Licence Tribunal
Appeal d'appel en
Tribunal matière de permis
DATE:
2011-10-07
FILE:
6013/ONHWPA
CASE NAME:
6013 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-
Northridge Homes Ltd. Added Party
REASONS FOR DECISION AND ORDER
ADJUDICATOR:
TERRANCE SWEENEY, Vice-Chair
APPEARANCES:
For the Applicants:
APPLICANTS, Unrepresented
For the Respondent:
BRENT ARNOLD, Counsel, Representing Tarion Warranty Corporation
For the Added Party:
BRENDA MCARTHUR Agent, representing the Added Party, Northridge Homes Ltd.
Heard in Toronto:
September 12 & 13, 2011
REASONS FOR DECISION AND ORDER
This is an appeal by the Applicants to the Licence Appeal Tribunal (the “Tribunal”) from the Decision Letters of Tarion Warranty Corporation (“Tarion”) dated March 24, July 9, October 14 and October 27, 2010 with respect to a new home purchased from Northridge Homes Ltd. (the “Added Party”), in which Tarion denied the Applicants’ claims.
FACTS
The Applicants are husband and wife. Their names will not be used to protect their privacy. They acquired their home in the summer of 2007. There were a number of problems in the construction of the home. The Applicants complained to Tarion which investigated their claims and issued Decision Letters.
The March 24, 2010 and October 14, 2010 Decision Letters relate to first year claims. The July 9, 2010 and October 27, 2010 Decision Letters relate to second year claims. Tarion resolved most of the claims but was unable to satisfy the Applicants in respect to the claims that are the subject of this hearing.
Each of the husband and wife testified and they called one expert witness. Tarion called a Field Claims Representative (“FCR”) to testify as well as an expert witness. The Added Party was present at the hearing but took no part in the proceedings.
LAW
The Ontario New Home Warranties Plan Act, R.S.O. 1990, c. O. 31 (the “Act”) provides a one year warranty period for defects in work and materials, violations of the Ontario Building Code (“Code”), unfitness for habitation, substitutions and delayed closing.1
There is a two year warranty period for water penetration through basement or building envelope, defects in electrical and mechanical systems, detachment or deterioration of exterior cladding, violations of health and safety requirements in the Code and major structural defects.2
The onus is on the Applicants to prove their case on a balance of probabilities.3 They must show that:
A warranty in the Act has been breached;
The Applicants have sustained damages as a result of this breach; and
What the cost of repairing each item claimed will be.4
A warranty does not apply, among other things, in respect of normal shrinkage of materials caused by drying after construction or damage as a result of an act of God.5
ISSES
Grading
Brickwork
Ceramic Tiles
Roofing/Shingles
Weep holes
Leaks and Cold
Windows not closing properly
Moreover, is there a major structural defect in the home?
APPLICANTS’ EVIDENCE
The Wife
She was sworn and testified as to the stress she continues to suffer as a result of the problems with the home and the time it has taken to get some of the claims resolved.
She said that the house was built on a swamp which has caused structural problems with the home. She complained that the grading is inadequate and that water is collecting around the foundation wall. The bricks and mortar joints are cracking. The Added Party came out in 2009 and tried to correct the problem but only made it worse. The Added Party and another builder have been out to the house four times on this problem but 30% - 40% of the bricks and mortar are still not right.
There is a crack in the wall underneath her son's bedroom and water is coming in. Both the Added Party and the other builder retained by Tarion addressed the problem but not to her satisfaction.
The windows are not closing properly and the seal is broken on eight windows. The builder checked the windows and suggested glue and caulking but that is not what she wants.
She said that the shingles on the roof are defective. Some repairs were done but apparently the builder ran out of the type of shingle originally used.
She augmented her testimony by referring to a number of photographs she took. They show, for example, water pooling around the home and broken shingles. She neglected, however, to tell the Tribunal when most of the photographs were taken. Some indicated "2010" but most had no indication as to when they were taken. It is impossible, therefore, for the Tribunal to determine at what stage in the Tarion investigation they were taken. Significantly, she produced no evidence as to the cost of the repairs she wanted done.
The Husband
He was sworn and testified solely in respect of the ceramic tiles. Tarion had found that the ceramic tiles had not been installed by the Added Party by any of the methods prescribed by the Code. Tarion hired a builder who was to install them according to the Code. This was done in May 2010. The husband said, however, that they continue to creak when he walks on them and that there is some cracking. He did not give any evidence as to the cost of fixing the tiles to his satisfaction.
