7933 v. Tarion Warranty Corporation, 2015 CanLII 9432

Licence Tribunal

Appeal d'appel en

Tribunal matière de permis

DATE:

2015-02-19

FILE:

7933/ONHWPA

CASE NAME:

7933 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-

83 Redpath Residences Inc.

Added Party

REASONS FOR DECISION AND ORDER

ADJUDICATOR:

D. Gregory Flude, Vice-Chair

APPEARANCES:

For the Appellants:

Self-represented

For the Respondent:

Erin D. Farrell, Counsel

For the Added Party:

Jeremy Millard, Counsel

Heard in Toronto:

October 2, 8 & 9, 2014,November 20, 2014,

December 1 & 2, 2014 and January 19, 2015

DECISION

1Pursuant to the Ontario New Home Warranties Plan Act, R. S. O. 1990, c. O.31 (the “Act”), the Appellants appeal the decision of Tarion Warranty Corporation (“Tarion”) to deny the claim for warranty set out in a Decision Letter dated February 7, 2013. The Added Party, 83 Redpath Residences Inc., 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.

2Using the numbering from the Decision Letter, claims numbered 1, 2, 3, 4, 5, and 7 relate to HVAC issues encountered during the winter. The majority of the hearing was focused on these issues with expert evidence tendered for both the Appellants and the Respondent. The Tribunal will address HVAC issues as a group and then address the remaining warranted issues individually.

3To provide direction to these reasons, it will be helpful to set out the role of the Tribunal and the scope of the statutory warranty. As a creature of statute, the Tribunal is charged with reviewing denials of warranty by Tarion. It is completely guided and constrained by the Act. It has no discretion to go beyond the wording of the Act.

4The scope of the warranty is set out in s. 13 of the Act. That section not only defines the scope but also sets out a long list of exclusions. It states:

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. R.S.O. 1990, c. O.31, s. 13 (1).

Exclusions

(2) A warranty under subsection (1) does not apply in respect of,

(a) defects in materials, design and work supplied by the owner;

(b) secondary damage caused by defects, such as property damage and personal injury;

(c) normal wear and tear;

(d) normal shrinkage of materials caused by drying after construction;

(e) damage caused by dampness or condensation due to failure by the owner to maintain adequate ventilation;

(f) damage resulting from improper maintenance;

(g) alterations, deletions or additions made by the owner;

(h) subsidence of the land around the building or along utility lines, other than subsidence beneath the footings of the building;

(i) damage resulting from an act of God;

(j) damage caused by insects and rodents, except where construction is in contravention of the Ontario Building Code;

(k) damage caused by municipal services or other utilities;

(l) surface defects in work and materials specified and accepted in writing by the owner at the date of possession.

5Looking at the Act and regulations as a whole, it is clear that their aim is to guarantee that new homes meet a minimum standard of construction. For instance, s. 13 requires that construction be “workmanlike” with no qualifier to elevate that standard to any greater level of excellence. It requires that construction is in accordance with the Ontario Building Code (OBC). It is argued in this case that the OBC allows for a better HVAC system than the one installed. The Act directs the Tribunal to determine if the system, as installed, is in accordance with the provisions of the OBC. If it is, the vendor has fulfilled its obligations. Finally, the Act provides a warranty for defective materials. Again, if the materials used in the construction of the home are not defective, there is no entitlement to better materials unless they are specifically agreed by contract or required by the OBC (s. 18 O/Reg 892). The onus is on the Appellants to establish on a balance of probabilities that they are entitled to warranty coverage.

6S. 13 also provides that the vendor of a new home warrants that it is fit for habitation. During the hearing, the Appellants testified that their son had had medical problems during his adolescence while occupying the third floor bedroom. The third floor bedroom is very much the focal point for the condensation problems raised by the Appellants, with allegations that the condensation was causing mould formation on window ledges. The Tribunal heard no evidence about the actual medical condition suffered by the Appellant’s son or how it may have been caused or contributed to by the condensation levels or the presence of mould in his room. There was no evidence that the home was causing or contributing to any health problems in any other family members. In the absence of evidence of this nature or other relevant evidence, there was no basis upon which the Tribunal could consider that the home was in breach of the warranty that it be fit for habitation.

