The Court Of Appeal For Ontario Sets The Record Straight Concerning The Applicability Of The Tarion Addendum In Residential Agreements Of Purchase And Sale

Overview

In its release of the highly-anticipated decision in Ingarra v. 301099 Ontario Limited (Previn Court Homes), 2020 ONCA 103 on February 11, 2020 (the "Appeal Decision"), the Ontario Court of Appeal addressed the issue of whether an agreement between lawyers (made orally and through the exchange of faxes and emails) to extend the agreed upon "Firm Closing Date" to the "Interim Closing Dates" (with adjustments remaining as at January 11, 2018) superseded the operation and effect of the provisions of the Tarion Addendum.

In allowing the appeal of the builder, 301099 Ontario Limited (Previn Court Homes) ("Previn"), the Court of Appeal for Ontario overturned the decision of the Honourable Madam Justice Kimmel, released May 30, 2019 (reported at 2019 ONSC 3347) (the "Application Decision"), which found that the parties did not have the contractual freedom to set a closing date outside of the confines of the Tarion Addendum.

In arriving at its decision, the Court of Appeal noted, among other things, that the Tarion Addendum is:

a small-font, single spaced, convoluted and confusingly long and obscure document; a trap for the unwary, particularly the unwary lay person; not "consumer protective" by any stretch of the imagination; consistent with Lord Devlin's sardonic remark: "This sort of document is not meant to be read, still less to be understood": McCutcheon v. David MacBrayne Ltd., [1964] 1 W.L.R. 125 (U.K. H.L); only marginally better drafted than its predecessor, which was described in the decision in Sirasena v. Oakdale Village Homes Inc., 2010 ONSC 2996 at para. 11, 100 R.P.R. (4th) 94, aff'd 2013 ONSC 1051, 30 R.P.R. (5th) 31 (Div. Ct.) as containing "consumer-unfriendly language"; and with respect to the process set out in section 4 of the Tarion Addendum, "cumbersome, paper-intensive and therefore expensive." Facts

On March 26, 2016, Anthony John Ingarra (as buyer) and Previn (as seller) entered into an Agreement of Purchase and Sale (the "APS") concerning the property located at 63 Walker Boulevard, Alliston, Ontario (the "Property").

As the APS was for a new home, it included a "Tarion Addendum to Agreement of Purchase and Sale - Delayed Closing Warranty" (the "Tarion Addendum") as Schedule "T" pursuant to the Ontario New Home Warranties Plan Act, R.S.O. 1990, c. O.31, as amended.

Under the terms of the APS and the Tarion Addendum, the parties fixed what the Tarion Addendum called a "Firm Closing Date" for January 11, 2018.

Under the terms of the Tarion Addendum, Previn was required to deliver an "Occupancy Permit" on or before "Closing", which means "the completion of the sale of the home including transfer of title to the home to the Purchaser..."

The "Occupancy Permit" was not delivered by Previn to Mr. Ingarra until January 12, 2018 (one...