8003 v. Tarion Warranty Corporation, 2014 CanLII 7965

Licence Appeal Tribunal

Appeal d'appel en Tribunal matière de permis

DATE: 2014-02-12

FILE: 8003/ONHWPA

CASE NAME: 8003 v. Tarion Warranty Corporation

An 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

Applicants: 8003

-and-

Respondent: Tarion Warranty Corporation

-and-

Added Party: Multi-Area Developments Inc.

REASONS FOR DECISION AND ORDER

ADJUDICATOR: Terrance Sweeney, Vice-Chair

APPEARANCES:

For the Applicants: Self-represented

For the Respondent: Michael Doyle, Counsel; Noah Bonder, Student-at-Law

For the Added Party: David and Aldo de Santis, Agents

Heard in Toronto: December 16, 17 and 18, 2013

DECISION AND ORDER

This is an appeal by the Applicants to the Licence Appeal Tribunal (the “Tribunal”) from a decision letter, dated October 11, 2013, of Tarion Warranty Corporation (the “Respondent” or “Tarion”), under the Ontario New Home Warranties Plan Act (the “Act”) denying most of the Applicants’ claims.

BACKGROUND

The Applicants took possession of their home on June 16, 2011. They had some problems with the home and complained to Tarion which inspected the home on December 11, 2011. Tarion issued a warranty assessment report on December 18, 2011.

The Applicants were not satisfied. Accordingly, Tarion issued three different decision letters all of which were updated and consolidated in the decision letter of October 11, 2013 (“Decision Letter”).¹

1. The Applicants are husband and wife. The Tribunal does not reveal the names of the Applicants in order to protect their privacy.

2. The husband acted for the Applicants at the hearing

3. On December 2, 2012, the wife filed a complaint against the Added Party with the Ontario Human Rights Commission.

4. On June 13, 2013, the Applicants sued the Added Party and the City of Hamilton in the Superior Court of Ontario in respect of their home.

5. The Applicants complained to the Human Resources Ombudsperson at Tarion.

6. The Respondent called two employees of Tarion and an independent expert witness to testify. The Respondent also filed four volumes of documents.²

7. The husband was the sole witness for the Applicants. He filed one volume of documents.³

8. On the third day of the hearing, December 18, 2013, the husband unilaterally withdrew all claims against Tarion for monetary damages.

DECISION

The Applicants failed to satisfy the onus on them of proving their case on a balance of probabilities. Accordingly, the appeal of the Applicants is dismissed for the following reasons.

EVIDENCE FOR THE APPLICANTS

In their Notice of Appeal, the Applicants said that their appeal was:

1. to find the truth, “Did the Tarion fulfil its mandate of impartiality between new homebuyer and builder in this test case?”

2. to find the truth, “Did the Tarion treat new homebuyer honestly in this test case?”

3. to find the truth, “Did the OBC [Ontario Building Code] give rights to Tarion to neglect the religious beliefs and do not respect personal privacy of the homebuyer?”

The husband testified. He produced a 46-page document which contained alleged facts, argument and opinion. The Tribunal accepted it as an opening statement only and he used it as an aid in giving his testimony.

In his opening statement, the husband said that the purpose of the Applicants’ appeal was twofold. Firstly,: “This case is about the sincerity and honesty in the implementation and administration of ONHWPA by Tarion....Secondly: How to save future homebuyers from the suffering as we did ....It will become clear during this hearing that where the Tarion slogan does stand to protect new homebuyers.”

The Applicants alleged fraud and misrepresentation against the Added Party and that it intentionally disrupted the reconciliation process. They also alleged that the Added Party breached the OBC and that its home access policy violated their religious beliefs.

The husband did not understand the difference between evidence and his own opinions, observations, assertions and argument. Consequently, he failed to present any evidence in support of any of the above. For example, he alleged fraud against the Added Party. This is a serious allegation. Yet he presented no evidence to support such a claim beyond his own opinion as to the work done and repairs effected by the Added Party.

The male Applicant organized his written argument by section, which the Tribunal will address as follows.

Section 2: Purpose of the Act and Tarion

The husband was not satisfied with the work done by the builder to repair a squeak in the ensuite tile floor in the shower stall so he asked the following question: “Does it mean that the Act allows the builder to use any material for repair to solve the problem for time being or need honesty?”

Other questions raised include: “Whose responsibility is to formulate the protection of the new homebuyer that suggested method will actually work or not, if the Act failed to address the issue?”