7The Appellants, who are spouses of each other, complain that the third floor bedroom occupied by their son during his adolescent year before going to university is cold and subject to excessive condensation on the windows during the heating season. Attempts to turn up the thermostat to warm the third floor bedroom resulted in the family room on that floor becoming too hot. Condensation pools at the bottom of the window and efforts to wipe off the moisture are ineffective because of the amount of condensation and its rapid reappearance. Black spots have formed along the bottom of the window. Cleaning attempts have proven futile because the spots just reappear after they have been cleaned. The third floor bedroom is where the condensation first became a problem, but the Appellants have noted that it is now manifesting in other rooms. The female Appellant testified that at times she felt the air in the house was stale and hard to breathe.

8The Tribunal heard evidence from two experts in HVAC systems. Both experts are eminently qualified; each of them having been involved in the Canadian Standards Association committees to set standards for HVAC systems. P. E. Coulter testified for the Appellants. His report (Exhibit 6) identifies a number of problems he discovered with the Appellant’s system, as follows:

1. Floor diffusers located too far into the room.

2. Excessive air leakage due to lack of joint sealing.

3. Uninsulated bare copper pipe in main floor mechanical room.

4. Improperly installed dehumidifier duct.

5. Humidistat control located in a dangerous hard to access position.

6. Air velocity at the diffusers less than 50% of design standard giving poor spread and throw over exterior walls and windows.

7. Thermostat on main floor too close to the front door causing system to switch on unnecessarily when front door is open.

8. All 6 exhaust fans are too noisy because they were mounted without vibration dampers.

9Of the above list, #2 has been addressed and the issue with # 4 is not the size of the duct, an issue which has been addressed, but its location behind the door such that it is crushed each time the mechanical room door opens. Mr. Coulter also has added an opinion that the heating system has been overdesigned and that the actual furnaces installed in the home are not those specified in the approved plans. The substitution of another furnace model without the approval of the HVAC design engineer is, in Mr. Coulter’s opinion, a breach of the OBC.

10Gord Cooke testified on behalf of Tarion. His reports and his oral testimony focussed on a review of the OBC requirements for ventilation, exhaust fan capacity and responses to Mr. Coulter’s report. He accepts Mr. Coulter’s remarks regarding items 4, 5 and 8 above that the thermostat and humidistat controls and duct should be moved. Accordingly, the Tribunal warrants those items.

11Both Mr. Cooke and Mr. Coulter recommend greater ventilation for the house to remove condensation. They differ on how to achieve that end. The Appellants have made attempts to ventilate the house by opening windows and running exhaust fans in bathrooms following showers or in the kitchen during cooking, all to no effect. Because the condition manifests in cold weather, keeping windows open for any length of time is not practical. The Principal Exhaust Fan (as defined in the OBC) in the house is in the second floor bathroom adjacent to their daughter’s bedroom. The Appellants testified that it is noisy so they do not leave it running continuously. It is run during and following showers and by their daughter from time to time when talking to friends on the phone so her conversation may be more private.

12The Appellants were directed to that section of the Homeowners Information Package (HIP) that addresses condensation issues. The HIP is a document given to each homeowner on taking possession of the home and contains advice on basic care and maintenance. It has a section specifically addressing condensation. It advises the purchase of an electronic hygrometer, an inexpensive instrument that measures relative humidity, to monitor humidity levels throughout the house. It recommends the use of an HRV or exhaust fans to control humidity. It also recommends the use of a dehumidifier in certain cases to control humidity. The Appellants did not purchase and use a hygrometer or, when they noticed a particular problem in certain rooms, a dehumidifier. The female Appellant testified that she felt the air was too dry on her skin.

13Without the use of a hygrometer, there is no record of actual relative humidity throughout the house and the effects of any remedial measures designed to control it. There was only one relative humidity reading taken. It was taken in the third floor bedroom by the Tarion representative at an inspection. The measurement showed relative humidity in that room, at that specific time, of 70%. There was no evidence about humidity in any other rooms or about any activity in the bedroom, such as a recent shower, that might have resulted in such a high reading. Particularly, there is no evidence of such a reading either before or since that reading.

