CITATION: Ducas v. Tarion Warranty Corporation., 2021 ONSC 5885

DIVISIONAL COURT FILE NO.: 388/18

DATE: 2021/09/07

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

Wilton-Siegel, Lederer, Kristjanson, JJ..

BETWEEN:

Elaine Ducas

(Respondent in Appeal/Appellant in Cross-Appeal)

– and –

Tarion Warranty Corporation

(Respondent in Appeal/Respondent in Cross-Appeal)

– and –

Forest Grove Homes Limited

(Appellant in Appeal/ Respondent in Cross-Appeal)

Sam A. Presvelos, for the Respondent in Appeal/Appellant in Cross-Appeal, Elaine Ducas

Michael Owsiany, for the Respondent in Appeal/Respondent in Cross-Appeal, Tarion Warranty Corporation

Matthew Greco and Jonathan L. Frustaglio, for the Appellant in Appeal/ Respondent in Cross-Appeal, Forest Grove Homes Limited

Valerie Crystal, for the Respondent in Appeal/Respondent in Cross-Appeal, Licence Appeal Tribunal

HEARD: May 25, 2021

Wilton-Siegel, J.

[1] This proceeding involves an appeal by Forest Grove Homes Limited (“Forest Grove”), and a cross-appeal by Elaine Ducas (“Ducas”), of a decision and order dated June 1, 2018 (the “Decision”) of Laurie Sanford, the Vice-Chair of the Licence Appeal Tribunal (the “Tribunal”).

[2] Ducas initiated a claim for warranty coverage with Tarion Warranty Corporation (“Tarion”) after water leaked periodically into the great room of her house within two years of construction of her new home. After Tarion denied her claim, Ducas appealed the Tarion decision to the Tribunal.

[3] In these Reasons, Tarion and the builder, Forest Grove Homes Limited (“Forest Grove”) Forest Grove, are collectively referred to as the Respondents.

Jurisdiction of the Court and the Standard of Appeal

[4] This Court has jurisdiction to hear these appeals pursuant to s.11(1) of the Licence Appeal Tribunal Act, S.O. 1990, c. 12, Sched. G, which permits appeals on matters of fact and law.

[5] As a statutory appeal, the standard of review is that set out in Housen v. Nikolaisen, 2002 SCC 33. On questions of law, the standard is correctness. On questions of fact or mixed fact and law, the standard of review is demonstration of a palpable and overriding error absent an extricable question of law.

The Decision

[6] The Tribunal began the Decision by making the following findings. First, the Tribunal stated that Ducas was unable to identify the source of the leak. Next, the Tribunal noted that Ducas’ experts agreed that the water penetration likely originated in one or more of three areas: (1) the north gable; (2) the valley between the north and south gables; and (3) the junction of the north gable with the valley. The Tribunal appears to have accepted this evidence. The Tribunal then found that it is more probable than not that the cause of the water leakage is ice damming. Fourth, the Tribunal held that Ducas had not demonstrated a second cause of the leaks that is separate from, and not the result of damage caused by, the ice damming.

[7] The uncontroverted evidence was that ice damming was a natural phenomenon that can occur with no fault of the home builder. It was also not disputed that it is not economically or practically feasible to eliminate ice damming, although there are some measures that may be taken during construction to minimize the consequences of ice damming.

[8] The Tribunal noted that that the specific warranty that is applicable in this case is the warranty in s. 15(2)(a) of Ont. Reg. 892 (the “Regulation”) under the Ontario New Home Warranties Plan Act, R.S.O. 1990, c. O.3 (the “Act”) ( the warranty is referred to herein and in the Decision as the “Two-Year Warranty”).

[9] The Tribunal then defined the issue before it as “whether there are breaches of the Two-Year Warranty that have caused or contributed to the water penetration into [Ducas’s] home and, if so, whether [Ducas] is entitled to claim a remedy for any of these warranty breaches.”

[10] The Tribunal found that Ducas had established three violations of the Ontario Building Code (the “OBC”) with respect to the insulation in parts of the attic, the installation of eaves protection on parts of the roof, and the absence of a starter strip on the edge part of the roof (collectively, the “Violations”). The Tribunal further held that such violations constituted breaches of the warranty of workmanship in the Two-Year Warranty as each violation was the result of faulty installation.

