Montgomery Shillington

The plaintiff builder sued the defendant homeowners for unpaid extras and registered a construction lien.

The homeowners counterclaimed, alleging the builder breached the contract by unilaterally altering the HVAC design, installing a defective hydronic heating system, and delaying possession.

The homeowners also brought a third-party claim against Tarion for failing to properly investigate their warranty claim.

The court found the homeowners liable for $57,189 in unpaid extras.

However, the court also found the builder breached the contract by substituting the HVAC system without approval, awarding the homeowners $45,106 in damages (subject to deduction for a prior Pierringer settlement).

Finally, the court held that Tarion breached its statutory obligations by failing to investigate the unauthorized substitution, making Tarion jointly and severally liable for the homeowners' damages.

The appellant homeowners' action was administratively dismissed for delay under r. 48.14(1) of the Rules of Civil Procedure because it was not set down for trial within five years of commencement.

The motion judge declined to set aside the dismissal, applying the Reid factors and finding insufficient evidence to explain the delay, with inferred prejudice where examinations for discovery had not occurred.

The Court of Appeal found no palpable and overriding error in the motion judge's reasoning, noting that the appellants bore the primary responsibility for their action's progress and that the delay was moving into the realm of 'inordinate' once the five-year mark was crossed.

The plaintiffs brought a motion seeking leave to amend their statement of claim against Tarion Warranty Corporation and to add the Home Construction Regulatory Authority (HCRA) as a defendant.

The proposed amendments included new allegations regarding a 2007 provincial offences conviction, a 2016 refusal to register, and a 2019 notice of proposal.

The court granted the motion in part, allowing amendments that clarified existing claims or arose from the same factual matrix, but refusing amendments that introduced new, statute-barred causes of action or sought relief outside the court's jurisdiction.

The court also permitted the plaintiffs to add the HCRA as a defendant for a damages claim, but refused to allow a claim for a mandatory order against the regulator, holding that such relief must be sought by way of judicial review in the Divisional Court.

The Appellant appealed a proposal by the Registrar to refuse to renew its registration as a new home builder.

The Registrar alleged that the Appellant breached warranties, failed to indemnify the Guarantee Fund for resulting losses, demonstrated insufficient technical competence, and that the past conduct of its sole officer and director afforded reasonable grounds to believe the business would not be carried on with integrity and honesty.

The Licence Appeal Tribunal found that the Appellant failed to resolve numerous serious defects, including Code violations, and failed to indemnify Tarion for the costs of repairs.

The Tribunal also found that the Appellant's officer engaged in aggressive and disrespectful conduct towards homeowners and Tarion staff.

The Tribunal directed the Registrar to carry out its proposal to refuse to renew the Appellant's licence.

The appellant builder brought a motion to dismiss the Registrar's notice of proposal to refuse its registration renewal, arguing the proposal was ultra vires because the registration had already been renewed.

The appellant relied on a notification on Tarion's online builder portal indicating its registration was 'approved'.

The Tribunal found that the online notification was an administrative error and that the appellant's registration had never been renewed.

The motion was dismissed, allowing the appeal of the notice of proposal to proceed on its merits.

The applicant sought declarations of her mother's incapacity to manage property, personal care, and instruct counsel, and an order for a new capacity assessment, as well as removal of her mother's s. 3 counsel.

The court dismissed the applicant's motion, finding that previous assessments of incapacity for property and personal care were sufficient and that a further assessment for capacity to instruct counsel was unnecessary and intrusive.

The court affirmed the role of s. 3 counsel and the principle that counsel determines their client's capacity to instruct, absent strong evidence to the contrary.

Tarion Warranty Corporation brought a motion to dismiss 22 items from the appellants' second-year new home warranty appeal, arguing they were barred by res judicata and issue estoppel following a previous Tribunal decision on first-year claims.

The Tribunal reviewed each item and found that while 7 items had been conclusively decided in the previous hearing, the remaining items involved new issues or different areas of the home, such as the garage, that were not previously adjudicated.

The motion was granted in part, allowing the appellants to pursue the remaining claims.

Following a successful appeal, the parties were unable to resolve the costs of the motion below.

The Court of Appeal fixed the costs of the motion below at $4,500 in favour of the appellants, payable out of the proceeds of the sale of the property, noting that much of the time claimed related to necessary housekeeping matters regarding the sale.

The appellants appealed an order setting aside a commercial lease as fraudulent under the Fraudulent Conveyances Act and directing the sale of a property free of the lease.

The Court of Appeal allowed the appeal, finding that the motion judge erred in deciding the fraudulent conveyance issue without proper notice or a trial, as the debtor's intent raised a triable issue.

Furthermore, the court held that the term 'encumbrancers' in the standard form order for partition and sale encompasses both existing and subsequent encumbrancers, meaning the property could not be sold free of the subsequently registered lease without the encumbrancer's consent.

The defendants brought a Rule 21 motion to strike portions of a statement of claim arising from a dispute regarding mould contamination in a newly constructed home and Tarion’s warranty decision.

The plaintiffs sought damages against Tarion and a Tarion employee, including punitive damages and an “open claim” relating to alleged long‑term health impacts.

The court held it was plain and obvious that no reasonable cause of action was disclosed against the employee because the pleadings contained no allegations of fraud, deceit, dishonesty, or independent tortious conduct.

The claim for punitive damages was also unsupported by pleaded facts demonstrating malicious or high‑handed conduct.

