Grewal v. Tarion Warranty Corporation, 2023 CanLII 110955

Citation: Grewal v. Tarion Warranty Corporation, 2023 ONLAT 14838 ONHWPA

Licence Appeal Tribunal File Number: 14838 ONHWPA

In the matter of an Appeal from a Decision of Tarion Warranty Corporation under the Ontario New Home Warranties Plan Act, R.S.O. 1990, c. O.31 (the “Act”) to deny a claim

Between:

Roby Grewal and Simarjot Grewal

Appellants

and

Tarion Warranty Corporation

Respondent

DECISION

VICE-CHAIR: Avril A. Farlam

APPEARANCES:

For the Appellant: Roby Grewal, Self-Represented and on behalf of Simarjot Grewal

For the Respondent: Carling Chan, Counsel

HEARD: September 19, 20, 21, 2023

OVERVIEW

1Roby Grewal and Simarjot Grewal (“appellants”) appeal the assessment of their claim for warranty under s. 14(3) of the Ontario New Home Warranties Plan Act, R.S.O. 1990, c. O.31 (the “Act”) for item number 4 set out in their 30-Day Form, as set out in the Decision letter dated April 11, 2023 (“Decision”) issued by Tarion Warranty Corporation (“Tarion”).

2The appellants’ claim arose after their purchase of a home known municipally as 189 Camlaren Crescent, Kleinburg (the “home”) from LaCaban Developments Inc. (“builder”). After taking possession, the appellants submitted their 30-day form to Tarion in which they listed many alleged construction deficiencies, all of which were resolved prior to the hearing of this appeal except item number 4.

3Accordingly, this appeal concerns only the quantum of damages arising from warranty coverage for item number 4 (“appellants claim”). In the Decision, Tarion describes Item number 4 as “overall cleaning-doors/paint/holes/water stains on brick/window frames with plastic.”

ISSUE

4The issue to be decided in this hearing is:

1. What is the quantum of the appellants’ damages flowing from the breach of warranty relating to Item number 4?

RESULT

5The appellants’ damages flowing from the breach of warranty relating to Item number 4 is $19,239.35. I order Tarion to pay the appellants $19,239.35 as damages for warranted Item number 4 in the Decision.

THE LAW

6Payment of compensation under s. 14(3) of the Act is for “damages resulting from a breach of warranty” subject to a number of limitations on the amount of recoverable compensation, as outlined in Regulation 892 under the Act, Administration of the Plan, R.R.O. 1990, (the “Regulation”). The total maximum compensation for homes, other than common elements of a condominium, is $300,000.00.

7Liability is limited to damage to the home only. There is no liability for any other direct or indirect damages under s. 6(6) of the Regulation.

8It is well established that, with respect to damages, the appellant has the onus to prove on a balance of probabilities, the quantum of damages.¹

9A Decision made by Tarion may be appealed to the Licence Appeal Tribunal (the “Tribunal”).

10After holding a hearing under s. 14(19) of the Act, the Tribunal may order Tarion to take the action that the Tribunal considers Tarion ought to take in accordance with the Act and the Regulation, and it may also substitute its opinion for that of Tarion. The Tribunal owes no deference to Tarion’s Decision.

11Although the Act is consumer protection legislation and should be given a liberal interpretation, the onus is on an appellant to prove on a balance of probabilities that the elements of the warranty have been met and that damage has been suffered, as well as proving the quantum of damage.

Positions of the Parties

12As stated in the Decision, Tarion agrees that Item number 4 is covered by warranty as there are many areas around the exterior of the home that are covered in construction debris, adhesive material, mortar splashes, paint overspray and white markings like adhesive residue on windows. Tarion is of the view that the windows and doors can be repaired and has offered $19,239.35 in compensation based on the cost of cleaning and painting the affected areas. The appellants have not accepted this amount because they disagree with the amount of compensation offered.

13In summary, the appellants take the position that they disagree with Tarion’s scope of work and cost regarding Item number 4. In their Notice of Appeal, the appellants describe “scratches, dents, mortar splatter and baked in plastic residue on all the exterior doors and windows” and take issue with Tarion painting the windows because the windows were never painted from factory. Instead, the damage in question is on the anodized aluminium part of the windows and painting them will lower the quality as well as the optics and make them susceptible to corrosion. Additionally, the painted finish will be functionally inferior, prone to lifting/flaking which could require maintenance during the window/door lifetime.