[11] The Tribunal directed Tarion to carry out repairs to rectify the Violations. Ducas had sought an order that Tarion “ensure that the necessary repairs be completed to correct the water penetration problem”. Such an order would have required that Tarion first determine the cause or causes of the water leakage. It was assumed that any such determination would entail considerable expense in removing and repairing sections of the interior walls and the roof. The Tribunal concluded that Ducas was not entitled to such relief in the absence of an engineer’s report that identified the cause of the water leakage. The Tribunal acknowledged that, in the absence of the investigation sought by Ducas, whether or not repair of the Violations will fully address the water penetration problem is unknowable.

The Applicable Statutory Provision

[12] As mentioned, the applicable warranty under the Act is the Two-Year Warranty, rather than the broader warranty under s. 13(1) of the Act. The relevant portion of the Two-Year Warranty reads as follows:

(2) Every vendor of a new home warrants to the owner:

(a) that the home is constructed in a workmanlike manner and is free from defects in materials including windows, doors and caulking such that the building envelope of the home prevents water penetration.

I note that, while the Tribunal also referred to the warranty in s. 15(2)(d) of the Regulation early in the Decision, that warranty plays no part in the findings and determinations of the Tribunal.

[13] On a plain reading of s. 15(2)(a) of the Regulation, there are two requirements to establish an entitlement to the Two-Year Warranty: (1) demonstration of a failure to construct the home in a workmanlike manner (I ignore defects in materials as they are not relevant to these appeals); and (2) demonstration that the result of such failure is that the building envelope of the house does not prevent water penetration.

The Forest Grove Appeal

[14] Forest Grove appeals the Tribunal’s order that Tarion undertake the repair of the Violations. It raises five grounds of appeal which engage one general issue, regarding the causation required to satisfy the second requirement of the Two-Year Warranty, and four specific issues, regarding the Tribunal’s factual findings in respect of the first requirement. I will address the issues in that order.

Failure of Ducas to Prove the Source of the Water Penetration

[15] The first and general issue engages the proper interpretation of the Two-Year Warranty. I will address this issue in three steps dealing first with the Respondent’s position, then with the Tribunal’s approach and lastly with my analysis of the issue.

The Respondent’s Position

[16] Forest Grove argues that the Tribunal erred as a matter of law in granting a remedy to Ducas based on the Violations after finding that Ducas had not proven the cause of the water penetration. It argues that Ducas has failed to establish that the Violations contributed to the ice damming that caused the water penetration. It says that the Tribunal should have determined that the cause was ice damming resulting from a lack of homeowner maintenance and that such damage is not warrantable under the Two-Year Warranty.

[17] Tarion takes the same position in these proceedings based on its interpretation of the Two-Year Warranty. In its factum, Tarion expressed its view that a workmanship defect is only warrantable under s. 15(2)(a) if (1) the defective construction element forms a part of the building envelope; and (2) the defective element is “causing or contributing to water penetration.”

[18] The Respondents submit that the language of the Two-Year Warranty requires that a claimant establish a causal connection between a specific violation of the OBC which constitutes a failure of workmanlike construction and the particular instances of water penetration that have given rise to the warranty claim. As the Tribunal found that the probable cause of the water penetration was ice damming, the Respondents’ say that Ducas was therefore not entitled to warranty coverage unless she could establish that the Violations contributed to ice damming at a particular location that caused the water penetration in Ducas’ house. It is implicit in their argument that such a finding cannot be made in the absence of knowledge of the source of the water penetration. They say that the Tribunal had no authority to order a remedy to rectify the Violations in the absence of a finding of such causal connection.

[19] In effect, therefore, the Respondents argue that, in reaching its conclusions, the Tribunal failed to give effect to the second requirement of the Two-Year Warranty as they interpret the second requirement therein. This is therefore principally a matter of the interpretation of the Two-Year Warranty, in particular the causation required between a demonstrated failure of workmanlike construction and water penetration giving rise to a warranty claim.