14The Appellant’s home has two furnaces. The correct term for the heating units is air handlers since no combustion takes place in the unit, but the more common term furnace better identifies the role of the units so the Tribunal will use that term. Each furnace has a humidifier attached. Over time, since their date of occupancy, they have turned the humidifiers to lower and lower settings and they are now switched off with the vent to the airflow shut. There was some dispute about this latter point with Mr. Coulter stating that the furnaces did not have a means to close the vent and Mr. Cooke, Tarion’s expert, pointing to photographic evidence of the vent lever in the closed position (Ex 3 Tab 3 Photo 1). The Tribunal is satisfied, on all of the evidence, that the humidifiers on the furnaces are shut off and are not contributing moisture to the air inside the house. What then is the source of the moisture?

15Mr. Cooke identified the source of moisture inside a home. It arises from human occupation and activity. There are obvious sources such as showers and cooking. But there are less obvious sources. Exhaled breath and moisture evaporating from the skin all contribute. Condensation is a manifestation of high relative humidity so its solution, according to Mr. Cooke, is to reduce the relative humidity of the interior air. This may be done by expelling moist warm interior air and replacing it with cool exterior air. He noted that heating air reduces it relative humidity thus, even though cold exterior air is humid outside, once it is heated inside the house, its relative humidity drops. A dehumidifier may assist in reducing humidity.

16Both Mr. Coulter and Mr. Cooke define the house as being “tight” by which they mean that there are not many places where cold outside air can get into the building envelope. Mr. Coulter described the construction method. The walls and floors are concrete. The side walls are “warm” meaning that they are common walls with the occupied houses on either side. Thus the only areas where outside air can enter the building envelope are through outside doors and windows.

17Mr. Coulter’s opinion is that the only means by which sufficient outside air can be brought inside efficiently is by the use of Heat Recovery Ventilators (HRV). He advocates installing two. An HRV acts as an extractor fan directly to the outside. As the warm interior air exits the building, it passes through a heat exchanger which transfers heat from the outgoing air to the incoming exterior air thereby saving energy. According to Mr. Coulter, without actively exchanging the air in this manner, the house is too tight to permit sufficient outside air to enter to achieve the appropriate level of humidity control. While Mr. Coulter did numerous tests on the efficiency of the exhaust fans, he did not do a test on the rate of air exchange in the house so his opinion on the rate at which air is exchanged in this particular house is based on his experience and not on any measurement.

18With respect to the specific issue of condensation forming on windows, Mr. Coulter was of the opinion that the solution was to direct the outflow from the heating vents towards the windows to evaporate condensation. While this solution does not address the overall issue of high interior relative humidity, the Tribunal understands it to be part of an overall plan to deal with condensation that includes humidity reduction by way of HRV installations. The specifications for the house call for a high velocity furnace. Mr. Coulter was of the opinion that a high velocity furnace should expel air through the diffusers in each room at a rate of about 1500 to 2000 feet per minute. Any lesser airflow, in his opinion, is not a high velocity system. It is also his opinion that the diffusers are too far from the window to give the requisite flow. He measured them in one room at 26 inches from the glass. In his view they should be as close as possible and behind any window coverings to provide airflow over the glass even with the window coverings closed. The warming air in this configuration would pass over the window and remove condensation and then out into the room from the gap around the window coverings, either at the top in the case of floor based diffusers or at the bottom in the case of ceiling diffusers.

19Mr. Coulter identified short-cycling as a cause of cold rooms and high energy bills. Short-cycling is a result of installing furnaces whose hearing capacity exceeds to heating needs of the building. He used the HVAC designer’s number that heat loss in the winter from this home is in the area of 40,000 British Thermal Units Per Hour (BTUH). The calculations he used indicate that the installed furnaces have a capacity of in excess of 80,000 BTUH. Because of the high capacity of the furnaces, they rapidly bring some rooms up to temperature before the whole system of air, furnace, ducting and vents has had time to warm up. Thus rooms cool again quickly and the furnace starts the cycle again. In the case of the third floor bedroom, the long duct does not warm sufficiently and cooler air is pumped into that room. Mr. Coulter’s view is that the furnaces in this house need to be removed and furnaces with a lower capacity installed.

