Citation: Ioffe v. Tarion Warranty Corporation et al., 2025 ONLAT 16543 ONHWPA

Licence Appeal Tribunal File Number: 16543 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., c. O.31, denying a claim

Between:

Mikhail Ioffe

Appellant

and

Tarion Warranty Corporation

Respondent

and

GG (9mile) Limited

Added Party

DECISION

VICE-CHAIR:

Avril A. Farlam

APPEARANCES:

For the Appellant:

Mikhail Ioffe, Self-represented

For the Respondent:

Christopher Gallo, Counsel

For the Added Party:

Angela Morra, Representative

HEARD: May 5, 2025

OVERVIEW

1Mikhail Ioffe, the appellant, appealed from the decision letter dated November 13, 2024 (“Decision”) issued by Tarion Warranty Corporation (“Tarion”) which pursuant to s. 14 of the Ontario New Home Warranties Plan Act, R.S.O. 1990, c. O.31 (“Act”) denied the appellant’s claim for warranty compensation for alleged flooring defects in his home, specifically the following items listed on the 30-Day form received by Tarion on August 9, 2023:

(11) INTERIOR – Floor 01 – Living Room – Floor – Multiple chipped boards in kitchen, living and foyer area

(12) INTERIOR – Floor 02 – Bedroom – Floor – chipped boards in primary bedroom

(13) INTERIOR – Floor 02 – Hallway – Floor – multiple chipped boards on entire 2 floor, (collectively, the “Claim”)

2The appellant and his spouse Angela Polissky purchased 88 Shepherd Drive, Barrie (“Home”) under an agreement of purchase and sale dated June 4, 2021 and amended January 21, 2023 (“APS”), made between the appellant and Ms. Polissky and GG (9 Mile) Limited (“Added Party” or “Builder”).

ISSUES

3The issues to be decided are:

i. Whether the alleged defect set out in the Decision constitutes a breach of warranty under s. 14(3) of the Act, and

ii. If so, whether the appellant suffered any monetary damage resulting from the breach of warranty; and

iii. If so, the amount of the damages.

RESULT

4Having considered all of the evidence, and for the reasons that follow, I find that the appellant has failed to demonstrate a breach of warranty and I direct Tarion to deny the appellant’s claim.

ANALYSIS

The Statutory Warranty

5Section 13(1)(a) of the Act provides that the vendor of a home warrants to the owner that the home is constructed in a workmanlike manner and is free from defects in material, is fit for habitation and is constructed in accordance with the Ontario Building Code.

6Although the Act is consumer protection legislation and should be given a liberal interpretation, the onus is on the appellants to prove, on a balance of probabilities, that the defects in the home fall within the warranty coverage, that monetary damages have resulted from the defects and the amount of those damages. The Tribunal owes no deference to Tarion’s decision.

7Following a hearing, the Tribunal may, pursuant to s. 14(19) of the Act, direct Tarion to take such action as the Tribunal considers Tarion ought to take in accordance with the Act and the regulations, and for such purposes the Tribunal may substitute its opinion for that of Tarion.

The Appellant and Ms. Polissky Got the Hardwood They Selected

8Both the appellant and Ms. Polissky admitted in their testimony that they selected Athena White Oak Smooth Character UVF 5” x ¾” engineered flooring from Vintage Hardwood Flooring for the Home (the “Hardwood”) and purchased it as an upgrade. Their selection of the Hardwood was agreed to in writing by both the appellant and Ms. Polissky in the Signed Options and Style Selections Form signed June 16, 2022.

9The appellant testified that prior to selecting the Hardwood, the appellant and Ms. Polissky went to the Builder’s decor centre, picked up and held a physical sample of the Hardwood in his hands and looked at it before selecting the Hardwood.

10Ms. Polissky testified that she is the one who liked the Hardwood and she regrets this.

The Hardwood Installed is not Defective

11The appellant has not established on a balance of probabilities that there is a defect in material or workmanship of the Hardwood installed which constitutes a breach of warranty under the Act.

12The appellant testified, consistent with his statement in his Notice of Appeal, that the Hardwood is of “…significantly lower quality than the manufacturer’s specified standards for this type of flooring….the flooring material specification allows only for sound filled knots, some voids as acceptable features. However, the current flooring exhibits 4 significant issues that clearly deviate from the manufacturer’s specifications” being voids (many surface holes exceed the acceptable size defined as voids, numerous holes measure approximately 10mm in width and 3mm in depth), filled knots (many knots are unfilled), sound knots (a significant number of the knots are unsound), some voids (a considerable number of surface holes, “far exceeding” what could reasonably be described as “some”).

13The appellant testified that the Hardwood is of low quality, is substandard material, different material than what he expected, referred to many photographs he has taken of the Hardwood, and held up a dime to indicate the size of voids as being significantly lower quality than the manufacturer’s specified standards for this type of flooring. More specifically, the appellant testified that there are many voids, unfilled knots, unsound knots, and a many surface holes, far exceeding what the manufacturer could reasonably describe as “some”. The appellant referred to various websites and information he found on the internet about hardwood flooring in support of his belief that the Hardwood is substandard material.

