Licence Appeal Tribunal

Safety, Licensing Appeals and Standards Tribunals Ontario

Tribunal d’appel en matière de permis Tribunaux de la sécurité, des appels en matière de permis et des normes Ontario

Date: 2020-01-14

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

Between:

Xin (Melissa) Chang Appellant

-and-

Tarion Home Warranty Corporation Respondent

-and-

Downsview Homes Inc. Added Party

DECISION AND ORDER

Adjudicator: Asad Ali Moten, Member

Appearances:

For the Appellant: Self-representend

For the Respondent: Michael Owsiany, Counsel

For the Added Party: Orly Kahane-Rapport, Counsel

Heard in Toronto: December 2 and 3, 2019

REASONS FOR DECISION AND ORDER

OVERVIEW

1This matter arises from an appeal of two Tarion Home Warranty Corporation decision letters dated October 16, 2018 and June 21, 2019. These decision letters denied warranty coverage for a subset of claims made by the appellant on her Year-End warranty claim form under the Ontario New Homes Warranties Plan Act (the Act).¹

2By the time of the hearing, all but one of the nearly 40 items claimed by the appellant had been warranted, resolved, or withdrawn. I commend the parties on working diligently to resolve a significant number of issues. The one remaining issue was with respect to a crooked wall in the upstairs bathroom.

3The appellant is of the position that the window located within the wall is crooked, and that this is a defect in workmanship that is covered under the warranty. Tarion and the added party builder, Downsview Homes Inc., are of the position that the wall is the claimed item, and that the wall is within acceptable tolerances.

4Based on the evidence before I find that the appellant has not satisfied her onus to prove that the item in question is a breach of warranty under the Act. Therefore, the appeal is dismissed.

PRELIMINARY ISSUE

5The appellant in this matter has made written submissions indicating that she is seeking remedies above and beyond items contained in the Tarion decision letters. These remedies include:

a. A declaration as to whether Tarion has violated an alleged fiduciary duty or other duty of care;

b. Damages in the amount of $100,000 plus interest and costs;

c. Recovery of legal and other costs;

d. Aggravated damages for pain, suffering, mental distress, insomnia, and anxiety;

e. An injunction to stop the offending practice.

6Several other items the appellant agreed were beyond the scope of this hearing and withdrawn.

7The appellant did not formally request that the above remedies be added to the proceeding, but Tarion requested that the Tribunal restrict this hearing to issues arising from its decision letters. Tarion's basis for this request is that the Tribunal does not have jurisdiction to determine the issues alleged in the appellant's written submissions. Downsview Homes, supports Tarion in this position.

8Tarion rightly pointed out that in making their request they had not complied with Rule 15 of the Common Rules of Practice and Procedure, Licence Appeal Tribunal, Animal Care Review Board, Fire Safety Commission, October 2, 2017 (the Common Rules of Practice and Procedure) which outlines what is required when bringing a motion. Tarion has not delivered a Notice of Motion.

9Rule 3.1 permits the Tribunal to waive or vary any of the Rules in order to, among other things, ensure an efficient, proportional, and timely resolution of the merits. In this case, it is in the best interest of the administration of justice to waive the formal requirements in bringing a motion. This is because I am satisfied that the purpose of the requirements in Rule 15 have been satisfied. The purpose of Rule 15 is to require parties bringing a motion to put all other parties on notice about the relief they are seeking. This permits the other parties to consider the motion, arrive at a position, and if necessary, prepare their argument in support of their position.

10Tarion advised, and there is no evidence to the contrary, that Tarion had raised the jurisdiction question with the appellant and builder as early as June 2019, when the appellant first raised the relief she was seeking. Subsequent to that, Tarion and the appellant exchanged emails about Tarion's position that the issues previously identified were not within the ambit of the Tribunal’s powers. The emails went so far as to suggest that the appellant considered that some of her claims may be better suited to Superior Court. In addition, Tarion delivered to the other parties last week case law and brief submissions on each case in support of its position, and advised that Tarion would be raising these issues at the hearing.

11The reason, according to Tarion, that it did not file a formal Notice of Motion is that there was no clarity as to whether the Tribunal would accept the appellant's submissions as an amended pleading. While I believe that prudent practice would call for Tarion to formally file a Notice of Motion anyway, I find that there is no prejudice in addressing this jurisdiction issue at the outset of the hearing as if it were a motion.

