Singer v. Ontario New Home Warranty Program [Indexed as: Singer v. Ontario New Home Warranty Program]

51 O.R. (3d) 69

[2000] O.J. No. 3867

Court File No. 372/98

Ontario Superior Court of Justice

Divisional Court

Blair R.S.J., Then and Coo JJ.

October 20, 2000

*Note: An addendum to the following majority judgment of Blair R.S.J. and Then J. was provided December 14, 2000. See 2000 ONSCDC 29026, 52 O.R. (3d) 254 for the court's endorsement.

Sale of land -- New Home Warranty Program -- Scope of recovery -- Purchaser buying condominium units for tax sheltered investment -- Vendor failing to perform contract -- Purchaser entitled to coverage under warranty program for compensation for business and investment costs relating to transaction -- Tax savings enjoyed by purchaser and rental income received to be deducted in determining purchaser's claim -- Ontario New Home Warranties Plan Act, R.S.O. 1990, c. O.31, s. 14(1).

The appellants purchased two condominiums as tax sheltered investments, but the developer failed to convey title, and the appellants sued and obtained a judgment against the vendor. The judgment was not paid, and the appellants applied to the Ontario New Home Warranty Plan for recovery under s. 14(1)(a) of the Ontario New Home Warranties Plan Act. The Warranty Program denied their claim for compensation for business and investment costs relating to the transaction, and the denial was upheld by the Commercial Registration Appeal Tribunal. The appellants appealed.

Held, the appeal should be allowed.

Per Blair R.S.J. (Then J. concurring): The Tribunal was incorrect in concluding that the Warranty Program was only required to compensate condominium purchasers in tax sheltered investment situations for payments made by the purchaser in respect of land and construction costs. Subject to the limit imposed by the regulations under the Ontario New Home Warranties Plan Act, condominium purchasers are entitled to compensation for business and investment costs relating to the transaction. Under s. 14(1) of the Act, a person who has entered into a contract with a vendor for the provision of a house has a cause of action in damages against the vendor for financial loss resulting from the vendor's failure to perform the contract. The Tribunal erred by limiting the scope of "damages" under s. 14(1) in a fashion not warranted by the legislative scheme and the language of the Act. Investors in tax-driven schemes are covered by the Act. The amount of the appellants' damages arose from the vendor's f ailure to perform the contract, which in this case involved a series of nine agreements that together constituted the condominium purchase. The agreements were all part of a single transaction, the essence of which was a contract for the provision of a condominium. The Tribunal, however, was correct in upholding the Warranty Program's decision that tax savings enjoyed by the purchaser/investor and rental income received should be deducted in determining the loss. Subsection 14(2) of the Act requires the Warranty Program, in assessing damages, to take into consideration any benefit, compensation or indemnity payable to the person or owner from any source.

Per Coo J. (dissenting): The Warranty Program and Tribunal decisions were correct. A major portion of the amount claimed did not fall within the language of s. 14(1) of the Act. The description of cause of action and remedy excludes the claim for alleged failure to deliver services in regard to the apartment units.

APPEAL from a decision of the Commercial Registration Appeal Tribunal denying a claim under s. 14 of the Ontario New Home Warranties Plan Act, R.S.O. 1990, c. O.31.

