2005 BCSC 160 Corbett v. Still Creek Housing Co-Operative

Before: The Honourable Madam Justice Ross

Reasons for Judgment

Counsel for the Petitioner	Chris M.A. Karlsson
Counsel for the Respondent	Geoffrey H. Dabbs
Counsel for the Intervenor Co-operative Housing Federation of British Columbia	C. Grant Haddock
Date and Place of Hearing:	November 18, 2004
	Vancouver, B.C.

INTRODUCTION

[1] The petitioner, Patrick Corbett, resides at #117-2730 Cooperative Way, Vancouver, British Columbia, which is a unit of housing in the respondent Still Creek Housing Co-operative (the “Co-op”). Mr. Corbett fell into arrears in his housing charges and eventually the Co-op invoked the provisions of the Occupancy Agreement and terminated his right to possess his unit. The Co-op then invoked a rule deeming his membership in the Co-op to be withdrawn. Mr. Corbett seeks to set aside that decision on the basis that the provisions dealing with the termination of membership of the Cooperative Association Act, S.B.C. 1999, c. 28 (the “Act”) were not complied with by the Co-op.

[2] The Co-operative Housing Federation of British Columbia, with the consent of the parties, intervened making submission concerning the broader implications of the ruling sought by Mr. Corbett.

FACTS

[3] Mr. Corbett became a member and resident of the Co-op in February, 1996 at which time he purchased membership shares in the Co-op. He acquired the right to occupy his unit pursuant to the terms of the Occupancy Agreement. The Occupancy Agreement included a provision by which the member agrees to pay a housing charge during the term of the Agreement. The Agreement also provides that the Co-op will have the right to terminate the Occupancy Agreement if a member fails to pay the housing charge and fails to correct the deficiency after receiving written notice from the Co-op.

[4] Relevant provisions of the Occupancy Agreement are reproduced in Appendix “A” to these reasons.

[5] The Occupancy Agreement formed a Schedule to the Rules of the Co-op. Those Rules contain provisions with respect to both withdrawal and termination. Rule 4.3 provides that if the Occupancy Agreement is terminated, the member will be deemed to have given notice of withdrawal of the membership effective immediately.

[6] The Rules of the Co-op in relation to Withdrawal and Termination are set out in Appendix “B” to these reasons.

[7] In the fall of 2003, Mr. Corbett fell into arrears of his monthly housing charge. By February, 2004, his arrears had accumulated to $2,967.43. Mr. Corbett and the Co-op entered into an agreement reduced to writing and dated February 23, 2004 (the “Payment Agreement”), by which Mr. Corbett agreed to a schedule for payment of his arrears. The Payment Agreement provided in part:

IT IS ALSO AGREED that should the member fail to make payments as set out in the Payment Schedule herein, the co-op will have absolute discretion to exercise any of it’s legal rights and remedies under the Occupancy Agreement, including termination of the Occupancy Agreement, expulsion of the member from membership and re-possession of the members unit.

[8] On June 1, 2004, Mr. Corbett breached the Payment Agreement by failing to make a scheduled payment. The Co-op responded with a letter from its solicitors dated June 10, 2004 in which it made written demand for the payment pursuant to the Payment Agreement. The letter made reference to Clause 16.03 and 10.04 of the Occupancy Agreement and Rule 4.3 of the Co-op Rules and stated in part:

If within ten days of this letter Mr. Corbett has not paid that $550.00, then the Co-operative will terminate Mr. Corbett’s Occupancy Agreement, effective July 31, 2004 and provide notice of that termination to Mr. Corbett. That termination of Mr. Corbett’s Occupancy Agreement will then automatically deem him to have given notice of the withdrawal of his Membership, effective as at that date.

This will be Mr. Corbett’s only warning of the potential termination of his Occupancy Agreement and the deemed withdrawal of his Membership.

[9] On June 15, 2004, Mr. Corbett failed to make the final payment owing under the Payment Agreement. His total balance of arrears was at that point $2,844.46. The Co-op, through its solicitors, responded by letter dated June 28, 2004 providing written notice that the Co-op had terminated Mr. Corbett’s Occupancy Agreement, effective July 31, 2004 pursuant to Clause 16.03 of that Agreement. The letter stated that, pursuant to Rule 4.3, by virtue of the termination of the Occupancy Agreement, Mr. Corbett is deemed to have given notice of the withdrawal of his membership effective that date. Finally, the letter gave notice that Mr. Corbett was to vacate his unit by 12:00 noon on July 31, 2004.

