Schedule "C"

1. General

The intent of these summary arbitration rules is to provide a fair, expedient and final resolution of disputes arising out of the rejection of claims by the Trustee of New Home Warranty of British Columbia, Inc. Arbitration pursuant to these rules may be conducted on the basis of written submissions with documentary support but without the need of an evidentiary hearing. The parties are at liberty to agree to modify these rules to better suit the particular circumstances of the dispute. In the absence of such agreement these rules will prevail.

The British Columbia International Commercial Arbitration Centre (the "Centre") will administer the arbitrations and will maintain a roster of qualified arbitrators (the "New Home Warranty Roster") to conduct arbitrations under these rules.

2. Parties to the arbitration

Where a creditor of New Home Warranty of British Columbia Inc. has a claim rejected in whole or in part by the Trustee, that creditor may challenge the Trustee"s decision by commencing an arbitration pursuant to these rules. The creditor will be the Claimant and the Trustee, the Respondent.

3. Commencement of arbitration

Within 30 days of a decision by the Trustee to reject all or part of a creditor"s claim that creditor may commence an arbitration under these rules by filing with the Centre and delivering to the Trustee a Notice to Arbitrate in the form attached as Arbitration Form 1 to these rules together with an arbitration fee in the amount of $1875 plus GST to cover one-half of the Centre"s administrative fee of $750 and a deposit for the arbitrator"s fee and expenses of $3000. The Trustee, on receipt of the Notice to Arbitrate, will pay its one-half of the arbitration expenses of $1875 to the Centre.

Upon receipt of a Notice to Arbitrate with the required fee the Executive Director of the Centre will provide the parties with a list of five arbitrators chosen from the New Home Warranty Roster. If the parties are unable to agree on an arbitrator within seven days of receipt of the Centre"s list, then the Centre will appoint a single arbitrator.

4. Classification of dispute

The Executive Director will review the Notice to Arbitrate, including the Claimant"s proof of claim and the Trustee"s rejection and will classify the dispute as a case where liability is in issue, quantum of the claim is in issue, or both liability and quantum are in issue.

5. Liability Disputes

Within 14 days of the commencement of the arbitration the Claimant will submit to the Respondent and to the Centre a statement setting out the basis upon which entitlement to payment is sought. The statement will address directly the basis upon which the Trustee rejected the claim in the first instance. The statement will be accompanied with copies of all documents that support the Claimant"s position.

Within 14 days of receiving the Claimant"s statement and supporting documents the Respondent will submit to the Claimant and to the Centre a statement setting out the basis upon which the Claimant"s entitlement to payment has been denied. The statement will be accompanied with copies of all documents that support the Respondent"s position.

6. Quantum Disputes

Within 14 days of the commencement of the arbitration, the Claimant will submit to the Respondent, and to the Centre, a statement setting out the amounts claimed. All supporting documents, including invoices for work done or estimates for the work to be done, together with statutory declarations from the persons contracted to do the work or who provided the estimate verifying the accuracy of the invoices or estimates and confirming that they have done or will do the work described for the amount indicated, will accompany the Claimant's statement.

Within 14 days after receipt of the Claimant's statement and supporting documents the Respondent will submit to the Claimant and to the Centre a statement setting out the basis upon which the Respondent takes issue with the amounts claimed setting out in detail the amounts the Respondent is prepared to allow for the work claimed together with all supporting documents including estimates for the work to be done together with statutory declarations from the persons providing estimates verifying their accuracy and confirming that they will do the work described for the amount indicated.

Within 7 days after delivery of the Respondents statement and supporting documents the Claimant and the Respondent will deliver to the Centre a final offer in the form attached as Arbitration Form 2 to these rules, setting out the amount that each party is prepared to accept as a quantification of the total claim. Once the Centre has received both final offers it will forward certified copies to the parties.

7. Preliminary meeting

Following the exchange of statements, supporting documents, and in the case of quantum disputes, final offers, the Centre will forward to the appointed arbitrator copies of those documents. The arbitrator will then contact the parties and arrange a preliminary meeting which may be conducted by teleconference. At the preliminary meeting the arbitrator and parties will discuss the procedure appropriate for the particular dispute. In the absence of agreement between the parties on procedure the arbitrator has discretion to impose procedures consistent with the object of these rules to insure a fair, expedient and final resolution of the dispute with a minimum of expense to the parties.

Topics to be discussed at the preliminary meeting include request for production of specific documents, the desirability of additional information, including whether reply submissions will be allowed, expert reports, estimates and supporting statutory declarations or other written evidence and the time and location for oral submissions. Unless agreed to by the parties or directed by the arbitrator no more than six hours will be allowed for a hearing of the submissions. Where additional hearing time is directed, the parties will each pay one half of an amount set by the arbitrator as a deposit for the arbitrator's fees together with a deposit for the anticipated expenses such as hearing room rental. All deposits will be held and administered by the Centre.

The procedures agreed to or directed at the preliminary meeting will be set out in a form of written directions from the arbitrator sent to each party and to the Centre.

8. Hearing

The hearing will be limited to the parties' submissions on the record comprised of the statements, the supporting documents, statutory declarations and in quantum disputes, the final offers. The format of the hearing will be in the discretion of the arbitrator.

9. Award - Liability Disputes

The arbitrator will either allow in whole or in part or dismiss a claim with a brief written award without reasons within 30 days of the conclusion of the hearing. No award will be made for costs of the arbitration.

10. Award - Quantum Disputes

The arbitrator will choose either the final offer of the Claimant or the final offer of the Respondent without reasons within 30 days of the conclusion of the hearing. No award will be made for costs of the arbitration.

11. Inapplicability of the Commercial Arbitration Act, RSBC 1996, c.55

Immediately following the commencement of arbitration, the parties to the arbitration will enter into an agreement in the form attached as Arbitration Form 3, excluding the jurisdiction of the Court under sections 30, 31, 33 and 34 of the Commercial Arbitration Act, RSBC 1996, c.55.