Court Information

Court File No.: 14-0445

Ontario Court of Justice Provincial Offences Division

Tarion Warranty Corporation v. George Mikhael

Before: Her Worship Justice of the Peace D. Doelman

Date: July 15, 2015

Location: Belleville, Ontario (235 Pinnacle Street, Belleville, Ontario K8N 3A9)

Appearances

Mr. R. Taylor – Provincial Prosecutor

Mr. G. Mikhael – In Person

Offence

Section 22(1)(b) Ontario New Home Warranties Plan Act – act as vendor

Reasons for Judgment

Introduction

Good morning, Mr. Taylor.

Mr. Mikhael is present. We can deal with that particular matter for decision on today's date.

By means of introduction, this is a case of Tarion Warranty Corporation versus George Mikhael. When delivering judgments the Ontario Court of Appeal has given the direction to be brief, clear and understandable. Chief Justice Beverly McLaughlin has provided the insight that oral and written judgments at the simplest are an attempt to communicate. My endeavour is for this judgment to show the analytical path I have taken to reach my decision.

The case before the Court involves a charge against the defendant, George Mikhael. The information sworn on the 7th of October, 2014 alleges that Mr. Mikhael, on September 4th, 2013 acted as a vendor of a new home located at 634 Barcovan Beach Road, Carrying Place, at the City of Quinte West. Without being registered by the Registrar pursuant to Section 6 of the Ontario New Home Warranties Plan Act, R.S.O. 1990, c. O.31 as amended. The charge is contrary to Section 22(1)(b) of the Ontario New Home Warranties Plan Act.

Background

On September 4th, 2013 Mrs. Katherine Smith signed the agreement of purchase and sale for 634 Barcovan Beach Road, Carrying Place. Approximately six months later Robert and Katherine Smith sought warranty protection on their home. According to prosecutor, Exhibit One, Tabs Six, Seven and 13, information was gathered from April to June 2014 by inspector Aaron Sveda to help the couple ensure they "get the proper warranty and proper repairs" on their retirement home in Carrying Place, Ontario.

George Mikhael was the previous owner of the home. Prosecutor Exhibit One, Tab 12, includes a copy of the August 12th, 2014 email the defendant sent to Mr. Sveda. Mikhael stated the following:

"In September 2011 I had moved to Belleville, Ontario for employment purposes. While working in the area I had met my now wife and was engaged in February 2013. With the engagement I purchased the lot for the aforementioned address in May 2013 with the plan to build our home for marriage. We commenced building immediately and obtained occupancy in August 2013. Unfortunately while in the latter end of the building process I was notified by my place of employment that I would be transferred unexpectedly to the Arnprior area with a start date in November 2014."

The letter goes on to state that it was shortly after occupancy that Mr. Mikhael was contacted by an unknown female who wished to purchase the house since she grew up on the street. Mikhael and his fiancée determined it would be best to sell earlier than expected. The closing date was mid-October, shortly before they moved to the Ottawa area.

Appendix A includes a compilation of the timelines presented by both the crown and defence. There is no dispute as to any of these dates.

Disputed Facts

The crown argued that Mr. Mikhael acted as a vendor of a new, not previously occupied home and as such he was obligated by law to be registered pursuant to the Ontario New Home Warranties Plan Act. The crown believes that Mr. Mikhael ignored his change of status from his May 10, 2013 application for a permit to construct or demolish, Tab Three. Mr. Mikhael indicated he was the applicant as well as the owner. The name of the builder was optional according to the application.

Mr. Mikhael believes the case should be dismissed. He gave evidence that he had no need to register as a vendor because he built the home for his own use and occupied it. There was no change in status.

The critical issue to this case was: Did Mr. Mikhael occupy his home within the meaning and intent of the Ontario New Home Warranties Plan Act?

