Licence Appeal Tribunal File Number: 15002/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:

Mable Mei Po Cheung

Appellant

and

Tarion Warranty Corporation

Respondent

and

Poetry Living (Abbey Lane) Limited

Added Party

DECISION AND ORDER

ADJUDICATOR: Rebecca Hines, Member

REPRESENTATIVES:

For the Appellants: Mable Mei-Po Cheung, Self-represented

For the Respondent: Danielle Peck, Counsel

Added Party: Rocco Ruso, Counsel

Heard: By way of written submissions

OVERVIEW

1Mable Mei Po Cheung (the “appellant”) appeals from the Decision Letter of Tarion Warranty Corporation (the “respondent”), dated May 17, 2023, under s. 14(13) of the Ontario New Home Warranties Plan Act (the “Act”) regarding the appellant’s 27 claims for compensation arising from various alleged construction defects in her new home. Poetry Living (Abbey Lane) Limited, the vendor of the home (the “vendor”), was previously added as a party to this appeal.

2In its Decision Letter the respondent agreed with the appellant that there were defects in 22 of the 27 items and that they were covered under the warranty and offered the appellant $11,499.07 in compensation for these defects. The appellant rejected this offer. The respondent denied that there was a breach of the warranty for the five remaining items and that the appellant was not entitled to compensation for same.

3The onus is on the appellant to prove on a balance of probabilities that any alleged defect in the construction of her home constitutes a breach of warranty, that she has suffered damages as a result of the breach, and the monetary amount of any such damages pursuant to s. 14(3) of the Act.

ISSUES IN DISPUTE

4The issues in dispute are as follows:

1. Was there a breach of warranty in respect of the five alleged defects for which the respondent denied compensation in its Decision Letter?

2. If so, did the appellant suffer monetary damages resulting from the breach or breaches, and if so, what is the amount of the damage?

3. What is the amount of damages to which the appellant is entitled in relation to the remaining 22 items the respondent accepts as warranted?

RESULT

5The appellant has not proven on a balance of probabilities that there was a breach of warranty in the five alleged defects for which the respondent denied compensation in its Decision Letter, according to the Act and Regulation. Further, the appellant’s damages flowing from the breach of warranty relating to the remaining 22 items is $11,499.07. I order the respondent to pay the appellant $11,499.07 plus HST as originally set out in its Decision Letter.

MOTION

6The appellant brought a motion seeking a further reconsideration of the reconsideration decision of Vice Chair Osterberg dated February 24, 2023, who decided that the appellant was not entitled to re-open a previous appeal because the parties had entered into a binding settlement agreement. The respondent opposed the motion, submitting that the claims in the previous appeal were not part of its Decision Letter and had been resolved.

7Rule 18 of the Licence Appeal Tribunal Rules, 2023 (“Rules”) sets out the process and procedure for the reconsideration process. It is well established law that a reconsideration decision finally disposes of an appeal at the Tribunal. The appellant’s only recourse was to appeal the reconsideration decision to the courts which has its own rules, processes, and time limits for commencing an appeal. I conclude that I do not have the authority to grant the relief sought by the appellant. Therefore, this decision will only address the 27 items for which compensation was sought, as set out in the respondent’s Decision Letter dated May 17, 2023.

ANALYSIS

The appellant has not proven that there was a breach of warranty in respect of the five alleged defects for which the respondent denied compensation in its Decision Letter

8Sections 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 cause of action against the vendor for damages resulting from a breach of the vendor’s warranty.

9In its Decision Letter, the respondent determined that the following five alleged defects were not covered by the vendor’s warranty:

a) The basement floor under the storage room under the staircase was not straight;

b) The bottom of the upper kitchen cabinets were white and did not match the grey underside of the kitchen cabinets;

c) The fireplace in the family room was not straight and parallel with the wall; and

d) Two of the bathroom switch panels (representing two defects) were erroneously placed on the outside of the bathrooms on the second floor instead of on the inside.

10In her submissions, the appellant did not address the above issues at all or direct me to any evidence to support her position that there were defects in the above items. Nor did she present any evidence that she is entitled to damages as a result.

