Motion by Diamond Luxury Builders Inc. for an Order to extend the time to file an Appeal to the License Appeals 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:
Diamond Luxury Builders Inc.
Applicant
-and-
Registrar, Home Construction Regulatory Authority
Respondent
DECISION and ORDER ON MOTION
ADJUDICATOR:
Harriet Lewis, Member
APPEARANCES:
For the Applicant:
Imran Ahmed, self-represented
For the Respondent:
Tim Snell, Counsel
Heard by Teleconference
April 16, 2021
OVERVIEW
1Diamond Luxury Builders Inc. (“Diamond”) has brought a motion asking the Tribunal to extend the time to appeal a Notice of Proposal (“the Proposal” ) issued by the Registrar under the Ontario New Homes Warranty Plan Act (“the ONWPA Registrar” and the “ ONHWPA “ ).
2The Proposal is to refuse Diamond’s registration as a builder. It was issued on or about January 4, 2021. There is one reason given for the refusal: that Diamond “cannot reasonably be expected to be financially responsible”. Evidence for that conclusion is that Diamond “has failed to provide security as required by s.9(3)4.1 of Regulation 892 as requested by correspondence dated September 11, 15, October 9, 26, November 30 and December 7, 2020”.
3Tarion Warranty Corporation (“Tarion”) attempted to serve the Proposal on Diamond by registered mail at Diamond’s corporate address. Canada Post was not able to confirm delivery and the Proposal was returned to Tarion on January 11, 2021. Tarion re-sent the Proposal to the home address of the principal of Diamond, Imran Ahmed (“Mr. Ahmed”), and service was confirmed on February 1, 2021. According to the Proposal and the terms of the ONHWPA, Diamond then had 15 days to appeal the Proposal. Diamond did not file a Notice of Appeal within the time noted on the Proposal.
4On February 1, 2021, authority over the registration of builders in Ontario was transferred from Tarion to the Registrar of the Home Construction Regulatory Authority (the “HCRA Registrar”).
5On March 22, 2021, the HCRA Registrar sent a final Notice of Refusal to Grant a License to Mr. Ahmed by email, stating that since Diamond had failed to file an appeal/request for a hearing within the 15-day appeal period, the Proposal was carried out and Diamond’s application for a builder’s license was refused.
6On March 23, 2021, 1 day after the final Notice of Refusal and 36 days after the expiry of the 15-day appeal period, Diamond filed both a Notice of Appeal and a Notice of Motion to extend the time to file the appeal.
7The HCRA Registrar has declined to consent to the extension of the time for Diamond to file a Notice of Appeal and asks that this motion be refused. In the alternative, it asks that if Diamond’s request for a hearing is granted, that the applicant remain un-licenced until the conclusion of the Tribunal proceedings.
8This Tribunal may extend the time for requesting an appeal hearing on a proposal if it is satisfied that there are reasonable grounds for the extension. The onus is on the applicant Diamond to establish those grounds.
ISSUES
9Has the applicant established reasonable grounds to support an extension of the time to request a hearing? If so, should its current un-licensed status continue until such appeal is decided?
DECISION
10For the reasons below, I find that grounds for an extension have been established and Diamond’s motion to extend the deadline to request a hearing is granted.
THE LAW
11Each of the ONHWPA and the NHCLA provide that no person may act as a vendor or a builder unless they are registered/licenced under the applicable Act. A corporate applicant, such as Diamond, is entitled to a licence if it and its officers and directors meet certain criteria as established in the legislation.
12Each of the Acts also provide that their 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.
13If 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.
14If 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.
15This Tribunal has jurisdiction to extend the 15-day time limit. The Licence 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.”
16This Tribunal 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.
17The respondent directed the Tribunal to the recent decision of this Tribunal 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. The overarching consideration is whether the justice of the case demands an extension, but 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”. These factors are not exhaustive—the Tribunal may consider any other factor that it considers relevant. Moreover, no factor takes precedence over the others, and the weight each is accorded in an analysis may change from case to case.
EVIDENCE
18As noted, builders are required to be registered, and until February 1, 2021, registration of builders under the Act was administered by Tarion. Diamond applied through Tarion for registration in late January or early February 2020, approximately one year prior to the events leading to this motion.
19The principal of Diamond, Imran Ahmed, (“Mr. Ahmed”), provided sworn testimony in support of Diamond’s motion. Neither he nor Diamond were represented by counsel, nor do they appear to have had counsel to assist in the registration process. Tarion was not represented at the hearing and no sworn evidence was given in support of the motion. The respondent’s evidence consisted of copies of the email correspondence between Tarion employees and Mr. Ahmed between July and December 2020.
20According to Mr. Ahmed, on or about July 27, 2020 Diamond received Tarion’s “Terms and Conditions of Registration”, a copy of which was included in Diamond’s materials. The conditions allowed for the construction/sale by Diamond of up to 36 homes and also contained a requirement that it provide evidence of security in the amount of $720,000, subject to increase, depending on the number and cost of the homes to be built. Mr. Ahmed described the amount of this security as totalling $900,000.00. Diamond was initially given thirty days to provide evidence of the security. Diamond asked for more time to arrange the security because, Mr. Ahmed said, the bonding companies were not responding to its enquiries; a delay which Mr. Ahmed attributed to general business delays arising as the result of the COVID pandemic.
21Mr. Ahmed testified that Diamond has now obtained the security required by the Terms and Conditions, has bought building supplies and has put other arrangements in place to begin building.
