9619 v. Tarion Warranty Corporation, 2015 CanLII 72198

Licence Tribunal

Appeal d'appel en

Tribunal matière de permis

DATE:

2015-10-30

FILE:

9619/ONHWPA

CASE NAME:

9619 v. Tarion Warranty Corporation

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

The Appellant

Appellant

-and-

Tarion Warranty Corporation

Respondent

-and-

Soho Lisgar Inc.

Added Party

REASONS FOR DECISION AND ORDER

ADJUDICATOR:

D. Gregory Flude, Vice-Chair

APPEARANCES:

For the Appellant:

Self-represented

For the Respondent:

Louis-Pierre Gregoire, Counsel

For the Added Party:

Christine Powell, Counsel

Heard in Ottawa:

October 16, 2015

REASONS FOR DECISION AND ORDER

INTRODUCTION

1The Appellant appeals to this Tribunal from the denial of her claim for warranty coverage under the Ontario New Home Warranties Plan Act, R. S. O. 1990, c. O.31 (the “Act”). Tarion is the corporation that administers the new home warranty program. Its denial of the Appellant’s claim is set out in a Decision Letter dated May 26, 2015. The Added Party is the vendor of the home in question. It supports Tarion’s denial of the Appellant’s claim.

2The appeal arises out of an Agreement of Purchase and Sale for a new condominium unit in the City of Ottawa. Following a number of delays, the transaction was scheduled to close in early December, 2013. The Appellant, having taken occupancy of the unit on September 25, purported to exercise a right of rescission, either by letter dated October 1, 2013 or by an email dated November 28, 2013. The Appellant paid a deposit in excess of $37,000.00 and is seeking recovery of $20,000.00, the statutory maximum recovery.

3Having considered all of the evidence, the Tribunal is of the view that the Appellant’s claim must fail.

FACTS

4With the exception of the authenticity of the October 1, 2013 letter purporting to rescind the Agreement of Purchase and Sale, all other documents were entered as exhibits on consent. The Tribunal heard evidence from the Appellant, Jacquie De’Ath on behalf of Tarion and Shauna Pettit on behalf of the Added Party. What follows is a summary of all of the cogent evidence heard by the Tribunal.

5Ms Pettit’s evidence was directed solely at the issue of whether the Added Party received the purported rescission letter dated October 1, 2013. Based on her evidence, that faxes to the Added Party are converted into computer files, stored in an email inbox, that the Added Party’s archives of such files go back to 2010 and that a search of the archives failed to find the fax that the Appellant says was sent on October 1, the Tribunal is satisfied that the Added Party did not receive the October 1, 2013 letter.

6A chronological approach to the facts best highlights the issues in this case. On September 27, 2011 the Appellant entered into an Agreement of Purchase and Sale. Forming part of the Agreement was a Tarion form entitled Statement of Critical Dates. The critical dates in this form track legislative provisions permitting vendors of new condominiums to extend the closing date to a certain maximum date. Failure to provide occupancy of the unit by a certain date triggers a 30 day window in which a purchaser may terminate the Agreement and seek return of all money paid to date. In the current case, the critical dates were:

First Tentative Occupancy Date: December 31, 2012

Outside Occupancy Date: September 3, 2013

End of Purchaser’s Termination Period: October 3, 2013.

7Section 3 of the Statement of Critical Dates provides a mechanism by which the Appellant could terminate the Agreement should she not be given occupancy by the Outside Occupancy Date:

If the condominium home is not completed by the Outside Occupancy Date, and the Vendor and Purchaser have not otherwise agreed, then the Purchaser can terminate the transaction during a period of 30 days thereafter (the “Purchaser’s Termination Period”), which period could end as late as the 3^rd day of October 2013.

8On October 19, 2012, the Added Party advised the Appellant that the transaction would close on August 21, 2013, within the Outside Occupancy Date period. According to the Appellant, from February 2013 onwards, she tried to gain the Added Party’s assistance in assigning the unit to a new purchaser.

9During the summer of 2013, there was a Province-wide strike by elevator installers. The strike commenced in May. On June 28, 2013, the Added Party advised the Appellant that there was an unavoidable delay and set out the necessary steps to be taken once the strike ended. Also on June 28, 2013 and, perhaps, coincidentally, a tentative agreement was reached. In a press release, it was announced that it was expected that all elevator installers would be back at work by July 10. Sections. 1 and 7 of the Statement of Critical Dates contemplate unavoidable delays. Section. 1 defines “Unavoidable Delay” and “Unavoidable Delay Period” as follows:

“Unavoidable Delay” means an event which delays Occupancy which is a strike, fire, explosion, flood, act of God, civil insurrection, act of terrorism or pandemic, plus any period of delay directly caused by the event, which are beyond the reasonable control of the Vendor and are not caused or contributed to by the Vendor.

“Unavoidable Delay Period” means the number of days between the Purchaser’s receipt of written notice of the commencement of the Unavoidable Delay, as required by paragraph 7 (b) and the date on which the Unavoidable Delay concludes.

