Overview
[1] The appellants, Caruk-Hall Construction Inc., James Caruk, and Daniel Hall, were found guilty of acting as the builder of a new home without being registered under s. 6 of the Ontario New Home Warranties Plan Act, failing to notify the Warranty Corporation of the build, failing to pay the prescribed fee, and, with respect to the directors of the company, knowingly omitting to do these things. They have appealed from the decision of Justice of the Peace K. Valentine dismissing their application for a stay of proceedings on the basis that their s. 11(b) Charter rights to be tried within a reasonable time were infringed. In the event that this ground of appeal is unsuccessful, they also allege that she erred in finding them guilty of these offences and in the quantum of fines that she imposed at their sentencing.
Section 11(b) of the Charter
Brief Chronology [1]
- August 6, 2019: informations charging the appellants are sworn.
- November 8, 2019: disclosure is provided at the first appearance. The prosecutor encouraged the appellants’ agent to reach out if there were any problems with disclosure. The agent requested a January return date, rather than the December date the prosecutor suggested.
- January 20, 2020: the Crown expected the matter would be adjourned to April 2020 for a Judicial Pre-Trial (“JPT”) with a s. 11(b) waiver; in the absence of the waiver, the matter was adjourned to February 14, 2020.
- February 14, 2020: the parties scheduled a JPT for April 25, 2020, with a s. 11(b) waiver; that JPT did not happen because of the COVID shut down. On May 19, 2020, the Ontario Court of Justice (“OCJ”) extended the adjournment of proceedings but indicated that judicial pre-trials could proceed by audio or video conference. [2]
- May 27, 2020: the court emailed the prosecutor about the cancelled JPT to ask whether one was still required and offered dates between June 23 and July 28, 2020. [3]
- June 1, 2020 – February 24, 2021: the prosecutor wrote defence counsel numerous times offering numerous potential JPT dates. With one exception (a date both parties agreed upon but which the defence did not ultimately schedule), the prosecution’s overtures were a one-sided attempt to move the matter along.
- March 11, 2021: having been unsuccessful in scheduling a JPT, the prosecutor requested that the matter be brought forward to be spoken to in court.
- July 23, 2021: the matter is addressed in court at the prosecutor’s request, who indicated the need to set a JPT because “[w]e’ve had a year and the defence hasn’t done anything to date.” Defence counsel asked for the matter to be adjourned and resisted the prosecutor’s request to have the JPT scheduled on a peremptory basis at the next appearance.
- September 10, 2021: the parties agreed to adjourn for resolution discussions and to schedule a JPT if necessary.
- October 15, 2021: the parties adjourned for continued resolution discussions.
- December 21, 2021: the parties adjourned for continued resolution discussions.
- March 4, 2022: the parties adjourned for continued resolution discussions.
- March 8, 2022: the parties scheduled a JPT.
- June 1 – November 23, 2022: three JPTs were either adjourned or truncated by the defence. When the fourth and final JPT concluded, the Crown indicated it would call three witnesses and need two days of trial time; the defence indicated that it would call 14 witnesses and need 10 days of trial time. The parties were offered trial dates of January 10, 11, 12, 13, 23, 24 and February 6, 7, 8, 9, 10, 2023, which the Crown viewed as sufficient to complete the matter. Ultimately, because of defence counsel’s availability and the size of the defence witness list, the parties scheduled 14 days between February 12 and June 12, 2023.
[2] Once the trial began, the defence sought the following adjournments:
- before arguing the 11(b) motion on January 23, 2023;
- before making opening arguments on February 13, 2023;
- relating to disclosure that the presiding justice found that counsel ought to have been aware was missing on February 16, 2023;
- due to illness on April 5, 2023;
- to prepare for a motion for non-suit on May 9, 2023;
- to prepare for closing submissions on June 8, 2023; and
- to prepare submissions on penalty on August 17, 2023.
The Presiding Justice’s Reasons on the s. 11(b) application
[3] The total delay in this matter was 46 months and 6 days. The presiding justice deducted 2 months, 1 day as having been expressly waived by the defence and an additional 15 months as delay caused by the defence, leaving a net delay of 31 months and 6 days. From that, she deducted 15 months and 8 days as a discrete exceptional circumstance relating to the COVID courts shut down. She reasoned that the public Notices to the Profession were instructive in determining appropriate start and end dates for calculating the impact of the COVID-19 pandemic on court closures. She concluded that July 23, 2021 was a reasonable time for this matter to return to court, given the large number of other cases that would need to be spoken to, and found that the prosecution had done what it could to attempt to mitigate pandemic delay. As the relevant delay, 16 months, was under the 18-month Jordan ceiling, she dismissed the s. 11(b) application. In doing so, she noted:
the time it took to get these matters to trial is not simply a result of the co-mingling of both defence delay and the exceptional circumstances caused by the COVID-19 pandemic. Instead, the evidence discloses that most of the delay was caused solely or directly by the conduct or inaction of the defence to move the matter forward. The pandemic provided the backdrop for this to occur because court appearances, remote or in person, were suspended during this time.
