Judge who ruled in favour of Habitat Edmonton donated to charity

The judge 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. 

Habitat's annual reports show Court of Queen's Bench Justice James Neilson donated between $100 and $999 to the charity in both 2018 and 2019. 

A group of 57 low-income families asked Neilson to stop Habitat from evicting them as they pursued a class action against the charity for breach of contract.

Neilson ruled in favour of the charity earlier this month, 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.  

"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," said Duff Conacher, co-founder of Democracy Watch, a non-profit organization working on issues of democratic accountability.  

"That's the line that no judge is allowed to cross."

The Canadian Judicial Council, which handles complaints against federally-appointed judges, says a judge should disqualify themselves from a case if they're aware of any conflict of interest that would give rise to a reasoned suspicion of a lack of impartiality. 

The credibility of the court depends on the judge's impartiality, Conacher said. Any hint at a judge's bias chips away at the rule of law and the right to a fair hearing.

"I've never seen a case involving a judge making donations and then having whatever organization they donated to be a party in the case," Conacher said.  

Under the judicial council's guiding ethical principles for judges, a justice can be rightly disqualified from hearing a case if they have expressed views that could be seen as biased toward a litigant. Elsewhere, the principles say judges should not personally lend their names to financial campaigns. 

Habitat says it was unaware of Judge's connections

In a statement to CBC News, the families said they were surprised by news of the judge's donations. Many of the families are recent immigrants; others are on income support caring for children with disabilities or single parents with health issues of their own. 

Their lawyer, Avnish Nanda, asked the court to ensure no judge with ties to the charity would decide the case given longstanding ties between the legal community and Habitat. 

The Edmonton legal community has sponsored the construction of a Habitat home every three years since 1999 and organizes an annual "Judicata Race" to support the charity. Last year, at least a dozen Court of Queen's Bench judges donated to the charity, according to a CBC review of Habitat's annual report.

"We will await further clarification from the Court and Habitat before taking any additional steps or commenting further on this matter," the families said in a statement.

Darryl Ruether, executive counsel for the Court of Queen's Bench, said in a statement that the court could not comment on any ongoing proceedings. He confirmed a plaintiff can file an action to have a judge recuse themselves "on the basis of a reasonable apprehension of bias." 

A former long-time civil litigator, Neilson acted as an in-house adviser on ethics and legal practice at his previous law firm before he was appointed to the bench in 2018, according to notice announcing his appointment.

A biography posted on his previous firm's website notes Neilson's history of community involvement, including contributions to the United Way and Big Brothers Association of Edmonton District. 

Habitat Edmonton says it was unaware of Nielson's donation to the charity before CBC News brought it to the charity's attention. 

"Habitat's view is that a donation to sponsor a runner in the Race Judicata, which supports Habitat building a home to commemorate a deceased member of the legal profession, would not create the conflict," Habitat CEO Karen Stone said in an email to CBC News, without clarifying whether Neilson actually sponsored a runner. 

Stone did not respond to follow up questions or requests for an interview on Wednesday afternoon. 

'We don't deserve this' 

The revelation is the latest development in the months-long legal dispute between the charity and 57 low-income families. The families say Habitat promised them a zero-interest mortgage so long as they finished 500 hours of what the charity called "sweat equity" — unpaid work, often building their promised future home, in lieu of a down payment — and successfully completed a 12-month tenancy.

Before the families could sign the mortgage contract, Habitat 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 testified in court that it would work with the families to find a pathway to home ownership. 

After Neilson refused the injunction application, several families tried to apply for the new mortgage agreement, only to be turned down because of their credit history or insufficient income, just as they feared, their lawyer Nanda said. 

"We don't deserve this. This was not expected," said Carema Bouanani, one of the people suing Habitat. 

Bouanani, a single mother on Alberta's disability support with two teenage boys, said Habitat told her she would not qualify for the new mortgage agreement given her credit history and income. It was a second Habitat betrayal, she says, after the charity initially changed the mortgage model late last year.  

"This was our Canadian dream and the Canadian dream was broken," she said. 

Bouanani was approved for Habitat's zero-interest mortgage program in 2017. She was diagnosed with breast cancer while she completed the required 500 hours of sweat equity, cleaning the charity's head offices and working at fundraising events between chemotherapy treatments, she says.

She was motivated by the promise of moving into her new home in December 2019 after eight years of living in social housing and periods of homelessness. Now she's unsure whether she'll ever step foot inside that house after the injunction was dismissed.

"I'm so close yet but yet so far. It was so discouraging and so upsetting and so depleting," she said. "I kept fighting, but nothing happened. Nothing positive came from it." 

In the decision, Neilson found that any risks posed to Habitat by an injunction outweighed the risks raised by partner families. The charity was $27 million in debt as of 2017 with no money left to build homes. If the injunction was granted, Neilson concluded, there was a real possibility that Habitat Edmonton would fail, leaving 450 other families in charity housing without support and 110 people unemployed. 

This was our Canadian dream and the Canadian dream was broken. ​​​​- Carema Bouanani

The exact contribution Neilson made to the charity is unclear, since his name was included under the list of contributors of between $100 and $999 in each of the annual reports. 

While determining that amount will be important if any application or complaints are brought against the judge, Conacher, with Democracy Watch, said the donation still amounts to a financial interest in the charity. 

"The judge has given the money to the charity not for the charity to use to pay off a lawsuit that they may lose or to settle that lawsuit, but for what the charity does, which is build homes for people in need," Conacher said. 

"It's not that the judge would profit from the case but that the judge's money would be part of the revenues of the charity and would go to paying off the lawsuit if the lawsuit is successful." 

The families are now in a delicate legal position going forward, said Conacher. Neilson would be responsible for recusing himself and ordering a new injunction hearing if Nanda makes an application on behalf of the partner families. 

The families could also take their case to the Alberta Court of Appeal and argue that Neilson's apparent bias led to an error in the application of law. The other route would be asking the judicial council to launch an inquiry, which often takes several years to complete. 

"Anyone who is looking at the plaintiffs in this case should be sympathetic because they're now kind of stuck in this situation with no easy way out," Conacher said.