As always, the role of the prosecutor was to prove all essential elements of the charge beyond a reasonable doubt. There was an agreement by both parties, including the Court, that this charge is correctly categorized as being one of strict liability. As such if the crown is successful in making out the charge, the opportunity then shifts to the defendant to convince me that he exercised due diligence. The standard is to prove this beyond a reasonable doubt.

The Evidence

I find that all witnesses were credible according to the standards set out in R. v. White and R. v. Covert. As Part I of disclosure Mr. Sveda, the inspector for Tarion Warranty Corporation provided copies of his handwritten notes from his investigation as well as a transcript of the lengthy initial telephone conversation with Mr. and Mrs. Smith. Mr. Sveda indicated his capacity to remember the steps of his investigation and presented his evidence in a clear and straightforward manner. I believe that Robert Smith answered questions to the best of his ability. I sensed there to be an honest endeavour to tell the truth. I noted that he was not present for some of the interaction with Mr. Mikhael. The crown's case was somewhat hampered by the absence of any direct evidence by Mrs. Smith as well as the lack of showing of the video which she is believed to have taken when she first attended the house on September 3rd.

Mr. Smith was obviously shaken by the stress that has resulted since the purchase of the home.

Mr. Mikhael was both polite and professional throughout the trial. As a self-represented defendant he indicated his respect for the Court and knowledge of the process. There were no contradictions in his evidence and his statements were reasonable.

This is a rare case because there was no dispute as to the facts. There is an entire agreement that Mr. Mikhael bought property, had a home built and moved there until he moved to his next home in Kanata in October 2013.

The crown tried to reduce the credibility of Mr. Mikhael based on the M.T.O. records of his driver's licence. I accept the evidence of the defendant that after he sold his principle residence and before he moved into his new home he was indeed in limbo. Although it may not have been prudent to use the business address of Mr. Dewal, his soon to be father-in-law and builder of the home, it did provide a location to which mail could be directed. I find it reasonable that Mr. Mikhael changed his M.T.O. records to Carrying Place on July 24th even though occupancy was not official until August 21st. There is no evidence that Mr. Mikhael was ever difficult to locate. M.T.O. records indicated that Mr. Mikhael's last change of address was in November 2013 and this was a few weeks after the sale of his Carrying Place home.

I believe that all of the evidence relating to the licence address of Mr. Mikhael does not reduce the credibility of the defendant when it comes to the central issue of the case. I agree with the prosecutor that Mr. Mikhael was all over the map as to his addresses; Brighton, Ottawa, Belleville and Carrying Place. However, only one address was provided during the critical period from August 21st to September 4th. In fact, that address continued to be listed on M.T.O. records until November 21st. This does not impact negatively on the definition of occupancy.

Analysis of the Evidence

I will reduce my summary of the timelines provided by the crown and defence to two critical dates in 2013.

First, on August 21st a building official for Quinte West issued the occupancy permit to George Mikhael for 634 Barcovan Beach Road, Carrying Place. I make a finding that this is the first date I should consider for legal occupancy; Tab Three, prosecutor Exhibit One. This ruling complies with the Ontario Building Code Act, Section 11:

"Occupancy for use after completion, Paragraph 11(1). Except as authorized by the Building Code a person shall not occupy or use a building or part of a building that is newly erected or installed or permitted to be occupied or used until the requirements set out in this Section are met. 2002, c. 9, S. 18."

My mind does not turn to the number of times that Mr. Mikhael or his friends stayed here prior to this date.

Second, September 4th, the date specified in the Information on which Mr. Mikhael allegedly acted as a vendor. This is also the date of the agreement of purchase and sale signed by Katherine Smith and George Mikhael, Tab 11, Prosecutor Exhibit One. This essential element of the case has been made out.

Definition of "Vendor"

A more difficult and fundamental element of this case hinges on the Court's interpretation of "vendor". Reference to Tab One, Prosecutor Exhibit One is helpful. I relied on the definition according to the Ontario New Home Warranties Plan Act, R.S.O. 1990 c. O.31, last amended in 2009. It states that:

VENDOR: means a person who sells on his/her or its own behalf a home not previously occupied to an owner and includes a builder who constructs a home under a contract with the owner.