There was a dispute between the Applicants and Tarion and the Added Party in respect to the space for a dryer in the laundry room in the home. The husband became convinced that there was a safety (fire) concern because the space was not large enough to adequately house the dryer. Tarion and the Added Party suggested methods to solve the problem but the Applicants rejected all of them. The Applicants withdrew their claim but sought to “discuss the issue before the Tribunal”.

Section 3: Claims and Facts

The Tribunal will cite just one complaint which is indicative of the male Applicant’s presentation as a whole. He complained that diamond shapes on the front of the home were aesthetically ugly as the mortar had not been done properly. The Added Party fixed them and the Applicants confirmed the repair on April 23, 2012. Nevertheless, he continued with the issue to this Tribunal.

Mr. Doyle cross-examined the husband mainly to determine what items from the Decision Letter were still outstanding. There were 23 (claim number used), as follows:

1. Floor squeaks – repair to underside floor joists
2. Basement foundation water penetration
3. Basement foundation water penetration near insulation
4. Kitchen counter top water damage
5. Kitchen cabinet gap
6. Living room archway drywall
7. Living room corner drywall
8. Stairwell creaks
9. Nail pops
10. Ensuite bathroom floor creaks
11. Ensuite caulking
12. Bathroom sink drainage
13. Main bathroom toilet
14. Ensuite bathroom toilet
15. Garage floor slab gap
16. Mortar gap at diamond stones
17. Window well drainage
18. Front porch floor surface
19. Railing fastener
20. Hose bibs water pressure
21. Roof debris
22. Front wall mud
23. Roof shingles

Tarion denied warranty coverage on all of the above save number 6 which it warranted but the Applicants refused the suggested repair; number 30 which was warranted but the Applicants were not satisfied with the repair; and number 37 which was warranted and repaired.

The husband conceded that he had only one written estimate of damage, $3,437.00, to repair the diamond shapes on the front of the house.

EVIDENCE FOR THE RESPONDENT

Nicole Kennedy

Ms. Kennedy is a Warranty Service Manager at Tarion. The Applicants asked for another person at Tarion to review their case. The file was, therefore, handed to her in March 2013.

She testified that the Applicants raised a lot of questions and considerable resources were employed at Tarion to try to answer them. She was involved in the decision to withdraw the three decision letters and issue the Decision Letter in October 2013 as a consolidated updated document to make it easier for all parties.

She stated that she did her best in a difficult situation and asked others at Tarion to do the same.

Danny Conte

Mr. Conte is a Warranty Service Representative employed by Tarion. He is the author of the Decision Letter.

In his evidence in-chief, Mr. Conte said that he had been to the Applicants’ home four or five times in 2013. He confirmed the items in the Decision Letter, outlined above, which had been withdrawn, warranted or unwarranted.

The following are some of the claims with which he dealt in his testimony.

Claim 1 – he said that he had reviewed the Applicants’ concern about the ceiling in the basement and the method of repair by the builder. He said that the 2x4 installed on the underside of the floor joist provides additional support for the sub-floor. He detected no squeaks in the floor when he walked on it.

Claim 2 – water penetration. He conducted a water test and found some limited water penetration. The builder inserted urethane in the cracks. It missed a small part but returned and repaired the minor leak. As of November 20, 2013, the area is repaired.

Claim 25 – railings. He said that the front and rear porch railings were installed in accordance with the OBC.

Claim 29 – diamond shapes. He observed them from the distance required by the OBC and that they both looked the same.

Andrew John Oding

Mr. Oding is employed by Building Knowledge Canada Inc. (“Building Knowledge”) which was hired by Tarion to review the claims in the earlier decision letters which were subsequently withdrawn and consolidated in the Decision Letter.

He is a senior building associate with Building Knowledge and co-authored with Gordon Cook, P. Eng., a report dated July 12, 2013.⁴ The curriculum vitae of Messrs. Cook and Oding are attached to their report. The Tribunal accepted Mr. Oding as an expert in building science.

The report deals with 27 items. The following are some examples of their findings.

Claim 8 – living room wall – There was a slight drywall “bulge” on the upper right corner of the opening between family room and dinette. They suggested that this issue could be remedied by an experienced tradesperson.

Claim 10 – main staircase squeaks. The tread and riser dimensions were well within acceptable OBC tolerances. There was some squeaking on tread 1 and 5 which would easily be fixed by an experienced professional.

Claim 24 – interior garage floor – They reviewed it visually and with a laser level. The condition of the slab was excellent and the “gap” between slab and foundation was expected because the slab and foundation were constructed separately.

