Tribunals Ontario
Licence Appeal Tribunal
Tribunaux décisionnels Ontario
Tribunal d'appel en matière de permis
Licence Appeal Tribunal File Number: 15665/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 disallow a warranty claim
Between:
Leah Ormsby and Newton Ormsby
Appellants
and
Tarion Warranty Corporation
Respondent
and
John Boddy Developments Ltd. Inc.
Added Party
DECISION AND ORDER
VICE-CHAIR:
Geneviève Painchaud
APPEARANCES:
For the Appellants:
For the Respondent:
For the Added Party:
Heard:
Leah Ormsby and Newton Ormsby
Ted S. Weredynski, Paralegal
Edward Boddy, President
Blake Boddy, General Manager
By way of written submissions
OVERVIEW
1Leah Ormsby and Newton Ormsby (“appellants”) appeal to this Tribunal a decision letter (“decision letter”) issued by Tarion Warranty Corporation (“respondent”) dated January 22, 2024, pursuant to section 14(13) of the Act in respect to deficiencies in their home.
2The appellants purchased a new home from John Boddy Developments Ltd. (the “Builder”) and signed an agreement of purchase and sale on July 15, 2020, along with amendments in the following few months, for a completion date of March 8, 2021.
3The appellants submitted a second-year warranty form dated April 16, 2023 claiming exterior defects (the “deficiency”), specifying the fence was not complete.
4A conciliation assessment was conducted by Ross Corallo of Tarion on November 20, 2023 and the report was dated December 15, 2023.
5In its conciliation report, Tarion concluded that this item was not warranted because it does not fall within the statutory warranties provided under the Act. In its reasons, Tarion’s position was that there was no section of the Agreement of Purchase and Sale (“APS”) that indicates the rear perimeter fence as part of the home, and that, upon inspection, the fence was completed. Also, they argue that a fence, if it was part of the home, it would be covered under the one-year vs the two-year warranty period.
ISSUES
6The issues to be decided are:
a. Was there a breach of warranty regarding the fence?
b. If so, what is the amount of damages?
c. Are the appellants entitled to costs?
d. Can the Tribunal compel Tarion to report this conciliation to the Home Construction Regulatory Authority (HCRA)?
RESULT
7For the reasons listed below, I find:
a. the appellants have not proven on a balance of probabilities that there was a deficiency covered by a new home warranty under the Act; it follows that no amount is payable from the Tarion compensation fund for damages;
b. the appellants are not entitled to costs; and,
c. the Tribunal cannot compel the respondent to report the conciliation to the HCRA.
8I confirm Tarion’s denial of the claim.
EVIDENCE AND ANALYSIS
The Incomplete Fence is not warranted under the Act
9In their submissions, the appellants describe a frustrating few years of addressing many different issues with the Builder, but there is only one element at issue in this hearing which is the fence, and therefore only a small portion of the evidence and submissions is relevant to this proceeding.
10The appellants claim $817.64 in costs related to their completion of the boundary fence behind their property including:
a. $427.17 in reimbursement for the cost to complete the fence;
b. $282.50 in reimbursement for the Tarion Conciliation Fee; and
c. $108.00 in reimbursement for the LAT Appeal filing fee.
11The appellants submit that the Builder did not fulfill its obligation of completing the boundary fence nor did they receive compensation when they were forced to do it themselves.
12The respondent and the Builder submit that no compensation is payable from the Tarion compensation fund because there is no deficiency covered by a new home warranty under the Act.
13Section 13 of the Act describes the scope of the warranties:
- Every vendor of a home warrants to the owner,
(a) that the home,
(ii) is constructed in a workmanlike manner and is free from defects in material,
(ii) is fit for habitation, and
(iii) is constructed in accordance with the Ontario Building Code;
(b) that the home is free of major structural defects as defined by the regulations; and
(c) such other warranties as are prescribed by the regulations. R.S.O. 1990, c. O.31, s. 13 (1).
14Subsections 13(3) and 13(4) specify the dates the warranties take effect and the date within which claims for breach of these warranties must be submitted as follows:
(3) The vendor of a home shall deliver to the owner a certificate specifying the date upon which the home is completed for the owner’s possession and the warranties take effect from the date specified in the certificate. R.S.O. 1990, c. O.31, s. 13 (3).
(4) A warranty under subsection (1) applies only in respect of claims made thereunder within one year after the warranty takes effect, or such longer time under such conditions as are prescribed. R.S.O. 1990, c. O.31, s. 13 (4).
