Licence Tribunal

Appeal d'appel en

Tribunal matière de permis

DATE:

2013-07-12

FILE:

7641/ONHWPA

CASE NAME:

7641 v. Tarion

An Appeal of a Decision of Tarion Warranty Corporation under the Ontario New Home Warranties Plan Act, R.S.O. 1990, c. O. 31 – to Disallow a Claim

Applicants

Applicant

-and-

Tarion Warranty Corporation

Respondent

-and-

Olympia Ventures

Added Party

REASONS FOR DECISION AND ORDER

ADJUDICATOR:

Mary Ann Spencer, Member

APPEARANCES:

For the Applicants:

Self-represented

For the Respondent:

Ellie Choi, Counsel

For the Added Party:

Paul Cooper, Counsel

Heard in Toronto:

May 23, June 11 & 13, 2013

REASONS FOR DECISION AND ORDER

This is an appeal by the Applicants to the Licence Appeal Tribunal (the “Tribunal”) from a Decision Letter of Tarion Warranty Corporation (“Tarion”) dated September 6, 2012 in which Tarion denied the Applicants’ claim on the basis that Olympia Ventures (the “Added Party”), is not a builder as defined in the Ontario New Home Warranties Plan Act (“the Act”).

As a preliminary matter, Counsel for the Added Party drew to the Tribunal’s attention the fact that the home in question is owned only by the female Applicant, who did not attend the hearing, and not by her husband, who was present and representing himself and his wife. The Tribunal notes that the Tarion Decision Letter is addressed to both Applicants and that the Order with respect to the pre-hearing conducted in this matter has no indication that the authority of the male Applicant to represent his wife had been questioned. For certainty, the Tribunal requested the male Applicant to provide the Tribunal with a letter of authorization which was received on the second hearing date. In this decision, the male Applicant will be referred to as the “Applicant”. The Applicant and his wife will be referred to as the “Applicants”.

FACTS AND EVIDENCE

The evidence comprised books of documents submitted by the Applicants and by Tarion which were entered as Exhibits 3 and 4 respectively, and of the testimony of the Applicant and his two witnesses.

The Applicant provided very little direct testimony. He noted that the Act defines ‘builder’ as a person who undertakes the performance of all of the work and supply of all the materials necessary to construct a home. Referring to the principal of the Added Party, he stated that Tom Letros supplied all of the work to build the Applicants’ custom home and the Applicants only paid the bills. The Applicant quoted the Webster’s dictionary definition of consultant as one who provides expert advice and stated that Mr. Letros did far more than provide advice. The balance of the Applicant’s testimony was provided in cross examination.

The Applicant and his wife owned a vacant lot upon which they wished to build a custom home. Because they knew nothing about building a house, in “2007 or 2008, somewhere around there”, they hired Mr. Letros, whom they had met through a mutual friend. A determining factor in retaining Mr. Letros was that he is the same nationality and speaks the same language as the Applicant’s mother-in-law who the Applicant described could be difficult to deal with. No due diligence was conducted other than touring some of the homes Mr. Letros had worked on.

The Applicants agreed to pay Mr. Letros $100,000 but signed no contract. The $100,000 fee was to be paid regardless of how long the project lasted. Asked what he understood Mr. Letros would provide for the fee, the Applicant stated a number of times “a key and a date to move in”. The Applicant initially testified that Mr. Letros was owed approximately $7,000 when he left the project in April, 2011. He later confirmed he had paid Mr. Letros $88,000 in equal $8,000 cash installments (Exhibit 4, Tab 7).

On the recommendation of Mr. Letros, the Applicants hired architect Hunt Design to design the house. They did not sign an agreement with Hunt Design. Asked if the architect dealt directly with the Applicants, the Applicant responded “with Tom, my wife and me”. Asked if he hired anyone else, he initially stated “that was it”. He later testified that he directly hired and paid the roofer, the landscaper, and the interior designer, who helped with paint, fine carpentry and tile, including organizing its installation in the downstairs bathrooms. He also employed and paid T.W., the site supervisor.

