Licence Tribunal
Appeal d'appel en Tribunal matière de permis
FILE: 7649/ONHWPA
CASE NAME: 7649 v. Tarion Warranty Corporation
Motion for an for an extension of time to file an Appeal of a Decision of Tarion Warranty Corporation under the Ontario New Home Warranties Plan Act, R.S.O. 1990, c. O. 31
Applicants
Applicants
-and-
Tarion Warranty Corporation
Respondent
REASONS FOR DECISION AND ORDER
ADJUDICATOR: Patricia McQuaid, Vice-Chair
APPEARANCES:
For the Applicants: Michael Simaan, Counsel
For the Respondent: David Outerbridge, Counsel
Heard in Toronto: November 5, 2012
REASONS FOR DECISION AND ORDER
The Applicants brought a motion under section 7 of the Licence Appeal Tribunal Act for an order extending the time for filing an appeal, arising from, in part, Tarion’s Decision Letter dated June 1, 2010. The Respondent, Tarion, opposed the motion.
The motion was heard on November 5, 2012. Written submissions were received from the parties subsequent to the motion hearing, in response to an issue first raised by the Applicants at the motion, namely, whether the Applicants can be held to have waived certain statutory rights. In support of their position, the Applicants cited the decision of Amerato et al v. Registrar, Motor Vehicle Dealers Act, 2004 Can LII 34772 (ON SCDC), aff’d 2005 CanLII 31577 (ONCA).
The Tribunal, after considering the evidence and submissions, dismisses the motion. Reasons follow.
BACKGROUND
The Applicants filed the Notice of Appeal on September 21, 2012. The grounds of appeal are three-fold. First, Tarion has failed to list the homeowners’ warranted claims on Tarion’s website as chargeable conciliations with respect to the dollar amounts of claims paid by Tarion. Second, the homeowners seek a reversal of the decision by Tarion to reduce the aggregate warranty coverage on their home (from $300,000 to $264,480). Third, the homeowners appeal the decisions of Tarion with respect to all first and second year non-warranted claims. Listed are three specific case numbers: 2369997 (Decision Letter dated June 1, 2010), 2393948 and 2509199. The homeowners state on the Notice of Appeal that the Decision Letter of June 1, 2010 was not received by them at the time it was written and only recently came to their attention and include the text of an email from the Tarion Ombudsman. This was reiterated on the Notice of Motion form.
The homeowners had previously filed a Notice of Appeal on July 25, 2012 which was virtually identical to the current Notice of Appeal but for the fact that there was no reference to case number 2369997 and the Decision Letter of June 1, 2010. In response to this earlier Notice of Appeal, the Tribunal advised that it could not accept the appeal as it did not have jurisdiction over the matters for which the appeal was being made as there was no Decision Letter, and referenced section 16(1) and (2) of the Ontario New Home Warranties Plan Act.
On the motion, the Tribunal heard evidence from the male homeowner (for ease of reference, he will be identified as AP). He reiterated his reasons for appeal and specifically, with respect to the June 1, 2010 Decision Letter, stated that it was never received by them as per the Ombudsman’s email of August 2, 2012 and not seen by him until September 2012. Following receipt of that email, he searched through bankers’ boxes of documents received from Tarion in the fall of 2011, in response to a Freedom of Information and Protection of Privacy Act (“FOI”) request. AP had made that request because he had noticed some inconsistencies in the Tarion documentation and was concerned about how they had been dealt with and the propriety of Tarion’s actions.
AP, in his evidence, did acknowledge that a settlement had been reached with Tarion in December 2010. The settlement was reached through negotiations between the parties, with the assistance of legal counsel, Mr Simaan. The settlement document was included in the Respondent’s book of documents (Exhibit 1, Tab 5). The settlement was dated December 17, 2010 and the amount paid to the homeowners was $24,000 plus HST (the amount by which the warranty coverage has been reduced). Certain paragraphs in the settlement agreement were highlighted by the parties at the motion. They are as follows:
“IN CONSIDERATION OF PAYMENT OF THE SETTLEMENT AMOUNT, l/WE RELEASE Tarion and its respective directors, officers, servants, employees, and agents from any and all claims for damages, costs, or injury, which I/we ever had, now have or may in the future have against Tarion arising from or relating to my/our claim(s) for the item(s) set out In the Settlement Schedule.