[10] Mr. Corbett did not pay the housing charge due July 1, 2004, and advised the Co-op through his solicitor by letter dated July 12, 2004, that he did not accept the Authority of the Board of Directors to terminate his membership. He did not give vacant possession of the unit to the Co-op. This litigation ensued.

DISCUSSION

[11] Mr. Corbett’s position is that the Resolution of the Co-op Board of Directors to terminate the Occupancy Agreement is not effective to terminate or withdraw his membership in the Co-op because the process for termination of membership stipulated in the Act was not followed. He submits further that Rule 4.3 of the Co-op Rules is subject to sections 35-39 of the Act.

[12] The respondent relies upon the termination of the Occupancy Agreement and submits that by virtue of the Payment Agreement, Mr. Corbett waived any right to complain about the procedure invoked by the Co-op in his case. The respondent submits further that the procedure adopted in this case is not in contravention of the Act.

WAIVER

[13] The Co-op submits that in consideration for its agreement to forbear in the exercise of its rights in relation to the arrears contained in the Payment Agreement, Mr. Corbett agreed that, if he failed to make the payments as agreed, the Co-op could exercise any of its legal rights and remedies under the Occupancy Agreement, including termination of the Occupancy Agreement and repossession of the unit. It submits that Mr. Corbett did breach the Payment Agreement and that it then exercised its legal rights in the precise manner prescribed by the Occupancy Agreement. It submits that there can be no basis for disputing the right of the Co-op to obtain an order for possession in the circumstances.

[14] In my view, the argument that Mr. Corbett has waived his right to object does not provide an answer. The submission made on behalf of Mr. Corbett is that the Co-op did not have the legal right to proceed as it did because its actions did not comply with the Act. The Payment Agreement did not purport to give the Co-op new legal rights. Mr. Corbett’s submission is that the Co-op was purporting to exercise a right it did not have. He did not, by virtue of the Payment Agreement, waive his right to complain that the Co-op’s actions are unlawful.

THE ACT

[15] Sections 35-39 of the Act deal with the termination of membership in a housing co-operative. The provisions contain detailed procedures to be followed in circumstances in which a housing co-operative provides in its rules for the termination of the membership of a member. The sections are reproduced in Appendix “C” of these reasons.

[16] The Co-op has established rules dealing with termination of membership that include Rule 5.1(b), termination for failure to pay occupancy charges. These Rules provide for a process that mirrors the process stipulated in sections 35-39 of the Act. It is common ground that this process was not followed in Mr. Corbett’s case. Rather, the Co-op invoked the provisions of the Occupancy Agreement and then the deemed withdrawal provision contained in Rule 4.3.

[17] The provisions dealing with termination of membership found in sections 35 to 39 of the Act are modifications of provisions found in earlier versions of the statute.

[18] The Cooperative Association Act, R.S.B.C. 1979, c. 66 provided for termination of membership in section 25, which stated:

Termination of membership

25 (1) Subject to the rules,

(a) a member may withdraw from an

association or transfer his shares;

(b) a member charged with conduct detrimental to the association may be expelled from membership by an extraordinary resolution of the association;

(c) a member making a charge shall lodge with the directors full particulars in writing signed by him, and the member charged shall be given by them a copy of the particulars at least 2 weeks prior to the meeting;

(d) the notice calling the meeting shall state that a charge has been made and specify the names of the members concerned.

(2) A member expelled is, subject to section 15(2), entitled to a refund of the amount paid up on his shares, but shall not be again admitted to membership, except by extraordinary resolution of the association.

[19] The Cooperative Association Amendment Act, S.B.C. 1988, c. 1 then added section 71, which provided:

Special provision for expulsion of members

71. (1) A housing cooperative may by its rules adopt either the circumstances set out in paragraph (a) or the circumstances set out in paragraph (b) as constituting the grounds for termination pursuant to this section of the membership of a member who has a right to possession or occupancy of residential premises that is dependent on his membership:

(a) the member has failed to pay rent, occupancy charges or other money due by him in respect of the residential premises;

(b) the member has

(i) failed to pay rent, occupancy charges or other money due by him in respect of the residential premises, or

(ii) in the opinion of the directors, the member has breached a material condition of an agreement between him and the housing cooperative relating to

(A) his possession or occupancy of the residential premises, or

(B) his use of the property of which those premises form part, and has failed to rectify the breach within a reasonable time after receiving written notice to do so from the housing cooperative.

(2) Sections 33 and 48.3 do not apply to termination pursuant to this section of a membership in a housing cooperative.