Because the Applicants’ home is located in an environmentally protected area, the process to obtain the necessary governmental approvals to build took approximately 1.5 years. Asked about Mr. Letros’ involvement in these early stages of the project, the Applicant initially testified that Mr. Letros attended all meetings with government bodies. He then modified this to “several” meetings, saying he had a “relaxed definition” of “all”. He did agree that he did not pay Mr. Letros during the design phase, stating that it was up to Mr. Letros to request payment. The first payment was made on November 25, 2009.

On September 16, 2009, applications for building permits were submitted to the municipality. Asked why the Application for a Permit to Construct or Demolish (Exhibit 4, Tab 1) shows his wife’s name as both owner and builder, the Applicant stated he did not know. The Applicant was referred to the “Declaration of the Applicant for a Building Permit” attached to the Application. The section which the Applicant’s wife signed provides the guidance that “here applicant is building to occupy and is acting as the general contractor”. The declaration states, in part:

I declare that I am not acting as a “vendor” or “builder”, nor am I contracting with a “builder” to construct or manage the construction of this “home”. I understand that this home is not eligible for enrolment or coverage under the Ontario new Home Waranties Plan Act and a warranty claim to Tarion Warranty Corporation (Tarion) cannot be made for this home, by me or by any subsequent purchaser of the home.

The Applicant alleged that the signature of his wife is not genuine. He indicated that obtaining permits was included in his contract with Hunt Design. The applications for permits were filed quickly after the approvals to build had been received because of concern that further governmental requirements might be raised. To obtain the permit, the Applicant stated he would have called Mr. Letros who “probably” called Hunt Design and told them to proceed. He then stated “Who knows who signed it?” Asked why no one told Hunt Design that Mr. Letros was the builder, the Applicant stated that he did not know how to answer the question.

Construction began on the house in the fall of “either 2008 or 2009”. The house is 7,500 square feet and was built at a cost of $3,500,000. The Applicants did not give Mr. Letros a budget because “we understood how much it would cost”.

The Applicant testified that his and his wife’s involvement in building the house was only the supply of the design and decision making with respect to cosmetic items. They chose items such as flooring, moulding, or paint colours. Asked if they went to the job site to make these decisions, the Applicant stated that they did whatever was needed. To select paint, they went to the job site; for inside doors, they reviewed a pamphlet provided by the fine carpenter; to select the front door, they went to a number of vendors, most often with Mr. Letros. After the selection, the process was managed by Mr. Letros. As an example, the Applicant testified “we’d pick a door and then somehow the door got delivered”. The Applicants paid directly for all supplies.

Mr. Letros’ role was to recommended contractors or trades and schedule work. The Applicant testified that Mr. Letros would present a contractor, say they had done a good job in the past and their price was fair, and the Applicants would say ‘yes’ or ‘no’. Because the Applicants did not know anything about building a house, they accepted all recommendations. Asked specifically if Mr Letros was recommending trades to the Applicants, the Applicant stated “no, he was supplying them”. The Applicant denied that he and his wife were selecting contractors and stated “if we wanted to interview people, we wouldn’t have hired Tom”.

The Applicant stated that Mr. Letros did ask the homeowners if they had people they wished to bring in and used the example of painting as an illustration. In this case, the Applicants suggested a specific painter be hired. However, because that painter was not available when needed, Mr. Letros suggested they use someone else. The Applicant confirmed that it was his and his wife’s decision to retain the recommended painter. He then testified that the Applicants had suggested to Mr. Letros that a friend be used for windows but Mr. Letros chose not to do so.

