Licence Appeal Tribunal File Number: 16517/ONHWPA

In the matter of an appeal from a decision of Tarion Warranty Corporation under section 14 of the Ontario New Home Warranties Plan Act, R.S.O. 1990, c. O.31 (the “Act”).

Between:

Jagroop Singh Pandher and Parneet Kaur Pandher

Appellants

and

Tarion Warranty Corporation

Respondent

and

Valente Development Corporation

Added Party

DECISION

VICE-CHAIR: Jeremy A. Roberts

APPEARANCES:

For the Appellants: Jagroop Singh Pandher, Self-represented

For the Respondent: Carling Chan, Counsel

For the Added Party: Anthony Mallandruccollo, Counsel

HEARD: March 31 to April 1, 2025

OVERVIEW

1Jagroop Singh Pandher and Parneet Kaur Pandher (the “Appellants”) appeal the decision letter, dated October 30, 2024, issued by Tarion Warranty Corporation (“Tarion” or the “Respondent”) pursuant to s. 14(13) of the Act, in respect to alleged deficiencies in their home.

2On January 24, 2025, Valente Development Corporation, (the “builder” or the “Added Party”) was added as a party in this proceeding at a case conference.

ISSUES

3The issues in dispute are:

i. Have the Appellants proven on a balance of probabilities that a breach of warranty exists and repair of the items should be compensated at a higher amount than what is assessed by the Respondent?

ii. Is the Added Party entitled to costs from the Appellants pursuant to Rule 19 of the Licence Appeal Tribunal Rules, 2023 (“LAT Rules”)?

RESULT

4The Appellants have not proven on a balance of probabilities that a breach of warranty exists under the Act.

5The Added Party is not entitled to costs from the Appellants.

6I direct Tarion to not pay the Appellants compensation from the Guarantee Fund and I dismiss the appeal.

PROCEDURAL ISSUES

The Appellants are not permitted to add two issues into dispute

7During Mr. Singh’s testimony, he began discussing two items that were not included in the Tarion decision letter. The Respondent objected, arguing that these items were beyond the scope of the hearing before the Tribunal. The Added Party agreed with the Respondent.

8The Appellants argued that the new issues were noted in their Notice of Appeal and that they had communicated with Tarion regarding these items numerous times. They pointed to an email sent to Tarion regarding the issues on October 24, 2023. They argued it would be inefficient and unfair for them to have to deal with these issues separately.

9I found that I did not have the authority to hear these new issues because no decision had been made by Tarion on these items. Sections 13 and 14 of the Act are clear that an appeal to the Tribunal may be made once a notice of decision has been issued by Tarion (i.e., the decision being a necessary precondition for an appeal). In this case, Tarion has not made a decision on these two items and, as such, I found that the Tribunal did not have authority to make a decision regarding their warrantability. My decision on this point does not prejudice the Appellants from bringing a new appeal to this Tribunal if they disagree with Tarion’s decision letter on those two issues.

The Respondent was permitted to add into evidence late filed photos

10At the start of the hearing, the Respondent requested permission to add as an exhibit a series of 31 photos that were taken by a Tarion representative during their claim inspection. It argued that these photos were not included in the respondent’s document brief due to a technical error and that there was little prejudice to the Appellants in adding the photos given that the Appellants (and a representative of the Added Party) were all present when these photos were taken. The Added Party consented to the admission of these photos.

11The Appellants argued that the photos should not be admitted because they were submitted far beyond the deadline imposed in the Case Conference Report & Order for exchange of documents and filing of the brief. Moreover, they argued that it was prejudicial against the Appellants to have to review and respond to questions about these photos when they only received them one day prior to the start of the hearing.

12I found that the photos could be admitted into evidence because they were: (1) relevant to the issues in dispute given that they were contemporary to the issue in dispute; and (2) all parties had knowledge of these photos prior to the start of the hearing. Using my authority under Rule 9.3 of the Licence Appeal Tribunal Rules, I allowed the photos to be admitted into evidence. However, prior to closing submissions on the final day of the hearing, I invited submissions from all parties as to how much weight this piece of evidence should be given in my decision as a result of its late filing. Despite the submissions, I ultimately did not rely on any of these photos in my decision.