(3) A housing cooperative that under subsection (1) has adopted the grounds for termination of membership set out in subsection (1)(a) or (b) may by a resolution of the directors

(a) requiring a majority of 3/4 of all the directors, and

(b) passed at a meeting of the directors called to consider the resolution, terminate the membership of a member described in subsection (1) on the grounds adopted by the housing cooperative.

(4) The member whose membership is proposed to be terminated by a resolution of the directors is entitled to at least 7 days’ notice of the meeting at which the resolution is to be considered, together with a statement of the grounds upon which his membership is proposed to be terminated, and may appear, either personally or by or with an agent or counsel, to make submissions at the meeting.

(5) Within 7 days after the date on which the resolution referred to in subsection (3) is passed by the requisite majority, the housing cooperative shall, in the same manner as that provided in section 31 for the giving of notice of a meeting of members, notify the person whose membership is terminated of the resolution.

(6) A person whose membership is terminated under subsection (3) may appeal the decision of the directors at the next meeting of the housing cooperative by delivering a notice of appeal to the housing cooperative within 7 days after the date when notice was given to him under subsection (5).

(7) A person who, pursuant to and within the time limited by subsection (6), appeals the termination of his membership shall, notwithstanding the resolution of the directors terminating his membership, continue to be a member of the housing cooperative unless the members at the general meeting to which the appeal is brought confirm the termination of his membership by a resolution requiring a simpler majority or, where provided by the rules, a greater majority.

[20] These provisions were considered in two decisions. In Tyee Housing Co-operative v. Youngs, [1990] B.C.J. No. 1004 (SC) per Campbell L.J.S.C., the court rejected a submission that following the enactment of section 71, termination of membership could no longer be effected by a co-operative pursuant to section 25. The court held that section 71 was not intended by the legislature to be the exclusive means of terminating the membership of a housing co-operative member.

[21] In Sherwood Forest Housing Co-operative v. Green, [1991] B.C.J. No. 3163 per Spencer J., a member had accumulated arrears, payment had been demanded and the member had failed to pay. The co-operative then gave notice that it would exercise its right of lien over the member’s shares if payment was not forthcoming. After the member did not pay the arrears, the shares were then redeemed and a claim was made for the outstanding balance. The member was warned that failing payment, the co-operative would exercise its right under the lease and rules. The member did not pay and the directors resolved to terminate her lease for breach of the lease. The member failed to vacate and the co-operative petitioned the court for a writ of possession.

[22] The member argued that the sections of the Act providing for termination of membership, then section 71(3) to (7), were a procedural code, which must be followed to deprive a member of her shares. This contention was rejected by Mr. Justice Spencer who held:

This part of the respondent’s case relies on the proposition that membership in the Co-operative can only be terminated under the procedure Set out in section 71 of the Act. In my opinion that is a fundamental error in her argument for this co-operative. Membership under its rules can also be terminated by the exercise of a lien over a member’s shares. That has been done here.

[23] The decision in Sherwood, supra, extends the scope for termination beyond that in Tyee, supra, in that in Sherwood, supra, the co-operative was relying, not upon either section 25 or 71, but upon its own rules providing for a lien over shares, which rules were described by Spencer J. as “fragmentary”.

[24] In 2001, the Cooperative Association Act, R.S.B.C. 996, c. 71 was repealed and replaced by the Act. The new Act does not include section 25. There is no separate section of the Act allowing for expulsion on the basis of conduct detrimental. Instead, the power to expel for conduct detrimental is incorporated into the provision of section 35. In addition, section 35(1) and (2) do not contain the phrase “pursuant to this section”.

[25] Paloma Housing Co-Operative v. Osmundson (2002), 13 R.P.R. (4th) 163, 2002 BCSC 1873 per MacKenzie J. was decided after the enactment of the above noted amendments. In that case, the member was liable for the payment of arrears and had been given notice to pay his arrears. He failed to do so. The co-operative then proceeded to terminate the member’s lease pursuant to the process in the lease. One objection by the member was that the process was defective in that there had been no compliance with the terms of the Act with respect to notice and natural justice.

[26] Madam Justice MacKenzie rejected this submission stating:

The defendant also complains about a lack of natural justice in that he was not notified of the meeting place to discuss arrears, the agenda, or the discussions concerning taking away his membership in the Co-op. The defendant submitted that the Co-operative Association Act requires he be notified. But I agree with the Co-op that no meetings are required by the procedure used in this case by the Co-op. The defendant did receive the ten day notice, and the 30 day notice required pursuant to the procedure under the Lease which the Co-op used. The Co-op proceeded under the Lease termination provisions which do not require any meetings. There has been no denial of natural justice there.

