Licence Appeal Tribunal / Tribunal d'appel en matière de permis
FILE: 8549/ONHWPA
CASE NAME: 8549 v. Tarion Warranty Corporation
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
Appellants
Appellants
-and-
Tarion Warranty Corporation
Respondent
-and-
Polmat Group Inc.
Added Party
MOTION ORDER
ADJUDICATOR: Katie Osborne, Member
For the Appellants: Self-represented
For the Respondent: Brent Arnold, Counsel
For the Added Party: Daniel McConville, Counsel
MOTION ORDER
OVERVIEW
The Appellants purchased a new home from a builder, Polmat Group Inc. (the “Builder” or the “Added Party”). They subsequently made multiple claims to the Tarion Warranty Corporation (“Tarion”) under the Ontario New Home Warranties Plan Act (the “Act”). After receiving Decision Letters from Tarion, the Appellants appealed to the Licence Appeal Tribunal (the “Tribunal” or “LAT”).
The hearing was lengthy and by all accounts difficult for everyone involved. At the end of the 26-day hearing, all parties made submissions on costs.
The Tribunal issued its decision on September 17, 2015 (8549 v. Tarion Warranty Corporation, 2015 CanLII 59625 (ON LAT)). The decision awarded the Appellant $3,500.00 plus HST in respect of one item claimed, and denied all other claims. The decision confirmed that the Tribunal would issue a separate Order and reasons on the issue of costs.
Before the separate Order on costs was issued, the Tribunal appointed an independent investigator to investigate a complaint by the Appellants regarding the lack of a complete audio recording of the hearing in this appeal. On November 27, 2015, the Tribunal informed the parties that because the complaint had become public and the investigation involved the parties, counsel and the Tribunal member who presided at the hearing (the “Adjudicator”), the Adjudicator was withdrawing and would not be determining the costs issue.
On December 10, 2015, the Tribunal notified the parties that another Tribunal member had been assigned to adjudicate the costs issue. Parties were given the opportunity to provide any further written submissions by December 18, 2015 to supplement the earlier costs submissions and the record in this matter. Both the Appellant and the Respondent provided further submissions to the Tribunal.
The parties’ requests for costs raises the question of whether the conduct of a party in the proceeding acted unreasonably, frivolously, vexatiously or in bad faith so as to justify an award of costs. While this was an extremely difficult and challenging case, I find that the parties did not act unreasonably, frivolously, vexatiously or in bad faith and deny all of the parties’ requests for cost.
THE TRIBUNAL’S COSTS RULES
Under Rule 14.1 of the LAT Rules of Practice (the “Rules”), costs may be awarded when the Tribunal finds that a party in the proceeding has acted “unreasonably, frivolously, vexatiously or in bad faith.” A representative’s conduct on behalf of a party may be deemed to be the conduct of a party for purposes of the costs rule.
Rule 14.5 requires a request for costs to set out the reasons for the request and the particulars of the party’s conduct that is alleged to be unreasonable, frivolous, vexatious or in bad faith. It goes on to provide the following examples of such conduct:
(a) failing to attend a hearing, pre-hearing or motion, or to send a representative without notifying the Tribunal and other parties;
(b) failing to comply in a timely manner with the Tribunal’s direction or order, or with the party’s or representative’s undertaking, that results in prejudice or delay to another party;
(c) failing to comply in a timely manner with the disclosure requirements in the Rules; or
(d) knowingly presenting false or misleading evidence.
The amount of costs is limited to $500 for each half-day of attendance at a motion, prehearing or hearing, and $1000 for each full day of attendance.
The Tribunal’s costs rules are quite narrow in nature and should be distinguished from costs in the context of civil proceedings. In civil proceedings, the side that loses usually has to pay the costs of the side that wins. In contrast, the LAT’s costs rules focus on the conduct of parties. Costs can be awarded regardless of the outcome of the hearing, but only in circumstances where a party’s conduct has been unreasonable, frivolous, vexatious or in bad faith. The power to award costs is discretionary.
ISSUE
- The sole issue to be considered in this case is whether any of the parties acted unreasonably, frivolously, vexatiously or in bad faith, so as to justify an award of costs.
DISCUSSION
- I reviewed a vast amount of material in this case, including the transcripts of the proceeding, audio recordings, the written record, and the parties’ supplementary submissions on costs. The hearing took 26 days to complete, and involved numerous preliminary and interlocutory motions. It is simply not possible to detail in this decision the numerous allegations of inappropriate conduct, or the many examples of such conduct highlighted by the parties. I note, however, that I carefully considered all of the information before me.