14The appellants submit that painting is the most inferior method of fixing the damage, as it will make the windows less durable than the original anodized aluminum. The windows were never painted and painting should not be offered as a remedy. According to the appellants, re-anodizing the windows or a replacement are the two true reasonable options.

15The appellants state in their Notice of Appeal that they have contacted a window company, a contractor, a real estate broker, a metallurgical engineering firm, a PH.D. and P.Eng., a consultant, and an estimator, and obtained a quote for new windows. I and it is apparent through such consultations that painting anodized aluminum windows is not an industry best practice.

16The appellants contend that minor defects and deficiencies can be repaired but major damage, defect beyond repair, should be a full replacement or equal value compensation.

17The appellants state that the arbitrary holdback of settlement funds to Ontario new home buyers by minimizing the scope of warranted work and by presenting inaccurate and false quotation by Tarion’s employees and their preferred symbiotic network should be pointed out and investigated. They suggest that Tarion’s senior management was rewarded for increasing profits and minimizing financial aid paid to homeowners and cite a 2019 auditors report of Tarion. Further, the appellants state in their Notice of Appeal that Tarion failed to adequately and diligently investigate their Item number 4 and failed to make inquiries, conduct inspections, or apply any technical and other expertise in recognizing the damage, material composition, and failed to provide an accurate scope of remedial work, thereby breaching s. 14(7) of the Act. The appellants also allege a breach of s. 14(3)(b) of the Act and state that it is “beyond a reasonable doubt that Tarion has effectively colluded with their symbiotic partners in crafting a scope of work and cost that is unreasonable, inaccurate and imperfect for Item number 4. Such a practice is against the Ontario home buyers consumer protection and confidence.”

ANALYSIS

Issue 1: What is the quantum of the appellants’ damages flowing from the breach of warranty relating to Item number 4?

18For the following reasons, I find that the appellants’ damages flowing from the breach of warranty relating to Item number 4 is $19,239.35.

19I find that scratches are not included in the warranted Item number 4 in the Decision.

20When submitting the 30-Day claim, the appellants did not complete the Tarion form but instead attached a spreadsheet. Under the heading “Issue Description” on the appellants’ spreadsheet, Item number 4 is described as “Overall cleaning – doors/paint/holes/water stains on brick/window frames with plastic”. Tarion found this claim to be warranted. In the Decision, Tarion describes Item number 4 as “overall cleaning-doors/paint/holes/water stains on brick/window frames with plastic”, the same words used in the appellants’ spread sheet they attached to the 30-Day claim.

21However, at the hearing, Mr. Grewal testified that he meant for the claim to be the words found under the heading “Resolution” for Item number 4 which contains the words: “Window plastic can not be removed. Will engage manufacturer on solution. All the exterior doors have lots of dings, scratches, and overspray….05/05 On site inspection with builder note all the deficiencies e.g. garage door, side entrances, back yard patio door, various windows throughout.” The main difference between the description of Item number 4 in the Decision letter, which Tarion agrees is warranted, and the description the appellant now says he intended to form the claim on Item number 4 is the reference to “scratches.”

22I find that although it was reasonable for Tarion to take the description of the claim for Item number 4 that it did from the spreadsheet submitted by the appellants, it is also apparent from the evidence that there may be some scratches on the doors and windows. Jonathan Franco, Tarion’s warranty services representative admitted in his testimony that he could see in the photos taken by Mr. Grewal some scratches on the doors and windows. Alison Wiley, Tarion’s warranty services manager, also indicated that there appeared to be localized cosmetic scratches shown on Mr. Grewal’s photos of the windows and doors.

23However, the appellants have not established that any scratches existed at the time of the 30-Day claim or during the first year of the Tarion warranty and, if they did exist at that time, their measurements or what caused them. Mr. Grewal admitted at the hearing that he did not take any photos of the windows and doors until December, 2022, more than one and one-half years after taking possession of the home. This delay was not satisfactorily explained. The earliest photos were taken by Mr. Franco, who took photographs on March 18, 2022, but these appear to show mortar splashes, possible paint overspray, and adhesive; scratches are not clearly identified. As a result, I find that scratches on the windows and doors are not included in Item number 4 on the 30-Day claim.

Appellants’ Window and Door Warranted Work is Cosmetic Only

24I find that the warranted work in Item number 4 regarding the appellants’ windows and doors is cosmetic only, for the following reasons.