[27] Later in the judgment, she comments that a co-operative has three methods by which to terminate the membership of a member and seek possession of the member’s unit for non-payment of housing charges:

(a) expulsion for conduct detrimental to the Co-op;

(b) directors’ resolution to expel; and

[28] She also noted that the Sherwood Forest, supra, decision was still good law.

[29] The petitioner urges this court not to follow Paloma, supra, on the basis that the court in following Sherwood Forest, supra, did not direct itself to the changes in the legislation. Counsel submits that the changes indicate that the legislature did not wish the sections to be non-exclusive in the manner described in Tyee and Sherwood, supra. Instead, counsel submits the new wording reveals a legislative intention for the provision to be the sole provision empowering a co-operative to adopt rules to terminate membership of a member and, that if such rules were adopted, they would be subject to the procedure in sections 35 to 39.

[30] It is true that there is no specific reference in Paloma, supra, to the amendments. There is, however, reference by inference to those provisions dealing with termination in that the court rejects the submission that because there had been no compliance with the notice provisions the termination was ineffective.

[31] As Wilson J. stated in Re Hansard Spruce Mills Ltd., [1954] 4 D.L.R. 590, 34 C.B.R. 202 (B.C.S.C.), a trial judge who differs from another of the same court creates uncertainties in the law. With respect to Paloma, supra, no subsequent decisions have been brought to my attention that affect its validity. There are no binding authorities and no legislation not considered by the court. In my view, it cannot be said that this was an unconsidered judgement. Accordingly, I am of the view that it should be followed. It would introduce an undesirable uncertainty to do otherwise.

[32] In any event, I am of the view that the amendments do not operate to eliminate the option adopted by the Co-op in this case. As stated in the Recitals to the Occupancy Agreement, a member’s right to possession is dependent upon both compliance with the Occupancy Agreement and continued membership in the Co-op.

[33] The procedures under section 35 to 39 of the Act are directed to the termination of membership. The object of the provisions of Clause 16.03 of the Occupancy Agreement, which was invoked in this case, is not the termination of membership, but the termination of the right of occupancy. Rule 4.3 then deals with membership incidental to the loss of the right of occupancy.

[34] In my view, the legislature did not intend to make such provisions subject to the procedures set out in sections 35 to 39. It did not intend to effectively eliminate the option to proceed under the provisions of the lease to terminate the member’s right of occupancy.

[35] In the result, the petition is dismissed and there will be an Order that the petitioner give vacant possession of #117-2730 Cooperative Way, Vancouver, British Columbia to the respondent, pursuant to section 172(10) of the Act.

COSTS

[36] Counsel submits that the court should decline to award costs against Mr. Corbett. Counsel notes that Mr. Corbett’s petition brings the scope of section 35 of the Act before the court for the first time. Although Mr. Corbett clearly has a personal interest in the matter, there is in addition, a significant public benefit in having a decision rendered. Counsel notes that the Co-operative Housing Federation of British Columbia paid the Co-op’s legal costs. The Federation intervened in the matter to seek a ruling regarding Model Rules that it drafted for co-operatives in British Columbia which have been adopted by many housing co-operatives in the province.

[37] The circumstances in which a litigant should be insulated from the operation of the general rule that costs follow the event, were addressed in Sierra Club of Western Canada v. British Columbia (Chief Forester) (1994), 117 D.L.R. (4th) 395, 10 W.W.R. 279 per Smith J. That decision emphasizes that the matter is one of discretion. Factors relevant to the exercise of the discretion include the novelty of the issue, the personal circumstances of the parties and whether there is a public benefit to having a court decision.

[38] In the case at bar, the issue is novel and clearly of concern to the housing co-operatives in the province. The respondent Co-op informed its members that it decided to maintain the litigation on the following basis:

The difficult choice the Board had to make was to proceed with the defense of our right to act under Rule 4.3, or acquiesce to the Member’s claim that this rule was in conflict with the Act. The Board unanimously decided to proceed with the defense on the condition that any legal expenses incurred would NOT come from Still Creek Co-op operating budget. The Board came to this decision because we wanted to continue to have the opportunity to exercise our authority under Rule 4.3, when unfortunate situations warranted such action and we also felt the Member had a right to challenge this rule in court. We approached CHFBC for financial assistance and they have agreed to pay the specific legal costs relating to the defense of this petition. Almost all other Co-ops in BC have adopted this particular rule within their Rules of Association, so the outcome of this petition will be far reaching.