The Parties’ Positions
[4] The appellants submit that the presiding justice erred in the time she apportioned as defence delay and for exceptional circumstances due to COVID. Their primary submission is that if even two months in this matter were incorrectly characterized as defence delay or exceptional circumstances, they are entitled to a stay. The respondent submits that the presiding justice correctly identified the conduct of the defence as the major reason why the trial was not completed within the Jordan timelines and deducted an appropriate period for pandemic delay.
Legal Principles
[5] The key principles here are well understood. In R. v. Jordan, 2016 SCC 27, the Supreme Court of Canada set out the framework for analyzing whether a defendant's right to be tried within a reasonable time has been violated and established an 18-month ceiling for matters prosecuted in this court, above which any delay is presumptively unreasonable. The burden then shifts to the Crown to demonstrate exceptional circumstances that justify the delay.
[6] On a s. 11(b) application, the court must:
(i) calculate the total delay from the charge to the actual or anticipated end of trial;
(ii) subtract defence delay from the total delay, which results in the “Net Delay”;
(iii) compare the Net Delay to the presumptive ceiling;
(iv) if the Net Delay exceeds the presumptive ceiling, it is presumptively unreasonable. To rebut the presumption, the Crown must establish the presence of exceptional circumstances. If it cannot rebut the presumption, a stay will follow;
(v) subtract delay caused by discrete events from the Net Delay (leaving the “Remaining Delay”) for the purposes of determining whether the presumptive ceiling has been reached;
(vi) if the Remaining Delay exceeds the presumptive ceiling, the court must consider whether the case was particularly complex such that the time the case has taken is justified and the delay is reasonable;
(vii) if the Remaining Delay falls below the presumptive ceiling, the onus is on the defence to show that the delay is unreasonable.
[7] “Defence delay” has two components: delay waived by the defence and delay caused solely by the conduct of the defence: Jordan at paras. 61-63. In R. v. Cody, 2017 SCC 31, the court clarified that the only defence delay that is deductible as “delay caused solely by the defence” is delay that is: (i) solely or directly caused by the accused person; and (ii) flows from defence action that is illegitimate in that it is not taken to respond to the charges. Inaction that is not legitimate may also amount to delay: Cody at paras. 32 and 42. Where the court and the Crown are ready to proceed but the defence is not, the resulting delay should also be deducted: Jordan at para. 64.
COVID Exceptional Circumstances
[8] Where access to the courts has been limited by disruptions to court operations caused by the pandemic, the attributable delays will generally be treated as discrete exceptional circumstances: R. v. Kirkopoulos, 2024 ONCA 596 at para. 44; R. v. Agpoon, 2023 ONCA 449 at paras. 33-34. But, even in the case of pandemic-related delay, the Crown must make reasonable efforts to mitigate the delay resulting from COVID-19 and delay that could reasonably have been mitigated may not be subtracted: R. v. Coates, 2023 ONCA 856 at para. 42; Jordan at para. 75.
Standard of Review
[9] Characterizations of periods of delay and the ultimate decision concerning whether delay has been unreasonable are reviewed on a standard of correctness. Deference is owed to a trial judge's underlying findings of fact: R. v. Grant, 2022 ONCA 337 at para. 30; R. v. Pauls, 2020 ONCA 220 at para. 40. In R. v. L.L., 2023 ONCA 52 at para. 21, the Court of Appeal noted that judges have “knowledge of the culture at the court location” they preside in and are able to make findings as to whether COVID impacted scheduling. Similarly, in R. v. Coates at para. 54, the court held that the trial judge was in the best position to evaluate the reasonableness of the steps that the Crown took to ameliorate delay.
