Court File and Parties

Court File No.: CV-18-597376 Date: 2018-11-26 Ontario Superior Court of Justice

Between: Dufferin Grove Housing Co-Operative Corporation, Applicant – and – Sade Smithen and Tamar Smithen, Respondents

Counsel: S.J. Lakhani, for the Applicant S. Cuthbertson, for the Respondents

Heard: August 30, 2018

Reasons for Decision

SCHRECK J.:

[1] This is an application for a writ of possession respecting a co-operative housing unit where two young people grew up and lived with their mother until she recently passed away. Sade and Tamar Smithen grew up at the Dufferin Grove Housing Co-Operative with their mother and their grandmother and great-grandmother lived in the same Co-Operative. When Sade and Tamar’s mother died in November 2017, they were invited to apply for membership in the Co-Operative. However, their membership application was not considered because although they made payments towards their membership fees, they had difficulty keeping those payments up to date because Sade was unemployed and Tamar was a fulltime high school student. As well, there was some type of allegation of an altercation between Sade and another individual, although this was never investigated. In April 2018, the Co-Operative’s Board of Directors made a decision to initiate eviction proceedings, but did not advise the Smithen children of this until sometime later.

[2] Sade is now employed and the membership fees are no longer in arrears. The Co-Operative has continued the eviction proceedings and has brought an application to this court for a writ of possession on the basis that the membership fees were in arrears.

[3] For the reasons that follow, the application is dismissed. The Smithen children have lived at the Co-Operative for their entire lives. Their grandmother and great-grandmother continue to live there. While they had difficulty keeping their membership fee payments up to date in the months immediately following the death of their mother, they are able to do so now. In these circumstances, I have concluded that it would be unfair to grant a writ of possession before the Smithen children’s application for membership in the Co-Operative can be fairly considered.

I. Facts

A. The Parties

[4] The applicant, the Dufferin Grove Housing Co-Operative (“the Co-Operative”), is a non-profit co-operative incorporated under the Co-Operative Corporations Act, R.S.O. 1990, c. C.35 (“CCA”) which owns property on Melbourne Avenue in Toronto. Apartments on the property, known as “member units”, are occupied by members of the Co-Operative. The relationship between members and the Co-Operative is governed by an occupancy agreement as well as the Co-Operative’s by-laws.

[5] Dawn Smithen (“Dawn”) became a member of the Co-Operative in 1995 and lived there for over 30 years. She raised her children, the respondents Sade and Tamar Smithen, on the Co-Operative property. Dawn’s mother, Cynthia Smithen (“Cynthia”), and her grandmother were and continue to be members of the Co-Operative.

[6] On November 6, 2017, Dawn passed away. At the time, she was living in her member unit with Sade and Tamar, who are now 24 and 16 years old, respectively.

B. The Invitation to Apply For Membership

[7] On November 24, 2017, the Co-Operative’s office administrator, Tonya Earle, wrote to Cynthia and advised her that Sade and Tamar could remain in Dawn’s unit until February 1, 2018. She also stated that “the Board would like to extend an offer of membership to Sade and Tamar to ensure they stay a part of the Dufferin Grove co-op community”.

[8] Ms. Earle’s November 24, 2017 letter also mentioned a “recent incident” involving Sade which “may affect her membership” and which would be addressed at a Board meeting in January 2018. In her affidavit on this application, which was sworn on July 28, 2018, Sade stated that the incident alluded to in the letter was never explained or communicated to her. In response, the applicant filed an affidavit from Ms. Earle, sworn on August 3, 2018, in which she stated that Sade had been advised of the Board’s concerns at a Board meeting on January 23, 2018. According to Ms. Earle, Sade explained that she had punched a neighbour who had touched her in an aggressive manner. Neither Sade nor Ms. Earle were cross-examined and there is no direct evidence from Sade with respect what, if anything, took place between her and the neighbour. According to counsel for the applicant, the “incident” was never investigated by the Co-Operative’s management.