[39] In the circumstances, I have concluded that this is an appropriate case for the exercise of my discretion to insulate the petitioner from exposure with respect to costs. Accordingly, each party will bear its own costs.

“C. Ross, J.”
The Honourable Madam Justice C. Ross

Appendix “A”

Conditions of Possession

1.01 Breach of conditions

This Occupancy Agreement and the term hereby created shall be subject to the conditions herein set forth, and at the option of the Co-op, shall cease and determine upon any breach of or failure by the Member to observe or comply with any of the obligations of the Member herein.

4.01 Payment of Housing Charge

The Member shall pay the Co-op on the first day of each and every month, commencing on the first day of the month of occupancy (or if occupancy occurs on a day other than the first day of the month then the first payment shall be on the day of occupancy), during the term of the Occupancy Agreement, a housing charge as determined and assessed by the Co-Op from time to time (the “Housing Charge”) and notified to the Member in writing.

4.07 Failure to pay Housing Charge

Failure of the Member to pay the Housing Charge, any additional or supplemental charge or any other amounts owing to the Co-op in accordance with this Occupancy Agreement shall be cause for termination of this Occupancy Agreement, in the sole and absolute discretion of the Directors, upon written notice from the Directors to the Member and upon such termination, the Member shall vacate the Unit.

16.01 Termination of Membership and Occupancy Agreement

Right of occupancy

The right of the Member, and that of any person residing in the Unit, to possession or occupancy of the Unit shall terminate if the membership of the Member is terminated pursuant to the Rules.

16.03 Termination of Occupancy Agreement

Notwithstanding any other provisions of the Occupancy Agreement and the Rules, the Co-op shall have the right, through its Directors, to terminate this Occupancy Agreement if:

[a] the Member commits a breach of any term of this Occupancy Agreement, the Rules, or the policies of the Co-op; or

[b] the Member fails to pay the Housing Charge or any other assessment herein when due and fails to correct the failure for ten days after receipt of written notice from the Co-op of the default.

16.04 Effective date of termination

If the Directors terminate this Occupancy Agreement pursuant to Subsection 16.03, it shall deliver to the Member at least 30 days’ written notice of termination and such notice shall state the effective date on which the Occupancy Agreement is terminated.

16.05 Possession of the Unit

The right of the Member, and that of any person residing in the Unit, to possession or occupancy of the Unit shall terminate if the Directors terminate this Occupancy Agreement as provided herein.

16.06 Oppression remedies and arbitration do not apply

If the membership of the Member is terminated or if the Directors terminate this Occupancy Agreement as provided herein, the Member agrees that Sections 156 (i.e. oppression remedy) and 208 (i.e. arbitration) of the Cooperative Association Act, and any grievance or dispute procedure that may exist in the Rules or the policies of the Co-op do not apply and are expressly waived and shall not be invoked by the Member.

17.01 Termination of Occupancy Agreement

This Occupancy Agreement shall be automatically terminated:

[a] in the case of withdrawal from membership in the Co-op, at 12:00 noon on the effective date of withdrawal; or

[b] in the case of termination of membership in the Co-op, at 12:00 noon on the date determined by the Co-op pursuant to the termination proceedings under the Rules.

17.02 Vacant possession

The Member agrees to immediately quit and give-up vacant possession of the Unit upon the effective date of termination of the Occupancy Agreement but if the Member does not immediately quit and give up vacant possession then the Member shall pay to the Co-op an amount equal to the Housing Charges herein prorated on a daily basis for each day that the Member fails to quit and deliver vacant possession together with any loss or damage the Co-op may suffer as a result of the failure to quit and deliver possession but without any other right or license to occupy and without any right or benefit or an entitlement to membership and in addition to any other remedy for recovery of the amount due to the Co-op it may be deducted from any money otherwise payable by the Co-op to the Member.

18.01 Withdrawal from membership

Withdrawal of the Member from the membership of the Co-op shall terminate the Occupancy Agreement, and withdrawal shall occur:

[a] upon termination of the Occupancy Agreement at any time by written agreement signed by the Member and the Co-op;

[b] by the Member giving two months’ notice of withdrawal in writing, the time being calculated from the last day of the month in which notice is given; or

[c] in the circumstances provided for withdrawal specified in the Rules of the Co-op.

20.01 Cumulative rights

The rights and remedies hereby created are cumulative and are in addition to all common law and statutory rights and remedies, and the use of one remedy shall not be taken to exclude or waive the right to the use of another, and said remedies may be proceeded under simultaneously or successively.