The Appellants were not permitted to add new evidence

13On the second day of the hearing, the Appellants asked to be allowed to enter in as evidence a short video which they had shot and prepared the prior evening, arguing that it would help prove some of the evidence Mr. Singh gave during cross-examination the previous day. They cited my decision to allow the Respondent to file late-submitted images as authority for me to do the same in this situation.

14The Respondent and the Added Party objected to this request, arguing that they had never seen this video and that it was not contemporary to the issues in dispute, given that it was taken the previous day (months after the last formal inspections). Both parties argued that it would be prejudicial for them to have to consider new, non-contemporary evidence.

15I found that the video would not be admitted into evidence because it was not relevant to the issues in dispute. Notably, the video was filmed between day 1 and day 2 of the hearing and there would be no way of knowing what had transpired between the last inspection and today. Moreover, the Tribunal was already presented with contemporary photographic evidence from the Appellants in their brief from the time of the inspections which was of much more use to the Tribunal. Applying Rule 9.3, I declined to admit this video into evidence.

ANALYSIS

The Appellants have not proven on a balance of probabilities that a breach of warranty exists

Background

16The Appellants disputed 18 items which Tarion deemed unwarrantable in its Decision Letter of October 30, 2024. For ease of reference, I have grouped these items into the following categories:

i. Cracks on Door Latches: Items 4, 21, 23, 34, and 74

ii. Debris: Items 7 and 35

iii. Studs: Item 11

iv. Kitchen Light: Item 17

v. Main Door: Item 18

vi. Paint Issues: Items 22, 31, 36, 37, 42, 50, 55, and 69

17Section 13(1)(a)(i) of the Act states that every vendor of a home warrants to the owner that the home “is constructed in a workmanlike manner and is free from defects in material”. The Act does not include a definition for “workmanlike manner” and the interpretation has been left to the Tribunal. Whether construction was not done in a “workmanlike manner” has been defined as falling below “industry standard”. The meaning of “workmanlike manner” includes concepts such as “functionality, expertise, practice skill, proficiency, craftsmanship, competency, and the ability to do something well”. Aesthetics also play a role in “workmanlike manner” but is neither the highest nor lowest importance. The standard is not one of perfection. (Goulet, [2000] OCRATD No. 51).

18The Construction Performance Guidelines (“CPG”), while not binding on the Tribunal, have been held up a helpful tool for the Tribunal in determining what is acceptable and common in the residential construction industry. The CPG is referenced throughout the evidence I heard and in my findings.

19Section 14(3) of the Act establishes that, subject to the regulations, an owner is entitled to receive payment out of the Fund for damages resulting from a breach of warranty.

20The onus in this matter lies with the Appellants. In order to prove their case, the Appellants must first demonstrate that the items in dispute are warrantable under s. 13(1)(a)(i), and, second, that they suffered damages as a result of a breach of warranty per s. 14(3).

21During the course of the hearing, I heard testimony from the following individuals:

i. Mr. Jagroop Singh on behalf of the Appellants;

ii. Mr. Kory MacDonald, Warranty Services Representative for Tarion; and

iii. Mr. Steve Bryant, Service Manager for the Builder.

22I will discuss each group of issues separately below.

Cracks on Door Latches

23The Appellants argued that the cracks around various door latches throughout the home (items 4, 21, 23, 34, and 74) were warrantable because they were the result of poor workmanship and not, as the other parties argued, natural shrinkage. Mr. Singh pointed to pictures of the door latches, which showed cracks emanating out from the areas of the door latches where screws had been inserted to secure the latch plate to the door and argued that these were the result of excessive tightening of the screws. They also argued that the reasons for Tarion’s denials were inconsistent (i.e., cracks were not visible from 1500mm, cracks did not allow light to pass through, result of natural shrinkage, etc.), and seemed to be designed to ignore what they viewed as poor workmanship. They argued that these cracks should all be warrantable.

