Court File and Parties
COURT FILE NO.: DC 679/21
DATE: 20220929
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: NEUHAUS MANAGEMENT LTD Appellant
AND:
MINZHEN HUANG Respondent
BEFORE: Firestone RSJ, Stewart, and Akhtar JJ.
COUNSEL: Adam Wainstock, for the Appellant
Bradley Philips, for the Respondent
HEARD: In Writing
ENDORSEMENT
BY THE COURT:
[1] The parties have brought this statutory appeal and cross-appeal from the awards of the Arbitrator pursuant to the Ontario New Home Warranties Plan Act, R.S.O.1990, c.O.31, released on July 16 and October 19, 2021. The dispute arises from the breakdown of a purchase agreement for a new build home.
[2] A hearing date was fixed for June 21, 2022.
[3] On June 17, 2022 the court sent counsel an email directing that the parties address the issue of whether leave is required, as a preliminary matter, at the outset of the hearing.
[4] On June 21, 2022, after hearing preliminary submissions from counsel, the panel directed that written submissions be provided to address the following questions:
Does the Divisional Court have jurisdiction to hear and determine this appeal from a decision of an arbitrator under the Ontario New Home Warranties Act?
If the answer is “yes”, does the Arbitration Act, 1991, S.O.1991, c.17 apply to require that (a) leave to appeal is necessary and/or (b) the appeal be limited to issues of law where the statute providing for an appeal (in this case s.17(4) of the Ontario New Home Warranties Plan Act) is itself silent on these issues but incorporates by reference the terms of the Arbitration Act?
[5] We have received and considered submissions from counsel for both parties.
[6] We agree with counsel for the parties that an appeal of this nature is to the Divisional Court. That the appeal lies to the Divisional Court is explicitly stated in s. 17(4) of the Ontario New Home Warranties Plan Act (“ONHWPA”). The Arbitration Act’s conflict provision (s. 2(3)) resolves any conflict of venue by stating that, in a conflict, the other statute (the ONHWPA) prevails.
[7] It is our opinion, however, that s. 45(1) of the Arbitration Act, 1991 requires that leave to appeal be granted before any appeal may be brought. Additionally, any such appeal must be limited to questions of law.
[8] In Elgin Mills v. Farhanian (2020 ONSC 6435), on a motion to stay proceedings under s. 7 of the Arbitration Act, there was no dispute that s. 15 of Tarion Addendum constituted an arbitration agreement. Section 7 of the Arbitration Agreement uses the same language (“if a party to an arbitration agreement commences…”) as section 45(1) (“if the arbitration agreement…”). In Grandfield Homes (Kenton) Ltd. v. Chen (2020 ONSC 5230), also a motion to stay proceedings under s. 7 of the Arbitration Act, the Court found that step one of the test (“is there an arbitration agreement with respect to the subject matter of this application?”) was met by section 15 of the Tarion Addendum. These cases support our conclusion that s. 15 of the Tarion Addendum is an arbitration agreement.
[9] The Tarion Addendum does not specifically address appeal rights or procedure. The parties argue that the legislature had the opportunity to qualify the appeal rights in s. 17(4) by stating what could and could not be appealed but failed to do so. This failure to expressly qualify the appeal to questions of law, they argue, means that the appeal rights awarded under 17(4) are broader. They point to the Residential Tenancies Act s. 210(1), the Ontario Disability Support Program Act, s. 31(1), and the Regulated Health Professions Act, s. 70(2) as examples of legislation with qualifying provisions relating to the breadth of the appeal.
[10] However, those examples do not arise in analogous circumstances to this statute. None of the aforementioned provisions include a specific incorporation of a statute that contains appeal rights.
[11] Additionally, the statutes referred to above involve appeals from tribunal or board decisions and are not from decisions of an arbitrator. Unlike tribunal decisions, arbitral decisions like the one at issue on appeal are, unless expressly overruled by the governing legislative scheme, subject to the Arbitration Act. Section 45 (1) of the Arbitration Act expressly considers appeal provisions for awards which do not specifically provide for appeal rights in the arbitration agreement. Incorporation by reference therefore serves as a qualifying factor in the provision.
[12] It is true that there is no privative clause, or privative language, in s. 17 (4) of the ONHWPA. The parties rely on Quadrexx Hedge Capital Management Ltd. v. Ontario Securities Commission (2020 ONSC 4392) in their submissions, in which it was stated that lack of privative language in the statutory provision meant that the appeal was not limited to just questions of law. The parties therefore argue that a lack of privative language in s. 17(4) is analogous to s 9(1) of the Securities Act, at issue in Quadrexx, and thus the appeal should not be limited to questions of law alone. However, it is important to note that there is no incorporation by reference of a statute with appeal rights in s. 9(1) of the Securities Act. While we agree that s. 17(4) does not contain privative language, we consider those statutory schemes to be quite different.
[13] Finally, the parties argue that, because of the statutory nature of the arbitration requirement, no arbitration agreement existed at all, making section 45(1) of the Arbitration Act inoperative. However, based upon our reading of the legislation and the above noted cases regarding the nature of the Tarion Addendum, we do not believe this view to be correct. There is an arbitration agreement in this case, and it does not speak to appeal rights and thus the provisions of s. 45 (1) are triggered.
[14] Appeal rights, while not expressly stated in the ONHWPA, exist by way of the Arbitration Act. The relevant arbitration agreement does not outline appeal routes. Section 17(4) governing appeals of the arbitration does not qualify the appeal but simply incorporates the Arbitration Act. The Arbitration Act is clear that arbitration agreements which do not speak to appeal rights may be appealed with leave on questions of law only.
[15] For these reasons, leave will be required for this appeal. Any appeal is to be confined to a question of law. In the circumstances, we direct that the leave motion be expedited and that Divisional Court staff ensure that the motion is placed before a panel for determination at the earliest opportunity.
[16] As this issue was raised by the Court, we consider it appropriate that there be no costs awarded to either party.
Firestone RSJ.
Stewart J.
Akhtar J.
Date: September 29, 2022