Appeal from a Notice of Proposal under the Ontario New Homes Warranties Plan Act to Refuse a Registration.
Between:
1917916 Ontario Ltd o/a Save On Contracting
Appellant
-and-
Registrar, Tarion Warranty Corporation
Respondent
DECISION & ORDER
Appellant’s Motion
Panel: Jennifer Friedland, Member
Appearances:
For the Appellant: Peter Mitchell, Counsel
For the Respondent: Montgomery Shillington, Counsel
Place and date of hearing: Motion proceeded in writing
Overview
1The appellant, 1917916 Ontario Limited, operating as Save On Contracting, has appealed from a notice of proposal issued by the respondent, the Registrar (“Tarion”) under the Ontario New Home Warranties Plan Act (the “Act”), on September 20, 2019 to refuse to renew the appellant’s registration (the “NOP”).
2A hearing has been set for October 2020 in advance of which the appellant has brought a motion seeking the following relief from the Tribunal:
(a) a determination that there exists no pending renewal application capable of being refused by the Registrar such that the within proposal is ultra vires the Registrar’s statutory authority; and
(b) a determination that the Tribunal therefore has no jurisdiction to adjudicate upon the merits of the within appeal.
Result
3For the reasons given below, the appellant’s motion is dismissed.
The Basis for the appellant’s Motion
4The basis for the appellant’s motion is that on or about October 2, 2019, which is after the Registrar issued its NOP to refuse to renew the appellant’s registration but before the appellant filed its notice of appeal, the appellant accessed Tarion’s online builder portal (called “BuilderLink”) and saw that its registration was noted as “approved.” The appellant therefore takes the position that its registration was in fact renewed and the Registrar therefore has no jurisdiction to continue with its NOP to refuse to renew it.
Tarion’s Position
5Tarion’s position is that the posting on BuilderLink was an error that has since been corrected and that the whole of the circumstances relating to the appellant’s renewal application indicates that it was not approved. Tarion asks the Tribunal to dismiss the appellant’s motion so that the appeal may proceed to a determination on its merits.
FaCTS
6This motion has proceeded in writing based on affidavit evidence.
7The appellant relies on the affidavit of Noorullah Kamil, dated May 8, 2020. Mr. Kamil describes himself in his affidavit as an “officer, director and guiding mind of the Appellant”.
8Tarion relies on the affidavit of Girish Sharma, sworn May 19, 2020. Mr. Sharma is the Director, Underwriting at Tarion and the person responsible for making the recommendation to Tarion’s Deputy Registrar to issue the NOP in this case.
9Tarion also relies on the affidavit of Jean-Marie Trant, sworn May 19, 2020. Ms. Trant is a business analyst in Tarion’s licencing and underwriting department who was responsible for mailing the NOP to the appellant and who took certain steps in relation to the BuilderLink page that showed the appellant’s registration as renewed. It was her determination that the BuilderLink page was displaying an incorrect status.
10There are many facts attested to in the affidavits of both parties that are not particularly relevant to the determination of this motion, though they may be relevant to the determination of the appeal on its merits. It is not necessary for me to recite these background facts in detail.
11For the purpose of this decision, the relevant facts may be summarized as follows:
The Appellant’s Initial Application for Registration, June 22, 2017
12In 2016 the appellant applied for registration as a vendor/builder under the Act
13Tarion was prepared to approve the appellant’s registration at that time provided that Mr. Kamil remove himself as a director of the appellant company. Tarion’s concerns with Mr. Kamil related to his alleged past conduct, including being convicted as an illegal vendor of a new home in 2007, and two assignments in bankruptcy, among other allegations. The appellant disagreed with Tarion’s concerns and refused to replace Mr. Kamil as a corporate officer. This led Tarion to issue a Notice of Proposal in 2016 to refuse the appellant’s registration. Ultimately, however, Tarion withdrew its proposal after the appellant acceded to Tarion’s request to replace Mr. Kamil as corporate officer. Instead, Mr. Kamil’s wife, Ruqia Alnoor, became the sole Director of the appellant company and the appellant was granted registration effective June 22, 2017.
14The appellant received notification of its successful registration at that time by way of a letter from Tarion dated June 22, 2017 that opened by saying, “Congratulations, your Application for Registration with Tarion Warranty Corporation was successful, and you are now a registered Vendor and/or Builder in Ontario.” The appellant’s Registration Certificate was enclosed.
