Licence Appeal Tribunal

 

2624-ONHWPA-CLAIM

APPEAL FROM A DECISION OF THE TARION WARRANTY CORPORATION TO DISALLOW A CLAIM

TRIBUNAL: E. ALAN GARBE, Vice-Chair

APPEARANCES: MICHAEL GWYNNE, Student-at-law, representing the Applicant,

KAREN JONES, Counsel, representing Tarion Warranty Corporation

KORI EASSON, representing 1353464 Ontario Inc., the Added Party

DATE OF HEARING: January 18, 2005 Toronto

 

 

REASONS FOR DECISION AND ORDER

BACKGROUND:

This is an appeal to the Licence Appeal Tribunal (the "Tribunal") from a written decision of Tarion Warranty Corporation (the "Respondent") dated September 3, 2004, which disallowed the Applicant's claim made pursuant to the Ontario New Home Warranty Program (the "Program"). This appeal is based upon the provisions of ss. 13(1)(c) and 14(3)(b) of the Ontario New Home Warranties Plan Act, R.S.O. 1990, c. O.31, as amended, (the "Act") and Regulation 892, Part VI, s. 17.

 

APPLICANT'S POSITION:

It is the Applicant' s position that he is entitled to compensation for the costs which he incurred as a result of the delay in his obtaining possession of a newly constructed condominium home because the builder, the Added Party, failed to give notice of the extended occupancy dates in accordance with the agreement of purchase and sale and the Act.

 

 RESPONDENT'S POSITION:

The Respondent takes the position that, although the Applicant may have been entitled to compensation for delay, he waived that entitlement when he executed an agreement amending the original agreement of purchase and sale.

PRELIMINARY MATTERS:

The Respondent's Book of Documents was tendered by the Respondent and entered as Exhibit 3 in these proceedings, with the consent of the parties.

SUMMARY OF EVENTS:

At the commencement of the hearing, the parties agreed to the following;

1                    The agreement of purchase and sale in this matter, signed on April 23, 2001, (the "Agreement") provided for a tentative closing date of November 30, 2002.

2                    By letter dated August 29, 2002, the tentative closing date was extended to January 14, 2003.

3                    By registered letter dated November 8, 2002, the Applicant was advised that the confirmed occupancy date was changed to March 4, 2003.

4                    By letter dated January 10, 2003 the confirmed occupancy date was extended to April 30, 2003.

5                    By registered letter dated February 19, 2003, the confirmed occupancy date was further extended to May 21, 2003.

6                    By registered letter dated April 21, 2003, the confirmed occupancy date was again extended to July 22, 2003.

7                    An amendment to the Agreement was signed by the Applicant on August 1, 2003, deleting the occupancy date of July 22, 2003 and inserting the occupancy date of August 5, 2003 and included a statement that the unadjusted balance due on closing was $55,000.00. 

  

THE EVIDENCE:

The Applicant testified that he was a professional photographer.  He stated that he had several discussions with Kori Easson regarding delays in possession of the condominium unit and that by the time he received notice of the extension to April 30, 2003, he understood that he was entitled to compensation for delay.  At the time of the discussion regarding the April 30, 2003, extension, he was told that he was eligible for compensation and that the builder had to take responsibility for the delay.

The witness testified that when he was advised of the change of the confirmed occupancy date to July 22, 2003, he contacted the builder and advised that the July date would not work, as the Applicant was leaving that day for Winnipeg.  It was the Applicant=s understanding that the amendment to the agreement, which appears at tab 9 of Exhibit 3, was simply a document issued to change the occupancy date from July 22, 2003 to August 5, 2003 and that he was not waiving any of his rights under the agreement of purchase and sale.

On cross-examination, the Applicant testified that the only person he dealt with was Kori Easson and confirmed that the Agreement which appears at tab 1 of Exhibit 3 was signed on April 23, 2001.  The Applicant did not recall whether or not he had a lawyer prior to signing the Agreement.  At the time that he received the letter from the Added Party dated August 29, 2002, he did not have a lawyer acting on his behalf and could not recall whether or not he had retained a lawyer at the time of receipt of the letter dated November 8, 2002.

