Licence Tribunal
Appeal d'appel en
Tribunal matière de permis
DATE:
2010-05-27
FILE:
5841/ONHWPA
CASE NAME:
5841 v. Tarion Warranty Corporation
An Appeal of a Decision of Tarion Warranty Corporation under the Ontario New Home Warranties Plan Act – to Disallow a Claim
Applicants
Applicants
-and-
Tarion Warranty Corporation
Respondent
-and-
Country Wide Homes at Cornell Inc. Added Party
REASONS FOR DECISION AND ORDER
ADJUDICATOR:
TERRANCE SWEENEY, Vice - Chair
APPEARANCES:
For the Applicants:
CHERRY E. ISSACS-REYNOLDS, Counsel, representing the Applicants
For the Respondent:
ELLIE CHOI, Counsel, representing Tarion Warranty Corporation
For the Added Party:
SAM BALSAMO, Agent, representing Country Wide Homes at Cornell Inc., the Added Party
Heard in Toronto:
May 11, 2010
REASONS FOR DECISION AND ORDER
The Applicants appealed from a Decision Letter of Tarion Warranty Corporation (“Tarion"), dated December 8, 2009, denying the Applicants’ claim for $32,599.00 in deposits.
In order to protect the privacy of the Applicants their names will not be used.
PRELIMINARY MATTER
The Vice-Chair participated, to a limited degree, in a discussion about settlement prior to the opening of the hearing.
When the hearing began, Counsel informed the Tribunal that there would be no settlement. The Vice-Chair offered to recuse himself and have another person conduct the hearing if any party felt that they could have been prejudiced by the actions of the Vice-Chair. All parties consented to the Vice-Chair conducting the hearing.
The Case for the Applicants
The female Applicant was sworn and testified. She admitted the following:
She and her husband entered into an agreement of purchase and sale with the Applicants on November 13, 2007, to buy a home for $ 609,990.00.
The agreement was modified, on March 6, 2008, through upgrades so that the price became $620,386.00
The Applicants were $90,000.00 short at the time of closing so the Added Party (the “AP”) refused to close and would not provide vendor-take back financing.
The Applicants entered into another agreement of purchase and sale, dated March 7, 2009, with the AP for a smaller house, $327,989.00. The AP applied their deposit of $32,599.00 to the purchase of the second house.
The Applicants were about $30,000.00 short when it came time to close this house deal and it failed to close.
The Applicants were represented by legal counsel throughout although the witness dealt directly with officials of the AP and called at the office on numerous occasions.
The witness said that, in or about March 2009, she called at the AP's office because she thought that the chief operating officer of the AP had lied to her when she told her the second house the Applicants were to buy had been sold. The witness was told to get off the AP’s premises, not come back, telephone or even check the AP's website. She then decided to try and get her money back.
On cross-examination by Ms. Choi, she admitted the following:
She understood that the agreements, referred to above, were legal documents.
She knew that she had to deliver all of the moneys at closing and that as she had no savings, she would have to raise all of the moneys by way of mortgage financing.
She did not think that if the house deal failed to close that the Applicants would lose their deposit.
The AP gave a number of extensions of the closing date.
The witness thought that as the recession was on, the AP ultimately would provide some of the financing.
She never told the AP that she would not be able to close either transaction.
Mr. Balsamo cross-examined the female Applicant. She acknowledged that each agreement of purchase and sale was conditional for a period to allow the Applicants to check with a lawyer and to arrange financing. She thought that she could get a mortgage but was not successful in obtaining all of the money required.
The Case for Tarion
Ms. Choi elected to call no evidence.
The Case for the AP
Michelle Andradi
She was sworn and testified that she is the accounting supervisor at the AP. Her task includes processing all agreements of purchase and sale. Usually, a prospective buyer gives the AP one cheque and a number of post-dated cheques. In this case the Applicants issued nine NSF cheques. She said that they tried to accommodate the Applicants and in December 2008, at the request of the female Applicant, she "held" a cheque. She recalled the incident in 2009, when the Applicant showed up at the AP’s office and asked to speak to the chief operating officer or, her failing, the owner of the AP. She said that she told the female Applicant that neither was in that day, took her telephone number and said someone would call her back the next day and a call was made.
Antoinette Bonsignori
She was sworn. She was the assistant to the chief operating officer of the AP with whom the female Applicant dealt. That person is no longer with the AP. She testified as to what the chief operating officer might or might not have done. In the circumstances, and as she tendered opinion evidence, the Tribunal gives it no weight.
THE LAW
Paragraph 14(1)(b)(ii) of the Ontario New Home Warranties Plan Act ("Act") provides, in part, as follows:
... a person who has entered into a contract to purchase a home from a vendor is entitled to receive payment out of the guarantee fund for the amount that the person paid to the vendor as a deposit to be credited to the purchase price under the contract on closing if,
... the vendor has fundamentally breached the contract.
The onus is on the Applicants to prove their case on a balance of probabilities.
APPLICATION OF LAW TO THE FACTS
The Applicants failed to adduce any evidence that the AP had breached either of the two contracts that it signed with the Applicants. The breaches were those of the Applicants who were unable to close the purchase of either home due to their inability to obtain the requisite financing. Counsel for the Applicants, in argument, said that they were unsophisticated and the economic advantage was very much in favour of the AP. The Tribunal notes, however, that the Applicants were legally represented throughout.
This is a sad case and the Tribunal is sympathetic to the Applicants who contracted for houses that they simply could not afford. Nevertheless, the Tribunal is limited in its jurisdiction and the statute does not give the Tribunal power to grant the appeal on the facts of this case.
ORDER
By virtue of the power of the Tribunal under section 16 of the Act, the Tribunal orders Tarion Warranty Corporation to carry out its Decision.
LICENCE APPEAL TRIBUNAL
Terrance Sweeney, Vice-Chair
RELEASED: May 27, 2010