Motion by Superior Construction – Luxury Homes Inc. for an Order to extend the time to file an Appeal to the Licence Appeal Tribunal of a Notice of Proposal to refuse to renew registration pursuant to the New Home Construction Licensing Act, 2017, S.O. 2017. C.33, Sched. 1
Between:
Superior Construction - Luxury Homes Inc.
Appellant
-and-
Registrar, Home Construction Regulatory Authority
Respondent
DECISION and ORDER ON MOTION
ADJUDICATOR:
Harriet Lewis, Member
APPEARANCES:
For the Applicant:
Christine Kellowan, Counsel
For the Respondent:
Letizia Filippazzo, Counsel
Tim Snell, Counsel
Heard by Teleconference
April 12, 2021
OVERVIEW
1Superior Construction – Luxury Homes Inc. (“Superior”) has brought a motion asking the Tribunal to extend the time to appeal a Notice of Proposal (“the Proposal” ) issued by the Registrar on October 29, 2020, under the Ontario New Homes Warranty Plan Act (“the ONWPA Registrar” and the “ ONHWPA “ ).
2The Proposal is to refuse to renew Superior’s registration as a builder. There are 5 reasons given in the Proposal. The first is that Superior has “failed or refused to execute and deliver the document detailing registrant specific Terms and Conditions of Registration as requested by correspondence dated April 21 and October 1, 2020.” The remaining grounds allege that Superior “cannot reasonably be expected to be financially responsible ” in the conduct of undertakings; that it is in breach of terms and conditions of registration by enrolling more homes than permitted; that it has a record of breaching warranty in respect to a home and failed to indemnify Tarion for losses in respect to others; and that it “does not have sufficient technical competence to consistently perform the warranties”, specifically by having “2 chargeable conciliations to 10 possessions and has demonstrated poor after sales service” in respect to a home listed in an appendix to the Proposal.
3The Proposal was served on Superior at its corporate address c/o Ali Fathi/Gord Palbod, on or about November 3, 2020. The front page of the Proposal states that if there is no appeal within 15 days after its receipt, the Registrar will carry out the Proposal. Gord Palbod (“Mr. Palbod”) and Ali Fathi are one and the same person.
4On December 11, 2020 a Notice of Registration Refusal was issued and sent to Superior at the same address confirming that since a Notice of Appeal was not delivered within the appeal period specified in the Act, Superior’s renewal of registration was refused.
5On February 1, 2021, oversight and regulation of builders in Ontario was moved from the Registrar under ONHWPA to the Registrar, Home Construction Regulatory Authority, (“the HCRA Registrar”) under the New Home Construction Licencing Act (the “NHCLA”).
6Also on February 1, 2021, approximately 7 weeks after the service of the Notice of Registration Refusal, Mr. Palbod emailed the HCRA Registrar advising of difficulties monitoring email from Tarion, difficulties answering email because he had been in accidents, and confusion about documents with the result that he had missed the deadline to file an appeal. On February 16, 2021, the legal office of the HCRA wrote to Mr. Palbod confirming that Superior’s request for an extension of time to file an appeal was denied and referring to its right to bring a motion before this Tribunal requesting an extension of time to appeal.
7On March 3, 2021 Superior filed a Notice of Appeal of the Proposal and a Notice of Motion asking that this Tribunal grant an extension of time to file an appeal, granting a stay of the refusal of renewal of registration. The Notice of Appeal also asks for an order “removing a stay previously granted by the Tribunal in this matter”. That latter ground was not addressed in the hearing of this motion by either party, nor was evidence provided of an earlier stay.
8There are 11 grounds for relief given in the Notice of Motion as follows (wording is verbatim):
Gord Palbod is suffering from two major vehicular accidents resulting in short term memory loss.
The annual cycle of registration renewal was changed by Tarion. When the registration proposal was issued the routine annual conditions had changed. Requests for information regarding the changes were not answered.
The Notice of Proposal was issued. Deadlines were not clear. There were conflicting timelines on Tarion letters and emails.
Given the unusual registration requirements and lack of reasoning in addition to short term memory loss and on top of that all that dealing with the repercussions of a global pandemic at home and at work, Gord Palbod simply forgot to sign back the Conditions of Registration.
On October 14, Tarion expected the conditions of Registration signed back. On October 29, Notice of Proposal was issued. There is no information on any new information received by Tarion from October 15 to October 29. Appellant finds this unusual.
Weeks were spent on emails and back and forth to understand what can be done and how to remedy the situation.
Eventually decision was made to wait and make the appeal to HCRA. Appeal was refused.
Superior does not believe that all the information at Tarion’s disposal have been transferred to HCRA for reconsideration.
Superior requests to have an opportunity to provide all information to LAT and HCRA for reconsideration.
Ability to earn income is being denied by Tarion/HCRA.
Three contracts, all signed before the issuance of the Notice of Proposal, are at risk. The owners of these three homes will be subject to financial loss.
