8310 v. Tarion Warranty Corporation, 2014 CanLII 36474

Licence Tribunal

Appeal d'appel en

Tribunal matière de permis

DATE:

2014-06-26

FILE:

8310/ONHWPA

CASE NAME:

8310 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 Appellants

Appellants

-and-

Tarion Warranty Corporation

Respondent

-and-

Zancor Homes Ltd..

Added Party

REASONS FOR DECISION AND ORDER

ADJUDICATOR:

D. Gregory Flude, Vice-Chair

APPEARANCES:

For the Appellants:

Self-Represented

For the Respondent:

Gregory W. Banks, Counsel

For the Added Party:

Domenic Di Genova, Agent

Heard in Barrie:

June 9, 10 & 11, 2014

DECISION

1The Appellants appeal the decision of Tarion Warranty Corporation (“Tarion”) to deny their claim for warranty set out in a Decision Letter dated August 1, 2013. The Added Party, Zancor Homes Ltd., 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 Appellants. The Added Party supports Tarion’s position in this matter. The Appellants are spouses of each other and the Tribunal heard evidence from the male Appellant. Throughout these reasons, the Tribunal will refer to the Appellants when referring to the Appellant husband’s evidence.

2The Appellants’ 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.

3The statutory warranty set out above is not limitless. Three warranty periods are prescribed by the regulations. For the first year following occupancy of a new home, there is a general warranty that covers defective workmanship or materials. For the second year, the warranty is limited to failure of major systems such as the electrical or plumbing system and includes water penetration into the basement. Thereafter, and for a period of seven years from the date of occupancy, there is a warranty for major structural defects. The homeowners took possession of their home in 2006 so the current claim is brought under the major structural defect provisions of the legislation. The term “major structural defect” applicable to this home is defined in s. 1 of O/Reg 892/90 as follows:

“major structural defect” means,

(b) in respect of a home that is enrolled after December 31, 1990 and that is not a post June 30, 2012 home, any defect in work or materials, including any defect that results in significant damage due to soil movement, major cracks in basement walls, collapse or serious distortion of joints or roof structure and chemical failure of materials, if the defect,

(i) results in failure of the load-bearing portion of any building or materially and adversely affects its load-bearing function, or

(ii) materially and adversely affects the use of such building for the purpose for which it was intended,

but does not include any defect attributable in whole or in part to a Year 2000 compliance problem, flood damage, dampness not arising from failure of a load-bearing portion of the building, damage to drains or services, damage to finishes, malicious damage or damage arising from acts of God, acts of the owners or their tenants, licensees or invitees, acts of civil or military authorities or acts of war, riot, insurrection or civil commotion;

4This is not the first time the Appellants have appeared before the Tribunal. In 2009, the Tribunal heard an appeal from the denial of their first and second year claims. The main thrust of those claims was that the home did not meet the provisions of the Ontario Building Code (“OBC”) because the house was built in the ground water table and that the footings were undermined as a result. The Tribunal heard expert evidence from engineers and reviewed an expert report filed by the Appellants. After a hearing spreading over several days, the Tribunal concluded that there was no credible evidence to support the Appellants’ claims. The Appellants appealed that finding to the Divisional Court which upheld the Tribunal’s decision.

5In light of the findings from the earlier proceeding, Tarion moved at the outset of this hearing to strike out several grounds for appeal that related solely to the height of the water table. After hearing argument from both sides, the Tribunal concluded that a greater part of the Appellants’ appeal was an attempt to re-litigate the earlier findings, and ordered that the hearing would proceed only on those issues that may support a claim for major structural defect. Accordingly, the hearing was limited to considering cracks in the concrete foundation wall, splitting in two studs around a door in the basement and squeaky main floors as a potential result of structural failure and the settling of the land outside the house and its impact on potentially permitting frost to penetrate the ground and cause the footings to heave. It was still necessary for the Tribunal to review testimony and exhibits that had been presented in the earlier hearing. The nub of the Appellants’ case remained that the alleged structural defects were the result of ground water either undermining the footings or freezing and heaving, thus destabilizing the footings. Added to that concern was the Appellants’ belief that the footings were not thick enough to support the weight of the house, a conclusion they reached from measuring the internal height of the basement wall and comparing it to the “as built” elevations set out on a surveyor’s chart (Ex 4 page C2).