THIS IS A FULL AND FINAL RELEASE OF any and all claims that we have brought or might have brought to the Licence Appeal Tribunal, a court or any other body or in any other forum as against Tarion relating in any way to the item(s) set out in the Settlement Schedule.
WE AGREE THAT should we hereafter make any claim or demand or commence or threaten to commence any action, appeal or other proceeding as against Tarion in any forum whatsoever in connection with the item(s) set out in the Settlement Schedule, this Release shall be a complete estoppel and complete ban to any such claim, demand, action, appeal, proceeding or complaint.
I/WE HEREBY WITHDRAW my/our request for hearing before the Licence Appeal Tribunal in respect to the item(s) set out in the Settlement Schedule.
I/WE HEREBY UNDERTAKE TO immediately complete and sign the attached Withdrawal form and to provide the completed and signed Withdrawal form to Tarion. I/we understand that Tarion will provide a copy of the completed and signed Withdrawal form to the Licence Appeal Tribunal for the purpose of advising that my/our request for hearing has been withdrawn, and I/we hereby authorize Tarion to do so.
IT IS UNDERSTOOD AND AGREED THAT
a) This Release does not waive my/our right to make new and unrelated claims under the Act for items not set out in the Settlement Schedule. For greater specificity, it is understood and agreed that my/our right to make new and unrelated claims under the Act includes the right to make a new and unrelated claim pursuant to section 14(4) of the Act for damage suffered because of a major structural defect not referred to in the Settlement Schedule.
b) This Release relates to any and all claims as against Tarion for the items in the Settlement Schedule. The Settlement Schedule is a global settlement and the $24,000 relates to:
i. All of the warranted items; and
ii. The following additional items that are listed on Tarion's Decision Letter dated June 30, 2010 as item numbers:
The settlement schedule states:
“This Settlement and Release covers all items, whether warranted or not by Tarion, (emphasis added) identified on the Applicants':
(a) 3D-Day Form dated April 24, 2008 (825206);
(b) Year-End Form dated March 27, 2009 (2369997):
(c) Second-Year Form dated May 7, 2009 (2384386);
(d) Second-Year Form dated June 1, 2009 (2393948); and
(e) Second-Year Form dated March 26, 2010 (2509199).”
Tarion agrees that June 1, 2010 Decision Letter was not delivered, but submits that a subsequent identical letter of June 30, 2010 was issued by them and formed the basis of the negotiations (being case number 236997) that culminated in the December 2010 settlement. That letter is cited in the body of the agreement, as noted above. However, AP in his evidence at the motion pointed to the chart contained in the agreement which references certain item numbers and stated that those numbers do not accord with the item numbers in the June 30 Decision Letter which is produced in Exhibit 1, where, AP states, he saw it for the first time. As an example, item #208 is listed in the chart as covered under the agreement, but in the June 30 letter when referencing item #208, Tarion states that it is not covered by the statutory warranties.
There may be issues of interpretation about some of the wording in the agreement. The Tribunal does not have to turn its mind to these in order to decide the issues on this motion; however, if one gives a plain reading to the words of the agreement, AP’s explanations seem to obfuscate. Specifically, the language of the release states that the settlement schedule is a global settlement comprising both all of the warranted items and (emphasis added) the additional items listed on Tarion’s Decision Letter of June 30, 2010 as item numbers, implying that the item numbers listed on the chart were in fact additional to the otherwise warranted items. This indeed suggests that it was intended by the drafters of the agreement that #208, for example, was covered by its terms.
In essence, the Applicants’ position is that the Act provides for a right of appeal of a Decision Letter. They did not receive the letter of June 1, 2010, nor its apparent successor, and only became aware of its existence in August 2012. As to the later letter being referenced in the agreement which they signed, they assert that this must have been a mistake because, as one reads the letter, it does not make sense that Tarion would have included certain items as warrantable items for which it would pay.
Tarion’s response is that if there is no service of a decision letter – and the Applicants assert that receipt of the letter in a box of documents delivered in response to a FOI request is not service – the Tribunal has no jurisdiction.
ANALYSIS and REASONS
Issues around jurisdiction are to a certain extent core to this motion, especially given that the September notice of appeal seems to have been filed as a result of the rejection by the Tribunal of the July notice of appeal, because of a lack of jurisdiction. However, the issues on this motion can most properly be addressed by looking to the guiding principles for consideration on motions for an extension of time. The recent decision of the Divisional Court in Manuel v. Registrar, Motor Vehicle Dealers Act 2002, 2012 ONSC 1492, on appeal from this Tribunal, sets out the four factors to be considered in assessing a request for an extension of time, as follows:
The existence of a bona fide intention to appeal;
The length of the delay;
Prejudice to the other party; and
The merits of the appeal.