The Applicant used the example of the septic system to describe the process of hiring contractors. He testified that Mr. Letros asked the Applicants if they knew a contractor and because they did not, Mr. Letros provided a recommendation. Asked why he agreed to use the recommended contractor, the Applicant stated “so they would put the septic system in the ground and hook it up”. Referring to the unsigned contract dated June 28, 2010 which refers to the Applicant as “contractor” (Exhibit 3, Tab 3), the Applicant stated “at that point, I didn’t care if I was called Superman”. With respect to contract approval, he stated “I could have said we don’t like these people”. The Applicant reiterated that Mr. Letros brought the contractors forward and the Applicant simply asked what he needed to do or sign because he “didn’t want the house to be waiting on us”.

The Applicant testified that he and his wife signed whatever needed to be signed but they “did not have to deal with the people”. Referring to the Applicants’ book of documents, the Applicant indicated that it contained contracts which the Applicants had signed and some which they had not. He pointed out that the septic system was installed even though the contract had not been signed. Asked about a November 25, 2009 contract for the provision of waterproofing (Exhibit 3, Tab 3), the Applicant agreed that while it was addressed to Mr. Letros, it had been signed by the Applicant’s wife. Pressed by Ms Choi to confirm that they authorized or approved every tradesperson or contractor who worked in the home, the Applicant stated that “yes – we gave the go ahead”. He then confirmed that he understood that the trades and contractors hired were independent and not Mr. Letros’ employees.

The Applicant stated that they “made some kind of contract with every person who walked through the door” although not always in writing. Where there was no contract, the Applicant was unable to state whether it was he or his wife who gave approval. The Applicants met the terms requested: “whatever it took to get the work done”. Asked who would have been able to address any issues that arose, the Applicant stated that in contract terms, it would have been him, but “according to the way the house is built, it would have been Tom”. The Applicant indicated while he was aware that he had the right to call contractors, it was Mr. Letros who made any necessary calls. He then stated that although he was aware that Mr. Letros does not have the right to sue the contractors, people “just call to get things done” and do not speak in terms of who holds the contract.

The Applicant testified that he and his wife did not give Mr. Letros authorization to sign contracts. He then said “I did not say to Tom give me a completed house. I said give me a key and let me move in.” Asked if Mr. Letros had agreed to take responsibility for the work on the house, the Applicant stated that he had, but not in writing. Asked if he had any evidence to support this, the Applicant stated “we asked him to build a house and the house is there”. He then referred to an e-mail written by Mr. Letros (Exhibit 3, Tab 28) which states “Can you please price out the attached list for a client I am building a home for…”. He also referred to e-mails from contractors asking for overdue payment (Exhibit 3, Tab 24) which had been sent to Mr. Letros rather than to the Applicants.

The Applicant testified that he and his wife were solely responsible for making payments for all work that took place in the house. Payments were made in cash and by cheque. Asked why he had paid in cash, he stated that he paid in whatever manner was requested but agreed that he was likely getting a better price when he paid in cash. He then noted that some would only work for cash. In some instances, invoices were received. In others, the Applicant paid based on progress reports and estimates provided by site supervisor T.W. In the case of the painter, asked how they knew how much to pay him, the Applicant testified that “I gauged it” and added that he paid in cash, stating he and he did not have to be present but would give the money to T.W.

The Applicant initially testified that he and his wife were present at the construction site if they needed to be and did attend the site every Friday when they made payments and “met with everyone”. Referred to the “Consumer Inquiry Package” the Applicants submitted to Tarion (Tab 3, Exhibit 4), which states that the Applicant visited the property at least twice a week, the Applicant confirmed that he did. He later testified that his wife would have to answer if she had been there more frequently.

The Applicant indicated that he went to the site to see the progress made and not to monitor the work, “if monitor means control”. Reminded that he had testified that he had intervened when he had seen a concrete wall in the wrong place, the Applicant stated that he had also done the same thing when there was water in the basement. He agreed he wanted to ensure the house was being built to the design but stated that if he saw something wrong, he went to Mr. Letros, because he was paying Mr. Letros to build a house. The Applicants’ job was to make decisions required in a custom home. He noted that the Applicants did not order a full set of drawings from the architect but relied on Mr. Letros for electrical, plumbing and windows, stating “Tom knew what he wanted and got what he needed”.