The Tribunal’s Approach

[20] In respect of each of the three construction defects raised by Ducas’ experts, the Tribunal found violations of the OBC and faulty workmanship due to faulty installation. On this basis, the Tribunal appears to have concluded that there were breaches of the Two-Year Warranty.

[21] The Tribunal does not expressly refer to the second requirement – that the failure of workmanlike construction shall have the result that the building envelope of the home prevents water penetration. I agree with the Respondents that the language of the Decision could therefore be read to suggest that the Tribunal ignored the second requirement of the Two-Year Warranty in reaching its conclusion.

[22] However, as mentioned, the Tribunal defined the issue before it as “whether there are breaches of the Two-Year Warranty that have caused or contributed to the water penetration into [Ducas’s] home and, if so, whether [Ducas] is entitled to claim a remedy for any of these warranty breaches.” It is clear from this statement that the Tribunal understood that the finding of breaches of the Two-Year Warranty giving rise to warrantable claims also required findings that the breaches of workmanlike construction, which the Tribunal referred to overly broadly as “breaches of the Two-Year Warranty,” also caused or contributed to water penetration into Ducas’ home.

[23] The Respondents are also correct that the Tribunal did not require demonstration of an actual causal connection between any of the specific construction defects and any particular episode of water penetration into Ducas’ house. The Tribunal implicitly concluded that the necessary causal connection exists in respect of a violation of an OBC requirement if the particular OBC requirement that was contravened was designed to prevent or minimize water leakage, whether as a result of ice damming or otherwise. On this approach, a violation of any such requirement results in the building envelope of the home failing to prevent water penetration regardless of whether a specific cause of water leakage can be identified.

Conclusion Regarding the Tribunal’s Approach to the Two-Year Warranty

[24] I am of the view that the Tribunal’s implicit interpretation of the Two-Year Warranty was correct for the reasons set out below.

[25] First, and most importantly, the phrase “such that the building envelope of the home prevents water penetration” in the Two-Year Warranty is descriptive of the defects in workmanlike construction that are warrantable. For this purpose, it is significant that not all defects of workmanship give rise to warrantable claims under s. 15(2)(a) – only those which result in the building envelope not preventing water leakage. However, if the defective construction involves a failure to install construction elements that are designed to prevent or minimize water leakage, it must be the case that the building envelope of the home will not prevent water penetration under some circumstances in which it is intended to be able to do so.

[26] The concept is best expressed by asking whether a particular OBC requirement exists to prevent water penetration. If it does, then a failure to comply with the OBC requirement must, by definition, have the result that the building envelope does not prevent water penetration to the extent anticipated by inclusion of the requirement in the OBC.

[27] Second, as mentioned, the Respondents argue that the language of the Two-Year Warranty requires a claimant to establish a causal connection between a construction defect and an actual event of water penetration. However, I see nothing in the language of s. 15(2)(a) of the Regulation that compels such an interpretation. On a plain reading, the phrase “such that the building envelope of the home prevents water penetration” requires no more than a failure of the building envelope to prevent water leakage that is consistent with a demonstrated non-compliance with OBC requirements that are designed to prevent such occurrence. The phrase does not contemplate, much less require, demonstration of a causal connection between a non-compliant construction element and an actual episode of water penetration.

[28] Further, the Respondents’ interpretation is inconsistent with the purpose of the Two-Year Warranty. A new homeowner is entitled to receive a house that has been constructed in accordance with the OBC requirements that are designed to prevent or minimize water penetration. If a builder fails to comply with OBC requirements designed to prevent water leakage in the construction of a new home, the homeowner’s entitlement to a warranty should not depend upon an actual incident of water leakage within two years of construction. Nor should it depend upon the establishment of a causal connection between the non-compliant construction element and a particular incident of water leakage or upon identification of the location of the water penetration.

[29] In this case, as discussed below, the Tribunal had evidence that (1) the Violations were the result of failures of workmanlike construction; and (2) each of the specific OBC requirements that were contravened are designed to prevent or minimize water penetration, whether by minimizing snow melt that might result in ice damming or by otherwise providing leak protection. The Tribunal concluded that such evidence satisfied the requirements for entitlement to the warranty under s. 15(2)(a) of the Regulation.

[30] Based on the reasons set out above, I do not see any error of law in the Tribunal’s application of the provisions of the Two-Year warranty to the facts of this case.