[9] In January 2018, Sade wrote to the Board to request that she be permitted to remain in Dawn’s unit, where she had been living since she was a baby. She stated that her mother’s death had caused her a lot of emotional turmoil and that it was important to her and her brother to remain in the unit, close to their grandmother.

C. The Membership Fees in Arrears

[10] On January 23, 2018, the Board decided to suspend its decision to require the Smithen children to vacate the apartment on condition that they submit a membership application by February 1, 2018. The Smithen children did so. However, by this point the membership fees for Dawn’s unit were in arrears of $1,824.

[11] On February 7, 2018, Ms. Earle and another Co-Operative manager, Anna Tirca, wrote to Sade and Tamar demanding that the arrears be paid by February 16, 2018. They were warned that failure to do so could result in “losing the opportunity to a membership interview” and eviction. When payment was not received, a second demand letter was sent on February 28, 2018.

[12] On March 1, 2018, the Smithen children made a payment of $1,416. However, by then the March payment had become due, so on March 6, 2018, Ms. Tirca and Ms. Earle wrote to Sade and Tamar demanding payment of an additional $1,416. The children were told that unless that payment was received by March 9, 2018, eviction proceedings would be commenced.

D. The Decision to Initiate Eviction Proceedings

[13] In her affidavit, Sade stated that she attended a Board meeting on April 9, 2018 at which she advised the Board that she would be able to make payments going forward. According to her, the Board expressed concerns about her “commitment to the co-op”. She assured the Board members that she was committed and willing to participate on Co-Operative committees. In her affidavit, Ms. Earle denied that Sade attended the April 9, 2018 meeting. Neither affiant was cross-examined.

[14] It appears that at the April 9, 2018 meeting, the Board had an “in camera” session during which a decision was made to evict Sade and Tamar. The Board’s minutes state:

T. Berinstein stands with previous motion to eviction. [^1] L. Zucker worries that there will be potential issues with late payments in the future and possibility of inviting more problems into co-op with Sade. D. Bowes worries also about ability to pay housing charges in the future. The unit has not demonstrated the ability to pay housing charges in the future. The unit has not demonstrated the ability to pay housing charges on time when asked recently. D. Bowes expresses that he like [sic] Tamar Smithen and wants the best for him, but sibling Sade Smithen has shown no interest in being a good member. J. Kirkpatrick states Board has given the unit enough chances to show they would like to be members.

T. Berinstein motions to instruct Office Staff and Iler Campbell to proceed with 60 days notice to 28 Melbourne, Unit #4 and to begin the eviction proceedings with the shortest path to eviction, Moved by: T. Berinstein, 2^nd^ by L. Zucker, all in favour, carried.

[15] The Smithen children do not appear to have been advised of this decision at the time it was made. They made a payment of $1,416 on April 19, 2018, by which time the April charges had become due. On April 23, 2018, Ms. Tirca and Mr. Earle wrote a letter to the children stating that unless a further $1,416 was received by April 27, 2018, eviction proceedings would be commenced. The letter does not mention that the Board had in fact already decided to commence eviction proceedings. It is unclear when the Smithen children were advised of this decision.

E. The Application for a Writ of Possession

[16] On May 7, 2018, the Co-Operative filed a Notice of Application seeking a writ of possession. At that time, $1,824 remained in arrears. The only basis for the relief sought in the Notice of Application is the fact that the membership fees were in arrears.

F. The Current Situation

[17] In her July 28, 2018 affidavit, Sade stated that she was now employed full time and able to make payments going forward. She attached a letter from her employer stating that she had been employed full-time as a cook since March 28, 2018 and predicting that she would remain so. Her evidence on this point has not been challenged.

[18] At the hearing of this application, I was advised that all arrears had been paid in full.

II. Analysis

A. Relevant Statutory Provisions

[19] According to s. 64(2) of the CCA, Dawn was deemed to have given notice of an intention to withdraw from the membership of the Co-Operative upon her death.

