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Housing Co-operatives Must Adopt Fair Procedures When Terminating Members

Posted On: January, 23 2015

A recent decision from the Ontario Superior Court of Justice, Chisolm Place Housing Co-operative Inc. v. Hickox, 2013 ONSC 2215, has affirmed that housing co-operatives must be transparent, fair and reasonable when seeking to terminate the membership and occupancy rights of co-op members.

Housing co-operatives are unique, and governed by special legislation pertaining to co-operative corporations. The normal rules governing landlords and tenants do not apply to residents or “members” of housing co-ops. If a housing co-op wishes to end the membership and occupancy rights of a resident, a co-op board may make a decision at a board meeting. The co-op then has a right to bring an application to the Superior Court to enforce the board’s termination decision.

 

Daniel Hickox and Katherine Lavallee were members of the Chisolm Place Housing Co-op. Mr. Hickox’s relationship with their neighbour, Shannon Page, was strained, and there was an ongoing disagreement between Mr. Hickox and Ms. Page regarding her cat, which was causing allergies for Mr. Hickox’s spouse, Ms. Lavallee. On August 22, 2012, Mr. Hickox and Ms. Page became involved in a heated exchange, in which Ms. Page falsely accused Mr. Hickox of impounding her cat, among other unpleasantries. In the exchange, Ms. Page declared that she would attempt to have Mr. Hickox evicted, threatening that she already had six Co-op members “lined up” against him.

The same day Mr. Hickox and Ms. Lavallee received a notice that the Co-op board would be meeting six days later to consider terminating their membership and occupancy rights in the Co-op. Mr. Hickox and Ms. Lavallee disputed the termination, arguing, among other things, that Ms. Lavallee had done nothing wrong and there was no basis to terminate her membership.

The following week, the Co-op board met and, without meeting with or hearing from Mr. Hickox and Ms. Lavallee, determined that their membership in the co-op was terminated.

Mr. Hickox and Ms. Lavallee appealed, and the Co-op board confirmed its decision for a second time. In the second decision, the Co-op board cited additional grounds for the termination, such as vandalism by Ms. Lavallee and Mr. Hickox’s purported misconduct on a Co-op landscaping committee. The Co-op board’s second decision was the first time that Mr. Hickox and Ms. Lavallee had been notified of these additional grounds for their termination. Mr. Hickox and Ms. Lavallee were not provided with advance notice of or an opportunity to respond to the purported “vandalism” accusation, and no details of the vandalism allegation had ever been disclosed to Ms. Lavallee.

Mr. Hickox and Ms. Lavallee appealed for a second time and the Co-op board’s decision was put to a vote by the general co-op membership. There were significant problems with the membership vote, including the fact that the vote was not confidential and the number of ballots distributed did not correspond with the number of votes counted. Despite this, the Co-op board relied on the vote and proceeded to terminate the occupancy rights of Mr. Hickox and Ms. Lavallee.

The Co-op board’s decision was then reviewed by the Ontario Superior Court of Justice. The Court held that the Co-op’s decision was unreasonable on several grounds, including the fact that the first decision had been rendered without adequate notice and in the absence of Mr. Hickox and Ms. Lavallee. As well, Mr. Hickox and Ms. Lavallee had not been provided with a complete or clear understanding as to why their occupancy rights were being terminated or with a reasonable opportunity to respond. The Court held that the Co-op was obligated to give its members facing termination disclosure of the documentation, information and witnesses upon which the Co-op would rely, and an opportunity to be present at the meeting and to be heard. The Court agreed that there was no basis to terminate Ms. Lavallee’s membership and occupancy rights. The Court went on state that while there may have been grounds to terminate Mr. Hickox’s occupancy rights based on his confrontation with Ms. Page, the lack of notice, and lack of procedural fairness and transparency on the part of the Co-op meant that this decision could not stand.

The full text of the Court’s decision can be found at Chisolm Place Housing Co-operative Inc. v. Hickox et al., 2013 ONSC2215(CanLII).

 

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