ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Jarvis-George Housing Cooperative Inc., Applicant
Applicant
- and -
Rosalee Samuda
Respondent
Bruce Woodrow, for the Plaintiff
Rosalee Samuda, in Person
HEARD: March 6, 2014
REASONS FOR DECISION
[1] Jarvis-George Housing Cooperative Inc. (the “Co-op”) makes application for an order declaring Ms Samuda’s membership and occupancy rights in the Co-op terminated. The Co-op also seeks a writ of possession, an order for payment of arrears of outstanding housing charges due, and costs on a substantial indemnity basis.
[2] The Co-op claims that Ms Samuda owes arrears of housing charges of $20,676.20 to February 28, 2014 plus $26.70 per day until the date she delivers up vacant possession of her unit. The Co-op relies on articles 3.1(a) and (c) of its occupancy bylaw which provides for the payment of housing charges each month. Under the provisions of article 9.2 of the occupancy bylaw, the board of directors of the Co-op can evict a member who is in arrears or who has been repeatedly late in paying housing charges. On August 19, 2013, the Co-op provided Ms Samuda with notice of a board of directors meeting at which the board of directors proposed to consider terminating her membership in the Co-op and evicting her from her unit. The form of notice was in accordance with the Co-op’s occupancy bylaw and the terms of the statute. It contained a statement of the two grounds relied upon under article 9.2 and gave significant warnings all as required.
[3] Ms Samuda attended the board of directors meeting with counsel on September 18, 2013. She was provided with notice the next day that the board of directors had determined to evict her effective September 30, 2013. That notice advised Ms Samuda of her right to appeal to a general meeting of all of the members of the Co-op - a right which she invoked. A general members meeting of the Co-op was held on October 21, 2013. Ms Samuda’s counsel submitted material that was circulated to all of the members of the Co-op on her behalf. She and her new lawyer spoke at the general members meeting as well. By secret ballot, the membership overwhelmingly approved the eviction resolution that had been adopted by the board of directors.
[4] The Co-op is a non-profit housing co-operative regulated under the provisions of the Co-operative Corporations Act, R.S.O. 1990, c. C.35 as amended (the “Act”). Termination and eviction proceedings are governed by detailed code prescribed under section 171.1 of the Act. Even after the eviction of a member has been approved by a cooperative corporation’s board of directors and affirmed by the membership, the Act provides that there will be no actual eviction until the co-operative corporation applies to the court for an order under the provisions of section 171.13 which provides as follows (in part):
Application for writ of possession
171.13 (1) After a person’s membership and occupancy rights are terminated or if there is no member occupying a member unit, the non-profit housing co-operative may apply to a judge of the Superior Court of Justice for an order,
(a) declaring that the person’s membership and occupancy rights are terminated or that there is no member occupying the unit, as applicable; and
(b) directing that a writ of possession be issued. 1992, c. 19, s. 23; 2006, c. 19, Sched. C, s. 1 (1).
Payment to local registrar of amounts in dispute
(7) No dispute to a claim for arrears of housing charges or compensation under section 171.10 may be made under subsection (6) on the grounds that the co-operative is in breach of obligations under the co-operative’s by-laws unless the respondent pays, to the local registrar, the amount of the housing charges and compensation claimed, by the co-operative, to be in arrears less any amounts of housing charges and compensation alleged, by the respondent, to have been paid, as substantiated by receipts filed or as verified by affidavit. 1992, c. 19, s. 23.
Order and judgment
(12) After a hearing, the judge shall determine the applicant’s claim and may make an order declaring the membership and occupancy rights terminated or declaring that there is no member occupying a unit or directing that a writ of possession issue or give judgment for the arrears of housing charges or for compensation under section 171.10 found due or amounts owing under subsection 171.3 (4), or any of them, and in any such order may impose such terms and conditions as the judge considers appropriate. 1992, c. 19, s. 23.
[5] Under the relevant case law, courts generally defer to an eviction decision made by a non-profit housing cooperative because of its democratic and self-governing nature. (See, for example, Tamil Co-operative’s Homes Inc. v. Arulappah, [1996] O.J. No. 768 (Ont. Ct. Gen. Div), appeal allowed on other grounds, 1999 19939 (ON SC), 44 O.R. (3d) 120 (Div. Ct.), appeal dismissed as moot, 2000 5726 (ON CA), 49 O.R. (3d) 566 (C.A.); David B. Archer Co-operative Inc. v. D’Oliveira, 2003 21004 (ON SCDC), [2003] O.J. No. 1469 (Div. Ct.)).
[6] Despite the court’s approach of deference, the Act codifies a general, equitable defense that is available to members in the event that the court determines that granting the relief sought would be unfair. Subsection 171.21(1) of the Act provides as follows:
Power of judge to refuse writ, etc.
171.21 (1) Upon an application by a Co-operative for a writ of possession relating to a member unit, a judge may, despite any other provision of this Act or the Co-operative’s by-laws,
(a) refuse to grant the application if he or she is satisfied, having regard to all the circumstances, that it would be unfair to grant it;
(b) order that the enforcement of the writ of possession be postponed for a period not exceeding one week.