11By contrast, the respondent relies on a Conciliation Report dated March 31, 2022, completed by Fabio Bertucci, warranty service representative, who determined the following:

a) The basement floor was installed in a workmanlike manner. A string test revealed that the height of the tiles ranged from 20 mm to 22 mm (a variation of 2 mm). This was in compliance with Article 12.2 of Tarion’s Construction Performance Guidelines, which state that any variation shall not exceed 6 mm from the specified plane. Therefore, there was no defect covered by the vendor’s warranty.

b) The appellant’s purchase agreement with the vendor does not indicate that the underside of the cabinets is to be a specified colour or finish. As a result, the cabinet installation is acceptable and there is no breach of the vendor’s warranty.

c) The wall and fireplace were installed in a workmanlike manner. A measurement of the wall determined that the wall is out of plumb 2 mm in 2,400 mm vertical measurement. This is compliance with Article 3.1 of the Construction Performance Guidelines, which states that walls shall not be out of plumb more than 19 mm in 2,400 mm vertical measurement. As a result, there is no defect in the fireplace or wall installation and no breach of the vendor’s warranty.

d) The appellant’s purchase agreement with the vendor does not specify the locations for the bathroom switches to be installed. Further, there is no Ontario Building Code or other requirement that switches be located inside the bathrooms. Consequently, there was no breach of the vendor’s warranty.

12Since the appellant did not make submissions or submit any evidence to support that the above items were not built or installed in a workmanlike manner, I accept Mr. Bertucci’s opinion that the vendor did not breach its warranty. For these reasons, the appellant has not met her onus to prove that the alleged defects set out above are a breach of the vendor’s warranty and is not entitled to compensation for same.

The appellant is entitled to damages in the amount of $11,499.07 plus HST as set out in the respondent’s Decision Letter

13Section 14(3) of the Act provides for payment of compensation for “damages resulting from a breach of warranty” subject to a number of limitations on the amount recoverable set out in Regulation 892 under the Act (“Regulation”). The total maximum compensation for homes, other than common elements of a condominium, is $300,000.00. Liability is limited to damage of the home only. There is no liability for any other direct or indirect damages under s.6(6) of the Regulation. The onus is on the appellant to prove the monetary amount of damages.

14The appellant’s claim for damages in relation to the 22 warranted defects stems from the vendor’s installation of the hardwood floors, staircase and railing in her home. She argues that repairing the hardwood floors and staircase is not the appropriate remedy due to the extent of the defects. Instead, she submits that they need to be replaced. She relies on numerous photographs, two quotes from Home Depot and Deslo Design, and a report of Vintage Hardwood Flooring dated November 29, 2021, who was hired by the vendor to inspect the hardwood floors. She submits that this report supports her position regarding the extent of the defects and proves that she is entitled to the damages claimed. Finally, she maintains that she is entitled to a full refund of monies paid for upgraded hardwood floors which was outlined in the Agreement of Purchase and Sale (“APS”) because of the extent of the damage to the floor. She claims the refund of the upgrades plus an additional 25% for the increase in costs of the materials since installation, expenses for movers and accommodations, filing fees for her appeal and punitive damages in the total amount of $122,592.92.

15As highlighted above, the respondent agreed that there was a breach of warranty in respect of various defects in the hardwood floors throughout her home as well as the staircase. It also determined that the appellant was entitled to compensation for damages resulting from these warranty breaches. However, it argues that the appropriate amount of damages is the cost of repairing the warranted defects. It submitted evidence that it had estimated the cost of these repairs using Xactimate, a program it submits is widely used by insurance companies to calculate building damage, repair, and rebuilding cost to generate loss estimates. This program estimated the appropriate cost of repairing the floors, staircase, and kitchen floor to be $11,499.07 plus tax. The respondent also relies on two Conciliation Assessment Reports dated March 31, 2022, and June 15, 2022, which assessed the defects, along with two repair estimates and compensation offers dated July 21, 2022, and October 21, 2022. It also relies on the report of Vintage Hardwood Flooring, referred to above. The respondent asserts that the sum claimed by the appellant is not proportional to the damage. Further, it states that the appellant has not submitted any evidence to support her position that the hardwood floors and staircase need to be replaced as opposed to repaired. Finally, it asserts that this Tribunal does not have jurisdiction to award punitive damages.

16I agree with the respondent for the following reasons.

17Of significance, what I find lacking in the appellant’s case was persuasive evidence to support her position that the only appropriate remedy to address the vendor’s warranty breaches was replacement as opposed to repair of either the hardwood floors or the staircase. Although I agree with the appellant that the Vintage Hardwood Flooring report identifies numerous defects in the hardwood floor boards, the majority of the defects noted were cosmetic. Further, despite the noted deficiencies, the inspector concluded that the installation of the floor was not defective. Nor does the Vintage Hardwood Flooring report provide an opinion on the appropriate remedy to address the defects.