The witness testified that the lawyer who issued the reporting letter on the sale of the Applicant's house in Rexdale, (the "House") dated December 17, 2002, appearing in tab 5 of Exhibit 3, was the same lawyer who acted on the purchase of the condominium unit under the Agreement. This lawyer, however, was not actually retained until 2003 when the Applicant had obtained the condominium papers.

The witness stated that at the time he considered selling the House, he anticipated a closing in the fall of 2002 and the move to the condominium in November 2002.  The Applicant acknowledged that by August of 2002, when he received the letter from the Added Party, he knew that the closing for the condominium unit would not take place until January 14, 2003.

The witness testified that the purchaser of the House wanted to complete the purchase by December 2002.  The Applicant acknowledged that, as a result of the November 8, 2002 notice, he knew that the closing of the condominium unit would not take place until March 4, 2003. The Applicant acknowledged that the date of November 30, 2002, set forth in the Agreement, was a tentative possession date and was subject to the general terms and conditions of Schedule A to the Agreement.

The Applicant testified that he felt he could not own two properties at the same time and it was the sales representative who originally advised him that occupancy date would be November 30, 2002.

The Applicant could not remember exactly when the House was sold, but believed it took place in October 2002.  He acknowledges that it might possibly have sold after November 8, 2002.

The witness testified that he was certain that he did not know at the time the House was sold, that the date for occupation of the condominium unit had been extended to March 4, 2003.

The Applicant stated that at the time he received the letter of August 29, 2002 from the Added Party, he realized he could not rely on the date of January 14, 2003 as an occupation date.  

The witness stated that he did not have any conversations with anyone as to when the tentative occupancy date would be confirmed. The witness could not recall having any discussion with his lawyer regarding tentative and confirmed occupancy dates.

The Applicant testified that he did rely on the registered letter dated November 8, 2002 and believed that the occupancy date of March 4, 2003 had been confirmed.

The Applicant stated that he had conversations with the Added Party about the confirmed occupancy date after receipt of the April 21, 2003, registered letter and had a telephone conversation with Kori Easson to discuss the April, 2003 date and his out of pocket expenses.  

The witness stated that he spoke to Ms. Easson at Colours and Concepts where she worked before moving to Intracorp Developments Ltd. (Intracorp) and continued to deal with her after her change of position.  The Applicant stated that, based on the information from Ms. Easson, he understood he was entitled to compensation of $100.00 per day up to a maximum amount of $5,000.00, which he had to claim through the Program. 

It was the witness's understanding that sometime about April 30, or May 1 he could make his claim for compensation. When asked about the affect of the letter dated April 21, 2003, appearing at tab 8 of Exhibit 3, the Applicant stated that it was his understanding that this letter did not affect his claim for compensation and Ms. Easson told him to keep his receipts and explained what was necessary and how to go about making a claim for compensation.  The Applicant was sure that he had a discussion with Ms. Easson between May and June of 2003 about compensation.

The Applicant stated that the proposal to extend the occupancy date to July 22, 2003, would not work, as he would be leaving for Winnipeg that day and would not be available. The Applicant stated that he had conversations with the Added Party advising that he was not able to take occupancy on July 22 because he would not be in the city and it was agreed that the occupancy date would be changed. 

The Applicant acknowledged that he had a lawyer at the time he received the amendment to the Agreement and could have asked the lawyer about the ramifications of signing, however he had agreed to the change of date set forth in the amendment which was sent to him by facsimile a day or so after his telephone conversation with Ms. Easson.  The Applicant stated that he could not recall the date that he received the amendment, but did recall that, initially, the date was changed to July 30, 2003, but that after another conversation the date was changed to August 5, 2003,  

The Applicant acknowledged that he could have sent a copy of the amendment to the Agreement he received from Ms. Easson to his lawyer by facsimile, however he did not have the opportunity to do so. The Applicant acknowledged that he signed the amendment on August 1, 2003.  The witness testified that there was a further telephone conversation with Ms. Easson to change the closing date from August 5 to August 8, 2003. It was the Applicant's recollection that Ms. Easson called and left a message that the date had been changed to August 8, however he could not recall having a conversation with Ms. Easson specifically about the August 8 date. It was his understanding that there was a verbal agreement that he would take possession on August 8, 2003. 

