Court reinforces its hands-off approach to housing co-ops

August 1st, 2012 by Celia Chandler

This spring, one of our housing co‑op clients was served with a Superior Court application from a member under section 178 of the Co‑operative Corporations Act.   The application requested an order of compliance against the Co‑operative for five alleged breaches of the Co‑operative’s by‑laws and the Act.

This was uncharted territory for our client, and indeed for us.  Section 178 has been on the books for years, but has received minimal attention.

The member making the application has had a years‑long history of behaving towards staff and other members in ways that do not conform to the Co‑op’s standard – that is, that are not co‑operative.  While still maintaining her full rights as a member, the Boards of Directors of the co‑operative have instituted practices to limit her interactions at the Co‑operative.  For example, the Board decided many years ago to prohibit the member from participating on committees because of her unconstructive behaviour; the Board also banned her from the Co‑op’s office using a Notice of No Trespass; and finally the Board put in place a protocol of entering the member’s unit to conduct maintenance with a witness present from the Board of Directors.

Justice Kenneth L. Campbell presided over a hearing on July 25, 2012.  After reading evidence and hearing submissions on these matters, he refused to interfere with each of these three decisions.  This is a significant victory for the Co‑operative and for the sector. 

Don’t be fooled – Justice Campbell was no pushover.  On Board decisions that he deemed to contravene the by‑laws and the Act, like access to her member file, he reprimanded the Co‑op and ordered compliance.

But the decision reinforces the long‑standing deference Courts have given to Co‑op housing boards.  Providing decisions do not explicitly violate any provision of the Co‑op’s by‑laws or any legislation, the Board can manage or supervise the management of the Co‑op in a way that makes sense for the community.

Filed in: Co-operative Law, Litigation

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