The appellant’s application for renewal of registration, June 22, 2018
15The appellant’s initial registration was up for renewal on June 22, 2018. The appellant’s renewal fee was processed on June 4, 2018. On July 6, 2018, the appellant was notified by letter that Tarion was prepared to renew its registration subject to terms and conditions. The appellant accepted the conditions and Tarion sent an email informing the appellant that its “renewal of registration has been approved.” This was followed up by a letter from Tarion dated August 3, 2018, which began “Congratulations, your Application for Renewal of Registration with Tarion was successful.”
The appellant’s application for renewal of registration, June 22, 2019
16The appellant’s registration was again due for renewal on June 22, 2019. Before then, the following events took place:
i. the appellant commenced an action against Tarion in Superior Court for damages in respect of the 2016-17 application process and with respect to a matter involving Tarion and a corporation controlled by Mr. Kamil between 2001 and 2005. Tarion has defended this action; and
ii. the appellant appointed Mr. Kamil as a Director of the appellant company, informing Tarion of this fact in May 2019. Mr. Kamil explains in his affidavit that his appointment as Director was consistent with the appellant’s pleaded position in the Superior Court action that Tarion’s refusal to allow him to be a corporate officer was “unreasonable and improper.”
17On June 22, 2019, the Appellant applied for renewal of its registration. Tarion processed payment of its application for renewal fee on that same date.
18On June 24, 2019, Tarion wrote thanking the appellant for its application for renewal of registration and requesting certain information before proceeding with the application. The letter was addressed to Ruqia Alnoor, the indemnitor of the appellant company and its sole Director prior to Mr. Kamil being added in May of that year. Tarion’s letter requested the following from Ms. Alnoor:
Please complete the attached Tarion Personal Net Worth Statement and provide the backup documents clearly showing ownership, date and value. For any business interests include the Shareholder Register. All documents must be current.
Provide the most current year-end externally prepared financial statement with signed Notice to Reader for 1917916 Ontario Ltd. If your company financials are not prepared externally with signed Notice to Reader, please submit the Corporation Income Tax Return (T2) including GIFI Schedules 100, 125, 141.
Please have Noorullah Kamil complete the attached page [Application for Registration with Tarion Warranty Corporation] – this is required for all Directors and Officers.
19Mr. Kamil responded to Tarion’s request on July 19, 2019, providing his Director information (while noting that it had earlier been provided to Tarion) but refusing to provide any of the personal or financial records requested. He undertook that the appellant would not build any new houses until its court case with Tarion was over and asserted that, because of this, “Tarion should not need any financial records from us at present time.” Mr. Kamil went on to write:
As far [as] the company and personal financial reports from us is concerned, we refuse to disclose our financial records because of our major lawsuit against Tarion. We do not want [to] disclose our strength to a foe like Tarion whom we have been in a continuous victim for over 12 years. It is about time for Tarion to be honest and face the responsibility for its wrongs against us and not to hide behind legal technicality and pretending nothing has happened. It will not go away! [emphasis in original]
20According to the appellant, there was “extensive correspondence” between counsel concerning the Superior Court matter in the course of the four months following the appellant’s letter informing Tarion that Mr. Kamil was now a director. Mr. Kamil raises this fact to indicate that at no time during this period did counsel for Tarion take issue with Mr. Kamil’s status as corporate officer – a detail that may or may not prove relevant to the determination of the merits of the appeal. For the purposes of this motion, I find this evidence helpful mainly to round out the chronology, for it is in or around the end of those four months – on September 20, 2019 -- that Tarion issued its NOP to refuse to renew the appellant’s registration.
21The NOP sets out a number of grounds for proposing to refuse to renew the appellant’s registration. The particulars are set out in the NOP itself. They are summarized in the affidavit of Mr. Sharma as follows:
Save On refused to provide financial statements;
Save On refused to provide a net worth statement and supporting documentation from its indemnitor;
Tarion has received reports setting out numerous construction defects in the four homes that Save On has enrolled;
Save On has failed to complete construction of the four homes that have been enrolled without undue delay;
Save On failed to notify Tarion that it had ceased construction on the four enrolled homes;
Save On’s website represents that it has been building more homes than the four it has enrolled; and
Save On unilaterally appointed Mr. Kamil as an officer and director knowing that it would not meet the criteria for registration under the Act.