10The impact of the strike was that the Added Party was not in a position to close the transaction on August 21, 2013. On July 17, 2013, it wrote to the Appellant advising her of the imminent end of the Unavoidable Delay and setting September 25 as a new firm occupancy date. The Appellant raised no objection to the new Occupancy Date. Instead she completed a Pre-Delivery Inspection of the unit on August 2, 2013. She then met with her lawyer and signed all of the documents necessary to give her occupancy of the unit on September 25. In particular, she signed a Direction re: Title dated September 14 and an Occupancy Agreement and Declaration dated September 15. Her lawyer forwarded these documents to the lawyer for the Added Party by cover letter dated September 16. Her father picked up the keys on her behalf on September 25 and from then until January 2014 when she returned the keys, she had occupancy of the unit. Other than having her brother install blinds in the unit, she never moved in.

11Setting aside consideration of the impact of the October 1, 2013 letter for the moment, the Appellant took several steps after she was given occupancy. On October 18, 2013 she sent an email to the Added Party asking if a firm closing date had been set. On October 19, she submitted a 30 day Statutory Warranty Form to Tarion. On October 25, 2013, the Added Party confirmed that the transfer of title to the unit would happen on December 3, 2013. Finally, on November 28, 2013, the Appellant sent an email to the Added Party advising that she would not close on December 3, 2013 because of the delayed closing. November 28 was, of course, long after the 30 day rescission period set out in the Statement of Critical Dates. The Appellant failed to close on December 3 yet did not relinquish possession of the unit until she returned the keys on January 10, 2014.

12The Tribunal has already found that the Added Party did not receive the October 1, 2013 letter purporting to terminate the Agreement. The Tribunal has serious doubts that it was ever sent. The Appellant failed to refer to it in any correspondence dealing with the closing of the transaction. Starting in mid-September when she signed the Occupancy Agreement and other documents prior to occupancy, she raised no objections about late closing with the Added Party. Her behaviour after occupancy and prior to December 3, 2013 is inconsistent with the actions of someone whose position is that they are rescinding the agreement. She pushed the Added Party for information on the final closing date. She testified that she had discussions with the lawyer for the Added Party seeking assistance with financing and about renting the unit between taking occupancy and taking title, again without mentioning the October 1 letter. In particular, not only does the Appellant fail to cite the October 1 letter in her November 28 email saying she will not close, she clearly states that the reason she will not close is because she cannot get financing. It appears that the October 1 letter did not surface until documentary disclosure in these proceedings.

ANALYSIS

13The position of Tarion and the Added Party is that, by entering into the Occupancy Agreement on September 15 and taking occupancy on September 25, 2013, the Appellant waived any right of rescission she might have had. Assuming, without deciding, that there was no right to extend the Outside Occupancy Date because of the strike, Tarion’s position is that the Appellant had the right to rescind the Agreement or to accept the new occupancy date. She chose the latter. The Added Party supports this position and argues that any other interpretation is insupportable.

14The Added Party also takes the position that the effect of the strike was to extend the Outside Occupancy Date past September 25, 2013. There were nineteen days between the Notice of Unavoidable Delay dated June 28 and the Notice of Firm Occupancy Date dated July 17. The latter did not set a date for the end of the Unavoidable Delay but rather set out steps to be taken before the delay ended. In the Added Party’s counsel’s submission, it is not hard to contemplate a period of two weeks or so to schedule the return of the workers and to arrange for the regulatory inspections, especially bearing in mind the backlog the strike would have created. Thus, in counsel’s submission, the Outside Occupancy Date actually occurred in early October and occupancy was given in a timely manner.

15It is the position of the Appellant that no action of hers could vitiate her right to rescind the contract after September 3, 2013. Once she had served the disputed October 1, 2013 letter, her right crystallized. In her view, she could occupy the unit, fail to pay the occupancy rent, and walk away from the transaction at any time until the transfer of title, without cost or obligation to herself.

16The Tribunal finds no merit in the Appellant’ position. It is clear from a reading of the Statement of Critical Dates that it puts purchasers to an election: rescind or negotiate new occupancy dates. Exercising that election ends the process. On the current facts, when the Appellant entered into the Occupancy Agreement on September 15, 2013 and took occupancy of the unit ten days later, she exhausted her right to demand rescission of the contract. The October 1, 2013 letter purporting to rescind the Agreement was of no effect. Her rights had been exhausted well before that date.

17In light of the finding above, the Tribunal does not need to consider the effect of the strike. It was not a ground asserted by Tarion in its Decision Letter. It was asserted only by the Added Party. To the extent that the Decision Letter defined the issues in the proceeding and is akin to the pleadings in a civil action, there may be an argument that the Appellant would suffer prejudice from having to deal with the strike issue at the hearing.

ORDER

42Having considered the evidence and the submissions of the Parties, the Tribunal orders Tarion to deny the Appellant’s claim for warranty as set out in the Decision Letter dated May 26, 2015.