Licence Tribunal / Tribunal d'appel en matière de permis

DATE: 2012-01-12

FILE: 6453/ONHWPA

CASE NAME: 6453 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

Applicant(s) -and- Tarion Warranty Corporation Respondent -and- Added Party

REASONS FOR DECISION AND ORDER

ADJUDICATOR: MARC D’AMOURS, Vice-Chair

APPEARANCES:

For the Applicants: APPLICANT, Unrepresented

For the Respondent: DANIELLE PECK, Counsel, representing Tarion Warranty Corporation

For the Added Party: JACK MARCOCCIO, Agent, representing the Added Party Jason Properties Inc.

Heard in Toronto: November 3 and 4, 2011

REASONS FOR DECISION AND ORDER

This is an appeal by the Applicant to the Licence Appeal Tribunal (the “Tribunal”) from a Decision Letter of Tarion Warranty Corporation (“Tarion”) dated January 5, 2011 with respect to a new home purchased from, Jason Properties Inc. (the “Added Party”), in which Tarion denied the Applicant's claim.

In order to protect the privacy of the Applicant, his name will not be used.

FACTS

On December 18, 2009, the Applicant acquired a condominium unit from the Added Party. A pre-Delivery Inspection Form was completed in December 2009. The Applicant filed, online, the 30-Day Form which listed, among other items, Item #43:

Item #43 Floor 1 Kitchen Countertop Granite-Appears to be fault better described as a very high degree of porosity that the polishing of the stone did not overcome. I have spoken with someone who has expertise and I was told that is not natural and should be replaced.

This is the only item in dispute.

THE LAW

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.

14(3)Subject to the Regulations an owner of a home is entitled to receive payment out of the guarantee fund for damages resulting from a breach of warranty if,

(b) the person has a cause of action against the vendor or the builder, as the case may be, for damages resulting from the breach of warranty.

ISSUES

The Tribunal must determine whether the Added Party has breached a warranty under the Act which sets out the following relevant warranties:

(1) That the material used by the Added Party is free from defects;

(2) That, if the Added Party did substitute an item of selection in the Applicants' purchase agreement, it first obtained the Applicants' consent; or

(3) That, if the Added Party substituted an item which was not one selected by the Applicants, the substituted item was one of equal or better quality than that specified in the purchase agreement.

In the event there has been a breach of one of these legislated warranties, the Tribunal must then determine:

(a) whether the Applicants have a cause of action for damages against the builder under section 14 of the Act; and, if so

(b) the amount of the damage.

EVIDENCE

The Applicant

On August 19, 2009, the Applicant entered into an agreement of purchase and sale with the Added Party. Its Schedule E established the unit finishes. In the section “KITCHEN FINISHINGS”, at Item #29, it indicates – European designed frameless kitchen cabinets with Granite countertop from Vendor’s samples.

On October 5, 2009, he attended the Home Décor Centre. He selected his kitchen countertop, Colour Group 2, style/colour Uba Tuba at a total cost of $4,043.05.

On November 3, 2009, he met Erick Chamale, representative of the Maple Group, the granite countertop supplier. A material and edge verification form was completed and signed by the representative and the Applicant. It specified the edge profile, the sink details and included this notation “(cut from Ship#3 without vein)”. There was no cost indication on the form.

The Applicant viewed granite slabs. From the selected lot, he asked the representative if the large vein would be in the finished product. The representative confirmed that the vein would not be in the finished product, and endorsed the form with the notation.

The Applicant paid a premium of $4,043.05 for this upgrade. He indicates that he has estimates which indicates that the removal and replacement of the granite countertop would cost $6,097.37.

In cross-examination, he confirmed that he was not an expert. His evidence is based on individuals that provided him with the information.

He also acknowledged that the verification form includes a general disclaimer for granite orders which states:

I acknowledge granite and marble as natural products and as such may vary in shading, texture, veining and direction of movement. I accept these variances and agree to have no recourse in the event of a difference between the sample and actual installed stone product.

Mr. A.

Mr. A is the Applicant’s cousin. He was present, on March 18, 2010, when Dave Hutchison, Project Manager for Maple Group inspected the countertop. He was told that the disputed area of the countertop was:

a) a natural vein found in this slab;

b) the pitted surface can be repaired but the work can not be guaranteed; and,

c) the colour variation can not be fixed, the only remedy is to replace the entire countertop.