22By Notice of Appeal dated October 4, 2019, the appellant appealed Tarion’s NOP on various grounds, including on the basis that the appellant’s registration had already been renewed. This position was taken based on the appellant logging onto BuilderLink after receiving the NOP and seeing a notice indicating that its registration was approved.
Builder Link
23BuilderLink is Tarion’s online portal for builders. It is accessible only to the builder, not to the public. Through the portal, a builder can enrol new homes, review warranty forms and reports, and access other tools.
24Mr. Kamil attests to logging on to BuilderLink on October 2, 2019. His screenshot of what he saw on that date is attached as an exhibit to his affidavit. The screenshot is reproduced here in its entirety.
25Mr. Sharma’s affidavit attests to the above status being posted in error and that the appellant’s renewal application was never approved. The error came to Tarion’s attention through the appellant’s Notice of Appeal which attached the above screen shot. Mr. Sharma attaches to his affidavit a letter dated October 11, 2019 from counsel for Tarion, Catherine Longo, informing the appellant’s solicitor at that time that the communication was “in error due to a systems malfunction” and that it was in the process of being removed. Ms. Longo further confirmed that “at no time did Tarion approve your clients’ 2019 application for renewal.”
26Mr. Sharma’s evidence confirms that a search of Tarion’s Ontario Builder Directory currently shows the correct status of the appellant’s registration, which is, “Registered – NOP Appealed.”1 The Directory also provides a brief description of the grounds underlying Tarion’s NOP.
27The affidavit of Jean-Marie Trant further elaborates on the purported error. She was tasked with investigating the issue. She confirms that while the BuilderLink portal was showing the appellant as registered, the internal records of Tarion showed the appellant’s correct status as “NOP to Refuse Application.” She started a “JIRA ticket” which she describes as a request to diagnose a potential issue with Tarion’s software. Although the specifics of the investigation are not detailed in either of Tarion’s affidavits, the conclusion of Ms. Trant is that BuilderLink was incorrectly displaying the status of the appellant’s application to renew. Her investigation revealed that the error occurred on September 20, 2019 at the same time that Tarion issued its Notice of Proposal. She states that the error was corrected on or before October 18, 2019.
ISSUES & ANALYSIS
28The appellant articulates the issues on this motion as follows:
(i) Do principles of natural justice require the imposition of a strict standard of proof where the Registrar seeks to resile from a confirmation of registration renewal on the basis of alleged mistake?
(ii) If the answer to (i) is yes, has Tarion proffered sufficiently full, frank and compelling disclosure to satisfy the Tribunal that the Registrar’s renewal confirmation resulted from mistake?
(iii) If the answer to (ii) is no, does the absence of a pending renewal application render the NOP ultra vires the power accorded the Registrar by Section 8(2) of the Act such that the Registrar should be ordered by this Tribunal to withdraw the NOP?
29It is unnecessary for me to address the appellant’s first issue to come to a conclusion on the second, which determines the outcome of this motion. Even assuming that the appellant is correct to say that natural justice requires strict proof that the confirmation of registration on BuilderLink was a mistake, I am satisfied that the evidence before me provides such proof.
30There is no dispute that Tarion issued a notice of proposal to refuse to renew the appellant’s registration on September 20, 2020. Then, when Tarion learned that the appellant’s status was being shown as renewed on BuilderLink, Tarion informed the appellant through its counsel that this was an error and shortly corrected that status. Currently, the appellant’s status is shown as “Registered – NOP appealed” which is consistent with Tarion’s position that the appellant’s registration was not renewed and that its proposal is still to refuse to renew that registration.
31The evidence of Ms. Trant further confirms that on October 7, 2019, while the BuilderLink portal was showing the appellant’s status as registered, Tarion’s internal system showed the appellant’s status as “NOP to refuse application.” This further supports Tarion’s claim that the BuilderLink posting was in error. And while the appellant urges me to put little weight on Ms. Trant’s evidence because the screenshot which is attached to her affidavit does not show the date that the image was printed, I have no basis to doubt that the sworn evidence of that date provided in her affidavit.