9The HCRA Registrar has declined to consent to the extension of the time for Superior to file a Notice of Appeal and asks that this motion be refused. In the alternative, it asks that if Superior’s request for an appeal hearing is granted, that the applicant remain un-licenced until the conclusion of the Tribunal proceedings.
10This Tribunal may extend the time for requesting an appeal if it is satisfied that there are reasonable grounds for the extension. The onus is on the applicant establish those grounds.
ISSUES
11Has Superior established that the “justice of the case” supports an extension of time to request a hearing? If so, should its current un-licensed status continue until such appeal is decided?
DECISION
12For the reasons below, I find that Superior has not established that the justice of the case requires an extension of the deadline for appealing the Proposal.
THE LAW
13Each of the ONHWPA and the NHCLA provide that no person may act as a vendor or a builder unless registered/licenced under the applicable Act. A corporate applicant, such as Superior, is entitled to a licence if it and its officers and directors meet certain criteria as established in the legislation.
14Each of the Acts also provides that their respective Registrars may refuse to approve registration in certain circumstances, including when, in the case of a corporation, the registrant’s financial position is such that the registrant cannot reasonably be expected to be financially responsible in the conduct of its business.
15If either the ONHWPA Registrar or now the HCRA Registrar intends to refuse registration, it must serve a Notice of Proposal, together with reasons, on the applicant/ registrant. The applicant/registrant then has 15 calendar days from the time of the service of the Notice of Proposal to request a hearing from this Tribunal. If no hearing is requested, the Registrar may carry out the Proposal and refuse registration.
16If a hearing is requested, the Tribunal shall hold a hearing and may direct the Registrar to carry out the proposal, refrain from carrying out the proposal, or take such other action as the Tribunal considers appropriate.
17This Tribunal has jurisdiction to extend the 15-day time limit. The Licence Appeal Tribunal Act, 1999 allows the Tribunal to extend a time limit if it is “satisfied that there are reasonable grounds for applying for the extension and for granting relief.”
18The Tribunal’s Common Rules of Practice and Procedure, October 2017, s. 3.1 provides for its rules to be liberally interpreted, and they may be waived or varied at its own initiative or that of a party, in order, among other things, to “facilitate a fair, open and accessible process and to allow effective participation by all parties, whether they are self-represented or have a representative”.
19Given the Tribunal’s authority, both it and the courts have established some guidelines for considering whether there are reasonable grounds for granting an extension of time to appeal. An applicant bears the onus of showing that “justice demands” an extension.
The respondent directed the Tribunal to its recent decision in 785372 Canada Inc. o/a Mapleview Homes, 2021 CanLII 20992 (On LAT) which in turn refers to the considerations applied by this Tribunal in re Allen, [2006] O.L.A.T.D. No. 443. Each relies on a decision of the Ontario Court of Appeal decision Frey v. MacDonald, [1989] O.J. No. 236. While the overarching consideration is one of whether justice demands an extension, these decisions indicate that the determination of whether there are reasonable grounds for an extension is to be guided by the following considerations: the length of the delay, whether there has been a “firm intention to appeal from the beginning”, whether the appeal is shown to have some merit and whether there is prejudice to the “other party”. The case law establishes that no one factor will be determinative, though some factors may be accorded more weight depending on the circumstances of the case.
EVIDENCE
20Neither of the parties in this matter provided affidavit or oral evidence. Each filed written materials and counsel for the HCRA filed written submissions. I have based this decision both on the materials filed and the arguments made by the parties. The following facts are not in dispute.
21Builders of new homes in Ontario are required to be registered/licenced. Until February 1, 2021, registration was administered under the ONHWPA by Tarion Warranty Corporation (“Tarion”). As of that date, the responsibility for administration and oversight of builders’ registration was assumed by the HCRA.
22Superior was registered as a builder under Tarion for eleven years, from October 28, 2010 until October 29, 2020, the date when the Proposal was issued.
23In March and April 2020, Tarion received warranty claims totalling $110,349.41 in respect of a house built by Superior. Superior denies that the allegations supporting the claim are valid and has been in litigation with the homeowner with respect to amounts Superior claims are owing to it.
24In April 2020, Tarion provided Superior conditions for its renewal. Among other things, these conditions increased the deposits required for Superior’s new construction. Mr. Palbod believes these conditions are unwarranted and unfair. He had several email and telephone conversations with Tarion personnel over the summer and fall of 2020 about the proposed conditions and the warranty claims.
25Prior to issuing the Proposal, Tarion advised Mr. Palbod that if he did not accept and sign back the new conditions for registration by October 15, 2020, Tarion might refuse Superior’s renewal of registration.
26When Tarion did not receive the signed the terms and conditions document by the deadline, Tarion issued and served the Proposal to refuse Superior’s renewal on October 29, 2020. The notice was sent by registered mail to Superior’s registered corporate address. The form of the Proposal clearly states on its front page that the registrant has a right of appeal, that there is a 15-day timeline to file an appeal, and that the Registrar has the right to refuse further registration without notice if no appeal is filed within the appeal period.