25The appellants obtained a report from Mr. Handyman Home Improvement Professionals, dated December 31, 2022, written by technicians Edward G and Steve S. after a site visit, which reported that “the damage to all these items is superficial and minor, strictly cosmetic…”

26At the hearing, Mr. Grewal agreed with the description in the Mr. Handyman Home Improvement Professionals report dated December 31, 2022 that “the damage to all these items is superficial and minor, strictly cosmetic…”

27The appellants have not advanced a claim under Item number 4 in the Decision regarding lack of functionality of their windows and doors.

28The appellants have not brought forward any evidence at this hearing that there are any functional issues with their windows and doors.

29Tarion’s witnesses Jonathan Franco and Alyson Wiley described the warranted work as cosmetic.

The Proportional Remedy is Repair of the Windows and Doors, Not Replacement

30Although the appellants submit that all the windows and doors in the home be removed and re-anodized or alternatively that all the windows and doors be replaced with new anodized windows, I do not find this to be a proportional remedy for the cosmetic damage to the appellants windows and doors. The proportional remedy is repair of the windows and doors by cleaning and electrostatically repainting as recommended by Tarion’s engineer Mr. Alskeif. The evidence submitted by the appellants’ does not persuade me otherwise.

31Mr. Grewal testified that he wants Tarion to replace all the windows and doors as 99 percent of the windows are damaged and the appellants purchased their home expecting new, undamaged windows and doors. Mr. Grewal testified that he believes that the issue is the look of the windows and doors which in time will result in flaking and corrosion. However, Mr. Grewal admitted at the hearing that he has no information as to the life span of the appellant’s windows and doors and now wishes he had contacted the manufacturer.

32The report submitted by the appellants from Ontario Estimating, made by Robert Zingel, an engineer and chief estimator, dated December 8, 2022 simply recommends a budget of $230,000.00 for removal of all windows and doors and installation of new windows, doors. Mr. Zingel does not opine on the necessity of replacement and did not testify at the hearing. While I can accept hearsay evidence, this report is unhelpful hearsay on the issue of whether replacement is a proportional remedy as Mr. Zingel does not opine on the necessity of replacement.

33As explained above, the report obtained by the appellants from Mr. Handyman Home Improvement Professionals, dated December 31, 2022, technicians Edward G and Steve S., after a site visit, states that “the damage to all these items is superficial and minor, strictly cosmetic…” When shown this statement at the hearing, Mr. Grewal testified that he agrees with that description. However, Mr. Grewal said that he does not agree with conclusion in this report that the “scratched” garage entry door and door jambs require re-finishing and suggested that Mr. Handyman is not an expert.

34The quotation of approximately $198,000.00, plus HST from Renewal by Anderson, Duane DeJong, dated December 2, 2022 is simply an estimate to replace some 27 windows and 3 doors after discount. This report does not contain any opinion on the necessity of replacement and no one from Anderson testified at the hearing. This report is unhelpful hearsay on the issue of whether replacement is a proportional remedy as it contains no opinion on the necessity of replacement.

35The letter from Steven Schmeiser, broker of record at Homelife/Bayview dated December 6, 2022 stating that “windows and doors with visible damage clearly devalues a property and reduces the curb appeal” is a general statement as is that from realtor Rattan Banait, neither of whom testified at the hearing. This hearsay evidence is not helpful on the issue of whether replacement is a proportional remedy because it lacks detail and loss of value on sale is derivative and thus secondary damage and excluded from the Tarion warranty. As the Divisional Court has said “Accordingly, the immediate result of the breach of warranty is covered and all that is derivative is excluded.”² Further, Tarion has no liability for any other direct or indirect damages under s. 6(6) of the Regulation.

36The appellants did not put forward any evidence that removal and/or replacement of the windows and doors was necessary except through Dr. Rocco Varano, Ph.D., P. Eng., who testified at the hearing regarding his April 21, 2023 Roar Engineering report and photo presentation. Dr. Varano, a Ph.D in metallurgical and materials engineering, opined that the appellants’ windows and door are made of an exterior anodized aluminum frame. Dr. Varano wrote in his report that Mr. Grewal performed a pre-delivery inspection of the dwelling on or around April 14, 2023. The appellants took possession of the home in 2021. Dr. Varano wrote in his report that the homeowner noted damage to windows and doors which consisted of dents, scratches, mortar splashes, scuff marks and baked plastic on the exterior surfaces.

