Licence Tribunal

Appeal d'appel en

Tribunal matière de permis

DATE:

2010-06-22

FILE:

5871/ONHWPA

CASE NAME:

5871 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-

David Kenneth Robson

Added Party

REASONS FOR DECISION AND ORDER

ADJUDICATOR:

DAVID GREGORY FLUDE, Vice-Chair

APPEARANCES:

For the Applicants:

A FAMILY MEMBER OF THE APPLICANTS, Agent, representing

the Applicants

For the Respondent:

GREGORY W. BANKS, Counsel, representing Tarion Warranty Corporation

For the Added Party:

DAVID KENNETH ROBSON, the Added Party

Heard in Toronto:

May 31 and June 1, 2010

REASONS FOR DECISION AND ORDER

The Applicants appeal the decision of Tarion Warranty Corporation (“Tarion”) to deny their claim pursuant to the provisions of the Ontario New Home Warranties Plan Act,

R.S.O. 1990, c. O.31 (the “Act”). Tarion’s original Decision Letter, dated January 4, 2010, denies four claims. The appeal was commenced with respect to two of those claims: 1) the failure of the builder to properly seal the cut ends of pressure treated wood used on the decks, and 2) the remediation of a mould problem in the basement crawlspace. On the second day of the hearing, Tarion advised the Tribunal that it has reversed its decision not to warrant the deck issue. That issue having now been warranted, the appeal continued with respect to the mould issue only.

The Tribunal heard evidence from one of the Applicants, Bruce Martin, the Tarion Field Claims Representative who handled this claim, Michael Chymycz, a mould remediation expert called by Tarion, and the Added Party, David Kenneth Robson (the “Added Party”).

SUMMARY OF THE EVIDENCE

The dispute between Tarion and the Applicants revolves around the actions of the Applicants in hiring a contractor to purportedly carry out mould remediation measures in November 2009. The Added Party takes the position that the mould resulted from the failure of the Applicants to properly insulate the basement and should not have been warranted in the first place.

The position of the Applicants is best set out in an email dated November 11, 2009, to Bruce Martin from the Applicants.1 The full text is as follows:

Mr. Martin,

I have taken this matter up with our Lawyer and this is our response.

1. Tarion was made aware of the mould problem as far back as July 16. Laboratory proof from PINCHIN was sent and received by you on October 16th. It is now November 11th, almost a month later. Over time several e-mails were sent, also by our Lawyer. All of our e-mails refering [sic] to mould asked for URGENT response from you.

Now you try to claim that TARION hasn’t had an opportunity to investigate.

2. TARION decided on Nov. 4 that our mould claim was warranted and stated that it required an IMMEDIATE REMEDIATION.

3. You received a copy of GEORGIAN INSULATION’s letter. It details a plan for eradication of the mould + prevention of future mould problems. (BACKED BY A 2- YEAR WARRANTY)

4. You are aware that we have made arrangements with GEORGIAN to start the work on Nov. 12 in keeping with the need for IMMEDIATE REMEDIATION.

5. You are claiming that the GEORGIAN plan does not represent mould remediation even though you have a copy of GEORGIAN’s proposal where it is explicitly detailed that it will achieve mould remediation.

6. You are aware that we haven’t been able to use our furnace

7. You are aware that [one of the Applicants] suffered an acute allergic reaction

(documented in her Doctor’s record.)

8. Now you are demanding that we agree to even more delaying by way of more tests, investigations etc. etc.; even though you are aware of TARION’s warranty of IMMEDIATE REMEDIATION.

9. You threaten us that TARION will refuse warranty if we don’t agree to these demands.

10. When you phoned me on Nov. 10 at 3:50 PM you told me that you had started to make arrangements parallel to ours as soon as you received our October 16 e-mail that contained the PINCHIN laboratory reports. Unfortunately you omitted to tell us about your arrangements. Even at this late date I have not received from you an e- mail with specific information and time-lines about your arrangements. You especially have not told us how, if at all, you planned to satisfy TARION’s decision of Nov. 4 2009 which stated that an IMMEDIATE REMEDIATION was required.

