An Appeal of a Decision of Tarion Warranty Corporation under the Ontario New Home Warranties Plan Act, R.S.O. 1990, c. O.31("the Act") to disallow a claim.
Between:
Anthony and Anna Vario
Appellant
and
Tarion Warranty Corporation
Respondent
and
Irene Thalassinos
Added Party
DECISION ON MOTION
ADJUDICATOR:
Zahra Dhanani, Member
APPEARANCES:
For the Appellant:
Self-Represented
For the Added Party:
Mr. Thalassinos, Agent/Husband of the Added Party
For the Respondent:
Ben Carino, Counsel
Heard by Teleconference:
October 30, 2019
OVERVIEW
1This motion is brought based on a settlement agreement that came out of the case conference (CC) held on August 23, 2019, prior to the appeal hearing before the Tribunal. The CC was conducted electronically via telephone call with all the parties present. In consideration of the settlement, the appellant withdrew his appeal and this file was closed at the Tribunal.
2The appeal was based on the respondent Tarion’s (Tarion) denial of the appellants’ year-end warranty claim. The issue on appeal was whether any of the alleged claims are warrantable under the Act, whether the appellants suffered damages because of the claims, and the quantum of any damages suffered.
3The August 23, 2019 CC led to a full and final resolution between the appellants, Tarion and the added party Irene Thalassinos (the builder).
4Subsequent to the CC, Tarion brought this motion because the builder was not agreeing to pay the settled upon amount.
5The motion hearing was held on October 31, 2019, where Tarion asked the Tribunal to order the builder to pay to the appellants the amount they said they would, according to the settlement agreement.
ISSUE ON MOTION
6Does the Tribunal have jurisdiction to order a party in a settlement to comply with the resolution agreement?
7If the Tribunal has jurisdiction in what is the Tribunal’s order in this matter?
RESULT
8The Tribunal does not have jurisdiction to make an order on the motion.
ANALYSIS
9The builder was represented by her husband at both the CC and the motion hearing, at both proceedings the builder was in the room with her representative while he was on the telephone.
[10] After lengthy conversation between the parties, a resolution was reached in this appeal at the CC. All the parties advised me that they agreed on the settlement and, as a result, the appellants would withdraw their appeal. I issued a CC Report with the details of the settlement listed as: -The appellants would sign a release for a settlement of $12,500.00, -The builder (added party) would pay $7,500.00 to the appellants, and -Tarion will pay $5,000.00 to the appellants.
11I facilitated this CC. All the parties fully agreed to the settlement. The parties were informed of their right to legal representation and to get legal advice before any settlement was reached.
12I was assigned to hear this motion because of my familiarity with the facts.
13At the beginning of the motion hearing, I asked all the parties for their consent to my hearing the motion as I wanted to make sure that there would be no perception of bias due to my previous involvement with the CC. All the parties consented prior to me proceeding.
14In this motion, the respondent informed the Tribunal that the builder was refusing to pay their portion of the agreed upon settlement.
15At the case conference, the appellants advised the Tribunal that they would withdraw their appeal on the basis of the settlement agreement reached with the respondent and the builder. The appellants did this on good faith and expecting that the resolution agreed upon by all the parties would be honoured and respected.
16Accordingly, the proceedings before the Tribunal were concluded and the Tribunal file closed.
17At the motion hearing, the builder’s representative stated that he was pressured into resolving the appeal at the CC, that he did not have legal counsel and that he did not have opportunity to consult anyone on the settlement. He stated that he was forced to settle, and he didn’t agree with the settlement any more.
18I find that the builder is not representing the conversation at the case conference accurately. At the commencement of the CC, all the parties were asked if they had the authority to resolve the matter. In response, everyone on the call affirmed that they had the authority to make a decision on any settlement proposed. Before the settlement was fully agreed upon, I made sure the parties knew that they had the right to legal advice and legal representation again and that they did not have to sign the agreement without such advice.
19The parties had had a fulsome conversation about settlement that canvassed all the costs/benefits of resolving this matter before going to hearing and the costs/benefits of going to hearing.
20The parties resolved this matter primarily so that they would not have to continue to spend energy and resources on the appeal. The appellants accepted an amount that is much less than they stated was the cost of repairing the issues in their complaint. Tarion also agreed for more than they had come to the CC expecting to spend.
21The builder’s representative said that the builder had an interest in resolving before going to hearing as well.
22The conclusion and settlement were very clearly based on the assessment that the parties were all interested in not having the appeal proceed to a hearing.
Does the Tribunal have jurisdiction to order a party in a settlement to comply with the resolution agreement?
23I find that the Tribunal does not have the jurisdiction to do what the respondent wants it to do. The Tribunal has the authority to do only what legislation authorizes it to do.
[24] Under the Act, the Tribunal can order Tarion to do something it ought to have done in accordance with the Act and the regulations if a hearing proceeded before the Tribunal: 16 Powers of Tribunal
(3) Where a person or owner gives notice in accordance with subsection (2), the Tribunal shall appoint a time for and hold the hearing and may by order direct the Corporation to take such action as the Tribunal considers the Corporation ought to take in accordance with this Act and the regulations, and for such purposes the Tribunal may substitute its opinion for that of the Corporation.
25This means: (1) the Tribunal can make an order only if there is a hearing before it, and (2) following the hearing of an appeal, the Tribunal an order the Corporation (i.e., Tarion) to take such action that the Tribunal considers Tarion ought to take in accordance with the Act and regulations.
26Even if there were a hearing, I don’t see anything in the language of s. 16(3) that grants the Tribunal the authority to make the builder do anything. The Tribunal can’t make the builder pay any money and can’t make the builder correct any deficiency. Indemnification for monies paid to the homeowner is a matter between Tarion and the builder.
27I asked Tarion for submissions on what authority, if any, such an order they are requesting would be based. Tarion provided no authority other than to generally submit that the Tribunal “should” have the authority to do so.
28I find that the Tribunal does not have the jurisdiction to order the builder to pay what she agreed to at the case conference.
29The resolution that Tarion and/or the appellants seek is a remedy that needs to be sought in a different forum, should they think it appropriate to do so.
30I note that the builder agreed very clearly to the settlement, there was a lengthy conversation into all the factors, there was no coercion involved in reaching the settlement, and the builder’s agent (her husband) came to the conversation stating he had full authority to resolve the matter and that the builder was in the room at the time of the CC to consult if needed.
31A settlement happens in the belief that everyone will follow through with the agreement and, when this is not the case, it undermines the settlement process and the willingness of other parties to settle in the future.
32Because I have found that the Tribunal does not have the jurisdiction in this case to make the order sought, I do not address the second question.
DECISION
33The motion is denied.
LICENCE APPEAL TRIBUNAL
Zahra Dhanani
Member
Released: March 16, 2020