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January 21, 1997 |
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| Sunforest Investment Corp. vs. Ontario New Home Warranty Program |
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32 O.R. (3d) 59
[1997] O.J. No. 128
Court File No. C23797 |
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Court of Appeal for Ontario,
Morden A.C.J.O., McKinlay and Laskin JJ.A. |
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Larry J. Levine, Q.C., and Kevin D. Sherkin, for appellants.
Brian M. Campbell, for respondent.
Michael A. Spears, for intervenor, Durham Condominium Corp. No. 120. |
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| Sale of land - New Home Warranty Program - Purchasers buying condominium units for investment purposes and with intention of renting the units - Purchasers entitled to coverage under warranty program for deposits paid and damages incurred as a consequence of vendor's default - Ontario New Home Warranties Plan Act, R.S.O. 1990, c. O.31. |
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The appellant PW in his own name and the appellant S Corp. as trustee for
eight individual investors signed agreements to purchase condominium units.
The appellants purchased the units for investment purposes and intended to rent them when they became available for occupancy. The agreements were not completed, and the appellants sought compensation under the Ontario New Home Warranties Plan Act for deposits paid and damages incurred as a consequence of the vendor's default. The administrators of the warranty program and the Commercial Registration Appeal Tribunal denied the appellants' claims.
The Tribunal held that the appellants were not covered by the Act's warranty plan. Alternatively, the Tribunal denied the appellants' claims on factual findings that it was the appellants who had breached the agreements with the vendor by not qualifying for mortgage financing or, in the further alternative that the appellants had failed to prove their payment of deposits. On appeal, the Divisional Court affirmed the decision of the Tribunal. Leave having been granted, the appellants appealed to the Court of Appeal. |
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| Held, the appeal should be allowed. |
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| The Tribunal wrongly held that since the units were acquired to be rented, the appellants did not qualify as an "owner", which is defined under the Act to be a "person who first acquires a home from its vendor for occupancy". However, even when a condominium unit is purchased for a tax shelter, it is purchased for occupancy and therefore the purchaser is protected by the provisions of the Act, and the vendor must register under the Act and pay premiums. In the immediate case, the vendor was required to register and to pay premiums, and the appellants as purchasers were entitled to coverage. As to the findings of facts by the Tribunal, there was sufficient and uncontradicted evidence that the appellants did all that was required with respect to mortgage financing and no doubt that they had paid the deposits. Accordingly, the appeal should be allowed. |
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