Caschetto v. Tarion Warranty Corporation, 2024 CanLII 115415

Citation: Caschetto v. Tarion Warranty Corporation, 2024 ONLAT 15984

Licence Appeal Tribunal File Number: 15984/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”).

Between:

Sebastiano Caschetto

Appellant

-and-

Tarion Warranty Corporation

Respondent

-and-

Alliance Homes Ltd.

Added Party

AMENDED DECISION AND ORDER

Adjudicator:

Jeffery Campbell, Vice-Chair

Appearances:

For the Appellant

For the Respondent

For the Added Party

Heard by videoconference:

Sebastiano Caschetto, Self-represented

Suzanne Chandrakumar, Counsel

Bobby Troop, Representative

Alex Troop, Representative

November 12, 2024

OVERVIEW

1Sebastiano Caschetto (the “appellant”) has appealed a Decision Letter issued on June 4, 2024 by the Tarion Warranty Corporation (the “respondent”) under section 14(13) of the Act.

2The appellant submitted a warranty claim on its 30-Day Form dated November 29. 2022 alleging in Item # 25: that the builder was to provide natural gas to the home instead of propane. In the Notice of Appeal, the appellant also claims that he received a furnace that is fueled by propane instead of an agreed upon natural gas furnace.

3In the Decision Letter, the respondent took the position that the appellant’s concern related to the actual fuel supply being propane as opposed to natural gas. The respondent asserts that the agreement of purchase and sale for the home provides for a two-stage, forced air, high-efficiency natural gas furnace which was installed and functions as intended to heat the home. There was no warranty coverage for services to the home, and thus, the lack of a natural gas supply is beyond the scope of the warranties. There is no defect or substitution, and therefore, no breach of warranty.

4By way of a Case Conference Report and Order dated August 15, 2024, the builder of the home, Alliance Homes Ltd. (“Alliance” or the “Vendor”) was added as a party.

Issues

5The issues at the hearing are:

a. The first issue to be determined is whether the appellant has proven that the deficiency he alleges exists is warranted under the Act.

b. If so, then the second issue is the quantum of damages or other relief the appellant is entitled to with respect to the warranted item.

Result

6The appellant has not proven on a balance of probabilities that the denied item in the respondent’s letter was a breach of a warranty under the Act.

Analysis

7The appellant asserts that the Vendor did not provide a natural gas furnace as agreed to in the Agreement of Purchase and Sale (“APS”) for the home. The appellant also submits that, instead of his home being supplied by natural gas, it is instead fueled by propane.

8The respondent submits that the furnace which was provided to the appellant is a natural gas furnace, converted to propane. With respect to the fuel supply to the home, the respondent submits that its warranty does not extend to services provided and connected to the home, whether propane or natural gas.

Evidence of the appellant

9The appellant submitted the Agreement of Purchase and Sale (“APS”) for the purchase of his home at 15 Vilnius Lane in Keswick, Ontario stipulates in Schedule A, that the home will be equipped with a “Two-stage, forced air, high efficiency natural gas furnace”. The appellant testified that the furnace has, rather, been converted to be fueled by propane. Also, instead of a natural gas line running to the home, the builder, without the appellant’s consent, placed two propane tanks on the exterior to fuel the furnace and other appliances.

10The appellant testified that he was advised by the real estate agent who sold him the home that the house would be equipped with natural gas. The appellant presented the MLS Listing which states that the home would be fueled by gas. However, I note that the MLS listing is for 8 Vilnius Lane, and not 15 Vilnius Lane, the address at issue in this matter. Notwithstanding, it is reasonable from the evidence before me for the appellant to have concluded that the home would be fueled by natural gas and not propane.

11The appellant also asserted that, due to his understanding that the home would be equipped for natural gas services, the cost of the natural gas lines to the home is also a deficiency he alleges is warranted under the Tarion Warranty.

12Lucy Cugnol, Customer Connections Field Representative for New Construction with Enbridge Gas testified on behalf of the appellant. According to Ms. Cugnol, in discussions with Alliance and with the appellant, she advised that, in order for natural gas to be extended to the homes on Vilnius Lane, a main line would need to be installed on Vilnius Lane with secondary service lines installed to the individual homes. In total, the cost of providing natural gas to the appellant’s home would be $42,183.26, plus H.S.T. The appellant produced an email from Ms. Cugnol and himself dated January 29, 2023 confirming this amount.