6Because the evidence relating to the split studs and squeaky floors is relatively uncomplicated, the Tribunal will deal with it first. The Appellants had asked and paid for a modification to the basement design. A door was to be added at the bottom of the basement steps in a position different from the door on the plan. When they attended the site shortly before closing, they noted that the door had not been installed. They raised this point with the Added Party and the Added Party undertook to install the door. The Appellants are concerned that the door structure is failing. They point to cracks in the top of the 2X6 studs on either side of the door and a split in the wood further down. Bruce Martin, the Tarion Warranty Service Representative who inspected the home, and Domenic Di Genova, the Operations Manager of construction related activity at the Added Party, who had not attended the home but referred to pictures of the door, testified that the two studs in issue are not load bearing. Their purpose is to stabilise the header over the door and the two inner studs. When asked why these studs had cracked and no other studs in the house had, Mr. Di Genova explained in his testimony that the wood used in any specific home may come from different lots and may have different moisture content. The split he saw was, in his view, typical of splits caused by the wood drying out.

7As an indication of failure of load bearing components, the Appellants point to the fact that the floors squeak. Squeaky floors had been in issue in the earlier Tribunal proceeding, so this Tribunal only considered them as they might be related to the failure of the two split studs and the support of the main basement steel beam. The Appellant who testified stated that floor squeaks are general throughout the house and the squeaks were not focussed in the area of the floor around the split studs or main beam.

8On the evidence it seems clear that the studs are not load-bearing. The Tribunal notes that the door was retrofitted to the home after it was nearly completed at a time when its load bearing walls had already been installed. The wood required would have come from a source unrelated to the bulk of the wood framing in the home. This fact lends weight to the assertion of Mr. Di Genova that the splitting is caused by different drying out rates. The Appellants have provided no evidence to suggest that these splits are the result of structural failure. The Tribunal accepts the evidence of Mr. Martin and Mr. Di Genova that the studs are not load bearing but act as spacers and stabilisers for the load bearing header of the door.

9The Appellants also assert that the floor squeaking indicates failure of the supports for the main floor steel beam. In their view, the beam has insufficient support because it is supported on a wooden laminate post made up of numerous 2X6 studs nailed together. They assert that the only proper support for the end of the beam is a metal post. Other than the bare assertion that this method of construction is improper, the Appellants cited no evidence that a failure is in process or that this type of support was in breach of the OBC. Mr. Martin and Mr. Di Genova both testified that it is a perfectly normal construction technique permitted by the OBC. It is designed to ensure that the house does not distort as a result of the shrinkage from the curing of the wooden stud walls when compared to the rigidity of a metal post. In the absence of evidence of either failure of the laminated support post or that it is in breach of the OBC, this claim must fail.

10The last area of concern for the Appellants was the adequacy of the foundation footings. It comprises two elements; the failure of the footings due to them not being sufficiently thick to support the weight of the house and the failure of the footings because they rest in the ground water and freezing of the ground water has resulted in frost heaving. The Appellants’ evidence relied heavily of statements made by witnesses in the earlier proceeding with respect to the elevation of the base of the footings and the elevation of the height of the basement wall.

11The Appellants measured the internal height of the basement wall. Using the elevation figures set out in the as built survey report (Ex 4 Page C2, they calculated that the footings were below the required thickness set out in the OBC. As the Appellants stated, no-one can see the actual as built footings now that the foundation has been covered by backfill. As proof of inadequate footings, the Appellants pointed to several cracks in the concrete basement wall. In their view, the cracks show that there is shifting in the footings and they posit that this is the result of failure or of frost heaving. They feel further justified in their opinion because the cracks extend from top to bottom of the wall through what they identify as a joint. They suggest that the joint was the result of the builder having miscalculated the height of the wall in the initial phase and having added a second “extension wall.”

12The cracks in question came to light during Mr. Martin’s conciliation inspection in the summer of 2013. Mr. Martin testified that the cracks are not displaced, are of equal width from top to bottom and that they were approximately 1mm wide. His observations are consistent with photographs of the cracks in the exhibit books. The Appellants stated that the cracks had widened since they were discovered and now measured 2mm but did not show any recent photographs of the widening. Of note is the fact that the Appellants did not state that the cracks were wider either at the top or bottom of the wall. Mr. Martin went on to state that the horizontal lines in the concrete wall identified as joints between two phases of wall construction were in fact simply impressions on the surface of the concrete from seams in the forms used during construction. Both he and Mr. Di Genova stated that the basement wall concrete was poured all at once in a single operation.

13Mr. Di Genova agreed with Mr. Martin that the cracks were typical of the cracks produced by the curing of the concrete. He described cracks that resulted from both failure of footings and from frost heaves. In the former, the sections of the wall subside at a different rate and the crack is widest at the bottom tapering towards the top. In the latter, the opposite happens. As the frost heaves the base of the footings, the cracks are wider at the top and taper towards the bottom. He has seen both of these conditions in his many years in the construction industry. He was of the view that the small undisplaced even cracks observed by Mr. Martin were symptomatic of concrete curing.

