Metropolitan Toronto Condominium Corp. No. 1352 v. Newport Beach Development Inc. et al., (2012) 298 O.A.C. 366 (CA)

• Jurisdiction: Ontario
• Court: Court of Appeal (Ontario)
• Judge: Winkler, C.J.O., Laskin and Watt, JJ.A.
• Citation: (2012), 298 O.A.C. 366 (CA),2012 ONCA 850
• Date: 02 April 2012

Toronto Condo. v. Newport Beach Dev. (2012), 298 O.A.C. 366 (CA)

MLB headnote and full text

Temp. Cite: [2012] O.A.C. TBEd. DE.022

Metropolitan Toronto Condominium Corporation No. 1352 (plaintiff/respondent) v. Newport Beach Development Inc., Canderel Stoneridge Equity Group Inc., Tarion Warranty Corporation , Enersys Engineering Group Inc., Eric Pun a.k.a. E.P.K. Pun and Salvatore Spampinato a.k.a. Sal Spampinato (defendants/ appellants/respondent )

(C54462; 2012 ONCA 850)

Indexed As: Metropolitan Toronto Condominium Corp. No. 1352 v. Newport Beach Development Inc. et al.

Ontario Court of Appeal

Winkler, C.J.O., Laskin and Watt, JJ.A.

December 4, 2012.

Summary:

Metropolitan Toronto Condominium Corporation No. 1352 (Metro 1352) managed a luxury condominium project in Etobicoke. It alleged that the project had two major construction defects. It sought compensation for these defects under the Ontario New Home Warranties Plan Act. The administrator of the Act, Tarion Warranty Corporation, denied compensation. Instead of appealing Tarion's decisions to the Licence Appeal Tribunal, as it was entitled to do, Metro 1352 commenced litigation against Tarion and Newport Beach Development Inc., the vendor and declarant of the project; a developer related to Newport (Canderel), Spampinato, an officer of Canderel, Enersys Engineering Group Ltd. and Pun, the engineers on the project. Metro 1352 sued for breach of statutory warranty, negligence, breach of fiduciary duty and breach of contract. The engineers were noted in default. The other defendants did not deliver a statement of defence. Newport, Canderel and Spampinato sought dismissal of the action under rule 21.01(3)(d).

The Ontario Superior Court, in a decision reported at [2011] O.T.C. Uned. 5445, dismissed the motion. Newport, Canderel and Spampinato appealed.

The Ontario Court of Appeal dismissed the appeal.

Estoppel - Topic 386

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - Issues decided on prior proceedings - This action arose out of a dispute between a condominium corporation (Metro 1352) and the vendor of the condominium development (Newport) over construction deficiencies - Metro 1352 was denied compensation for the two defects under the Ontario New Home Warranties Plan Act by the administrator (Tarion) - Instead of appealing Tarion's decisions to the Licence Appeal Tribunal, as it was entitled to do, Metro 1352 commenced litigation against Tarion, Newport and others - Newport sought dismissal of the action under rule 21.01(3)(d) - It argued that the action was an abuse of process based on issue estoppel - It argued that Tarion had made a final and judicial determination of Metro 1352's claims and issue estoppel prevented re-litigation of the statutory warranty claims in another forum - The motion judge dismissed the motion - The Ontario Court of Appeal dismissed an appeal - Tarion's decisions were judicial and final - It was doubtful whether the same parties were involved - However, even if all the preconditions for applying issue estoppel were met, the court would exercise its discretion to not apply issue estoppel because doing so would work a real injustice to Metro 1352 - See paragraphs 32 to 77.

