Non-profit St. John’s shelter suing province, alleging it was told to fire its executive director or else

Fresh Start Housing Solutions alleges it was told its funding would be yanked if it didn't get rid of its executive director, Gail Tobin, who left her previous position at Iris Kirby House clouded in controversy.

A non-profit emergency shelter in St. John's has filed a lawsuit against the provincial government, alleging it was given an ultimatum to either fire its executive director — a woman with a controversial past in the sector — or its funding would be cut off.

Fresh Start Housing Solutions began taking clients in May 2019, operating as a non-profit and charging $185 a night. That gave the provincial government an alternative to private landlords charging as much as $350 a night, at a time when shelter services were needed more than ever.

At Fresh Start's head is Gail Tobin, who left her position as CEO of Iris Kirby House, the most prominent women's shelter in St. John's, after a government audit in 2017. That audit raised concerns about Tobin's salary, as well as taxpayer money and donations being spent on things like travel and alcohol.

After more than a year away from the industry, Tobin made a quiet return as executive director with Fresh Start, a new shelter with businessman Wayne Moore listed as its owner.

Its operations lasted from May until November 2019, when a lawsuit filed by Fresh Start last week alleges the CEO of the Newfoundland and Labrador Housing Corporation told Moore to fire Tobin or the province would stop sending them clients, sparking outrage and confusion at the shelter.

“They have a duty to the homeless populations in the metro St. John's region to act in accordance with the objectives and purposes as set out in the Housing Act, and not in accordance with private, personal or political agendas,” reads the lawsuit.

The shelter, along with Tobin and property owner Jeff Sears, are suing for damages and an order to force the NLHC to resume sending clients to Fresh Start.

Documents obtained by CBC News show the province paid the shelter more than $214,000 for services rendered in the six months before it was cut off.

Fresh Start said it hired staff and sank significant money into the shelter with the expectation of having an ongoing relationship with the NLHC, and had already passed background checks with Tobin listed as its executive director.

The lawsuit accuses the NLHC of either being negligent in the vetting process that approved Tobin in the beginning, or breaching contract when it ordered Tobin to be fired in the end.

The NLHC declined to speak with CBC News on Friday afternoon. It has not yet filed a statement of defence and none of the claims have been proven in court.

Emails show frustration with slow process

Documents obtained by CBC News through access-to-information requests show Moore was not impressed by the length of time it took to get Fresh Start approved as a shelter.

The provincial government was struggling to find non-profit alternatives to the private shelters, a system that padded the pockets of landlords who did not have to provide anything other than a bed and a meal to clients stuck in a pattern of homelessness.

Emails show that an NLHC employee said Fresh Start was originally intended to start as a for-profit shelter and had met with Leonard Phair, the province's highest-paid private shelter provider at the time.

The shelter system in Newfoundland and Labrador has been mired in controversy for several years, after it became clear the province was paying millions of dollars to for-profit landlords for what were supposed to be short-term stays.

Fresh Start was told government wouldn't accept another profit shelter, and so began the process of incorporating as a non-profit a few days later.

Emails also show an NLHC employee express some concern over Tobin's exit from Iris Kirby House, and how it remains unclear whether she quit or was fired after the auditor's report.

The NLHC had plenty of questions after Fresh Start submitted its proposal to operate in October 2018, and it grew frustrating for the shelter as the months ticked by.

The following February, Moore demanded a meeting with Lisa Dempster, the minister responsible for the NLHC, and Finance Minister Tom Osborne. The lawsuit says Fresh Start was reassured at that meeting, and continued making preparations ahead of getting its first clients.

Between May and November 2019, dozens of people stayed at Fresh Start Housing's shelter on Freshwater Road in St. John's — some staying for as many as 70 nights at the flat rate of $185 a night.

Then, the lawsuit alleges, the rug was pulled out from underneath the shelter.

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CBC News began asking questions about Fresh Start's status as a non-profit shelter in early November, while doing an investigation on costs to house the homeless in for-profit shelters.

Three weeks later, Fresh Start says it was given an ultimatum to fire Tobin or lose all business.

Is there a contract to breach?

The shelter operated on a per-diem basis — there were no guarantees in writing beyond a few nights at a time.

The NLHC would send an authorization form when it had a client that needed to stay at the shelter. The shelter would then send an invoice when the stay ended and get paid.

But Fresh Start argues in its statement of claim that there was a quid pro quo between the parties involved; if the shelter could provide an acceptable place to stay, then the NLHC would provide clients.

Fresh Start says nothing changed between when the shelter was approved and when the ultimatum was given, and the level of service provided never dropped.

Lawyers for Fresh Start will argue that constitutes a breach of contract, and a breach of fiduciary duty by acting in bad faith with public money.

Read more from CBC Newfoundland and Labrador

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