27Mr. Palbod signed the new conditions document on or about November 18, 2020 “out of duress” but did not file an appeal of the Proposal at that time.
28Mr. Palbod was in communication with Tarion on multiple occasions between October 29 and December 11 but did not file an appeal.
29On December 11, 2020, Tarion issued a Notice of Registration Refusal which was served on Superior again at its office address.
30On February 10, 2021 Superior approached HCRA regarding an extension of the time to appeal and on February 16 was advised that the HCRA Register would not consent to an extension of time. Superior appealed on March 7, 2021.
31In support of the motion for an extension of the appeal period, Mr. Palbod filed comments on each of the reasons for the Proposal and a letter of March 12, 2021 from a neurocognitive psychologist.
ANALYSIS
32In a motion for an extension of time to appeal, the Tribunal must consider whether the moving party can establish that the “justice of the case” requires an extension. The factors which assist in determining the justice of the case are those referred to above, and the failure to observe the statutory time limit must be convincingly explained.
Firm intention to appeal and length of delay
33The course of events between Superior and Tarion which address Superior’s intent to appeal are confusing. It is evident from the material before me that Superior in the person of Mr. Palbod disagrees with the allegations in the Proposal, and objects to the terms and conditions for Superior’s registration. It is also evident that over a period of many months Mr. Palbod continued to object to the terms and conditions established for Superior’s continued registration. I accept that he signed the conditions because he felt he had no other choice.
34Mr. Palbod contends that he/Superior did not receive either the Proposal or the final Notice of Registration Refusal until after the expiry of the 15 day appeal period and that when received, the timelines for filing a request for a hearing were not clear. While there is a possibility that he did not receive the Proposal on the date it was served at his corporate address, I do not accept that once it was received, the time limit for appeal was not clear, it having been prominently noted on the front page of the document.
35The parties agree that Mr. Palbod continued to communicate and negotiate with Tarion during the period between October 15, 2020, through the end of November when he signed the Terms and Conditions document and thereafter. As stated by Mr. Palbod in the Notice of Motion, “weeks were spent on emails and back and forth to understand what can be done and how to remedy the situation”. Even so, no appeal was filed. Tarion did not issue the Notice of Refusal on November 18 when it was entitled to do so, but waited until December 11, 2020, providing Mr. Palbod with additional time to make the necessary filing.
36In his Notice of Motion, Mr. Palbod states that “Eventually decision was made to wait and make the appeal to HCRA”. This statement clearly indicates a firm intention not to appeal to Tarion, but to wait until Tarion’s jurisdiction devolved to HCRA. As noted by the Respondent in its submissions, there was no intent to appeal indicated to HCRA until February 10, 2021, and no Notice of Appeal or Motion filed until March 8, 2021, approximately 4 months after the date an appeal was due. Both the stated intention not to appeal to Tarion and the length of delay, militate against a finding that the justice of this case favours an extension.
The merits of the appeal
37In his materials, Mr. Palbod provided some evidence that there are grounds for appealing one or more of the reasons for the Proposal. Superior argues that by accepting the terms and conditions, Tarion represented, and Superior understood, that its registration would be renewed. It strongly disagrees with the other grounds and makes arguments about each. If these could be substantiated by evidence, they may have some merit. For example, Mr. Palbod provided copies of letters to Tarion from satisfied customers which might address the last ground in the Proposal: that Superior is not competent or has poor after sales service. While this branch of the analysis has a low threshold, based on the evidence before me, I cannot in this motion determine on the evidence before me whether there is merit to an appeal of allegations that Superior’s is not able to be financially responsible, whether it has breached its warranties, or if it is in breach of its terms and conditions; all serious allegations.
The Justice of the Case
38As noted, Superior filed a letter from a psychologist attesting to Mr. Palbod’s “notable residual deficits of impaired attention, concentration and memory” as a result of a minor brain injury. In his materials Mr. Palbod notes that it is “uncaring” of Tarion not to consider the consequences of two serious accidents”.
39I do not discount the evidence of the psychologist. I recognize the nature of the impairment which, Mr. Palbod states in his Notice of Motion, affected his memory such that he “forgot to sign back the Condition of Registration” It is possible to speculate that it might have affected other of Superior’s actions or inactions. However, it is clear from the reasons given in the Notice of Motion that Mr. Palbod’s ultimate decision not to appeal was not the result of impaired attention, concentration or memory, but a calculated and conscious decision not to do so until authority transferred from Tarion to HCRA.
40In summary, considering the law and the facts and factors mentioned above, I conclude that the appellant has not satisfied the onus of establishing that an extension of the appeal period is warranted.
41Section 46 of the NHCLA allows Superior to reapply for a licence in one year from the date of revocation if it can demonstrate it has new or other evidence, or that material circumstances have changed.
DECISION AND ORDER
42I dismiss the appellant’s motion to extend the time limit for filing an appeal in this case.
LICENCE APPEAL TRIBUNAL
Harriet Lewis, Member
Released: May 20, 2021