The Applicant testified that his family moved into the house before it was totally finished and “camped” there. When they moved in, his wife dismissed T.W. “because we were living there and there was no point in him being there”. The Applicant did monitor the house during that period “but I did not look at every nail”. Approximately a month after moving in, on the day their furniture was being delivered, there was an issue between the trade polishing the concrete and the finish carpenters. The Applicant asked Mr. Letros to deal with it but Mr. Letros told him to deal with it himself and left the project. Asked if he contacted suppliers directly after Mr. Letros had left, the Applicant stated he did not because the issues with the house, including leaks in the basement, were the same as those that existed before Mr. Letros left.

With respect to project records, including drawings, plans, permits and contracts, the Applicant testified that they were kept by site supervisor T.W. in his vehicle. He agreed he had access to them on request and that T.W. would meet him if necessary. After T.W. was dismissed, the records were returned to and have been retained by the Applicants.

The Applicant testified that all of the work on the house is not completed. The driveway has yet to be installed and he has contracted directly for this. Final approval of the landscaping has not been received from the municipality since they need to ensure that trees that were replanted have survived.

Counsel for the Added Party asked the Applicant if changes have been made to the home after municipal approvals were received. The Applicant testified that he did create a theatre room and add bathrooms to the basement and did so without obtaining building permits. Asked if the basement had been finished and an interior demising wall had been erected to create two separate homes after the final inspection by the municipality, the Applicant indicated that he believed the work had been done before the inspection. Referred to an invoice for structural engineering services dated January 22, 2011 (Exhibit 3, Tab 8), the Applicant could not recall if this was for changes made to the home or for the original design. He agreed that the invoice, sent to Mr. Letros’ attention, was paid directly by the Applicants and that the Applicants had retained the services of the engineer.

Counsel for the Added Party also asked the Applicant if he was aware that his wife had sent an e-mail to Mr. Letros indicating that the Applicants were going to drop the proceeding before the Tribunal. The Applicant stated that he and his wife had been contemplating a civil suit against the Added Party in addition to pursuing the Tarion warranty. He stated that when his wife sent the e-mail, they believed they would be dropping their appeal in this matter but she subsequently changed her mind after deciding not to pursue a civil case. He stated that his fight was with Tarion, not with Mr. Letros and that he believes the Applicants are entitled to a warranty. The e-mail was not entered as an exhibit.

Counsel then asked the Applicant about a second e-mail, also not entered as an exhibit, his wife had sent in which she indicated there was a problem with the work of Hunt Design. The Applicant stated that this e-mail was sent only to see how the information would be disseminated to acquaintances, not because she meant it. He then specifically said that there was no issue with Hunt Design. Asked if there were any issues with the house, the applicant referred to leaks in the basement and to a wall that was moved back, creating extra space for a bedroom but causing ice and snow accumulation issues on the roof.

The Applicant testified that he approached Tarion because there are problems in the basement. He was not aware that a home needed to be enrolled. Asked if this was the first new home he had purchased, he stated that he and his wife had previously purchased a new home in Ontario and had received the Homeowners’ Information Package.

The Applicant called two witnesses to testify.

Jermaine Lawrence is a project manager with Hunt Designs. Mr. Lawrence testified that he was not part of the design team which worked on the Applicants’ home but acted primarily as a courier. With respect to the Application for a Permit to Demolish or Construct (Exhibit 4, Tab 1), he could not recall who completed the forms or when they were signed but testified he delivered them to the municipality. He testified that it was “absolutely not” the policy of Hunt Design to sign on behalf of others and agreed that the forms show the Applicant’s wife as the ‘owner’ and the ‘builder’. Asked if he knew who had witnessed the various signatures on the forms, he stated he did not know but that it might have been someone from the municipality.