15The provisions relating to the year-end warranty claims are described in Regulation 892 (the “Regulation”) and the one-year warranty are described in section 4.3. This is where and when a fence would be covered, if warranted.
16On the other hand, warranties that are covered under the two-year warranty period are outlined in section 15 of the Regulation and include the building envelope, the distribution systems and the exterior cladding but do not provide warranty coverage in respect of the delay in the construction of a backyard fence.
17While the appellants claim that their fence was not completed and they are seeking for warranty compensation, I agree with the respondent that a fence is not warranted under the second-year warranty. Since there was no specific category in the second-year form that would cover a fence, the appellants checked off the defect as cladding, yet the definition of cladding as per the Regulation relates to the exterior wall covering of the home, like brick or siding, which is completely different. I find that there is no other category of deficiencies under the second-
year warranty that would come close to covering a fence, or the completion of a fence, as those include issues related to the building envelope, electrical, plumbing and hearing issues as well as structural deficiencies.
18Since the claim was filed past the deadline for a deficiency of a fence, I also considered if it was a matter of mistakenly using the wrong form, but it was not. The second-year form was submitted approximately 2 years after possession which is beyond the time allowed for filing of a year-end form under the Act.
19Section 5.10 of the Regulation sets out some circumstances where warranty claims made outside the warranty period may be made, but having reviewed those, I find that none of them apply to the circumstances under consideration. While it is clear that section 5.10 of the Regulation describes that Tarion has discretion to extend the time for carrying out certain actions, this discretion does not extend to the time to make a claim.
20The onus lies on the appellants to show, on the balance of probabilities, that they are entitled to warranty coverage. They have not established that the deficiency is covered under the Act, as I find the fence is not covered under the second-year warranty.
The Fence is not Part of the Home as per the APS
21While the conclusion above is enough to dismiss the appeal, I chose to briefly address another argument made by the parties.
22The parties agree that the construction of the boundary fence is part of a residential sub-agreement with the Town of Ajax.
23The appellants argue that the Builder’s delay in installing the fence was in breach of their agreement with the Town of Ajax, and that the delay impacted their own security and safety.
24The respondent and the Builder argue that the boundary fence is not included in the APS, that the appellants have not paid for it, and therefore it is not covered under the Act.
25I find that the fence is not covered by a warranty covered under the Act because the appellants did not provide evidence to establish, on a balance of probabilities that the fence is part of the contract with the Builder for the construction of the home and therefore not subject to the warranties set out in the Act.
The Appellants are not Entitled to Costs
26The appellants are not entitled to costs under Rule 19.1 of the Licence Appeal Tribunal Rules, 2023 (the “Rules”). The Tribunal’s only power to order costs is under Rule 19.1. Under this Rule, the Tribunal can order costs only when a party has acted unreasonably, frivolously, vexatiously, or in bad faith in a proceeding. The appellants submit that the Builder tampered with evidence and that the respondent withheld evidence, and that both of these are crucial to a fair adjudication of the matter.
27The appellants brought up costs in their reply submissions outlining that they should be entitled to maximum costs, or a level deemed appropriate by the Tribunal, but did not provide specificity in terms of the total amount sought.
28I do not award costs to the appellants as I find that the appellants did not establish that the Builder or the respondent tampered with evidence and, more importantly, I find that the documents alleged to have been withheld are not relevant to my conclusion that there was no breach of warranty under the Act. Therefore, the evidence mentioned did not interfere with my ability to carry out a fair and effective process.
The Tribunal will not order Tarion to Report to the HCRA
29The Tribunal only has the powers granted to it by statute. In this case the Tribunal's authority comes from s. 14(19) which does not include the authority to direct Tarion to report the conciliation to the HCRA as the appellants requested.
30The Tribunal will not order Tarion to report the conciliation to the HCRA.
CONCLUSION
31As I find that the boundary fence is not covered under the Act, I conclude that there was no deficiency covered by a new home warranty under the Act and therefore no compensation may be ordered.
ORDER
32For these reasons:
a. I order Tarion to deny the appellants’ claims as set out in the decision letter dated January 22, 2024.
b. I order the appellants are not entitled to costs.
c. The Tribunal will not order Tarion to report the conciliation to the HCRA.
LICENCE APPEAL TRIBUNAL
Geneviève Painchaud,
Vice-Chair
Released: November 14, 2024