Decisions of the warranty plan administrator: final and not subject to appeal?

As part of the application of Regulation on the guarantee plan for new residential buildings, it is the warranty plan administrator who has the prerogative to decide on eligibility for warranty coverage, the problems reported to him and, if necessary, to order the carrying out of corrective work.¹. In the event of dissatisfaction of the beneficiary or the contractor with the decision made by the administrator of the guarantee plan, they may refer it to arbitration.² : the Arbitral Tribunal will then issue a decision that will be final and cannot be appealed³. But if they do not bring the administrator's decision to arbitration, is it final and final?

The answer is yes. The decision of the administrator, if it is not submitted to arbitration by one of the parties involved in accordance with the Rules, is a final and final decision without appeal. This was recently confirmed by the Tribunal in a recent judgment of the Court of Quebec.⁴.

A decision, but no arbitration

In the context of this case, the administrator had carried out the corrective work ordered in his decision concerning deficiencies recognized as eligible for warranty coverage given the contractor's failure to perform. The administrator's decision ordering remedies was initially referred to arbitration by the contractor, but as the contractor failed to pay the required fee, the arbitration never took place.

Contested decision

The administrator therefore sued against the bonds in order to recover the cost of the corrective work carried out in addition to the applicable penalties since the contractor (the main obligor of the obligation) was
insolvent. Therefore, although the administrator recognized the deficiencies reported by the beneficiaries as admissible and had already carried out the work, the guarantors denied any amount and contested the claim before the Court, arguing in particular that various elements corrected were not deficient or should not have benefited from warranty coverage since they had been reported late.

In short, the guarantors argued that the director's decision was unfounded and that they should not be convicted on the basis of that decision.

Final decision

However, the Tribunal did not share the views of the guarantors and rejected these defences. The Tribunal indicated that since the contractor did not exercise his right to challenge the decision in arbitration, the administrator's decision was final and not subject to appeal, just as an arbitrator's decision would have been. He further indicated that since the contractor could no longer challenge the decision, the guarantors, who could not do indirectly what the main obligor of the obligation (the contractor) could not do directly, could not challenge it either.

Finally, the Tribunal summarized its thoughts by indicating, on the subject of contesting the decision before the civil courts, that” due to the economy of the regime of the compulsory guarantee plan for new residential buildings, the rules under the Regulation and those of the Civil Code of Quebec, it is no longer possible neither [the main debtor] nor the [guarantors] to do so ”.

In summary, knowing that a decision of the administrator not contested in arbitration is final and final and cannot be appealed, a party dissatisfied with this decision has every interest in contesting it in a timely manner in arbitration under penalty of being imposed once before the ordinary courts.

DID YOU KNOW THAT?
Only an organization dedicated to the arbitration of disputes may be authorized by the Régie du Bâtiment du Québec to organize the arbitration provided for in the Regulation respecting the guarantee plan for new residential buildings.

1 Articles 18 and 34 of the Regulation
2 Articles 19 and 35 of the Regulation
3 Articles 20 and 36 of the Regulation
4 Quebec Home Guarantee Inc. v. Quirion, 2018 QCCQ 1549 (CanLII)

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Consult the source publication