Cases referred to Feingold and Discipline Committee of College of Optometrists of Ontario (Re) (1981), 1981 ONSC 1898, 33 O.R. (2d) 169, 123 D.L.R. (3d) 667, (Div. Ct.); Grudzinski v. Ontario New Home Warranty Program (1997), 1997 ONSC 16252, 32 O.R. (3d) 376, 33 C.L.R. (2d) 315 (Div. Ct.); Ontario New Home Warranty Program v. Marchant Building Corp. (1991), 1991 ONCA 7132, 1 O.R. (3d) 513, 44 O.A.C. 395, 15 R.P.R. (2d) 113 (C.A.), revg (1989), 1989 ONSC 4203, 68 O.R. (2d) 577, 4 R.P.R. (2d) 164 (H.C.J.) (sub nom. Platinum I Property Ltd. v. Ontario New Home Warranty Program); Ontario New Home Warranty Program v. Meadows of White Oaks II Ltd. (1988), 1988 ONSC 4655, 65 O.R. (2d) 362, 50 R.P.R. 186 (H.C.J.); Pezim v. British Columbia (Superintendent of Brokers), 1994 SCC 103, [1994] 2 S.C.R. 557 (1994), 92 B.C.L.R. (2d) 145, 14 B.L.R. (2d) 217, 114 D.L.R. (4th) 385, 168 N.R. 321 (sub nom. Ivany v. British Columbia); Stenzler (Re), [1995] O.C.R.A.T.D. No. 29 (QL); Sunforest Investment Corp. v. Ontario New Home Warranty Program (1997), 1997 ONCA 1739, 32 O.R. (3d) 59, 12 R.P.R. (3d) 157 (C.A.) [Leave to appeal to S.C.C. refused (1997), 223 N.R. 80n]; Templeton (Re), [1994] O.C.R.A.T.D. No. 141 (QL) Statutes referred to Ministry of Consumer and Commercial Relations Act, R.S.O. 1990, c. M.21, s. 11 [rep. S.O. 1999, c. 12, Sch. G, s. 27] Ontario New Home Warranties Plan Act, R.S.O. 1990, c. O.31, s. 14 Rules and regulations referred to Administration of the Plan, R.R.O. 1990, Reg. 892, s. 6

Kevin D. Sherkin and Messod Boussidan, for applicants. James C. Tory and John Terry, for respondent.

R.A. BLAIR R.S.J. (THEN J. concurring): --

Background

[ 1 ] In 1987 Allen and Nancy Singer purchased two condomiums in a large condominium project in Scarborough, Ontario. The condominiums were bought and sold as tax sheltered investments. Subsequently, the developer/vendor, Reemark Sterling Club 1 Limited, was unable to convey title to the Singers, who sued and obtained judgment from the Honourable Mr. Justice White in May 1992. The judgment granted declaratory relief and a monetary award totaling approximately $95,500 (inclusive of pre-judgment interest).

[ 2 ] Reemark has never paid the judgment, and the condominium project was sold under power of sale. The Singers applied to the Ontario New Home Warranty Program under s. 14(1)(a) of the Ontario New Home Warranties Plan Act, R.S.O. 1990, c. O.31 for recovery under the guarantee provisions of that statute. The Warranty Program denied their claims. That denial was upheld by the Commercial Registration Appeal Tribunal.

[ 3 ] The Tribunal concluded the Warranty Program had been correct in determining it was only required under s. 14(1)(a) of the Act to compensate condominium purchasers in tax sheltered investment situations for payments made by the purchasers in respect of land and construction costs and not for the business/investment costs relating to the transaction. It also upheld the Warranty Program's decision that tax savings enjoyed by the purchaser/investor, and rental income received, should be deducted in determining the loss, if any, actually suffered by the appellants.

[ 4 ] The Singers now appeal to this court.

Issues

[ 5 ] The issues on the appeal are the following:

(a) Is a purchaser who acquires a new condominium unit as a tax sheltered investment entitled to look to the Warranty Program for reimbursement for payments made, not only in respect of lands and buildings purchased, but also in respect of condominium and business-related services provided to the purchaser pursuant to the investment package which forms an integral part of the condominium purchase?

(b) In calculating the financial loss for which a purchaser can look to the Warranty Program for compensation, should tax savings arising out of the investment be an offsetting deduction?

[ 6 ] In my opinion, the answer to both questions is "Yes". The Tribunal and the Warranty Program were incorrect in answering the first question in the negative.

Standard of Review

[ 7 ] The standard of review on an appeal from a decision of the Tribunal, in circumstances such as this, is that of correctness.

[ 8 ] There is no privative clause protecting decisions of the Tribunal, and the Ministry of Consumer and Commercial Relations Act, R.S.O. 1990, c. M.21 provides for a broad statutory right of appeal from such decisions. The relevant subsections state:

11(1) Any party to proceedings before the Tribunal may appeal from its decision or order to the Divisional Court in accordance with the rules of court.