[31] I would also note an alternative position of Forest Grove. Before the Tribunal, the Respondents took the position that the sole cause of the water leaks into Ducas’ home was ice damming. Forest Grove submitted that if ice damming is permitted to recur without repair or proper maintenance, then the action of the ice and water may damage the roof to the point where it will leak during warmer weather. Insofar as Forest Grove also argues that the cause of the water penetration was damage caused to roof elements by ice damming, the argument is entirely speculative. There was no evidence before the Tribunal that supported such position. This issue was not raised directly as a ground of appeal in the present proceeding.

[32] I turn then to the four particular grounds of appeal of Forest Grove.

The Attic Insulation

[33] The Tribunal held there was an OBC violation regarding the insulation in the attic above the sloped ceiling at the front, or west side, of the great room in Ducas’ house in the form of an absence of the required space between the top of the insulation and the underside of the roof sheathing.

[34] The OBC requires that there be a gap of at least 2 ½” between the top of the insulation and the underside of the roof sheathing. The Tribunal accepted the evidence of Ducas’ expert, Stephen MacDougall (“MacDougall”), and there was no evidence to the contrary, that “the space is required to ensure air flow from the soffits to the vents at the top or side of the attic and that this venting is designed to lessen the possibility or severity of ice damming”.

[35] The Tribunal found that Ducas had established that there was a violation of the OBC regarding the installation of the attic insulation in that the attic insulation in the front sloped roof lacked the requisite space between the top of the insulation and the underside of the roof sheathing. The Tribunal then found that this violation of the OBC was the result of a breach of the warranty of workmanship in that the attic insulation was “improperly installed.”

[36] There was also evidence that, as a result of such violation, the building envelope of the home did not prevent water penetration. MacDougall testified that, without the vented space above the insulation, there is heat loss into the attic which heats up the roof surface and increases the snow melt, aggravating ice damming. As mentioned, the Tribunal also referred to his statement that the venting is designed to lessen the possibility or severity of ice damming in expressing its finding. Such evidence establishes that the OBC violation contributes to water penetration and has the result that the building envelope of the home does not prevent water penetration to the extent contemplated by the OBC requirements.

[37] This evidence satisfies the requirements for a breach of the Two-Year Warranty in respect of the installation of the attic protection.

[38] Forest Grove argues that the Tribunal erred in relying on the evidence of Ducas’ experts. It says that Ducas’ experts failed to measure the gap, if any, between the insulation and the wood sheathing and relied entirely on a visual inspection.

[39] However, the evidence of the two Ducas experts based on their visual inspection was clear, unequivocal and uncontradicted. MacDougall’s evidence was that, where he was able to check from the main attic, the sloped section of the attic above the vaulted ceiling had no apparent gap between the insulation and the wood sheathing and there was no viable means of ensuring such a gap. He testified that this was a breach of the OBC. The other Ducas expert, Shawn James (“James”), testified that the space between the insulation and the roof sheathing available for a clear air flow path “is minimal if it exists at all.” There was no apparent need for a measurement to establish a violation of the OBC requirement.

[40] The Tribunal was entitled to rely on the foregoing evidence. I see no palpable and overriding error in the Tribunal’s finding that the attic insulation did not comply with the OBC requirement and that such violation was the result of a failure of workmanlike construction.

Alleged Denial of Natural Justice

[41] Forest Grove also argues that it was denied natural justice in two respects pertaining to the evidence that was admitted by the Tribunal pertaining to the issue of the attic insulation.

[42] First, Forest Grove says that it was denied access to the attic to conduct its own inspection. This does not however appear to have been the case. I accept that James’ report, in which the issue of attic insulation was first raised, was delivered late, shortly before the commencement of the hearing, However, Forest Grove’s expert did have time to prepare a reply report which apparently addressed this issue. Whether Forest Grove’s expert had access to the attic in the preparation of his report is unclear. However, to the extent that he did not, Forest Grove had ample time both before and during the hearing (which was heard over ten months) to request an inspection. It did not do so. It therefore cannot raise this matter as a ground of appeal.