[20] The granting of writs of possession by this court is governed by ss. 171.13 and 171.21 of the CCA. Section 171.13 provides as follows:

171.13 (1) After a person’s membership and occupancy rights are terminated under section 171.8, or if there is no member occupying a member unit, the non-profit housing co-operative may apply to the court 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.

(3) An application under subsection (1) may only be made if the person against whom the order is sought is in possession of a member unit.

(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.

[21] Section 171.21 provides as follows:

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.

(2) If the member who had occupancy rights to the member unit has died or has left the unit and none of the persons who are occupying the unit are members or have occupied the unit continuously for the three years preceding the day the application for a writ of possession was made, the judge may refuse to grant the application under clause (1)(a) only as required by subsection (3).

(3) Without restricting the generality of subsection (1), the judge shall refuse to grant the application if he or she is satisfied that,

(a) the co-operative has contravened the Act or its articles or by-laws and the contravention is material and relevant to the application;

(b) a reason for the application being brought is that the person against whom an order is sought has complained to any governmental authority of the co-operative’s violation of any statute or municipal by-law dealing with health or safety standards including any housing standard or by-law;

(c) a reason for the application being brought is that the person against whom an order is sought has attempted to secure or enforce his or her legal rights; or

(d) a reason for the application being brought is that the member unit is occupied by children, provided that the occupation by the children does not constitute overcrowding and the unit is suitable for children.

B. The Discretion to Refuse a Writ of Possession

[22] It is clear from the language of both s. 171.13(12) and s. 171.21(1)(a) that the court retains a discretion to refuse a writ of possession. However, it is well established that this discretion should be exercised only in exceptional circumstances and that deference is usually owed to decisions made by a co-operative for the reasons explained by Swinton J. in Windward Co-Operative Homes Inc. v. Shuster (2007), 54 R.P.R. (4th) 55 (Ont. Div. Ct.), at paras. 11-12:

Judges will usually defer to an eviction decision made by a non-profit housing co-operative because of its democratic and self-governing nature (McBride v. Comfort Living Housing Co-operative Inc. (1992), 7 O.R. (3d) 394 (C.A.) at para. 20; Ryegate (Tecumseh) Co-operative Homes Inc. v. Stallard, [2000] O.J. No. 5423 (Div. Ct.) at para. 32; David B. Archer Co-operative Inc. v. D’Oliveira, [2003] O.J. No. 1469 (Div. Ct.) at para. 5). As A. Campbell J. stated in Ryegate (at para. 35), the case law reflects

a general judicial recognition that the consensual and communitarian nature of the co-operative organization commands deference from the courts in any attempt to substitute the view of the court for the democratically governed view of the co-operative and its members.

As a result, the courts have refused to set aside a decision of a co-operative unless it was unreasonable, or the co-operative failed to meet the requirements of procedural fairness in reaching its decision to evict the member (Ryegate at para. 38).

While the hearing judge has discretion to refuse to grant an application for a writ of possession on the grounds of unfairness, such discretion is to be exercised only in exceptional circumstances (Coady Housing Co-operative Inc. v. Fekete, [1995] O.J. No. 4894 (Ont. Ct. (Gen. Div.)) at para. 11).

[23] While the discretion under s. 171.21 is to be exercised only in exceptional circumstances, it is nonetheless a “broad discretion”: Windward Co-Operative Homes Inc. v. Shuster, at para. 20. Courts have exercised their discretion to deny applications on the basis of fairness in a variety of circumstances, examples of which are described in William Punnett Housing Co-Operative Inc. v. Njok, 2014 ONSC 5197, 122 O.R. (3d) 222, at paras. 64-73.

[24] Relying on Beaver Hall Artists’ Co-Operative Inc. v. Berry, 2011 ONSC 685, at para. 35, the applicant submits that the standard of review to be applied to the decision of the Co-Operative’s Board is whether the decision was “patently unreasonable”. The applicant is mistaken. In Fieldstone Co-Operative Homes Inc. v. Rodriguez, 2011 CSON 4660, 2011 ONSC 4660 (Div. Ct.), Swinton J. said the following with respect to what had been said in that case by the same judge who had decided Beaver Hall Artists’ Co-Operative v. Berry:

The application judge stated that the standard of review of the Co-operative’s decision is patent unreasonableness. That is an error, as the standard of review of the Co-operative Board’s eviction decision is reasonableness. [Citations omitted].