20The heating system in the Appellant’s home uses hot water to heat the core. The calculations that Mr. Coulter used to determine that the heating system exceeded the capacity requirement assumed a water input temperature of 160 F^o. The capacity is adjustable by adjusting the input water temperature to as low as 120 F^o to130 F^o. At the lowest temperature setting, the heat output rating is very close to the rated value espoused by Mr. Coulter as optimal. Mr. Coulter did not consider reducing the rated heat capacity in this manner to be an acceptable solution.

21In fact, Mr. Coulter had numerous criticisms of the heating system. He reviewed the HVAC plan prepared for the house and noted that the model of furnace installed is not the model of furnace identified on the approved HVAC plan. In his view, this change of model is a breach of the OBC, absent an updated plan from the HVAC engineer certifying acceptance of the new model. He also had issues with input return air duct size and output duct size. He was of the view that the output ducts were incorrectly sized. His measurements indicate that there was no return air at the return air vent in the third floor bedroom.

22Among the measurements taken by Mr. Coulter, were measurements taken at exhaust fan outlets to the outside, particularly the kitchen fan outlet and the main bathroom outlet. He determined that the kitchen fan outlet was operating almost at capacity but that the main bathroom outlet was only operating at less than 50% efficiency. He felt that friction losses in the long duct from the bathroom to the outside might reduce the outflow somewhat. The core assumption in the lack of outflow was that the house was too tight to permit air to enter and replace the outflowing air. Essentially, the fan was attempting to pull air out of the house but negative pressure inside the house meant it could not perform its function.

23In dealing with the fans, Mr. Coulter stated that they were noisy. He identified the cause of the noise as vibration through the ceiling because the fans were not mounted in vibration reducing mounts. He suggested that all fans, except the kitchen fan, should be removed and replaced with new, higher capacity fans installed in vibration reducing mounts. Overall, the cost for all of the remedial work Mr. Coulter felt was necessary would cost in the region of $40,000.00. He prepared two estimates, on for $35,050.00 (ex 6 Tab 4) and a second estimate in the range of $40,000.00 to $47,000.00 (Ex 8 Para 10 D).

24It is worthy of note in summing up Mr. Coulter’s expert report and evidence that he appeared to focussed on improving the HVAC system rather than identifying those areas where it deviated from OBC standards or manifested poor workmanship. He did identify several specific areas of poor workmanship and his conclusions in that regard were not seriously challenged by Mr. Cooke. The placement of the humidistats in the two equipment rooms makes them inaccessible. It was Mr. Coulter’s view that the humidistats should be lowered to be readily accessible without the need for a ladder. In one room there is a flexible vent which is located in such a position that it is crushed by the door. Mr. Coulter states that this configuration is not workmanlike and advocates moving it.

25The main thrust of Mr. Coulter’s opinion regarding breaches of the OBC is that the furnaces that were installed are not the same model as the furnaces approved in the heating plan by the HVAC engineer. In his view, only the make and model of furnace identified in the heating plan may be used in the construction of the home absent specific authority from the HVAC engineer and approval by the municipality. In this he is directly at odds with Mr. Cooke.

26Mr. Cooke focussed his evidence specifically on the provisions of Part 9 of the OBC. Part 9 sets the design standards for Type 1 new home construction. He identified the problem of high humidity levels in the Appellants’ home as the cause of condensation on various windows. To solve this problem, there must be ventilation. One manner by which to ventilate is by using the HRVs recommended by Mr. Coulter. He is of the view that they would be an effective solution, but they are not required by the Part 9 of the OBC. He takes Mr. Coulter to task for citing breaches of Part 6 of the OBC since it is not applicable to Type 1 buildings.

