York Regional Standard Condominium Corporation No. 1284 v. Tarion Warranty Corporation, 2024 CanLII 15879

Citation: York Regional Standard Condominium Corporation No. 1284 v. Tarion Warranty Corporation, 2024 ONLAT 14889 ONHWPA

Licence Appeal Tribunal File Number: 14889/ONHWPA

Appeal from a Decision of Tarion Warranty Corporation under the Ontario New Home Warranties Plan Act, R.S.O. 1990, c. O.31 to Denying the Appellants Claim for Warranty Coverage

Between:

York Regional Standard Condominium Corporation No. 1284

Appellant

and

Tarion Warranty Corporation

Respondent

and

Allegra On Woodstream Inc.

Added Party

MOTION DECISION

VICE-CHAIR: Colin Osterberg

Representatives:

For the Appellant: Erik Savas, Counsel

For the Respondent: Danielle Peck, Counsel

For the Added Party: Sarah Jamshidimoghadam, Counsel

HEARD in writing

OVERVIEW

1York Regional Standard Condominium Corporation No. 1284 (the "appellant") appeals the letter dated April 11, 2023 (the “Decision Letter”) issued by the respondent Tarion Warranty Corporation (“Tarion”) denying the appellant’s claim for major structural defect warranty coverage for its building at 24 Woodstream Boulevard, Woodbridge, under section 14(4) of the Ontario New Home Warranties Plan Act, R.S.O. 1990, c. O.31 (the “Act”).

2The hearing is scheduled to take place March 18, 2024.

3Tarion brings this motion for what it describes as “bifurcation” of the appeal so that a preliminary issue may be determined which it says may resolve the entire appeal. In effect, Tarion is asking that the hearing be adjourned and that in its place there be a one-day motion hearing for the purpose of determining whether the appellant’s appeal should be dismissed on the basis that the warranty claims that form the basis of the appeal are covered by a settlement agreement entered into by the parties.

4The appellant opposes Tarion’s motion and argues that the hearing should proceed as scheduled.

ISSUES

5The issue in dispute in this motion is whether the Tribunal should order an adjournment of the hearing and order that a hearing of Tarion’s motion to dismiss be heard in its place.

RESULT

6I find that the respondent has failed to demonstrate that the hearing should be adjourned. In my view the most efficient, proportional, and timely process is for the adjudicator at the hearing to determine whether the appeal is precluded by the settlement agreement as a preliminary issue at the commencement of the hearing.

7Subject to the Tribunal’s availability, a case conference will be scheduled in order to discuss the process to be employed at the hearing with respect to the preliminary issue relating to the settlement agreement.

ANALYSIS

8This appeal was filed May 9, 2023. Case conferences were held June 23, 2023 and August 29, 2023. At the latter case conference, the date for the hearing was scheduled, with the consent of the parties, to commence March 18, 2023. The issue set out in the Case Conference Report and Order dated August 23, 2023 was whether the appellant’s building is eligible for major structural warranty coverage. It was during this case conference that the builder was added as a party to the appeal.

9According to Tarion, when it was preparing its documentary disclosure for the hearing, it found that the claims items that are in dispute in this appeal, and which were the subject of Tarion’s Decision Letter, were included in the first-year and second-year warranty claims and had been resolved by way of settlement agreements. Of note, the settlement agreements are between the appellant and the added party. Tarion is not a party to the settlement agreements although it did acknowledge the agreement and agreed to extend or abridge statutory timelines to accommodate the agreement.

10Tarion does not explain why a major structural defect claim, which is in issue in this appeal, was resolved as part of the settlement of first and second-year warranty claims.

11Despite the issuance of the Decision Letter, the appellant’s appeal, the participation of both Tarion and the added party in two case conferences where the issues in the appeal were agreed and dates for hearing set, neither Tarion nor the added party ever raised the allegation that the claims that are the subject of the appeal had been settled and that Tarion would be taking the position that the appellant was thereby barred from pursuing this appeal.

12Tarion argues that the adjournment of the 10-day hearing and conducting a 1-day motion hearing instead will avoid unnecessary time, effort and costs if it is determined that the settlement prevents the appeal from proceeding. Tarion presumably agrees that the adjournment will not avoid those negative consequences if it is determined that the appeal should proceed.

13In the alternative, Tarion requests a further case conference to discuss the issue it is now raising.

14The appellant opposes the relief requested by Tarion.