14As a result, the appellant states that he is entitled to have all of the Hardwood on the main floor and second floor to be replaced. The appellant is also seeking “punitive and aggravated damages, reimbursement for all legal expenses and any subsequent court costs” as set out in his Notice of Appeal.

15However, in cross-examination the appellant admitted that some of the standards he found on the internet refer to unfinished wood flooring and he knows that his flooring is not unfinished wood flooring. The appellant admitted that he does not know what the term “MFA” that he saw on the internet means and he does not know whether that refers to maple flooring, and he does not know if these standards apply to his oak Hardwood.

16The appellant, when challenged in cross-examination, admitted that he has no expertise about hardwood flooring, although he continued to suggest that he knows that there are “unsound knots” in the Hardwood, by which he means that the flooring is crumbling and parts of the floor are coming out. The appellant referred to photographs that he claims show many defects which he said he can identify using “common sense”. However, when pressed, the appellant admitted that he has no photographs of the flooring coming out, and he has no photographs of the same spot in the Hardwood getting worse over time.

17Ms. Polissky had little relevant testimony about the condition of the Hardwood. Although Ms. Polissky testified that she sees “holes” in the wood and she can see “more and more each day”, she admitted that they didn’t count the holes in the Hardwood. Although Ms. Polissky said the holes in the Hardwood are getting bigger, she admitted in cross-examination that she does not see pieces of wood and sawdust when cleaning, she has never found a piece of wood or chip that came up from the floor, and does not know where the material that she thinks is coming out of the holes is actually going.

18It is clear from Ms. Polissky’s evidence that she regrets her choice of Hardwood. However, her testimony is insufficient to establish that there is a defect in material or workmanship of the Hardwood which constitutes a breach of warranty under the Act. Regretting the choice made does not make the Hardwood defective or a breach of warranty.

19It is clear from his evidence that the appellant is also unhappy with the Hardwood chosen. However, the appellant did not provide sufficient evidence to persuade the Tribunal that there is any defect in material or workmanship. He relied solely on his own testimony of what he saw, information that he obtained from internet sources that he admits he may not fully understand, his own “common sense”, and photographs showing measurements even though the specifications for the Hardwood do not contain measurements.

20I prefer the evidence of the Builder’s employee Kelly Ferguson, Philip Kavanagh, director of inventory and procurement for Mirage and Company Vintage Hardwood Flooring, Drew Kern, an expert in flooring, and Megan Faria, Tarion Warranty Services Representative all of whom testified about the design features of the appellant’s “character” Hardwood.

21Kelly Ferguson testified that after the Builder sells a home, there are a minimum of three appointments with the Builder’s design studio. Ms. Ferguson confirmed that customers are given physical samples of flooring to handle before making a selection. The reverse of the physical sample contains a photograph of the flooring installed in a whole room so that purchasers can see how the flooring will look when installed in a larger space. She said that on the reverse of the sample of the Hardwood there is a photograph dated January 12, 2021 showing it installed in a whole room. Based on the date, the photograph would have been on the reverse of the sample when the appellant and Ms. Polissky selected the Hardwood in June, 2022.

22Ms. Ferguson testified that the Hardwood selected was installed and has no defects. Ms. Ferguson also testified that this Hardwood is a popular choice by many homeowners because of the character in the wood created by the knots and variation of colour.

23Philip Kavanagh is employed at Vintage Hardwood Flooring which manufactures this pre-finished vintage Hardwood. The Hardwood selected by the appellant is called “character grade”, as distinguished from other hardwood flooring with a different finish called “Select V”. Mr. Kavanagh described the manufacturing process and confirmed that the top layer is sawn from natural white oak, which is ultimately pre-finished with stain and coats of urethane. He testified that this Hardwood has the word “character” in its name because it contains larger voids, knots and other natural features such as sap wood.

24Mr. Kavanagh explained the written specifications for this Hardwood which he said are also set out on the back of the sample board given to the Builder together with the photograph of the Hardwood shown in a large room. Under the heading “Naturally occurring characteristics of White Oak Character grade”, and accompanied by eight photographs of the naturally occurring characteristics, it is written:

(a) Unlimited knots – No limitation of size

(b) Open filled knots – Can have voids

(c) Some voids allowed

(d) Color variation/sapwood

(e) May have checks and splits

(f) Mineral streaks

25Mr. Kavanagh testified that the Hardwood allow for unlimited knots without limitation of size, open filled knots, some voids, colour variation, sapwood, checks and splits, and mineral streaks. In “character” grade, unlimited variation is allowed and that is why a photograph of the Hardwood installed in a whole room is put on the back of the sample board.