Self-represented Parties
The Appellants in this case are self-represented. This fact is an important consideration in my decision. I will therefore preface my analysis with some comments about self-represented parties and the impact of their participation on proceedings and participants.
Courts and tribunals have seen a significant increase in the number of self-represented individuals appearing before them. Self-represented parties, even well educated and sophisticated ones, may lack the specialized knowledge and experience necessary to navigate complex proceedings effectively and efficiently. Despite efforts to improve accessibility by making processes more user-friendly, individuals without legal training often encounter difficulties understanding the language, rules and processes of courts and tribunals and may face challenges managing and presenting their cases.
In addition to technical and procedural challenges faced by an unrepresented party, adjudicators, lawyers and other people familiar with tribunal procedures may not fully appreciate the anxiety and emotions experienced by a self-represented party with no courtroom or tribunal experience. Emotions and frustration may be heightened when the matter at issue is of great importance to the party’s life, and they are heavily and personally invested in the outcome of the proceeding.
When a party is self-represented, there can be consequences for everyone involved. A self-represented party may find unfamiliar rules and processes confusing, and may feel they are suffering from an unfair advantage. The opposing (represented) party may feel they incurred unnecessary legal fees due to delays resulting from the inexperience, lack of knowledge or conduct of the self-represented party. Finally, the presence of a self-represented party can impose significant additional obligations and demands on an adjudicator that are likely to lengthen the hearing.
In assessing the conduct of the parties in this case, and determining whether any of the parties acted unreasonably, frivolously, vexatiously or in bad faith, I am mindful of this context.
The Appellants’ Request for Costs
The Appellants seek costs from the Respondent and the Added Party. Many of the matters outlined in the Appellants’ supplementary submissions on costs relate to concerns about the Adjudicator’s conduct, the larger hearing process, and the decision on the merits issued by the Adjudicator in this case. The Appellants feel that the Respondent and the Added Party aided and abetted in an unfair, unjust and biased process.
I appreciate that the Appellants have strongly held concerns about these matters, but must emphasize that my role is to consider the parties’ requests for costs only. I will not address any allegations of bias or unfairness on the part of the Adjudicator. I also will not address the submissions relating to the Adjudicator’s management of the hearing process. I do not have authority to consider or award costs in relation to the conduct of the Adjudicator. It is also not my role to review the decision reached by the Adjudicator in this case. In considering the Appellants’ request for costs, it is only the conduct of the Respondent and the Added Party that is subject to scrutiny.
I also will not address the issue of the incomplete recordings. The Respondent and the Added Party were not involved in recording the proceedings, and this issue does not speak to their conduct. While a portion of the hearing was not recorded, the part of the hearing that was not recorded was brief. In the context of this very lengthy proceeding I am satisfied that I have a sufficient basis for assessing the conduct of the parties for purposes of considering the issue of costs.
While concerns about the Adjudicator’s conduct and the larger hearing process dominate the Appellants’ costs submissions, the Appellants also submit that the conduct of the Respondent and the Added Party should result in an award of costs against them. They describe a number of actions and behaviours on the part of the Respondent and the Added Party that they believe are unreasonable, frivolous, vexatious or in bad faith. Summarizing, they include:
misleading the Tribunal and providing false evidence
raising inappropriate objections
delaying the proceedings through adjournments
bullying, oppressive and unprofessional conduct
I will deal first with the allegation that the Respondent and the Added Party misled the Tribunal and provided false evidence. I note that “knowingly presenting false or misleading evidence” is one of the examples of conduct set out in Rule 14.5 of the LAT Rules.
In their written submissions, the Appellants describe in general terms what they view as false and misleading conduct.
Tarion and the builder were fully aware of all the contract and Building Code violations in our home which were submitted into evidence by us, yet Tarion and the builder continued to fight us and aid and abet Ms. Cassidy to treat our case unfairly. Tarion continually supplied Ms. Cassidy with false and misleading information which she used to deny us justice.
The Appellants go on to provide specific examples of what they describe as false and misleading evidence. In doing so, they take issue with the testimony of specific witnesses called by the Respondent. They believe the witnesses were incompetent, dishonest and misleading, and that calling these witnesses was unreasonable, vexatious and in bad faith.
I appreciate that the Appellants are not represented and, perhaps more importantly, that they fundamentally disagree with the position of the Respondent and the Added Party, and the evidence they led at the hearing. However, it is important to remember that the hearing process is adversarial in nature.