11. While we have in fact made arrangements with GEORGIAN towards the speediest resolution possible, all that we know from you is that you were planning to add more delaying steps with tests, assessments etc. etc., pushing the resolution further back.

12. We supplied you with a detailed repair plan through GEORGIAN, and all that you have done is claim that the information is false.

Mr. MARTIN, you have just about exhausted our patience with the TARION warranty process, especially since you seem to think nothing of the fact that our health and well- being is endangered.

[Agent’s name]

for [the Applicants]

The Applicant who testified confirmed the contents of the above email in her evidence. She described how she had first pointed out mould on rock on the floor of the crawlspace to Mr. Martin, when he conducted a conciliation inspection of the basement on August 14, 2009. There is no mention of it on the 30-Day Form, which was the basis for the conciliation inspection. She stated that Mr. Martin had been of the opinion that the white powdery substance on the rock was mineral leachate and that he advised them to have it tested to see if it was mould. She stated, and Mr. Martin confirmed, that he did not tell her what type of testing to do.

Notwithstanding her evidence that she was starting to feel ill as a result of mould contamination, no further steps were taken to analyze the mould until mid-September. In and around that time, the Applicants retained the services of Pinchin Environmental Microbiology Laboratory (“Pinchin”). The Applicants were advised to take a sample of the substance by using sticky tape. They forwarded the sticky tape sample, together with a piece of cardboard box that had become mouldy while sitting in the crawlspace. The samples were received by the laboratory on September 18, 2009. Pinchin issued its report on September 28, 2009.2 It found that the cardboard had a heavy growth of

Aspergillus sp and the rock surface had a heavy growth of Acremonium sp.

In and around October 1, 2009, the Applicants contacted a company called Georgian Insulation Systems (“Georgian”) and Georgian attended for a site visit.3 There was no further contact with Georgian until October 21, 2009, when Georgian forwarded two letters of the same date addressing the subject of the site visit. The opening line of the second of the two letters is interesting. It states:

Thank you for inviting Georgian Insulation Systems to supply our quotation for installing

spray foam insulation to the crawl space below your home.

[Emphasis added]

The letter then addresses the fact that mould contamination had been found during the site visit and details remedial measures to be taken by Georgian to address the mould contamination. The letter details removal of existing partially installed insulation and other loose material, followed by spraying a fungicide, Concrobium. The letter then describes how heat from the foam insulation will kill existing mould and will then provide a water-tight seal and an air-tight seal to prevent further mould growth. The balance of the letter details the insulation value of the foam spray and thermal barrier.

2 Exhibit #3, Tab 10

3 Exhibit #3, Tab 12

On October 16, 2009, the Agent on behalf of the Applicants sent an email to Mr. Martin.4 It is clear from the header that the email had two files attached. The body of the email states:

At the time of your inspection we were unable to point out the areas where mould had been noticed before. However subsequent to your visit we sampled the rock as you suggested and we now have evidence of mould growth demonstrated by the PINCHIN Environmental Microbiology Laboratory. A copy of their report will be appended to this e- mail (or sent by fax if that fails).

The Applicants take the position that the attachments were the two pages of the Pinchin report and that Tarion received the report on that date. In his evidence, Mr. Martin states that he did not receive the attachments. October 16, 2009 was a Friday. On Monday, October 19, 2009, Mr. Martin emailed the Agent for the Applicants with regard to the mould issue and stated: “Tarion will revisit this concern once the report has been received, this does not mean it will necessarily be warranted”.5 Having conceded the fact that the email attachments may not have been received, the Applicants’ Agent responded on October 26, 2009: “I appended the reports by Pinchin Laboratories…to my previous email, and I am surprised you did not receive them. I will attach them

onxce [sic] more to this message”. Mr. Martin received the Pinchin report on October

26, 2009. On October 29, 2009, he advised the Applicants that he would take the matter up with his management team and respond as soon as possible.6

On November 4, 2009, Mr. Martin notified the Applicants that the mould issue was warranted.7 His email states:

B) It is Tarion’s position that the water penetration into the crawlspace through the crack in the foundation wall and the roots under the footings has contributed to the mold [sic] growth in the crawlspace and requires immediate remediation as it poses a health risk. Warranted

These decisions will be entered on a revised Warranty Assessment Report, which will be issued tomorrow. In the meantime, in compliance with the New Home Warranty Plan Act the builder has a repair period of 30 days and the homeowner must provide access to the builder and his trades during that period to allow for the repairs, failure to do so may void the Tarion Warranty.

