Licence Tribunal

Appeal d'appel en

Tribunal matière de permis

DATE:

2010-05-03

FILE:

5738/ONHWPA

CASE NAME:

5738 v. Tarion Warranty Corporation

An Appeal of a Decision of Tarion Warranty Corporation under the Ontario New Home Warranties Plan Act – to Disallow a Claim

Applicants

Applicants

-and-

Tarion Warranty Corporation

Respondent

-and-

Medi-Terra Properties Corp. Added Party

REASONS FOR DECISION AND ORDER

ADJUDICATOR:

LAURIE SANFORD, Vice Chair

APPEARANCES:

For the Applicants:

THE APPLICANTS, self represented

For the Respondent:

MARSHALL REINHART, Counsel, representing Tarion Warranty Corporation

For the Added Party:

JOHN SPINA, Agent, representing Medi-Terra Properties Corp., the Added Party

Heard in Toronto:

April 15 &16, 2010

ORDER

This is an appeal by the Applicants to the Licence Appeal Tribunal (the “Tribunal”) from a decision of Tarion Warranty Corporation (“Tarion”) under the Ontario New Home Warranties Plan Act (the “Act”) denying certain of the Applicants’ warranty claims. The Decision Letter that gives rise to this appeal is dated October 21, 2009. The hearing took place in the presence of the Applicants, who are self-represented. To preserve their privacy, the Applicants will not be referred to by name but will be referred to as Mr. and Mrs. D. Also appearing at the hearing were Mr. Reinhart, Counsel, representing Tarion and Mr. Spina, Agent, representing Medi-Terra Properties Corp. (“Medi-Terra”), the vendor/builder and added party.

Facts

Mr. and Mrs. D. took possession of their home on April 15, 2008. Shortly after moving in, they noticed dents and cracks in the hardwood floor they have on their first floor, including in the kitchen, dining, living and family rooms as well as on the landing and the stairs to the second floor.

These dents and cracks occurred in about 15% of the boards. It is not clear whether Mr. and Mrs. D. were offered the option of replacing the affected boards. Mr. D. testified that the dents and cracks were caused by faulty installation and he was concerned that the problem would become more widespread. Medi-Terra offered to sand down and re- finish the first floor hardwood, except on the landing and stairs, which Mr. and Mrs. D. did not want repaired. Both Mr. and Mrs. D. heard the representative of Medi-Terra, a certain Mr. M., tell them that if the sanding and refinishing of the floor did not satisfy them, then Medi-Terra would replace the floor. Mrs. D. understood that the sanding and re-finishing was a first step which, if unsatisfactory, would be followed by a full floor replacement. Mr. M. no longer works for Medi-Terra and was not called as a witness. Mr. and Mrs. D. feel they had no control over the method of repair that was chosen and Medi-Terra called no evidence to dispute that assertion. Mrs. D. testified that it was not made clear to her what changes the sanding and re-finishing would make to her floor.

Mrs. D. testified that she had chosen and particularly liked the deep burgundy stain and the smooth, factory finish used on her floor originally. Both Mr. and Mrs. D. liked the micro-bevels that existed on either end of each board. Mr. D. testified that had he been told that he would lose the micro-bevelling as a result of the work, they would have reconsidered their decision to proceed with the repair. It is not clear whether either Mr. or Mrs. D. understood that their floor had been upgraded to an exotic wood or what this might mean. Mrs. D. testified, in response to a question about the type of wood she had on the floor that she had “hardwood”. Mr. D. testified that they had been told they had Brazilian Oak but he did not say when they learned this.

A flooring expert called by Tarion confirmed that the floor is Brazilian Oak and testified that it is a characteristic of this type of oak that there are wide variations in colour. The wood, because it is harvested from the rain forest and is rare, is not graded with the same degree of specificity as a North American oak might be. The dark burgundy stain applied in the factory masked this characteristic of the wood. When the stain was re- applied on site, it was a dark red but was not as opaque as the factory stain; it revealed the natural variation in the wood, including some boards which have an orange cast which the Tarion expert said is characteristic. Mrs. D. particularly dislikes this orange colour. The work also revealed the texture of the wood, which had similarly been masked by the smooth factory finish. Mr. D. is particularly unhappy about this. The finish has a duller sheen than the factory finish. As well, when the floor was sanded, the micro bevels were removed. While the parties agree that the repair resolved the issue of the cracks and dents, both Mr. and Mrs. D were unhappy with the result. Mrs. D. in particular was dismayed that the floor she had bought was no longer recognizable to her. The Tarion expert testified that the resulting floor is typical of an in-home finished Brazilian Oak floor and that in his experience 80% of homeowners prefer this type of custom finish to the factory pre-finished floor that Mr. and Mrs. D. find desirable.