12On to the substance of the motion, I grant the relief requested by Tarion, and restrict this hearing to issues of denied warranty claims as described in Tarion's two decision letters.

13The Tribunal's powers in a hearing such as this stem from section 16 of the Act. This provision permits the Tribunal to order Tarion 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 Tarion.

14I read this to mean that the Tribunal can decide whether Tarion was right or wrong in denying a claim, and can order Tarion to do something where the Tribunal believes Tarion was wrong.

15Taking a step backwards then, the Tribunal's jurisdiction can only come from things about which Tarion can make a decision. Namely, warranty. Section 13 of the Act outlines what is warranted, and section 13(2) outlines specifically what is excluded. Secondary damage, including personal injury and property damage, is excluded. Case law put forward by Tarion supports the proposition that 'secondary damage' is interpreted to mean any damage that is not a direct breach of warranty.²

16This, in my opinion, excludes the appellant's claims for $100,000 in damages, aggravated damages for personal injury, and recovery of legal and other costs related to the construction of the home. The Tribunal, therefore, cannot consider these issues because Tarion cannot consider these issues.

17With respect to the declarations and injunction sought, the Tribunal is not a court of equity. The Tribunal as a creature of statute, cannot venture outside of the boundaries of the statute to bestow itself with powers that the statute does not confer.

18The appellant argues that the Act is consumer protection legislation and should be interpreted broadly and liberally to give that effect. I agree. And I sympathize that the appellant feels she has been treated unjustly, unfairly, and in some cases discriminatorily. However, interpreting a statute broadly and liberally does not mean inventing the power to do something where that power does not exist in the statute, particularly where there is a specific exclusion in that regard.

19Finally, with respect to claiming recovery of legal and other costs related to this proceeding, I note that the appellant has limited ability to seek costs arising from parties' conduct during the course of the proceeding, and I make no finding at this point prohibiting the appellant from doing so.

20In sum, the motion is granted and the appellant is restricted in her appeal to items contained in the decision letters, and any costs she may seek pursuant to Rule 19.

ISSUES

21At the outset of the hearing the parties advised the Tribunal that of the denied items contained in Tarion’s decision letters that were originally the subject of this appeal, only one remained at issue by the start of the hearing.

22Therefore, the issues to be decided in this appeal are:

a. Whether the crooked wall in the appellant’s upstairs bathroom is a breach of warranty under the Act; and,

b. If so, what is the amount of compensation for the warranted item?

LAW, EVIDENCE, AND ANALYSIS

23The Act is consumer protection legislation that must be liberally construed. It is intended to provide purchasers of new homes with some limited recourse in the event that the home they purchased does not accord with requirements under the Act. The one-year warranty applicable to the appellant’s home is set out in section 13(1) of the Act:

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 materials;

(ii) is fit for habitation; and,

(iii) is constructed in accordance with the Ontario Building Code.

24The onus is on the appellant to prove that an item claimed on the Year-End Warranty Form is in breach of the above warranty. After holding a hearing, the Tribunal may order Tarion to take such action as the Tribunal considers that Tarion ought to take in accordance with the Act and regulations.

25Tarion’s decisions with respect to warranting claimed items are informed, at least in part, by comparing the item claimed with the Construction Performance Guidelines for the Ontario Home Building Industry as published from time to time (the Guidelines). In this instance, the Third Edition of the Guidelines applies.

a. Is the crooked wall in the appellant’s upstairs bathroom a breach of warranty?

26I find that the appellant has not satisfied her onus to demonstrate that item 29A, the wall in her upstairs bathroom, as described in the October 16, 2018 decision letter, is in breach of warranty. This is for the following reasons.

27First, the item claimed by the appellant on her Year-End Warranty Form differs from what she claims is a warranted defect during the hearing. On the Year-End Warranty Form completed by the appellant on February 2, 2018, the item in question is described as:

29 – Floor 03 – Bathroom – Wall – the wall under the window is crooked, cracked and damaged. its the same in the shower. [sic]

28This item was examined by Tarion’s representative during the summer of 2018, and on September 14, 2018 Tarion sent a Warranty Assessment to the appellant. In that assessment, the item was described the same way, specifically “the wall under the window is crooked, cracked and damaged. its the same in the shower”. For practical purposes, and to reflect the comments of the appellant, however, Tarion divided this item into two sub-items. Item 29A was with respect to the wall to the left and right of the window. Item 29B was with respect to the wall underneath the window and above the tub. Tarion concluded that item 29B was warranted, but that item 29A was not.