18The various pictures submitted by the appellant of the defects in the hardwood floor and staircase are unhelpful to her claim for damages because they do not address the remedy of replacement versus repair. Neither do the quotes procured from Home Depot or Deslo Design. While the quotes may support the cost of replacement of materials and installation, they do not address why replacement of the hardwood floors and staircase is required, as opposed to the cost of repairs as identified in the respondent’s Decision Letter. In my view, a report from an expert stating that replacement versus repair is required to address the defects, and why, would have been helpful in support of the appellant’s position.

19Regarding the appellant’s claim for a full refund for the damaged hardwood floor upgrades she paid for outlined in the APS, there is no evidence before me as to what hardwood materials were installed by the vendor, or that they were not the upgrades agreed upon in the APS. Further, this issue was not addressed in the respondent’s Decision Letter. As a result, I find that this issue is not properly before me.

20By contrast, the respondent relies on two repair estimates and compensation offers dated July 21, 2022, and October 21, 2022, which provide a very detailed breakdown of the cost of materials and labour for repairs for the defects under warranty. In the absence of a competing opinion, I accept these amounts as reasonable in contrast to the unsubstantiated amounts claimed by the appellant. In addition, the appellant did not address why the amounts proposed by the respondent for repair in its compensation offers were unreasonable. Her claim was based on replacement which I am not satisfied is required.

21Finally, the appellant’s submissions and evidence were not relevant to the Tribunal’s authority and mandate. For example, the bulk of her submissions and evidence focussed on allegations of corruption on the part of the respondent, which was said to favour builders and to be biased against homeowners. As highlighted by Adjudicator Farlam in the Tribunal’s decision in Grewal v. Tarion, 2023 CanLII 110955 (ON LAT) relied on by the respondent, even if there was evidence, this Tribunal does not have the jurisdiction to investigate and make decisions regarding Tarion’s conduct. The Tribunal’s mandate is to hold hearings under s. 14(9) of the Act, and to order Tarion to take any action it deems necessary in accordance with the Act and Regulation. As a result, I find the various media articles submitted by the appellant did little to support her claim for damages.

22In the same vein, the appellant requested several times that the Tribunal summon various representatives from the respondent and vendor to give oral evidence in this matter. The Tribunal’s case conference report and order indicates that the parties agreed to a written hearing. Accordingly, both parties were provided with the opportunity to present their submissions in writing. The appellant did not make a request to convert this matter into an oral hearing. Further, Rule 8 allows a party to request that the Tribunal issue a summons in advance of a hearing and to set out the relevance of the witnesses’ testimony. The appellant did not take any of these steps in this matter. I find it would not be appropriate for the trier of fact to summons witnesses on the appellant’s behalf as the onus is on the appellant to prove her case.

23The appellant’s submissions also reference various articles and case studies which address the courts’ jurisdiction in tort actions to award punitive damages in matters involving the respondent. I also find these articles unhelpful to the appellant’s claim for damages because this matter involves an appeal before an administrative tribunal, not a tort action before the courts. The respondent and vendor submit that this Tribunal does not have the jurisdiction to grant punitive damages. I agree. The vendor directed me to my decision in AJ v. Security National Insurance Co., 2021 CanLII 35586 (ONLAT) in support of this position. Although I acknowledge that this decision dealt with accident benefits under the insurance scheme it highlights the principle that this Tribunal only has the powers specifically delegated to it by statute and that this Tribunal has not been granted the authority to award punitive damages. As noted above, liability is limited to damage of the home only. There is no liability for any other direct or indirect damages under s.6(6) of the Regulation.

24Finally, the appellant did not direct me to any section of the Act or authority to support her position that she is entitled to the cost of movers and accommodations or filing fees. Again, as set out in s.6(6) of the Regulation, the respondent is not liable for any direct or indirect damages other than damage of the home.

25For the above-noted reasons, the appellant has not met her onus in proving that she is entitled to the amount of damages that she has claimed. I accept the respondent’s position that the appellant is entitled to damages of $11,499.07 plus HST.

SUMMARY

26The appellant has not proven on a balance of probabilities that there was a breach of warranty in respect of the five alleged defects for which the respondent denied compensation in its Decision Letter. Further, the appellant’s damages flowing from the breach of warranty relating to the 22 warranted items is $11,499.07 plus HST.

ORDER

27I order the respondent to pay the appellant $11,499.07 plus HST as set out in its Decision Letter.