Citing Frey v. Macdonald, [1989] O.J. No. 236 (C.A.), the Court stated that the general rule is that time for an appeal is not extended unless the appellant has shown that these factors support an extension.
The Tribunal will assess each of these factors in light of the evidence before it and the submissions of the parties.
Intention to Appeal
The Applicants state that they did show a bona fide intention to appeal: they discovered the June 1, 2010 Decision Letter in August 2012 and they filed an appeal on September 21, 2012. However, the Tribunal considered the following facts. This was not a new process for the Applicants. They had come before the LAT in relation to their home before. There was a bona fide intention to appeal, in 2010, which led to the settlement in December 2010. Then, in July 2012, there was an intention to appeal certain issues between themselves and Tarion, but the Tribunal stated then that it had no jurisdiction to decide those issues – as articulated by Mr Simaan, these were whether the reduction in the warranty coverage was fair and had Tarion acted appropriately. Therefore, Mr Simaan submits, the only way to attack the reduction in warranty coverage is through the Decision Letter. That approach is borne out by the sequence of events in July 2012, followed by the filing of the appeal in September, after the decision letter was “found’ in August.
The Tribunal finds the evidence regarding the lack of awareness of a June 1 (or 30), 2010 Decision Letter perplexing. Even if the Tribunal accepts that the Applicants were unaware of the letter in December 2010 when they signed the settlement agreement, it stretches credulity to suggest that when documents were delivered to them by Tarion in the fall of 2011, after the Applicants had gone to the effort of filing a FOI request, that they did not review those documents until August 2012.
The Length of the Delay
To reiterate, if at best, the June 1, 2010 letter was not discoverable until the fall of 2011, the Applicants have not offered any explanation for the delay from that date. No extenuating circumstances were presented that might suggest a reasonable or credible explanation for the failure to file an appeal before September 2012.
As noted above, one issue raised by counsel was whether there was “service” of the decision letter. Mr Simaan states that there was no delay because it was never served: providing the letter with the FOI documents is not service; to which Mr Outerbridge responds that if there was no “service” there is no decision letter from which an appeal can be taken – hence, no jurisdiction. This line of argument resembles a game of “chicken and egg” which does not advance the position of either party before the Tribunal. As stated previously, the Tribunal finds that at best, the delay between the fall of 2011 and September 2012 is unexplained, but in fact, AP’s credibility regarding awareness of the decision letter by December 2010 is significantly undermined by the documentary evidence.
Prejudice to the other Party
A settlement was reached between the parties in December 2010, which on its face, strongly supports Tarion’s contention that the claims encompassed by the June decision letter(s) and the case numbers listed in the schedule attached thereto were resolved. The Applicants had independent legal advice and by the terms of the agreement, the Applicants released Tarion from all claims that the Applicants brought or might have brought to the Tribunal in respect of those claims. Further, the Applicants agreed that their written release of Tarion “shall be a complete estoppel and complete ban to any such appeal”. The Tribunal agrees with Tarion’s submission that to permit an appeal of the June 1 decision letter at this time negates the terms of the agreement. The finality to claims that the agreement purported to achieve, on a consensual basis, would evaporate, to the prejudice of Tarion.
Before specifically addressing the fourth factor, the Tribunal will address the decision cited by Mr Simaan in his submissions concerning the effect, if any, of the settlement agreement: the Amerato decision. Tarion has submitted that the agreement, by its terms estops the Applicants from pursuing warranty coverage for the matters referred to in the schedule to the agreement, and case number 2369997 in particular. In Amerato, the Court of Appeal held that the right to have a hearing cannot be waived by an applicant; the waiver of a prospective hearing was invalid. There, the Registrar issued a notice of proposal to revoke a registration. In response, the applicants requested a hearing before this Tribunal. The parties, who were represented by legal counsel, reached a settlement, the terms of which were attached to and made a part of the consent order issued by the Tribunal. The specific term in dispute stated that the applicants agreed that if the applicants breached any of the terms and conditions set out in the order, in whole or in part, the Registrar was directed to and shall carry out the proposal.