Applicants' Expert: Mr. Henry Jansen, P. Eng.
He is the owner of Criterium-Jansen Engineers and has over 15 years of engineering experience. Counsel for Tarion conceded that Mr. Jansen is qualified as an expert in house construction and the Tribunal so accepted him.
He tendered his report dated January 25, 20116 and spoke to it. His report is based solely on visual inspection. He did not conduct any destructive or invasive testing.
He visited the home once, on January 11, 2011. He noted areas of step cracking and past areas of repair. He also said that he saw hairline cracks in the poured concrete foundation walls. He observed weep holes that were missing from the brick and stone work and repairs that had been done to the weep holes.
He considered the overall installation of the brick and stone work to be below average. He proffered three theories for the problems with the brick and stone work:
An inadequate number of brick ties were installed to hold the brick and stone in place. The brick and stone are, thus, susceptible to movement which would cause step cracking.
The poured concrete foundation walls are moving.
A lack of weep holes could be a contributing factor.
His opinion, however, is tempered by his admission in his report that he would need to do testing to prove his thesis. This was not done.
He said that there was some warping of the roof sheathing and cracking shingles and issues with roof sheathing support.
He did provide an "order of magnitude" cost estimate to excavate the foundation walls and replace weeping tiles, implement a site grading plan and remove and replace all the brick and stone from the home and replace roof sheathing and roof shingles. He did not provide estimates simply to repair the items complained of by the Applicants.
He tendered a second report dated July 15, 20117 in which he opined that the home was constructed without verifying the specific bearing capacity of the ground on which the home is built. The home should have a foundation designed to meet the specific soil bearing capacity for the lot on which the home is situated.
This opinion is attenuated by his admission in this respect that he would need to do a geothermal investigation to test his theory. This was not done.
On cross-examination he conceded the following:
He has not read the report of Tarion's expert.
He has no evidence to contradict the findings of the Tarion expert.
When he refers to foundation water on the ground around the home, he is not talking about grading but drainage. In his report he is not suggesting that grading is causing the water to accumulate around the foundation.
He does not know if the cracks he observed have increased in size.
He did no testing to investigate the alleged failure of the weeping tile.
RESPONDENT’S EVIDENCE
Lee Jamieson (“Mr. Jamieson”) was duly sworn. He is a FCR employed by Tarion. He is a graduate of Fanshaw College in construction engineering. Prior to his employment with Tarion, he worked as a contractor for 17 years and did work for Tarion.
He was the FCR who responded to the claims of the Applicants and he wrote the four Decision Letters. He is thoroughly familiar with the home as he has visited it at least a half dozen times.
He testified in respect to the claims of the Applicants. He essentially repeated his findings set out in the four Decision Letters.8
His testimony is summarized as follows:
Grading
Tarion is only concerned with the first two or three feet around the home. Beyond that the grading is the responsibility of the Municipality.9
He was satisfied that the grading conformed to the Construction Performance Guidelines (“CPG”) issued under the Act.
Roofing and Shingles
There were a number of shingles which had blown off the home. He contracted with a builder which replaced a section of roofing on the garage. In his opinion the shingles were blown off by an act of God which is not covered by the statutory warranty. So far as he is concerned the roof has been fixed.
Windows
He warranted that clips be installed on the windows. In February 2010, however, the wife refused entry to the contractor sent out to do this. She wanted all the windows replaced which Tarion was not obliged to do.
Foundation Wall Crack
He said the crack was only 3 mm wide. Under the CPG anything under 6 mm is normal cracking in a foundation.10
Mortar Joint Cracks
The cracks were less than 3 mm wide. Notwithstanding this he authorized a builder to repoint the cracks. There were a few areas where the mortar was not complete. Tarion offered to touch up the mortar but the wife or husband told him not to do it.
Exterior Weep Holes
Tarion hired a builder to install them.
Exterior Brick
The builder hired by Tarion inserted a flexible sealer and he is happy with the work that has been done.
Ceramic Tiles
This was a legitimate complaint of the Applicants. Tarion hired a builder to take up the tiles and replace them on a new layer of sheathing. This is an approved method under the Code. The husband wanted a "diamond mesh" treatment. Mr. Jamieson conceded that this would be a better technique but Tarion was not required to do that one.
New Cracks in Foundation Wall
There were two cracks at the corners and water penetrated the home. Tarion warranted this claim and the builder injected them. In June 2010 the Applicants asked for a water test. The test showed that the work had not been done properly as water did leak in. The builder reinjected the cracks and they have not leaked since.
