Clinic successful in halting sale of public co-operative housing in Collingwood

The clinic recently co-counseled with Lucas Lung of Lerners LLP (a former clinic staff lawyer) in the fight against the sale of Matthew Co-operative Housing in Collingwood. Matthew is a non-profit housing co-operative with a number of rent-geared-to-income units. Unlike other forms of rental housing, co-operative housing is democratically governed by the co-operative's membership through an elected board of directors.

Matthew has been under the power and control of a receiver since 2006, when the County appointed Mintz and Partners to act as a Receiver and Manager for one year. The receivership was subsequently extended by court order in 2007.

After taking control of the Matthew, the Receiver recommended that Matthew be sold to Simcoe County Housing Corporation and become regular rental housing managed by the County. In order for the sale occur, not only did the court have to accept the Receiver's recommendation, but Simcoe County had to consent to the sale of Matthew. The County provided its consent to the proposed sale, and the Receiver asked the court for authorization to sell Matthew.

Matthew challenged both the recommendation of the Receiver to sell Matthew and the decision of the County to consent to a sale of Matthew. Lucas Lung and Katie Clements, a clinic staff lawyer, attended at a two day hearing of the matter on behalf of Matthew Way, where Lung presented extensive oral argument. The Co-operative Housing Federation of Canada, a non-profit association that assists co-operatives in achieving growth, stability and independence, has also provided great support to the co-op over the past several years and also supported Matthew in court.

In a decision dated July 15, 2010, (Corporation of the County of Simcoe v. Matthew Co-Operative Housing Inc., 2010 ONSC 4999), the court dismissed the Receiver's request for authorization to sell Matthew. In its reasons, the court expressed concern that the Receiver did not follow the previous directions of the court and took steps to pursue a sale without the court's approval to do so. The court also quashed the County's decision to consent to the sale of Matthew. The law provides that the County owes a duty of fairness to the members of Matthew in deciding whether to consent to the sale of Matthew. The court held that the County did not provide a fair and reasonable consultation process with Matthew's membership prior to consenting to the sale.

The court ordered all parties to return to court in August to get directions as to next steps for Matthew.

To read the decision of the court, see here.