This definition leads to a search of the meaning of two more words. The Act defines as follows:

OWNER: means a person who first occupies a home from its vendor for occupancy and the person's successors in title.

HOME: in addition to the usual meaning does not include a dwelling built and sold for occupancy for temporary periods or for seasonal purposes.

The word OCCUPIED is not defined by the Act. Both crown and defence have noted this in their arguments.

Definition of "Occupy"

I have relied on three sources for the definition of occupy. First, Black's Law Dictionary, Sixth Edition 1990 states that:

OCCUPY: to take or enter upon possession of; to hold or keep the use; to possess; to tenant.

My second source, the Canadian Oxford Dictionary 2001 defines OCCUPY as:

reside in; be the tenant of; take up or fill space or time or place.

These two definitions are easy to understand and accept. Since the Act itself is lacking in definition of occupancy, my third source is case law. Judicial decisions do indeed provide the additional background context that is necessary for this case.

I make a finding that there is no time frame associated with the common meaning or interpretation of "occupied". Although I am satisfied that Mr. Mikhael occupied the home according to the common definition, it is the analysis of case law that is critical to this case.

In deciding this case I have read and re-read the case law presented. Taking into consideration the detailed evidence that describes Mr. Mikhael's circumstances and lifestyle, I believe that he did occupy his home on 634 Barcovan Beach Road, Carrying Place. The crown has not proven that he acted as a vendor of a home not previously occupied, therefore, the charge is dismissed.

Factors Which Distinguish This Case

After hearing the evidence of Mr. Mikhael I am of the view that his case is most similar to the defence submitted case, Tarion Warranty v. Samuel Joseph Oppedisano, 2007. Mr. Oppedisano was charged with acting as a vendor of a new home without being registered. This case is spot on with similarities to today's case. Like Mr. O, Mr. Mikhael obtained an occupancy permit and moved in. Both arranged for postal service and both ate and slept there and lived simply.

While Mr. O's lifestyle was described as somewhat Spartan, Mr. Mikhael's can be described as being a minimalist to the extreme. I believe Mr. Mikhael has provided two explanations why this was the case. Both are credible and reasonable. They can only be addressed in the context of the evidence. I note the defence Exhibit Two, the agreement of purchase and sale of the Folwell residence indicates that Mr. Mikhael included as chattels, fridge, stove, loveseat, coffee table, end tables, kitchen table and chairs and three bar stools.

Mr. Taylor, the prosecutor challenged the situation that Mr. Mikhael could occupy a home with no furnishings or kitchen appliances. While it would not be my choice to do so, clearly it was that of Mr. Mikhael. Firstly, Mr. Mikhael had sold most of the belongings from his principle residence. In July new furnishings were ordered to be delivered in September. He and his wife occupied the home after their wedding on September 21st. The items had not been delivered by September 4th. Defence Exhibit Three regarding receipts from Best Buy purchases. These are persuasive.

Secondly, Mr. Mikhael gave evidence that all his contents were in the basement of the home except for the mattress and those contents were used. This included tools to use to construct, weights, boxes, etcetera. He stated and I quote:

"I had weights that I continually used and operated. I had boxes in the basement."

It was not necessary that the prosecutor establish where Mr. Mikhael showered or ate in the morning. I am cognizant that today's lifestyle options are very flexible. I can surely take judicial notice of my son, a lawyer in Calgary. He keeps his suits at the firm. He eats, showers and works out at the firm. He also occupies an apartment.

Short Period of Occupancy

Another issue raised by the prosecutor was the short period of occupancy. According to the frame of the charge, basically it was two weeks from August to September. The Oppedisano case indicates a three month period of occupancy. Several of the cases take into consideration that the timeline would be a relevant factor to be taken into account in appropriately assessing occupancy within the meaning of the Act.