In an adversarial system, the parties (and their lawyers if they have them) are responsible for preparing and presenting their own cases. The lawyer’s job is to represent his or her client and to advocate for the client’s interests, not the interests of the opposing party. As noted by the Tribunal in Ontario (8138/ONHWPA) (Re), [2014] O.L.A.T.D. no. 76:
The Act clearly envisions a scheme whereby two parties with adverse interests have an opportunity to make their cases before an impartial body. They are allowed to make out their cases by producing documents and testimony from witnesses of their choosing and to test the case put forward by adverse parties through cross-examination at hearing.
It is frequently the case that parties to a proceeding do not agree on many matters, big and small. The fact that one party disagrees with the position put forward by an opposing party, or the evidence given by one of their witnesses, is not a sufficient basis for finding the party’s conduct to be unreasonable, frivolous, vexatious or in bad faith. If a party in any case leads evidence that is unreliable or lacking in some way, it is the adjudicator’s role to assess that evidence and give it the appropriate weight. The adjudicator’s role includes the ability to disregard evidence altogether.
In terms of objections and adjournment requests, again it is open to each party to make their own case and respond to the opposing party’s case in the manner they choose. I also note that it is not unusual to see additional objections in a case where a party is self-represented. While the Respondent and the Added Party raised numerous objections, this is not entirely unexpected in the circumstances of this case. The record does not support a finding that the objections made by the Respondent or the Added Party amount to unreasonable, frivolous, vexatious or bad faith conduct.
The Appellants characterize the Respondent’s behaviour as bullying and oppressive, and go on to provide examples of conduct and comments which they feel are inappropriate and unprofessional. The conduct they complain of includes gestures and inappropriate facial expressions exchanged between Respondent’s Counsel and the Adjudicator. The Appellants submit that these behaviours amount to unreasonable, vexatious and bad faith conduct.
The information before me indicates that the relationship between the parties broke down during the proceedings. The record suggests that the Respondent and the Added Party were exasperated by the Appellants’ behaviour and the manner in which they conducted themselves throughout the proceeding. It also appears that communications between the parties were far short of ideal. The decision itself notes that the parties in this case were very acrimonious.
I cannot emphasize enough the importance of respectful and professional conduct and communications throughout the appeal process on the part of everyone involved. Counsel should be held to a particularly high standard in this regard. However, while the information before me suggests a high level of frustration on the part of the Respondent and the Added Party – and less than optimal communications between the parties – it does not support a finding that the Respondent or the Added Party acted unreasonably, frivolously, vexatiously or in bad faith. I therefore refuse the Appellants’ requests for costs from the Respondent and the Added Party.
The Requests for Costs of the Respondent and the Added Party
I turn now to the request for costs of the Respondent and the Added Party.
In the Respondent’s submissions on costs at the hearing, and in the Respondent’s further submissions on costs, the Respondent asked the Tribunal to award costs against the Appellants on the basis that their conduct was unreasonable, frivolous, vexatious and in bad faith. The Respondent highlighted the following conduct on the part of the Appellants:
Bringing numerous bias motions and interlocutory motions
Issuing a summons for a witness to speak to things that were irrelevant in the proceedings
Constant attempts to raise and pursue irrelevant issues
Constant arguments with the Adjudicator about her rulings and constant disregard of rulings
Bullying and threatening of the Respondent’s witnesses at the hearing and online
Posting of the Tribunal’s audio recordings on Facebook in a manner calculated to embarrass and intimidate witnesses and circumvent an order excluding witnesses from the hearing room – leading to a publication ban by the Tribunal
Reporting a witness to his professional body and police
The presence of armed police in the hearing room for two days, to alleviate the concern that the Appellants would so aggravate one of the witnesses that violence might ensue in the hearing room
Lack of candour
The Respondent highlighted portions of the transcript to show what he described as “pointless objections, ridiculous bickering, constant efforts to avoid simple questions.” He noted that on cross-examination, the Appellant J.F. used every question as an attempt to re-enter his entire testimony in chief. He described the Appellants as “completely ungovernable.” The Respondent argued that the Appellants’ conduct unnecessarily lengthened the proceedings.
The Respondent submits that the conduct of the Appellants justifies an award of costs. In support of his submission he referred to two decisions of the LAT:
Lanoue (re), [2005] O.L.A.T.D. no 92 (“Lanoue”)
Ontario (3515-ONHWPA-Claim) (Re), O.L.A.T.D. No 251 (“3515”)
In both cases, the LAT awarded costs against self-represented parties. The Respondent submits that the Lanoue and 3515 cases involve the type of conduct seen in the hearing in this case, and that the cases show that the Tribunal has previously found such conduct worthy of censure through an award of costs. I will briefly discuss each of these cases.
