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Fairness - Right to be Heard. Midnight Building Corp. v Tarion Warranty Corp.
In Midnight Building Corp. v Tarion Warranty Corp. (Div Ct, 2025) the Divisional Court allowed an application, this regarding a finding of liability "by Tarion, for the cost to construct a retaining wall incident to construction of a swimming pool (the “impugned finding”), pursuant to the Ontario New Home Warranties Plan Act".
Here the court considered a fundamental 'right to be heard' as a fairness issue:Procedural fairness – Tarion Revisiting An Issue
[3] The impugned finding was one of 23 issues raised with Tarion by the purchaser of the subject home. In a “Conciliation Assessment Report” of the issues, dated January 12, 2023, Tarion accepted that the property had been inspected and approved by the City, and thus that failure to build a retaining wall was not a warranted defect.
[4] Subsequently, on September 5, 2024, Tarion changed its Conciliation Assessment Report to require Midnight to pay the purchaser’s cost to construct a retaining wall ($45,688.71, including HST). This change in Tarion’s disposition of this issue followed communications to Tarion from the purchaser, including provision of additional documents and submissions. Midnight was not given notice that Tarion was revisiting the retaining wall issue, and Midnight was not given notice of the additional documents and submissions provided to Tarion by the purchaser.
[5] This was unfair. Midnight was entitled to consider the retaining wall issue resolved unless it was given notice that Tarion was revisiting the issue. If circumstances had changed, or some other basis had been raised that justified Tarion reconsidering its disposition of the retaining wall issue, Midnight was entitled to notice and a meaningful opportunity to provide its side of the story to Tarion before a decision was made: Baker v. Canada (Minister of Citizenship and Immigration, 1999 CanLII 699 (SCC), [1999] 2 SCR 817, paras. 20, 30 and 32.
[6] Therefore, the impugned finding is quashed, and the issue is remitted back to Tarion to decide following a fair process.
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