Habitat International calls on Edmonton affiliate to halt action against 57 families

Habitat for Humanity International is criticizing its Edmonton affiliate for the handling of a dispute with 57 partner families, urging them to halt any further action in the case until an independent mediator can be appointed. 

Habitat International 'highly concerned' by ongoing legal dispute

Edmonton lawyer Avnish Nanda speaks to families involved in a lawsuit against Habitat for Humanity. (Raffy Boudjikanian/CBC)

Habitat for Humanity International is criticizing its Edmonton affiliate for the handling of a dispute with 57 partner families,  urging the agency to halt any further action in the case until an independent mediator can be appointed. 

The organization issued a statement on Thursday, saying it is "highly concerned" with the actions of Habitat Edmonton. 

"We have engaged our colleagues at Habitat Edmonton with the expectation that they reach an appropriate solution with the families involved in this matter," the statement said.

"We remain highly concerned they have not reached agreement with all affected families." 

The statement is the latest development in a months-long legal dispute between Habitat Edmonton and its client families. The families were recently denied a court injunction which would have stopped Habitat from evicting them as they pursued a class action against the charity for breach of contract.

The low-income families say Habitat promised them a zero-interest mortgage if they perform 500 hours of what the charity calls "sweat equity" — unpaid work in lieu of a down payment — and successfully complete a 12-month tenancy.

Before the families could sign the mortgage contract, however, Habitat Edmonton changed the agreement. 

The mortgage would now be 50 per cent financed by a credit union, the families were told late last year. 

Despite the families' concerns that their credit applications would be denied making them ineligible for the new agreement, Habitat Edmonton testified in court that it would work with the families to find a pathway to home ownership. 

After their injunction application was rejected, several families tried to apply for the new mortgage agreement, only to be turned down because of their credit history or insufficient income, their lawyer Avnish Nanda said.

In its statement Thursday, Habitat International said the Edmonton organization erred in changing the agreement for families who had already been promised homes. 

In the statement, Habitat International noted that local affiliates operate "at the direction of their own leadership" under the oversight of their own boards of directors, using the Habitat name through an affiliation agreement.

"The vast majority of Habitat homeowners in North America receive title at the time of occupancy," reads the statement issued Thursday.

"Additionally, we feel any change to Habitat Edmonton's mortgage terms should have applied only to future applicant families, not those already enrolled in the home ownership program.

"Habitat for Humanity International has asked Habitat Edmonton to seek the appointment of an independent mediator … We have also asked Habitat Edmonton to delay further actions with the families until the mediation process can take place."

The criticisms from the international agency come hours after CBC News detailed conflict-of-interest concerns surrounding the judge who presided over the injunction hearing.

Court of Queen's Bench Justice James Neilson, who ruled in favour of Habitat for Humanity Edmonton in a recent injunction application has donated to the charity in each of the past two years, according to Habitat's annual reports.

An ethics watchdog says the revelation casts doubt on the judge's impartiality and could amount to a violation of the ethical principles applied to Canadian courts. 

"The fact that the judge put his money in support of this charity twice means that he supports this charity. That, I think, means that someone could reach a reasonable conclusion that he has the appearance of bias in favour of the charity," Duff Conacher, co-founder of Democracy Watch, a non-profit organization working on issues of democratic accountability, told CBC Wednesday. 

Neilson ruled in favour of the charity on June 1, writing that the families had failed to make a strong case for their allegations, and that Habitat was more likely to face irreparable harm from granting an injunction than the families were if it was dismissed. 

At no point during the hearing did he disclose his charitable contributions.  

In the time since the injunction was refused, the partner families allege that Habitat Edmonton has been approaching them individually and pressuring them to drop the lawsuit in exchange for an extended tenancy agreement or a payout that would be based, in part, on the amount of money they paid in rent.

In some cases, the charity sought to have them sign releases without first getting legal advice, the families said in a statement to CBC News. 

"The Partnership Families are comprised of marginalized, vulnerable and mainly racialized individuals who have difficulties with English and are not legally sophisticated," the statement read.

"For any fair and meaningful mediation to occur, all Partnership Families need to be at the table, including those pressured into signing the releases by Habitat Edmonton without any legal advice." 

Habitat Edmonton has not responded to several requests for comment from CBC News since Wednesday afternoon. 

'Grateful for the intervention'

Nanda said the statement from Habitat International comes as welcome relief amid the fraught legal battle. 

"The families and myself are both grateful for the intervention of Habitat International because there was no progress being made towards mediation despite numerous attempts to have Habitat Edmonton come to the table to try to resolve this," Nanda said in an interview Thursday. 

"They refused to do so and they refused to do so in a matter that was fair. And without the public pressure, I don't think anything would have happened." 

Nanda says Habitat Edmonton would only agree to sit down with the families on an individual basis, not as a group with legal counsel. 

"Habitat International has validated and confirmed that our position is the correct one, the acceptable and moral one," Nanda said.