29This was reflected in Tarion’s decision letter dated October 16, 2018. The decision letter advised the appellant of Tarion’s conclusion that item 29A was not warranted. The reason for Tarion’s decision, according to the letter, was that the walls to the left and right of the window were not out of plumb greater than the 19mm in a 2400mm vertical measurement permitted by Article 3.1 of the Guidelines. Tarion’s measurements indicated that the wall to the left of the window was 9.9mm out of plumb, and the wall to the right was 5.9mm out of plumb.

30The appellant, however, did not address the wall during the hearing. Her evidence and argument was with respect to an allegedly crooked window located within the wall in question. She argued that all parties agreed that the wall was crooked so there was no need to present any further evidence about the wall, and that her concern was the window. I therefore find that there is insufficient evidence before me to conclude that the wall is in breach of warranty.

31Second, I am willing to accept that the appellant meant to claim the window as an item, and not just the wall. The appellant appeared with an interpreter, and English is not her first language. It is reasonable to conclude that the appellant viewed her whole wall, window included, as crooked, but lacked the ability to clearly articulate that on her claim form or in subsequent communications with Tarion. The window, after all, is a part of the wall. Even with this generous interpretation of the appellant’s intent, however, I find that the evidence before me does not support a conclusion that the window is in breach of warranty.

32The appellant submitted a Home Inspection Report, completed by Nathan Nie, a professional engineer, on September 19, 2018. This report contained no measurements of the window or the wall. The extent of the engineer’s inspection of this issue is demonstrated by several photographs in which the engineer is using his flashlight as a measurement tool and holding it up at various points on the windowsill to demonstrate that the window is crooked. During cross-examination the appellant stated that the engineer did not actually measure whether and by how much the window was crooked because he had forgotten his measuring tape. She also stated that she had attempted to call the engineer as a witness but that he was overseas and unavailable. I therefore, have no reliable measurement by an engineer to indicate whether and by how much the window is out of plumb.

33The appellant also submitted one undated photo, taken by her, showing hand-drawn measurements on the left side of the windowsill. The naked eye can see from this photo that the window, at least on the left side, is crooked. The measurements shown in the photo indicate differences in the windowsill depth from the wall, ranging from 0.7mm to 24mm.³ However, it is not clear where each of the measurements begins from or ends, nor could the appellant testify as to her method and approach in measuring the windowsill. This is particularly important because an inconsistency of even a few milimetres in how the windowsill is measured could be significant for this issue. Without a clear understanding of how the appellant arrived at her measurements, I cannot rely on this photo as conclusive evidence of any defect in the window.

34Therefore, the appellant did not present any reliable evidence to support her argument that the window is out of plumb to an extent that it violates the warranty. I find that the appellant has not satisfied her onus to demonstrate that the window is in breach of warranty.

b. What is the amount of compensation for the warranted item?

35Given my conclusion with respect to the first issue, it is unnecessary for me to decide this issue. However, in the event that that I am wrong with respect to whether the wall is in breach of the warranty, I will consider the arguments made with respect to compensation for the warranted item.

36None of the parties submitted as evidence any quotes with respect to the cost of repair for the crooked wall and window. The appellant testified that she had been provided with quotes by Downsview Homes and Tarion, and that she had informally inquired elsewhere about how much the repair would cost. She advised that she understood the cost to be approximately $10,000, but could not tell the Tribunal how that cost was broken down. I cannot give this estimate any significant weight.

37Downsview Homes and Tarion, for their part, did not address the cost of repair or any quotes during their evidence.

38As a result, I do not have any reliable evidence before me with respect to the damages resulting from the breach of warranty, and the appeal would fail on this prong of the test to be met by the appellant.

CONCLUSION AND ORDER

39For the reasons above I find that the appellant has not satisfied her onus to demonstrate that the denied item in Tarion’s decision letter is a breach of warranty, or any damages that might result. The appeal is therefore dismissed.

LICENCE APPEAL TRIBUNAL

_________________________

Asad Ali Moten, Member

Footnotes

1. 1R.S.O. 1990, c. O.31
2. 2See Liddiar et al v. Tarion Warranty Corporation et al, 2009 CanLII 65801 (ON SCDC), 99 O.R. 3d 656, at paras 47-52.
3. 3[3] The photo shows ‘cm’ as the unit of measurement. However, during her testimony the appellant stated that she had mislabeled the measurements as cm, and they were actually in millimetres.