Application of Legal Principles
Defence Delay
[10] There are two types of defence delay: delay waived by the defence and delay caused solely or directly by the conduct of the defence. In this case, the presiding justice carefully reviewed the transcript of each appearance, the audio of appearances where no transcripts were provided, and the extensive application records filed by the parties, which contained all relevant communications relating to scheduling. She attributed defence delay to the following periods:
- January 20 to February 14, 2020, because defence counsel delayed setting a JPT despite the court and prosecutor being available;
- February 14 to April 15, 2020, for the same reason;
- July 23, 2021 to September 10, 2021, because when the matter was first spoken to in court after the pandemic closure, the prosecutor sought to schedule a JPT but the defence sought an adjournment;
- June 1 to November 23, 2022, because three of the four scheduled JPTs were either adjourned or not meaningfully participated in by the defence;
- January 13 to February 13, 2023, because defence counsel did not accept the first offered trial dates;
- February 16 to June 12, 2023, because of the number of trial days that were adjourned at the defence request and because both parties ultimately only called three witnesses; if the January dates had been accepted, the matter would have concluded by February 16, 2023.
[11] I agree with the presiding justice’s assessment that at least this much time should be attributed to defence delay. Her factual findings about the effect of the defence conduct and inaction here are well-supported by the record.
Pandemic Delay
[12] Remote court appearances in Provincial Offences Act prosecutions began on January 25, 2021. Because of the conduct or inaction by the defence referred to above, the prosecutor contacted the court on March 16, 2021 to have the matter put on a docket; it was ultimately spoken to in court on July 23, 2021. When it was, defence counsel resisted the idea that a JPT should be set peremptorily on the next appearance.
[13] The presiding justice deducted the period from April 15, 2020 to July 23, 2021 as an exceptional circumstance relating to the pandemic, finding: “[i]t is not unreasonable for these matters to return to court on July 23rd, 2021, given the large number of cases that would need to be returned to the court dockets, not just across the City of Toronto but across the province.” She did so after reviewing the relevant, evolving Ontario Court of Justice Practice Directions that were issued during this period, her knowledge of the local courthouse, and after considering binding authority from the Court of Appeal for Ontario as to what factors must be considered with respect to this issue. She found as a fact that the prosecution had proactively tried to mitigate the delay caused by the pandemic.
[14] I would not interfere with the presiding justice’s apportionment of delay relating to the pandemic. However, in the same way that the presiding justice intimated, I will observe that much of this period could equally be characterized as delay attributable to the defence. On either view, I am satisfied that the presiding justice correctly found that the net delay in this matter was below the 18-month Jordan guideline and dismissed the application.
Appeals from Conviction
Standard of Review
[15] Pursuant to section 120 of the Provincial Offences Act, to succeed on an appeal from conviction, an appellant must establish that the decision was unreasonable or not supported by the evidence, based upon an error of law, or based on an error that amounts to a miscarriage of justice. An appeal judge is not entitled to simply re-try the case. Deference must be accorded to the trial judge’s assessment of the evidence: R. v. Wittwer, [2002] O.J. No. 1333 (Ct. J.) at para. 34 and R. v. Fagbemi, [2000] O.J. No. 2550 (Ct. J.) at para. 15.
The Act: Relevant Legal Principles
[16] The appellants’ potential liability for these offences turned on the factual issue of whether Caruk-Hall Construction Inc. was a “builder” as defined by the Ontario New Home Warranties Plan Act, RSO 1990, c. O.31. It defines “builder” as
a person who undertakes the performance of all the work and supply of all the materials necessary to construct a completed home, whether for the purpose of sale by the person or under a contract with a vendor or owner.
[17] At the relevant time, section 6 of the Act provided that “No person shall act as a vendor or a builder unless the person is registered by the Registrar under this Act.” At the relevant time, section 12 of the Act provided that “[a] builder shall not commence to construct a home until the builder has notified the Corporation of the fact, has provided the Corporation with such particulars as the Corporation requires and has paid the prescribed fee to the Corporation.”
[18] The Act established a mandatory program requiring the builder of a new home in Ontario to which the Act applied to register with the Warranty Corporation and to enrol each home they build under their registration number. Failure to register under section 6 or enrol under section 12 constituted an offence under section 22(1). Directors and officers of a corporation who knowingly concurred in such an offence were liable under s. 22(2).
[19] The Court of Appeal for Ontario has characterized the Act as “consumer protection legislation aimed at protecting purchasers of new homes in Ontario”: Tarion Warranty Corporation v. Kozy, 2011 ONCA 795. It similarly described the major purpose of the Act as to “protect purchasers of new homes by requiring that vendors and builders be screened for financial responsibility, integrity and technical competence.”
[20] In order to effect this purpose, “a broad and liberal interpretation” of the Act’s provisions is required, specifically but not limited to its definition of “builder”: Kozy and Ontario New Home Warranty Program v. Lukenda (1991), 2 O.R. (3d) 675 (Ont. C.A.); JRC Developments Ltd. v. Tarion Warranty Corp., 2010 ONSC 6205 (Div. Ct.) at para. 4. Ultimately, whether someone is a “builder” involves consideration of who was responsible for completing the essential elements of the home and who had control over the construction of the home.
