Licence Tribunal
Appeal d'appel en
Tribunal matière de permis
2016-11-22
FILE:
10249/ONHWPA
CASE NAME:
10249 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
Appellants
Appellants
-and-
Tarion Warranty Corporation
Respondent
-and-
Hilden Homes Ltd.
Added Party
REASONS FOR DECISION AND ORDER
ADJUDICATOR:
Patricia McQuaid, Vice-Chair
APPEARANCES:
For the Appellants:
One of the Appellants, on behalf of both
For the Respondent:
Ted Weredynski, Paralegal
For the Added Party:
Eric DenOuden, Agent
Heard in Oshawa:
October 20, 2016
DECISION AND ORDER
BACKGROUND
Pursuant 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 as set out in a Decision Letter dated May 17, 2016. The Added Party, Hilden Homes Ltd. (“Hilden”), 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 that the claims are warranted.
The only issue raised in the Decision Letter, and the basis for the denial of coverage, is Tarion’s assertion that the Appellant did not make a claim for a conciliation inspection within the required time period set out in the regulation, Administration of the Plan, R.R.O 1990, Reg. 892, made under the Act (the “Regulation”). In the first year of possession, there are two opportunities for homeowners to raise concerns with their vendor and Tarion. The first is during the 30-day period immediately following possession, referred to as a 30-day claim, and the second is the 30-day period immediately preceding the anniversary date of possession, referred to as a Year-End claim.
After the homeowner files a claim, the Regulation places duties on the vendor to complete warranty repairs within 150 days of receiving a claim form. If the vendor fails to do so to the satisfaction of the homeowner, or if there is dispute whether any specific item is warranted, the homeowner may request Tarion to conduct an inspection and conciliate the dispute. The regulation places a duty on the homeowner to contact Tarion and request a conciliation inspection during the 30-day period ending on the 181st day after the date of possession in the case of a 30-day claim or ending on the 150th day after the first anniversary of the date of possession in the case of a year-end claim.
The consequence for failing to request a conciliation inspection is that “the owner shall be deemed to have withdrawn all claim items listed on the year-end form that the vendor does not repair or resolve by the end of the 150th day” – see section 4.3(10). It is common ground that the Appellants did not request conciliation within the regulatory time period. Tarion argues that the Appellants are deemed to have withdrawn their claim and have no further right to warranty coverage for items claimed in the Year-End form.
FACTS
The Appellants took possession of their home on May 20, 2014. The 30-day form, which listed 27 items, was submitted by the Appellants, by fax, on June 17, 2014. Tarion sent a letter to the Appellants, with a copy to Hilden, advising that the Builder should resolve the items covered by warranty by October 20, 2014. The letter stated as follows:
What Happens Next
Your builder should resolve the items that are covered by the warranty by October 20, 2014…
What if my items are not resolved by October 20, 2014?
You can log into your MyHome account (if you submitted your form through MyHome) or contact us between October 21, 2014 and November 19, 2014 to schedule a conciliation inspection so that Tarion can assess the situation. Please note the following:
If you do not request an inspection during this time period, Tarion will consider all items listed on your form to have been withdrawn. You may re-submit the items on a Year-End Form if they remain an issue.
There is a deposit of $282.50 for the inspection, which will be refunded to you if we determine that one or more items we inspect are covered by the warranty….
In this instance, all of the items were resolved.
The letter also referred to the Homeowner Information Package (“HIP”). In his testimony, the Appellant stated that he could not recall if he received the HIP from Hilden, but he assumed that he did. He could not remember looking at it. He knew that Tarion coverage was offered for the home because Hilden had advertised that it was registered with Tarion. Mr. DenOuden, Agent for the Builder, stated in his testimony that the Appellants did get a copy of the HIP which they signed for on December 20, 2013. Based on the evidence, including the fact that both the 30-day and Year-End forms were filed within prescribed time periods, the Tribunal accepts that the Appellants did get the information package.