37Dr. Varano opined that in order to obtain the original anodized aluminium finish, which was purchased by the homeowner, the damaged windows and doors would need to be removed and replaced by new anodized aluminium windows and doors. Dr. Varano opined that painting over the damaged aluminum windows and doors as proposed by Tarion would not be an equivalent long-term solution and could require further maintenance during the windows’/doors’ lifetimes.

38I give little weight to the testimony and report of Dr. Varano. Dr. Varano admitted that his experience is in aerospace landing gear and has limited experience with construction, has not worked for any construction firms and has no direct experience in remedial work in windows and doors. Dr. Varano’s post-graduate work concerned medical materials. Dr. Varano did not go to the home and only looked at the photos taken by Mr. Grewal. Dr. Varano testified that Mr. Grewal told him the photos were taken in April, 2023 and did not know they were in fact taken in December, 2022. Dr. Varano relies on information given to him by Mr. Grewal that the builder sent a crew to clean that resulted in permanent staining and further scuff marks on certain windows and doors. Dr. Varano did not contact the builder to find out what method they used, he does not know how many windows and doors the builder is said to have worked on, and Mr. Grewal did not tell him what solvent or other materials were said to have been used by the builder. Dr. Varano testified that he did not do any testing to see if the marks are actually permanent. Dr. Varano said he did not review the Unlimited Building Solutions (“UBS”) quote to repair and repaint obtained by Tarion, and did not contact the builder or UBS.

39Dr. Varano stated that once there is exposure of bare metal, then the anodized layer cannot be applied locally. He does not know how many windows or doors have exposed metal on them. Dr. Varano testified that where no metal is exposed, the damage to the windows and doors is cosmetic in nature. Dr. Varano stated that if there is only superficial damage to the coating layer, he doesn’t know how it will affect the longevity. Dr. Varano doesn’t know the current lifespan of the appellants’ existing windows and doors. Again, Dr. Varano has never had experience with repairing windows.

40I find the opinion of Tarion’s engineer Ali Alskeif more persuasive than that of Dr. Varano. Mr. Alskeif is an expert in building science and repairing anodized windows, has three degrees in civil and structural engineering, is experienced in the investigation of window damage and failure and has experience with window repair and replacement, including anodized windows based on the more relevant education and experience of Mr. Alskeif.. Mr. Alskeif testified that Tarion retained him to review and respond to Dr. Varano’s report and give his opinion on whether the appellants’ anodized windows can be repaired. Mr. Alskeif testified that his opinion is based on his experience repairing windows for years, and on industry practice.

41Mr. Alskeif reviewed the photos in Dr. Varano’s report and the photos taken by Tarion but did not go to the site. Mr. Alskeif’s report confirms that he was asked to recommend a method to address the localized scratches, stains from mortar splash and film that was baked on the anodized frame surface due to prolonged exposure to heat.

42Mr. Alskeif testified that should the surface be scratched, electrostatic painting may be used as an efficient and cost-effective method to touch-up the damaged areas and that this provides a high-quality repair to the anodized frames. With regard to stains, including mortar splashes and residual film adhering to the frames, these can be removed with cleaning, using mild solvents and then electrostatically painted. Mr. Alskeif opined that electrostatic painting is an efficient, economic approach to remediating and maintaining the aesthetic of the anodized aluminium surfaces and provides a balanced approach. Mr. Alskeif recommended that electrostatic painting be undertaken following the method outlined in his report, specifically conducting a mock-up repair at one or two locations to ascertain the extent to which colour of electrostatic painting will match the original. Mr. Alskeif opined that undertaking repairs of the affected windows would likely be a more practical and economical situation than replacing all windows and doors, especially if not all windows and doors have been affected by the reported scratches and staining.

43With respect to the appellants’ concerns about scratches affecting the substrate under the anodized surface, Mr. Alskeif explained that anodized windows and doors are fabricated after anodizing and also typically have holes drilled in them on site during installation so there are already layers that are not protected. When shown the photos of what appear to be scratches, Mr. Alskeif testified that these are likely splashes and not scratches. Even if it is a scratch, electrostatic painting is very efficient, looks good, and distributes the paint evenly over the anodizing. The good properties of the original anodized layer will stay but have extra protection. Mr. Alskeif testified that he has successfully used this method on anodized windows before, including on large projects.

44Mr. Alskeif testified that anodized windows can last 40 years but 30 years is a more usual estimate of life span. Glazing failures typically occur around 15 years and other failures such as gaskets, caulking, and condensation, depending on the north or south exposure of the windows and doors, usually will occur before the frame fails. Mr. Alskeif testified that, like a car, one doesn’t replace it if scratched. Mr. Alskeif explained in his testimony that the electrostatic painting from an engineering perspective is the most practical and suitable solution, the life span of the windows will not be affected by painting the scratches and the aesthetics will be improved.