26During the manufacturing process, boards for this Hardwood are selected for these “character” features while some other grades of hardwood use cleaner boards. None of these character features make the boards unsound and the glue bonds are tested during manufacturing. Mr. Kavanagh testified that if there is rot or bark or dead parts of the tree in the boards, this would be unsound. A sound knot has this material removed, with epoxy put in the void, which hardens and becomes part of the board before it is stained and sealed like the rest of the board.

27Mr. Kavanagh testified that he has not inspected the Home but has seen photographs. After his review of the photographs he noted that one board appears to have a damaged edge and he would recommend removing and replacing this board or touching it up with filler. Mr. Kavanagh testified that he did not see any holes in the Hardwood the size of dime. When shown a photograph by the appellant of a hole that the appellant said is 5-7mm with a depth of 3 mm and is unfilled, Mr. Kavanagh said that this is allowable as character in this Hardwood.

28Drew Kern, Infinity Claims Management Solutions, an independent consultant and inspector and an expert in flooring, testified that he inspected the Home in July, 2024 and was asked by Tarion to determine if there is any defect. Mr. Kern testified that he walked through both levels of the Home and looked at the knots, voids, splits, and factory applied filler pointed out to him and he examined some uninstalled flooring. After inspecting and viewing voids and splits under 15 times magnification, Mr. Kern opined that the factory finish clear coat had been applied on tops of the voids, splits and character features of the Hardwood and concluded that the Hardwood matched and met the manufacturer’s description of character in the floor, and did not see anything that needed to be replaced. Mr. Kern opined that there is no defect in workmanship or materials in the Hardwood. In cross-examination Mr. Kern explained that he did not take any measurements because no measurement is specified by the manufacturer for this Hardwood, so measurements do not matter. No specification or other document was put to Mr. Kern to the contrary.

29Megan Faria, Tarion’s warranty service representative testified that she attended the conciliation inspection at which the appellant and Ms. Polissky identified their areas of concern with the Hardwood on both floors of the Home. Ms. Faria, after observing the Hardwood and its knots, checks, and splits, took some measurements, felt these areas and found the Hardwood to be in compliance with the manufacturer’s specifications. Ms. Faria testified that she found no defect in material or workmanship. Tarion hired Mr. Kern to give his opinion because the appellant disagreed with Tarion’s report. After Mr. Kern also found that there was no defect in workmanship or materials and that the Hardwood is within the manufacture’s specifications, Ms. Faria issued a second report in September, 2024 and later wrote the Decision. Ms. Faria testified that she saw one damaged board in the kitchen but this had not been reported earlier and she had no evidence that this was damaged at the time of occupancy of the Home. In cross-examination Ms. Faria explained that she measured and found a split that was no more than 1mm wide and did not recall finding any in excess of 1mm in the Home. Ms. Faria also measured a knot to be 5mm but she felt it and found it to feel smooth and not like a defect. Ms. Faria said that she took some measurements because Tarion uses tolerances set out in the Construction Performance Guidelines but found nothing for this Hardwood.

30I prefer the testimony of Messrs. Kavanagh and Drew, and Ms. Faria and Ms. Ferguson all of whom spoke of the characteristics found in this Hardwood, that these characteristics are not defects but part of the features of this Hardwood, and that the Hardwood in the Home is not defective but consistent with the manufacturer’s specifications. All of these witnesses are familiar with the Hardwood, Mr. Drew and Ms. Faria inspected the Home and found no defect in material or workmanship. None of the testimony of these witnesses was seriously shaken on cross-examination.

Damages

31Having found that there is no breach of warranty established before me, it is not necessary to consider whether the appellant suffered any monetary damage resulting from the breach of warranty; and if so, the amount of damages.

No Costs Awarded to Appellant

32In his Notice of Appeal the appellant requests “…punitive and aggravated damages, as well as reimbursement for all legal expenses and any subsequent court costs.” I take this to include a request for costs under Rule 19 of the Licence Appeal Tribunal Rules, 2023 (the “Rules”) where a party believes that another party has acted unreasonably, frivolously, vexatiously, or in bad faith.

33I am not satisfied that there is any basis to find that Registrar’s conduct has risen to the level of acting unreasonably, frivolously, vexatiously or in bad faith during the conduct of the proceeding, as required by Rule to authorize a costs award. This is a high bar and the appellant has not met it.

34As a result, I decline to award costs to the appellant.

35The balance of the appellant’s cost request, namely punitive and aggravated damages, reimbursement of legal expenses, and subsequent court costs, is not within the jurisdiction of the Tribunal as nothing in the Act, the Statutory Powers Procedure Act, or the Licence Appeal Tribunal Act, 1999 contemplates a monetary award of the nature sought by the appellant. .

Conclusion

36I find that the appellant has failed to demonstrate a breach of warranty with respect to the Claim.

ORDER

37For the reasons set out above and pursuant to s. 14(19) of the Act, I direct Tarion to deny the appellant’s claim.