COURT FILE NO.: 419/05

DATE: 20080303

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

ferrier, molloy and swinton jj.

B E T W E E N:

THE MEWS OF SCARLET MILLS

Applicant (Appellant)

• and -

TARION WARRANTY CORPORATION (also known as ONTARIO NEW HOME WARRANTY PROGRAM)

Respondent

Counsel:

Mark A. Klaiman, for the Appellant

Carol Street, for the Respondent

HEARD at Toronto: March 3, 2008

ENDORSEMENT

[1] This is an appeal from the decision of the Licence Appeal Tribunal dated September 30, 2005.

[2] There was no error of law in the Tribunal’s reasons. The issues raised by the appellant are primarily issues of fact or mixed fact and law for which the standard of review is reasonableness: Cecilio v. Tarion Warranty Corp., [2007] O.J. No. 1692 at para. 29.

[3] The Tribunal made findings of fact based on the evidence before it that the past conduct of Mr. Pitino personally was such that there were reasonable grounds for belief that the undertakings of Scarlet Mills would not be carried out in accordance with law or with integrity. There was ample evidence to support the Tribunal’s conclusion. It was a reasonable conclusion and we see no basis to interfere with it.

[4] The Tribunal concluded on the evidence that the number of chargeable conciliations entered against the prior corporation Bellamy (being 8 conciliations out of 30 homes) was significantly above the acceptable industry standard of 1 out of 25 homes. The Tribunal noted that it was Mr. Pitino who was responsible for construction and for after sales service of Bellamy. The Tribunal inferred from this evidence that there were problems with Mr. Pitino’s technical competence, which would undermine the technical competence of Scarlet Mills of which he was the sole officer and director. This is a rational conclusion fully supported by the evidence and, applying a reasonableness standard, we would not interfere with it.

[5] The “technical competence” of a corporation in this regard is appropriately judged by reference to those in control of that corporation and there was no error of law by the Tribunal in taking that approach.

[6] The appellant submitted that the Tribunal erred in considering the quality of the construction when the Notice of Proposal referred to “poor after-sales service” in the particulars relating to technical competence. This argument was not raised by the appellant before the Tribunal, nor in its factum on this appeal. If it had been raised below there would have been ample opportunity and jurisdiction to amend the proposal to reflect the evidence or anticipated evidence before the Tribunal. We are satisfied that there was no unfairness in the Tribunal’s consideration of the high number of chargeable conciliations in determining the issue of technical competence.

[7] In the result, the appeal is dismissed with costs to the respondent fixed at $5,000 inclusive of GST and disbursements.

FERRIER J.

MOLLOY J.

SWINTON J.

Date of Reasons for Judgment: March 3, 2008

Date of Release: March 6, 2008