Tony DiCarlo is a partner with Hunt Design. Mr. DiCarlo testified that he worked for Mr. Letros eighteen years ago providing house design services for Mr. Letros’ residential building company. At that time, Mr. Letros was building subdivisions. Mr. Letros introduced the Applicants’ project to Mr. DiCarlo as a custom residential home. Mr. DiCarlo testified that he was not involved in the first half of the design process but became involved with ongoing changes. There was no contract between the parties other than the fee proposal provided to the Applicant. The Applicants paid Hunt Design directly.

Mr. Di Carlo testified that the Applicant, his wife and his mother-in-law provided instructions to Hunt Design. Mr. Letros did provide some input from a construction perspective but ultimately, Hunt Design made the decisions. Architectural and structural engineering drawings are submitted with the application for a building permit. In the case of the Applicants’ home, Mr. DiCarlo could not recall specifically if there was a structural engineer but stated he assumed there was, given the size of the house.

With respect to the application for a building permit, Mr. DiCarlo stated that the information on the form indicating the project value would have been supplied by Hunt Design. He could not recall who provided the information relating to the builder but stated that Hunt Design does not make this decision. He added that in some circumstances, owners do not have builders yet and that the application can later be amended. He stated that no addendum was filed in the case of the Applicants’ home.

THE LAW

The applicable provisions of the Act are as follows:

Definitions:

1. In this Act,

“builder” means a person who undertakes the performance of all the work and supply of all the materials necessary to construct a completed home whether for the purpose of sale by the person or under a contract with a vendor or owner;

“home” means,

(a) a self-contained one-family dwelling, detached or attached to one or more others by common wall,

(b) a building composed of more than one and not more than two self-contained, one-family dwellings under one ownership,

(c) a condominium dwelling unit, including the common elements, or

(d) any other dwelling of a class prescribed by the regulations as a home to which this Act applies,

and includes any structure or appurtenance used in conjunction therewith, but does not include a dwelling built and sold for occupancy for temporary periods or for seasonal purposes;

“owner” means a person who first acquires a home from its vendor for occupancy, and the person’s successors in title;

“vendor” means a person who sells on his, her or its own behalf a home not previously occupied to an owner and includes a builder who constructs a home under a contract with the owner;

Warranties:

13. (1) Every vendor of a home warrants to the owner,

(a) that the home,

(i) is constructed in a workmanlike manner and is free from defects in material,

(ii) is fit for habitation, and

(iii) is constructed in accordance with the Ontario Building Code;

(b) that the home is free of major structural defects as defined by the regulations; and

(c) such other warranties as are prescribed by the regulations.

Exclusions

(2) A warranty under subsection (1) does not apply in respect of,

(a) defects in materials, design and work supplied by the owner;

The relevant portions of Ontario Regulation 892 include:

Definitions:

“construction contract” means an agreement between a builder and an owner of land which provides for the construction of a home on the land;

“contracted home” means a home constructed pursuant to a construction contract;

APPLICATION OF LAW TO FACTS

The issue to be addressed in this matter is whether or not the Applicants are entitled to warranty coverage under the Act. For warranty coverage to apply, the definitions in the Act must be satisfied: there must be an ‘owner’, a ‘vendor’ or ‘builder’, and a ‘home’. In this case, there is no dispute that there is an owner and a home. What is at issue is whether or not the Added Party is a builder.

In making its decision, the Tribunal has relied on the evidence of the parties and considered the authorities submitted by Counsel for Tarion and Counsel for the Added Party.

The Applicant testified he did not know how to build a house and therefore the Applicants hired the Added Party. The Applicant stated a number of times that he told Mr. Letros he wanted “a key and a date to move in”. The Applicants did not enter into a written contract with Olympia Ventures or Tom Letros. Consequently, there is no direct evidence before the Tribunal of the parties’ agreement with respect to the Added Party’s responsibilities. Asked specifically by Tarion’s Counsel for documentation to support that the Added Party took responsibility for the work performed, the only documents the Applicant referred to were two e-mails; one in which Mr. Letros, seeking bids for appliances, stated “I am building a house for…”, and the other a request to Mr. Letros for overdue payment from a structural engineer, whom the Applicant subsequently testified he hired and paid.