The Applicants did not report moisture on the basement floor until recently. It is not, therefore, a proper claim. In any event he has inspected the unfinished basement and noted that items are stored there.
On cross-examination Mr. Jamieson said that he was not happy with the Added Party. But he does not think that there is anything major wrong with the house now that the builder he hired to respond to the Applicants’ claims has completed its work.
Tarion’s Expert
James Wallace (“Mr. Wallace”), BASc, MASc, P.Eng, was duly sworn and tabled his curriculum vitae which was marked as an exhibit.11
The Tribunal accepted him as an expert in construction engineering.
He is employed by Aecom Canada Ltd. (“Aecom”). Aecom was retained by Tarion to determine whether Tarion was correct in its assessment of the Applicants’ claims.
He visited the home three times over a sixteen month period. He had the advantage of reading the report of Mr. Jansen. His expert testimony is summarized as follows:
There is no major structural defect with the home.
He disagrees with the three theses put forward by Mr. Jansen to explain the cracks in the brick veneer. He does not think that the crack patterns and crack locations on the home are consistent with Mr. Jansen's theory. Rather, in his opinion, they are the result of concrete shrinkage.
The cracks in the top of the interior main floor walls are due to "truss uplift" as a result of relative humidity of the air in the attic. He said that the cracks will likely close during the course of the summer and open again each winter.
Unlike Mr. Jansen, he tested his conclusions. For example, he used a "crack monitor" on two occasions to measure the crack size. He found that the cracks were not large enough to be a concern. He recommended, however, that they be continually monitored.
He also had a test pit dug along the side of the home on March 5, 2011, to observe the amount of water in the soil and the condition of the weeping tile. He observed that while some water was in the weeping tile, it was not full and appeared to be draining excess water from the soil around the house.
APPLICATION OF LAW TO FACTS
The Applicants are the victims of some shoddy work by the Added Party. They were right to complain to Tarion. The Applicants have suffered understandable anguish as a result of the Added Party's poor work. Moreover, Tarion has been put to considerable expense in an effort to satisfy the Applicants.
The Applicants did not present any evidence in their testimony which consisted of a litany of complaints. In contrast Mr. Jamieson gave his testimony in a dispassionate manner which was backed up by the analysis in his Decision Letters. It follows, therefore, that where there is any inconsistency between the evidence of Mr. Jamieson and the Applicants, the Tribunal prefers that of Mr. Jamieson.
The reports of Mr. Jansen can best be described as conjectures as he did not test his theories.
Mr. Wallace refuted the theories of Mr. Jansen based on the tests he conducted. Again, the Tribunal prefers the report of Mr. Wallace as opposed to Mr. Jansen.
The Tribunal finds based on all of the evidence, documents and testimony of witnesses, that the Applicants have failed to meet the onus on them to prove their case on a balance of probabilities.
The Tribunal will not review each of the claims of the Applicants but the following few examples will illustrate how the Applicants failed:
Grading
Mr. Jamieson said that Tarion is not responsible beyond the first few feet around the home and he gave authority for that statement. The Applicants presented nothing to contradict that.
Windows
The Tribunal prefers Mr. Jamieson's testimony that the wife denied Tarion’s contractor entry to the home in February 2010 to satisfy the warranted claim in respect of the clips on the windows. This action disentitled the Applicants to any relief on that claim.12
Ceramic Tiles
All parties agreed that the treatment demanded by the husband would be a better technique. But the Tribunal accepts that the repair was according to the Code and Tarion did not have to do the repair demanded by the husband.
Roof and Shingles
The Tribunal accepts the testimony of Tarion and Mr. Wallace that the shingles blew off through an act of God which is not covered by the statutory warranty. Again, the Applicants had no evidence to contradict that opinion.
Damages
The foregoing is enough to dispose of the Applicants' claims. However, even had they been able to establish breaches of statutory warranties, they would have failed as they did not present evidence of the costs of the repairs they sought.
They were warned in this regard. Each Decision Letter sent to them pointed out the need to prove their damages. They ignored this at their peril.
The Tribunal notes that Mr. Jansen did provide “ballpark” estimates but they were related to the theories he expounded and were not specific to the claims of the Applicants.
DECISION
By the power invested in it under the Act, the Tribunal orders Tarion to deny the claims of the Applicants.
LICENCE APPEAL TRIBUNAL
Terrance Sweeney, Vice-Chair
RELEASED: October 07, 2011