24The Respondent and the Added Party argued that these cracks were not warrantable because they were only small hairline cracks which are acceptable in the industry. The Respondent pointed to Article 10.5 of the CPG, which states that “minor cracks that do not allow light through the door are acceptable”. Moreover, it argued that the Appellants had failed to demonstrate that these cracks fell below industry standard and, if even if they did, that they resulted in damages.

25I find that the Appellants have failed to meet their onus in demonstrating that these items are warrantable. Firstly, the Appellants failed to demonstrate that these defects fall below industry standard. Per the testimonies of Mr. MacDonald and Mr. Bryant, hairline cracks in these areas are not uncommon and it would be inappropriate to hold the industry to a standard of perfection. I found this testimony compelling given their combined years of experience in the industry, compared to Mr. Singh who did not have any experience in the industry. Secondly, I am not convinced by the Appellants’ photographic evidence, which was clearly taken from close proximity (despite their testimony to the contrary), that these small defects would be visible from a normal viewing angle and distance. Lastly, even if these items were warrantable, I heard no evidence from the Appellants as to the damages that have resulted from an alleged breach of warranty.

26For these reasons, I find the items are not warrantable.

Debris

27The Appellants argued that in both the electrical room (item 7) and the crawlspace (item 35), the spaces were left dirty with dust and construction debris. They argued that Tarion failed to establish what is an acceptable amount of debris, and that the Added Party’s contention that it cleaned the home was unverifiable as no one inspected the cleanliness after these alleged cleanings despite having invoices saying $1,300.00 was spent on cleaning services. They argued that the inappropriate debris should be warrantable.

28Both the Respondent and the Added Party argued that these items should not be warrantable because the spaces were left in a state of cleanliness that met industry standards. The Respondent argued that industry standard is for rooms to be brush swept and that it is not unusual for an unfinished space to have some dust remaining. Mr. Bryant testified that the Builder hired cleaners to ensure that the space met industry standards and provided receipts for these cleaning visits.

29I find that the Appellants have failed to meet their onus in demonstrating that these items are warrantable. While there is no legislative industry standard on the amount of acceptable debris, I was convinced by the arguments advanced by the Respondent and the Added Party that a small amount of construction debris (sawdust, dirt) in these unfinished and largely unvisited areas is acceptable. This matches the expectations of common sense for an area like this. Moreover, the Appellants did not advance arguments as to the damages that resulted from these alleged breaches of warranty.

30For these reasons, I find the items are not warrantable.

Studs

31The Appellants argued that the studs in the basement crawlspace area were broken or chipped in a way that was not workmanlike. Mr. Singh pointed to pictures which showed a stud with noticeable chips on its sides along with another that presented with cut pieces. He testified that the only acceptable reason for a stud to be cut was if it were being used to accommodate pipes or electrical components, which this clearly was not. The Appellants argued that for these reasons, the cracked and damaged studs should be warrantable.

32The Respondent and the Added Party argued that the studs were not structural in nature and that studs that are not perfect or that are cut are acceptable in these circumstances. Both Mr. MacDonald and Mr. Bryant testified that the studs were installed in a workmanlike manner and that it was not unusual for imperfect studs to be used in non-structural areas. Furthermore, the Respondent argued that even if there were a defect present, the Appellant had failed to demonstrate how this defect fell below industry standard.

33I find that the Appellants have failed to meet their onus in demonstrating that this item is warrantable. While I agree that the stud does not appear to have been cut to accommodate a pipe or electrical component, I do find that the Appellants failed to convince me that an imperfect stud, that is non-structural in nature and is installed in an unfinished space, falls below industry standards. I was convinced by the testimonies of Mr. MacDonald and Mr. Bryant who, based on their experience in the industry, shared that these types of studs were commonly used in situations like these. The Appellants failed to provide evidence to the contrary. Moreover, the Appellants did not advance arguments as to the damages that resulted from this alleged breach of warranty.

