Date: 2022-05-31

Appeal from the amended notice of proposal dated August 17, 2020 made by the Registrar, New Home Construction Licencing Act, 2017 (formerly Tarion Warranty Corporation) proposing to refuse to renew the registration of the appellant under section 43 of the New Home Construction Licensing Act, S.O 2017, c. 33, Sched. 1

Between:

1957922 Ontario Ltd.

Appellant

and

Registrar, New Home Construction Licencing Act, 2017

Respondent

DECISION AND ORDER

ADJUDICATOR: Kevin Lundy, Member

APPEARANCES:

For the Appellant: Valerie Astudillo, Paralegal

For the Respondent: Montgomery Shillington, Counsel

Heard by Videoconference: July 21, 22, 23, 26, 28, 29, 30, 2021

A. Overview

11957922 Ontario Ltd. (the ‘Appellant’) has appealed an Amended Notice of Proposal to Refuse to Renew Registration issued by the Tarion Warranty Corporation (‘Tarion’) on August 17, 2020 to the Licence Appeal Tribunal (the ‘Tribunal’). Tarion’s licencing authority under the Ontario New Home Warranties Plan Act (the ‘ONHWPA’) was subsequently assumed by the Home Construction Regulatory Authority (the ‘Registrar’) under the New Home Construction Licensing Act, 2017 (the ‘Act’) as of February 1, 2021.

2The Registrar took the position that the Appellant breached warranties under section 13 of the ONHWPA for a home in Pelham, Ontario and failed to indemnify Tarion for the resulting losses. The Registrar has also alleged that the past conduct of the Appellant’s officer and director, Franca Pingue (‘F.P.’), affords reasonable grounds to believe that the Appellant’s business undertakings will not be carried on in accordance with law and with integrity and honesty.

3F.P. took the position that she made every effort to fulfill her duties as a registered builder but was obstructed by difficult homeowners. She also alleged that the Respondent never put her on notice with respect to the penalty amounts she could face. Furthermore, she submitted that the Registrar has incorrectly labelled her as disrespectful and aggressive.

4The following witnesses participated in the videoconference: Erin Cahill (‘E.C.’), Magda Macari (‘M.M.’), Michael Provo (‘M.P.’), Timothy Semenuk (‘T.S.’), F.P. and Bruce Hindrea (‘B.H.’). Glen McCabe (‘G.M.’) and Pat La Scala (‘P.L.S.’) participated by telephone. Letizia Filipazzo (‘L.F.’) and F.P. attended the full seven days as instructing clients to their legal representatives while the other witnesses were excluded until their evidence was called.

B. PRELIMINARY ISSUES

Change of Adjudicator

5The hearing commenced on July 21, 2021 by videoconference and continued on July 22, 23, 26, 28, 29, concluding on July 30, 2021. As requested by the Registrar and ordered by the Tribunal, a court reporter was present. However, as the hearing adjudicator was no longer available to issue the order, the parties agreed that rather than reconvene the hearing de novo, it would be assigned to another adjudicator who would re-hear the appeal and issue an order based upon the audio recordings from the above hearing dates and the submitted exhibits. This agreement implicitly bound the parties to accept the rulings issued by the original adjudicator during the course of the hearing.

Respondent’s Motion to Exclude Appellant’s Late File Documents

6The Appellant’s paralegal served and filed a portion of her documents in a 37 page Book of Authorities titled “Book of Authorities II” on July 20, 2021, well after the June 26, 2021 deadline ordered by the Tribunal on May 10, 2021. Counsel for the Registrar requested an order excluding the late documents. The Appellant’s paralegal stated that she only received the new documents from her client over the weekend preceding the hearing and immediately transmitted them to the Registrar and the Tribunal.

7The hearing adjudicator admitted the documents on the basis that the witness who authored them was available for questioning and granted leave to the Registrar to submit any reply evidence, if necessary, by July 27, 2021. Counsel for the Registrar was also permitted an exception from the usual prohibition against discussing evidence with witnesses who had already testified in order to review the documents in question with those two witnesses, specifically M.P. and M.M., as well as a dispensation to recall one or both of those witnesses.

Selective Participation by Telephone

8The Appellant’s paralegal advised that three of her witnesses G.M., P.L.S. and Jozo Mamic (‘J.M.’) would be unable to call into the videoconference and requested a separate hearing date to participate by telephone. This request was denied as unnecessary. Both G.M. and P.L.S. were able to call into a separate teleconference line provided during the scheduled hearing dates. As J.M. was apparently unable to access the telephone or videoconference, the Appellant ultimately elected not to call him as a witness.

Appellant’s Adjournment Request

9Related to the above issue, at the beginning of the third day of the hearing, the Appellant’s paralegal requested an adjournment as she was unable to secure J.M.’s attendance as he was on vacation at that time. The hearing adjudicator expressed some concern that the witness had apparently not been summoned weeks or even months prior to the hearing date, particularly given the age of the file. The Appellant’s paralegal estimated that J.M. would be one of the last witnesses called to testify. Counsel for the Registrar was amenable to permitting J.M. to participate by telephone but opposed any adjournment.

10The adjournment request was effectively withdrawn as J.M. subsequently agreed to participate by telephone. As noted above, on the sixth day of the hearing, J.M. remained unavailable; rather than revisit the issue of adjournment to arrange for his participation, the Appellant elected to close its case after the testimony of P.L.S.

C. RESULT

11For the following reasons, and having considered the evidence and submissions, I find that the Appellant has breached warranties under section 13 of the ONHWPA with respect to the home at 260 Farr Street, Pelham and failed to indemnify Tarion for resulting losses. I also find that the Registrar demonstrated that that the past conduct of the Appellant’s officer and director affords reasonable grounds to believe that the Appellant’s business undertakings will not be carried on in accordance with law and with integrity and honesty. Lastly, I also find that the Appellant’s high ratio of conciliations to enrollments with respect to one house demonstrates insufficient technical competence. Having considered the possibility of licencing with conditions, I am not satisfied that any conditions are appropriate to protect the public interest and I therefore direct the Registrar to carry out its proposed action pursuant to subsection 43(8) of the Act.

D. LAW

12Given the detailed nature of much of the evidence presented, a brief overview of the statutory context for the role of Tarion in the warranty process for new homes may be useful for the issues in this appeal, particularly as it engaged transitional legislation.

13Tarion is a private, non-profit corporation designated by the Lieutenant Governor-in-Council to administer the ONHWPA. Prior to a change in legislation five months before the present hearing, it served as the Registrar under the Act and applied and enforced the Act and Regulations.

14Each builder or vendor of new homes in Ontario must be licenced with the Registrar. The licencing process involves an applicant agreeing to standard terms, either through a Vendor Agreement, Builder Agreement or both, depending on a particular applicant’s proposed role in new home construction. It is with respect to this duty that the amended Notice of Proposal, dated August 17, 2020, was issued.

15Tarion does not operate as an insurance company. Rather, its role is to ensure that builders comply with the statutory warranties set out in the Act. The warranties are those of the builder, not Tarion. The builder is also required to respond to warranty claims as submitted by homeowners to Tarion within certain defined time periods. A homeowner may ask Tarion to intervene by requesting a conciliation inspection only if a builder fails to complete warranty repairs in a timely manner and the homeowner believes that one or more warranted items have not been repaired or resolved within the allowed time limits.

16The present proceeding related to two categories of warranty claims, specifically, a delayed closing claim and a claim under the 30 Day Form. With respect to the delayed closing claim, when a builder or a vendor sells a new home, he or she is required to attach an addendum or schedule to every agreement of purchase and sale that sets out when the closing date of the agreement will be and includes clear protocols with respect to extensions. If a new home buyer believes that he or she received the home after the date that it should have closed according to the addendum, then the homeowner may file a delayed closing claim with Tarion, after paying a required fee. Once such a claim has been filed, the builder is notified and has thirty days to negotiate with the homeowner to satisfy or resolve the claim.

17If this negotiation is not successful, Tarion invites the builder to provide input with respect to his or her perspective on the conflict. A Warranty Service Analyst then conducts a conciliation to make a determination with respect to whether the homeowner’s claim is warranted and issues a Warranty Assessment Report (‘WAR’). If Tarion finds that the claim was warranted, the homeowner’s fee is refunded.

18A builder who disagrees with Tarion’s determination of warrantability or chargeability in a WAR may be eligible to request an arbitration under the Builder Arbitration Forum (‘BAF’). An arbitration request may only be made by licenced builders who attend the conciliation inspections and must be made within 28 days of receipt of the WAR. The Warranty Service Analyst also assesses whether the claim is chargeable. A determination that a claim is chargeable represents Tarion’s finding that the builder ought to have resolved an issue that led to an unnecessary conciliation. In that instance, Tarion settles the claim directly with the homeowner, writing a cheque out of its Guarantee Fund and then invoicing the builder for the amount paid along with a 15% administrative fee. Tarion would also invoice the builder for the cost of the homeowner’s refunded claim fee.

19A 30 Day claim follows a similar process. The ONHWPA imposes a one year warranty on a wide range of defects with respect to workmanship and materials and any violation of the Ontario Building Code (the ‘Code’), except as proscribed by the Regulations. The Regulations also provide a process for a homeowner to make a claim within the first thirty days after the date of possession. Once the homeowner files a 30 Day claim, the builder has 120 days to address the items on the claim. This is known as the first builder repair period. After the 120 days has elapsed, a homeowner who is dissatisfied with the builder’s efforts to resolve the items on the 30 Day claim may request a conciliation inspection.

20When a homeowner requests a conciliation, Tarion schedules an inspection and notifies the builder. This starts the second builder repair period in which the builder is given a further thirty days after the date the homeowner requests the conciliation inspection to repair or resolve all of the claim items. Unless the homeowner requests that the conciliation inspection be cancelled, a Warranty Services Representative from Tarion attends at the home, reviews the homeowner’s claims and issues a WAR that includes findings of warrantability or non-warrantability for each disputed item. The builder then has thirty days to appeal Tarion’s decision to the BAF.

21If Tarion determines that at least one item in the WAR is warranted, barring some specific exemptions, the conciliation will be deemed to be chargeable against the builder’s record. The third builder repair period commences upon to the issuance of the WAR if any items have been found warranted. The builder is then permitted a further thirty days to conduct repairs, failing which Tarion will then schedule a claims inspection with the homeowner. In such circumstances, the only issue to be determined is whether the builder has carried out repairs to those items determined to be warranted in the WAR. If not, Tarion will arrange to carry out the repairs or provide cash compensation to the homeowner from its Guarantee Fund, in the same process as with a delayed closing claim.

22In the present case, Tarion issued the Notice of Proposal pursuant to subsection 9(1) of the ONHWPA. However, when the present Act came into force, appeals to the Tribunal under the ONHWPA that commenced before February 1, 2021, such as the present proceeding, were continued under the Act.

23Section 86.3 of the Act and section 4 of O. Reg. 630/20 provide that licencing proceedings before the Tribunal commenced under the ONHWPA continue as a proceeding under the Act. The requirement that vendors or builders be licenced is set out at subsection 37(1) of the Act.

24The grounds for the issuance or renewal of a licence for a corporate builder are set out at subsection 38(1)(d) of the Act:

38. (1) An applicant is entitled to a licence or a renewal of a licence by the registrar if, in the registrar’s opinion,

(b) the applicant is a corporation and …

(iii) the past and present conduct of its officers and directors, of all interested persons in respect of its officers and directors and of all interested persons in respect of the corporation affords reasonable grounds for belief that its business will be carried on in accordance with the law and with integrity and honesty, and

(c) the applicant is not in breach of a condition of the licence, if the applicant is applying for a renewal of a licence;

(d) the applicant meets the prescribed requirements, if any, including requirements for competency;

25With respect to the ground of honesty, integrity and compliance with the law, in Ontario (Alcohol and Gaming Commission of Ontario) v. 751809 Ontario Inc., the Ontario Court of Appeal found that as a standard of proof, “reasonable grounds for belief” is lower than the “balance of probabilities.”¹ It requires more than mere suspicion and an objective basis for the belief based upon compelling and credible information. The Court of Appeal also noted that when examining past conduct, the Registrar is not limited to the operation of licensee’s business and may consider both criminal and noncriminal conduct.² Further, according to CS v. Registrar, Real Estate and Business Brokers Act, 2002, there must be a nexus between the Appellant’s past conduct and its ability to conduct business under the Act serving the interests of the public.³

26Subsection 39(d) of the Act provides that a licence is subject to prescribed conditions. “Condition of the licence” is a defined term pursuant to section 3 of O. Reg. 626/20, of which the following terms relate to the present matter:

3. The following conditions are prescribed for the purpose of clause 39 (d) of the Act:

4. A licensee shall comply with all applicable policies, rules, and directions issued by the Registrar of the warranty authority and by the warranty authority.

5. A licensee shall comply with all conditions, obligations, and requirements imposed on the licensee by the warranty authority.

27Sections 4 and 5 of O. Reg. 631/20 detail the competency requirements are prescribed for the purposes of subsection 38(1)(e) of the Act. The provisions relevant to the present proceeding are:

4. The following legislation is prescribed for the purposes of subclause 38 (1)(c)(ii) of the Act:

5. The Ontario New Home Warranties Plan Act.

6. The Building Code Act, 1992.

7. (1) The following competency requirements are prescribed for the purposes of clause 38(1)(e) of the Act:

8. With respect to an applicant for a licence or a renewal of a licence, competency with respect to,

i. business planning and management,

ii. financial planning and management,

iii. project management and supervision,

iv. legal issues in housing, and

v. customer service requirements and requirements imposed by the warranty authority.

2. With respect to an applicant for a builder’s licence or a renewal of a builder’s licence, in addition to the competencies set out in paragraph 1, competency with respect to,

i. the requirements of Ontario Regulation 332/12 (Building Code) made under the Building Code Act, 1992 and of Ontario Regulation 213/07 (Fire Code) made under the Fire Protection and Prevention Act, 1997, and

ii. construction technology.

(2) The registrar must be satisfied that each applicable competency requirement set out in subsection (1) is held by at least one of the following persons in connection with an application:

1. The applicant.

2. An individual identified by the applicant in the application for a licence or a renewal of a licence.

28Lastly, pursuant to subsection 43(8) of the Act, following the hearing, the Tribunal may either confirm the Registrar’s proposal or substitute its own opinion:

43. (8) If the applicant or licensee requests a hearing in accordance with subsection (2), the Tribunal shall hold the hearing and may, by order,

(a) direct the registrar to carry out the registrar’s proposed action; or

(b) substitute its opinion for that of the registrar.

29In the Notice of Proposal dated August 17, 2020, Tarion proposed not to renew the Appellant’s licence. When the responsibility for licencing vendors and builders transferred from Tarion Warranty Corporation to the Home Construction Regulatory Authority, the Registrar maintained that position. Where the ONHWPA referred to registration, the present Act refers the same process as licencing.

E. IssueS

30The Notice of Proposal initially related to the following three grounds for non-renewal of the Appellant’s licence:

1. Pursuant to s. 8(2) of the Act, the Registrar finds that 1957922 Ontario Ltd. has a record of breach of warranty and is in breach of the term and condition of registration. Specifically:

a. 1957922 Ontario Ltd. has breached warranties under s. 13 of the Act for the home at 260 Farr Street, Pelham and failed to indemnify Tarion for resulting losses as set out in Schedule A and thereby breached the terms and conditions of registration prescribed by s. 1.3 and s. 1.4 of Regulation 894 under the Act; and

b. 1957922 Ontario Ltd.’s officer and director, Franca Pingue-Gionet, has failed or refused to complete the Core Competency courses of study required by the Registrar and consented to by 1957922 Ontario Ltd. by correspondence dated February 9, 2018 and April 12, 2019 and thereby breached the terms and conditions of registration prescribed by s. 1.3 and s. 1.4 of Regulation 894 under the Act.