32In addition, I have the evidence of Mr. Sharma that the appellant’s application for renewal was never approved, as well as the correspondence from Tarion’s counsel to the appellant’s counsel at the time advising that “at no time” did Tarion approve the appellant’s application for renewal.
33Against this evidence, the appellant asks me to conclude that Tarion did, in fact, renew its registration. Thus it frames its argument in terms of whether Tarion should be entitled to “withdraw renewal confirmation” or “reverse confirmation of registration.”
34In support of its position, the appellant urges me to place little to no weight on Tarion’s affidavit evidence that the status temporarily shown on BuilderLink was an error. It contends that this evidence should be assessed with a “very critical eye” (emphasis included in the appellant’s factum).
35One of the appellant’s primary objections to Tarion’s evidence is that neither of its affiants describe the nature of the purported software malfunction that caused the alleged error, nor did any member of Tarion’s IT department provide direct testimony regarding the alleged error. I am asked to draw an adverse inference against Tarion from this fact and conclude that such evidence was not provided because it “would not hold up under cross-examination.” I am asked, in short, to conclude that Tarion’s claim of administrative error is an excuse to cover up what had been a bona fide decision to renew the appellant’s registration.
36This allegation is then made plain in the appellant’s factum when the appellant theorizes about what may have caused Tarion “to ignore Mr. Kamil’s appointment for over four months, approve the 2019 Application and then attempt to rescind that approval.” The appellant suggests at paragraph 49:
It may well be that those Tarion staffers responsible for assessing the registrability of the Appellant at some point recognized the unreasonableness of maintaining opposition to Mr. Kamil’s role as a corporate officer on the basis of 14 year old events and therefore elected to abandon that opposition and facilitate renewal. Upon learning of the renewal, however, in-house litigation counsel likely objected to the renewal and somehow convinced the Registrar that (i) Tarion’s interest in a successful resolution of the action would be better served by maintaining opposition to Mr. Kamil’s appointment and (ii) if challenged, Tarion could credibly claim that its Builder Link confirmation was just a software glitch.
37I agree with the respondent’s submission that “there is no evidence submitted that remotely substantiates such speculation.” I find that the whole of the circumstances amply supports Tarion’s claim that the BuilderLink notification was simply an error.
38I find the appellant’s other complaints about the quality of the evidence of mistake to be without merit. For example, the appellant submits that I should not rely on the lack of any surrounding indicia of registration (such as the congratulatory letters previously sent to the appellant) as support for Tarion’s position that the renewal notification was in error. The appellant contends that I would require evidence about the timing of the renewal as against Tarion’s usual practice of sending out such letters, as well as evidence that Tarion continued this practice in 2019. I disagree. I have no basis to doubt Mr. Sharma’s affidavit evidence that such actions did not take place because the appellant’s registration was never in fact renewed.
39The appellant further objects to Mr. Sharma’s affidavit as aiming to cast Mr. Kamil as an “ungovernable villain” and seeming to argue the merits of the NOP “as if such (disputed) testimony will lend credibility to the Registrar’s administrative error excuse.” However, while I agree that the merits of Tarion’s position is not relevant to this motion, I find that Mr. Sharma’s evidence does lend credibility to Tarion’s position that the BuilderLink approval of registration was an administrative error. As the person responsible for making the recommendation to the Registrar to refuse the appellant’s renewal application, Mr. Sharma’s affidavit provides compelling evidence that Tarion believes it has grounds to refuse to renew the appellant’s registration. Again, whether Tarion is correct in its belief is an argument to be made at the hearing of the appeal. In the meantime, however, that belief provides compelling evidence on this motion that Tarion never approved the appellant’s application for renewal.
40Ultimately, I find that the only evidence on the whole of the record before me that supports the appellant’s position that its registration was renewed is the temporary notification on the BuilderLink portal. There is no accompanying letter of congratulations confirming the appellant’s registration, nor any other evidence to suggest its registration was in fact renewed. On the other hand, there is clear, cogent and compelling evidence that it was not renewed and that the BuilderLink posting was an error.
41For the above reasons, I find that the appellant’s registration was not renewed and there is no basis for me to grant the relief requested in the appellant’s motion.
ORDER
42The appellant’s motion is dismissed.
Licence Appeal Tribunal
Jennifer Friedland, Member
Released: July 20, 2020