At face value, the Applicant’s statement that his arrangement with the Added Party for “a key and a date to move in” implies that the construction was essentially a “black box” with the Added Party bearing responsibility for building the home. However, the Applicant’s testimony at this hearing indicated that the Applicants were very actively involved in the construction of their home.

The Applicant testified that the Added Party recommended the architect and supplied and scheduled all of the tradespersons and contractors who worked on the home. With respect to the architect, Mr. DiCarlo agreed that Mr. Letros referred the applicants to Hunt Design. However, he also testified that it was the Applicants were his clients; they accepted Hunt Design’s fee proposal, they provided instructions to the firm, and they paid for its services.

The Added Party was retained approximately eighteen months before a building permit was obtained. On the “Application for a Permit to Demolish or Construct” filed by Hunt Design on September 16, 2010, the Applicant’s wife is listed as both ‘owner’ and ‘builder’, notwithstanding the fact that Mr. Letros was known to one of the Hunt’s partners and had referred the Applicants to the firm. Mr. Lawrence, who delivered the permit application to the municipality, could not recall how the application was completed. However, Mr. DiCarlo testified that Hunt Design does not make decisions on the ‘owner’ or ‘builder’ sections of the application but relies on information supplied by clients.

The building permit application includes a declaration signed by the Applicant’s wife, as ‘general contractor’, which states that she understands the home will not be eligible for warranty coverage under the Act. The Applicant alleged that his wife’s signature on this declaration was not genuine. However, he provided no evidence to support that the signature is a forgery and his wife did not testify at this hearing.

A substantial portion of the two day cross examination of the Applicant in this hearing was related to the subject of contractor approval. The Applicant initially testified that the decisions he and his wife made were cosmetic and not dissimilar to those anyone buying a new home is required to make. However, the Applicant ultimately testified that he and his wife approved all the tradespersons and contractors who worked on their home and that Mr. Letros had no delegated authority in this regard. Mr. Letros presented contractors and tradespersons to the Applicants who had the ability to, as the Applicant testified, “say yes or no”.

The Applicants also had the ability to directly provide trades or contractors. The Applicant suggested Mr. Letros use a painter with hom the Applicants had experience. Similarly, they suggested Mr. Letros hire a friend to provide windows. In these cases, other contractors were retained. However, the roofer was provided by the Applicants. In addition, the evidence indicates the Applicants directly hired and paid the engineer, the landscaper, and the interior designer who, in turn, provided the finish carpenter and some tiling work. While the Applicant provided the example of the windows to illustrate that he did not control who worked on the home, the fact that he had final approval on all contracts does constitute control.

The evidence also indicates that not only did the Applicants have control of who worked on their home but they also supervised that work, either directly, or through T.W., the site supervisor, who they employed and paid. When the Applicants moved into their home before construction was complete, the Applicant’s wife dismissed T.W. because “we were living there and no longer needed him”. The Applicant stated that during that period he oversaw the remaining construction work although he “did not look at every nail”.

The Applicant initially testified that during construction, he or his wife attended a meeting at the site every Friday when payments were made. In the Consumer Inquiry Package submitted to Tarion, he wrote that he visited the home “at least twice a week until move-in”. In cross-examination, he also agreed that his wife could have been there on days that he was not, and, that it was conceivable that one of the Applicants was on site every day. While the Applicant refuted that he was monitoring the work, “if monitor means control”, he also testified very specifically about an instance where he discovered, by comparing progress to drawings, that a concrete wall was in the wrong place, and later he indicated he had done “the same thing” with respect to the basement.

The evidence also indicates that the Applicants maintained control over the project records including the drawings and contracts. While these were in the possession of site supervisor T.W. during most of the construction, the Applicant testified that he could see them when he needed to. When T.W. was dismissed, the records were returned to the Applicants, not to the Added Party.