2. Pursuant to s. 7(1)(d) of the Act, the Registrar finds that 1957922 Ontario Ltd. does not have sufficient technical competence to consistently perform the warranties. Specifically:

a. 1957922 Ontario Ltd. has demonstrated poor customer service and has a high ratio of 2 chargeable conciliations to 1 possession and has thereby breached the terms and conditions of registration prescribed by s. 1.3 of Regulation 894 under the Act and s. 2.1 of its Vendor Agreement with Tarion under s. 9(3)1 of Regulation 892 under the Act

31At the second case conference held on December 1, 2020, the Registrar stated that it was satisfied the appellant has completed the necessary core competency courses of study required by the Registrar. Accordingly, the Registrar withdrew item 1.b. from the Notice of Proposal. However, the other two reasons outlined in the Notice remained unchanged as the basis of the decision to refuse to renew the Appellant’s licence.

32Specifically, the remaining alleged grounds for refusing to renew the Appellant’s licence are that:

a. The Appellant did not reimburse the Guarantee Fund as required by the conditions of the licence;

b. The Appellant’s very high ratio of conciliation to enrollments with respect to one house demonstrates insufficient technical competence; and

c. The conduct of F.P. affords reasonable grounds for belief that the Appellant will not carry on its undertakings in accordance with the law and with integrity and honesty. With respect to this ground for non-renewal, the Registrar alleged that she has acted in a threatening and intimidating manner towards homeowners at a conciliation inspection and that she has been disrespectful and aggressive towards Tarion employees, disregarding and disputing their advice and assistance.

33The issue to be determined at the hearing was whether the Registrar demonstrated on the balance of probabilities that the remaining grounds for refusing to renew the Appellant’s licence have been met.

F. EVIDENCE AND ANALYSIS:

Background and Agreement of Purchase and Sale

34F.P. is the sole officer and director of the corporate Appellant. She incorporated the company in November 2016 and stated that it only builds new homes. The corporation has no employees; however, F.P. vaguely implied that she has occasionally enlisted her friend and contractor, P.L.S., as her agent to coordinate after sales service and obtain quotes.

35F.P. has a degree in education and took a leave of absence from her full-time employment with the Niagara Catholic District School Board to start her construction company in 2016 but returned to her teaching position in or around November 2019. She also owns and operates a pizza restaurant in St. David, near Niagara on the Lake.

36She has been involved in the construction industry building homes since 2003 and had been involved with Tarion since 2003 or 2004 through her uncle’s company. She acknowledged that she has no formal education in construction or the trades other than the training required by Tarion. At the hearing, she estimated that she has been involved in the construction of roughly twelve new homes and built approximately “half a dozen” homes either under her own name or that of her corporation over the course of her career.

37On January 25, 2017, F.P. signed a Vendor Agreement with a representative of Tarion. That agreement contained the following terms:

2.1 The Registrant shall diligently perform the obligations heretofore or hereafter imposed upon the Registrar by the Act, the Regulations, this Agreement and/or the Bulletins and shall indemnify and save Tarion harmless against all losses, claims, costs, damages and/or liabilities whatsoever heretofore or hereafter suffered or incurred by Tarion resulting from (or arising out of) any non-performance or inadequate performance of such obligations, in whole or in part, at the times, (and in the manner) as may be provided or contemplated by the Act, the Regulations, this Agreement and/or the Bulletins, provided written notice of a claim against the Registrant, or relating to any homes in respect of which the Registrant acted as Vendor (or that were enrolled by the Registrant) has been given to Tarion within the relevant warranty period(s).

2.7 The Registrant shall pay to Tarion an administration fee equivalent to fifteen (15%) per cent (or such other per cent as may be stipulated from time to time by the Regulations) of each amount paid out by Tarion to any purchaser(s), homeowner(s) or third party contractor(s)/consultant(s) in respect of the obligations imposed upon the Registrant by the Act, the Regulations, this Agreement and/or the Bulletins.

38F.P. agreed that she understood both of the above provisions and that they applied to her corporation as a licensee. She also agreed that the following term of the Agreement applied to her company’s licence with Tarion:

3.13 Compliance with the provisions of this Agreement shall form a term and condition of the registration of the Registrant under the Act.

39Prior to the present matter, the Appellant’s licence had never been the subject of a Notice of Proposal to deny renewal. F.P. testified that as of the date of the hearing, both the property adjacent to 260 Farr Street and a bungalow that she built in Port Colborne had been completed, but neither were enrolled with Tarion; the latter is a rental property that she uses as a model home. She agreed that 260 Farr Street was the first home enrolled with Tarion by the corporation.

40M.P. and Andrea Tyler (‘A.T.’) purchased the single family house at 260 Farr Street in the Town of Pelham (the ‘Town’) from the Appellant. M.P. has no building experience or training in home construction and met his then real estate agent, R.T., at their shared workplace.

41In early June 2018, M.P. and R.T. had viewed a number of new and resale homes in the Niagara Region when they met F.P. at the lot at 260 Farr Street, where she was building the basement foundation. M.P. returned with A.T. and they discussed the possibility of adding a basement walkout to the proposed plan for the property, which F.P. agreed would be feasible given the size of the lot. At her suggestion, the homeowners viewed her model home in Port Colborne, a bungalow similar in layout to the plan for 260 Farr Street.

42M.P. explained that they had a strict time requirement to move into a new home as his mother-in-law could not stay at her current residence due to financial and cognitive issues. He acknowledged that while he informed R.T. of his mother-in-law’s medical condition, he did not advise F.P. of this issue before moving into the property. F.P. denied noticing any issues when interacting with A.T.’s mother whenever she attended at the property.

43Since the foundation for the house had already been built, F.P. was confident that she could meet the homeowners’ proposed deadline for occupation. At the same time, given the pace of construction, to accommodate their request for a higher foundation, she would need them to submit an offer in comparatively short order. They made the offer approximately two weeks later.

44On November 21, 2018, M.P.’s lawyer received a letter from the Appellant’s lawyer requesting an additional $20,000.00 to be paid to Tarion for the enrollment fee for the house. The homeowners received this letter on or about the same date. M.P. did not expect to incur this cost as he had assumed that the house had already been enrolled since the Appellant was listed with Tarion as a builder. The homeowners never paid the requested $20,000.00.

45F.P. agreed that she posted $20,000.00 as a security deposit when she enrolled the property in the program. She testified that she did not believe that she was permitted to enroll the home with Tarion until she paid this deposit. She denied that 260 Farr Street was the only property that she had enrolled with Tarion and testified that she had paid a similar deposit for other homes. She did not clarify whether she referred to homes enrolled after 260 Farr Street or in relation to her uncle’s company.

46This letter also requested confirmation on whether the homeowners intended to conduct a walkthrough of the property and suggested November 29 or 30, 2018 as potential dates for this inspection. M.P. confirmed that he and A.T. conducted the offered walkthrough on or about November 30, 2018. At the hearing, he described the house at that time as “a beautiful home other than the Code violations that still needed to be corrected” and confirmed that he mentioned these defects, particularly those related to the stairs, to F.P. during the inspection. He explained that he understood that the visible issues with the house represented Code violations, based upon a building inspector’s report provided to his lawyer shortly before the closing.

The Delayed Closing

47Pursuant to the Agreement of Purchase and Sale and the Statement of Critical Dates provided by Tarion, the first tentative closing date was Friday, December 3, 2018. There was no dispute that the homeowners did not move into the house until Monday, December 6, 2018 and no substantial dispute that the delay was caused by the Appellant’s failure to obtain an occupancy permit before the original closing date.

48On the weekend prior to the closing, the homeowners received an email from R.T. indicating that F.P. had advised through her lawyer that the Appellant was not going to close on December 3, 2018. This delay posed a significant inconvenience to the homeowners as A.T.’s mother-in-law’s house was subject to a conditional sale closing on December 3, 2018 and she was required to vacate her house as of that date. They were compelled to rent storage facilities for her furniture and other property as the moving van had been arranged for December 3, 2018 on the assumption that they would move her belongings directly into the new house. As his mother-in-law was already upset at vacating the house where she had lived for thirty years, this unexpected complication was very difficult for the family.

49When M.P. filed his Delayed Closing/Occupancy Claim Form, he attached the rather laconic email sent by F.P. on Sunday, December 2, 2018 at 12:24 a.m., which stated, “The inspector can only come on Tues. in am for occupancy. Thnx.” This came as a surprise to the homeowners as they had no prior notice that they would be unable to move into the house on December 3, 2018.

50By contrast, F.P. repeatedly testified that throughout construction, the homeowners had advised her that they could move into the house well after the closing date as late as February or March in the following year. She stated that this was consistent with their pattern of causing delays during construction in August and September 2018 through late submission of their final plan for the electrical system and frequent changes to various elements of the house, including the ceiling in the basement.

51However, she testified that when the issue of the pending closing date began to arise in conversations with R.T., in mid-November 2018, she contacted her lawyer for an update on the closing, as there could be potential issues with financing. She did not indicate communicating this urgency to the homeowners. Instead, she reviewed the architectural plan highlighted with the homeowners’ additions with R.T. but opted not to have her lawyer review the changes to the plan, despite an awareness that the small narrow walk out requested by the homeowners would require an engineer’s plan and approval by the Town. Both the basement walkout and the higher foundation were not part of the original plan and required municipal approval.

52On Friday, November 30, 2018, an inspector from the Town attended at the property to assess the remaining items that required inspection before an occupancy permit could issue. F.P. offered extremely inconsistent evidence with respect to the details of that meeting. She initially testified that the inspector would not pass the risers on the walkout stairs as they were not sufficiently uniform in height and requiring further sanding. She then changed her evidence to claim that the stairs were passed but that the occupancy permit was not granted due to a problem with the plumbing in the basement, as well as another unspecified mechanical issue possibly related to the water heater. She stated that she was required to bar the top step of the back deck to prevent its use until the excessively high top step was reduced to the same height as the deck surface. In his evidence, M.P. denied that any such barrier was ever installed. F.P. then claimed that the front landings and walkout were passed. This evidence tends to conflict with Tarion’s later determinations with respect to the poor workmanship evident in the construction of these items.

53While she claimed at the hearing that the occupancy permit was not required to close, this position conflicted with her own email to her lawyer on December 2, 2018, agreeing with his assessment that the closing could not occur without the occupancy permit. During this same period, F.P. was in communication with her lawyer over scheduling the Pre-Delivery Inspection (the ‘P.D.I.’) before the now postponed closing. Strangely, she did not know whether the P.D.I. occurred on December 4, 2018 but speculated that it may have taken place in the evening or possibly on December 5, 2018.

54The only coherent fact arising from F.P.’s meandering and fluid testimony with respect to the November 30, 2018 inspection was that the occupancy permit was not granted on that date and that since the inspector was unable to return until December 4, 2018, it could not be issued until then.

55M.P. agreed under cross-examination that he and A.T. had “agreed” to delay the closing to December 5, 2018 when this delay was proposed to them in an email from their lawyer. However, this concession should not be viewed as consent to delaying the closing in general since, in the absence of an occupancy permit, the homeowners could not legally reside in the house until the Town issued the full occupancy permit.

56I find that F.P.’s inconsistent and repeatedly fluctuating recollections on the reasons for the delayed occupancy permit falls far short of credible or reliable evidence. Similarly, her claim that the homeowners were indifferent to the closing date was never put to M.P. on cross-examination and was first introduced into evidence during F.P.’s direct examination. This version of events is also inconsistent with M.P.’s unchallenged evidence that he and A.T. made a prompt purchase offer to the Appellant primarily due to the urgency of moving A.T.’s mother into the home as soon as possible and F.P.’s assurances that she could meet their needs on this timeline. On the balance of probabilities, I prefer M.P.’s evidence on this issue and find that the homeowners expected the property to close on December 3, 2018 until they were informed the day before the closing that this would not occur. In light of M.P.’s largely uncontested evidence regarding the inconvenience and anxiety caused by the postponement, I reject the Appellant’s evidence that the homeowners had led her to reasonably believe that they were indifferent to a delayed closing.

57As well, I find that F.P. failed to establish a causal link between earlier delays during construction and the Town’s refusal to issue the occupancy permit, particularly as on her own evidence, she was aware that the alterations to the plan would require municipal approval.

58E.C. has been employed with Tarion since 2004 and has served as a Warranty Service Analyst since 2016. She completed training in the Code at Fanshawe College as well as extensive training with Tarion. In her present position, she investigates delayed closing claims, deposit claims and financial loss claims and estimated that she conducted approximately one hundred warranty assessments prior to the present matter.

59She testified that the statement of critical dates, attached to an agreement of purchase and sale, lists potential critical dates, the builder’s ability to extend those dates and the purchaser’s ability to terminate a purchase, as well details of the delayed closing warranty and the deposit protection. If purchasers believe that they are entitled to compensation, they can submit a claim with respect to delayed closing at any time to Tarion during the first year of occupancy. Homeowners may claim $150.00 per day to a maximum of $7,500.00 if there is a delay past the firm closing or occupancy date. She acknowledged that she often sees extended or delayed closings as these may occur for a number of reasons.

60E.C. also explained that the Builder Bulletins provide information to builders with respect to the legislation in terms of expectations and requirements. For instance, when a homeowner submits a claim for delayed closing, the builder is expected to assess the claim by determining the amount of delayed closing compensation payable based upon the rules set out in the addendum to the Agreement of Purchase and Sale and the receipts provided by the builder within thirty days and may provide input to Tarion. E.C. agreed that she had discretion to extend that timeline on behalf of Tarion. Tarion then issues a WAR determining whether the claim is warranted or chargeable. If Tarion finds that the builder provided compensation the homeowner equal or greater to the compensation payable, then Tarion could make the claim non-chargeable if the homeowner still requested an assessment.

61Builder Bulletin 46 sets out the requirements for changing a critical date by agreement as follows:

• The builder and purchaser may at any time after signing the purchase agreement, agree in writing to extend or accelerate one or more Critical Dates, (e.g., First Tentative Closing Date, Second Tentative Closing Date, Firm Closing Date or Delayed Closing Date), in each case to a new specified calendar date.

• The amendment must provide that it is being made voluntarily; that the builder and purchaser acknowledge that the purchaser has no obligation to sign the amendment; and that the purchase transaction will still be valid if the purchaser does not sign the amendment.

• The amendment must include a new revised Statement of Critical Dates.

62The Appellant never revised the Statement of Critical Dates and never obtained the required statement that the homeowners waived compensation or accepted the compensation in full satisfaction of any Delayed Closing compensation otherwise payable by the builder. At the hearing, F.P. acknowledged that she was aware of these requirements at the time that the closing date was delayed, but after some evasion, essentially blamed her legal representatives for her company’s failure to comply with these provisions.

63Builder Bulletin 20 also applied until February 1, 2021 when the new legislation came into force and included a section on how chargeability was determined and applied during the material time covered by this appeal. As noted above, if a builder disagrees with an assessment, he or she may appeal to the BAF. In the present case, the Appellant never commenced an appeal to the BAF with respect to this issue.