[7] Ms Samuda submitted that I should not grant the relief sought as doing so would be unfair to her and to her family. She submitted two affidavits containing a substantial number of exhibits. She admits that she owes $5,868.60 to the Co-op. She says however that she fell into arrears due to wrongdoing by the Co-op commencing in 2009 and that the Co-op has refused to meet with her to try to settle upon a proper accounting of her arrears and a payment plan that she could meet given her limited means. Ms Samuda was very articulate and clear with me that her reason for appearing in court is to try to sit down with the Co-op to look at the books from both sides and try to agree on a payment plan.
[8] Ms Samuda’s evidence and submissions relate to a story that commences in 2009. There was a flood in her unit at that time which Ms Samuda says the Co-op refused to pay to fix. She had to pay for repairs herself. Her efforts to obtain repayment seem to have engendered hard feelings as she repeatedly escalated issues to the board of directors. She claims that management began concocting arrears by declining to deposit her housing charge cheques. Moreover, she claims that management became very picky in demanding excessive and unnecessary documentation concerning her income, her son’s income and his citizenship as part of its annual process for setting housing charges and subsidies. Subsidies are apparently available to Ms Samuda from the City of Toronto. However, the amounts of the subsidies depend upon a complicated calculation conducted by the Co-op in accordance with City of Toronto and regulatory guidelines. In late 2009, the Co-op terminated Ms Samuda’s existing subsidy based on her alleged failure to provide necessary documents. Ms Samuda paid unsubsidized housing charges throughout 2010 although some amount of arrears began to mount by early 2011. Ms Samuda said that making these unsubsidized payments was a serious financial hardship for her. The Co-op’s ledger shows that starting in April, 2011, Ms Samuda commenced paying monthly housing charges in the amount of $977. This is an amount that she calculated as her proper payment net of subsidy to which she said she was entitled without the benefit of detailed application of the City standards and omitting certain charges levied by the Co-op with which she disagreed. The Co-op continued to claim payment of full unsubsidized housing charges from Ms Samuda. Serious arrears mounted.
[9] In November, 2011, the Co-op obtained default judgment for eviction and for payment of arrears against Ms Samuda. She stopped paying housing charges completely in February, 2012. On August 3, 2012, Ms Samuda’s counsel had the default judgment set aside based on service issues. At court that day, Ms Samuda provided the Co-op’s counsel with four monthly payments of $977 each. She concedes that even at her determined quantum, she remained one month in arrears at that time. With the exception of one further payment of approximately $720 in October, 2013, Ms Samuda has made no payments to the Co-op for housing charges from August, 2012 until today in March, 2014.
[10] In January, 2013, in response to complaints by Ms Samuda, the Co-op revisited the quantum of subsidy to which she claimed to be entitled from 2009. Based on what it says was incomplete documentation provided by Ms Samuda at the time, the Co-op retroactively adjusted its ledger and credited Ms Samuda with substantial subsidy credits reducing her arrears to approximately $1,500. The Co-op was dissatisfied with the quality of the information that Ms Samuda had provided and gave her notice that it was terminating her subsidy in April, 2013. Ms Samuda complained to the City as was her right. The City expressly found that the Co-op was within its rights to terminate the subsidy, but provided Ms Samuda with a further opportunity to provide a full set of the required documentation to the Co-op. Armed with the further documents provided by Ms Samuda, on June 10, 2013, the Co-op re-assessed Ms Samuda’s subsidies and revised the accounts since 2010. This resulted in an increase of Ms Samuda’s arrears. On June 27, 2013, the Co-op served several notices on Ms Samuda in respect of each year’s subsidy calculation. The notices also advised Ms Samuda that she had a right to seek an administrative review of two of the re-assessments and invited her to discuss the other two with management if she so desired. (Apparently the regulatory process for review of subsidy assessments changed and the review process was no longer available for the most recent re-assessment years.) Although Ms Samuda still had counsel at the time, she did not take any step to contest the final re-assessments of her subsidy entitlement.
[11] Counsel for the Co-op notes that the total value of all of Ms Samuda’s complaints (involving parking, cable, and the utilities component of the subsidy calculation) is quite small and that the arrears that exist are due to the fact that Ms Samuda has paid nothing at all for the past 19 months. The total arrears of approximately $20,000 equates to just over $1,000 per month for the past 19 months.
[12] Ms Samuda has two responses. First, she says, that by removing her subsidy in 2010 the Co-op caused Ms Samuda to be in a state of financial crisis from which she has yet to recover fully. She also argues that in 2012, the manager of the Co-op again refused to accept two monthly payments made by Ms Samuda in order to artificially create arrears. Therefore, she says, she is afraid to make payments to the Co-op so she has not done so. Instead, she points to four photocopies of money orders made payable to herself that Ms Samuda says she gave to her lawyer in 2013. Unfortunately, Ms Samuda says that her lawyer did not represent her well. He was not only unable to settle with the Co-op, but he did not find a way to pay the money to the Co-op in a safe and provable manner.