In Lanoue, the Tribunal found that the Appellant’s “basket clause” approach (an approach that involved making every possible argument and hoping something will fly) was vexatious, unreasonable and “tantamount to bad faith.” The Respondent submitted that the Appellants engaged in the kind of conduct described in the Lanoue decision, including pursuing claims where they had led no evidence, refusing to withdraw items that duplicated items already warranted, and attempting to put in all of his evidence every time the Appellant J.F. was asked a question on cross-examination.
In 3515, the Tribunal directed the Appellant to pay costs. The basis for awarding costs against the Appellant in that case included:
being disorganized, repetitive, unfocused and obstructionist
accusing the Tribunal of bias and obstructing justice
giving evidence and cross-examination in a rambling and unfocused manner which unduly lengthened the hearing
refusing to accept Tribunal rulings
The Respondent identified similar conduct on the part of the Appellants in this case, including refusal to accept Tribunal rulings “on probably hundreds of occasions,” issuing unnecessary summons, threats to witnesses and allegations of wrongdoing. He described these things as being clearly abusive, frivolous and vexatious.
The Respondent argued that the type of conduct exhibited by the Appellants is the reason the Tribunal has the power to order costs. The Respondent acknowledged that costs are only awarded by the Tribunal in extraordinary circumstances, but submitted that he has provided examples of extraordinary circumstances in the present case that go beyond those in the Lanoue and 3515 decisions. The Respondent urged the Tribunal to sanction the Appellants’ behaviour for the good of the process and the system. He argued that the Tribunal has a message to send to the public about this type of conduct, and submitted that failure to award costs would invite open contempt for the Tribunal in future proceedings.
In his closing submissions, Counsel for the Added Party (the Builder) adopted the Respondent’s submissions on costs. He noted that the proceeding had been extremely difficult and frustrating for the Builder. He submitted that there should be consequences for this kind of conduct. Counsel noted that he tried to minimize legal fees for the Builder, but ultimately was required to attend for 12 days of hearing. The Builder seeks his costs for all 12 of those days.
The record clearly shows that this was a challenging matter. At 26 days, the hearing in this case was much longer than most hearings under the Act and, more importantly, probably longer than it needed to be. It appears that the conduct of the Appellants contributed to the difficulties and the length of the hearing.
However, under the LAT Rules costs can only be awarded where another party has acted unreasonably, frivolously, vexatiously or in bad faith. It is not enough for a party to be difficult, challenging or demanding, nor is it enough to determine that a party was responsible for increasing the length of the hearing.
In his closing submissions, the Appellant J.F. spoke about the Appellants’ conduct in the proceedings. He suggests that the Appellants were being criticized for their perseverance. He acknowledges that maybe they were “stubborn and persistent,” but feels as homeowners this was necessary to get them through the process. He states that they tried to follow the rules but wanted to get the evidence in. He also indicates that they were trying to be respectful, and that the Appellants respect others involved, but acknowledges that he was “unhappy with a lot and I have let you know about it.” In their further submissions on costs, the Appellants state that they tried to remain strong as self-represented homeowners and to keep a professional demeanor. However, they also speak to the psychological toll of the appeal process. It is clear that the proceedings were extremely stressful and difficult for the Appellants.
At the heart of this appeal are concerns about the Appellants’ home – a home that the Appellants describe as their dream home. It appears that the highly personal and emotional context of the appeal raised the stakes for the Appellants and left them unable to contain their frustration. The fact that they were self-represented created additional challenges for them.
While some of the behaviour and actions of the Appellants troubled me, I find that they did not act unreasonably, frivolously, vexatiously or in bad faith, so as to justify an award of costs. The Appellants’ status as self-represented parties is an important factor in reaching this decision. While the Tribunal awarded costs against self-represented parties in the Lanoue and 3515 cases, I am not bound to follow those decisions and choose not to do so in the circumstances of this case. While I have exercised my discretion in deciding not to award costs in this case, it is open to an adjudicator to find otherwise in a future case where the adjudicator determines that the behaviour, conduct and circumstances warrant it.
In closing, I note that while I am sympathetic to the Appellants’ emotional investment in the case, and the obstacles they faced as self-represented parties, my decision should not be taken as condoning inappropriate or disrespectful behaviour on the part of anyone involved in a Tribunal proceeding.
All parties – whether represented by counsel or not – have an obligation to treat the adjudicator with respect, and to comply with the adjudicator’s directions and rulings. Parties also should be polite and respectful to Tribunal staff, other parties and witnesses, and should conduct themselves in a manner that reduces conflict and promotes the operation of an efficient, effective and fair hearing.
ORDER
The requests for costs made by all parties are denied.
LICENCE APPEAL TRIBUNAL
Katie Osborne, Member
Released: March 01, 2016