64In their claim, the homeowners entered a calculation of four days for $600.00 total living expenses. If a builder does not provide at least ten days of a firm closing or occupancy date, then an automatic addition of ten days for insufficient notice is available. As a result, the homeowners claimed ten days for insufficient notice of a Delayed Closing/Occupancy Date at $1,500.00 for a total of $2,100.00 in delayed closing compensation. The homeowners attached a statement of critical dates from the Agreement of Purchase and Sale and occupancy permits, as well as some email correspondence that offered some explanation for the last minute delay.

65On the same date, Tarion acknowledged receipt of the claim in a letter copied to both parties and providing information that the Appellant had until December 4, 2019 to assess and contact the homeowner, failing which, the homeowners may request conciliation.

66F.P. acknowledged receipt of the Tarion’s confirmation letter but testified that she did not receive it until an unknown date presumably later in December 2019, vaguely attributing the delay to unspecified issues with her mail. She stated that she had been dealing with M.M. on behalf of Tarion at the time and raised the issue in conversation. She then changed her evidence to state that she discussed the claim with O.F. at Tarion, then stated that she did nothing at all as she was waiting to hear from M.M., who she believed was upset with her for missing a meeting with the homeowners in November 2019. She stated that in response to several letters from O.F. with respect to the delayed closing, she contacted O.F. on an unknown date. F.P. stated that O.F. advised that the case was still open and that F.P. was “entitled to go there now.” F.P. summarized her emails with O.F. and sent them back to her for unexplained reasons in either January or February 2020. As the Appellant chose not to call O.F. as a witness at the hearing to clarify her involvement on the file or to confirm her alleged statements to F.P., I would assign this evidence very little probative weight.

67On December 9, 2019, Tarion notified the Appellant by letter that the homeowners had requested conciliation and that the Appellant had until January 8, 2020 to submit any information or documents to support its position or to advise Tarion that the claim has been resolved. E.C. recalled communicating with the Appellant by email and by telephone and that it was F.P.’s position that the delay had been requested by the homeowners and that the Appellant was therefore not responsible for the delay. While these emails were not filed as evidence at the hearing, I do not find that their absence contradicted or undermined E.C.’s testimony since F.P.’s apparent statements in these emails were consistent with her position at the hearing that the homeowners had delayed the closing. As well, the Appellant referenced no corroborating evidence to contradict E.C.’s testimony that F.P. had claimed that the homeowners had requested the postponement.

68E.C. requested a copy of the homeowners’ required written waiver of delay from the Appellant as this document was required to make an unwarranted assessment. However, despite allowing additional time, she never received this waiver from the Appellant. F.P. denied ever communicating with E.C. or that E.C. ever contacted her. However, as she acknowledged notification that the homeowners had requested conciliation, I find that if she was confused regarding the next step in the process, she could have and should have contacted someone at Tarion.

69On February 9, 2020, Tarion sent a general cover letter to the homeowners confirming that their claim had been accepted for the following reasons:

The vendor failed to provide 90 days’ written notice of the Second Tentative Closing Date to the purchaser. Therefore, the First Tentative Closing Date of December 3, 2018 shall for all purposes be the Firm Closing Date.

The builder’s representative, Franca Pingue, sent an email to the purchasers on December 2, 2018: “I just spoke with Rudy and after some hesitation we agree with you that Wednesday, December 5th would be better to close as they would like it to be the same day as their walk threw [sic]. The only foreseeable delay is the okay from the region to the town for the septic. I will keep everyone posted on Tuesday with occupancy status after inspector leaves as I understand, at this point, this is required prior to closing.”

Tarion received a copy of the Occupancy Permit from Pelham Niagara confirming occupancy was granted on December 4, 2018.

The purchasers received occupancy of the home on December 6, 2018.

The vendor was contacted and provided their position stating the delays were caused by the purchaser. Tarion requested evidence from the vendor to support their position, however the vendor did not respond with supporting evidence.

Conclusions:

The purchasers are entitled to Delayed Closing Compensation for the time period between December 3, 2018 and December 6, 2018; 3 days.

The purchasers are entitled to an additional $1,500.00 for the vendor failing to provide 10 days’ notice of a delay prior to the Firm Closing Date.

The purchasers are entitled to compensation in the amount of $1,950.00.

70E.C. testified that Tarion would have sent a copy of this letter to the Appellant, along with information on the appeal process to BAF. She explained that Tarion’s computer system automatically sends a paper copy to both the homeowner and the builder; a builder may also receive an electronic copy depending on how the builder has elected to receive correspondence. Under cross-examination, she agreed that confirmation of this transmission was not included in the Registrar’s evidence. However, when E.C. offered to provide evidence that would confirm that the Registrar had such a document in its records generally, the Appellant’s paralegal refused her offer.

71The Appellant’s paralegal chose not to put any specific evidence that may have contradicted E.C.’s evidence on this point to her, but then attempted to elicit evidence to the contrary from her own client in direct examination, engaging of the rule in Browne v. Dunn.⁴ In response to the Registrar’s objection, the Appellant’s paralegal then misrepresented the exchange, claiming that she had asked E.C. for the missing email, but that E.C. had responded that she was unable to provide it. As a result, I find that F.P.’s implied denial of any communication from the Registrar with respect to the process to appeal the delayed closing compensation should be accorded virtually no probative weight.

72E.C. testified that this assessment was also found to be chargeable. The homeowners signed a form on February 11, 2020 accepting the above payment in full resolution of their delayed closing claim. On February 19, 2020, Tarion invoiced the Appellant for the claim, plus the 15% fee and H.S.T. E.C. testified that she believed that the Appellant had paid the invoice but noted that it was unusual for a builder not to resolve such a small claim immediately and thereby avoid a chargeable conciliation.

The 30 Day Form

73On December 28, 2018, the homeowners submitted their 30 Day Form. On January 9, 2019, Tarion sent a letter to the homeowners acknowledging receipt of the Form, which provided the relevant timelines for the homeowners and the Appellant:

Your builder is expected to resolve the items covered under the warranty by May 15, 2019. Please note that there are specific situations to which this timeline may not apply (such as repairs to the exterior of your home that require suitable weather conditions). During this initial repair period, you should work with your builder to resolve the warranted items submitted on your form.

74Other than seasonal items, if the Appellant failed to complete repairs or otherwise resolve the warranted items by May 15, 2019, the homeowners had thirty days between May 16, 2019 and June 14, 2019 to contact Tarion to request a conciliation.

75The homeowners’ 30 Day Form contained the following seventeen issues:

a. Basement: Walk up stairs to outside - poor workmanship - risers are not uniform - treads are too narrow - leading edge of treads don't have a levelled or rounds edge - no drain at bottom - loose pavers at bottom of stairs - not agreed upon. Builder not willing to provide builders permit.

b. Rear deck: Risers not uniform - ledger has no flashing. Deck is over 2" ft in height and wood posts are not anchored to concrete - concrete pier depth & footing not verified - no side gussets on post and beams function. Builder not willing to provide builder permits.

c. Front stairs: First stair on grade was covered - finish is rough - no hand railing installed.

d. Outside grading: Not done.

e. Outside: A/C not installed.

f. Outside: Eaves troughs are leaking on all inside & outside seams.

g. Outside: Parging not complete.

h. Outside: Window wells - garage needs to be removed & stone added to bottom of windows wells & pipe cut according to OBC.

i. Lower level: Missing 3 sets of interior door handles.

j. Lower bathroom: Missing ceiling bathroom light fixture.

k. Upstairs kitchen: Holes drilled in wrong place for handles.

l. Kitchen – upper: Unauthorized substitution of a Kenmore Elite /55/60" - fridge & freezer - Should be a Frigidaire 55/60" Professional series.

m. Outside: Missing all screens for windows & doors.

n. Survey: No updated survey - septic system location not correct on survey.

o. Garage door: Dent in seam – Double garage door.

p. Bedroom #3: Missing folding window crank.

q. Garage: Both windows missing folding window crank.

76While M.P. agreed that A.T. had handwritten the above list on the form, both homeowners collaborated on its content. As a result, the hearing adjudicator rejected the Appellant’s submission that only A.T. could properly testify to this evidence. Similarly, while neither homeowner had any formal training with respect to the Code, like any reasonable person, both could recognize the obvious defects in the workmanship on the house, as confirmed by the copious photographic evidence submitted at the hearing. In addition, as noted at paragraph 46 above, the homeowners had been in possession of the building inspector’s report since November 30, 2018, roughly one month before they submitted the 30 Day Form.

77As several of the items on the 30 Day Form were not resolved by the end of the initial builder repair period, the homeowners requested a conciliation.

78M.P. acknowledged that several of the items were ultimately resolved, albeit not necessarily within the initial builder repair period. For instance, after some delays with contractors, the air conditioner was eventually installed. Similarly, the parging and the issues with the window wells were resolved, as were items i., j. and k. above. As for the septic system on the survey, he described the placement of this item as “questionable,” but evidently did not pursue the issue further. After delivery delays, the window screens and the window hand cranks were eventually supplied and installed, well after the end of the initial builder repair period.

79The eavestroughs were also not repaired during the initial builder repair period. At the hearing, M.P. testified that they leaked quite heavily in various areas and trickled elsewhere. The corners were also leaking and the seams were “unsightly” exhibiting poor workmanship.

80F.P. insisted that the homeowners wait one year before finishing the front landings and the walkout, stating simply that this was her practice as the land was still settling. Under cross-examination, she was evasive with respect to the basis for this statement, refusing to state whether the concrete pad was poured in a single piece and suggesting that the question should be put to an expert on concrete. She stated that she felt pressured by the homeowners to proceed with the pour as they wanted it completed in time for the closing date.

81F.P. stated that pursuant to the Agreement of Purchase and Sale because she had accommodated the homeowners’ various late requests for changes to the plan, they “could not hold her” to imperfections and poor workmanship on the landings and stairs on the basement walkout.

The July 30, 2019 Conciliation Inspection and Aftermath

82At the request of the homeowners, on June 19, 2019, Tarion scheduled a conciliation inspection for July 30, 2019 to assess the unresolved items on the 30-Day Form. During the pre-conciliation builder repair period, the Appellant had until July 18, 2019 to resolve the items on the form that were covered by the warranty. During this pre-conciliation repair period, they were advised to continue to work with their builder to resolve the items.

83M.M. has worked in the construction industry since 2003, working for various builders conducting pre-delivery inspections and administrative duties and for homeowners. She also completed training at Tarion and obtained her Building Code Identification Number (‘B.C.I.N.’). As of the date of the hearing, she had worked for Tarion for three years and four months as a Warranty Services Representative. Her work involves conducting inspections and writing warranty assessment reports. By the date of the 30 Day conciliation inspection in this matter, in addition to years of experience for various builders, she had completed over 150 inspections for Tarion.

84She testified that if an item listed in a 30 Day Form is seasonal, such as a water test during the winter, the builder will have an extended period to resolve the issue. For instance, if a form is submitted between November 16 and November 30, the builder would have until September 1 of the following year to complete the seasonal items. Or, if the completion of an item is simply not feasible for other reasons, Tarion may schedule a re-inspection at a future date for completion.

85F.P. recalled that she asked P.L.S. to conduct work at the house during this period as the homeowners appeared to get along with him better than the other contractors. On June 27, 2019, she requested access to the house on July 11, 2019 to conduct work on interior items; however, the homeowners refused this request.

86M.M. conducted a 30 Day inspection of the homeowner’s residence on July 30, 2019 and reviewed all of the items on their form. Both A.T. and M.P., as well as F.P., were present. During this inspection, M.M. took a number of photographs and measurements of the outstanding items, which were included in her WAR. She recalled that although a few of the items were in the interior, the majority of the issues of concern to the homeowners were on the exterior of the home.

87M.P. testified that the inspection began with a discussion inside the house with respect to the relevant paperwork and the items listed in the 30 Day Form. They then went outside and examined the walk up area. He recalled that M.M. examined the exterior items on the Form, as well as the leak into the basement, followed by an inspection of the deck.

88He noted that throughout the inspection, there was some degree of confrontation and observed that F.P. appeared “agitated” that some of the measurements of the disputed items did not appear to be “going her way.” They then entered the house and examined the cupboards, the refrigerator and the door handles. In response to F.P.’s complaints that the homeowners had unreasonably refused access to the property to conduct repairs, M.M. confirmed that she was required to provide at least two business days’ notice before attending at the home. When F.P. accused the homeowners of delaying the closing, the discussion became further agitated. Since the parties had already finished discussing the items on the 30 Day Form and F.P. began to vent her annoyance over other issues, M.M. opted to terminate the meeting.

89M.M. agreed that the discussions during the inspection were not particularly amicable and that there was “a lot of arguing” and raised voices commencing immediately upon discussion of the disputed items. The concrete staircase at the walkout to the basement at the rear of the home prompted the most heated exchange between the homeowners’ expectations and the workmanship provided by the Appellant. She recalled that while both sides engaged in some degree of bickering, F.P. was very disrespectful to the homeowners, repeatedly raising her voice when discussing the staircase.

90When the parties went into the house, M.M. testified that the situation worsened. She recalled that she was standing at the kitchen island with the parties on either side when the topic of responsibility for the delayed closing was raised. She stated that F.P. became very aggressive and shouted at the homeowners, calling them names and swearing. M.M. testified that only F.P. engaged in profanity and name-calling. At one point, she began to approach the homeowners in an aggressive manner, causing M.M. to fear that she would physically attack them. M.M. blocked F.P.’s advance with her own body and suggested that the inspection should terminate. As Warranty Service Representatives are instructed not to make physical contact with others, she persuaded F.P. that it would be best if she left the property.

91M.P. recalled that as F.P. was walking to the front door to leave, she walked towards A.T., yelling and pointing in her face that she was “totally disgusted.” A.T. told F.P. to get out of her house and M.M. repeatedly asked F.P. to leave until F.P. finally exited the home. When F.P. reached the landing, M.M. had to ask her to leave “a couple more times after that.” M.P. testified that the incident was “kind of scary” and “upsetting” particularly as his daughter and mother-in-law were present. He explained that this incident severely damaged the homeowners’ relationship with the Appellant and that they preferred not to allow F.P. in the house again unless M.M. was also present. M.P. stated however that neither he nor A.T. specifically denied F.P. access to the property even after this incident. While he testified that he reported the confrontation to Tarion, he agreed that the email containing this communication was not submitted at the hearing. However, since M.M.’s description of the event was not challenged under cross-examination, I find little turns on the absence of an email to another Tarion employee that would have largely repeated the substance of M.M.’s direct testimony.

92M.M. testified that she has never encountered this level of aggression at an inspection before and was “quite shaken” by F.P.’s conduct. While she briefly considered calling the police, this ultimately proved unnecessary when F.P. drove off the property. M.M. noted that she was unable to discuss the timeline for repairs at the inspection on July 30, 2019 before F.P. became belligerent towards the homeowners. She did not provide a description of F.P.’s conduct in the inspection reports as this was not appropriate to the purpose of these documents. She nonetheless testified that she reported this incident to her manager by telephone.

93F.P. provided a differing account of the events on July 30, 2019 but agreed that the meeting ended a heated confrontation. She testified that she arrived early to the inspection with items for the house and met with M.M. When they entered the home, they started the inspection gathered around the dining room table. After M.M. described the process for the meeting, they began by inspecting the front steps, which F.P. described as landings. While she agreed that the landings were cracked, she took the position that the homeowners were searching for any imperfections to present to M.M.