The Applicant testified that there were no conversations after April regarding the compensation claim and did not think that Ms Easson said anything more about making a compensation claim.

When asked why it took approximately a year for him to submit his claim, the Applicant stated that he had a lot of things on the go and was trying to put his life back together after the move.

The Applicant stated that his claim was for $4,920.00, comprised of the costs for alternative accommodations of $750.00 per month for four months plus the cost of storage and for moving his possessions to storage.

Kori Easson, who was called as a witness for the Respondent, testified that she was a senior project coordinator for Intracorp, a position she had held for two and half years, and was involved with the sales part of the business.  In August of 2002, Ms. Easson was hired by Intracorp as a colour consultant to help buyers choose colours and other items such as plumbing fixtures for their units.  She stated that, in this role, she meets with buyers and in the present situation she did assist the Applicant in booking appointments for work to be done by trades in the condominium unit.  Prior to working for Colours and Concepts, the witness had worked for Brookfield Homes as a sales administrator.  

Ms. Easson testified that she was familiar with the Program from the builder=s point of view, including delays in closing and delay claims and had worked in this field for approximately 7 years. The witness stated that Wendy Chan, whose name appears on various letters in Exhibit 3, was an administrator in the offices of the Added Party.

Ms. Easson stated that she was familiar with the Pantages Tower, which was the name of the building where the condominium unit purchased by the Applicant was located. 

The witness testified that by the summer of 2002 the exterior structure of the building had been erected, but the building had not been enclosed and that the builder would have had a clearer understanding of the work to be done by the trades and the possibility of delays after having reached that stage of construction.  

Ms. Easson stated that a vendor had ninety days in which to extend a tentative deadline and that, generally speaking, occupancy was approximately eighteen months after the roof was poured.  

The witness testified that a tentative possession date was given until the builder could establish an actual date for occupancy for a particular unit and, in the present situation, occupancy for all the units on the floor on which the condominium unit purchased by the Applicant was located was being extended.

Ms. Easson testified that she had conversations with the Applicant on April 21, as a part of phoning various purchasers to advise them that they would be receiving a notice of further delay.  Ms. Easson testified that it was her practice to keep in touch with purchasers during the period from signing an agreement of purchase and sale to closing.  

Ms. Easson stated that she did not keep a day journal of telephone conversations, but did make notes of voice messages that were left for her.  Ms. Easson explained that the general policy was to keep maintain contact with the purchasers so they would not be surprised to receive a notice of extension.

The witness testified that out of the 400 units in this building, 80% were not owner-occupied.  Ms. Easson stated that as the time of the actual closing became closer, the purchaser would be given a telephone call on a "heads up basis".

Ms. Easson stated that, if asked about delayed claims, she would discuss the basis for the claim with a purchaser, but did not recall if she had such a discussion with the Applicant, although she knew the Applicant was entitled to make a delay claim.

The witness stated that, if she knew a purchaser was entitled to make a delay claim she would so advise, and inform the purchaser that they were entitled to $100.00 per day, $75.00 per day with receipts and $25.00 per day without receipts. 

The witness testified that in certain situations there was flexibility in establishing occupancy dates and if a date was inconvenient, a change could be made to a later date. Ms. Easson stated that the signing of an amending agreement was an expression of the mutual agreement to the change rather then a unilateral change by the vendor. The witness testified that it was her practice to tell a purchaser when signing an amending agreement that by so signing they "dissolve" their right to a compensation claim. The witness testified that it was not her wish to mislead a potential purchaser, but that it was a general policy that where a purchaser requested a postponement an amending agreement would be signed.

