Licence Appeal Tribunal File Number: 15063/ONHWPA

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

Between:

Chantelle Nicole Imperato, Gennaro Imperato and Michael Imperato

Appellants

and

Tarion Warranty Corporation

Respondent

and

Paradise Homes Kleinburg Inc.

Added Party

DECISION AND ORDER

Adjudicator: Rebecca Hines, Member

Representatives:

For the Appellants: Michael Imperato, Self-represented

For the Respondent: Michael Campbell, Counsel

Added Party: Matthew Rutledge, Counsel

Court Reporter: Taha Aqdas and Erika Yu, Veritext Court Reporting

Heard: By videoconference on February 12 and 13, 2024

OVERVIEW

1Michael Imperato (the "appellant") appeals from the Decision Letters of Tarion Warranty Corporation (the "respondent"), dated June 19, 2023, and August 10, 2023, under s. 14(13) of the Ontario New Home Warranties Plan Act (the "Act") regarding the appellant's 34 claims arising from various construction defects in his new home. Paradise Homes Kleinberg Inc, (the "builder") of the home, was previously added as a party to this appeal.

2In its Decision Letters the respondent agreed with the appellant that there were various defects in the construction of his new home that were covered under the warranty. However, it denied the appellant's claim because he failed to allow the builder access to his home to complete the repairs during the post-conciliation repair period and interfered with both the respondent and the builder's statutory right to mitigate damages. As a result, it denied the appellant's claim for warranty compensation under the Act.

3At the hearing, the appellant testified on his own behalf. Paul Valenti, warranty services representative, testified on behalf of the respondent, and Anthony Iamonaco, Director of Building Operations, testified on behalf of the builder.

ISSUES IN DISPUTE

4The issues in dispute are as follows:

(a) Is the appellant disentitled to warranty compensation because the builder was unreasonably denied access to the subject property to investigate and attempt repair in order to resolve the appellant's claims within the repair period?

5If the answer to the above question is no, then I must decide:

(a) Was there a breach of warranty in one or more of the 34 items in the respondent's decisions letters?

(b) If so, did the appellant suffer monetary damage resulting from the breach or breaches?

(c) Where a breach of warranty occurred and monetary damage resulted, what is the amount of the damages?

RESULT

6I find the appellant unreasonably denied access to his home to the builder was to investigate and attempt to repair and resolve the appellant's claims. As a result, the appellant is disentitled to any warranty compensation under the Act.

PROCEDURAL ISSUE

7At the outset of the hearing, the appellant sought an order from the Tribunal to compel various employees of the builder to testify at the hearing. The appellant submitted that at the case conference the builder was directed to provide him with the contact information for those employees, but that the builder failed to comply with this direction. The builder submits that there was nothing in the Tribunal's case conference report and order("Order") directing it to provide contact information for these employees, nor did it indicate at the case conference that it intended to call those witnesses. Further, it served its witness list and willsay statement 30 days prior to the hearing, in compliance with the deadline provided in the Tribunal's order, which indicated that it only intended to call Anthony Iamonaco as a witness.

8Rule 8 of the Licence Appeal Tribunal Rules, 2023 ("Rules") outlines the process a party must follow in summonsing a witness. Rule 8.2 provides that a party must request a summons from the Tribunal in a timely manner and the Tribunal may issue a summons if the witnesses' testimony is relevant. Once a summons is issued by the Tribunal, a party must serve the summons on the witness 10 days prior to the hearing. Rule 8.3 also provides that a party summonsing a witness must provide the witness with attendance money.

9I denied the appellant's request to compel the various witnesses to testify as he did not comply the Rules by requesting and serving the summons on the witnesses 10 days prior to the hearing. I find it would be procedurally unfair to the respondent and the builder to entertain such a request at this stage in the process. Further, while the Tribunal's order indicated that both the appellant and respondent would each be calling five witnesses, it did not specify that the builder was to provide the contact information for its employees to the appellant. Finally, the builder served its witness list on the appellant 30 days prior to the hearing. In my view, the appellant had enough notice and could have taken steps to request summonses or inquire about the process but did not. For these reasons, the appellant's request was denied.

ANALYSIS

The appellant unreasonably denied the builder access to his home to investigate and attempt to repair and resolve the appellant's claims.