(5) An appeal under this section may be made on questions of law or fact or both and the court may exercise all the powers of the Tribunal, and for such purpose the court may substitute its opinion for that of the Registrar or of the Tribunal, or the court may refer the matter back to the Tribunal for rehearing, in whole or in part, in accordance with such directions as the court considers proper.

(Emphasis added)

[ 9 ] These statutory provisions call for a standard of correctness in circumstances where, as here, what is involved is the interpretation of a statutory provision regarding which the Tribunal has no more expertise than does the court. In Pezim v. British Columbia (Superintendent of Brokers), 1994 SCC 103, [1994] 2 S.C.R. 557, at p. 590, 92 B.C.L.R. (2d) 145, Iacobucci J. stated:

At the correctness end of the spectrum, where deference in terms of legal questions is at its lowest, are those cases where the issues concern the interpretation of a provision limiting the tribunal's jurisdiction . . . or where there is a statutory right of appeal which allows the reviewing court to substitute its opinion for that of the tribunal and where the tribunal has no greater expertise than the court on the issue in question as for example in the area of human rights.

(Emphasis added)

[ 10 ] See also Re Feingold and Discipline Committee of College of Optometrists of Ontario (1981), 1981 ONSC 1898, 33 O.R. (2d) 169, 123 D.L.R. (3d) 667 (Div. Ct.); Grudzinski v. Ontario New Home Warranty Program (1997), 1997 ONSC 16252, 32 O.R. (3d) 376, 33 C.L.R. (2d) 315 (Div. Ct.).

[ 11 ] For the reasons set out below, I am of the view that the Tribunal was incorrect in holding that the Singers were not entitled to claim under the Warranty Program for the financial losses they sustained in relation to the condominium and business-related services provided as part of the purchase agreement, and which formed an integral part of the contract for the sale of the "homes" in question.

Law and Analysis

[ 12 ] The pertinent provisions of the Ontario New Home Warranties Plan Act, R.S.O. 1990, c. O.31 ("Act") are found in s. 14. Subsections (1) and (2) state:

14(1) Where,

(a) a person who has entered into a contract with a vendor for the provision of a home has a cause of action in damages against the vendor for financial loss resulting from the bankruptcy of the vendor or the vendor's failure to perform the contract,

the person or owner is entitled to be paid out of the guarantee fund the amount of such damage subject to such limits as are fixed by the regulations.

(2) In assessing damages, the Corporation shall take into consideration any benefit, compensation or indemnity payable to the person or owner from any source.

[ 13 ] Section 6 of Ontario Regulation 892, R.R.O. 1990, Adminstration of the Plan, limits the amount of recovery under s. 14 of the Act to $20,000 plus (in the case of a condominium unit) the amount of any interest owing on the amount to be paid out of the guarantee fund.

Damages for Financial Loss Resulting from the Vendor's Failure to Perform

[ 14 ] What is at issue, then, is the interpretation of the phrase "a cause of action for damages . . . for financial loss resulting from . . . the vendor's failure to perform the contract [for the provision of a home]."

[ 15 ] Counsel for the Warranty Program submits that the agreements between the Singers and Reemark Sterling fall into two separate and distinct categories. The first relates to the sale of land and construction of the condominium -- "the provision of a home", in the traditional sense. The second relates to certain services to be provided by the vendor, and paid for by the purchasers, which gave rise to tax deductions. The Warranty Program and the Tribunal held that only losses relating to the purchase of land and buildings were compensable under the Act, and that losses sustained as a result of the vendor's failure to provide the services purchased were not. The rationale for this position was that the latter losses did not arise from a contract for the provision of a home. Rather, they arose from a contract for business services associated with renting the condominium in order to generate revenue from the home, not as a "home" but as a "business investment". As such, the argument goes, they are not covered under the Act.