22The copies of e-mail correspondence between a Tarion underwriter and Mr. Ahmed were provided in the Respondent’s record. These reflect the course of discussions between the parties throughout the autumn of 2020 around the financial conditions being required of Diamond. Communication from Tarion to Mr. Ahmed in September 2020 is clear that approval of registration was contingent on the provision of evidence of the requested security. No other conditions were set. The latter correspondence also stated that if Tarion did not hear from Diamond by October 15, 2020, ‘the Registrar may issue a Notice of Proposal”. This was reiterated in another note from Tarion to Mr. Ahmed on October 9, 2020. On October 26, 2020 Mr. Ahmed was advised that Tarion was about to take a decision regarding Diamond’s application.
23On October 26, 2020, Mr. Ahmed wrote back to Tarion advising that he had spoken to his bonding company and been told that it would take 10 to 14 business days to process the bond. However, the notes of November 30 and December 7 from Tarion to Mr. Ahmed filed by the Respondent are clear that notwithstanding Mr. Ahmed’s statements, no bonding arrangements were put into place.
24In the e-mail to Mr. Ahmed of December 7, 2020, Tarion wrote “Following our last conversation and the uncertainty surrounding financing, we kindly request that you withdraw the application and reapply when financing and construction plans are certain.”
25Mr. Ahmed did not withdraw Diamond’s application. He testified that he did not and does not want to withdraw Diamond’s application or create a new corporate entity, (as was suggested by the Respondent’s counsel in cross-examination).
26Diamond’s lease on its registered corporate office expired or was terminated at the end of December 2020. Mr. Ahmed said that at that point he decided to conduct Diamond’s business from his home. He also testified that around that time he had to take a trip abroad with his wife because of the illness of a member of her family. As a result, the attempted service of the Notice of Proposal on Diamond at its (former) corporate address was not received until re-served on Mr. Ahmed’s home address on or about February 1, 2021. Mr. Ahmed said that he contacted the Registrar when the Proposal was received, but at that time or shortly thereafter, he contracted the corona virus and was unable to follow-up or attend to his business affairs.
ANALYSIS
27As mentioned, 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 explained.
Firm intention to appeal and length of delay
28The evidence is clear that the Notice of Appeal was not filed within the statutory 15-day period. However, it was filed immediately after the Final Notice was received, just over a month later. The evidence of Mr. Ahmed’s intentions throughout the months leading up to the Proposal illustrate an ongoing intention to satisfy the conditions for registration imposed by Tarion. i.e. to satisfy the security requirement and have Diamond registered. He declined to withdraw Diamond’s application when withdrawal was suggested to him; a fact which speaks to his strong intention to see the application through to completion. His evidence that he contacted HCRA when he received the Proposal was not contradicted. Mr. Ahmed explains his failure to file a request for a hearing/appeal within the statutory period as being the consequences of his illness. While no independent evidence of illness was provided, his immediate action following the receipt of the Final Notice demonstrates a continuing intention on his part and leads me to believe that he was intent on keeping Diamond’s application alive through an appeal.
29In its written response to Diamond’s motion materials, the HCRA calculates that Diamond’s 15-day statutory appeal period expired on February 20, 2021. It acknowledges receipt of the Notice of Appeal on March 23. While In its materials it calculates that there was no intent to appeal for “nearly three months after the due date of the appeal”, that date is based on the un-successful attempt to serve Diamond at the listed address of its corporate headquarters. I find that the actual delay in requesting a hearing in this case was 36 calendar days, or just over 1 month past the statutory deadline. I find that the relatively brief period of delay, as well as the appellant’s firm intention to appeal during the period of delay, are both factors that weigh in favour of granting an extension.
Prejudice to other parties
30The Respondent admits that there has been no prejudice to the Registrar caused by the delay in filing Diamond’s appeal. Because this is an initial application for registration, neither is there any prejudice to consumers. It was not argued, and I have no basis on which to find, that in these circumstances there is any prejudice to the public interest in general. The Respondent, in declining to consent to the motion, asked that if the Tribunal should grant the request for a hearing, that the applicant remain un-licenced until the conclusion of the Tribunal proceedings. In making such an order, any potential prejudice to the public will have been addressed.
The merits of the appeal and the justice of the case
31The proposal alleges that Diamond cannot reasonably be expected to be financially responsible in the conduct of its undertakings or in addition or in the alternative, that it has failed to comply with the requirements of s.9 of Regulation 892, specifically that it failed to provide requested security. Counsel for the Respondent in written submissions argues that Diamond’s failure to provide financial security over the period between July 31, 2020 and December 7, 2020 illustrated that “the Applicant failed to take proper interest in providing the requisite documents to obtain a licence.” While the Respondent’s position may prevail at the hearing on the merits with a full record, Diamond has an arguable case that there is no evidence of lack of financial fitness. The threshold for this branch of the analysis is low and I find that Diamond has established that its appeal is not without merit.
32Balancing the factors, I find in this case that to deprive Diamond of the opportunity to have a tribunal hearing on the matter in issue would result in an injustice. I conclude that the time to file a Notice of Appeal should be extended for a further short period. In coming to this conclusion, I am persuaded by the relatively brief period of delay, as well as a lack of prejudice to the Registrar. Perhaps more importantly, I am satisfied that the appellant maintained a firm intention to appeal the Proposal.
33This motion is not a hearing on the merits of the Proposal, and I know of no authority to order Diamond to be licensed pending the full hearing. There is no reference in the Act to a provision that allows a proposed builder to enjoy interim licensing pending a hearing by the Tribunal, or that confers a discretion on the Tribunal to order interim licensing. To do so, would undermine the purpose of the hearing. Inasmuch as Mr. Ahmed is entitled to have his appeal heard, the HCRA Registrar is entitled to test Diamond’s evidence about the required security or on other matters relevant to whether, and on what basis, the Terms and Conditions can be fulfilled.
DECISION AND ORDER
34I allow the appellant’s motion.
LICENCE APPEAL TRIBUNAL
Harriet Lewis, Member
Released: May 21, 2021