[43] Second, Forest Grove argued that it was denied natural justice by virtue of the Tribunal’s pre-hearing order admitting the late report of James but refusing to admit the reply report of Forest Grove’s expert. The circumstances around this matter are unclear as Forest Grove’s counsel before the Tribunal is now deceased. However, the factum filed by that counsel states that subsequent to the pre-hearing order of the Tribunal, the parties negotiated an agreement to allow both reports to be admitted into evidence. Notwithstanding this agreement, for unknown reasons, Forest Grove’s counsel chose not to call its expert to testify. In such circumstances, there is no basis for Forest Grove’s assertion of a denial of justice.

The Eaves Protection

[44] The Tribunal further held that there was an OBC violation regarding the installation of eaves protection. The eaves protection is an underlay between the shingles and the wooden sheath of the roof. It begins at the edge of the roof overhang and extends up the roof either 36 inches or 48 inches. The OBC specifies that eaves protection be installed at the edge of a roof having a slope less than 7.9:12.

[45] The Tribunal found that the eaves protection installed on the south side of the north gable did not comply with this OBC requirement. It found that the eaves protection in this area was less than the width required by the OBC and did not extend to the edge of the eaves. The Tribunal held that this constituted a breach of the warranty of workmanship on the basis that the OBC violation was due to a faulty installation.

[46] The evidence of Ducas’ experts regarding the purpose of eaves protection was not contradicted. MacDougall testified that the purpose of the eaves protection is to prevent any water that does seep under the shingles during the pooling behind an ice dam from coming into contact with the wooden roof sheath and seeping through it. In other words, the eves protection prevents or minimizes water penetration. James testified that the purpose of eaves protection was to provide moisture protection for conditions such as ice damming. Accordingly, in the absence of proper eaves protection, it cannot be said that the construction was conducted in a workmanlike manner such that “the building envelope of the home prevents water penetration.”

[47] These findings satisfy the requirements for a breach of the Two-Year Warranty in respect of the eaves protection.

[48] Forest Grove submitted that the eaves protection continued under the shingles and that the eaves protection complied with the OBC. In particular, Forest Grove submits that James testimony is not reliable because he did not lift up the shingles to ascertain whether the eaves protection continued under the shingles.

[49] However, the evidence of both MacDougall and James to the contrary was based on their visual inspection of the roof and was again clear and unequivocal on this issue. MacDougall testified that the eaves protection on the south side of the north gable did not extend to the edge of the roof and that there was therefore an unprotected area along the edge of the roof. James testified that the eaves protection was only visible at the edge of the roof. He further testified that, at that spot, the eaves protection did not extend 36” up the roof line. He measured only 21 or 22 inches of eaves protection. He concluded on this basis that there was a violation of the OBC requirement. James was clear that he could see the edge.

[50] In addition, the Tribunal had good reasons for rejecting the evidence of Forest Grove’s expert witnesses. While Tarion’s expert witness, Murdock Brooks (“Brooks”), testified that the roof was in good shape, he did not inspect the roof but, instead, reported on an inspection conducted by Gentech Roofing. Brooks also acknowledged that he and the Gentech Roofing representative were at the home for a very short time only. The Tribunal also noted that there was no evidence of a detailed examination of the roof in either of the reports filed by Brooks and Gentech Roofing or in Brooks' testimony. Moreover, there was no reference in the Gentech Roofing report to the question of eaves protection. The Tribunal also noted that, while Brooks referred to the presence of "felt paper at the eaves," he made no mention of an inspection of the eaves protection for compliance with the OBC.

[51] Forest Grove also argued that neither of Ducas’ experts measured the slope of the roof to determine whether the OBC required eaves protection. However, on this issue, Forest Grove’s own witness, Terry Lamonthe, testified that both the OBC and the plans for the house called for this feature.

[52] The Tribunal was entitled to rely on the foregoing evidence in making its determination. I see no palpable and overriding error of the Tribunal in finding on the basis of the evidence before it that the eaves protection installed on the south side of the north gable did not comply with the OBC requirement and was the result of a failure of workmanlike construction.

The Starter Strip

[53] The Tribunal further held that there was an OBC violation regarding the installation of a “starter strip” along the edge of the valley between the two gables. The OBC requires a “starter strip” at the edge of the roof where the shingles begin. The “starter strip” is required to extend approximately ½” or 12 mm past the eaves to provide “leak protection to the roof’s edge”.