[ 16 ] Having regard to the tax sheltered nature of the scheme under which the Singers purchased the condominiums, the purchase price of each unit was divided between land and construction costs, and services, as follows:

Unit 1308 Unit 1201

Land and Construction $84,044 $114,040

Services $18,946 $23,950

Total Purchase Price $102,990 $137,990

[ 17 ] In its decision dated May 28, 1998, the Tribunal framed its approach to the determination of the issues before it (at p. 5) as follows:

The question to be decided is what compensation, if any, are the Applicants entitled to under the Act.

What losses and what benefits may be claimed is entirely governed by the Act. Damages in contract law involve different principles from claims by way of compensation under the Act. Allowable claims for compensation under the Act are narrower than damages based on a breach of contract at common law.

Damages in contract law flow from an agreement, whereas under the Act, consumer protection is being provided for people buying a new home. The Act is not devised to protect investors in a tax driven scheme although like others they are covered. The Act, a consumer driven statute, offers protection for what is directly necessary for the provision of a home. Remoteness for financial loss or damage is a vital consideration.

Financial losses under the Act, are dealt with in section 14:

[The Tribunal then cited the provisions of s. 14 set out above.]

With these statutory restrictions, the type of compensation contemplated focuses on the phrase "for the provision of a home". The Act provides funds by way of warranty, limited in amount by the regulations and in limited circumstances.

(Emphasis added)

[ 18 ] These reasons reflect the continuing legacy of a series of decisions in which the Warranty Program and the Tribunal have sought to narrow the application of the compensation provisions of s. 14 to financial losses arising from a vendor's failure to perform obligations regarding the acquisition of land and newly constructed buildings -- to new home purchasers in the traditional sense -- on the premise that the Act is "consumer protection. . . for people buying a new home". See, for example, Re Stenzler, [1995] O.C.R.A.T.D. No. 29 (QL); Re Templeton, [1994] O.C.R.A.T.D. No. 141 (QL); Sunforest Investment Corp. v. Ontario New Home Warranty Program (1997), 1997 ONCA 1739, 32 OR. (3d) 59, 12 R.P.R. (3d) 157 (C.A.); Ontario New Home Warranty Program v. Meadows of White Oaks II Ltd. (1988), 1988 ONSC 4655, 65 O.R. (2d) 362, 50 R.P.R. 186 (H.C.J.); Ontario New Home Warranty Program v. Marchant Building Corp. (1989), 1989 ONSC 4203, 68 O.R. (2d) 577, 4 R.P.R. (2d) 164 (H.C.J.).

[ 19 ] However, this approach has not fit easily with the purchase of condominium units. Condominiums are by nature multiple unit developments -- frequently quite large multiple unit developments -- with common elements in which the unit holders have a common interest and which require upkeep, maintenance, landscaping and servicing. These developments provide "homes" for the consuming public, but they often do so under the rubric of highly sophisticated financing, investment, and service packages. Some of these packages are tax driven investment purchases where the buyer does not intend to live in the premises -- indeed, to do so would jeopardize the tax sheltered nature of the investment -- but rather intends to rent the unit to others.

[ 20 ] In the circumstances of this case, for example, the Singers' purchases are reflected in a series of nine agreements. These included a General Agreement, a Unit Purchase Agreement, a Development Agreement, a Services Agreement, a Rental Management Agreement, and a Guarantee Agreement. In the litigation involving the Singers and Reemark Sterling, Mr. Justice White found that the agreements, taken together, constituted a condominium purchase. A review of the documents demonstrates that such is the case.

[ 21 ] The General Agreement, for instance, stipulates that the appended agreements "form integral parts of [the] General Agreement", and each of the vendor/developer and the purchasers agree to be bound by and carry out all of their terms and conditions. Under the Services Agreement the purchasers are to pay for, and the vendor is to provide, such things as legal and accounting services, landscaping, paving, the arrangement of financing, a buy-down of the interest rate, a guarantee of the first mortgage, and other guarantees pertaining to rentals and cash flows. The Guarantee Agreement, which deals particularly with these latter matters and provides protection to the purchasers pending occupancy by a tenant, clearly states (Art. 1.01) that:

in consideration of the Vendor providing the above guarantees, the Owner covenants and agrees that as part of the Purchase Price he will pay to the Vendor the amounts set out in . . . the Services Agreement.