27According to Mr. Cooke, there are essentially two principal ways in which a house can be designed to eliminate moist interior air. The first method would use fans to blow outside air into the building envelope. Interior air would then leak out through whatever gaps it could find. The second method is to use fans to expel interior air and permit outside air to leak into the envelope. The second method is the method accepted in Canada and applied in the OBC. The difficulty with the former method is moist air is likely to force its way into the wall cavities though electrical outlets and joints and water will condense in the insulation causing mould problems and reduced insulation values.

28An HRV is somewhat of a hybrid system that actively expels interior air but draws in exterior air to replace it. Such systems are acceptable in Ontario homes, but the only requirement for ventilation under Part 9 of the OBC is exhaust fans to expel interior air. A new Part 9 building must be designed with fans rated to sufficient capacity to meet the Code. In Mr. Cooke’s view, exhaust fan rating and capacity are OBC design standards. It is not necessary for the fan, as installed, to actually operate at its designed rating. An HRV is simply another way to achieve the same result, but not, in Mr. Cooke’s view, a more effective way.

29There is a formula in the OBC that sets out the total exhaust fan capacity requirement. It is based on the number of rooms and the expected number of occupants based on the number of bedrooms plus one person. Mr. Cooke’s calculation for the Appellants’ home was that the OBC required exhaust fan capacity of in the region of 140 cubic feet per minute. There are six fans in the home with a total exhaust rating well in excess of 140 cubic feet per minute so, according to Mr. Cooke, there is no violation of the OBC design standard.

30During his site visit, Mr. Cooke measured the outflow of fans from the inside of the house. He found that the outflow was very close to the rated capacity of the fans. He was puzzled by Mr. Coulter’s measurement that fan outflow measured at the outside wall was only 40% of the rated capacity for the main bathroom fan. In his view, if the fan draws in its rated capacity then that amount of air must leave the duct somewhere. Unless there are leaks in the duct, and the Tribunal heard no specific evidence of that nature, the air must flow to the outside. Notwithstanding his puzzlement, Mr. Cooke was prepared to accept Mr. Coulter’s measurements. Applying the 40% effective rating to the total rated capacity, Mr. Cooke determined that the actual exhaust capacity exceeds the OBC design standard by a large margin.

31The problem, according to Mr. Cooke, is that the Appellants have not been running their exhaust fans sufficiently to expel moisture, particularly the principal fan in the 2^nd floor bathroom. He advocates the purchase of a hygrometer and two measurements of relative humidity: one initial measurement and one after running the principal fan for 24 hours. He is of the view that there would be a marked drop in relative humidity. He went on the state that should the humidity not fall, then it would indicate another source of moisture requiring investigation.

32In addressing the change in furnace from the model assigned by the HVAC engineer, Mr. Cooke stated that it is acceptable in residential construction for builders to use available brand furnaces rather than the brand specified. Part of the reason for this practice is that there are many brands and few manufacturers. Local suppliers may not have the specified brand available but can supply a largely equivalent model. He noted that the capacity rating between the specified brand and the installed brand was 8%, a totally acceptable variation in his opinion. Indeed, he noted that the design engineer, M. V. Shore Associates (1993) Limited, reviewed the installed system and found it acceptable (Ex 5 Tab 1).

33Mr. Coulter and the Appellants complained that all of the fans were noisy. Mr. Cooke reviewed the rated noise levels for exhaust fans set out in the OBC. He determined from specification stickers affixed to the inner housing on each fan that the fans installed in the home were all within OBC noise specifications. In response to Mr. Coulter’s suggestion that all of the fans should be removed and installed in vibration dampening mountings, he stated that there is no OBC requirement for such mountings.

34Mr. Cooke and Mr. Coulter differ on the placement and output from the floor diffusers and its spread to the windows. The OBC requires that, where practical, diffusers be placed adjacent to at least one exterior wall or window in each room and bathe the wall or window with warm air. Mr. Coulter is of the view that this means placing the diffusers as close to the wall of window as possible and directing the diffuser flow onto the cold surface. Mr. Cooke is of the view that as long as some of the diffuser flow bathes the cold surface then the provisions of the OBC are met. He measured the warm air flow over the windows and found it to be satisfactory. Even where his instrument was not sensitive enough to quantify the flow, he felt airflow over the windows.