94F.P. acknowledged that when the homeowners directed her and M.M. to the walkout steps, there may have been bickering, but she emphasized that she directed most of her statements to M.M. She testified that they next inspected the deck and its attached stairs, providing a lengthy and meandering digression on the defects listed in the 30 Day Form, largely complimenting herself on her construction skills and claiming that M.M. conspired with her in whispered tones to prevent the homeowners from overhearing their plans to repair the piers under the deck.

95When they returned to the interior of the house, she stated that M.M. listed the items on the Form. She stated that at that point, some “discrepancies” between herself and the homeowners started to arise, including their complaint over the substituted refrigerator. She became “very offended and hurt” as she believed that the homeowners were not sufficiently grateful for her goodwill gesture in agreeing to alter the basement ceiling from the building plan. She stated that A.T. then promptly asked to her leave. She stated that she was pleased to comply as she was “shaken up” after everything she had done for the homeowners. She recalled stating that she could “not believe the lies” to which M.M. suggested that she stop speaking and ushered her out of the house, while repeating, “I’m on your side” to F.P. She stated that she then apologized to M.M. if she did not maintain her composure but emphasized that she was justifiably upset at the homeowners as she had been “so patient and kind” to them. She then went on to describe how M.P. had been effusively grateful to her for building his dream house, apparently during the November 30, 2018 inspection. “Demoralized” by their subsequent lack of appreciation, she never returned to the property.

96F.P. denied that she could have intimidated A.T. when they argued in the kitchen because the kitchen island was very large and A.T. was “ten feet away”; she also denied approaching A.T. She denied calling the homeowners derogatory names or approaching A.T. while pointing her finger. Essentially, she took the position that she was blameless as she did not physically assault the homeowners or attempt to do so. She also denied receiving any notice from the homeowners or Tarion that the homeowners felt intimidated by her conduct. However, in light of the uncontested evidence that M.P. had requested that she refrain from attending at the property after this incident, I find that she would have reasonably understood their position if not agreed with it.

97Significantly, F.P.’s alternative version of events, particularly M.M.’s alleged allegiance with F.P. against the homeowners, was never put to M.M. or M.P. under cross-examination despite her paralegal’s opportunity to do so.

98On the balance of probabilities, I prefer the testimony offered by M.P. and M.M. as the more accurate description of the events of July 30, 2019. While F.P. attempted to minimize and rationalize her conduct, she ultimately did not contest their evidence that she bickered with the homeowners and raised her voice towards them when disagreements over the inspection arose. While M.P. may have had a potential interest in depicting F.P. as the aggressor, I find that the Appellant failed to explain why M.M. would have been motivated to misrepresent the events of July 30, 2019 and none of her evidence was challenged in any meaningful manner. In light of M.M.’s forthright and detailed testimony regarding how disturbing she found F.P.’s belligerent conduct during and after the inspection, I find that F.P.’s attempt to depict M.M. as her covert co-conspirator against the homeowners lacked any air of reality. Rather, the evidence suggests that F.P. conducted herself in an aggressive and unprofessional manner precisely as M.M. and M.P. described, but believed her actions justified in response to her increasingly frustrating relationship with the homeowners.

99Similarly, I do not find that the Appellant substantially refuted M.M.’s description of F.P.’s belligerent conduct following the conciliation inspection. M.M. testified that throughout this process, F.P. was “continually very aggressive” towards her. Although there was no further meeting between her, the homeowners and F.P. after July 30, 2019, whenever M.M. spoke to F.P. over the telephone, F.P. became aggressive and disrespectful, “yelling and screaming” at M.M. and would “try to put words in [her] mouth.” As F.P. was extremely loud, M.M. would inevitably have to retreat to a private area to attempt to converse with her. M.M. noted that F.P.’s general lack of knowledge of the process appeared to frustrate her during these conversations resulting in numerous questions and emails over the same issues “over and over and over again” also overwhelming M.M. with emails asking the same questions. M.M. did not know if F.P. sought to obtain a different answer or simply did not understand the original information; however, it was clear to M.M. that F.P. had very little understanding of the process. For instance, she could not comprehend the time limitations for builder repair periods or why she was not permitted in the home to complete repairs prior to or past the claim inspection despite M.M.’s best efforts to explain these concepts to her.

100Eventually, M.M. asked F.P. to cease communicating with her by phone as these conversations were not productive given her abusive conduct. While she requested that F.P. contact her by email, this too proved counterproductive as F.P. would bombard her with emails, often three minutes apart for hours at a time, totalling between thirty to forty emails in a given day. This would interfere with M.M.’s ability to work on other files. Although she suggested that F.P. summarize all of her questions in one collective email, this never occurred. Although M.M. offered to meet with F.P. in public place, F.P. refused, demanding to meet in a private location of her choosing. In light of F.P.’s aggressive conduct, M.M. did not feel comfortable meeting her in an unfamiliar area such as an empty house or office as F.P. suggested, particularly as F.P. intended to bring her own “witness” to these proposed meetings.

101F.P. denied the allegation that she was aggressive and disrespectful to Tarion employees and speculated that they were confused. In response to the allegation that she disregarded their advice, her responses were the product of excessive leading by her representative. She agreed that she was “almost too assertive” as she believed that the Tarion employees lacked the expertise to answer her questions. She demanded that they respond to each “in line,” meaning that she expected them to provide itemized responses to every item in each of her queries. She took the position that any response that fell short of these criteria did not qualify as a satisfactory response.

The August 7, 2019 Warranty Assessment Report

102On August 7, 2019, Tarion sent the resulting WAR to the Appellant with a summary of the items found warranted during the inspection. The attached letter provided the following information with respect to timelines for repairs and as well as information on appeals to BAF:

Warranted Items

If we have assessed an item as warranted, you are required to resolve that item by September 6, 2019 (or by the date that may be indicated in the report for a particular item). We will contact the owner of the home at the end of this post-conciliation repair period to confirm that warranted items have been resolved.

Chargeability

This conciliation is Non Chargeable for the following reason: No Warranted Items .

Builder Arbitration Forum

If you disagree with Tarion’s assessment, you may be able to challenge it at the Builder Arbitration Forum, as set out in Builder Bulletin 41R. To do so, you must submit an Arbitration Application Package to Tarion, with an administration fee of $750 plus HST, by September 12, 2019. Builder Bulletin 41R, the Arbitration Application Package and the BAF Rules can be found on our website.

[Emphasis in original]

103M.M. ultimately found two of the interior items not warranted. The balance were exterior seasonal items and therefore not assessed at the inspection on July 30, 2019 due to “unsuitable weather conditions,” allowing the Appellant to resolve them by September 1, 2019. She also found the issue with the septic system not warranted as it related a contractual issue beyond the scope of the statutory warranties. Similarly, she found that the model of refrigerator supplied was “of equal quality and therefore an allowable substitution.”

104Although F.P. took the position that the WAR had vindicated her since none of the items had been deemed warranted, it should be noted assessment of these items had been deferred due to their seasonal status, rather than evaluated on the merits of the homeowners’ complaints. In any event, if the seasonal items were not resolved by the listed deadline, the homeowners could request a seasonal inspection. M.M. explained that, as a consequence, there would have been nothing in the WAR for the Appellant to challenge at the BAF.

The Seasonal Builder Repair Period

105On September 13, 2019, Tarion sent the homeowners a letter advising that it had scheduled a second conciliation inspection for November 14, 2019 to assess the seasonal items on the 30-Day Form:

Pre-Conciliation Builder Repair Period

Your builder has until July 18, 2019 to resolve the seasonal items on your form that are covered by the warranty. During this pre-conciliation repair period, you should continue to work with your builder to resolve the items. [Emphasis in original]

106At the hearing, there was no dispute that the July 18, 2019 deadline above was an error and F.P. immediately recognized it as such, recalling that she found this date “beyond weird” when she read the letter. However, while she stated that she corresponded with O.F. at Tarion by email possibly after receiving the letter, she did not clarify whether she inquired with respect to the correct deadline for the seasonal repairs. M.M. explained that these letters are automatically generated by Tarion’s system and that the July 18, 2019 deadline incorrectly related to the earlier letter generated on June 19, 2019 in relation to the July 30, 2019 conciliation inspection.

The November 14, 2019 Conciliation Inspection

107M.M. attended at the November 14, 2019 inspection with her colleague, T.S. She explained that she asked T.S. to accompany her to the inspection since in light of F.P.’s past behaviour, she did not feel comfortable attending at the house by herself. However, as F.P. did not attend the inspection, M.M. and T.S. reviewed all of the items together with the homeowners. In addition, as T.S. is a senior Warranty Service Representative, he has extensive knowledge of the Code, expertise that she believed would be helpful given the serious defects evident at the property.

108M.M. recalled that F.P. had advised her after this inspection that she was ill; however, she denied any prior notice of her absence. This evidence was not challenged under cross-examination. By contrast, F.P. testified that she had somehow “expressed” this to M.M. shortly before the inspection by email and then by telephone, apparently to M.M.’s voicemail after the email was returned undelivered. Under cross-examination, she confirmed that she was not teaching at the time and therefore was not unable to attend the inspection due to employment obligations.

109T.S. has been an employee of Tarion for over twenty years and currently serves as a Senior Warranty Services Representative, a position he has occupied for approximately ten years. In addition to attending at the November 14, 2019 inspection, he ultimately assumed carriage of the file with respect to the leaking eavestroughs. In terms of education, he has been certified as an engineering technologist since 1984 and has passed ministry examinations for the Code and is registered with the Ministry as a designer. He has also completed in-house training with Tarion for defect recognition and claims resolution.

110M.M. and T.S. found that the basement stairs to the outside exhibited poor workmanship as the risers were not uniform. M.M. confirmed that she personally assessed this item and explained at the hearing that the risers on the concrete walk up stairs to the exterior represented a serious safety risk as someone falling on these stairs could be severely injured or die. T.S. took several photographs of a number of these risers with a tape measure showing the varying heights. This item was warranted.

111F.P. agreed that some the risers were not in compliance with Code, but stated that it would have only represented a breach of the 30 Day warranty “if they noticed it,” apparently referring to the homeowners. When asked if she failed to correct the risers at the property by September 1, 2019, she evaded the question and offered rather nebulous testimony that the building inspector had passed this item in part on an unspecified date, possibly referring to November 30, 2018.

112She was also evasive with respect to whether there was a single handrail installed on the exterior walkout stairs, claiming that she and the homeowners had agreed to place this item “off to the side” but ultimately agreed with M.M.’s finding that only a single handrailing had been installed. With respect to the missing handrail, she declined to state whether this was resolved by September 1, 2019, instead attributing responsibility to P.L.S. and alleging that the homeowners did not want this item and obstructed its installation.

113The related allegation that the treads were too narrow and that the leading edge of treads did not have a levelled or rounds edge was not assessed. With respect to this issue, F.P. was evasive and vaguely disagreed that they were in violation of the Code, possibly referring instead to the risers at the front of the house.

114With respect to the drainage issue at the bottom of the basement walkout stairs, some brief background is needed. On April 14, 2019, A.T. had notified the Appellant by email that the basement doors leading to the walkout stairs were leaking. On the same date, F.P. responded that she “must have forgotten to seal the door where it meets the concrete.” At the hearing, she suggested that the homeowners may have poured water on their own basement floor to discredit her but “gave them the benefit of the doubt” and stated that she would have J.M. attend to this issue when he returned to seal the eavestroughs.

115In the same email exchange, she denied that Tarion required builders to provide “reasonable notice” for the arrival of trades as suggested by A.T., a policy mandated in Builder Bulletin 20. She offered no cogent explanation for her departure from this policy, stating only that she “has her reasons” for doing so.

116This issue was apparently not resolved since on July 21, 2019, M.P. sent Tarion several photographs of water pooled on the basement floor with an explanatory email stating that the door leaked during heaving rainfall and that the caulking applied by the Appellant on July 11, 2019 had not resolved the issue.

117In the homeowners’ photographs, interlocking brick is visible outside the glass double doors at the bottom of the small landing immediately outside the basement. M.P. testified that the drain for this recessed area was covered by the brickwork, causing collected water to drain into the house instead of away from the dwelling. A.T. had taken a number of similar photographs of the same recurring issue and sent them to Tarion in a separate email on July 30, 2019.

118During the inspection on November 14, 2019, although M.M. and T.S. discovered a drain in the landing, they confirmed that it had been covered and blocked by interlocked paver stones. A photograph taken by T.S. showed a paver stone removed by M.P. with the drain for the landing underneath. Wooden shims had been placed between the paver stones and the concrete pad, apparently to permit water flow under the stones. T.S. noted that the addition of these rudimentary supports and the paver stones at the base of the stairwell served to exacerbate the variations in the riser heights above and complicated potential maintenance to the drainage system.

119The homeowners did not explicitly include the pooling issue in the 30-Day Form because the form was submitted in December and the issue did not become apparent until the outdoor temperature rose the following spring and rainfall entered the house. M.P. clarified that the listed issue of drainage in the 30 Day Form directly related to the later pooling. M.M. explained that because she and T.S. determined that this constituted a safety issue, they were required to include it in the WAR. T.S. also measured the steps leading to the walk out basement entrance and found that the substantial variations in the heights of the risers violated Code requirements.

120While the substitution of pavers for the concrete pad in the Agreement of Purchase and Sale was not found warranted, because the pavers were loose and not secured to the substrate below, this item was warranted. As noted in the report, “the warrantability of this claim refers only to the loose pavers.” F.P. disagreed that this item should have been warranted and took the position that the mere presence of the drain under the pavers was sufficient and denied that the pavers had been loose. She did not call any evidence to support her disagreement with this aspect of the report.

121F.P. explained that she had offered to allow the homeowners to negotiate directly with her suppliers in order to expedite the repairs. However, when they appeared to cherry-pick who could attend at the house, she began to suspect that they would rather receive a cash settlement from Tarion than actually resolve the issues on the 30 Day Form. For example, she recalled an incident when the homeowners asked P.L.S. to leave the property, thereby frustrating her ability to address the leaking issue in the basement. She advised them that they should cooperate with her efforts to address this emergency issue to prevent mould or further damage to the home. She testified that the leaking issue and the drain blockage were eventually resolved after several instances of refused access to P.L.S.

122Because the garage door was too narrow for the homeowners’ mother-in-law’s wheelchair to pass, the homeowners were compelled to rely entirely on access through the stairs leading to the front door, the first step for which M.P. described as “too treacherous to use.” The state of the stairs also presented a safety and liability issue as homecare workers attend at the house on a routine basis. F.P. disputed the use of the term “front stairs” as she called them “landings” but did not substantively dispute that she was aware of the identity of the item in question. She was evasive however with respect to the accuracy of Tarion’s assessment that this item was defective.

123The risers on the stairs to the rear deck were also not uniform as confirmed by the photographic evidence. T.S. testified that although they discovered substantial variation in the heights of the risers, unlike the steps to the basement, these disparities fell within the range permitted by the Code. As a result, that issue was found not warranted.

124However, as noted at paragraph 75(b) above, there was a second component to the homeowners’ claim with respect to this item, specifically that the ledger lacked flashing. T.S. confirmed that although flashing had been installed overhanging the concrete foundation immediately outside the deck area, this protective covering was missing under the deck. In the photographic evidence, the building wrapping is visible protruding from under the wood and is not sealed, terminated or flashed out over the foundation. This aspect of the claim was therefore warranted.

