounter considerable difficulty in recovering an costs from the Respondent. That said, the awarding of costs must reflect an amount that is fair and reasonable: Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA) , 71 O.R. (3d) 291 (C.A.). After hearing submissions from Ms. Boutis and reviewing the bill of costs, I fix costs at $7500.00.

Goldstein J.