As of November 4, 2009, out of a total of 82 days since the issue was first brought to Tarion’s attention on August 14, 2009, Tarion had taken nine days from receipt of the Pinchin report on October 26, 2009, to make a determination that the mould issue was warranted. Even allowing for the Applicants’ position that the Pinchin report was received by Tarion on October 16, 2009, the resulting period of 19 days to consider and warrant the mould issue was hardly excessive. In finding the mould issue was warranted, Mr. Martin had relied solely on the representations of the Applicants concerning the source of the basement dampness that led to the presence of mould.

4 Exhibit #8

5 Exhibit #24

6 Exhibit #9

It was the Added Party’s evidence that he was not present at the time of the conciliation inspection. This fact was confirmed by Mr. Martin. It was Mr. Martin’s evidence that the basement was dry when he inspected it on August 14, 2009. Mr. Martin noted that one wall was partially insulated with fibreglass batting and that no vapour barrier had been installed. The bedrock exposed in the crawlspace had no vapour barrier and all other walls were bare.

Mr. Martin contacted the Added Party almost immediately after warranting the mould problem. The Added Party then took steps to locate a mould remediation company. The next day, the Added Party sought permission to have his mould specialist enter the Applicants’ home on November 6, 2009, to conduct tests. As an alternative date, he offered November 13, 2009. The position taken in the response to this request totally baffles the Tribunal. By email dated November 6, 2009, the Applicants’ Agent states in response:

I received your e-mails of yesterday evening. [The Applicant] told me about your phone call to her answering machine at seven minutes to six, when you announced or demanded that you needed access the following morning at 10 AM.

We are appalled by your arrogance and your lack of consideration. You know full well that both [the Applicants] have jobs, that don’t allow them to take time off with insufficient or no notice.

As it happens, [the Applicant] is exhausted as a result of the stresses generated by this conflict with you, and also she is just barely recovering from a medical emergency six days ago, when she had an acute allergic reaction to the moulds in the crawl space. She surely doesn’t need you and your so-called specialist clomping through her bedroom (did you forget that the access trapdoor is in the Master Bedroom?) to ‘assess the mould situation’.

You are already way behind. In keeping with the need for an ‘immediate remediation’ as warranted by TARION, we already have in place an assessment and treatment plan by a legitimate company, who have agreed to insert us in their line-up due to the urgency and medical implications of our mould problem.

Also: you seem to be forgetting that you personally are banned from our property (or face trespassing charges).

If and when in the future there might be a need for you to communicate with us such as to arrange TARION mandated repairs, you are warned that we will not tolerate arrogant and inconsiderate demands from you. We are under no obligation to subject ourselves to your lack of manners.8

Between the disclosure of the mould report on October 26, 2009, and the above email response, there had been a series of emails from the Applicants and their counsel urging Tarion to take steps to resolve the mould issue quickly. Tarion had consistently responded that the builder was permitted a 30 day remediation period to carry out the necessary work. As those emails progress, the concept that the female Applicant has had an acute allergic reaction on October 31, 2009, begins to enter the picture.

For instance, the Applicants’ Agent sent Mr. Martin an email on November 2, 2009, prior to the November 4, 2009 warranty email, stating concerns about the deleterious effects of moulds on health but making no mention of any medical emergency.9 On the same day, counsel for the Applicants sent an email urging rapid resolution and citing general health concerns but making no mention of an acute allergic reaction on October 31,

2009.10 On November 3, 2009, the Applicants’ Agent sent a further email about Georgian’s schedule, but makes no mention of an acute allergic reaction.11 In fact, the first mention of a medical emergency is on November 4, 2009. In an email from the Applicants’ counsel, it is stated that the female Applicant has had to attend emergency medical treatment as a result of mould.12 That email states a lack of confidence in the builder to act expeditiously, yet when the builder acted with dispatch to arrange for testing and development of a remediation program, he was accused of arrogance and bad manners.