The Appellants filed their Year-End form on May 15, 2015. Eight items were listed. This form was filed through the on-line MyHome account, with assistance from a Tarion customer service representative. Because they filed this form through the online portal, it appears that the acknowledgement of receipt from Tarion was generated through the MyHome account. Patricia Lutz, Tarion’s Director of Customer Services, testified that the MyHome account also generates a list of relevant dates for the homeowner. In particular, it indicates that the request for an inspection of the Year-End items, if not resolved, was between September 18 and October 19, 2015 (emphasis added). Ms Lutz also stated that once a homeowner files the claim through the MyHome portal, all communication from Tarion is by email. The homeowner has to “check” a box on the MyHome portal to opt out of email communication. Any reminders of the various relevant dates are only accessible through the portal. The Appellants did not check the box.
Of the eight items listed, all but two were resolved. These two relate to the carpet in two bedrooms, approximately 400 square feet. Specifically, the Appellants stated that: “upgrade carpet showing very noticeable traffic pattern after 8 months of use”. The Appellants travel approximately 40% of the time in the year so the carpet is not subject to daily wear and tear.
Because the carpet seemed to be an issue, Mr. DenOuden got involved. The relationship between the Appellants and Hilden had generally been positive. Hilden arranged for the supplier of the carpet to attend at the Appellants’ home in July 2015. It was then suggested that the carpet be steam cleaned, which was done on September 10, 2015. The Appellants took the position that the carpet did not look any better after it was steam cleaned, so Hilden (and the carpet manufacturer) then arranged for a carpet inspection by MBD Floorcovering Inspection Service (“MBD”). The inspection took place on October 20, 2015. MBD prepared a report, dated October 22, 2015, which stated that this would not be a warrantable claim.
The Appellants did not receive a copy of this report until January 2016. The Appellant testified that he and his wife were away for the month of November and it was not until after the holidays, in early January, that he followed up with Mr. DenOuden. Mr. DenOuden dropped off a copy of the report on January 13, 2016. By email dated January 26, Mr. DenOuden stated that Hilden was not in a position to assist the Appellants any further since the carpet manufacturer was taking the position that all was good.
The Appellants then contacted Tarion. On February 10, 2016, a Tarion representative e-mailed the Appellants, stating: “For all items listed on the Year-End Form, you were required to contact us between September 18, 2015 & October 19, 2015. As a result, Tarion is unable to enforce any items that are covered under the one year warranty”. The representative did go on to state that although Tarion could not enforce the one year warranty items, to be of assistance, they could contact the builder on the Appellants’ behalf to discuss the outstanding items. Subsequent to this, Tarion emailed the Appellants again, advising that Mr. DenOuden told them that there was nothing further they could do and that the issue was considered to be closed by Hilden.
From this chronology, it is clear that the Appellants were pursuing resolution of their Year-End claim items with Hilden and were generally successful, except for the two carpet items. Tarion had required that they request a conciliation inspection by October 19, 2015. That there may have been some confusion in the mind of the Appellants is not surprising given that the carpet was inspected by MBD on October 20, 2015. It is unfortunate that the MBD report was not provided to the Appellants until January 2016, and the Tribunal does not infer any ulterior motive by that delay, but in light of the facts, it was reasonable for the Appellants to have assumed that the carpet issue was an ongoing one. After the exchange of emails between Mr. DenOuden and the Appellants in January 2016, when it was clear to the Appellants that Hilden would not help them any further, they promptly contacted Tarion to pursue their remedies through it.
ANALYSIS
The Appellants submit that the carpet claim item should be assessed on its merits, that is, whether it is a warrantable claim, and should not be decided based on a technicality, namely, the failure to make a request for a conciliation inspection between September 18 and October 19, 2015. Mr. Denouden also used the word “technicality”, stating that he was not at the hearing to urge that the Tribunal deny the Appellants’ claim based on that, but rather stressed that Hilden’s position was that the carpet does not need to be replaced.
Tarion stresses that the Act places certain obligations on homeowners and there are timelines that the homeowner must abide by, about which Tarion provides an abundance of information, both in the HIP and on its website. However, the Tribunal notes that on the facts presented here, with all information provided to the Appellants after filing of the year-end claim through the MyHome portal, there may be an issue of accessibility. Mr. Weredynski, on behalf of Tarion, also pointed out that a Tarion customer service representative spoke with the Appellant when he filed his Year-End form, provided him with assistance and offered to help as needed. At that time, the Appellant stated that he was working with his builder; however, there was no suggestion by Tarion that if the Appellants were working with the builder that meant there was no need to request a conciliation inspection within the time frame specified. At the same time, the Tribunal also notes that there is also no suggestion that there was any discussion at all about conciliation inspections.