Limitation of Actions - Topic 206

Practice - Requirement of pleading expiry of limitation period - This action arose out of a dispute between a condominium corporation (Metro 1352) and the vendor of the condominium development (Newport) over construction deficiencies - Metro 1352 was denied compensation for the two defects under the Ontario New Home Warranties Plan Act by the administrator (Tarion) - Instead of appealing Tarion's decisions to the Licence Appeal Tribunal, as it was entitled to do, Metro 1352 commenced litigation against Tarion, Newport and others - Newport sought an order pursuant to rules 21.01(1)(a) and (3)(d) dismissing one of the claims on the basis that it was a new cause of action added by an amendment to the statement of claim after the expiration of the limitation period - The motion judge rejected the argument - The Ontario Court of Appeal dismissed an appeal - The court agreed with the motion judge that Newport's motion was premature because it had not yet delivered a statement of defence, and a limitation defence, like any other defence, ordinarily had to be pleaded in the statement of defence - This was not one of those rarest of cases where the court would entertain a defendant's motion to strike a claim based on the limitation defence where the defendant had yet to deliver a statement of defence - See paragraphs 111 to 116.

Practice - Topic 2229

Pleadings - Striking out pleadings - Grounds - Issues which could have been raised in prior action or matter between same parties - [See Estoppel - Topic 386 ].

Practice - Topic 2239

Pleadings - Striking out pleadings - Grounds - Abuse of process or delay - This action arose out of a dispute between a condominium corporation (Metro 1352) and the vendor of the condominium development (Newport) over construction deficiencies - Metro 1352 was denied compensation for the two defects under the Ontario New Home Warranties Plan Act by the administrator (Tarion) - Instead of appealing Tarion's decisions to the Licence Appeal Tribunal, as it was entitled to do, Metro 1352 commenced litigation against Tarion, Newport and others - Newport sought dismissal of the action under rule 21.01(3)(d) as an abuse of process - It argued that Metro 1352's action against Tarion, who Newport would be required to indemnify if the action was successful, should be dismissed because Tarion was not a suitable entity in the civil courts - The motion judge rejected the argument - The Ontario Court of Appeal dismissed an appeal - A civil action against Tarion simply sought payment out of the fund for breach of the statutory warranties - Nothing in the Act precluded a civil cause of action - Allowing the action for payment from the fund was consistent with the direction of the Ontario jurisprudence and the language and consumer protection purpose of the Act - See paragraphs 78 to 83.

Practice - Topic 2239

Pleadings - Striking out pleadings - Grounds - Abuse of process or delay - This action arose out of a dispute between a condominium corporation (Metro 1352) and the vendor of the condominium development (Newport) over construction deficiencies - Metro 1352 was denied compensation for the two defects under the Ontario New Home Warranties Plan Act by the administrator (Tarion) - Instead of appealing Tarion's decisions to the Licence Appeal Tribunal, as it was entitled to do, Metro 1352 commenced litigation against Tarion, Newport and others - Newport sought dismissal of the action under rule 21.01(3)(d) as an abuse of process - It argued that the action was a collateral attack as Metro 1352 was required to challenge Tarion's decisions by a Tribunal appeal - The motion judge rejected the argument - The Ontario Court of Appeal dismissed an appeal - The action did not offend the rule against collateral attack - The scheme and language of the Act showed that an appeal to the Tribunal was meant to be permissive - It was not the exclusive forum in which a homeowner could seek relief for an adverse Tarion decision on warrantability - See paragraphs 87 to 93.

Practice - Topic 2239

Pleadings - Striking out pleadings - Grounds - Abuse of process or delay - This action arose out of a dispute between a condominium corporation (Metro 1352) and the vendor of the condominium development (Newport) over construction deficiencies - Metro 1352 was denied compensation for the two defects under the Ontario New Home Warranties Plan Act by the administrator (Tarion) - Instead of appealing Tarion's decisions to the Licence Appeal Tribunal, as it was entitled to do, Metro 1352 commenced litigation against Tarion, Newport and others - Newport sought dismissal of the action under rule 21.01(3)(d) as an abuse of process - It argued that s. 23 of the purchase agreements between it and the unit owners precluded Metro 1352 from suing for anything other than the breach of warranties under the Act - Therefore, Metro 1352 could not maintain its claims for negligence, breach of contract and breach of fiduciary duty - The motion judge rejected the argument - The Ontario Court of Appeal dismissed an appeal - The court agreed with the motion judge that s. 23 of the purchase agreements dealt solely with warranties of workmanship and materials and did not preclude an action by Metro 1352 for breach of contract, negligence or breach of fiduciary duty - See paragraphs 94 to 97.