45As stated in the Decision, Tarion agrees that Item number 4 is covered by warranty, as there are many areas around the exterior of the home that are covered in construction debris, adhesive material, mortar splashes, paint overspray and white markings like adhesive residue on windows. Tarion has offered $19,239.35 in compensation based on the cost of cleaning and painting the affected areas contained in a February 24, 2023 quote obtained from Unlimited Building Solutions (“UBS”). This quote outlines the work to be done, including cleaning, repainting window frames to match existing colour, scaffolding, ladders or a lift, construction clean-up and removal of waste from the site. This work is consistent with the recommendation of Mr. Alskeif and consistent with expected work as testified to by Norman Bess of UBS.

46Repair of the windows and doors is a remedy that is not overbroad. The Divisional Court has previously given the Tribunal direction that a remedy should not be overbroad. Otherwise, replacement of work done by the builder that can alternatively be remedied by repair can amount to specific performance by the builder.³

47As a result, I find that the appellants have not met their onus to establish that replacement of all the windows and doors or alternatively, removal of all the windows and doors for re-anodizing, is necessary and appropriate. I find Tarion’s proposed repair is the more reasonable and appropriate remedy and I find that Tarion’s cost of repair of $19,239.35 is reasonable.

Appellant’s Other Concerns Regarding Tarion’s Conduct

48Although the appellants allege arbitrary holdback of settlement funds to Ontario new home buyers by minimizing the scope of warranted work and by presenting inaccurate and false quotation by Tarion’s employees and their preferred symbiotic network, that Tarion’s senior management was rewarded for increasing profits and minimizing financial aid paid to homeowners and cite a 2019 auditors report of Tarion, there is no evidence before me to support these allegations. Even if there were evidence, the Tribunal has no mandate to investigate Tarion’s conduct, only to holding hearings under s. 14(19) of the Act, and to order Tarion to take the action that the Tribunal considers Tarion ought to take in accordance with the Act and the Regulation.

49Although the appellants state in their Notice of Appeal that Tarion failed to adequately and diligently investigate their Item number 4 and failed to make inquiries, conduct inspections, or apply any technical and other expertise in recognizing the damage, material composition, and failed to provide an accurate scope of remedial work, thereby breaching s. 14(7) of the Act, I find no evidence before me to support these allegations and I find no breach of the Act, including s. 14(7). Jonathan Franco and Alyson Wiley both gave evidence as to the inspections they conducted, observations made and recorded in reports, the conciliation inspections and photographs taken. From their testimony, it is clear that Derek Bess, an estimator at UBS was engaged at an appropriate time to provide a quotation of the work proposed and that Ali Alskeif, a senior forensic engineer was engaged at an appropriate time to consider the report of the appellants’ engineer. The testimony of Mr. Franco, Ms. Wiley and Mr. Bess was not shaken and remained consistent on cross-examination.

50Although the appellants allege a breach of s. 14(3)(b) of the Act in their Notice of Appeal and state that it is “beyond a reasonable doubt that Tarion has effectively colluded with their symbiotic partners in crafting a scope of work and cost that is unreasonable, inaccurate and imperfect for Item number 4” and “Such a practice is against the Ontario home buyers consumer protection and confidence”, I find no evidence before me to support these allegations and I find no breach of the Act, including s. 14(3)(b) of the Act. Again, the testimony of Mr. Franco, Ms. Wiley and Mr. Bess explained their respective roles in the assessment of Item number 4, how the claim was handled, and how a quotation for what Tarion considered to be appropriate remedial work was arrived at.

Conclusion

51The appellants’ damages flowing from the breach of warranty relating to Item number 4 is $19,239.35.

ORDER

52For the reasons set out above, I order Tarion to pay the appellants $19,239.35 as damages for warranted Item number 4 in the Decision.

Footnotes

1. 1See for example: 8549 v. Tarion Warranty Corporation, 2015 CanLII 59625 (ON LAT).
2. 2Liddiard v. Tarion Warranty Corp., 2009 CanLII 65801 (ON SCDC), 2009, 99 O.R. (3d) 656, para. 50 (Div. Ct.).
3. 3Grammenis v. Tarion Warranty Corporation, 2019 ONSC 1214, para 4 (Div. Ct.).```