[54] The Tribunal held that the shingles along the edge of the valley between the two gables lacked a “starter strip”, which constituted a violation of the OBC. The Tribunal also found that this OBC violation constituted a breach of the warranty of workmanship as it resulted from a faulty installation. The Tribunal accepted MacDougall’s evidence that the purpose of the “starter strip” was “to provide leak protection to the roof’s edge.”

[55] These findings satisfy the requirements for a breach of the Two-Year Warranty in respect of the absence of a “starter strip.” I see no palpable and overriding error in this conclusion.

[56] In the factum filed by Forest Grove’s previous counsel, Ducas raised the issue of whether the evidence established a requirement for a “starter strip” under the applicable OBC provision. However, Forest Grove did not raise any ground of appeal in respect of the “starter strip” on the hearing of this appeal.

Disposition of the Forest Grove Appeal

[57] Based on the foregoing, the appeal of Forest Grove is dismissed in its entirety.

The Ducas Cross-Appeal

[58] As mentioned, Ducas sought an order that Tarion “ensure that necessary repairs be completed to correct the water penetration problem”, which would require that Tarion determine the cause or causes of the water leakage into her home.

[59] The broadest exposition of Ducas’ argument is set out in paragraph 38 of her Factum. She says that her expert evidence demonstrates that the water leakage problem began with the design of the roof of her house and that the Violations “further exacerbated the conditions of ice damming and is [sic] warrantable under the Act.” She says, further, that “[g]iven that a likely cause or contributing factor is the design of the roof, itself, the Respondent, [Forest Grove] is the most appropriate party to conduct additional testing and/or investigations to determine the flaws of its chosen roof design and what remedial measures can be taken to address this.”

[60] Ducas’ position engages her five principal grounds of appeal which I will address in turn.

The Tribunal’s Findings Entitle Ducas to the Relief Sought

[61] Ducas asserts two grounds of appeal based on the findings of the Tribunal.

[62] First, Ducas argues that the Tribunal erred in failing to conclude that the Tribunal’s findings of three proven Violations entitled her to the relief sought. I am not persuaded however that the Tribunal erred this respect. This conclusion is based on the structure of the Act and the Regulation.

[63] Section 15(2)(a) of the Regulation is expressed as a warranty. Ducas is entitled to a remedy for the three breaches of the warranty that she has established. However, such remedy is limited to repairing the damage resulting from the breach of the warranty itself, either by way of monetary compensation or an order of physical repair. There is nothing in the Act or the Regulation that would give the Tribunal the authority to order relief that extends beyond ordering the repairs necessary to bring the house into compliance with the specific provisions of the OBC that were not in compliance.

[64] Second, Ducas argues, in effect, that the Tribunal’s finding that ice damming was the probable cause of the water leakage should have been sufficient to order a full investigation and rectification of the water penetration.

[65] The Tribunal noted that ice damming is not expressly included or excluded from the Two-Year Warranty. It also noted that Ducas had not demonstrated a second cause of the leaks that is separate from, and not the result of damage caused by, the ice damming. In this respect, it is important that secondary damage is expressly excluded from warranty coverage under s. 13(2)(b) of the Act. The Tribunal then proceeded to identify specific violations of the OBC that were warrantable and to order rectification of those violations. It is implicit in the Tribunal’s approach that, at least in the present circumstances, ice damming per se is not warrantable under the Act. I agree.

[66] For ice damming to be warrantable, it must be demonstrated to be the result of a failure to construct a home in a workmanlike manner. In this case, the only evidence before the Tribunal that could establish such causation pertained to the design of the home. However, while MacDougall and James both testified that the design of the roof line and eaves troughs meant that the valley between the two gables funneled a large portion of the water drained from the front of the roof, neither testified that this design violated OBC requirements or constituted a design flaw according to industry practice. Moreover, both MacDougall and James agreed that ice damming was a naturally occurring phenomenon and that it could occur with no fault of the builder. The Tribunal also accepted the evidence of Brooks that there are two reasonable homeowner maintenance requirements that could prevent ice damming - snow removal and installation of heating cables. Ducas acknowledged that she did neither of these things. In the absence of evidence of actual ice damming that was a consequence of a recognized design flaw of the house layout, the finding of ice damming by itself could not support a remedy of the nature sought by Ducas.