Appendix “B”

4.1 Withdrawal from membership

A member may withdraw from membership in the Co-op:

[a] by giving to the Co-op at least 60 days’ written notice calculated from the last day of the month in which the notice is given; or

[b] with the written consent of the Directors, by giving less than 60 days’ written notice,

and in each case, membership ceases on the last day of the notice period.

4.2 Deemed withdrawal of membership by a member

Unless the Directors determine otherwise, a member will be deemed to have given notice of withdrawl of their membership if the member:

[a] terminates the Occupancy Agreement;

[b] surrenders possession of the Unit, abandons the Unit, or ceases to live in the Unit on a full-time basis as their principal residence;

[c] dies;

[d] is unable to conduct his or her affairs by reason of mental or physical infirmity;

[e] does not hold and pay for the shares of the Co-op as required under these Rules; or

[f] is an associate member and the principal member in the Unit withdraws or the membership of the principal member is terminated,

and in each case, notice is deemed to have been given when the event occurs and membership ceases 60 days later.

4.3 Deemed withdrawal of membership by termination of Occupancy Agreement

If the Co-op terminates the Occupancy Agreement, the member will be deemed to have given notice of withdrawal of their membership effective immediately.

4.4 Withdrawal of membership with the consent of the Directors

The Directors may consent to withdrawal from membership in the Co-op by a member under any other circumstances where it seems just and equitable to do so and may agree on the date on which membership ceases.

5.1 Grounds for termination of membership

Where a member:

[a] has engaged in “conduct detrimental” to the Co-op;

[b] has not paid occupancy charges or any other money due by the member to the Co-op within a reasonable time after receiving written notice to do so from the Co-op; or

[c] in the opinion of the Directors, based on reasonable grounds,

[1] has breached a “material condition” of the Occupancy Agreement; and

[2] has not rectified that breach within a reasonable time after receiving written notice from the Co-op to do so.

the membership of that member may be terminated by a resolution of the Directors requiring a majority of at least three-quarters of all the Directors and passed at a meeting of the Directors called to consider the resolution.

5.2 Conduct detrimental to the Co-op

Conduct detrimental to the Co-op can include, but is not limited to, such things as:

[a] failure to comply, or failure to ensure compliance by any resident or person visiting the member, with any term or provision of:

[1] these Rules or the Occupancy Agreement; or

[2] any house rule or policy which may be in effect;

[b] causing, permitting, or threatening wilful damage to the property or physical premises of the Co-op or the Unit;

[c] causing, permitting, or threatening violence directed against persons on the Co-op’s property;

[d] unauthorized detention of property of the Co-op; or

[e] causing, permitting, or threatening injury or harm to the reputation of the Co-op.

5.3 Material conditions of the Occupancy Agreement

Material conditions of the Occupancy Agreement are those defined as material conditions in the Occupancy Agreement.

5.4 Notice of meeting

A member of the Co-op whose membership is proposed to be terminated by a resolution of the Directors:

[a] must receive at least seven days’ notice of the meeting at which the resolution is to be considered, together with a statement of the grounds on which the membership is proposed to be terminated; and

[b} may appear, either personally or by or with an agent or counsel, to make submissions at the meeting.

5.5 Notice of outcome of the meeting

Within seven days after the date on which a proposed resolution to terminate the membership:

[a] is withdrawn;

[b] is defeated because it does not receive the required majority of three-quarters of all Directors; or

[c] is passed by the required majority of three-quarters of all Directors,

the Directors must deliver written notice of the outcome to the member.

5.6 Notice of appeal of termination

A person whose membership has been terminated by the Directors may appeal the decision of the Directors at the next meeting of the Co-op by delivering a written notice of appeal to the Co-op within seven days after the date of delivery of the written notice given to the member advising the member of the termination of their membership.

5.7 Appeal of termination

A person whose membership in the Co-op is terminated by the Directors and who appeals the termination of the membership continues to be a member of the Co-op, despite the resolution of the Directors, unless the members, at the general meeting to which the appeal is brought, confirm the termination of membership:

[a] by a special resolution, if the membership is terminated for the “conduct detrimental” of the member, as described in Rules 5.1 and 5.2; or

[b] by an ordinary resolution, if the membership is terminated for non-payment of occupancy charges or any other amount due by the member to the Co-op or for a breach of a material condition of the Occupancy Agreement, as described in Rules 5.1 and 5.3.