The issue before the Tribunal is the “technicality” that the Appellant failed to request a conciliation inspection within the legislated deadline, not whether the approximately 400 square feet of carpet is a “warrantable” claim. This is not to say that a conciliation inspection is a technicality. It is an opportunity for a Tarion representative to assess whether or not a disputed item is covered by warranty. What may be considered as a technicality is the time-frame within which Tarion requires that the conciliation take place.
Mr. Weredynski did point out that there is a provision in the regulation that allows for the extension of the regulatory time limits and that the Act permits the Tribunal to order Tarion to perform any action that it is authorized to perform under the Act and regulations, including exercising its discretion under s. 5.10. This section states:
5.10 The Corporation may, in its sole discretion, extend or abridge any time specified in sections 4.1 to 4.6, 5.1, 5.2, 5.5 to 5.7 and 5.9 if it determines that,
(a) the vendor is unable or unwilling to repair or resolve the claim items covered by a warranty;
(b) the warranty claim,
(i) relates to items involving health and safety, seasonal repairs or an emergency, or
(ii) involves other extraordinary circumstances; or
(c) the specified times begin in, end in or span the period from December 24 of one year to January 1 of the following year, both inclusive.
However, Tarion submits that there are no extraordinary circumstances here; nor is the issue one involving health and safety, seasonal repairs or an emergency. Tarion cited the Tribunal’s decision in 8873 v. Tarion Warranty Corporation, 2014 CanLII 79666, in which the Tribunal found no evidence to bring the homeowner’s actions within the terms of s. 5.10. In that case, the homeowner acknowledged that he had read the relevant documents, but offered no explanation for not following the required timeline other than to say that had he known that it was part of the statutory scheme (versus merely contractual) he would have taken it more seriously.
In interpreting this section, the Tribunal notes that it is well settled that the Act is remedial consumer protection legislation which should be given a fair, broad and liberal interpretation. Section 5.10 uses permissive language. Whether to exercise that discretion must be assessed in the context of the particular facts.
Here, the outstanding claim items – the two bedroom carpets – were identified in the Year-End form. The Appellants required assistance to file on-line and it appears from the evidence that they did not check their MyHome account thereafter. The evidence also indicated that the Appellants were not particularly at ease with the online filing process. The Appellants did, however, continue to work with their builder, as Tarion encourages homeowners to do. Inspection of the carpet took place through the summer of 2015. Ironically, one day after the conciliation inspection timeline expired, another inspection of the carpet took place, at Hilden’s request, though the report from that inspection, dated October 22, 2015, was not given to the Appellants for over three months and only after the Appellants made further inquiries of Hilden.
These facts make it clear that at no time did the Appellants consider the claim withdrawn by them; it was very much a live issue with ongoing progress and activity by Hilden. Until January 2016, they had a reasonable expectation that this final item would likely be resolved, as had the others. Unlike the homeowner in 8873, the Appellants here provided a reasonable and credible explanation for the lapse in time before contacting Tarion about next steps. When they became aware of Hilden’s position; specifically that Hilden was unwilling to resolve the claim item, they acted expeditiously and contacted Tarion.
On these facts, to deny the Appellants the opportunity to pursue their claim for warranty coverage would be unreasonable and antithetical to the consumer protection nature and character of the Act. The Tribunal finds that the power to extend the time limit in section 5.10 is a broad discretion that should be exercised in a manner consistent with the remedial consumer protection nature of this legislation. Paragraphs (a) to (c) in section 5.10 do not necessarily impose mandatory limits on the exercise of this discretion. In any event, the Tribunal finds that the circumstances before it fall within the meaning of “extraordinary circumstances” within s. 5.10 (b)(ii). The Tribunal’s decision on this issue does not mean that the claim item is warranted as a Year-End claim, but rather that Tarion must accept and assess the claim as if the request for a conciliation inspection had been made within the required time limit.
ORDER
By virtue of the authority vested in it by the Act, the Tribunal orders Tarion to extend the time for the request for a conciliation inspection and assess the claim under the Act.
LICENCE APPEAL TRIBUNAL
________________________
Patricia McQuaid, Vice-Chair
Released: November 22, 2016