The request for an “open claim” was barred by statutory limits and exclusions under the Ontario New Home Warranties Plan Act.

The claims against the employee and the impugned remedies were struck without leave to amend.

On a contested passing of accounts, estate trustees sold the estate’s principal asset—a farm—to a sibling beneficiary for substantially less than its appraised market value and without exposing the property to the open market.

Beneficiary objectors alleged breach of fiduciary duty, improper estate expenditures, and excessive executor compensation.

The court held the estate trustees breached fiduciary obligations by selling the asset below fair market value and failing to treat beneficiaries impartially.

Certain estate expenditures incurred in connection with the improper transaction were characterized as waste and ordered repaid personally by the trustees, while other costs associated with a subsequent open-market sale were allowed.

Executor compensation was significantly reduced and the accounts approved subject to the court’s corrections and disallowances.

The applicant appealed a decision by Tarion Warranty Corporation denying warranty claims for improperly installed siding, basement water penetration, and poor paint finish.

The Licence Appeal Tribunal found that the siding met the applicable deflection standards and that the basement moisture was likely caused by condensation rather than water penetration.

The Tribunal also held that the paint finish met the Construction Performance Guidelines.

The appeal was dismissed and Tarion was ordered to deny the claims.

The applicants appealed a decision by Tarion Warranty Corporation denying their claim for secondary damages related to mould contamination in their new home.

The builder had gone bankrupt, and Tarion had previously remediated the mould issue.

The applicants sought compensation for cleaning clothing and damaged personal effects, and requested further mould testing.

The Licence Appeal Tribunal dismissed the claim for secondary damages, finding it had no jurisdiction to order such payments as they are explicitly excluded under the Ontario New Home Warranties Plan Act.

However, the Tribunal directed Tarion to proceed with further destructive testing and remediation as offered in its Supplementary Decision Letter to ensure the home was safe and habitable.

The Licence Appeal Tribunal issued a pre-hearing order in an appeal by a homeowner against Tarion Warranty Corporation regarding denied warranty claims.

The parties resolved some issues and agreed to continue settlement efforts on others.

The Tribunal ordered a timetable for the disclosure of documents and expert reports, and scheduled the hearing dates.

The applicants appealed a decision by Tarion Warranty Corporation denying their claim for secondary damages related to mould contamination in their new home.

The applicants sought compensation for cleaning clothing and damaged personal effects.

The Licence Appeal Tribunal dismissed the claim for secondary damages, finding that the Ontario New Home Warranties Plan Act explicitly excludes such damages.

However, the Tribunal directed Tarion to proceed with further destructive testing and remediation work as outlined in a supplementary decision letter to ensure the home is safe and habitable.

The applicants sought an extension of time to appeal decision letters issued by Tarion Warranty Corporation regarding their new home warranty claims.

The applicants claimed they did not receive two of the letters and missed the 15-day appeal deadline.

The Licence Appeal Tribunal applied the four-part test for extending time and found no bona fide intention to appeal, no credible explanation for the delay, and no merit to the case.

The motion for an extension of time was dismissed.

The Applicants appealed a decision by Tarion Warranty Corporation denying several claims under the Ontario New Home Warranties Plan Act regarding their newly-built home.

The Licence Appeal Tribunal reviewed claims relating to cement work, paint, cabinets, a range hood, toilets, a shower, flooring, and ductwork noise.

The Tribunal dismissed all claims except one, finding that most issues were either not defects in materials or workmanship, fell under statutory exclusions like normal shrinkage, or were private contractual disputes outside the Tribunal's jurisdiction.

The Tribunal allowed the appeal regarding the stone work above the garage doors, finding that the builder's substitution of horizontal stone work instead of the contracted arched stone work constituted a defect in workmanship, and ordered Tarion to have the arched stone work constructed.

The applicants appealed a decision by Tarion Warranty Corporation denying their claim for compensation for a delayed closing of a new home.

The applicants argued the builder was at fault because the home was not 97% complete, causing their mortgagee to withhold funds.

The Licence Appeal Tribunal found that the home was ready for occupancy under the Ontario Building Code on the scheduled closing date, save for front steps which were not installed because the applicants had already requested an extension.

The Tribunal held that the builder was not bound by the mortgagee's requirements and that the delay was not the builder's fault.

The appeal was dismissed.

The applicants appealed a decision by Tarion Warranty Corporation denying warranty coverage for four issues in their new home: noisy vents, a leaking basement patio door, water ponding on the lakeside patio, and cupping of the hardwood floor.

The Tribunal dismissed the claims regarding the vents and the water ponding, finding that the vents met Building Code requirements and the ponding was caused by subsidence, which is excluded from warranty.

However, the Tribunal allowed the claims for the basement patio door and the hardwood floor cupping.

The Tribunal found that the basement door leaked and should be replaced, similar to the upper patio door.

Regarding the hardwood floor, the Tribunal preferred the evidence of the applicants' experts, finding that the cupping was caused by excessive moisture resulting from defective work and an inadequate HVAC system, rather than improper maintenance or an 'unattended house syndrome.' The Tribunal ordered Tarion to pay $17,069.78 for the patio door and $50,846.44 for the replacement of the hardwood floor.

The appellant requested an adjournment of the appeal, which was denied because the appellant had known for five months that new counsel was needed and a previous order made the appeal peremptory.

On the merits, the Court of Appeal found no error in the lower court's judgment and dismissed the appeal, awarding costs to the respondents.