The Court noted at paragraph 27 of its decision that while waiver of an existing proceeding may be valid, the waiver of a potential future hearing is not. Two reasons were given for ruling the consent order invalid: improper delegation of authority (from the Tribunal to the Registrar) and fettering of the Tribunal’s discretion. Regarding the latter, such a consent order would in effect have decided what the consequence of a breach would be (revocation) without the benefit of a hearing to determine whether the breach had actually occurred and if so, what the appropriate consequences would be.
In response, Mr Outerbridge referred the Tribunal to the decision of MTCC 1101 v. Ontario New Home Warranty Program [2003] O.J. No. 5145 which, he submits, is essentially on all fours with this matter. The Tribunal agrees. The MTCC case involved two warranty claimants that entered into written settlement agreements with their vendor which included releases of warranty claims. The court noted that the claimants were advised throughout by their solicitor. The court decided that it would be contrary to the purposes of the Act and the goal of encouraging settlements and streamlining the process to achieve resolution, to construe s. 13 (6) as barring settlements by denying effect to releases that are integral to settlement agreement. The MTCC decision was cited by this Tribunal in 4981-ONHWPA-Claim [2009] O.L.A.T.D. No.7 where it concluded that a purchaser can waive their right to an established claim in exchange for other consideration and in settlement of that claim.
The MTCC decision does pre-date Amerato, however, that is of little consequence, given that the principles enunciated in Amerato are not applicable here. The factual circumstances are quite distinct. There is neither a fettering of discretion or a delegation of authority by virtue of the agreement negotiated between the Applicants and Tarion. Furthermore, by the terms of the agreement and release, the Applicants do not waive the right to make new and unrelated claims under the Act for items not set out in the settlement schedule. Future, prospective claims, claims that had not crystallized are not precluded1. To hold, as urged by Mr Simaan, based on Amerato, that the release provisions are invalid would render meaningless a settlement in which a full and final release of existing and known claims is negotiated.
Merits of the Appeal
It is up to the applicants to demonstrate some merit to the case. As the Applicants were clearly aware after the attempt to appeal in July 2012, the Tribunal has no jurisdiction regarding the first several grounds of appeal. This leaves the appeal of the June 1, 2010 Decision Letter as the only possible basis, or as stated by Applicant’s Counsel, the only way to attack the reduction of warranty coverage was through the Decision Letter. However, given the settlement agreement, for which the Applicants are not disputing they had legal advice, and the Tribunal’s assessment that the Amerato decision does not apply so as to invalidate its terms, the Tribunal therefore concludes that the appeal does not have merit.
Finally, as stated in Manuel, the above noted factors may be properly understood to be factors that assist in assessing whether the “justice of the case” requires that an extension be granted. This is the overriding consideration. The Tribunal has reviewed the Applicants’ evidence, in particular, the oral evidence of AP, and concludes that the justice of the case does not require granting the extension. The matters set out in the schedule to the settlement agreement were resolved, and intended as per the Applicants being signatories, with independent legal advice, to be a final resolution of those issues. To suggest an alternate meaning to the release provided as an integral part of that agreement is, frankly, a surprising position to assert at this stage. In looking at the ”justice of the case” from the perspective of the homeowner, claims not encompassed by that agreement, arising subsequent to it, have not disappeared. All other such warranties afforded to the homeowners by the Act and subject to the statutory remedies, remain.
ORDER
Therefore, for the reasons cited above, the Applicants’ motion seeking an extension of time for the filing of the appeal is dismissed.
COSTS
Tarion is seeking costs on the motion in the amount of $800, pursuant to Rule 14 of the Tribunal’s Rules of Practice. Counsel for the Applicants did not respond to this request in his responding submissions filed with the Tribunal.
Costs are rarely awarded by the Tribunal, especially in the context of ONWPA matters, which arise in a consumer protection context. Here, the Applicants commenced an appeal in July at which time they were advised that the Tribunal had no jurisdiction. They persisted, albeit without legal representation, using a different approach (the June 2010 Decision Letter) to essentially get the same issue articulated in the July appeal, in front of the Tribunal. The Applicants then pursued this motion, with the same counsel that had represented them on the settlement in December 2010. Given the Tribunal’s conclusions as to the effect of the settlement and observation about AP’s evidence, it has concluded that the appeal before the Tribunal was unreasonably undertaken. As this matter did not proceed to a full hearing, the Tribunal awards costs to Tarion in the amount of $400.
LICENCE APPEAL TRIBUNAL
Patricia McQuaid, Vice-Chair
Released: November 29, 2012