P.D. and M.D. v. Tarion Warranty Corporation, 2018 CanLII 128770

Licence Appeal Tribunal

Safety, Licensing Appeals and Standards Tribunals Ontario

Date: 2018-09-14

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

Between:

P.D. and M.D.

Appellants

-and-

Tarion Warranty Corporation

Respondent

DECISION ON MOTION

Order Made by: Marisa Victor, Member

Date of Decision: September 14, 2018

APPEARANCES:

For the Appellants: Keith Jobbit, Counsel

For the Respondent: Danielle Peck, Counsel

For the Builder: Mike McNab, Agent

Heard by teleconference: July 5, 2018

REASONS FOR DECISION ON MOTION

Overview

1The appellants own a residential unit built by Allure Condominiums LP by its General Partner 2353268 Ontario Inc. (Allure). The appellants sought coverage under the Tarion Warranty Corporation (Tarion) program for various deficiencies. Tarion issued a decision letter on April 17, 2018.

2The appellants appeal the decision letter before the Licence Appeal Tribunal (LAT).

3Tarion has brought a motion to add Allure as a party to this appeal. The motion was supported by Allure and opposed by the appellants.

4I find that the evidence establishes that Allure has a significant interest in the appeal and is therefore added as a party to the appeal.

ISSUES

5The issue is whether the LAT should exercise its discretion to add Allure as an added party. The test to consider is whether Allure has a significant interest in this particular appeal.

LAW

6Section 16(4) of the Ontario New Home Warranties Plan Act, R.S.O. 1990, c. O.31 (the Act), names homeowners and Tarion as parties. The section also provides that "such other persons as the Tribunal may specify" may be added as parties but does not state the test for determining this.

7Rule 3.6 of the Licence Appeal Tribunal, Animal Care Review Board, and Fire Safety Commission Common Rules of Practice & Procedure, Version I (October 2, 2017) (the Rules) sets out that to add a party, that party must have a significant interest in the proceeding (emphasis added).

EVIDENCE

8Tarion provided evidence and argument as the moving party of the motion. Tarion's position is that Allure should be added because:

a. Allure provides the warranty coverage;

b. Allure is responsible for any payment ordered by the LAT under the warranty program;

c. Tarion has valued the claim at $12,000 or more, which would be the amount Allure would be required to pay to Tarion should the appellants be successful at the LAT;

d. Allure has been active in the disputes with the appellants, including settling a previous appeal with the appellants;

e. Allure's involvement will assist in determining factual matters;

f. Adding Allure would promote early settlement;

g. Allure should be able to represent its own interest and protect its own interest;

h. Allure faces a financial and reputational risk; and

i. Allure should be added on the basis of natural justice and procedural fairness.

9Allure's agent at first stated that it wanted to be part of the appeal and had a significant history with the unit. It expressed its desire to be part of the process and to be able to respond to allegations.

10At that point, Allure's president, Giselle McDonald, contradicted the previous position and stated that it did not want to be dragged into this matter after a full hearing already. Tarion clarified that Ms. McDonald was referring to a previous LAT appeal, which settled. After input from Tarion, who stated that Allure was still responsible for warranty obligations whether or not they were added as a party, Allure reversed its position again and supported the motion.

11The appellants opposed Allure's involvement on the following grounds:

a. The compensation Allure may have to pay is not an issue that involves the appellants, but is a matter solely between Tarion and Allure;

b. The appellants have been dealing with Allure for over three years and some issues have resolved, but the issues under appeal remain. Allure has taken the position it is not responsible for any repairs. The appellants believe Allure's involvement will not further settlement at this point;

c. With regard to Allure's possible evidence benefiting the hearing, the appellants state that if there is additional evidence it should already be available and should be part of the record. Therefore, there is no further advantage in adding them as a party; and

d. Adding Allure will complicate the hearing process.

ANALYSIS

12The decision to add a party is a discretionary one. However, the test to be considered, pursuant to Rule 3.6, is whether Allure has a significant interest in this particular proceeding.

13Tarion has made numerous arguments that would apply in general to any builder appearing in relation to warranty matters before the LAT. However, the following evidence specific to this appeal provided by Tarion was that:

a. Allure has been active in resolving some previous issues before the LAT; and

b. The value of the claim is $12,000 or more.

14Allure's submissions were contradictory. On the one hand it did not want to be dragged into a hearing and on the other hand it supported the motion. In the end, Allure chose to support the motion. Throughout the rest of the case conference, Allure acted in accordance with its stated desire to be part of the process and, when called upon, provided factual information that was of assistance to the LAT in terms of framing the dispute.

15The appellants opposed the motion. I agree with the appellants that any compensation owed to Tarion is a matter that does not involve the appellants and should not be litigated before the LAT. I also agree that adding the builder may complicate the hearing.

16I disagree that with the appellants' assertion that the fact that Allure has not been able to resolve these issues in the last three years should disentitled it from party status. I find that the fact no resolution has been reached is not relevant to the builder's significant interest in the proceeding. In addition, I find that the builder's involvement as an added party is merited because of their lengthy history with these issues and the factual evidence they can bring to the LAT both at the case conference level and at the hearing as a result of that experience.

17In addition, as the case conference progressed, the appellants took a position, particularly in regard to flooring, that significantly increased the potential value of the claim such that it was closer to $30,000. This is a significant amount of money. For this reason also, I find that the builder's has a significant interest in the proceeding.

18By being added as a party, Allure will be provided all the procedural rights of a party, including the ability to be represented by counsel, the ability to call witnesses and cross-examine witnesses, the ability to submit evidence including potential expert evidence, and the ability to make submissions. Allure is also subject to all the requirements of a party including that it must attend future case conferences and the hearing and possibly face cost or other consequences should it fail to attend or choose to act unreasonably, frivolously or in bad faith.

ORDER

19The motion to add Allure as a party is granted.