10Sections 13(1) and (2) of the Act require the vendor of a home to warrant to the owner, among other things, that the home is constructed in a workmanlike manner, free from defects in material, fit for habitation, and constructed in accordance with the Ontario Building Code. These warranties apply for one year after the warranty takes effect. An owner is entitled to compensation out of the guarantee fund under section 14(3) of the Act if the owner has a cause of action against the vendor for damages resulting from a breach of the vendor's warranty. However, s. 14(12) of the Act provides that the respondent may perform or arrange for the performance of any work in lieu of or in mitigation of damages that are claimed. Furthermore, under R.R.O. 1990, Regulation 892 (the "Regulation"), after an owner submits their claim to the respondent, the vendor has the opportunity at various time periods to repair or resolve the claim items that are covered by a warranty. The Regulation provides that a vendor has 30 days after the respondent's issuance of a conciliation assessment report, during which the vendor may complete the repairs. Only if the vendor fails to resolve a warranted claim must the respondent pay compensation out of the guarantee fund to the owner, perform or arrange for the performance of necessary repairs or otherwise resolve the warranted claim.

11I found the Tribunal's decision in 8232 v. Tarion Warranty Corporation, 2013, CanLII 83569 (ON LAT) to be a useful guide in setting out the rights and responsibilities of the parties in the warranty claims process, which are highlighted below:

While the Act creates homeowners' rights, it also creates obligations. Similarly, while the Act imposes obligations on vendors, it gives them rights. A homeowner has the right to have a home constructed to certain minimum standards. The corresponding obligation is that claims must be made within certain time frames and the vendor must be given an opportunity to remedy any defects. The vendor has the obligation to remedy warranted defects but has as well, the right to inspect the alleged defect and agree or disagree with the homeowner about warranty coverage. If the vendor agrees that a defect is warranted, it has the right to carry out the repairs within a set timeframe.

Tarion also has rights and obligations under the legislation. Tarion has an obligation to conduct a conciliation inspection in response to homeowner complaints made in a timely manner. When the vendor fails to carry out the required remedial work, Tarion has an obligation to enter into settlement discussions with the homeowners and either arrange for remedial work to be carried out or pay a cash settlement. Central to the remediation scheme is Tarion's right to inspect and determine the scope of work necessary for the repair.

12The respondent also relied on case law from this Tribunal where the adjudicators found an owner to be disentitled to warranty compensation for failing to provide the builder reasonable access to investigate and attempt repair of the home. (See: 5871 v. Tarion Warranty Corporation, 2010 CanLII 100819; and Toronto Standard Condominium No. 2541 v. Tarion Warranty Corporation, 2022 CanLII 78805 (ONLAT) 8232 v. Tarion Warranty Corporation, 2013, CanLII 83569 (ON LAT), paragraphs 59-69.). For example, in 5871 v. Tarion Warranty Corporation, the adjudicator reviewed the regulatory scheme, noting that "of great importance...is the right of a contractor to attend at a home and carry out repairs or remedial work during the 30 days following a finding by Tarion that an item has been warranted." In that case, the owners were held to have refused access to their home contrary to legislative requirements, and therefore their claim was denied.

13It is undisputed by the parties that there were multiple defects in the construction of the appellant's new home which the respondent deemed to be protected by warranty.

14The appellant argues that prior to the respondent's Decision Letters he had given the builder access to his property multiple times to make repairs. However, from his experience with the builder he does not trust the builder's competence to do the work correctly. Further, the appellant argues that in response to the builder's request to schedule dates to attend and make repairs, he repeatedly requested that the builder provide a schedule and timeline for attending and completing repairs which the builder ignored.

15The respondent argues that the appellant is disentitled to warranty compensation for 34 items under the Act, because he refused to give the builder reasonable access to his home to carry out repair work within the 30-day post-conciliation period to resolve his warranty claims. As a result, he deprived it and the builder the opportunity to mitigate damages.

16For the following reasons, I agree with the respondent and the builder. Since this dispute involves two Decision Letters and post-conciliation periods, I will address my findings regarding each in turn.