Practice - Topic 2239

Pleadings - Striking out pleadings - Grounds - Abuse of process or delay - [See Estoppel - Topic 386 ].

Practice - Topic 2239.4

Pleadings - Striking out pleadings - Grounds - Abuse of process - Collateral attack on administrative decision - [See second and third Practice - Topic 2239 ].

Practice - Topic 5361

Dismissal of action - Grounds - General and want of prosecution - Abuse of process - [See Estoppel - Topic 386 and first, second and third Practice - Topic 2239 ].

Practice - Topic 5374

Dismissal of action - Grounds - General and want of prosecution - Collateral attack on administrative decision - [See second Practice - Topic 2239 ].

Cases Noticed:

Workers' Compensation Board (B.C.) v. Figliola - see Workers' Compensation Board (B.C.) v. Human Rights Tribunal (B.C.) et al.

Workers' Compensation Board (B.C.) v. Human Rights Tribunal (B.C.) et al., [2011] 3 S.C.R. 422; 421 N.R. 338; 311 B.C.A.C. 1; 529 W.A.C. 1; 2011 SCC 52, refd to. [para. 32].

Danyluk v. Ainsworth Technologies Inc. et al., [2001] 2 S.C.R. 460; 272 N.R. 1; 149 O.A.C. 1; 2001 SCC 44, refd to. [para. 34].

Angle v. Minister of National Revenue, [1975] 2 S.C.R. 248; 2 N.R. 397, refd to. [para. 36].

Minott v. O'Shanter Development Co. (1999), 117 O.A.C. 1; 42 O.R.(3d) 321 (C.A.), refd to. [para. 50].

Knight v. Board of Education of Indian Head School Division No. 19, [1990] 1 S.C.R. 653; 106 N.R. 17; 83 Sask.R. 81, refd to. [para. 50].

Radewych v. Brookfield Homes (Ontario) Ltd. et al., [2007] O.T.C. Uned. D70 (Sup. Ct.), affd. [2007] O.A.C. Uned. 403; 2007 ONCA 721, refd to. [para. 59].

Machin v. Tomlinson (2000), 138 O.A.C. 363; 51 O.R.(3d) 566 (C.A.), refd to. [para. 71].

Belanger v. 686853 Ontario Inc. (1990), 74 O.R.(2d) 114 (Dist. Ct.), refd to. [para. 82].

Ottawa-Carleton Standard Condominium Corp. No. 650 v. Claridge Homes Corp. et al., [2009] O.T.C. Uned. C23 (Sup. Ct.), refd to. [para. 82].

R. v. Consolidated Maybrun Mines Ltd. et al., [1998] 1 S.C.R. 706; 225 N.R. 41; 108 O.A.C. 161, refd to. [para. 88].

Hunt v. Carey Canada Inc. - see Hunt v. T & N plc et al.

Hunt v. T & N plc et al., [1990] 2 S.C.R. 959; 117 N.R. 321, refd to. [para. 104].

Counsel:

Irving Marks and Carla Lubell, for the appellants;

David Outerbridge, for the respondent, Tarion Warranty Corporation;

Blaine Fedson, for the respondent, Metropolitan Toronto Condominium Corporation No. 1352.

This appeal was heard on April 2, 2012, before Winkler, C.J.O., Laskin and Watt, JJ.A., of the Ontario Court of Appeal. Laskin, J.A., released the following decision for the court on December 4, 2012.