From November 9, 2009 onwards, Mr. Martin attempted to communicate with the Applicants to advise them of the need for access to develop a scope of work. In his evidence, he stated that it was necessary to conduct air sampling around the house to determine if mould spores had spread through the ventilation system. He pointed out that nothing in the Georgian quote addressed that possibility. He advised the Applicants on a number of occasions that refusal to let the builder’s representative in to test, would result in loss of warranty. He requested that the Applicants cancel the Georgian appointment to allow for further testing, but to no avail. Georgian attended on November 12, 2009, and completed the work over the next few days.

As stated above, the statements concerning a medical emergency began to arise in emails from November 4, 2009 onwards. In her testimony, the female Applicant stated that she had an acute allergic reaction on October 31, 2009, and had to take time off work. She did not attend an emergency room or even go to see her family doctor on October 31, 2009. Her visit to her family doctor did not occur until November 4, 2009. The doctor’s note, written on January 20, 2010, states that the female Applicant attended to see him “on an urgent appointment on November 4, 2009”. She advised the doctor that she had had an acute allergic reaction after exposure to mould in the crawlspace on October 31, 2009. The doctor lists the reported symptoms but notes that the Applicant is largely symptom free at the time of the visit. The doctor concludes that the Applicant must have had an acute flare-up as a result of her October 31, 2009 mould exposure, but does not provide any objective evidence for this conclusion or any review and elimination of similar conditions such as the common cold. The Tribunal can place very little weight in the doctor’s note, as confirmation that the Applicant suffered an acute allergic reaction or had any form of medical emergency. Her own failure to take any steps other than to use over the counter medications, indicates a less dire condition.

9 Exhibit #10

10 Exhibit #11

11 Exhibit #12

12 Exhibit #14

Michael Chymycz has been involved in the construction business since completing a pre-apprenticeship course at The Centre for Skills Development. He then worked for several years framing residential houses. In 2003, he became involved in mould remediation and has remained in that field since. He is certified as a Mould Inspector and as a Mould Remediator by the National Association of Mould Professionals. He is also certified as a Hazardous Material Technician and a Water Damage Restoration Technician. Based on his experience and training, the Tribunal found him amply qualified to give opinion evidence in mould remediation techniques and in preparing estimates for the cost of mould remediation. He reviewed the work done by Georgian, allegedly to clear up the mould problems in the Applicants’ home.

He characterized the Georgian approach as attempting to kill the mould and then encapsulating it. He stated that this approach is not an accepted manner of mould remediation. He stated that the key to mould remediation is removal of the mould from the site. He noted the manufacturer of the heat foam that Georgian sprayed into the Applicants’ crawlspace does not advertise it as a mould remediation product. In fact, contrary to Georgian’s assertion that the heat would kill the mould, Mr. Chymycz stated that heat may not kill mould.

The correct method for mould remediation in the Applicants’ crawlspace, according to Mr. Chymycz, is to remove all of the mould currently present by vacuuming, as suggested by Georgian, to remove loose material. Thereafter, removal is completed by blasting with dry ice, a process known as kryoblasting. The cold from the dry ice kills the mould and the abrasive effect of the blasting removes it from surfaces. The blast products are removed from the space through vacuuming. This step is considered by Mr. Chymycz as of great importance and is omitted from the Georgian proposal. Thereafter, the surfaces are sprayed with Concrobium, as suggested by Georgian. Finally, the best way to prevent future mould growth in the crawlspace, according to Mr. Chymycz, is to control the humidity. To do so, it is necessary to install an exhaust fan controlled by a humidistat. As the humidity rises, the exhaust fan draws it from the crawlspace. The total cost of remediation using the techniques espoused by Mr. Chymycz is $5,500.00, as opposed to the $15,280.13 charged by Georgian.