[25] In determining whether or not to exercise its discretion not to grant an application, the court is entitled to consider not only the circumstances that existed at the time of the board's decision, but also any changes in those circumstances that have arisen since the board’s decision: Alexandra Park Co-Operative v. Hamilton, 2010 ONSC 1277 (Div. Ct.), at para. 20; William Punnett Housing Co-Operative Inc. v. Njok, at para. 60.

C. The Distinction Between Eviction and Membership Decisions

[26] What distinguishes this case from most cases decided under s. 171.21 of the CCA is that the respondents are not members of the Co-Operative. They have applied to be members and it would appear from the record that was filed that the Board never made any formal decision as to their application. It is important to keep in mind that what I am reviewing pursuant to s. 171.21 is the decision to evict the respondents. I am not reviewing any decision not to grant them membership.

[27] That said, in this case the issue of membership is inextricably linked to the issue of whether the Board’s decision to evict the respondents is reasonable. While there was no formal decision refusing membership, the decision to evict them necessarily determined their membership application. The decision to evict and the refusal of a membership application were also linked in Superior View Housing Co-Operative v. Keefe, 2013 ONSC 7519. In that case, the Co-Operative had sought to evict a member on the basis that he had permitted a non-member to reside in his unit for more than 30 days. The non-member, his spouse, had applied for membership but had been refused without reasons being given. Pierce J. stated, at para. 8, that the “refusal is not before the court, but it is relevant to the co-operative’s decision to evict the respondent.” Pierce J. ultimately concluded that the refusal to grant membership to the respondent’s spouse was unreasonable and consequently denied the application. Similarly, in this case, in order to determine whether the decision to evict the respondents was reasonable, I must consider all of the circumstances, including the membership application.

D. The Decision of the Board in This Case

[28] In this case, the respondents were invited to apply for membership and did so. Their membership interview did not occur because their housing payments were in arrears. By the time the payments were up-to-date, the decision to evict them had already been made.

[29] In determining whether the Board’s decision was reasonable, I must of course consider the reasons for that decision. Unfortunately, the record in this regard is less than clear. The only basis for the eviction identified in the Notice of Application is that the membership fees were in arrears, which is no longer the case. The April 9, 2018 Board meeting minutes mention other concerns, although it is unclear to what extent, if any, they played a role in the decision to evict the respondents.

[30] The Board meeting minutes mentions concerns about “inviting more problems into co-op with Sade” and that Sade had “shown no interest in being a good member”. One Board member stated that the respondents had been “given … enough chances to show they would like to be members.” It is difficult, on this record, to assess these concerns. I do not know what “problems” the Board was worried Sade would “invite” into the Co-Operative. It is unclear to me whether this refers to the altercation with the neighbour. As noted earlier, the Board conducted no investigation into that altercation. The only evidence I have as to what occurred is Ms. Earle’s description in her affidavit as to what Sade had told her, which was that she had punched a neighbour who had assaulted her. It is unclear when this took place or whether the neighbour was a member of the Co-Operative, and it appears from Sade’s description that she was acting in self-defence. In my view, absent some attempt to ascertain the details of what took place, it was unreasonable for the Board to rely on this incident, if the Board in fact did so.

[31] With respect to Sade’s purported lack of interest in being a “good member”, I am unsure what that means. Sade’s affidavit refers to the Board having a “nebulous, ill explained ‘feeling’” that she would not demonstrate a commitment to the Co-Operative. She denies this and states that she is willing to serve on committees and be a committed Co-Operative member.

[32] The final concern expressed in the Minutes is that the respondents had been “given enough chances to show they would like to be members”. I do not understand this concern. The respondents had completed membership applications and Sade had written a letter to the Board pleading to be allowed to become a member. They have clearly shown that they would like to be members.