35With respect to the placement of the floor diffusers on the 2^nd floor, Mr. Coulter measured them at 26” from the window surface. He is of the opinion that this placing is both ineffective and dangerous. Ineffective, because it does not permit sufficient airflow over the windows and dangerous, because the flimsy plastic diffuser cap could easily break under the pressure of a high heel and cause personal injury. He advocates using more expensive metal diffusers to alleviate the latter problem. The only standard before the Tribunal was the manufacturer’s standard. It stated that, where possible, diffusers should be set with their centres 8” from walls and clear of window coverings. The Tribunal notes that Mr. Coulter’s measurement is not from the wall below the sill but from the window. It also notes that placement inside the window coverings as Mr. Coulter suggests would result in the diffusers being much less than 8” from the wall. The Tribunal prefers the evidence of Mr. Cooke in this regard that the diffusers are well placed to achieve their purpose. While it might be prudent to replace the plastic diffuser caps with metal caps, it is not a requirement of the OBC to do so.

36There was a discussion of vent size and capacity. Mr. Coulter testified that the outlet and return air vents were not the correct size. Mr. Cooke testified that these vent sizes are built into the furnace and were not adjustable. The difference in the two positions relates to the point of measurement. It appears, to Mr. Coulter’s opinion, that the specified vent sizes must be maintained from the furnace to each individual room vent. Mr. Cooke’s position was that the vent size only pertains to the vents as they leave the furnace. As the vents branch to disperse air throughout the system or collect it for return to the system, they go through size reductions. Mr. Cooke was of the opinion that maintaining a large vent size as recommended by Mr. Coulter would result in reduced air velocity at diffusers. Insufficient outlet air velocity was one of Mr. Coulter’s concerns and his solution to the vent size problem would not ameliorate the condition as he suggested.

37Mr. Coulter measured the return air velocity in the third bedroom. He found no discernible airflow at the return air duct. He believes this is part of the problem of his humidity in that room. By contrast, Mr. Cooke measured the inlet airflow into that room and found it to be consistent with a high velocity system. He applied basic physics principles to determine that if air was flowing into the room it must be flowing out at the same rate. The fact that it was not flowing through the return air duct did not cause any stale air condition or basis for moisture buildup in that particular room. He cited studies recently completed in the United States that support his own observations that return air ducts play a negligible role in furnace air distribution. From the measurement of air outflow at the diffusers it is clear that the furnace is moving air around the house as it should. The fact that the return air may come from somewhere other than the return air duct in any given room does reduce the effectiveness of the system.

38There was an issue about the placement of a return air duct on the 4^th floor of the home. The Appellants were of the view that it should be relocated to the top of the wall rather than on the floor where it is currently located. Ryan Haley, the Tarion Warranty Services Representative, denied this item on the basis that there is no OBC requirement that it be located in any specific position. The Appellants produced no evidence to establish that there was an OBC requirement for their preferred location.

39Overall the Tribunal prefers the evidence of Mr. Cooke to that of Mr. Coulter. Mr. Coulter’s evidence focussed more on improvement of the system and the use of the term “good engineering practice.” Mr. Cooke directed his comments to the provisions of the OBC and whether any particular installation met the OBC's requirements. There is a specific exclusion of warranty coverage in s. 13 (2) (e) for problems arising from condensation caused by the failure of the homeowner to control humidity. In the absence of evidence of a defect in workmanship or materials causing a high humidity condition in the home, the Tribunal cannot find that there is any warranty coverage for items 1 through 4 and 7 in the Decision Letter save and except for relocation of the humidifier duct from behind the door, relocation of the humidistats and relocation of the main floor thermostat.