Decision Letter dated June 19, 2023

17In its Decision Letter dated June 19, 2023, the respondent denied the appellant's claims for 34 warranted items on the basis that he denied reasonable access to the builder to complete the necessary repairs during the post-conciliation 30-day repair period (from December 22, 2022, to January 31, 2023). The letter indicated that the builder had contacted the appellant on multiple occasions between January 3 to January 24, 2024, to request access to his home to repair the items that the respondent assessed as warranted. However, the appellant denied the builder reasonable access to his home by:

i) Insisting that all repair work be completed in three-hour work windows between 2:30 to 5:30 each day from Monday to Friday so that he could be present to supervise the work.

ii) Demanding that all workers and contractors on the property provide criminal background checks and that he be permitted to audio and video record their work.

iii) Raising concerns about health and safety issues for his son who has a severe dust allergy and the potential harm of paint chemicals to his children who reside in the home.

iv) Refusing to extend the 30-day conciliation period to allow the builder access to complete the repairs.

18I find the above facts are supported by the emails relied on by both parties at the hearing. In response to the appellant's demands, the builder denied the appellant's request to provide criminal record checks for all workers as well as the appellant's request to audio and videorecord all work due to its policies around privacy. However, it did confirm that it would work within the two-hour repair windows between 2:30 to 4:30 every day until the work was done, control dust and odors, and coordinate work at times when the appellant's family members were not present.

19The respondent submitted Tarion's Registrar's Bulletin No.1: Customer Service Standards which confirms the obligations of both builders and homeowners in the warranty claim's process. The bulletin also addresses circumstances when it is reasonable for a homeowner to deny access to a builder, such as concerns about the health and safety of the occupants of the household.

20Prior to the respondent issuing its Decision Letter there had been a breakdown of trust between the appellant and the builder. For example, on the date of closing there was a physical altercation between the appellant and one of the builder's contractors. The appellant testified that he found himself surrounded by five contractors with tools and was forced to defend himself. The appellant also testified that because of this incident, he does not trust any of the builder's contractors in his home without supervision, which is why he only provided 3-hour repair windows for when he would be present in the home to supervise. Further, he requested criminal reference checks for all workers to ensure the safety of his wife, who works from home, his parents and his two small children. He also does not trust that they will carry out the repairs properly. The appellant also maintains that the repairs pose a health and safety risk to his son who has a severe allergy to dust, and he does not want either of his children exposed to harsh paint chemicals.

21The builder relies on emails between Mr. Iamonaco and the respondent where he had reported that the appellant had physically assaulted one of the builder's contractors and that the incident had been reported to police. Mr. Valenti also testified that the appellant had bragged about being an MMA fighter and that he had knocked out one of the builder's electricians. I find the details about this incident unclear as to what exactly transpired and why.

22While the details of the above incident are unclear, I find that overall, the evidence supports that the appellant has conducted himself in an intimidating and inappropriate manner throughout the history of this claim. For example, an email from Mr, Iamonaco to Mr. Valenti indicated that the appellant (along with some friends) had followed one of the painters home after working at his home. The appellant acknowledged that he did this during cross-examination and explained that he was upset that the builder had ripped him off because he paid for paint upgrades that he never received. I do not find his explanation justifies this conduct. In another email between Mr. Iamonaco and Mr. Valenti, he reported that the appellant had expressed a desire to injure the builder's employees and its contractors on more than one occasion. Finally, in the emails between the appellant and Mr. Iamonaco, the appellant was verbally abusive in his communication as he would call him profanities and his tone was angry and aggressive. Despite the tone of the appellant's communication Mr. Iamonaco remained courteous and professional in his emails to the appellant.

23Although I can understand that the appellant was upset and frustrated with the builder because of the numerous defects and shoddy workmanship in his new home, I find his conduct inappropriate. Because of this evidence supporting the appellant's conduct, I find his testimony about the physical altercation and his fear for his families' safety lacks credibility. For these reasons, I find his request for three-hour repair windows, along with a request for criminal background checks and to audio and video record the builder's work unreasonable. In addition, I find that the respondent warned the appellant in correspondence multiple times that his refusal to provide the builder reasonable access to his home to make repairs could disentitle him to warranty coverage. However, the appellant ignored these warnings.