Mr. Chymycz stated that there was no need, in his opinion, to put three inches of foam insulation on the rock floor. It was sufficient to cover it with a vapour barrier. The foam insulation, in his opinion, simply acted as ballast on the vapour barrier. With respect to the walls, he was of the view that, after removal of existing mould contamination, the installation of fibreglass batting was equally effective for insulation purposes as four inches of foam spray. He stated that mould will not grow on fibreglass batting. It may grow on contaminants that get into the fibreglass batting, but the same is true of foam insulation. In his opinion, installing fibreglass insulation in the basement crawlspace together with a vapour barrier would cost approximately $1,000.00. Mr. Martin estimated about $800.00 in his evidence.

With respect to the source of the dampness leading to mould, Mr. Chymycz stated that un-insulated walls or insulated walls without a vapour barrier permit water condensation on the inside during the cold winter weather. If there is no ventilation, the presence of moisture will promote mould growth. To prevent mould growth, it is necessary to dry the space within 48 hours of it becoming damp.

The Added Party testified concerning his involvement in the construction of the home. He stated that his contract was to build the house on a time and materials basis as far as the drywall stage. The Applicants were then responsible for finishing the interior and getting the occupancy permit from the local municipality. He stated that basement insulation was one of the responsibilities of the Applicants. He conceded to the Applicants’ Agent that installation of a vapour barrier on the rock floor of the basement is a requirement of the Ontario Building Code (“OBC”), but stated that the Applicants undertook to ensure compliance with the OBC as far as finishing the basement was concerned, in order to be granted the occupancy permit.

The Added Party took issue with the source of the moisture in the basement. He addressed an allegation that a root had allowed water to wick through the foundation wall. He informed the Tribunal that he had spoken to a contractor who had sealed a crack in the basement wall. He was informed by that contractor that an uncut root extended approximately 2” underneath the foundation wall. He stated that the location of the uncut root was well below the level of the basement.

The Added Party testified that, when basement walls are left without insulation or when insulation is installed but no vapour barrier has been installed, condensation can form on the basement walls. The condensation can run down the wall and make it appear as if there is a leak in the wall permitting outside water access to the basement. In his view, it was the failure of the Applicants to properly insulate the basement that caused the water accumulation in the basement. His evidence is close to the evidence of Mr. Chymycz, with regard to the effect of failure to properly insulate basement walls and water in the basement.

The Added Party told the Tribunal that he has had to file a lien on the Applicants’ property in the amount of $61,881.00, for unpaid work. The female Applicant advised that the Applicants have counterclaimed in that action for poor workmanship, including recovery of the amount paid to Georgian for its work in the crawlspace. As at this time, the matter has not yet been heard and there has been no resolution on the merits. Mr. Martin explained how this unpaid bill is a benefit to the Applicants that Tarion has to take into account when determining the Applicants’ claim. Should this Tribunal determine that the Applicants are entitled to compensation, Tarion would apply that amount as a credit to any amount the court finds owing from the Applicants to the builder.

FACTS FOUND PROVEN

In analyzing the positions of the parties, it is necessary for the Tribunal to make factual findings. The Tribunal finds the following facts proven:

1. The Applicants’ contract with the Added Party was a time and materials contract, where the Added Party was responsible for construction of the home to the drywall stage.

2. The Applicants undertook to insulate the basement crawlspace and comply with the OBC requirements for installing vapour barriers and insulation in the basement in order to get a building permit.

3. The Added Party’s work was completed in December 2008, and thereafter, he performed no further work on the home.

4. As of December 2008, the basement crawlspace was not insulated.

5. The Applicants did not properly insulate the basement crawlspace over the winter of 2008/2009.

6. The failure to properly insulate the basement crawlspace and install a vapour barrier resulted in the build-up of condensation in the basement crawlspace, increased humidity and the growth of mould.

7. Following the Tarion conciliation on August 14, 2009, the Applicants took in excess of ten weeks to test for mould in their basement and communicate the test results to Tarion.