125On November 14, 2019, neither M.M. nor T.S. were able to climb under the deck to inspect the defects underneath due to unsafe weather conditions, specifically snow and ice on the ground as well open excavation around the piers under the stairs. As a result, although they were able to view and photograph the area from the exterior, they asked the homeowners to take some measurements under the deck once the weather improved. On November 19, 2019, M.P. emailed several photographs to M.M., as well as a text listing of the requested measurements. T.S. confirmed that this photographic evidence was taken into account when Tarion issued the WAR and that it corresponded with his own visual inspection of the deck from the outside during the inspection. Although he could see the exposed building wrap from the exterior, the other issues were not visible from his vantage point outside the structure on the day of the inspection.

126Photographs taken by M.P. and sent to Tarion confirmed that although the support beam under the center of the deck was thirteen feet in length, it does not extend the full sixteen feet of the deck or support the two joists nearest to the foundation wall. T.S. concluded that the lumber used for the beam was not sized to its application. There were also no fasteners attaching the ledger board to the frame of the house above. While the deck structure may have been anchored by small deck screws, T.S. testified that this would be inadequate to support the weight, compared to the large bolts usually employed. These items were warranted.

127Similarly, T.S. noted that there were no side gussets on the post and beams and no brackets attaching the beam to the support post. A number of shims were inserted into a significant space between one of the posts and the beam; another post was not attached to the beam at all. Both posts are also considerably off centre from where they should contact the beam and set on the corner of their respective concrete piers. As there was insufficient support for the deck, T.S. found that this represented a serious structural defect. Similarly, the middle vertical support beams was cracked from the point where it met the joist via an inserted shim and there was no flashing under the deck to run water away or any bolts into the ledger that attaches the deck structure to the foundation wall. These items were warranted.

128Although the homeowners alleged in their 30 Day Form that the pier depth was not verified, this issue formed no part of the WAR. T.S. recalled that excavation subsequently confirmed that the piers were properly installed, although that assessment was not conducted by Tarion. M.P. denied that he and the Appellant had entered into an agreement to replace the deck.

129On the front stairs, the first stair on the landing was covered by gravel. However, as the report stated, “the Builder has until July 10, 2020 to complete the Special Seasonal items,” including issues related to grading. However, there was also a rough finish to the front concrete landings from inconsistent and messy broom finishing:

The second part of the claim is the rough finish on the front concrete landings. Tarion observed and measured the areas of concern. The landings had rough finish, especially on the edges and closest to the risers. The landings were also bowed on the edges of the treads and had uneven risers. The left to right difference in height was approximately 25 mm. It is Tarion's position that this constitutes a defect. As a result, this part of the claim has been deemed warranted.

130The stairs were uneven in excess of allowable amounts and no hand railing had been installed contrary to the Agreement of Purchase and Sale. T.S. noted a curve to the concrete steps suggesting that the forming for the concrete was not executed properly but acknowledged that a uniformly straight line may have been difficult to maintain given the width of the steps. These items were warranted. M.P. noted that as of the date of the hearing, the grading had still not been completed. However, he stated that the homeowners intended to address this issue themselves without Tarion’s assistance.

131Two other items were not separately assessed on November 14, 2019. Specifically, the homeowners alleged that the stair treads above were too narrow and that their leading edges lacked a levelled or rounded edge was covered by the issue described at paragraph 75(a) above. Although the details section of the report stated that “A warranty assessment was not made because the owner withdrew this item,” M.M. explained that this was the only option available in a drop-down menu to mark this issue as not assessed and that the homeowners had not actually withdrawn the item.

132The leaking eavestroughs could not be assessed through the necessary water test on the date of inspection due to the freezing weather and snowfall. This item required additional information before a warranty assessment could be made. Also, as this was a seasonal item, the Appellant had until September 1, 2020 to complete it. At the hearing, M.M. explained that this deadline was derived from the original WAR issued on August 17, 2019.

The November 26, 2019 WAR

133On November 26, 2019, Tarion issued the resulting WAR that described the various items found to be warranted and not warranted from the November 14, 2019 inspection. The attached assessment summary detailed the warranted items as serious examples of poor workmanship and non-compliance with the Code. A letter attached to the Appellant’s copy of the WAR included deadlines to complete repairs on the warranted items as well as information with respect to appeals to BAF:

Warranted Items

If we have assessed an item as warranted, you are required to resolve that item by January 6, 2020 (or by the date that may be indicated in the report for a particular item). We will contact the owner of the home at the end of this post-conciliation repair period to confirm that warranted items have been resolved.

Builder Arbitration Forum

If you disagree with Tarion’s assessment, you may be able to challenge it at the Builder Arbitration Forum, as set out in Builder Bulletin 41R. To do so, you must submit an Arbitration Application Package to Tarion, with an administration fee of $750 plus HST, by . Builder Bulletin 41R, the Arbitration Application Package and the BAF Rules can be found on our website.

[Emphasis in original]

134Under cross examination, both T.S. and M.M. agreed that the deadline for appeals to BAF was missing from the latter paragraph and that this was an error. The reported noted that the builder was not present at this inspection. Although F.P. repeatedly emphasized that she had asked Tarion to send all notices in hardcopy to her by regular mail, she did not substantively dispute receipt of any of their communications, including the November 26, 2019 WAR. Under cross-examination, she acknowledged receipt of this document and that she would have seen the missing deadline above.

135F.P. stated that after the inspection, M.M. contacted her upset that she had not attended. She testified that M.M. stated that she had missed her message and would contact her later to review the results of the inspection with her. She stated that M.M. urged her not to attend at the property in the interim, a statement seemingly at odds with her claim that M.M. was upset at her absence, itself a claim in conflict with M.M.’s own evidence and challenged under cross-examination. F.P. then claimed that she never heard from M.M. again.

136As she was regularly corresponding with O.F., F.P. was unconcerned that M.M. had not contacted her with respect to the November 2019 WAR. Eventually, she contacted O.F. with respect to numerous invoices received, which she presumed related to the delayed closing. While she was apparently aware that M.M. had carriage of the file, she preferred to communicate with O.F. as she believed that O.F. was “very compassionate” to her and had access to the file. Her self-serving hearsay that O.F. was strongly aligned to her interests should be accorded very little weight since as noted above, O.F. was not called to testify at the hearing and none of these communications were submitted in writing as exhibits at the hearing. In any event, the evidence indicates that despite her knowledge that of the conciliation inspection on November 14, 2019, she did not exercise appropriate diligence in obtaining the results of the report in order to effect repairs within a reasonable period following its issuance.

137Similarly, although F.P. acknowledged that she had a basic understanding of the role of the BAF, she opted not to pursue this option or inquire with respect to the missing date as she believed to do so would have been premature. She added that she assumed that the paragraph referencing BAF was simply boilerplate that Tarion inserted in all of its notices.

138Pursuant to the report, the Appellant had until July 10, 2020 to resolve the issue with the grading as this was a special seasonal item. M.M. explained that this was a chargeable conciliation inspection as there was no exception to chargeability. As a result, Tarion invoiced the Appellant for the conciliation. M.M. stated that, according to the Vendor Builder Invoice History, the Appellant had paid that invoice.

The Claim Inspection

139On January 10, 2020, Tarion sent a letter to the homeowners and the Appellant advising that Tarion had scheduled a claim inspection for January 22, 2020. F.P. contacted M.M. to advised that she was not aware that the WAR had been issued or that the subsequent builder repair period had expired. Several telephone and email conversations followed in which F.P. expressed confusion over the purpose of the claim inspection and alleged that she did not receive the WAR. However, M.M. informed her during these communications that Tarion had confirmation that the WAR had been issued to the Appellant’s email on file. There was no evidence that this email was returned as undeliverable.

140Before the claim inspection, F.P. advised M.M. that the homeowners had denied her access to the property to conduct repairs. As a result, on January 21, 2020, M.M. asked her to provide written documentation of this denial. M.M. testified that the Appellant did not provide the requested documents.

141On January 21, 2020, F.P. contacted M.M. by email, requesting additional time to correct the outstanding issues from the conciliation inspection to protect her public image as a builder. At the hearing, she explained that she viewed her interaction with the homeowners as a unique situation that merited additional time for resolution given the multiple times the homeowners had denied her contractors access to the property. M.M. denied the request for the extension. She claimed that M.M. recommended that she make a monetary offer to the homeowners, preferably at a rate higher than her own costs. This “advice” was not documented in any of the emails submitted at the hearing and not put to M.M. under cross-examination. However, on the same date, M.M. advised F.P. by email that the homeowners had refused her settlement offer and were not interested in another offer. Instead, they intended to proceed with the claim inspection process.

142M.M., M.P. and two contractors attended at the claim inspection on January 22, 2020. As the homeowners had requested that F.P. not be present at the inspection, she did not attend. However, through discussions with F.P. prior to this inspection, there was no dispute that the items listed in the WAR were not completed; as a result, Tarion retained the contractors to provide quotes on the work to be done. To that end, Service1 Enterprise Inc. provided a quote on February 24, 2020 for $77,100.00 plus H.S.T. to repair the warranted items on the WAR and found not completed at the claim inspection. Similarly, Unlimited Building Solutions (‘U.B.S.’) provided an estimate on the same day for the same work in the amount of $68,434.00 plus H.S.T. An internal Tarion estimate provided by inhouse experts provided an estimate of $88,579.35 plus HST.

143F.P. acknowledged that she received both of the above third party quotes but dismissed them as inflated in scope and alleged that they contained various unspecified errors with respect to measurements and quantities of materials used. She speculated that she would have raised these alleged errors with M.M. and possibly T.S., but referenced no communications to support this assumption.

144After she did not receive a response agreeing with her assessment and M.M. asked her to stop consulting with O.F. on the file, F.P. escalated the issue to someone she believed to be M.M.’s superior, possibly T.S. She testified that when someone asked her for details on the errors in the quotes, she stated that she submitted an itemized list of the improper items to this person, again possibly T.S. She stated that no one responded to this document. She also claimed that she had proposed various alternatives to the work contemplated by Tarion’s quotes but could not proceed with the construction as she received no response. She agreed that she did not have any agreements with the homeowners to proceed with her proposed alterations.

145She also stated that M.M. asked her to generate quotes for the same work prompting her to research the appropriate costs through unspecified authorities in the industry and information on the internet. She then provided extremely vague testimony with respect to her attendance at a meeting on an unknown date with various named individuals apparently employed by Tarion, but whose relationship to this matter was never explained. However, on her own evidence, vague though it was, the other attendees at this meeting did not accede to F.P.’s requests and terminated the meeting when she became overly aggressive and attempted to dominate the discussion. They later declined to respond to her demands for an itemized response to her review of Tarion’s quote.

146Significantly, the Appellant’s paralegal chose not to ask either M.M. or T.S. any questions about this evidence, thereby failing to resolve the multiple ambiguities in F.P.’s testimony.

147On April 6, 2020, Tarion issued a claim resolution and release document with respect to a cash settlement to the homeowners for the unresolved items in the amount of $73,100.00. This amount was determined by an analysis of the work to be completed and the best estimate for the project. The settlement resolved all of the uncompleted items in the WAR and the claim inspection report. Tarion then invoiced the Appellant for this above amount offered and accepted by the homeowners, plus a 15% administration fee and H.S.T. for a total of $85,490.45. According to the Vendor Builder Invoice History, the Appellant has paid $15,990.01 of this invoice, leaving an outstanding balance of $69,500.44. M.P. confirmed that he and A.T. received this payment from Tarion.

148F.P. did not deny that her deposit and some interest had been applied to the invoices sent to the Appellant with respect to the property. She testified that she paid an additional amount to O.F. in respect of the amount charged for two days for the delayed closing. Although she offered no documentary evidence to support this claim, counsel for the Registrar agreed that the invoice history indicated that a payment received in February 2020 tended to support her testimony on this point. While refusing to agree that according to Tarion, she still owed $69,500.44 with respect to 260 Farr Street, she testified that she had calculated an alternative amount $25,000.00 based upon her own subjective and substantially more favourable assessment of the cost to replace items at the property that she believed did not require replacement.

149Significantly, even putting aside the fact that no provision in the Act, the Regulations or the Vendor Agreement permitted the Appellant to unilaterally substitute her own accounting for the balance outstanding, as of the date of the hearing, she had not paid even this alternative amount to indemnify Tarion.

150As the issue with the leaking eavestroughs issue was not resolved at the November 14, 2019 inspection, this issue was rescheduled to a later inspection. Both T.S. and M.P. confirmed that the claim settlement did not include the costs to resolve this issue.

Access to the Property

151Throughout the hearing, F.P. took the position that her efforts to resolve the issues on the 30 Day Form were routinely impeded by the homeowners’ repeated refusals to allow access to the property, thereby preventing her from resolving the defects in a timely manner. Last minute cancellations often posed difficulties as larger suppliers were already their way to the house by the time that F.P. received notice from the homeowners that they intended to refuse access to the property. As well, she explained that companies often could not dedicate a full day to accommodate the narrow windows for delivery specified by the homeowners during the week.

152M.P. recalled that although the homeowners had requested that F.P. give them two days’ notice and that workers attend during normal business hours, often workers would show up without notice or the homeowners’ permission to be on the property. This resulted in inconveniences as the homeowners needed to arrange for a support person to stay with A.T.’s mother in case she became anxious over the contractors’ presence and construction noise. He recalled that the Appellant often made demands for immediate access in the last days before a critical date such as a scheduled inspection.

153After several incidents of refused access, on May 23, 2019, F.P. documented the ongoing access issues to the property in an email to M.P., copied to Tarion. In this email, she noted that one of the workers had reported that M.P. had used profanity to him. At the hearing, she confirmed that the worker in question was G.M.

154G.M. has known F.P. for three or four years, having met her at her pizza restaurant in St. David. He recalled that she not only owned but worked at this restaurant and had done so in early 2019 and continued to do so to the date of the hearing. He picked up various materials for F.P. and delivered them to the construction site at 260 Farr Street, worked on the cement stairs at the back and the front stairs at the front of the house, as well as some painting and clean-up work. He did so in the capacity as a friend rather than as an employee of the Appellant and had no role in coordinating customer service.

155He estimated that he conducted work at the property between thirty and forty times over a six month period, including two or three times when he was turned away by the homeowners. It was his understanding that he was turned away as it was inconvenient for him to attend on those occasions. He recalled that M.P. would inform him that his presence was not expected and would ask why he had attended. He recalled speaking with M.P. on May 17, 2019 in the course of picking up window screens from the property to deliver them somewhere else and testified that M.P. said to him, “Franca doesn’t know what the f*** she is doing; she should learn her job.” Not wanting to engage in a confrontation, he left and delivered the items to F.P., mentioning what had just occurred.

156P.L.S. described a similar experience with the homeowners. He installed tiles in the bathrooms and conducted parging around the house and the stairwell at the property in 2018 and 2019 as a contractor for the Appellant. With respect to the homeowners, he mostly dealt with M.P. and occasionally with A.T. He recalled being told to leave the property as he was not allowed to be at the property due to what he assumed was a disagreement with the Appellant. While he agreed that their conduct was somewhat aggressive, when this occurred, he respected their wishes and departed. He recalled no other problems with this project.