(Emphasis added)

[ 22 ] Moreover, the recitals to the Services Agreement itself demonstrate the integral nature of all of these agreements. They state (in part):

WHEREAS pursuant to a Unit Purchase Agreement delivered contemporaneously herewith it is contemplated that the parties deliver this Services Agreement;

AND WHEREAS the Owner is purchasing an undivided prorata share of the Land with the intention that the Vendor will provide certain initial services to facilitate completion of the Project with the objective that upon substantial completion of the Proposed Unit and the registration of a Condominium Declaration, title to the Proposed Unit shall be transferred to the Owner.

(Emphasis added)

[ 23 ] I agree with counsel for the Warranty Program that the agreements encompass a variety of things, including the purchase of land and buildings and the purchase of services. In my opinion, however, the Agreements are all part of a single transaction --albeit an investment transaction -- the essence of which is "a contract for the provision of a (condominium) home".

[ 24 ] Although the Warranty Program and the Tribunal resisted such an interpretation of the legislative scheme under the Act, it is now established that purchasers of new condominium units for investment purposes -- including tax-shelter driven investment purposes which preclude the purchaser from living in the premises -- are covered by the Act: see Sunforest Investment Corp. v. Ontario New Home Warranty Program, supra. At p. 63 of that decision, McKinlay J.A. stated on behalf of the court:

I agree with Holland J. in Ontario New Home Warranty Program v. Meadows of White Oaks II Ltd. (1988), 1988 ONSC 4655, 65 O.R. (2d) 362, 50 R.P.R. 186 (H.C.J.), that even where condominiums are purchased for tax shelters, they are purchased for occupancy and, therefore, the vendor of a condominium which has not been previously occupied must be registered and pay premiums under the Act. If that is so, the purchaser is protected by the provisions of the Act.

[ 25 ] The Tribunal recognized this when it observed:

What losses and what benefits may be claimed is entirely governed by the Act. Damages in contract law involve different principles from claims by way of compensation under the Act. Allowable claims for compensation under the Act are narrower than damages based on a breach of contract at common law.

Damages in contract law flow from an agreement, whereas under the Act, consumer protection is being provided for people buying a new home. The Act is not devised to protect investors in a tax driven scheme although like others they are covered. The Act, a consumer driven statute, offers protection for what is directly necessary for the provision of a home. Remoteness for financial loss or damage is a vital consideration.

(Emphasis added)

[ 26 ] In this respect, the Tribunal was drawn into error, in my opinion. It limited the scope of "damages" under subsection 14(1) in a fashion not warranted by the legislative scheme and the language of the Act. The Court of Appeal has confirmed, in Sunforest Investment Corp., supra, that investors in a tax- driven scheme are covered and entitled to be protected. It is not accurate to say that damages in contract law involve different, and narrower, principles than do compensation claims under the Act. Nor is it correct that damages in contract law flow from an agreement, whereas under the Act other considerations apply and protection is only offered "for what is directly necessary for the provision of a home". It is correct to say, as the Tribunal did recognize, that "what losses and what benefits may be claimed is entirely governed by the Act".

[ 27 ] Under the Act, entitlement to compensation under paragraph 14(1)(a) does flow from an agreement -- or, more accurately, from the vendor's failure to perform that agreement -- just as is the case in contract law. Compensation is payable where a person who has entered into a contract for the provision of a home "has a cause of action in damages against the vendor for financial loss resulting from . . . the vendor's failure to perform the contract [for the provision of the home]". The claimant is entitled to be paid out of the guarantee fund "the amount of such damage", subject to the regulated limits. Had the legislature intended to introduce a concept other than that of damages for financial loss resulting from the failure to perform, it would not have used term of art language like "a cause of action in damages".