13The appellant presented emails between his spouse, Maria Caschetto and Bobby Troop, Alliance’s project manager, in which Mr. Troop advised Ms. Caschetto that Alliance would be paying for the installation of the natural gas lines. Payment was stated to be divided among the homes on Vilnius Lane.

14The appellant testified that the natural gas lines were never installed.

Evidence of the respondent

15Testifying on behalf of the respondent, Paul Valenti, Warranty Services Manager for Tarion Warranty Corporation advised that, on December 12, 2023, he inspected the appellant’s home in response to item # 25 on the 30-Day Form. As noted, item 25 states, “Builder to send documentation of gas proposal sent in to Enbridge gas. Property is supposed to have natural gas instead closed with propane.” The purpose of the inspection was to determine whether Item 25 was warranted.

16During his inspection, Mr. Valenti also inspected the furnace in the appellant’s home and determined that the furnace was, indeed, a natural gas furnace that had been converted to accommodate propane fuel. The appellant did not dispute this.

17In the resulting Conciliation Report dated December 14, 2023, with regards to the supply of fuel (that being propane as opposed to the agreed upon natural gas), Mr. Valenti concluded that:

“The homeowner's concern regarding the actual fuel supply being propane as opposed to natural gas is not explicitly outlined within the purchase agreement and supplied services beyond the construction of the home are not covered under the limits of the statutory warranty. As such, it is deemed that this item does not represent a breach of the substitution warranty for a specified item as the outlined furnace has been supplied and the gas supply is beyond the limits of the warranty coverage. This item is assessed as Not Warranted”.

18The respondent submits that the furnace, although fueled by propane and not natural gas, is operational and is not defective. Therefore, the conversion of the furnace to propane is not a breach of the substitution warranty.

19The respondent also submits that that the servicing of the home with propane and not natural gas falls outside of the parameters of the statutory warranty, whether it is a warranty on defective materials or a substitution warranty. While the alleged failure of Alliance to provide natural gas services to the home may be a contractual issue, it is not warranted under the Act.

20I agree with the respondent.

21Section 13(1).3 of the Act states:

“Every vendor of a home warrants to the owner,

(a) that the home,

(i) is constructed in a workmanlike manner and is free from defects in 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.”

22Section 14(19) of the Act specifies that the powers of the Tribunal are limited to ordering the respondent to take action in accordance with the Act and the regulations.

23While both the conversion of the furnace and the providing of propane in the place of natural gas may be contractual issues, and subject to redress in the courts, the Tribunal has no authority to order redress of inadequacies not enumerated in s. 13(1).3.

24I determine from the Act that the conversion of the furnace from natural gas to propane as well the failure to provide natural gas services to the home do not fall under the enumerated warranties of s. 13(1).3 of the Act. Accordingly, neither of those issues are deficiencies and are not breaches of the warranty.

25With respect to whether the furnace constitutes a warrantable substitution, and therefore falls under s. 18 of the Administration of the Plan, RRO 1990, Reg 892 (the “Regulation”), the respondent submits that the item agreed upon in Schedule A of the Agreement of Purchase and Sale is a “Two-stage, forced air, high efficiency natural gas furnace”. The respondent submits that, as stated, the furnace provided is indeed as described in Schedule A, albeit converted to propane.

26S. 18 of the Regulation states that the vendor warrants that there will be “no substitutions in those items of construction or finishing for which the purchaser is entitled to make selection pursuant to the purchase agreement without the written consent of the purchaser”.

27I agree with the respondent. The conversion of the furnace to propane does not affect the nature of or the value of the furnace. The furnace provided is, in fact, the furnace agreed upon in Schedule A of the Agreement of Purchase and Sale and therefore does not constitute a substitution of the item which is being claimed by the appellant.

Conclusion

28As previously noted, the onus is on the appellant to prove on a balance of probabilities that there was a warrantable defect or warrantable substitution in the home. After reviewing all the evidence I am satisfied the appellant has not met his onus and I deny his claim. I find that there is no warrantable defect or warrantable substitution as described under the Act or the Regulation.

29As there is no warrantable defect or warrantable substitution, I am not required to consider whether the appellant has suffered any damages or their quantum.

ORDER

30Pursuant to s. 14(19) of the Act, I direct the respondent not to pay the appellant’s claim.