He confirmed that the Applicant had declined that repairs be done to the countertop.

Andrew Wilson

Mr. Wilson, Tarion’s Field Claim Representative inspected the countertop. He penned the warranty assessment report which confirmed that the countertop was not warranted. He indicates that the granite countertop is a natural product with variations in pattern and colour which is not a defect in material or workmanship.

He confirms that there are no provisions in the Construction Performance Guidelines addressing granite countertops.

In cross-examination, he acknowledged that he was not an expert in countertop manufacturing. He states, however, that natural conditions of material are not covered under warranty. He was provided Maple Group’s verification form, he indicated that this document was not a consideration in his determination that the item was not under warranty.

Dave Hutchinson

He has been a project manager for more than ten years for the Maple Group. He has been involved in all aspects of installing, manufacturing and servicing granite countertops. He indicates that granite is a natural product. Veins are found in granite, they are a variation in the mineral concentration of a slab.

On March 18, 2010, he attended the Applicant’s condo. He inspected the granite countertop. He confirmed by letter that the surface pitting could be repaired but that the stone’s appearance could not be changed.

He stated that the concentration viewed was a vein in the slab. As to the notation, he can not comment or confirm what was guaranteed by his colleague, Erick Chamale. It is possible to avoid a vein, this would be at a greater cost to the client.

Bob Bortolotti

He has been in the granite/marble/tile industry for fifty years. For the last fifteen years, he was the supervisor for two installation crews. He has overseen hundreds of granite installations, including countertops.

In January 2011, he became an inspector with the Terrazzo, Tile & Marble Association of Canada. Since then, he has performed seven inspections. He has testified three or four times in his new functions. He is an inspector and not an expert.

He participated in the July 8, 2010 report signed by John Newland submitted to the Inspection Committee of the Terrazzo, Tile & Marble Association of Canada. The Report indicates that the countertop was fabricated and installed in accordance with the industry standards. It is the writer’s opinion that the Applicant should allow the contractor to fill and buff the pitted pinholes.

APPLICATION OF LAW TO FACTS

The Applicant has the onus to prove his claim to a civil standard. Section 14(3) of the Act provides that if a breach of warranty is proved then the Applicant is entitled to damages.

Section 13 of the Act

The only provision of this section which is relevant is subsection (b) which stipulates that every home shall be “constructed in a workmanlike manner and is free from defects in material”.

There is no evidence, and the Applicant did not contend that the countertop was not installed in a workmanlike manner. The Tribunal, therefore, has to determine if the granite countertop was free from defects. In this matter, the question becomes: can a defect be a customer specified exclusion?

Pursuant to the Offer of Purchase and Sale, the Applicant attended the Added Party’s designated granite countertop supplier, Maple Group. The Applicant viewed the slabs of the type of granite selected, uba tuba. He queried the salesperson, Erick Chamale, if a vein would be part of the finished product. He confirmed that it would not, and he endorsed the verification form with the notation “(cut from Ship#3 without vein)”.

Erick Chamale did not testify. Dave Hutchison, a Maple Group project manager, could not advise the Tribunal of the meaning of this notation.

Bob Bortolotti, an inspector of the Terrazzo, Tile & Marble Association of Canada, confirmed, as did Dave Hutchison, that the granite countertop did include a vein, being the Applicant’s claim. Having paid a premium for this material and negotiated that there would be no vein; the Applicant did not receive a countertop free from defects. This deficiency constitutes a breach of a warranty.

The Respondent submits that the disclaimer of the verification form constitutes a barrier to the Applicant’s claim. The Applicant’s unchallenged evidence was that he had viewed the selected slab; it could be installed without the vein. It was, therefore, not a sample variation but the actual stone used for the countertop. The disclaimer can not be advanced as a defence to this claim.

The Respondent contends that the industry standard does provide for variation of natural products such as granite. The Tribunal agrees with this submission. It is also reproduced as the general disclaimer included in the supplier’s verification form. In this matter, the general provision was overridden by the specific endorsement of the salesperson.

ORDER

Pursuant to the authority vested in it under the provisions of the Act, the Tribunal directs Tarion to carry out the work and replace the granite countertop without any veins.

LICENCE APPEAL TRIBUNAL

Marc D’Amours, Vice-Chair

Released: January 20, 2012