The defendant has explained the background for the time frame set by the crown, that is August 21st to September 4th. I make a finding that occupancy of Mr. Mikhael did not end when he signed the agreement of purchase and sale. To consider the timeframe in which the charge is fashioned actually distorts the time that the home was occupied. I make a finding that occupancy ended when Mr. Mikhael moved out of Barcovan Beach. That was sometime in October after he was married and after his wife moved in. The place of occupancy in this case was the only place Mr. Mikhael had to live. Guilt or innocence cannot be determined by imposing an arbitrary timeline that is not defined under occupancy.

Representation to Buyers

There is documentary evidence that Mr. Mikhael wrote in an email to Katherine Smith that this was a newly built home. The buyer must always beware. In a parallel situation Mr. O orally advised buyers that he had lived in the house and that it was one year old. I believe that Mr. Mikhael accurately stated that he owned a newly built home. At no time was evidence given that he said that this was a new home, never occupied. This was an inaccurate assumption made by Mrs. Smith based on her initial attendance and her interpretation of the contents of the home when she viewed it on September 3rd.

Review of Case Law

I have reviewed the seven cases by the prosecutor.

Tarion v. Kamal Dhakal (2001)

Tarion v. Kamal Dhakal (2001) decision, Tab Four, is persuasive as to the start date of occupancy. Paragraph 30 indicates that:

"Anyone moving into a new home prior to such authority being obtained must be said to do so at their own peril and however one might characterize such action it cannot said to be occupancy within the meaning of the Ontario New Home Warranties Plan Act, definition of vendor."

Another factor from this case relates to the size of the owner's footprints. Justice of the Peace Connacher describes Mr. Dhakal, paragraph 43 as having made a very light footprint in the home. He slept on an inflatable mattress. He did not use the kitchen appliances. He had sparse furniture on the main floor only. He did not change his driver's licence or mailing address. His occupancy was minimal and sporadic and there was no occupancy permit. These distinguished the case from that before the Court. Mr. Mikhael neither had nor used kitchen appliances, but he did change his driver's licence and mailing address.

Tarion v. Julie Stefko (2012)

Tarion v. Julie Stefko (2012) has few comparisons with the Mikhael case. Miss Stefko, although aware of her obligation to register as a vendor of a previously owned home decided to flip the home without moving in or obtaining an occupancy permit. I agree with the prosecutor's own submissions that this case is not directly at point in terms of the matters before the Court.

Carreiro v. Moreira (1998)

Carreiro v. Moreira (1998) is the oldest case provided. The General Division Judge, J. Gans in paragraph 12 stated:

"Having regard to its plain and ordinary meaning I am not persuaded, however, that Sidonio occupied the house prior to his decision to sell, as the word is used in the Act. I am of the opinion after considering the dictionary definitions provided me for occupancy to occur there must be an element of residency or tenancy. Simple possession does not and should not suffice. The absence of appliances such as a refrigerator suggest to me that Sidonio was merely sleeping at the house and not much more. Such does not create a residence for purposes of the Act."

In the analysis of occupancy I rely on key phrases from this case. And this was another case in which the Court was asked to consider occupancy without an occupancy permit. Mr. Mikhael had an occupancy permit. I make a finding that the lifestyle of young people such as Mr. Mikhael is much different than what was common in 1998. Occupancy was not determinative in the Mikhael case based on the presence of appliances. I am persuaded by Mr. Mikhael's submission that his style of occupancy was influenced both by his family background and his previous work experience.

I refer to my transcript of the submissions in which Mr. Mikhael asked that one consider what he referred to as a little story, and I certainly did not mind whatsoever. This is what Mr. Mikhael stated:

"My father immigrated to Canada. He is one of 13. He's the second oldest, the first one to come to Canada. In July 1976 he got a two bedroom apartment and brought over all his siblings and his parents. There were 13 people living in a two bedroom home with two mattresses. I ask you, did they not occupy that home? That's all they had to their name."