8. In and around October 1, 2009, the Applicants contacted Georgian for a quote on insulating the basement crawlspace.

9. The primary purpose of the Georgian quote was insulation, but the Applicants were advised that the insulation process would also have an effect on mould remediation.

10. The mould remediation aspect of the Georgian insulation process was not industry standard, failed to test for the presence of mould throughout the home, by relying solely on heat to kill mould was ineffective over the long term, failed to fully remove the mould from the crawlspace and failed to address future humidity in the crawlspace.

11. While the Applicants attempted to email it on October 19, 2009, Tarion actually received the laboratory report concerning the presence of mould on October 26, 2009.

12. Tarion responded to the laboratory report by warranting the mould problem on November 4, 2009, requiring immediate remediation as a result of potential health consequences.

13. The Added Party acted with dispatch and in an appropriate manner to arrange to test for and remediate the mould issue.

14. On a number of occasions, Tarion clearly and concisely set out the requirements of the legislation permitting both the Added Party and Tarion the right to carry out mould inspections and remediation work.

15. The Applicants refused the Added Party’s and Tarion’s requests for access to the home to carry out testing for the extent of mould contamination, and development of a scope of work to remediate the mould.

16. No condition existed to justify the Applicants abrogating the statutory rights of the Added Party and Tarion to complete the mould remediation work.

17. The cost of mould remediation of the basement crawlspace was $5,500.00.

18. The Added Party has commenced a construction lien action against the Applicants in the amount of $61,881.00, for unpaid invoices.

19. The Applicants have counterclaimed in the construction lien action for defective work, including the value of the Georgian invoice.

ANALYSIS

The applicable provisions of the Act are as follows:

Warranties

13. (1) Every vendor of a home warrants to the owner,

(a) that the home,

(i) is constructed in a workmanlike manner and is free from defects in material,

(ii) is fit for habitation, and

(iii) is constructed in accordance with the Ontario Building Code;

(b) that the home is free of major structural defects as defined by the regulations; and

(c) such other warranties as are prescribed by the regulations.

Other recovery

14. (6) In assessing the amount for which a person is entitled to receive payment out of the guarantee fund under this section, the Corporation shall take into consideration any benefit, compensation, indemnity payable, or the value of work and materials furnished to the person from any source.

Performance

(7) The Corporation may perform or arrange for the performance of any work in lieu of or in mitigation of damages claimed under this section.

Notice of decision under s. 14

16. (1) Where the Corporation makes a decision under section 14, it shall serve notice of the decision, together with written reasons therefor, on the person or owner affected.

Notice requiring hearing

(2) A notice under subsection (1) shall state that the person or owner served is entitled to a hearing by the Tribunal if the person or owner mails or delivers, within fifteen days after service of the notice under subsection (1), notice in writing requiring a hearing to the Corporation and the Tribunal.

Powers of Tribunal

(3) Where a person or owner gives notice in accordance with subsection (2), the Tribunal shall appoint a time for and hold the hearing and may by order direct the Corporation to take such action as the Tribunal considers the Corporation ought to take in accordance with this Act and the regulations, and for such purposes the Tribunal may substitute its opinion for that of the Corporation.

The scheme by which Tarion administers warranty claims and the rights of homeowners to make claims are set out in R.R.O. 1990, Regulation 892. The regulatory scheme provides for periods during which homeowners may make claims, and timeframes during which contractors can carry out repairs. Of great importance to this matter is the right of a contractor to attend at a home and carry out repairs or remedial work during the 30 days following a finding by Tarion that an item has been warranted. The regulatory provisions are set out in sections 5 and 5.1 of Regulation 892, as:

5.(0.1) Section 4 applies, and subsection 5 (2) and section 5.1 do not apply, to claims and conciliations for delayed closing or delayed occupancy made under Ontario Regulation 165/08 (Warranty for Delayed Closing or Delayed Occupancy) made under the Act for all homes with a date of possession on or after May 1, 2004.

(1) An owner who requires conciliation of a dispute between the owner and the vendor shall make request therefor to the Corporation and both the owner and the vendor shall each pay to the Corporation the applicable conciliation fee set out in Schedule A.

