An appeal of a Decision of Tarion Warranty Corporation under the Ontario New Home Warranties Plan Act to Disallow a Claim
Between:
J. Y.
Appellant
and
Tarion Warranty Corporation
Respondent
MOTION ORDER
Order Made By: Jeanie Theoharis, Vice-Chair
OVERVIEW
1The appellant owns a residential home in Oakville, Ontario built by Mattamy (Preserve) Limited.
2The appellant submitted a claim for eight defects in his home including balcony water penetration, exterior cladding defects, faulty repairs to the kitchen, faulty window frame repair, basement floor cracks and defective garage door panel. Tarion Warranty Corporation (Tarion) denied the majority of the warranty claim on December 3, 2018 (the Decision Letter).
3The appellant appeals the Decision Letter to the Licence Appeal Tribunal (LAT or Tribunal).
4The parties attended a case conference on March 5, 2019. The matter did not settle, and is scheduled to proceed to a hearing on May 7, 2019.
5On March 26, 2019, Mattamy brought a motion to be added as a party to the proceeding.
6The respondent, by letter dated March 27, 2019, consents to Mattamy being added as a party.
7The appellant had until April 11, 2019 to file responding submissions. To date, the Tribunal did not receive any submissions from the appellant on this motion.
ISSUE
8The issue is whether the LAT should exercise its discretion to add Mattamy as an added party to the appeal.
LAW
9Section 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.
10Rule 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 AND ANALYSIS
11Mattamy indicates that they would like to be added as a party to the proceeding for the following reasons:
a. The appellant did not name Mattamy as a party to the LAT appeal;
b. It may facilitate settlement of the proceeding because Mattamy can provide additional, helpful evidence and participate in settlement discussions; and the proceeding is more likely to be resolved without a hearing if added as a party; and
c. It should be given an opportunity to represent its own interest and participate in this proceeding because the Act requires Mattamy to indemnify Tarion for compensation Tarion pays if it is found that Mattamy breached those warranties. Mattamy states that if in the LAT proceeding, the Tribunal orders Tarion to pay compensation to the appellant, Mattamy may be liable to Tarion.
12For the reasons noted below, I find that Mattamy did not show it has a significant interest in the proceeding. The motion to add Mattamy as an added party is denied.
a. The appellant did not name Mattamy as a party to the LAT appeal
13The appellant is not required to name Mattamy as a party to the LAT appeal.
14Section 16 of the Act stipulates that a homeowner’s appeal of a decision made by Tarion is within LAT’s jurisdiction and the parties to that proceeding are the homeowner and Tarion. The Act does not intend builders to automatically be part of the LAT process and the Tribunal maintains discretion to add parties.
15A homeowner may bring an appeal before LAT to address their concerns with Tarion for compensation under the statutory compensation process. Neither the appellant nor Tarion are required to notify a builder that an appeal has been filed with the LAT.
b. Providing Evidence to Facilitate Settlement
16Mattamy submits that by being added as a party to the LAT proceeding, they will facilitate settlement, and as such, they have a significant interest in the proceeding. I do not agree.
17The parties and builder may attempt to resolve the issues in dispute in hopes of settling the homeowner’s claims outside of the LAT process. Mattamy does not have to be added as a party to facilitate settlement discussions.
18In the present case, Mattamy has been aware of the homeowner’s claims and has already attempted to resolve them with the appellant. In support of the motion, Mattamy filed a case conference report. The report indicates that the homeowner worked with Mattamy to try to resolve the claimed defects in the home, but the claims were not resolved. The homeowner took the next step afforded to it and filed a LAT appeal.
19It is unclear how Mattamy’s participation in the LAT proceeding as an added party would now facilitate resolution of the homeowner’s claims, when they were not able to resolve prior to the filing of the LAT appeal. A mere statement that they will be able to resolve the issues in dispute by being an added party is not convincing.
20I find that, based on the facts of this case, Mattamy has not shown a significant interest in the proceeding on this basis.
c. Mattamy’s potential liability to Tarion for indemnification
21Mattamy asserts that it ought to be able to present evidence and submissions in the LAT proceeding because if the Tribunal orders Tarion to pay compensation to the appellant, then Mattamy may be liable to Tarion in an indemnification claim. I find this reason is not a significant interest in the LAT proceeding because the indemnification claim is separate from the LAT appeal, and Mattamy still maintains its procedural rights should Tarion bring an indemnification claim against Mattamy.
22To be added as a party, Mattamy must show that they have a significant interest in the proceeding. The significant interest must relate to the proceeding before LAT. The issue in the LAT proceeding addresses the appellant’s claim to be compensated by Tarion for breaches of warranty. The significant interest is not in relation to a builder’s interest in defending itself against a possible indemnification claim from Tarion.
23Adding Mattamy as a party to the LAT proceeding is not intended so that Mattamy can defend its workmanship in hopes of minimizing potential indemnification claims. Mattamy states they should be given the opportunity to participate in the LAT proceeding by representing its own interests and presenting its own evidence and submissions. I find that this is not the intent of the statutory scheme.
24Quite the opposite, the statutory scheme is based upon consumer protection related to when homeowners have a disagreement with a builder. The legislation forms a warranty scheme to allow homeowners the ability to obtain compensation without prolonged and expensive litigation with a builder. It is an avenue for aggrieved homeowners to seek the protection from a third-party payer regime and provide recourse to homeowners in the form of compensation based on warranties that are covered by the legislation.
25The issue in the LAT appeal is whether the deficiencies claimed were submitted on time; are the deficiencies warrantable items under the Act; and if so, the amount of compensation to be ordered.
26The indemnification claim is a separate proceeding which is not within LAT’s jurisdiction and it is a claim that Tarion may choose to pursue or not.
27Tarion, in addressing the LAT appeal, may opt to have the builder, or another builder present evidence to support their position as a witness. The witness need not be added as a party to present evidence.
28Mattamy wants to participate in the LAT proceeding to protect themselves from a future claim does not rise to the level of a significant interest in this proceeding. The parties in the indemnification proceeding are Tarion and the builder. A builder maintains its procedural rights to defend itself in that claim. Mattamy is not automatically liable to indemnify Tarion. Mattamy has an opportunity to represent its own interest and participate in the indemnification proceeding with its own legal counsel by presenting evidence and submissions.
29I am not satisfied that Mattamy has established a significant interest in the LAT proceeding.
ORDER
30The motion to add Mattamy as an added party is denied.
LICENCE APPEAL TRIBUNAL
Jeanie Theoharis, Vice-Chair
Released: May 2, 2019