[13] I inquired of counsel for the Co-op as to whether there is room left for negotiation of a payment plan with Ms Samuda. He advised that if she had wished to make payments or settle on an agreeable payment schedule, she could have made such an offer to the board of directors or to the membership when she spoke to them both. Even in court on March 6, 2014, Ms Samuda was unwilling or unable to indicate an amount that she proposed to pay because she has yet to finally determine the amounts that she claims may be due to her relating to floor repairs in 2009, parking issues and other matters. I note that the Act specifically prohibits members from disputing claims for eviction based on assertions that they are owed money by their co-operative for breach of its obligations unless the member first deposits with the court all arrears less the amount of such alleged compensation. While I heard Ms Samuda’s submissions, I only deal with her claims in the context of her continued inability or unwillingness to make payments to the Co-op.
[14] I also read Ms Samuda’s evidence and heard her heartfelt submissions concerning the serious hardship which an eviction may cause her. She has a new baby. She is currently on maternity leave and is or is about to be receiving employment insurance benefits. She has been trying to go to night school while holding full-time employment during the day. Her husband is about to move in with her with his three children. She has an older child who suffers from serious illness. He is a resident of another subsidized unit in the Co-op. Ms Samuda takes care of him.
[15] Ms Samuda is obviously a person of principle. She works hard and is not afraid to assert her rights. However, there is a difference between advocating for one’s rights and taking the law into one’s own hands. Despite whatever advice she may have received from her lawyer, Ms Samuda was not entitled to decline to pay housing charges with which she disagreed. The Co-op sets its charges each year in its budgetary process in accordance with the law and the Co-op’s bylaws. Ms Samuda had access to review mechanisms. It was not open to her to set a figure of $977 and assert that the Co-op had to prove to her that it was entitled to anything more than the amount she was willing to pay. Nor was she entitled to withhold payment of housing charges for the past 19 months based on a concern as to whether management would recognize her payments. She had counsel as did the Co-op. If her lawyer would not send payments to the Co-op’s lawyer, then Ms Samuda could have simply sent her payment cheques or money orders to the Co-op and copied her lawyer to create a record of payment. Ms Samuda admits that she has used some of her housing money to pay for lawyers and for other expenses. It is not fair to the Co-op or the other members for Ms Samuda to withhold payment of her housing charges in the amounts properly determined under the prescribed administrative processes. I do not need to determine whether Ms Samuda failed to provide sufficient documentation to the Co-op for subsidy-setting purposes in 2009 to 2011 or whether the Co-op was exceedingly technical with her. By ceasing all payments after August, 2012, (and even discontinuing payment of the amount of $977 that she unilaterally established) Ms Samuda has made the situation untenable.
[16] Ms Samuda was not able to prove any unfairness in the procedure adopted by the Co-op. I do not find it unfair to grant the relief sought. I have great sympathy for Ms Samuda and her family’s situation. But financial hardship is ameliorated by the City’s subsidies and other resources and social programmes. It is not fair to the other members to foist Ms Samuda’s hardship on the Co-op or them. Ms Samuda’s current hardship is not a ground making eviction unfair. As written by the Divisional Court in Windward Co-operative Homes Inc. v. Shuster, 2007 8010 (ON SCDC), [2007] O.J. No. 967at para 34:
While there is no doubt that the respondent would face serious hardship if evicted, hardship does not equate with unfairness within the meaning of that term in s. 171.21(1).
Were it otherwise, then co-operatives would not be able to enforce payment or evict people who cannot afford to pay. That would spell the end to the co-operative as a viable business model and would be contrary to the very purpose of the Act.
[17] Under the terms of the Co-op’s occupancy bylaw, the Co-op is entitled to its costs on a substantial indemnity basis. (See Willmar Eight Housing Co-operative Inc. v. Tricarico, [2001] O.J. 555 (Div. Ct.)). Ms Samuda was warned of this outcome by the Co-op. I find it appropriate to award cost on a substantial indemnity basis to protect the Co-op and its members from the costs of this proceeding and to enforce the bylaws to which all members submit upon joining a co-operative. I have carefully reviewed Mr. Woodrow’s Bill of Cost and find it reasonable. The maximum hourly rate sought of $300 even for a substantial indemnity account for a lawyer with 28 years’ experience at the bar is modest indeed. I have signed a draft Judgment declaring Ms Samuda’s membership and occupancy rights terminated effective October 23, 2013; directing the issuance of a writ of possession; ordering Ms Samuda to pay arrears in the amounts sought; and fixing costs of this application on a substantial indemnity basis in the amount of $18,431.54 inclusive of disbursements and HST.
F.L. Myers J.
Released: March 7, 2014
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Jarvis-George Housing Cooperative Inc., Applicant
Applicant
- and -
Rosalee Samuda
Respondent
REASONS FOR DECISION
F. MYERS J.
Released: March 7, 2014