34For these reasons, I find this item not warrantable.

Kitchen Light

35The Appellants argued that despite the Respondent’s and Added Party’s assertion that it been fixed, the loose kitchen light (item 17) was never fixed properly. Mr. Singh testified that this was bolstered by Mr. Bryant’s alleged statement at the case conference that he had been unable to adequately fix the light. Mr. Singh insisted that the kitchen light was still loose and because Tarion had previously found the light to be warrantable in the conciliation report, it should still be warrantable now.

36The Respondent and the Added Party argued that the loose kitchen light was repaired. Mr. Bryant testified that he fixed this light be replacing it with one that had plate that could be more securely affixed to the ceiling. Mr. MacDonald testified that he checked to ensure that the light was more securely affixed and confirmed that it was. Both parties argued, therefore, that the item was no longer warrantable because it had been adequately repaired.

37I find that the Appellants have failed to meet their onus in demonstrating that this item is warrantable. Both Mrs. MacDonald and Bryant testified that this item was resolved to an industry standard. In fact, Mr. Bryant testified precisely to the measures taken to fix the loose light (changing the light to one that had a plate that could be more securely affixed to the ceiling with screws). Beyond Mr. Singh’s testimony, the Appellants did not provide evidence to demonstrate that this item had not been repaired.

38For this reason, I find that this item has been properly addressed per the Conciliation Report, and is therefore, no longer warrantable.

Main Door

39The Appellants argued that despite the Respondent’s and Added Party’s assertion that it had been fixed, the door alignment (item 18) was never fixed properly. Mr. Singh testified that the door was still swinging open on its own and that the Respondent had not properly checked this issue during the claim inspection. Moreover, they argued that the concurrent issue of the paint on the front moulding of the door had never been addressed because the Respondent alleged that it could not see the defect from a distance of 1500mm. They argued based on photographic evidence that the paint defect was present and should be warrantable, along with the unresolved alignment issue.

40The Respondent and the Added Party argued that the door alignment issue was adequately addressed and that the paint finishing on the door was minor and not visible at a reasonable distance. Mr. MacDonald testified that he observed the door functioning properly during the claim inspection and that he observed the paint issue for a reasonable distance of 1500mm, and that the issue was not visible, and therefore, not warrantable. Mr. Bryant testified that he fixed the alignment issue, and that any residual “swinging-open” is not due to the door’s alignment but instead to the weight of the owner-installed blinds and the force of the wind.

41I find the Appellants have not met their onus in demonstrating that these issues are warrantable. On the issue of the alignment, the Appellants failed to address the arguments advanced by the Respondent and the Added Party regarding the owner-installed heavy blinds and wind-tunnel-like effect that was pushing the door open. Both these reasons seem to be the likely culprits for the phantom door opening as opposed to a warrantable defect. On the issue of the paint on the moulding, the photos by the Appellants are clearly taken from a close distance or zoomed (contrary to Mr. Singh’s testimony). I am not convinced that these minor paint differences would be visible from a reasonable distance and at a normal viewing angle. Moreover, the Appellants provided no evidence to suggest that this alleged breach of warranty resulted in damages.

42For these reasons, I do not find this item to be warrantable.

Paint Issues

43The Appellants argued that various areas in the home had been painted in a sloppy fashion. In several closets (items 22, 55, and 69), on the descending stairs (item 31), in the garage (items 36, 37, and 42), and on the living room wall (item 50) they argued that paint was either splattered inappropriately on adjacent objects (e.g. on brackets, lightbulbs), uneven on seams, visible on weather stripping, or poorly finished. They argued it was impossible for the Respondent to apply the standard of viewing the defect from a distance in every instance because for many of the issues the paint defects were inside tight viewing areas (like closets). Because of this, they argued, the Respondent was misapplying industry standards. They also argued that it was inappropriate for the Respondent and the Added Party to apply a different standard to the inside of the house versus the garage. They argued that none of the paint issues had been resolved and should all be warrantable.