157F.P. emphasized that her May 23, 2019 email to M.P. did not resolve the ongoing issues as the homeowners continued to refuse access to the property, as confirmed by additional emails from late May to mid-June 2019. For example, on June 18, 2019, A.T. accused F.P. of harbouring an unknown agenda in attempting to gain access to the home to address minor issues when more urgent items remained unresolved. F.P. interpreted this allegation as a stalling tactic on the part of the homeowners. On the same date, A.T. emailed F.P. to advise that while the homeowners would allow the window supplier access to the home as scheduled, they would not permit F.P. to attend on the advice of Tarion, “due to your behaviour on previous visits to our home and your propensity for fabricating accusations.”

158However, the homeowners’ insistence on two business days notice was not an arbitrary stipulation, but derived from the larger customer service policy in Builder Bulletin 20, which states that Tarion’s expectations of conduct to apply to all interactions between builders and homeowners. These expectations include the following:

a. A builder (and its trades) is expected to act in a respectful, courteous and cooperative manner in all aspects of the claims process.

b. A builder is expected to have a system to track and verify that all the items listed on the Warranty Form have been resolved.

c. A builder is responsible for paying attention to a claim and providing a resolution in a timely manner. If a builder consistently performs repairs at the last minute, it may have an impact on future licensing considerations, including prescribing mandatory customer service training.

d. A builder is expected to provide details of proposed repairs in a timely manner, if requested by the homeowner, in advance of the conciliation.

e. A builder should be fair and reasonable in scheduling repairs and reliable in terms of following up on the agreed to dates and times. Most homeowners have to book time off work to accommodate the scheduling arrangements. A minimum period of two (2) business days’ notice should be provided to homeowners when scheduling repairs.

159As the Vendor Agreement incorporates the Builder Bulletins into its terms and conditions, the above requirements form provisions of the Appellant’s duties as a Tarion licensee. While F.P. agreed that these policies applied to all builders licenced with Tarion including her own company, she took the position that the notice requirements did not necessarily apply in the case of perceived emergencies. She offered no authority for this alleged exemption. Ironically, in her own example of an emergency repair with respect to the basement leak, she did not send her contractor to the property until nine days after A.T.’s notification.

160In the same bulletin, Tarion imposes expectations on homeowners, including the following:

a. A homeowner will facilitate a more favourable resolution by allowing a builder (and its trades, suppliers, subcontractors) reasonable access to the home during business hours (Monday to Friday, 8:00 a.m. to 5:00 p.m.) to investigate and remedy defects.

161When asked whether it would be reasonable for a homeowner to insist upon access during business hours, she replied that this was “a matter of opinion” and that a contractor’s busy schedule should take priority. Specifically, she stated that for a large company such as JELD-WEN, the window supplier, it was “unheard of” for the homeowners to expect deliveries only when they were home.

162The homeowners were concerned over delays particularly with respect to the drainage issues and problems with the stairs that impeded access to the house. However, despite M.M.’s confirmation to F.P. at the July 30, 2019 inspection that the Appellant was indeed required to provide two business days notice before attending at the property to conduct work, M.P. testified that occasionally, he and A.T. would consent to late notice, but would at other times return to the house, find workers present and request that they leave.

163Their insistence upon advance notice of service calls and deliveries was motivated by more than a mere robotic adherence to Tarion’s protocol. Typically, while the homeowners were at work during the day, A.T.’s mother would be alone in the house. She had a “health button” that she could press if she required assistance after a fall or some other emergency. When A.T. left work to attend to her mother, she occasionally found workers at the house and told them to leave as they were not scheduled to attend on that date. While G.M. and P.L.S. both interacted with A.T.’s mother and did not perceive any symptoms of her dementia, M.P. emphasized that his mother-in-law often became upset and frightened when workers attended at the house without notice and the homeowners were unable to prepare her for their presence. M.P. estimated that this occurred on four or five occasions.

164Although the Appellant’s evidence of contractors being refused access to the property was generally uncontested, the evidence indicated that these inconveniences would not have occurred so frequently if at all if F.P. had simply cooperated with the homeowners by providing proper notice. By failing to respect the homeowners’ requests to accommodate A.T.’s mother, F.P. prioritized her own convenience over the homeowners’ reasonable requests for advanced notice as required by Builder Bulletin 20 and by incorporation, her own Vendor Agreement with Tarion.

165In addition, I find that F.P.’s repeated demands to attend at the property near the end of builder repair periods or even their deadlines stemmed from a lack of comprehension with respect to how those periods are calculated. For instance, on June 17, 2019, she sent an email to A.T. stating the following incoherent interpretation of Tarion’s policies regarding repair periods:

From speaking with Tarion, they will be unable to warrant your claims for a number of reasons tho [sic] primarily, not being permitted access. In the unlikely event that your claim is warranted, the builder is still given 30+14 Christmas days+120+30+30+30+30days to resolve the warranty claim.

166When asked if she still believed if the above erroneous formula accurately reflected the builder repair periods, she twice evaded the question, then claimed that someone else had directed her to insert this calculation in the email, blamed her training with Tarion and ultimately changed the subject to irrelevant matters. When asked to apply her understanding of the repair periods to specific items in the homeowners’ claims, she consistently offered evasive responses, veering off on tangents to unrelated topics. While she interpreted the above formula to provide her with 240 days to repair warranted items, Builder Bulletin 42 clearly states that the initial builder repair period is 120 days, starting 31 days after the homeowner takes possession, excluding the December 24th to January 1st Holiday Period. Subsequent builder repair periods are predicated on specific events rather than part of a generic 240 day allowance as F.P. asserted.

167F.P. took the position that Tarion did not support her or provide her with sufficient notice that her licence could be in jeopardy over a single house construction. Although she acknowledged awareness of the information contained in the Builder Bulletins, she suggested that Tarion had been colluding with the homeowners as a scheme to replenish the Guarantee Fund through inflated penalties and claims or simply intended to drive small builders from the industry as part of an agenda to favour their larger competitors. Unsurprisingly, she was unable to offer evidence to support these conspiracy theories. This position also conflicts with her frequent claims throughout the hearing that M.M., O.F. and her stakeholder relations contact, B.T., frequently expressed support and commiseration for her difficulties dealing with these difficult homeowners.

168Emails between F.P. and M.P. on April 18, 2019 relating to the delivery of kitchen doors showed F.P. pressuring the homeowners to accept the delivery on the weekend and on a date that she believed to be a statutory holiday. At the time, she had returned to her day job with the Niagara Catholic School Board and agreed that her own schedule may have slightly limited the options she offered to the homeowners for attendances at their house. She explained that she was able to take an occasional day off to attend to her construction business and was not conducting the actual work at the house, but simply supervising contractors. She explained that it was her understanding from Tarion that for outdoor items, she or her contractors could simply attend and conduct the work provided that they make some effort to work with the homeowners.

169When incorrect window screens were delivered in April 2019, roughly one month passed before this issue was resolved. F.P. testified that part of the problem was the homeowners’ insistence on being home for the delivery. An email exchange between F.P. and A.T. dated April 18, 2019 confirmed that the homeowners had offered several dates to May 17, 2019 to which F.P. had replied “got it,” indicating agreement. She testified that she had attempted to deliver the screens as early as March 2019, a statement seemingly at odds with the established timeline to replace the incorrect items delivered in April 2019.

170Pursuant to a letter sent by Tarion to both parties on January 9, 2019, the builder repair period for the 30 Day Form ended on May 15, 2019 for non-seasonal items. However, email correspondence between F.P. and the homeowners confirmed that she was still attempting to schedule work at the property during the days following that deadline.

171When the homeowners advised F.P. in late May or early June 2019 that the builder repair period had ended and that she was no longer permitted to attend at the property to conduct repairs, she insisted upon her erroneous calculation that permitted at least 240 days starting from an indeterminate date. While she testified that someone at Tarion, possibly B.T., had told her that she could still attend at the property to conduct repairs, this alleged statement was hearsay as B.T. did not testify at the hearing and his precise statements, including their context, were not submitted as evidence. Essentially, she interpreted the end of the builder repair period as a meaningless end point since she believed that nothing prevented her from conducting repairs on the property after this date. She dismissed the formula on the Builder Bulletin as unreliable as these documents are subject to updates.

172When asked if she agreed with M.P.’s evidence that no one attended on May 16, 2019 to deliver the screens, she was evasive and stated that G.M. attended and was asked to leave, possibly on a later date one week later. She denied cancelling delivery of the screens, stating that she became confused over her rights to access the property and insisted on delivering the items at a time more convenient to herself and the supplier. An email exchange between F.P. and her contact at JELD-WEN on June 18, 2019 confirmed however that F.P. cancelled the appointment the following day to deliver the window parts as she preferred to postpone this delivery and combine it with other work on a single collective visit in the interests of “efficiency.” There was no indication that the homeowners had objected to the JELD-WEN delivery on June 19, 2019. Also on June 18, 2019, M.P. emailed F.P. to question why she was adamant about gaining access to the house with respect to these comparative minor issues when the more serious issues such as the rear deck, the walk out and the stairs remained in violation of the Code. He stated in the emails that he and A.T. were “unsure of [her] agenda.”

173While she reluctantly agreed under cross examination that homeowners were entitled to refuse access after the end of the builder repair period, she took the position that they were nonetheless wrong to do so as insisting upon their rights interfered with her due diligence in resolving the outstanding issues. Eventually, the homeowners took delivery of the hardware from F.P. when she brought them to the conciliation inspection on July 30, 2019 and installed these items themselves.

174Although F.P. characterized her persistent attempts to access the property as evidence of a stalwart dedication to resolving the issues at the property, she offered no persuasive rationale for failing to conduct the work within the prescribed periods or to work within the reasonable parameters requested by the homeowners.

Eavestroughs and Roofing Issues

175B.H. operates Hindrea Roofing and Siding and had worked in the roofing industry for forty-seven years as of the date of the hearing. He testified that in August 2018, F.P. asked him for an estimate to install the metal roof at the property. He had no prior relationship with the Appellant. He explained that there is a fifty year warranty on the roof, with twenty years for the coating; after twenty years, the manufacturer would supply material, but the homeowners would be responsible for the labour costs to replace the roof. He did not communicate with the homeowners during the installation and was unaware of any problems with the roof for almost two years until he was contacted by the homeowners. He also denied receiving any communications from the Appellant with respect to problems with the roof after installation. He also did not observe any water tests conducted on the roof or return to the property until November 2020.

176M.P. recalled that during the period between September 1, 2019 and November 14, 2019, the Appellant sent a worker to the property to attempt to fix the eavestroughs. As F.P. had provided two business days notice, the homeowners permitted this attendance. M.P. explained that the gutters had not been installed properly and that the drip edge is intended to lead inside the gutter. Instead, the gutter had been installed on the face of the drip edge, causing the water to run between the gutter and the edge of the roof. M.P. testified that the homeowners and the Appellant agreed that the worker would remove and reinstall the gutter under the drip edge. While M.P. testified that this agreement was made by email, that communication was not submitted as evidence at the hearing.

177However, this was not the solution adopted by JJM Aluminum Siding and Windows Inc. (‘JJM’), the company the Appellant sent to repair the eavestroughs. Instead, J.M. attended and installed a flashing over the top of the drip edge, applied caulking and screwed flashing to the drip edge around the entire perimeter of the house. This was visible from the ground in some areas and not only failed to resolve the leak, but worsened the problem in some areas. Photographs taken by M.P. show large applications of caulking material applied by JJM between the drip edge and the gutter, open screw holes as well as a dent in the gutter caused during this work and crudely folded aluminum at the corner of the eavestrough, leaving an opening at the bottom of the eaves.

178On November 13, 2019, M.P. sent an email to M.M. with respect to his dissatisfaction with J.M.’s repairs. The attached photographs showed caulking added to the two rows of interlocking steel layers closest to the edge of the roof, immediately before the eavestroughs. M.P. noted in his email that the large amount of caulking used may indicate a more serious issue while simultaneously having no effect on the drainage problem. He stated that both the installation of the gutter and the misuse of the caulking represented poor workmanship.

179M.P. testified that the seams on the roof also opened when the Appellant’s worker walked on its surface. At the hearing, he indicated an area further up the roof where the worker’s actions had caused one of the shingle-like layers to detach, resulting in a raised edge.

180B.H. agreed that the eavestroughs had been improperly installed over the drip edge with the hangers fastened over the drip edge. He recalled observing that someone had caulked the seams along the bottom edge of the roof. He and his son added a sealer over this material that would expand and contract with changing temperatures and matched the roof surface.

181M.P. recalled that on or about November 30, 2019, J.M. attended on the last day of the builder repair period. The homeowners were confused with respect to his presence as the Appellant had stated that she planned to put together a proposal with B.H. for a different solution to the issues with the roof that did not involve J.M.’s company. B.H. advised A.T. that F.P. had sent him to the house as it was raining and he asked to inspect the leaks. A.T. showed him an area at the rear of the house and he stated that there was likely an issue with roof and promptly left. M.P. clarified that neither he nor A.T. asked J.M. to leave.

The September 2020 Conciliation

182On September 17, 2020, Tarion conducted a water test to determine if the Appellant’s repairs to the eavestroughs had fixed the problem. T.S. recalled that the restrictions related to the COVID-19 pandemic likely delayed this test to September 2020 as all of Tarion’s inspections had been rescheduled to after August 2020. Conversely, he noted that pandemic restrictions would not have necessarily delayed the Appellant’s ability to conduct repairs since construction was deemed an essential service. He was not aware of how many inspections may have been conducted in the area where the property is located, but was aware of some virtual inspections that proceeded in the Windsor area.

183The homeowners requested that F.P. not attend at the property but did agree to allow a qualified tradesperson to represent the Appellant at the conciliation and observe the water test. At the request of Tarion, the Appellant provided the names of three companies with the necessary insurance coverage and the homeowners selected Gutterserve from this list.

184Tarion investigated the eavestrough by hiring contractors to inspect and water test the troughs to verify the operation of the troughs. T.S., the homeowners and J.K. and K.A. for UBS attended to conduct the water test.

185M.P. and T.S. testified that M.D., the representative from Gutterserve, was late to the water test and arrived while UBS was examining the eavestroughs; he left the property without explanation after approximately ten minutes. Shortly thereafter, someone else arrived in a black Jeep and watched the water test for some time before exiting his vehicle. After some evasion with respect to his identity, he introduced himself as a representative for Gutterserve, attending on the Appellant’s behalf. T.S. asked for some identification and that he introduced himself as J.V. to A.T. A.T. contacted Gutterserve to verify his employment; Gutterserve advised that no one by that name worked for the company; J.V. promptly departed. At the hearing, F.P. explained that J.V. is in fact a real estate agent.

186J.K. and K.A. examined the eavestrough installation on September 17, 2020 and ran water on the roof with a garden hose to test the operation. The resulting WAR, dated October 21, 2020, was distributed to the homeowner and the Appellant. F.P. refused to state whether the eavestrough continued to leak by the date of T.S.’s inspection, preferring to complain that because her agent J.V. was made to feel “very unwelcome,” he left the property.

187T.S. testified that he personally inspected the eavestroughs and observed water leaking from the corner joints of the eavestrough and down the back of the eavestrough between the eavestrough and the fascia. UBS took photographs and provided these images to Tarion with their findings in a report dated October 21, 2020. T.S. relied on these photographs when he drafted his assessment.