The second part of Mikhael's submissions that I find compelling is that:

"I used to work in a homeless shelter and I worked in Client Services and what I did was provide homes for those without much at all. So I brought them to places where all they had was a mattress and that's where they resided and they came to the shelter to eat their meals. Do they not occupy that space?"

R. v. Bernard Machado Construction and Woodworking (2001)

R. v. Bernard Machado Construction and Woodworking (2001) relates to the charge involving a change in status. The building permit was issued to Machado to occupy his owner. The home was sold before construction was completed. Justice of the Peace Carmichael ruled that although Machado had decided to build a home for his own personal use, he changed his status and had possessed, but not occupied the home. Her Worship relied, at Paragraph 20 on the plain and ordinary meaning of occupancy. She stated that there must be an element of residence or tenancy. I believe that Mr. Mikhael's case satisfies the concern raised by the Machado Construction case. The house was completed and legally occupied. It was Mr. Mikhael's primary residence while he continued to work in Quinte West.

R. v. Richard Parslow (2000)

The case, R. v. Richard Parslow (2000) is summarized as follows: February 1998, building permits stated not acting as vendor, no intention to sell. July '98, the owner listed the property. In March 2000 occupancy permit granted. Although Parslow moved in furniture the fall of 1998, two years prior to the occupancy permit, Justice of the Peace Watson ruled:

"The house was not occupied within the intent and meaning of the Act."

Mr. Mikhael had one residence with the freedom of choice to occupy it with a permit and furnish it according to his personal situation and values. It is not appropriate for this Court to dictate what contents confirm occupancy.

R. v. Repaci (2006)

My final reference will be to R. v. Repaci (2006) by colleague Justice Switzer. This was another case of originally planned to build and occupy. Mr. Repaci lived in a home a few months with somewhat sparse surroundings; no major appliance, no furniture except table and four chairs, no blinds. Paragraph Three states:

"the Court viewed this as camping. Merely sleeping at a residence and as such occupancy does not create residency for the purposes of the Act."

I believe the clear intent and actions of Mr. Mikhael distinguish this case from this one of my colleague.

Conclusion

In conclusion I believe that Mr. Mikhael accurately referred to his home as "our newly built home". To the buyer it appeared to be brand new, not gently used as Mr. Mikhael described in his evidence. The house was never put up for sale by erecting a For Sale sign or contracting a realtor. Mrs. Smith indicated interest in what appeared to be a very new home. At no time did Mr. Mikhael deceive the buyers that the house qualified under the Ontario New Home Warranties Plan. Catherine Smith signed the agreement of purchase and sale that included Item 13, the inspection section of the document:

"Buyer acknowledges having had the opportunity to inspect the property, etcetera."

I make a finding that the change in circumstances of Mr. Mikhael accepting a transfer from Hastings to Renfrew did not change the intention of Mr. Mikhael to reside at Barcovan Beach Road. It was impossible for Mr. Mikhael to predict when if ever his request for transfer would be granted. Life is one of flexibility. Job opportunities should not be a reason to charge someone in the context of occupancy under the New Home Warranty Plan Act.

I wish to thank Mr. Taylor for presenting this case in such a thorough and organized manner over the course of this trial. I note that Mr. Mikhael has the great responsibility of both defending and enforcing the laws of Ontario. It has been a challenging and thought provoking case.

Certification

I, Karen Lattimer, certify that this document is a true and accurate transcript of the recording of TARION v. GEORGE MIKHAEL in the Ontario Court of Justice Provincial Offences Division held at 235 Pinnacle Street, Belleville, Ontario K8N 3A9 taken from digital recording monitored by T. MacDonald which has been certified in Form 1.

Certified Court Clerk Reporter City of Belleville

Photostat copies of this transcript are not certified and have not been paid for unless they bear the original signature of Karen Lattimer, and accordingly are in direct violation of Ontario Regulation 587/91, Administration of Justice Act, R.S.O. 1990.

Transcript Ordered: July 15, 2015

Transcript Completed: August 31, 2015