14Mr. Di Genova prepared a drawing from available measurements to show that the width of the footings was in accordance with the OBC requirements (Ex 11). Using the as built measurements for the base of the footings and the top of the basement wall, he calculated that with footings and basement slab of the correct thickness the external basement wall measured 1.35 metres. He could not explain why the internal measurement of the Appellant was 1.41 metres. Initially there was some discussion about a ledge at the top inner side of the wall used to support the brick course, but Mr. Di Genova was of the opinion that the ledge would not have been installed in the area of measurement because that area of the house had siding, not brick. He had no further explanation for the discrepancy between his calculations and the Appellants’.

15Housing construction in Ontario is subject to inspections by municipal building officials. Mr. Di Genova outlined them. Of particular note is the fact that there is a footings inspection prior to the area being back-filled. Thus, the footings had been inspected and passed by the municipality before they were covered up. There are framing inspections prior to the walls being enclosed and inspections of electrical systems and plumbing, all at the appropriate stage of construction. No issue was raised by the inspectors about inadequate footings or inadequate support for the steel beam.

16The Appellants have measured the soil level from the bottom of one of their basement windows. From this measurement they conclude that there may be insufficient earth between the grade and the base of the footings to prevent the ground from freezing in the winter. There needs to be a depth of 1.22 metres to ensure that frost does not penetrate to the footings. It appears from calculation that approximately 1.33 metres of earth was placed from grade to the base of the footings by the Added Party. The Appellants are of the view the 1.22 metres is the standard and that in particularly cold winters frost may penetrate further. Their measurement of settlement of 0.1 metres indicates there may be a frost problem. Tarion points out that settlement of the property is covered in the first year warranty and thereafter settlement becomes the responsibility of the Appellants.

17Finally, the Appellants asserted that they had a mould problem in their house. They testified that there was a black dust on the basement floor and that, when they use the basement, they feel sick after a couple of hours and have to come back upstairs. Despite this feeling, they house overnight guests in beds in the basement. They have intended to have a mould check done, but have not gotten around to it in the eight years they have lived in the house.

ANALYSIS

18In approaching an analysis of this warranty coverage, Mr. Banks urged on the Tribunal that it must first find that there is a major structural failure before proceeding to determine what the cause of that failure may be. Indeed, it was his submission that the cause becomes Tarion’s concern if the Tribunal identifies that a major structural defect exists. This approach recommends itself to the Tribunal although it may be difficult to separate the cause of a failure from the fact of its existence in any particular case. The warranty coverage is for a major structural defect that manifests itself within the seven year warranty period. It does not address potential future failures.

19Using this approach to deal with the adequacy of the footings, the Tribunal must first determine if the basement wall is failing and then, perhaps, turn its mind to the question of why the wall is failing. The evidence advanced by the Appellants in support of the failure of the basement wall is that there are four cracks. Both Tarion and the Added Party have given evidence explaining those cracks as a natural and normal consequence of concrete curing. They assert they are not indicative of structural failure. The Appellants have produced no evidence to contradict that position other than their own opinions. The onus is on the Appellants to prove their case on a balance of probabilities and the Tribunal finds that they have not done so.

20For a mould problem to constitute a major structural defect it must materially affect the use of the house as a dwelling. The evidence from the Appellants was that, while they express a concern about mould, they still use the basement for working out, cooling off in the summer months, housing guests and for storage. They produced no objective evidence of mould contamination and relied simply on a vague assertion that they feel ill after a couple of hours in the basement. There is insufficient evidence that there is a mould problem in the house sufficient to materially affect its use as a dwelling.

20Notwithstanding the above finding of the lack of evidence for a major structural failure, the Appellants have continually expressed concern about the footings of their house. There are only two incontrovertible facts about the footings: the elevation of the base of the footings, and the top of the basement wall as measured by J. D. Barnes, Surveyors and the fact that the footings passed a municipal inspection for compliance with the OBC prior to being covered up by fill. In the view of the Tribunal, the inspection, in itself, provides almost incontrovertible evidence of the adequacy of the footings that can only be displaced by uncovering them and measuring them anew. It appears that the Appellants have convinced themselves that their house is defective despite the evidence advanced in two hearings. That evidence establishes that the Appellants’ home is built in accordance with the OBC and is without major defect.

ORDER

23By virtue of the authority vested in it by the Act, the Tribunal orders Tarion to deny the Appellants’ claims for warranty.

LICENCE APPEAL TRIBUNAL

D. Gregory Flude, Vice-Chair