[ 28 ] The Tribunal expressed concern about the scope of such damages. That concern is met in two ways under the legislative scheme. The first is the limit of $20,000 for compensation, as fixed by regulation. The second is the "other recovery" provision of subsection 14(2) of the Act. I turn now to a consideration of this latter provision, in the context of the deduction of tax benefits received by the Singers as a result of the transaction, and which the Warranty Program and the Tribunal ruled must be subtracted from any recovery to which the Singers might be entitled.

Tax savings as benefits

[ 29 ] Subsection 14(2) of the Act requires the Warranty Program, in assessing damages, to take into consideration any benefit, compensation or indemnity payable to the person or owner from any source.

[ 30 ] It is agreed that the Singers received income tax savings totaling $49,056.66 as a result of the transaction, notwithstanding that title never passed and that the vendor defaulted. These amounts included tax deductions in respect of:

(a) the amounts they paid for services;

(b) the interest they paid on their promissory note;

(c) rental losses they incurred on the units once tenants were in place; and,

(d) terminal losses arising upon the disposal of the units in 1993.

[ 31 ] In my view the Warranty Program and the Tribunal correctly took these tax savings into consideration in calculating the financial loss for which the Singers could look to the Warranty Program for compensation. The tax deductions were real and --unlike the situation at the time of the trial before White J. -- they had been realized by the time of the proceedings here in question. They are properly accounted for as "benefits . . . from any source", under subsection 14(2).

[ 32 ] The Tribunal had before it the expert report of Ms. Susan Glass. No expert evidence was tendered on behalf of the Singers. Ms. Glass reviewed and analyzed the Singers' relevant income tax returns, and concluded that they had received benefits by way of income tax savings as a result of entering into the contracts for the purchase of the two units. She broke down the savings into the four categories noted above, and testified that under either of two scenarios, offsetting the savings against the financial losses sustained in relation to "the provision of a home" -- that is, those losses pertaining to the cost of land and construction -- resulted in the Singers suffering no net damages. The first scenario involved offsetting all of the tax savings against land and construction costs. The second only offset those tax savings pertaining to land and construction.

[ 33 ] For the reasons articulated above, I do not agree that the tax savings should only be offset against the amounts paid in respect of land and construction. If such were the case, however, it would follow that only those tax savings arising from losses pertaining to the land and construction should be taken into account. The benefits from any source which are to be taken into consideration under subsection 14(2) must be benefits relating to the damages being assessed. If the purchasers are only entitled to be compensated for financial losses sustained in relation to land and construction, and not financial losses relating to the cost of services provided, tax savings arising out of the contract for those services are not a benefit to be accounted for in assessing damages for land and building costs. However, on the view I take of the situation, the Singers are entitled to be compensated for their financial losses suffered as a result of the vendor's failure to perform the contract for the provision of these condominium homes, including losses relating to the service contracts which formed an integral part of the purchase of the homes.

[ 34 ] The tax savings received must therefore be deducted from the total financial losses sustained.

[ 35 ] Mr. Singer claimed financial losses with respect to Unit 1308 in the amount of $32,015.18, plus pre-judgment interest of $8,775.70. For reasons I will explain momentarily, the Singers are entitled to include their claims for pre-judgment interest in their claims for compensation under s. 14 of the Act. Against his losses, Mr. Singer must account for net rentals received of $6,084 and tax savings of $21,334.77. He is therefore entitled to recover the sum of $13,372.77 from the Warranty Program in respect of this Unit.

[ 36 ] Mr. and Mrs. Singer claimed financial losses with respect to Unit 1201 in the amount of $42,984.55, plus pre- judgment interest in the amount of $11,768.79. With respect to this Unit, they must account for net rentals received of $8,152 and tax savings of $27,721.89. They are therefore entitled to recover the sum of $18,879.45 from the Warranty Program in respect of this Unit.

Other claims

[ 37 ] At trial before White J., the Singers obtained judgment for damages totaling $74,999.73, plus pre-judgment interest in the aggregate amount of $20,544.70. They were also awarded party and party costs of the action, which amount to $8,833.69. In addition to the pure damage award, the Singers also claimed to be entitled to have the pre-judgment interest amount and the costs taken into account in determining their recovery from the Warranty Program, plus their costs of the proceedings before the Tribunal. The Tribunal rejected these contentions.