188He confirmed that because the Appellant had installed the eavestroughs on top of the leading edge of the roofing material rather than behind it, water collected from the roof surface was channeled behind the eavestroughs rather than into them. In addition, parts of the roofing material particularly at the mitre corners of the roof were not properly interlocked, but crudely folded, resulting in gaps. As well, the eavestrough itself is buckled and distorted in areas, resulting in wider gaps between the edge of the roof and the eaves, allowing water running off the roof to run down the wall behind eavestrough, missing it altogether. Photographs provided by UBS confirmed that the eavestrough was improperly installed over the roof edge around the entire house. At the hearing, F.P. expressed confusion at this evidence as she could not discern any issues with the eavestrough assembly, later admitting under cross-examination that she was aware of at least one leak from information provided by J.M.

189JJM had smeared copious amounts of caulking along the roofline in an attempt to seal the gap between the drip edge and the eavestrough and along the open seams on the roof surface. Both the original assembly and the inept repairs represent poor workmanship. T.S. noted that the use of caulking in this instance cannot be relied upon as a long term solution as it is intended as a maintenance material and did not alleviate the leaks. Tarion later received information from the manufacturer that caulking is not intended as a means of sealing joints on this style of roof. F.P. defended this repair on the basis that because T.S. had declined her request for an extension, this was the best that could be done.

190Photographs provided by UBS show areas of damage to the surface of the steel roof where the granular coating has been scuffed away by foot traffic. T.S. noted that M.P.’s own photographic evidence of the damage to the roof concurred with his own assessment of the issue.

191Lastly, a diagram in the UBS report shows that the water test revealed numerous sites of leaking all around the perimeter of the roof. T.S. observed the UBS workers highlighting the areas of leakage on a rough draft of this diagram as they encountered leaks during the test. He confirmed that the diagram was an accurate representation of the locations and prevalence of the leaks revealed by the water test.

The 2020 Builder Repair Period

192On October 8, 2020, T.S. emailed F.P. and the homeowners, advising that because he had not yet received the report from UBS to assess the eavestrough leaks, there was “currently no builder repair period in place for the repairs” and that it was “probably to everyone’s benefit to wait for the report before determining the type and extent of repairs required.” He then asked F.P. to advise who she preferred to conduct repairs to the eavestroughs, noting that the homeowners would likely require more details regarding her proposed alternative contractor before they offered a response. In the same email, he reminded F.P. that Tarion was still waiting on the contact information for “the gentleman that attended this home on your behalf after Michael Dawson left the site.” F.P. understood this email to mean that she should wait until Tarion contacted her to resume repairs to the eavestroughs. As a result, I find that in this case, F.P. may have been reasonably confused with respect to the timing of the builder repair period following the September 17, 2020 inspection, at least until T.S. issued his report three weeks later.

193Tarion’s WAR, dated October 29, 2020, reported the results of the water test as follows:

Tarion investigated the eaves trough by hiring a contractor to inspect and water test the troughs to verify the operation of the troughs. Unlimited Building Solutions examined the eave trough installation on September 17, 2020 and ran water on the roof with a garden hose to test the operation. Their report dated October 21, 2020 was distributed to the homeowner and builder.

Leaks through the eaves trough joints and water bypassing the troughs were identified in numerous locations. Water was observed to bypass the roofing system and leaked out under the roofing in some isolated locations. Damage to the roofing was observed including scuff marks on the granular surfacing and caulking applied to the surface of the roofing. Liberal amounts of caulking along the top of the back edge of the trough in isolated locations was observed. The inspection also revealed areas of the roofing where the roof sheathing materials remain exposed at the bottom of hips.

194The WAR provided a deadline of November 30, 2020 to resolve the issues with the eavestroughs or “by the date that may be indicated in the report for a particular item.” T.S. testified that another thirty day builder repair period followed the issuance of the WAR to allow the Appellant to resolve the warranted items.

195M.P. confirmed he was aware of this repair period but did not recall any significant scheduling or access issues with respect to the completion of repairs to this area after September 17, 2020, other than several inquires from the Appellant’s contractor with respect to timeframes and the homeowners’ requirement of two business days’ notice. While F.P. may have been confused by T.S.’s comments on October 8, 2020, upon receipt of the WAR, she should have reasonably understood that the applicable builder repair period terminated on November 30, 2020.

196T.S. did not recall any appeal by the Appellant to the BAF in response to the WAR. However, F.P. explained that the Notice of Proposal had suspended her licence and in turn her eligibility to engage the BAF appeal process. The Appellant’s ineligibility to commence an arbitration through the BAF was confirmed in a late submitted letter dated May 6, 2021 from Tarion that referenced BAF Procedural Rule 3 that bars builders whose licence is subject to a Notice of Proposal from commencing such an appeal.

197Although the homeowners had not listed the damage to the roof in the 30 Day Form, this damage was caused by subsequent foot traffic on its surface when the Appellant’s workers attempted to repair the problems with the eavestroughs, an issue that was listed on the 30 Day Form. Tarion found that the eavestroughs were covered by the warranties and that the Appellant must resolve them. This warranty did not cover the dent in the eavestrough described by M.P. in his testimony and photographic evidence as Tarion had no means of confirming his theory that this damage was caused by workers attempting to repair the roof. Although warranted, the eavestroughs were not chargeable as the original conciliation had been chargeable and Tarion only charges one conciliation to a Form. In other words, although the Appellant was required to repair this item because it had been found warranted, it would not be charged the set $1,000.00 fee for a chargeable item as this had already been imposed.

198T.S. recalled that the Appellant gained access to the property and conducted some repairs, specifically screwing sheet metal to the fascia board above the eavestroughs. M.P. also testified that Gutterserve installed flashing at some point after the issuance of the WAR. He stated that this repair was subsequent to JJM’s earlier work which involved further application of caulking. He photographed the piece of bent and wavy flashing loosely screwed to the edge of the roof above the gutter during the latter repairs. He testified that UBS returned to confirm that the repairs involving the flashing had resolved the issue.

199The homeowners notified T.S. with respect to the crudely installed flashing and T.S. discussed this with F.P., expressing concerns that a sharp edge to the flashing that projected away from the surface perpendicular to the drip edge could injure anyone attempting to maintain the eavestroughs. He believed that it was subsequently changed to a hemmed edge since he did not observe any horizontal flashing at the subsequent claim inspection. A number of other images taken by the homeowners likely depicted earlier attempts to correct the leaking issue before April 2021.

200The Appellant emailed T.S. to request a change to the method of repair on or about the twenty-fifth day of the period and asked for an extension to accommodate the alternative repair strategy. T.S. encountered some difficulties in getting a clear description of the planned repairs and requested details of this planned work in writing. While he never received this written description, he learned that after the repair period had ended, the Appellant had proposed to remove and reinstall all of the eavestrough and portions of the roof.

201T.S. forwarded the extension request to other staff at Tarion for consideration and noted that the other department ultimately denied the extension request. He explained that Tarion usually extends a repair period in instances where a particular material is not available or it may take more than thirty days to order it, such as custom-made kitchen cupboards or windows which often take some time to order. In this case, the reason for the request related to a course change in the middle of the repair period, which Tarion believed would unfairly prejudice the homeowners by serving to drag out the process. He conveyed Tarion’s decision to F.P., who responded by repeating the same argument for extension.

202B.H. testified that on Friday, November 13, 2020, he spoke with A.T., who informed him that there was a problem with the eavestroughs. He advised her that since there was a 90% chance of rain on November 15, 2020, she should check for leaks and call him the following Monday, November 16, 2020 to attend and inspect the roof. When he attended at the property on November 16, 2020, he discovered evidence that someone had walked on the roof and that the panels had separated as a result of this contact. He explained that there is a specific way to walk on such a roof without causing damage, but had no idea who had caused this damage.

203He stated that his son sealed the panels and touched up these areas to match the original colour. At the front entrance at the left side where the valley meets the trough and the fascia, his son found an opening not sealed by the trough installer, which he sealed. When they came down from the roof, A.T. directed his son to the mitre at the corner of the roof. While B.H. was not aware of the precise nature of the latter problem, he testified that his son repaired this issue and they departed the property.

204When the builder repair period ended on November 30, 2020, the eavestroughs had not been repaired and the homeowners were dissatisfied with the work to that point. As a result, Tarion scheduled a claim inspection for this item.

205On December 1, 2020, B.H. contacted F.P. to detail the scope of the work required to resolve the remaining issues with the roof and eavestroughs, specifically replacing the first layer of the shingles the eavestroughs and the drip edge. He advised F.P. of the estimated cost to complete these repairs and speculated at the hearing that it would have cost approximately $5,000.00. He ordered the new drip edge from Boral Roofing (‘Boral’), the manufacturer and was ready to commence the work. Boral had taken over from the predecessor company and changed all of the available colours; however, he advised F.P. that at the time that the project was contemplated, the colour for the roof was still available. It has since ceased to be available and he would be unable to match the colour of the existing panels with the replacement materials now available, resulting in higher costs.

206However, he did not carry out the repairs as A.T. never called him back to confirm the project. It was his understanding based upon something that he read that A.T. had refused to have this work done. He noted that the manufacturer’s warranty would not have covered modifications or work conducted on the roof by someone other than a contractor certified by the manufacturer. The warranty similarly would not have covered the eavestroughs or damage caused by someone walking on the roof.

The April 14, 2021 Claim Inspection

207On April 14, 2021, T.S. attended at the property and conducted a claim inspection. The homeowners and L.S. from UBS attended the inspection. The Appellant was neither present nor represented at this test. UBS conducted another water test on the gutters and disassembled part of the flashing to assess its functionality with respect to the earlier repairs by JJM. The water test confirmed that the eavestroughs continued to leak down the wall and at the mitre joints.

208Both T.S. and L.S. took several photographs during the inspection, all of which were considered in the resulting assessment. Tarion hired UBS to ascend the roof as Tarion staff do not climb ladders or work at heights. Photographs taken by L.S. and presented at the hearing showed the brown flashing added by JJM over the eavestroughs and the earlier caulking smeared into the roof seams. Images of the water test show water applied to the roof surface by L.S. bypassing the eavestrough and running down the face of the wall. UBS detached the brown flashing in one area to reveal caulking underneath smeared along the eavestroughs. The water test demonstrated that neither the caulking nor the flashing prevented the leaks. As a result, the added flashing provided no significant improvement.

209Also evident in the inspection were several scuff marks on the surface of the roof. UBS echoed the comments made by T.S. in its report to Tarion that the caulking represented an ineffective method of local repair when the roof manufacturer recommended complete replacement. While the claim that prompted this inspection related to the leaking eavestroughs, T.S. agreed with the homeowners’ theory that workers sent by the Appellant had caused this damage by walking on the roof without proper precautions against scuffing its granular surface. Under cross-examination, he testified that the homeowners had shown him photographs of contractors walking on the roof but conceded that these images were not submitted as evidence. However, he emphasized that if trades are responsible for causing damage in the course of conducting repairs, they are also responsible for those damages.

210T.S. testified that the repairs carried out by the Appellant did not meet warranty standards and exhibited poor workmanship. Tarion issued its report on July 12, 2021 and found the item warranted as “the eaves trough still leak despite the recent repairs.” The report confirmed that the roofing “was not installed properly and will need to be removed to install the eaves troughs.”

211It is worth noting that this WAR was issued only ten days before the second day of testimony when this evidence was presented. As a result, T.S. stated that Tarion’s next step would be to resolve the claim with the homeowners. As of the date of the hearing, Tarion was in the process of obtaining estimates for the costs of the repairs. Multiple quotes are required as it would appear that the roof must be removed and replaced.

212T.S. could not comment on F.P.’s conduct as he had never met her due to the homeowners’ preference that she not attend inspections after he became involved in the file. He corresponded with her primarily by email. He testified that to his knowledge, this home was the only property constructed by the Appellant and enrolled in the Tarion program. He did not know how long the Appellant had been licenced, but in his experience, the two chargeable conciliations for a first and only build was unusual and “not a good record.”

Analysis

213Like the ONHWPA before it, the present Act represents consumer protection legislation intended to protect purchasers of new homes in Ontario.⁵ That the Appellant may be comparatively new to the regulatory scheme does not offer it a defence against its obligations under the Act or the Regulations. As the Tribunal held in Ashlar Construction Ltd. v. Registrar, Ontario New Home Warranties Plan Act:

The Act is consumer protection legislation, and the stakes are high for homebuyers. They expect that Tarion has satisfied itself when registering a builder that the builder will be able to build well-constructed homes, on time, and in accordance with regulatory requirements, including meeting its warranty obligations, both financially and from an after sales service perspective. Whether it is a relatively new builder, such as Ashlar, or a large, established builder, the expectations are the same. In other words, there is no “probationary period” where the builder learns the ins and outs of the various Builder Bulletins and regulations. The homeowners at 1605 may have been challenging clients, but it was not for Mr. Hamed to conclude that they had forfeited their right to warranty coverage by virtue of their behaviour.⁶

214As the findings of the first two warranty assessment reports were never challenged through an arbitration at the BAF, it is not open to the Tribunal to question the determinations made within these documents with respect to poor workmanship.

215Builder Bulletin 42 sets out the process to appeal findings in WARs as follows:

BUILDER ARBITRATION FORUM

A builder who disagrees with Tarion’s determination of warrantability or chargeability in a Warranty Assessment Report may be eligible to request an arbitration under the Builder Arbitration Forum. An arbitration request may only be made by registered builders who attend the conciliation inspections and must be made within 28 days of receipt of the Warranty Assessment Report. For full eligibility requirements and other information, please refer to Builder Bulletin 41: Builder Arbitration Forum. [Emphasis in original]

216In the present case, the Appellant did not follow this process following issuance of E.C.’s or M.M.’s WARs.

217In Ashlar, the Tribunal considered the role of BAF as the appropriate form for a builder to dispute settlement amounts paid by Tarion to the homeowners:

Mr. Hamed expressed frustration and did not agree with the settlement amounts paid to the homeowners. He believed that the homeowners were, to some extent, at fault due to their lack of communication with him and their manipulation of the Tarion system. Upon receiving Tarion’s invoice, he wrote a letter, citing several points of disagreement. He stated that he had “continuously inquired when speaking with [the homeowners] if everything we were doing was to their liking. They confirmed it was with the only exception being the stucco columns not having a top-coat as they wanted.” He further stated that the homeowners’ “lack of communication, deliberate misleading and lying” led to the builder repair periods having been exhausted. In the same letter, he asked to appeal the decision to hold Ashlar in breach of warranty. However, as noted above, he did not file an appeal with the BAF, as was his right.

The Tribunal was clear, at the outset of the hearing, that this was not the forum to hear or determine questions regarding the warrantability of claims or the chargeability of inspections. The BAF would have been the appropriate venue for Mr. Ashlar to voice his concerns regarding the homeowners’ alleged actions - upon which he claims to have relied - to his detriment, in this case.

Mr. Hamed did not attend the January 26th conciliation inspection. By that time, the relationship between the 1605 homeowners and Ashlar had deteriorated. In particular, Mr. Hamed and M.P., an employee who performed some customer service and administrative work for Ashlar, testified that the male homeowner demonstrated intimidating and volatile behaviour. Mr. Hamed described the homeowner as an “edge case” and Ms. P. indicated in her testimony that Ashlar had “constantly” been denied access to the home, despite its attempts to resolve the warranted items.