5.8 Confirmation of termination

If the members of the Co-op confirm the termination of a person’s membership by the Directors the Co-op must promptly notify the person with:

[a] a notice that the ordinary resolution or special resolution, as the case may be, confirming the termination was passed by the members; and

[b] a notice as prescribed by the Act, setting out the person’s right to appeal the termination to the Supreme Court of British Columbia, as well as copies of forms 59, 59B, and 59C of Appendix A of the Supreme Court Rules B.C. Reg. 221/90 or such other forms as prescribed by the Act and the Cooperative Association Regulation as amended from time to time.

5.9 Appeal to the Supreme Court of British Columbia

A person who has been given notice under Rule 5.8 may appeal the termination to the Supreme Court of British Columbia, in the manner provided in the Act, before the expiry of 30 days from the date of delivery of the notice.

5.10 Court filing fees

At the written request of the member appealing the termination, and if the member is not in arrears for any monthly housing charge, the Co-op must issue to the member a cheque payable to the Minister of Finance (or to the member for reimbursement), for the amount of the fee required by the Supreme Court of British Columbia to file a notice of appeal of the termination. If there is a dispute between the member and the Co-op respecting the amount of the housing charge, then the amount of the housing charge for the purposes of this Rule 5.10 must be the amount of that charge that is not in dispute.

5.11 Timing of request for filing fees

The request under Rule 5.10 must be made by the member within ten days after the day the member is served with notice of termination under Rule 5.8. If the member fails to make the request within this time, the Co-op may, but need not issue the cheque for the filing fee.

5.12 Certain sections of the Act and these Rules do not apply

Sections 156 (i.e. oppression remedy) and 208

(i.e. arbitration) of the Act and Rule 25 of these Rules (i.e. dispute resolution) do not apply to terminations under Rule 5.

6.1 Possession and occupancy rights

The right of a member, or that of any person residing in the Unit, to possession or occupancy of the Unit is terminated upon withdrawal from membership, termination of membership, or if membership ceases for any other reason.

Appendix “C”

Termination of membership in a housing cooperating

35 (1) A housing cooperative may provide in its

rules for the termination of the membership of a member.

(2) Rules referred to in subsection (1) and the rules that a housing cooperative may adopt under subsection (3) of this section are subject to this section and sections 36 to 39.

(3) A housing cooperative by its rules may adopt either of the following grounds as constituting grounds for termination of the membership of a member who has a right to possession or occupancy of residential premises that is dependent on the member’s membership:

(a) the member has not paid rent, occupancy charges or other money due by the member to the housing cooperative in respect of the residential premises and has not rectified the non-payment within a reasonable time after receiving written notice to do so from the housing cooperative.

(b) the member

(i) has not paid rent, occupancy charges or other money due by the member to the housing cooperative in respect of the residential premises, or

(ii) in the opinion of the directors, based on reasonable grounds, has breached a material condition of an agreement between the member and the housing cooperative relating to the member’s

(A) possession or occupancy of the residential premises, or

(B) use of the property of which those premises form part,

and has not rectified the non payment or breach within a reasonable time after receiving written notice to do so from the housing cooperative.

(4) Subject to any rules of a housing cooperative for termination of membership, and to subsections (5) and (6), a housing cooperative may terminate the membership of a member if the member has engaged in conduct detrimental to the housing cooperative.

(5) A housing cooperative may exercise the powers under this section to terminate the membership of a member only by a resolution of the directors requiring a majority of at least 3/4 of all the directors and passed at a meeting of the directors called to consider the resolution.

(6) Sections 156 and 208 do not apply to termination under this section of a membership in a housing cooperative.

Notices respecting the termination of members

36 (1) A member of an association whose membership is proposed to be terminated by a resolution of the directors

(a) is entitled to at least 7 days’ notice of the meeting at which the resolution is to be considered, together with a statement of the grounds on which the member’s membership is proposed to be terminated, and

(b) may appear, either personally or by or with an agent or counsel, to make submissions at the meeting.

(2) Within 7 days after the date on which a proposed resolution to terminate a membership referred to in subsection (1)

(a) is withdrawn,

(b) is defeated because it does not receive the required majority, or

the directors must deliver written notice of the outcome to the member.

Appeal from termination of membership

37 (1) A person whose membership in an association is terminated under section 34 or 35 may appeal the decision of the directors at the next meeting of the association, by delivering a notice of appeal to the association within 7 days after delivery of written notice under section 36(2).

(2) A person whose membership in an association is terminated and who, under and within the time limited by subsection (1), appeals the termination of the membership, continues, despite the resolution of the directors terminating the membership, to be a member of the association unless the members at the general meeting to which the appeal is brought confirm the termination of the membership.