Application of Legal Principles
[21] The presiding justice found as a fact that Caruk-Hall Construction Inc. undertook to perform all the work and supply all the materials necessary to construct a completed home under a contract with Andrew and Jessica Maciel and to build their home. She made this finding on the basis of the following evidence:
- Andrew Maciel and Jessica Maciel owned the property in question;
- neither had any experience building a home and did not know any trades or contractors;
- Mr. Hall and Mr. Caruk were directors and officers of Caruk-Hall Construction Inc. who entered into a contract with the Maciels on April 8, 2016;
- the proposed budget in the appellants’ initial estimate provided for the foundation, framing, roofing, insulation, drywalling, plumbing, electrical work, HVAC, flooring, windows, and doors, which the parties accepted at trial made up the essential elements of a completed home;
- Caruk-Hall expressly accepted responsibility in the construction agreement for the work and materials of trades and suppliers and agreed to warrant all labour and materials for a period of two years from the date of substantial performance of the work;
- Mr. Caruk was the main contact with trades;
- HVAC, plumbing, electrical, insulation, building envelope and exterior stonework trades were sourced and supervised by Caruk-Hall;
- Mr. Caruk or a designate met the building inspector on site at different stages of the project;
- the site was closed, with boarding around the property embossed with the Caruk-Hall brand;
- the written contract provided that the “Contractor” agreed to supply all labour, materials, and supervision to complete the work;
- the construction agreement identified Caruk-Hall as the “Contractor” and no pre-construction material referred to it as “project manager”;
- the Maciels had to schedule on-site visits and did not have direct access to the build site;
- at all material times, Caruk-Hall was not registered with the Warranty Corporation;
- the new home was not enrolled with the Warranty Corporation; and
- the prescribed fee was not paid.
[22] The presiding justice’s reasons make clear that she considered the evidence and arguments the appellants relied on at trial, such as the fact that they played no part in the design of the house or in obtaining building permits prior to construction, and that the Maciels made budgetary decisions about aspects of the construction, materials, and finishings. She gave clear reasons for the credibility findings she made against the appellants where their evidence conflicted with Mr. Maciel’s evidence. She also resoundingly rejected the possibility that the appellants were mistaken about the nature of their role with respect to this build. Her factual and credibility findings are not the product of any misapprehension of evidence and attract deference on appeal. In my view, the presiding justice’s findings were not simply available to her on the evidentiary record at trial, they were virtually inexorable.
[23] As such, the appeals from conviction are dismissed.
Appeals from Sentence
[24] The presiding justice imposed a $15,000 fine on Caruk-Hall Construction Inc. for acting as the builder of a new home without being registered with the Warranty Corporation (count 1) and a suspended sentence for failing to notify it and pay the prescribed fee (count 2). She imposed $5,000 fines on both counts each individual defendant was found guilty of. She explained why she determined that it was necessary to impose separate fines on the individual directors in addition to fines against Caruk-Hall Construction Inc. She noted that the maximum fines for these offences had doubled in 2018 but made clear that she was sentencing the appellants under the pre-amendment penalty regime. She emphasized that the appellants were constructing “high end custom homes in Toronto”, a market she characterized as “the most lucrative home construction industry in Ontario.” She also considered the fact that the appellants were very experienced builders. She correctly identified general and specific deterrence as the primary sentencing objectives.
[25] I would not interfere with the fines that the presiding justice imposed. The evidence at trial established that the construction budget for this home was approximately $1,300,000. I agree with the respondent that some of the authorities the appellants rely on as supporting the moderate quantum of fines they sought are no longer reflective of the market realities of the home building industry in Ontario and would have been insufficient to achieve deterrence. [4] The fines imposed here were significantly lower than those sought by the prosecution and, in the particular circumstances of this case, could easily be viewed as on the more lenient end of the appropriate range.
[26] For these reasons, the appeals from sentence are dismissed.
Dated: January 21, 2025
Justice Peter Scrutton
[1] This summary is not intended to provide a comprehensive account of each party’s steps (or lack thereof) over the course of the litigation of this matter.
[2] Remote court appearances did not resume until January 25, 2021.
[3] Notices from December 2020 and January 21, 2021 permitted remote appearances as of January 25, 2021 at court locations with the available technology.
[4] See, e.g., the $2,500 fines imposed on the director and the building company in R. v. Crowe, [2001] O.J. No. 5239 (C.J.).