40Before leaving these items, it is worthy of note that there were defects in workmanship in the ducting system. These were fixed when it was found that vents had been improperly sealed or nor sealed at all. In and around this time, the vendor carried out some measure of heat balancing, that is closing or restricting vents either at the furnaces or at the diffusers. At a subsequent inspection, when asked if the cold bedroom issue had improved, the female Appellant told Tarion that it was better. This leads the Tribunal to conclude that at least part of the cold problem is poor heat balancing of the 3^rd floor HVAC system. It is likely that some further heat balancing together with lower input water system will improve this problem. This process falls squarely under homeowner maintenance and is not covered by warranty.

41Item 5 dealt with a missing grease screen on the kitchen exhaust fan. At one inspection, the grease screen was found in a kitchen drawer and installed. Mr. Coulter was of the view that the screen was wholly inadequate and that only a charcoal grease screen was acceptable. He provided neither a manufacturer’s specification requiring charcoal filters nor an OBC requirement. The issue with respect to the grease screen is whether it is a warranted item. The Appellants take the position that it was not installed during installation of the microwave by the builder. The problem was not noted for at least a year. In the intervening time period, according to the Appellants, grease has entered the fan area and motor and is now a fire risk. In their view, it is necessary to replace the microwave. Tarion’s view is that the grease screen was available and it cannot determine who removed it or failed to install it. At the least, the Appellants were responsible to ensure the screen was installed and failed to do so. The Tribunal notes that the screen was always available in a kitchen drawer. On the evidence, it cannot determine who removed or failed to install it. Thus it cannot find this item warranted.

42There are four remaining items in the Decision Letter: Item 6, loose shower heads, Item 8, wall bracket repairs, Item 9, defective door stop causing damage to the front door and Item 10, problems with the main floor equipment room. The Tribunal will deal with them in sequence.

43There are three bathrooms in the home. In each shower, the Appellants claim that the shower heads are loose and have excessive movement when they are being cleaned. Ryan Haley testified that he checked the movement and did not find it excessive. Other than a subjective belief on the part of the Appellants that the movement is excessive, they produced no independent evidence that the shower head installation did not meet acceptable industry standards. The excessive movement only occurs when they are cleaning the shower heads and does not occur during normal use of the shower. The concern of the Appellants is that the excessive movement may cause plumbing joints to work loose and cause leakage, water damage and mould behind the tiled walls. There is currently no sign of such damage so the concern is speculative. The statutory warranty is for defects that manifest themselves after one year. The Tribunal cannot take into account the future possibility of a problem. In the absence of evidence of actual defect, this claim must fail.

44Item 8 addresses the repair of a previously warranted item. The home has a minimalist design concept with stair handrail brackets designed to lie flush to the wall. These brackets were loose and the vendor undertook repairs. In carry out the repairs, the brackets were installed approximately ⅛” off the flat wall surface. The gap between bracket and wall has been filled. According to the Appellants, the repair constitutes an eyesore and ruins the minimalist look that so attracted them to the house in the first place. Mr. Haley determined that the repair was not generally noticeable in normal use of the house. It is, in his view, quite acceptable workmanship to fill minor gaps such as these.

45The difficulty for the Tribunal is to balance the Appellants’ subjective concerns with Tarion’s objective approach. The Tribunal has no doubt that, being aware of the repair, the Appellants notice the repair each and every time they view the stairs. It must grate. Tarion attempts to objectify the standard by the use of the concept of noticeability from a normal viewing position. The Appellants’ photograph is a close up (Ex 5 Tab 5 last page, top right) that makes the condition appear much more pronounced than it really is. They do not reflect what is presented to the naked eye.

46Numerous decisions of this Tribunal have endorsed an objective approach. In the case of Mark Teitelman (1987) 16 CRAT at page 181 the predecessor of this Tribunal, the Commercial Registration Appeal Tribunal, stated:

The Teitelmans were not the authors of the defects and the Tribunal understands that they are a constant source of irritation to them. However, they must accept the fact that no house, new or old, is perfect or warranted to be perfect…All that can be done is to keep these imperfections at acceptable levels.