24Regarding the appellant's concern about his son's dust allergy, I find the respondent attempted to accommodate this concern by offering the appellant $450.00 in order to relocate his family to a hotel for three days while the repair work could be done. The builder also offered to hire a cleaner to minimize dust. The appellant submits that the money offered by the respondent would not pay for the cost of a hotel for him and his family for three days. The respondent submits that this offer was meant to assist the appellant with the cost of relocating to a hotel. In addition, the respondent was under no legal obligation to make this offer and did so to try to facilitate a resolution so that the repairs could be completed. Despite this, the appellant rejected this offer. Further, much was made by the appellant about the fact that it would be impossible for the respondent to complete all of the repairs in three days. I find this point irrelevant as the builder was clear in correspondence that it may take longer than three days to complete some of the repairs and the appellant did not even let the builder get started on making repairs to mitigate its damages. In light of the respondent and builder's attempt to accommodate the appellant, I do not find his reasons for denying access reasonable.

25From a careful review of the chain of emails, I find that every time the builder tried to accommodate one of the appellant's requests he came back with another demand. The appellant argued that the builder failed to provide a detailed schedule setting out what would be repaired when and the allotted time for completion of same. The builder submits that this was not possible, given the limited three-hour windows proposed by the appellant to make the repairs. I find the appellant was unreasonably inflexible by only providing the builder with three-hour repair windows during regular work hours, yet at the same time expecting the builder to provide a detailed schedule of what would be fixed when. His request to section off each area of the home was also unreasonable given the respondent's offer to pay for hotel accommodations. Further, the appellant did not submit any evidence to support how long it would take the builder to make the repairs. In the absence of any evidence, I find the appellant's refusal to accept the hotel accommodations and request to section off each area of the house for three-hour work periods unreasonable.

26For the above-noted reasons, I find the appellant did not provide the builder with reasonable access to his home and interfered with the respondent and the builder's statutory right to mitigate their damages to make repairs within the post-conciliation period.

Supplementary Decision Letter dated August 10, 2023

27The respondent issued a supplementary Decision Letter dated August 10, 2023, denying the appellant's warranty claim regarding his home's HVAC system. In its letter it advised that it had retained Unlimited Building Solutions ("USB") who issued a report dated June 5, 2023, finding that there was a defect in workmanship in the installation of the appellant's home's HVAC system and it was deemed to be warranted. However, the letter advised the appellant that his claim was denied because he unreasonably denied the builder access to his home during the post-conciliation period (June 23, 2023, to July 24, 2023) to make the repairs.

28The respondent relied on email exchanges between Mr. Iamonaco and the appellant, where three attempts were made to schedule dates and times to attend the appellant's home to assess and repair the HVAC system. The appellant allowed the builder to attend his home on July 13, 2023. However, Mr. Iamonaco testified that the purpose of this visit was to assess the HVAC and fix the appellant's sump pump, but not complete the HVAC repair. A follow up email was sent to the appellant on July 14, 2023, outlining three separate dates for the repair, to which the appellant did not respond by the deadline. The appellant also asked for confirmation about the scope of work, to which Mr. Iamonaco responded with a breakdown of the work to be done. Mr. Iamonaco sent the appellant another email on July 18, 2023, requesting dates, to which the appellant confirmed that he was available on July 27, 2023, which was outside the 30-day repair period. When the builder reached out to confirm the date for the visit the appellant advised him that he was out of time and to contact the respondent.

29I find the appellant was delayed in responding to the builder's email by the various deadlines and purposely selected a date outside of the repair period. I find the appellant did not provide the builder with reasonable access to his home and interfered with the respondent and the builder's statutory right to mitigate their damages to make repairs within the post-conciliation period.

30In light of my finding that the appellant is disentitled to warranty coverage for unreasonably denying the builder access to his home to make repairs, he is not entitled to compensation. However, I find it important to note that he did not make any submissions or refer to any evidence regarding compensation for the warranted items throughout the hearing in support of same.

SUMMARY

31The appellant is disentitled to warranty coverage arising from the respondent's Decision Letters as he unreasonably denied the builder access to his home to investigate and attempt to repair and resolve the claims. As a result, the appellant is not entitled to compensation.

ORDER

32Tarion is directed to deny the appellant's claims as set out in the Decision Letters dated June 19, 2023, and August 10, 2023