Ms. Easson did not have a record of a voice message from the Applicant in her day journal for May or June and had no recollection of a conversation with the Applicant in May or June 2003. The witness testified that there was a message on or about July 3, 2003, regarding the change of the occupancy date to July 22, 2003.  The witness stated that on or about July 10, she had a voice message indicating that the Applicant would be out of town between July 22 and July 30, 2003

The witness testified, that according to her file, on July 11 she transmitted by facsimile an amending agreement with the new date of July 31^st, but could not recall whether she spoke to the Applicant at that time.  Ms. Easson stated that their practice is that they do not send a document by facsimile without calling the recipient in advanced.  The witness stated that she sent a revised amending agreement changing the date for the closing from July 31^st to August 5^th to the Applicant by facsimile and assumed that she had previously spoken to the Applicant and it was as a result of that conversation that the date was changed to August 5, 2003.

The witness testified that a purchaser of a condominium unit need not be available on the occupancy closing as that date is just for the exchange of documents and the key could be picked up at a later date.  Ms. Easson testified that she would have spoken to the Applicant to see if the change in the date was acceptable and would not have changed the date without such a discussion.  

Under cross-examination, Ms. Easson testified that she was aware that the Applicant would lose his rights to claim compensation if he signed the amendment to the Agreement. The witness testified that where a vendor is able to change the occupancy date by notice they do so, but where there may have been breaches of the regulation regarding notice giving rise to a delay claim they will make the change to the occupancy date by way of an amendment to correct the breach and "restart the clock".

When asked about the letter dated April 21, 2003, (Exhibit 3, tab 8) which makes reference to a conversation between the witness and the Applicant, Ms. Easson testified that she could not recall the conversation and had no record of the conversation, but trusted that if the administrator stated such a conversation took place it did occur.

Ms. Easson acknowledged that there was a difference between a letter, which is not a legal document and an amendment, which is a legal document.

The witness repeated that she believed that by signing the amendment the Applicant waived his right to compensation, but could not recall if she so advised the Applicant or if there had been a specific discussion with the Applicant about the delay claim at this time.

The witness testified that there was some confusion about the actual date of closing on the statement of adjustments with respect to the transaction, but that the parties had agreed that August 8^th was acceptable.

LAW

Section 13 (1)(c) of the Act states: 13(1) Every vendor of a home warrants to the owner, …

(c)        such other warranties as are prescribed by the regulations.

Section 14 (3)(b) of the Act states: 14(3) Subject to the regulations, an owner of a home is entitled to receive payment out of the guarantee fund for damages resulting from a breach of warranty if, ...

(b)        the person has a cause of action against the vendor or the builder, as the case may be, for damages resulting from a breach of warranty.

 

ISSUE

The issue before the Tribunal is whether or not the claim made by the Applicant has or has not been waived by the signing of the amending agreement.

FACTS FOUND PROVEN

The following facts have been found to be proven:

1                    The Agreement provided for a tentative occupation date, described as a tentative date to occupy or the "Tentative Possession Date" of November 30, 2002.

2                    The notice dated August 29, 2003, was given more than 90 days prior to the tentative closing date of November 30, 2003, thereby establishing a new tentative occupancy date of January 14, 2003.

3                    The notice dated November 8, 2002, was given less than 90 days before the new tentative occupancy date of January 14, 2003 and therefore the January 14, 2003 date became the confirmed occupancy date.

4                    As the notice dated November 8, 2002 was given more than 65 days prior to January 14, 2003, the vendor was entitled to a major extension of the confirmed occupancy date by a maximum of 120 days, and therefore the January 14, 2003 confirmed occupancy date was extended to March 4, 2003.

5                    The notice dated February 19, 2003 extending the confirmed occupancy closing to May 21, 2003 was given less than 65 days but more than 35 days before the confirmed occupancy date of March 5, 2003 and therefore the vendor was entitled to a minor extension of 15 days such that the confirmed occupancy closing could only be extended to March 19, 2003, not May 21, 2003.

6                    The Applicant signed an amendment to the Agreement on August 1, 2003, pursuant to which the confirmed occupancy closing was changed to August 5, 2003.