(a) in the case of a membership in an association other than a housing cooperative,

(i) if the membership is terminated for any of the reasons referred to in section 34(4)(b) or (c), by a resolution requiring a simple majority or, if provided by the association’s rules, a greater majority, or

(ii) if the membership is terminated for the reason referred to in section 34(4)(a), by a special resolution, or

(b) in the case of a membership in a housing cooperative,

(i) if the membership is terminated for any of the reasons referred to in section 35(3), by a resolution requiring a simple majority or, if provided by the housing cooperative’s rules, a greater majority, or

(ii) if the membership is terminated for the reason referred to in section 35(4), by a special resolution.

(2.1) If the members of a housing cooperative confirm the termination of a person’s membership under subsection (2)(b), the housing cooperative must

(a) promptly serve the person with

(i) a notice that the resolution or special resolution confirming the termination was passed by the members, and

(ii) a notice in the prescribed form of the person’s right to appeal the termination under subsection (3), and

(b) comply with other prescribed conditions.

(3) A person who has been served with a notice under subsection (2.1)(a)(i) may appeal the termination to the court before the expiry of the 30 day period beginning on the day after the person is served with the notice on any of the following grounds:

(a) the housing cooperative failed to observe the principles of natural justice in terminating the membership;

(b) the decision of the housing cooperative is not reasonably supported by the facts;

(3.1) Despite section 171, a person who has commenced an appeal in accordance with subsection (4) of this section continues to be a member of the association for the purposes of an application under section 172.1, and may include with the appeal an application under section 172.1 for an order of possession.

(4) An appeal to the court under subsection (3) must be commenced in accordance with Rule 49 of the Rules of Court by notice of appeal in Form 59

(a) filed in a registry of the court before expiry of the 30 day period referred to in subsection (3), and

(b) served on the housing cooperative before expiry of the 14 day period beginning on the day after the notice of appeal is filed in the registry of the court.

(4.1)If a person commences an appeal under subsection (3) from a decision of a housing cooperative to terminate that person’s membership, the housing cooperative may file an application under section 172(1) with its appearance under Rule 49(6) of the Rules of Court.

(4.2)If an appeal is commenced under this section,

(a) any application by the housing cooperative for an order under section 172

(1) must be filed with the appearance, and

(b) any application by the member under section 172.1 must be filed with the notice of appeal

so that the court may determine at the same time all the issues between the parties relating to the termination.

(5) An appeal to the court under subsection (3) may be a new hearing and the court may hear all the evidence the court considers relevant including, but not limited to, the evidence of the housing cooperative and the person, and the court

(a) must either

(i) despite section 39, restore the membership in the housing cooperative of the person whose membership was terminated by the resolution or special resolution, with the restoration to be effective on and after a date specified by the court, and if an application has been made under section 172.1, the court must make an order of possession in favour of the member, or

(ii) confirm the resolution or special resolution by which the members of the housing cooperative confirmed the termination of the person’s membership, and if an application has been made under section 172, the court must make an order of possession in favour of the housing cooperative, and

(b) may make any other order that the court considers appropriate.

(6) An appeal from a decision of the court under subsection (5) lies to the Court of Appeal with leave of a justice of the Court of Appeal.

Requirement to redeem shares on membership withdrawal or termination

38 (1) A person who withdraws from membership in an association is entitled, subject to section 66(2), to require the association to redeem

(a) the person’s membership shares, and

(b) any of the person’s investment shares in classes restricted for distribution to members only

within a period and on conditions the association may establish under its rules, or immediately and unconditionally, if the association’s rules do not establish any period or conditions.

(2) A person whose membership in an association is terminated under this Division is entitled, subject to section 66(2), to require the association to redeem

(a) the person’s membership shares, and

(b) any of the person’s investment shares in classes restricted for distribution to members only.

(3) The entitlement, described in subsections (1) and (2), of a person who withdraws from membership in a housing cooperative or whose membership in a housing cooperative is terminated, is postponed until the person has given up the actual possession and occupancy of any residential premises in which the person had a right to possession or occupancy dependent on the person’s membership.

(4) In the case of an association to which section 173 or 196(2) applies, the refund on account of membership shares must not exceed the amount paid up on the member’s membership shares.

Special resolution for readmission

39 A member whose membership is terminated under this Division must not be again admitted to membership except by special resolution of the association.

Citation:	*Corbett v. Still Creek Housing Co-Operative,*
	2005 BCSC 160