The initial estimate of the project cost on the building permit was $800,000. The Applicant testified that the home ultimately cost $3,500,000. All payments were made by the Applicants, and many were made in cash, including those to Mr. Letros. Not all work was performed with the benefit of a written contract. To make Friday payments, the Applicant testified he relied on progress reports and estimates provided by the site supervisor, not by Mr. Letros. In the case of the painter, the Applicant stated that he himself gauged the amount of work performed.

The Applicant’s testimony in this hearing was often somewhat evasive. Rather than directly answer the questions posed by Counsel, the Applicant would provide an example to illustrate a point he wished to make. As a result, questions were frequently had to be rephrased by Counsel in order to elicit a clear response. Although he was present on the second day of this hearing, Mr. Letros was not called as a witness by any of the parties. Counsel for the Added Party posed a series of questions to the Applicant to clarify Mr. Letros’ role. The Applicant agreed that Mr. Letros recommended the architect, attended some of the meetings required to obtain government approval to build, and scheduled the project. When asked if Mr. Letros recommended trades and contractors and negotiated their prices and terms, the Applicant pointedly responded that Mr. Letros “supplied them”.

The Act defines builder as one “who undertakes the performance of all the work and supply of all the materials necessary to construct a completed home”. In section 13(2)(a), the Act does contemplate that an owner may supply some portion of the design, materials or work in a house and specifically excludes those contributions from warranty coverage. In this case, the Applicant submitted that the Added Party supplied all work and materials used in the construction of the home, other than the roofer, interior designer and landscaper.

JRC Developments Ltd. v. Tarion Warranty Corporation, 2010 ONSC 6205, [2010] O.J. No. 5089 establishes that in determining who is a builder as defined in the Act, consideration should be given to who was responsible for completing the essential elements of a home and who had control over its construction. In 5396-ONHWPA-Claim (Re), [2010] O,L.A.T.D. No 32, Vice Chair Flude wrote:

It is open to the owner to arrange for his building affairs in such a manner that there is no “builder”. One such means would be for the owner to retain ultimate control of the supply of materials and labour to the project and hire a person in the role of site supervisor to oversee the project on a day to day basis.

Notwithstanding the Applicant’s statement that Mr. Letros supplied the contractors, the Applicant testified that he and his wife approved each one. No authority was delegated to Mr. Letros. By retaining decision making authority, the Applicants controlled who worked on the construction of their home. They also hired T.W. as site supervisor to oversee the project on a day to day basis. There was no evidence before the Tribunal to suggest that T.W. was hired on the recommendation of Mr. Letros. However, even if that were the case, T.W. reported to, was paid by, and ultimately, was dismissed by the Applicants

Based on the testimony of the Applicant and the documentary evidence, including the building permit, the Tribunal concludes that the Applicants intended to act as their own general contractor and that they retained the Added Party in the role of project manager to schedule work and as a consultant to identify potential contractors, tradespersons and suppliers for the Applicants’ consideration. As the Applicant stated, although in the context of refuting the Applicants’ role in retaining contractors, “if we wanted to interview people, we wouldn’t have hired Tom”.

The Applicants may well have chosen to accept Mr. Letros’ recommendations in making their decisions. However, the Tribunal finds the Applicant’s position that he and his wife’s decision making was limited to cosmetics to be disingenuous. The evidence indicates that the Applicants had control over the construction of their home. They were responsible for its design, for the retention of the architect, the engineer, the landscaper, the roofer, the interior designer, all tradespersons and contractors, and the site supervisor, all of whom they paid directly. The Tribunal therefore finds that the Added Party is not a ‘builder’ as defined in the Act. Because there is no ‘builder’, the Applicants are not entitled to warranty coverage under the Act.

ORDER

Pursuant to the authority vested in it under the provisions of the Act, the Tribunal directs Tarion to deny the Applicants’ claim.

LICENCE APPEAL TRIBUNAL

_________________________

Mary Ann Spencer, Member

Released: July 12, 2013