8539 v. Tarion Warranty Corporation, 2014 CanLII 23597

Licence Tribunal

Appeal d'appel en

Tribunal matière de permis

DATE:

2014-05-05

FILE:

8539/ONHWPA

CASE NAME:

8539 v. Tarion Warranty Corporation

Appeal of a Decision of Tarion Warranty Corporation under the Ontario New Home Warranties Plan Act, R.S.O. 1990, c. O.31 - to Disallow a Claim

The Appellant

Appellant

-and-

Tarion Warranty Corporation

Respondent

-and-

Kaneff Homes Corp.

Added Party

REASONS FOR DECISION AND ORDER

ADJUDICATOR:

D. Gregory Flude, Vice-Chair

APPEARANCES:

For the Appellant:

Self-represented

For the Respondent:

Ellie Choi, Counsel

Noah Bonder, Student-at-Law

For the Added Party:

Michael A. Cohen, Counsel

Kristina Kaneff, Counsel

Heard in Toronto:

April 10, 2014

DECISION

1The Appellant appeals the decision of Tarion Warranty Corporation (“Tarion”) to deny her claim for warranty set out in a Decision Letter dated December 18, 2013. The Added Party, Kaneff Homes Corp., is the vendor of the home and is liable to either effect warranty repairs or to reimburse Tarion for the cost of those repairs in the event this Tribunal finds in favour of the Appellant. The Added Party supports Tarion’s position in this matter.

2At the outset of the hearing, the Appellant advanced two claims. The first claim related to the lack of a railing around a ground floor balcony at the back of the house. The Appellant makes two arguments concerning the balcony. The first argument is that she was promised a railing during negotiations for the purchase of the home. The second argument is that a railing is required by the Ontario Building Code (“OBC”) because in one specific area, the vertical drop from the balcony deck to the garden exceeds the regulatory minimum drop of 600 mm. It appears that most participants in the hearing were more comfortable using inches rather than millimetres, so the minimum was converted to 23 5/8 inches. At issue in the appeal is the fact that at one spot on the north side of the balcony, the drop appears to be 23¾ to 24 inches.

3The second claim advanced by the Appellant related to drainage. The Appellant asserted that the grade in her neighbour’s back yard is too low and constitutes a danger to her young children. Her neighbour will not build a fence so she asserted a warranty claim. At the conclusion of the evidence, the Appellant abandoned her claim relating to the drainage and grading of the back yard and the drainage grate.

4The Appellant’s right to warranty coverage is set out in s. 13 of the Ontario New Home Warranties Plan Act, R.S.O. 1990, c. O.31 (the “Act”):

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.

5The Appellant testified. Her brother also testified about observations made during the Tarion inspection. The Tarion Warranty Services Representative, Vincenzo Vaccaro, testified about the measurements he took during his warranty inspection. The Added Party elected to call no witnesses.

6According to the Appellant’s evidence, she decided to order, as an upgrade, a two storey balcony on the rear of her house at a cost of $12,526.17 (Ex. 2, Design Meeting Selections & Upgrades). During the negotiations to purchase her home, she asked on a number of occasions if she would be given a railing on the ground floor balcony. On each occasion, she was referred to the model home and told that her home would be the same as the model home. In all, she stated that she visited the model home on at least four occasions to view the upgrade. The model home has a railing: her home does not (Ex. 2, photos 1 and 2 respectively). Based on those representations, she is of the view that she is entitled to a railing.

7When she executed the Agreement of Purchase and Sale, she was given time to review it with her lawyer. She did not read it in great detail, but her lawyer explained its contents to her. Counsel for the Added Party drew the Appellant’s attention to section 20 of Schedule 1 of the Agreement of Purchase and Sale, the “Whole Agreement” clause (Ex. 4, Tab 1). The Appellant acknowledged that the clause excludes any representation or warranty made during the negotiations. She is of the view that s. 27 (a) of Schedule 1, warranting that her home would be “similar to pictures or renderings but may not necessarily be identical”, together with the representation made to her, are sufficient to constitute a binding agreement for a railing. She did acknowledge that the pictures or renderings she saw were not clear on the issue of the railings, but restated that she was continually referred to the model home for the specifications of her balcony.

8Counsel then referred the Appellant to Schedule A of the Agreement of Purchase and Sale. The Appellant acknowledged that she had initialled each page of Schedule A. She had no particular recollection of the terms of Schedule A. The Appellant acknowledged that at paragraph 20 under “Exterior,” Schedule A states:

Some homes may require handrails installed on the front porch and to grade, depending on the grade conditions as per the Ontario Building Code.

Further, it states on each page of Schedule A:

The Purchaser acknowledges that the Vendor’s model homes have been decorated for public display purposes and may contain certain features, upgrade finishes and augmented services which may not be included in basic model types...Due to grading conditions, risers and railings may be necessary at the front and rear entrances.

9Mr. Vaccaro testified that he conducted the conciliation inspection at the Appellant’s home on September 13, 2013. He took photographs of his measurements (Ex. 3, Tab 9). He measured each corner of the balcony and found measurements well within the regulatory limit. He measured the corners because, while general settlement is not warranted under s. 13 (2) (h) of the Act, subsidence of footings is warranted. By measuring the corners, Mr. Vaccaro stated that he can get a sense of the grading of the lot in the vicinity of the building. In the present case, he determined that the grade sloped away from the house as it should and he concluded that the drop from the deck to grade was within the OBC requirement.

The Appellant’s brother testified that he saw Mr. Vaccaro make a measurement in the location where the drop was in excess of 23 5/8”. He further testified that Mr. Vaccaro measured the drop as 24” in that location. Mr. Vaccaro had no recollection of making such a measurement or taking a photograph of the tape measure in that area. He did take a general photograph from the north side of the balcony (Ex. 3, Tab 9, photo 7).

ANALYSIS

10There are two issues for the Tribunal to consider: was the Appellant entitled to a railing around her balcony as part of her Agreement of Purchase and Sale and does the OBC require a railing? The Tribunal has concluded that the Appellant must fail on both these issues.

11It is clear from the evidence that the Agreement of Purchase and Sale has a “Whole Agreement” clause and that the Appellant had a full opportunity to review and understand the ramifications of that clause prior to signing the agreement. Nowhere does the Agreement set out a requirement for a railing on the ground floor balcony, except if it is required by the OBC because of grading issues. The overall grading of the Appellant’s lot is such that, with the exception of one very small area, the drop from the balcony to grade is within the regulatory limit. In the case of the one area, while Tarion and the Added Party dispute whether the drop was in excess of the statutory requirement at the time the Occupancy Permit was granted for the house, there is evidence that it exceeds the statutory requirement at this time. The remedy sought by the Appellant for a minor grade fluctuation in one tiny area is the installation of a railing around the whole balcony. The Tribunal is of the view that the remedy sought is excessive. Mr. Vaccaro acknowledged that if the OBC limit is exceeded, then steps must be taken to bring it back into compliance. In the current appeal, one small area exceeds the OBC requirement by between 1/4” and 3/8”. The Tribunal is of the view that the appropriate remedy is to add soil to the depression to bring it into compliance.

ORDER

12By virtue of the authority vested in it by the Act, the Tribunal orders Tarion to deny the Appellant’s claims for warranty save and except that, should the Appellant request it within 30 days of the release of this decision, Tarion shall add sufficient topsoil to the depressed area to bring it into compliance with the OBC.