[ 38 ] I would not interfere with the Tribunal's decision not to allow the costs of the civil proceeding to be factored into the compensation calculation under s. 14. However, the Tribunal erred, in my opinion, in not taking into consideration the pre- judgment interest amounts. Pre-judgment interest is a concept designed to prevent a party's damages in terms of financial loss from eroding between the time a claim is made and judgment is obtained. It is therefore an aspect of "financial loss" sustained as a result of the defendant's failure to perform. To conclude otherwise would be to lessen the quantum of financial loss recoverable, in real terms.

[ 39 ] Consequently, the Tribunal should have taken into account the pre-judgment interest portion of the "damage" award by White J. in considering the Singers' entitlement to compensation. Instead, it treated pre-judgment interest as "interest paid [by the Singers] on their borrowings", and concluded both that the borrowings were too remote and that it would "not be equitable that a borrower can claim interest whereas an investor who pays with his own resources cannot claim for lost interest". In doing so it misapprehended the nature of pre-judgment interest.

[ 40 ] I conclude, therefore, that the Singers are entitled to include their claim for pre-judgment interest in their claim for compensation under the Act, subject to the limits prescribed by regulation.

Disposition

[ 41 ] I would accordingly allow the appeal, set aside the decision of the Tribunal, and order that the Singers are entitled to be compensated pursuant to s. 14 of the Ontario New Home Warranties Plan Act in the following amounts:

(a) The sum of $18,879.45 with respect to Unit 1201; and,

(b) The sum of $13,372.77 with respect to Unit 1308.

[ 42 ] Both of these amounts are less than the $20,000 limit for each claim under the Regulation.

[ 43 ] The Singers are also entitled to their costs of this appeal. We heard submissions as to costs at the conclusion of argument. Counsel agreed that costs should follow the event and that they should be fixed. There was a range between them as to quantum. I fix the costs of the appeal at $5,500 plus GST.

[ 1 ] COO J. (dissenting): -- This is an appeal under s. 11(1) of the Ministry of Consumer and Commercial Relations Act, R.S.O. 1990, c. M.21, from the decision of the Commercial Registration Appeal Tribunal dismissing the appeal from a decision of the Program denying the appellants' claim for compensation.

[ 2 ] I have the misfortune to disagree with my brothers who have seen the matter differently. I express my reasons succinctly.

[ 3 ] In my view the Program and Tribunal decisions were correct and the appellants were not entitled to be awarded any sum to cover the cost of business services in fact provided to the appellants in connection with their investment purchase of two residential condominiums.

[ 4 ] In any event they were not entitled to avoid giving credit in respect of any allowable claim for the tax benefits claimed and received by them in connection with their condominium investments.

[ 5 ] A major portion of the amount claimed does not fall within the language of section 14(1) of the Ontario New Home Warranties Plan Act, R.S.O. 1990, c. O.31, which provides a cause of action to a ". . . person who has entered into a contract with a vendor for the provision of a home [including a condominium] for financial loss resulting from the bankruptcy of the vendor or the vendor's failure to perform the contract." [Emphasis added]

[ 6 ] That description of cause of action and remedy excludes from consideration the claim for alleged failure to deliver services in regard to the apartment units involved in what was essentially a tax shelter investment. That aspect of the agreement with the vendor was in a quite calculated way segregated from the deal in regard to purchase of the units, for reasons that made good sense from the purchasers' perspective at the time.

[ 7 ] Section 14(2) of the Act requires that "In assessing damages, the [respondent] shall take into consideration any benefit, compensation or indemnity payable to the person . . . from any source." The tax savings received by the appellants fall within this description and are deductible, producing the result that there are no net damages payable in regard to the land and construction phase of the arrangements between the parties at the material time.

[ 8 ] I would have dismissed the appeal.

Appeal allowed with costs.