(3) If the Corporation determines that the remedial work will require time to complete, the Corporation shall continue to conduct such inspections of the home as the Corporation considers necessary until the work has been completed.

(4) If the Corporation determines that the conciliation reveals one or more defects that is covered by a warranty, the Corporation shall refund to the owner the conciliation fee paid by the owner.

(5) If the Corporation determines that the conciliation should not be chargeable to the vendor, the Corporation shall refund to the vendor the conciliation fee paid by the vendor.

5.1 (1) This section applies, and subsection 5 (2) does not apply, to all homes, excluding the common elements of a condominium project, with a date of possession on or after October 1, 2003.

(2) If an owner requests conciliation in accordance with section 4.2, 4.3 or 4.4, the Corporation shall, at any time between the 30th day and the 60th day, both inclusive, from the date of the request for conciliation, conduct a conciliation and issue to the owner and the vendor a report setting out the Corporation’s assessment of whether the claim items are covered by a warranty and the repairs or compensation, if any, required.

(3) The vendor shall have a further 30 days from the date on which the report is issued to complete the repairs or pay the compensation required in the report.

(4) If the vendor does not complete the repairs or pay the compensation, the Corporation shall, subject to subsection 14 (3) of the Act and section 6, pay the compensation out of the guarantee fund to the owner or shall perform or arrange for the performance of the repairs.

It should be pointed out that the legislative scheme requires the vendors of new homes to provide a warranty, not Tarion. Tarion’s role is to conciliate warranty disputes, make findings that items are or are warranted, and guarantee warranties when the vendor fails to complete the work in a timely manner as required by the legislation. The Act defines a builder who is responsible for the substantial construction of a home on a private lot, as a vendor for the purposes of the warranty provisions. The Added Party, as the builder in this case, becomes the vendor for the purposes of the warranty scheme.

It is the position of Tarion and the Added Party that, in acting in the manner in which they acted, the Applicants voided the warranty by refusing the Added Party access to their property to carry out mould remediation work. Tarion further states that its rights under section 14 (7) have been nullified by the Applicants’ actions. Finally, it is Tarion’s position that the Applicants have enjoyed the benefit of $61,881.00 of work performed by the Added Party for which payment has not been made. The Applicants’ position is that the presence of mould created emergency conditions requiring them to act immediately and unilaterally. They take the position that it is premature to determine that they have had a benefit as the law suit is still ongoing, and there has been no resolution on the merits.

The Tribunal is satisfied on the overwhelming preponderance of evidence that the Applicants refused access to their home contrary to the legislative requirements. Their actions highlight the dangers of abrogating the rights of the Added Party.

When a warranty is provided, the legislation gives a vendor the right to make reasonable enquiries concerning the scope of the breach of warranty and the scheme of repairs and then to carry out those repairs. Should the vendor fail to honour its statutory obligations, there is a guarantor, Tarion, to ensure, not only that repairs are made, but that only those repairs that are necessary to fix the warranted item are made. The guarantor acts as a third party referee to ensure that neither the vendor nor the homeowner take unfair advantage of the situation.

On the current facts, the actions of the Applicants establish an attempt to have the Added Party pay the cost of the Georgian work without discussion or review of any nature. Indeed, when the Added Party acted on an emergency basis, he was accused of arrogance and bad manners. Tarion and the Added Party were foreclosed from exercising the essential right under the statutory warranty scheme, the right to develop and implement a cost effective repair. In addition, the Tribunal has found that the predominant purpose of the Georgian work was to insulate the basement crawlspace, not to remediate mould. While it is the right of the Applicants to perform any work on their home that they choose, they cannot oblige others to pay for that work simply because they create a non-existent emergency and misconstrue the words “immediate remediation” to mean instantaneous remediation.

DECISION

Having reviewed the evidence as a whole, the Tribunal directs Tarion to deny the Applicants’ claim.

LICENCE APPEAL TRIBUNAL

David Gregory Flude, Vice-Chair

RELEASED: June 22, 2010