[67] Based on the foregoing, I am of the view that Ducas failed to demonstrate that, in the circumstances of this case, the existence of ice damming by itself was a warrantable claim under the Two-Year Warranty.

The Onus to Investigate

[68] Ducas suggests, as an alternative argument, that the onus to prove the cause of the water penetration should shift to the builder after a breach of the Two-Year Warranty has been established. On this basis, Ducas argues that the Tribunal erred by failing to place the onus on Forest Grove to conduct an investigation of the cause of the water penetration after she had established the three Violations.

[69] There is no authority for such a reverse onus in the language of the Act or the Regulation, which Ducas acknowledges. I do not accept that the Tribunal had this authority merely because it is to be viewed as consumer protection legislation, as Ducas suggests.

[70] Ducas submits that the Tribunal had the authority to grant the remedy she sought pursuant to two cases upon which she relies. Both of these decisions are, however, unique on their facts and distinguishable from the present circumstances for the following reasons. Neither decision evidences the Tribunal’s authority under the Act to impose an obligation on either of the Respondents to investigate and remedy the cause or causes of the water leakage in Ducas’ home in the circumstances of this case.

[71] In Ontario (4175-4414 ONHWPA-Claim), (Re) [2008] O.L.A.T.D. No. 188, the builder volunteered to investigate the foundation further and the parties agreed to a consent order of the Licence Appeal Tribunal. There is therefore no precedential value to this decision. In Re Cecilio [2008] O.L.A.T.D. No. 1, the builder had chosen to construct a party wall using a method that was not prescribed in the OBC. The homeowner claimed there was undue noise transference through a party wall. The builder was of the view that its method met the required acoustical standards. The issue was who should bear the onus of such demonstration. The Divisional Court held that, in such circumstances, the builder could not rely on the presumption of compliance with the OBC requirements and therefore should have the onus. These circumstances are not analogous in any way to the present circumstances. In particular, as mentioned, there is no suggestion that the design of Ducas’ house violated OBC requirements or constituted a design flaw according to industry practice.

The Tribunal’s Pre-Hearing Order

[72] Ducas suggests that the Tribunal erred in law in denying her the relief sought as a result of her non-compliance with the Tribunal’s pre-hearing order that she provide access to the Respondents during the roof inspection by her expert. She bases this view of the Tribunal’s actions on the following statements in paragraphs [34] and [60] of the Decision:

… [Ducas] was ordered to conduct an engineer's inspection of the house to establish the source of a leak and to grant access to both Tarion and the builder to attend during the inspection. [Ducas] did not comply with this Order in a way which permitted either Tarion or Forest Grove to attend during the inspection. There are consequences to [Ducas] for her non-compliance. As will be discussed below, her refusal to follow the Order results in her being denied the remedy she seeks. However, it is not accurate to say that either Tarion or Forest Grove was denied access to the attic. …

[Ducas] cannot profit from her failure to follow the Order of this Tribunal by requiring Tarion to carry out what she declined to do.

[73] Ducas’ argument is based on a misreading of the Decision. As mentioned above, in paragraph [34], the Tribunal also stated that it was not accurate to say that either Tarion or Forest Grove was denied access to the attic. Instead, it is clear from the statements in paragraph [6] of the Decision that Ducas’ non-compliance with the pre-hearing order to which the Tribunal was referring was her failure to authorize an inspection that involved sufficient testing to enable her experts to determine a more specific cause of the water penetration problem than ice damming, or an additional cause. The significance of this failure for the Tribunal was that Ducas was unable to identify the source of the leak and therefore any cause of the water leakage in addition to the three Violations. In these circumstances, the Tribunal’s authority was limited to ordering repairs that remedied the Violations that had been established. Paragraph [59] refers to the fact that Ducas’ experts were unable to determine the cause of the water penetration because of Ducas’ instructions. The statement of the Tribunal in paragraph [60] refers to the limitation of the Tribunal’s authority that resulted from her decision.