[33] In my view, on this record the only reasonable aspect of the Board’s decision is the concern about the late payment of membership fees, and this was likely the impetus for the Board’s decision. The respondents clearly failed to make timely payments between the time their mother died until at least the end of April 2017. However, their late payments have to be considered in the context of what was occurring. Their mother, who was presumably paying some if not all of the membership fees, had just died and obviously stopped contributing. Sade was not working at the time and did not get a full-time job until March. The children were clearly upset and grief-stricken by their mother’s death. While they did not make timely payments in full, they did make some payments and it appears that they were doing the best that they could. There is no indication that the Board gave any consideration to any of these factors.

[34] In addition to this, I note that although the Board made the decision to evict the respondents on April 9, 2017, in Ms. Tirca’s and Ms. Earle’s April 23, 2018 letter to the respondents, they were told that if they failed to make payment by April 27, 2018, the Co-Operative would begin eviction proceedings. I can only infer that the Co-Operative had failed to advise the Respondents that a decision had already been made to evict them. This conduct is not, in my view, consistent with good faith.

E. Considerations of Fairness

[35] As noted earlier, in considering whether to grant the application, I am not restricted to a consideration of the circumstances that existed at the time of the Board’s decision and may consider circumstances that arose since then. In this case, the respondents have paid all of their arrears. At the time I reserved judgment in this matter, I made an interim order that the respondents pay all of their fees on time and in full, that they abide by the By-Laws of the Co-Operative, and that I was to be notified in the event that they failed to do so. At the time these reasons were released, I have not been notified of any non-compliance.

[36] Ultimately, the central consideration in determining whether to exercise my discretion under s. 171.21(1)(a) and refuse the application is fairness. As counsel for the applicant points out, sympathy for the respondents is not a basis upon which to dismiss the application: William Punnett Housing Co-Operative v. Njoku, at para. 62. However, fairness and sympathy are distinct concepts.

[37] The respondents have lived at the Co-Operative for their entire lives. They grew up there. Their grandmother, whom Sade described in her letter to the Board as “the closest thing to a mother we have”, lives at the Co-Operative, as does their great grandmother. Tamar attends school in the area. While they initially had difficulty making timely payments, they do so now. In these circumstances, it would be, in my view, unfair to evict them without giving them an opportunity to have their application for membership to the Co-Operative properly and fairly considered.

F. Should This Court Determine The Issue of Membership?

[38] Counsel for the respondents submits that I should hold a hearing at which I could hear evidence from the Respondents and the management of the Co-Operative and then make my own decision as to whether they should be granted membership. I decline to do so for several reasons. First, I have grave doubts as to my jurisdiction to hold such a hearing. Section 171.21 only gives me the jurisdiction to grant or decline an application for a writ of possession. In my view, I can only consider the issue of membership insofar as it relates to the decision whether or not to grant the application.

[39] Second, the Co-Operative is a democratic and self-governing institution with a “consensual and communitarian nature”. As such, except in very narrowly circumscribed situations as provided for in the CCA, it should be able to make its own decisions without interference.

[40] Third, and most importantly, I have no reason to think that the Board will not give full and fair consideration to Sade and Tamar’s applications for membership. As noted earlier, in my view, it is likely that the Board’s initial eviction decision was based primarily on Sade and Tamar’s difficulties in making timely payments, rather than on vague concerns about their commitment and unsubstantiated allegations about the “incident”. I am sure that the Board will now consider not only their initial difficulties in making timely payments, but also their subsequent conduct since the time the Notice of Application was filed. I have no doubt that the Board will consider their longstanding history as residents of the Co-Operative and their ties to their grandmother and great-grandmother, who are also residents. I am confident that the Board will not deny the respondents’ applications for membership without good reason.

III. Disposition

[41] The application is dismissed. This is not an appropriate case for costs.

Schreck J.

Released: November 26, 2018.

[^1]: The record is unclear as to when there was a previous motion to evict the respondents or what the result of that motion had been.