Yet, once again, Ashlar did not appeal Tarion’s findings of chargeability to the BAF. While the Tribunal is prepared to accept Ashlar’s evidence regarding the difficulties it faced when dealing with the 1605 homeowners, we reiterate that this is not the forum in which a builder may dispute Tarion’s findings of warrantability or chargeability.⁷

218In the present case, the Registrar issued the Notice of Proposal before T.S. issued his WAR on November 26, 2019. The evidence indicated that the Appellant did attempt to commence an appeal with BAF with this WAR but was ineligible to proceed as her licence was then under notice of proposal. As a result, the findings in that WAR may be open to some examination. However, since that WAR contained no chargeable items, it did not adversely contribute to the Appellant’s record with respect to the ratio of chargeable items to possessions. There was also no substantive dispute that the eavestroughs continued to leak when T.S. found them to be warranted as of the date of inspection on September 17, 2020, particularly as F.P. was in contact with B.H. as late as December 1, 2020 with a plan to fix the issues with the roof.

219The Appellant failed to indemnify the Guarantee Fund for damages arising from multiple breaches of warranty. According to Tarion’s evidence, $69,500.44 remained outstanding, not including any anticipated amount related to the eavestroughs repair. While B.H. estimated that this work would cost $5,000.00 in 2020, he noted at the hearing that it would now cost more as the manufacturer no longer produces roofing materials in this colour. As of the date of the hearing, T.S. was still in the process of gathering quotes.

220This balance is consistent with F.P.’s own evidence that her $20,000.00 deposit had been applied to invoices and that she may have made an additional payment to O.F. However, she did not dispute E.C.’s evidence of the balance outstanding, instead offering an alternative accounting based upon her own assessments of the cost of materials and labour to resolve the outstanding defects with the property. Significantly, T.S. was never challenged under cross-examination with respect to the accuracy of the charged amounts and the Appellant called no witnesses to corroborate the reasonableness of her own calculations with respect to her preferred total of $25,000.00, despite the opportunities for both. T.S. explained that the claim was the product of multiple estimates, two provided by arm’s length contractors, while F.P. offered a vague summary of unspecified conversations with anonymous sources and undisclosed research to arrive at a significantly lower figure, largely informed by her own subjective dismissal of the homeowners’ complaints for many of the defects. On the balance of probabilities, I prefer the charged amounts and total submitted by Tarion in the claims assessment as the more reliable evidence.

221Pursuant to section 2.1 of the Vendor Agreement, the warranty is that of the builder and it bears the responsibility to indemnify the Guarantee Fund, not Tarion. In Re Charmchi, the Tribunal noted that pursuant to then section 8(2) of the ONHWPA, “the Registrar may refuse registration where the registrant has a record of breaches of warranties or of failure or unwillingness to complete performance of contracts or is in breach of a term or condition of the registration.”⁸ In that case, the applicant builder had a one possession, but three chargeable conciliations to one possession, two arising from the same incident. As the adjudicator noted, “It is not a long record; it is not a good record.”⁹ The Tribunal further noted that the breach of the condition to indemnify is a serious breach and should have a consequence. It also provided further and legitimate concern as to the builder’s willingness and ability to be regulated.¹⁰ The Tribunal took the position that the consumer protection purpose of the legislation required that the consequences must relate to the issue of registration:

The Act is to protect consumers both before and after they take possession of their new home. How the Applicant deals with the problems and concerns, which arise after possession is, among other things, critical to determining whether he should be in the industry.¹¹

222Similarly, in B & C Contracting (Kenora) Inc. (Re), the Tribunal directly considered the issue of unpaid invoices related to unresolved construction defects:

There is no dispute that the Applicant has made no effort to indemnify TWC for any of the settlement funds advanced to homeowners as a result of the Applicant failing to remedy deficiencies found warranted in the construction of its homes. It is also clear this obligation is derived from contractual agreements signed at the time of registration, no less than from the terms and conditions of registration under section 1.3 and 1.4 of Regulation 894.¹²

223As the Appellant remains in breach of the Vendor Agreement, I find that it is not entitled to renewal of its licence pursuant to paragraphs (d) and (e) of subsection 38(1) of the Act. As explained below, I am not satisfied that renewal of the Appellant’s licence with conditions would be appropriate in this case.

224F.P.’s lack of understanding of the builder repair periods also represented insufficient technical competence. The 30 Day Form included a mix of ordinary and seasonal claims, leading to two different timelines for repairs. For one of the seasonal items, when it came time for assessment, it was too cold to conduct a water test, resulting in assessment at a later date and in turn another timeline. Further complicating the latter issue, some of the claims fell over the holiday season and Tarion does not include the period from December 24 to January 1 as part of the builder repair periods.

225The homeowners’ 30 Day Form included a number of ordinary non-seasonal claims. Based upon the information outlined in Builder Bulletin 42, the following timeline applied:

a. The homeowners had thirty days from the December 6, 2018 date of possession to file a claim, excluding December 24, 2018, to January 1, 2019, resulting in a deadline of January 14, 2019.

b. The initial builder repair period was 120 days from the end of the homeowner claim period, ending on May 15, 2019.

c. Tarion notified the Appellant that the homeowners had requested a conciliation on June 19, 2019, which triggered the 30 Day builder pre-conciliation period, ending on July 18, 2019.

d. The conciliation inspection took place June 30, 2019. All the items were to be resolved at or before that time.

226The homeowners’ 30 Day claim form contained a number of seasonal claims. The following timeline applied to all of these items, except the eavestroughs:

a. As with the ordinary items, the homeowners were required to file their claim by January 14, 2019.

b. The initial builder repair period for the seasonal items ended September 1, 2019.

c. The Appellant was notified that the homeowners had requested a conciliation on June 19, 2019, which triggered the 30-day builder pre-conciliation period, ending on July 18, 2019. However, this was a moot point, as the initial builder repair period for seasonal items extended beyond that date.

d. The conciliation inspection of all seasonal items except the eavestroughs took place on November 14, 2019. The WAR was issued on November 19, 2019. The builder post conciliation period was thirty days from the warranty assessment report, excluding December 24, 2019, to January 1, 2020, resulting in a deadline of January 6, 2020.

227The remaining seasonal item from the homeowners’ claim (the eavestroughs) could not be assessed at the same time as the others because it was too cold to conduct a water test. The following timeline applied to the eavestroughs:

a. The conciliation inspection of the eavestroughs took place on September 17, 2020. Tarion issued the WAR on October 29, 2020. The builder post conciliation period was thirty days from the warranty assessment report, terminating on November 30, 2020.

228The timeline for a delayed closing claim is even more straightforward. A homeowner has one year to submit a claim. A builder has thirty days from the date of the claim to resolve it, failing which Tarion will conduct an assessment and issue a WAR. In this case, the homeowners filed their claim on November 4, 2019. The builder failed to resolve the claim and Tarion issued its warranty assessment report on February 10, 2020.

229The Appellant’s almost total failure to comply with the builder repair periods provides a backdrop for its lack of technical competence. For instance, the screens for the windows were not delivered until March 2019, but even these were the wrong screens. In April, May and June 2019, the homeowners were still asking for the proper screens. In July 2019, the homeowners made arrangements directly with the supplier; however, emails from F.P. showed that she was actively attempting to block delivery of this item. Other interior items were only resolved when F.P. delivered items at the conciliation inspection, leaving the homeowners to install these items themselves. This does not demonstrate a good customer service record.

230Emails from the homeowners and testimony at the hearing demonstrated that F.P. also did not approach her responsibilities as a builder with sufficient seriousness. For instance, she failed to act in a respectful, courteous and cooperative manner in all aspects of the claims process or to provide resolutions in a timely manner, often attempting to resolve issues at the last minute or later.

231She also failed to be fair and reasonable in scheduling repairs and reliable in terms of following up on the agreed to dates and times. As noted in Builder Bulletin 20, most homeowners have to book time off work to accommodate the scheduling arrangements. As a result, a minimum period of two business days’ notice should be provided to homeowners when scheduling repairs. In the present case, M.P. testified that A.T.’s mother suffered from dementia and the homeowners worked full time. A.T.’s mother was confused by the arrival of unannounced trades.

232With respect to exterior items other than the eavestroughs, the Appellant had until September 1, 2019 to conduct repairs. However, the items listed on the 30 Day Form were not resolved by this date and, other than the seasonable items, were found warranted by M.M. They were found to be chargeable items and represented serious and expensive defects including Code violations and health and safety issues. The Appellant’s efforts to resolve these issues were excessively slow and represented at best half measures. For instance, the deck had obvious and multiple structural problems. These items cost the Guarantee Fund $73,100.00 to resolve.

233Even after this experience, the Appellant still demonstrated a poor grasp of her customer service responsibilities, largely reiterating her unreasonable positions during the hearing. For instance, when confronted under cross-examination with respect to her faulty interpretation of the builder repair periods as set out in her email of June 17, 2019, she continued to insist that she had 240 days to repair any item, according to her own nonsensical formula and in direct conflict with the explanatory materials in the Builder Bulletin.

234Rather than acknowledge her errors, F.P. continued to blame the homeowners and attack their character. For instance, the evidence overwhelmingly confirmed that the Appellant failed to follow the formal process for extending the closing date. However, rather than acknowledge her mistake, she blamed the homeowners for requesting modifications to the agreement of purchase and sale.

235F.P.’s allegations that she was denied access to the property also lacked substance. The email exchanges relied upon by the Appellant equally convey an attempt to cooperate with her to resolve the interior items at least until the builder repair period expired. At that point, the emails show their frustration over F.P.’s failure to understand her responsibilities or the relevant repair periods and let months pass before resolving even simple items such the delivery of window screens.

236B.H. was not contacted with respect to a comprehensive solution to the defects with the roof until December 1, 2020, one day after the end of the final builder repair period and almost two full years after the date of possession. On the evidence, there were multiple shoddy attempts to the eavestrough that may have caused additional damage to the roof in the process. At this point, the homeowners were entitled to deal directly with Tarion to resolve the issue.

237While the present record includes two chargeable conciliations for one possession, one less than in Charmchi, this Appellant’s performance high ratio of two chargeable conciliations to one possession amply demonstrates a lack of competence.

238In Limo Homes (Re), the Tribunal considered the significance of chargeability with respect to the builder’s record:

The Tribunal does not accept Mr. Campbell's assertions that chargeable conciliations are irrelevant in assessing a builder's record. Under the Act, the builder makes warranties to the homeowner as of the date of possession and the homeowner has set periods of time after the date of possession to make a claim to Tarion for breaches of these warranties. The builder has the right to repair items complained of both before and after the conciliation inspection. The purpose of a conciliation inspection is for Tarion to make a determination as to whether the items complained of are warrantable items under the Act. Therefore, the conciliation inspection is a milestone in the Tarion process and chargeable conciliations represent Tarion's first assessment of the validity of the homeowners' complaints.¹³

239The Appellant also lacks the institutional resources to understand and address warranty claims. The company lacks any employees including a dedicated customer service department. While F.P. frequently referred to her company in the first person plural, this was invariably intended to include arm’s length contractors rather than actual employees. As a result of her other full time obligations including her restaurant and her teaching duties, as well as managing her rental properties, her availability to address the needs of the homeowners was severely narrowed. This inevitably would detract from her ability to dedicate sufficient time to her responsibilities under the Act and the Regulations.

240The evidence submitted by M.M. and M.P. with respect to the events of July 30, 2019 at the conciliation inspection was extremely consistent. Both testified that F.P. aggressively approached A.T. with her finger extended and her voice raised. That both G.M. and P.L.S. have found her professional and courteous is laudable, but cannot overshadow the overwhelming evidence that she subjected the homeowners to conduct falling far short of the minimal standard detailed in Builder Bulletin 20.

241While F.P. readily identified one letter from Tarion as incorrect with respect to a stated deadline, many other informational letters sent by Tarion were largely ignored. To that end, I find no merit in the Appellant’s submission that Tarion should have accommodated her failure to comply with builder repair periods by offering extensions to deadlines missed due to her own lack of diligence and arbitrary refusal to provide reasonable notice to the homeowners of scheduled work at the property. With respect to the eavestroughs in particular, had Tarion granted the requested extension, as the item in question was seasonal, this could have postponed resolution of this issue for another calendar year, thereby severely prejudicing the homeowners who had already waited two years from the date of possession to resolve this issue.

242F.P.’s deluge of emails to M.M., many repetitive and aggressive, caused M.M. anxiety and interfered with her other duties. This combined with her pattern of aggressive arguing with Tarion employees and disregarding their advice caused Tarion to reasonably believe that the Appellant will not carry on its business undertakings in accordance with the law and with integrity and honesty. Given my findings with respect to the Appellant’s conduct, particularly that of F.P., I agree with Tarion.

243While the Appellant’s paralegal argued at the start of the hearing that non-renewal of the licence would imperil F.P.’s livelihood, this is irrelevant to the Appellant’s duties under the Act and the Regulations. The Tribunal is also not a court of equity. In any event, the evidence demonstrated that F.P. has several other sources of income and has made no significant educational investments in her construction business.

244Counsel for the Registrar emphasized that the Act sets minimum standards for licencing for all new home builders regardless of size. That the Appellant lacks any customer service department is a separate issue of insufficient resources on the part of the Appellant, not a systemic bias favouring large corporate builders.

245Although subsection 43(9) of the Act permits the Tribunal to attach conditions to the renewal of the Appellant’s licence, given the substantial outstanding debt still owed to the Guarantee Fund as of the date of the hearing and F.P.’s demonstrated refusal to take any responsibility for her substandard customer service and conduct, I do not find that any conditions would realistically address the serious issues raised by the Registrar. As the evidence indicated no reasonable prospect that the Appellant’s conduct will change, it is reasonable to refuse the imposition of such terms.

246That having been said, section 46 of the Act permits the Appellant to reapply for a licence in the future should material circumstances change:

46. Once a decision of the registrar to refuse a person a licence or a renewal of a licence or to revoke a licence of a person has become final, the person may reapply for a licence only if,

(a) the time prescribed to reapply has passed since the refusal or revocation; and

(b) the person satisfies the registrar that new or other evidence is available or that material circumstances have changed.

247Ultimately, in light of all the evidence, I find that the Registrar has met its evidentiary onus to demonstrate on the balance of probabilities that:

a. the past conduct of the Appellant’s officer and director affords reasonable grounds to believe that the Appellant’s undertakings will not be carried on in accordance with law and with integrity and honesty;

b. the poor workmanship employed in the construction and repairs to the property represent multiple breaches of warranty under section 13 of ONHWPA for the home at 260 Farr Street and failed to indemnify Tarion for resulting losses; and

c. the Appellant’s high ratio of conciliations to enrollments with respect to one house demonstrates insufficient technical competence.

G. ORDER:

248For the reasons set out above and pursuant to subsection 43(8) of the Act, I direct the Registrar to carry out its proposed action in the amended Notice of Proposal dated August 17, 2020 and deny the Appellant’s appeal.

Footnotes

1. 12013 ONCA 157.
2. 2Ibid. at para. 29.
3. 32019 ONSC 1652.
4. 4(1893) 1893 CanLII 65 (FOREP), 6 R. 67, H.L.
5. 5Tarion Warranty Corporation v. Kozy (2011), 2011 ONCA 795, 109 O.R. (3d) 180 at para. 2 (Ont. C.A.).
6. 62017 CanLII 35337 at 13 (ON LAT) (‘Ashlar’)
7. 7Ibid. at 8-9.
8. 8[2008] O.L.A.T.D. No. 270 (‘Charmchi’).
9. 9Ibid. at para. 116.
10. 10Ibid. at para. 128.
11. 11Ibid. at para. 141.
12. 12[2007] O.L.A.T.D. No. 107 at para. 87 (ON LAT).
13. 13[2007] O.L.A.T.D. No. 349 at para. 27 (ON LAT).