The comments in Teitelman would appear to be on all fours with the current facts. In Tharmathurai (Re) [2001] O.L.A.T.D. No. 466 at paragraph 77 Vice-Chair Israel pointed out the dangers of relying on close-up photographs. The Tribunal finds these authorities persuasive and accepts Tarion’s objective approach. On the evidence of Mr. Haley, that the repairs are not noticeable from a normal viewing position, the Tribunal finds there is no warranty coverage for the handrail supports.

47Item 9 in the Decision Letter refers to damage to the front door from a defective door stop. Tarion argues that the front door is part of the common elements of this townhouse condominium development. The Appellants did not seriously argue with this point. Rather they seem to take the position that the damage to the door resulted from an inexpensive door stop that wore through quickly. Care and replacement of the door stop would appear to fall within the homeowners’ maintenance obligations. A defective common element front door is a matter for the Condominium Board and outside the scope of the statutory warranty.

48The final item claimed by the Appellants relates to damage flowing from a defective equipment room door. The defective equipment room door has been warranted and several attempts to repair it have failed. It sags on its hinges. In the operation of the door, the hardwood floor has become scratched where the underside has dragged across the floor. While the scratched floor is not specifically addressed in the Decision Letter, the Appellants argue that it is part and parcel of the defective door problem and flows directly from the warranted condition. They argue that its repair should be included in the door repair.

49The difficulty for the Appellants is the specific exclusion in s 13 (2) (b) of the Act for secondary damage caused by a defect, whether property damage or personal injury. It is not disputed that the damage to the floor arose out of the use of the defective equipment door at some time after failed repairs. The Tribunal is constrained by the wording of the Act. It cannot see any interpretation of this specific exclusion that would provide warranty coverage for the scratched floor.

50The Appellants ask the Tribunal to order Tarion to carry out the various warranted repairs rather than making a cash settlement. Tarion, for its part, argues that the relationship with the Appellants has been long and arduous and has broken down to the extent that a cash settlement is the preferable solution. Tarion’s authority to make a cash settlement of claims is set out in s. 14 of the Act. Section 14 presumes payment out of the compensation fund for breaches of warranty but in s. 14 (7), as an exception to the general rule about compensation, Tarion is empowered to: “perform or arrange for the performance of any work in lieu of or in mitigation of damages claimed under this section.” The Tribunal has the power to order Tarion to take any action that Tarion is permitted to take under the legislation. The Tribunal, then, can order Tarion to carry out the repairs. Should it do so in this situation?

51The Tribunal notes that the home was completed for possession on January 24, 2011, over 4 years ago. Tarion seeks to bring closure to the first year items by making a cash payment. The Appellants are concerned that they will not get trades to do the work for the amount of money offered by Tarion. It is their view that Tarion has access to a greater diversity of skilled workers and the ability to oversee the work. They have not provided estimates to Tarion to encourage Tarion to offer a higher sum but seek the comfort of Tarion’s knowledge and a one year warranty on the repairs. The Tribunal does not consider the Appellants’ concerns overcome the presumption in the Act that the remedy is to be paid compensation out of the fund. In particular, the Tribunal notes the lapse in time, four years from possession and three years from the expiry of the 1^st year warranties.

ORDER

52Tarion has already made an offer with respect to the main floor equipment room door. The Tribunal orders Tarion to pay this amount to the Appellants in full and final settlement of the Appellants’ claims regarding this door.

53In paragraph 10 the Tribunal found several items to be warranted. They were: the relocation of the thermostat and humidistats and the relocation of the humidifier duct to prevent it from being crushed. The only evidence with respect to the cost of these repairs came from Mr. Cooke’s 2^nd report dated September 23, 2014 (Ex. 4 Tab 8) where he states that a trained technician could do the work and reset the furnace input water temperature for about $250.00. The Tribunal orders Tarion to pay that amount to the Appellants. No specific estimate was before the Tribunal for relocation of the humidifier duct. It was subsumed in Mr. Coulter’s wide-ranging estimate. The amount of work involved would not appear to be extensive and is of the same order of magnitude as the work involved in relocating the humidistats and thermostat. The Tribunal allows the amount of $100.00 for this work.

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

LICENCE APPEAL TRIBUNAL

D. Gregory Flude, Vice-Chair