Claim 25 – railings. They found that the railing on the back deck conformed to OBC supplementary standard SB-7.

The husband, in his cross-examination, focussed only on the alleged safety problem in the laundry room on the main floor where the Applicants alleged that insufficient room had been left for a dryer. The Applicants had previously withdrawn this item but the Tribunal allowed him to proceed. Mr. Oding conceded that he had erred by 3mm in his measurement of the gap behind the dryer

EVIDENCE FOR THE ADDED PARTY

Aldo De Santis

Mr. De Santis is the president of the Added Party. He filed a copy of the Statement of Claim by the Applicants against his corporation and the City of Hamilton.⁵ In this document, the Applicants claim many of the same things against the Added Party as they have in this hearing. In the Statement of Claim, the Applicants ask for a number of orders against the Added Party, including the following:

• an order that the Defendant comply with article 1, 3, and 12 of the Universal Declaration of Human Rights;

• an order that the Defendant has violated the Ontario Building Code and related Status [sp.], Laws and Acts;

• punitive and exemplary damages in the amount of $150,000.00.

His lawyer has moved to strike out the claim, but successive judges have allowed the Applicants more time to perfect their claim. On the fourth occasion, the judge ruled that the Applicants had until January 8, 2014 to pay costs to the Added Party of $2,500.00 or their case would be dismissed.

He testified that his staff has been out to the Applicants’ home at least 50 times in an attempt to satisfy them. This is more than all of the homeowners in the subdivision combined.

REASONS FOR DECISION AND ORDER

At the end of the hearing, the Tribunal invited the parties to file written argument. All submissions were received by January 27, 2014 and were carefully considered. The Applicants submitted a 55-page document. The Respondent filed a 28-page document..

The hearing took a dramatic turn on the last day when the Applicants withdrew all claims against Tarion for monetary damages. The Tribunal might still have ordered specific performance, for example, if the husband had asked for it and had proven on a balance of probabilities that the Applicants were so entitled. This, the husband failed to do

The Tribunal repeatedly warned the male Applicant throughout the hearing that, to the extent that the Applicants’ claims did not relate to the Decision Letter, they were probably outside the jurisdiction of the Tribunal under the Act.

The power of the Tribunal is set out in subsection 16(3) of the Act and reads as follows:

16. (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 Tribunal has only those powers given to it under the Act. It can only order Tarion to provide a remedy that is within the Act. It does not have, for example, the ability to issue declaratory judgments on the practices and procedures of Tarion or to punish the Added Party for alleged fraud and misrepresentations.

Vice-Chair Weary in 5506/ONHWPA, released October 21, 2009, stated, at page 5:

By virtue of section 16(3), this Tribunal has no over-arching authority to provide redress or remedies outside of the Act. Its authority is limited to actions Tarion can take “in accordance with the Act and Regulations”.

The legislation does not give Tarion the authority to remedy injustice or inadequacy in contracts between homeowners and builders. Its statutory powers do, however, include authority to review homeowner warranty claims. Only where an enumerated warranty breach is verified, may it provide a homeowner with specified methods of redress including payment from the guarantee fund set up under the Act.

Therefore, the fact that the Agreement contained a provision, the fulfillment of which is subject to dispute, is not a matter over which either Tarion or this Tribunal has jurisdiction. It is, rather, a private contractual matter for which redress is available from the courts....

This statement was approved by Vice-Chair Koprowski in 6598/ONHWPA, released December 23, 2011:⁶

This Tribunal accepts Vice-Chair Weary’s statement as an accurate interpretation of the scope of its powers under the Act.

The Notice of Appeal of the Applicants and their opening statement demonstrate their complete misunderstanding of the Tribunal’s powers and the relief it may grant under the Act.

None of the claims of the Applicants, set out in their Notice of Appeal or as addressed in their evidence or their written argument, is within the jurisdiction of this Tribunal.

ORDER

The Tribunal therefore orders the Applicants’ appeal is dismissed. By virtue of the authority vested in it by the Act, the Tribunal orders Tarion to deny the Applicants’ claim for warranty.

LICENCE APPEAL TRIBUNAL

Terrance Sweeney, Vice Chair

Released: February 12, 2014

Footnotes

1. 1Exhibit 9, Tab 2
2. 2Exhibits 6, 7, 8 and 9
3. 3Exhibit 4
4. 4Exhibit 9, Tab 6
5. 5Exhibit 11
6. 62011 CanLII 88465 (ON LAT)