15The appellant says that the appellant submitted its claim for major structural defect warranty coverage in October 2020. The appellant obtained engineering reports, including one which was commissioned after the August 2023 case conference and which is alleged to identify serious, threatening structural defects in the underground parking facilities which is the subject of this appeal.

16After the appellant had already completed its disclosure as ordered by the Tribunal and obtained the latest of its engineering reports, Tarion advised the appellants that it had located settlement agreements which precluded the appeal. The date of this notification is not set out in the materials of the parties but appears to have occurred in either December 2023 or January 2024.

17The appellant points out that the position with respect to the settlement agreements had never been raised by either Tarion or the added party since the appellant submitted its claim for warranty coverage for major structural defect in October 2020.

18Further, on January 12, 2024, Tarion has served its engineering report on the appellants. In order to comply with the Case Conference Report and Order, the appellant was then required to serve any responding report before February 12, 2024.

19This motion was not served until January 29, 2024.

20The appellant makes the point that, by failing to bring this motion, or to even raise the allegation that the matter has been resolved, until after the appellant has already incurred significant expenses over the course of almost three-and-a-half years, Tarion and the added party cannot now reasonably take the position that it should be granted an adjournment of the hearing so that it can save its own costs of preparing and attended the ten-day hearing in March so that it can have its motion to dismiss, which it may not even win, heard.

21The appellant does not, at this time, admit the authenticity of the settlement agreement and does not admit that the added party is in compliance with the terms of that agreement. Further, the appellant does not agree that the settlement agreement, if proven, and if it is proven that the added party complied with its obligations thereunder, would foreclose the appellant’s warranty claim or this appeal.

22I am not satisfied that the hearing should be adjourned.

23Rule 16.3 of the Licence Appeal Tribunal Rules, 2023 sets out the factors the Tribunal will consider when an adjournment is requested. I have considered those factors and in particular find as follows:

i. The appeal was filed May 9, 2023, and the conduct of the hearing has been delayed by the adjournment of a previous case conference. The length of time the matter has been before the Tribunal and the fact that there has been some delay at the request of the parties mitigates against the granting of an adjournment.

ii. The appellant alleges that it would be prejudiced as the result of an adjournment. The needed repairs are extensive and will be expensive. The appellant has implied that there is a safety risk to a delay in repairs. The appellant has spent time and resources preparing for the hearing and has scheduled witnesses. I am satisfied that the appellant would be prejudiced as the result of a delay in the hearing.

I am not satisfied that Tarion or the added party would be prejudiced by proceeding with the hearing and find that such prejudice as may occur is the result of Tarion’s failure to raise the allegation relating to the settlement agreement in a timely fashion. Tarion will be able to raise all of its defences to the appeal, including that the subject matter of the appeal has been settled, if the appeal goes ahead as scheduled.

iii. The parties have been aware of the date for the hearing since August 29, 2023 and only brought this motion on January 29, 2024. The information on which the motion rests has been in the hands of Tarion and the added party since the appeal was commenced and this issue should have been raised earlier. Moreover, it appears that Tarion failed to bring this motion for some time even after it determined to take the position that the settlement agreements applied. The adjournment was avoidable.

iv. I am not satisfied that a determination of the issue raised by Tarion is likely to result in rendering the remainder of the hearing unnecessary. The resolution of a first-year or second-year warranty item, on the basis of criteria for entitlement, both factual and legal, which are different than those relating to a seven-year warranty claim, may not preclude the latter claim. Further, the determination of whether the settlement agreement applies to the current appeal may require evidence to be called which would then have to be presented again should the matter then proceed to a separate hearing.

v. Tarion has not explained why the settlement issue cannot be heard as a preliminary motion followed immediately by the hearing. It says that the motion would only take one day. Given that the issue is a narrow one, it may take less time than that.

Conclusion(s)

24I find that the respondent has failed to demonstrate that the hearing should be adjourned. In my view the most efficient, proportional, and timely process is for the adjudicator at the hearing to determine whether the appeal is precluded by the settlement agreement as a preliminary issue at the commencement of the hearing.

25Subject to the Tribunal’s availability, a case conference will be scheduled in order to discuss the process to be employed at the hearing with respect to the preliminary issue relating to the settlement agreement.

ORDER

26The respondent’s motion for an adjournment of the hearing is dismissed.

27Subject to the Tribunal’s availability, a case conference will be scheduled prior to the hearing.