44The Respondent and the Added Party argued that these paint issues were either resolved or not visible from a reasonable viewing angle at approximately 1500mm. Firstly, both Mr. MacDonald and Mr. Bryant testified that the paint splatter on the light bulb in the garage and on the weather stripping were both resolved and are therefore not warrantable. Secondly, the Respondent argued that the paint finishing in the closets, on the wall, and on the stairs were all finished to an industry standard and that any defects were not viewable from a normal viewing position at a distance of approximately 1500mm. Lastly, the Respondent argued that the paint issues in the garage were acceptable given that it was common in the industry to have a different standard for the inside of the house versus the garage. Additionally, the Respondent argued that the Appellant failed to demonstrate the damages that resulted from these alleged defects.

45I find that the Appellants have not met their onus in demonstrating that these issues are warrantable. Firstly, Mr. Bryant testified that certain issues, such as the weather stripping and light bulb had already been resolved. The Respondent reinforced this testimony, presenting photographic evidence showing that the weather stripping no longer had paint marks. On other issues, I find that these minor paint issues appear only visible on close inspection. In the regular use of a home, individuals will not be climbing into closets in order to inspect the paint. I accept the Respondent’s and Added Party’s arguments that the garage can be held to a lower standard than the interior of the home based on common sense, as it would be unfair to hold this space to the same standard as a kitchen or living room. The Appellants failed to demonstrate how these various issues fell below industry standard, and I find that these issues are all minor in nature and likely not viewable from a normal viewing angle under normal use of the various rooms. Moreover, the Appellants did not advance arguments as to the damages that have resulted from these alleged breaches of warranty.

46For these reasons, I find that these items are not warrantable.

The Added Party is not entitled to costs

47I find that the Added Party is not entitled to costs to cover the legal fees incurred by this proceeding because this is not a reasonable basis for costs.

48Rule 19.1 provides that a party may request costs of the proceeding if they believe that another party has acted unreasonably, frivolously, vexatiously, or in bad faith during the proceedings. Rule 19.4 further sets out the requirements for that request, which must include the reasons for the request and the particulars of the alleged conduct. The purpose of Rule 19.1 is to deter conduct by parties that is unreasonable, frivolous, vexatious, or in bad faith. This is a high bar for conduct to attract a costs award and is an exceptional remedy. Rule 19.6 sets out the maximum amount of costs, which shall not exceed $1,000.00 for each full day of attendance at a hearing.

49The Added Party argued that costs were merited in this case because it felt that the Appellants acted unreasonably throughout the hearing by presenting evidence that was unreliable. It argued that it had incurred substantial legal costs dealing with this two-day matter which warranted a cost award of an amount at the adjudicator’s discretion.

50Both the Appellants and, notably, the Respondent disagreed and argued that there was no conduct on the side of the Appellants that rose to the high bar needed to attract a cost award.

51I agree with the Appellants and Respondent. In consider this request, I look to Rule 19.5 of the LAT Rules, which encourages adjudicators to consider the seriousness of the alleged misconduct, whether the conduct was in breach of a direction or order issued by the Tribunal, whether the party’s behaviour interfered with the Tribunal’s ability to carry out a fair, efficient, and effective process, and the prejudice to other parties. When considering these factors, I find the Added Party’s case does not meet the high bar required to attract a finding of costs. The Appellants are self-represented, and presented their case and followed my directions to the best of their ability. I find none of the alleged behaviour rises to the level of unreasonable, frivolous, vexatious, or in bad faith and costs are not merited.

ORDER

52I order the following:

i. Pursuant to s. 14(19) of the Act, I direct Tarion to not pay the Appellants any compensation from the Guarantee Fund.

ii. In accordance with Rule 19, the Added Party’s claim for costs is denied.

iii. I dismiss the appeal.