[74] In short, while Ducas did fail to comply with the Tribunal’s pre-hearing order in a manner that permitted either of the Respondents to attend during an engineer’s inspection of her house, there is no evidence that the Tribunal penalized Ducas for this action

The Brooks Expert Evidence

[75] Ducas argues that the Tribunal erred in accepting Brooks as an expert witness. To the extent that her argument was based on the applicable rules of the Tribunal, it appears that Ducas was in error and that the Tribunal had the discretion under the rules to accept Brooks’ evidence.

[76] In any event, the Tribunal did not rely on any expert evidence of Brooks in reaching its conclusions. The Tribunal did not accept Brooks’ expert evidence regarding either the eaves protection or the “starter strip.”. There is no mention of any evidence of Brooks regarding the attic insulation. While the Tribunal did accept certain non-expert evidence regarding ice damming and homeowner maintenance in managing snow and snow melt, such evidence was non-controversial and, in any event, was not relevant for the Tribunal’s determinations. Further, Brooks’ evidence regarding ice damming as the cause of the water penetration is entirely consistent with, rather than contradictory of, the evidence of MacDougall and James.

Alleged Failure to Accept Industry Standards

[77] Lastly, Ducas argues that the Tribunal erred in finding that “industry standards” are not contemplated by the term “workmanlike manner” under the Act. I do not agree.

[78] There is no dispute that “workmanlike manner” under the Act means “meets industry standards”: see, for example, Ontario (9147/ONHWP), (Re), [2015] O.L.A.T.D. No. 116 at paras. 24 and 25. In the present case, “industry standards” means the requirements of the OBC in respect of the three Violations. The Tribunal expressly found that, in each case, the violation of the OBC constituted a breach of the warranty of workmanlike construction.

[79] Ducas’ argument is based upon paragraph [57] of the Decision. In that paragraph, the Tribunal referred to the evidence of MacDougall who apparently described a number of steps that could be taken to help minimize damage from ice damming that were not identified in the Decision. MacDougall testified that these actions are not OBC requirements although he characterized them as “standard industry practices”. James also testified regarding certain identified measures which he regarded as “usual practices in the roofing trade”.

[80] The Tribunal refused to consider any of these practices as subject to the “workmanlike standard” such that their absence constituted further breaches of the Two-Year Warranty. I see no palpable and overriding error in this conclusion for the following two reasons.

[81] First, James’ personal views regarding “usual practices in the roofing trade” are not sufficient to establish standard industry practice in the absence of an OBC requirement. As indicated in Ontario (9147/ONHWPA), (Re), supra, this would require more objective evidence than was before the Tribunal. Second, the evidence before the Court established that the practices referred to by MacDougall and James were more properly characterized as “best practices”. In particular, as the Tribunal noted, neither expert identified the lack of these features as evidence of poor workmanship or a defect in materials. In short, what Ducas refers to as “industry standards” are, in fact, best practices which, as the Tribunal noted, are not warranted under the Act.

Disposition of the Ducas Cross-Appeal

[82] Based on the foregoing, the cross-appeal of Ducas is dismissed in its entirety.

Conclusion

[83] For the reasons set out above, both the appeal of Forest Grove and the cross-appeal of Ducas are dismissed. Forest Grove and Ducas have agreed that, in such circumstances,

each party will bear its own costs. Neither Tarion nor the Tribunal seek their costs of these proceedings. Accordingly, no costs are awarded in respect of this appeal.

Wilton-Siegel, J.

I agree _______________________________

Lederer, J.

I agree _______________________________

Kristjanson, J.

Released: September 7, 2021

DIVISIONAL COURT FILE NO.: 388/18

DATE: 20210907

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

Wilton-Siegel, Lederer, Kristjanson, JJ..

BETWEEN:

Elaine Ducas

(Respondent in Appeal/Appellant in Cross-Appeal)

– and –

Tarion Warranty Corporation

(Respondent in Appeal/Respondent in Cross-Appeal)

– and –

Forest Grove Homes Limited

(Appellant in Appeal/ Respondent in Cross-Appeal)

REASONS FOR JUDGMENT

Wilton-Siegel, J.

Released: 2021/09/07