In addition to the colour variation, the texture and the loss of the micro bevels, Mr. and Mrs. D. are concerned about several other issues. First, they believe the colour is fading in the high traffic areas. Neither of the two Tarion witnesses called observed this fading despite their inspection of the floor. Second, Mr. D. in particular is concerned that some of the stain was applied to the shoe moulding and that, despite a repainting of the moulding, a thin line of the stain remains. The Tarion representative who wrote the Decision Letter in question inspected the shoe moulding and found one area with very minor staining. Mr. D. is concerned that when the flooring people were in to sand and re-finish the floor they did not dust carefully and that some white dust has penetrated the cracks between the boards and is visible. The Tarion flooring expert testified that if dust had been left on the floor, it would be immediately apparent. In his opinion, the white lines between some boards are a result of the floors contracting in some weather. He suggests the solution is better humidity control in the house to avoid the degree of gapping that would reveal the unfinished, white wood. The Applicants’ believe this is a red herring and that humidity is not the issue. Mr. D. complains of cracks in some boards. The Tarion representative only discovered one minor crack in the kitchen and one gap between two boards which he characterized as within Tarion’s guidelines.

Finally, there is an issue of the kitchen island. While this is movable, it is heavy. Mr. and Mrs. D. elected not to have the island moved prior to the work being done. However, when they returned, they found the island had been shifted slightly off centre. When they re-centered it, there was a strip of wood, about 36 inches by about 1 inch, visible on one edge that had not been sanded and re-finished. The Tarion representative testified that one reason he denied warranty coverage for this is because of the arrangement that the homeowners made not to move the island out of the way. However, he also testified that he was not satisfied that he knew who had shifted the island and when it had been moved. He confirmed that, in the absence of those two considerations, the resulting strip of un-re-finished wood would be a warranted defect. His proposed remedy is to increase the trim at the base of the island to conceal the strip. The cost of this repair is approximately $300.

Decision

It is unfortunate that Mr. and Mrs. D. did not understand the essential nature and characteristics of the exotic floor they acquired. It is also unfortunate that Medi-Terra did not explain this to them. It is very much to be regretted that no one at Medi-Terra apparently saw fit to sit down with Mr. and Mrs. D. and inform them of the consequences of the repair method that Medi-Terra used. The question of what Mr. M. told Mr. and Mrs. D. and the extent to which they relied on his representation that Medi- Terra would replace the floor if they were not satisfied is obviously a matter of utmost importance to Mr. and Mrs. D. However, it is an issue that is beyond the jurisdiction of this Tribunal. Any remedy sought as a result of these representations would have to be pursued in another forum.

The narrow question before the Tribunal is whether the sanding and re-finishing of the floor was done in such a matter that it breaches the warranties contained in the Act.

Included in those warranties is a warranty that the home is constructed in a workmanlike manner and is free from defects in material. This warranty applies to repairs.

The Tribunal finds that the fact that the essential nature of the wood has been revealed by the sanding and re-finishing of the wood is not, in itself, a breach of warranty. There is no evidence of poor workmanship or defects in material. It is important to note that the fact that the Tarion expert testified that 80% of homeowners prefer the type of in- home finish that the Applicants now have would not be a defense if there were a breach of warranty. It is also important to note that in some cases questions of aesthetics are so fundamental to the resulting floor that they may give rise to a warrantable claim. That is not the case here. The Tribunal accepts the evidence of the Tarion witnesses that the floor is a typical Brazilian Oak floor without defect. As well, the pictures produced by the homeowners in support of their claim did not show the degree of colour variation that would give rise to a warranted claim.

The Tribunal accepts Tarion’s evidence that there is no evidence of colour fading or dust between some boards. The Tribunal also accepts that the only cracking observed is typical of normal shrinkage. One small area of stain left on the shoe moulding likewise does not give rise to a warrantable claim. However, the Tribunal accepts the evidence of Mr. and Mrs. D. that they first observed the kitchen island off centre when they returned to the house after the floor had been sanded and re-finished. The Tribunal finds, on a balance of probabilities, that the floor finishers were the most likely people to have shifted the island. The Tribunal does not accept the argument of the Tarion Representative that because the homeowners elected not to move the island prior to the repair, then the resulting off-centre re-finishing should not be warranted under the Act. By not moving the island, Mr. and Mrs. D. accept the fact that the floor under the island has not been re-finished. They should not have to accept a skewed island or a strip of un-re-finished flooring. Either of these alternatives would constitute a defect in workmanship. The Tribunal will award Mr. and Mrs. D. $300 to install deeper trim on the base of the island to conceal the strip of wood that has not been re-finished and that is visible when the island is centred.

Accordingly, the Tribunal orders that the Applicants be awarded the sum of $300 in full satisfaction of their appeal from the Tarion Decision Letter dated October 21, 2009.

LICENCE APPEAL TRIBUNAL

Laurie Sanford, Vice Chair

RELEASED: May 3, 2010