COURT FILE NO.: 1769/18
DATE: 2020/04/14
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: 375 Lakeshore Developments Inc., Plaintiff
AND:
1695895 Ontario Inc. c.o.b. Wilson Project Management, Richard Wilson, WPML Inc., Prana Masonry Inc., Architectural Accents c.o.b. Stonerox et al., Respondents
BEFORE: Justice J.C. George
COUNSEL: Kyle MacLean, counsel for the Plaintiff
Michael Owsiany, counsel for the Non-Party Respondent Tarion Warranty Company
Non-Party Respondents Alfred Kasik & Beth Bontigao-Kasik, Daniel Paulk & Margaret Schroll, Tiberiu & Anna Wachter, Walter & Olga Kaminskyj, self-represented
HEARD: April 9, 2020
DATE: April 14, 2020
THIS MOTION WAS HEARD BY TELECONFERENCE PURSUANT TO THE PROTOCOL IN PLACE DURING THE SUSPENSION OF NORMAL COURT OPERATIONS DUE TO THE COVID-19 OUTBREAK
ENDORSEMENT
[1] Pursuant to r. 32.01 of the Rules of Civil Procedure the Plaintiff seeks the following relief:
an order permitting it, through its duly authorized agents and expert witness, to attend the property previously known as 375 Lakeshore Road W., Mississauga (presently known as 37, 39, 41 and 43 Godfrey’s Lane) for the purpose of inspecting the real property and to take samples, make observations or conduct tests or experiments with respect to the mechanical heating systems and internal temperatures at the premises;
an order compelling Tarion Warranty Company to temporarily suspend any planned demolition work of the concrete slab located in the ground floor of the premises until the data collection is complete;
an order authorizing the Plaintiff’s agents and expert witness to enter on and into the premises for the purposes of data collection;
an order permitting the Plaintiff’s agents and expert witness to measure, survey, or photograph the premises or any particular object or operation at the premises;
an order permitting the Plaintiff’s agents and expert witness to take samples, make observations or conduct tests or experiments provided that the real property or personal property of the homeowners of the premises is not damaged, and that the planned remedial work being controlled by Tarion is not unreasonably delayed or impacted;
a preservation order; and
an order that would compel it to share the findings, opinions and conclusions of its expert, unless it undertakes not to call its expert as a witness at trial.
[2] None of the Defendants filed materials or participated at the hearing. Non-party Respondent Tarion – who is administering ongoing statutory warranty claims at these homes - did, as did the impacted homeowners. They all oppose the motion.
[3] I addressed a similar motion by the Plaintiff earlier this year (January 24, 2020) when I granted its request to allow its engineering representatives to attend at and inside the units in question to measure, survey, make observations, and conduct tests and or experiments. As pointed out by Tarion’s counsel on the present motion, the following passage in my January endorsement (para. 21) is important and of some relevance to the issue at hand:
- In my view, the concerns raised by Ms. Rieder in her affidavit, and by Tarion’s counsel in argument, are adequately addressed by Plaintiff counsel in the draft order he has proposed. For example, he proposes that the Plaintiff and its duly authorized agents must attend at unit 15 on or before January 31, 2020 in order to assess, sample and balance the mechanical heating system in that unit. In addition, the Plaintiff would be required to remove all testing equipment and sensors on or before March 2, 2020, which is the date the slab removal is to occur at that unit. As a further example, in respect of unit 16, the deadline he proposes is February 7, 2020 for the assessment and balancing and that all testing equipment and censors be removed on or before March 9th which would allow Tarion to proceed with the remedial work in that unit as scheduled.
[4] At paras. 23 and 24 I continued:
Furthermore, I specifically find, as required by r. 32, that the inspection appears to be necessary for the proper determination of an issue in a proceeding, and that the inspection and testing proposed by the Plaintiff falls within the purview of sub rule (2).
I appreciate the rule is permissive, which means even if I deem the inspection necessary, I can still decline to make an order if it is otherwise not appropriate in the circumstances. However, in this case I am prepared to exercise my discretion in favour of the Plaintiff.
[5] The point in highlighting these comments is to make clear that my initial order was specifically designed so as to not delay the remediation work to be done on these units. Which, in my view, is precisely the impact an order in the Plaintiff’s favour would now have.
[6] The Plaintiff argues that, irrespective of my initial order’s design, a delay in the remediation efforts would not cause a hardship or be prejudicial to either Tarion or the homeowners. In its Notice of Motion, at paras. (y) and (z) under the heading ‘Grounds’ the Plaintiff puts it this way:
(y) There is no conceivable prejudice to Tarion, or the Unit Owners, if an order under Rule 32 of the Rules of Civil Procedure for the inspection of the Premises and the Data Collection is granted in favour of [the Plaintiff];
(z) [The Plaintiff] will not unreasonably delay or interfere with any of the Repair Work.
[7] For reasons I will now explain, I disagree. To grant the order requested will interfere with and unreasonably delay the repair work contemplated.
[8] This is perhaps a good time to step back and provide a broad overview of the facts. The Plaintiff was the previous owner of the premises, an 18-unit luxury townhome. It developed the property and sold the homes to the homeowners in question. The general contractor it hired to complete the project (Wilson Management) is a Defendant in this action, in which the Plaintiff sues for various deficiencies with the premises including for the installation of inadequate insulation which is believed to be a contributing cause to heating issues at its ground floor slab edges.
[9] Tarion is the non-profit corporation designated by the provincial government to administer the Ontario New Home Warranties Plan Act, a piece of consumer protection legislation. Tarion’s mandate is to conciliate warranty disputes between vendors (in this case the Plaintiff) and homeowners by deciding which defects fall within the statutory warranties. It also backstops these warranties by resolving claims directly with homeowners in cases where vendors fail to meet their warranty obligations; see Affidavit of Samantha Rieder sworn January 21, 2020.
[10] In this case the homeowners submitted their warranty claim to Tarion (copying the Plaintiff) which initiates what Ms. Rieder described as the ‘Builder Repair Period’. The vendor is then afforded an opportunity to assess and resolve the claim. As the issue with these premises was deemed a ‘Major Structural Defect’ the Plaintiff had 90 days to conduct its assessment the claim and resolve it to the homeowners’ satisfaction. This was not achieved.
[11] This inability to resolve the outstanding issues led to Tarion’s more direct involvement. At that point it was to engage a ‘Conciliation Process’ which involves a home inspection and assessment of whether the defects claimed are in fact warranted. Tarion ultimately determined that they were covered which created a further deadline for the vendor (Plaintiff) to fix the problem. Only if a vendor is unwilling or unable to do so does Tarion step in and backstop the warranty, meaning it will conduct the repairs. This is the stage we are at with the demolition of the concrete slab floors slated to occur in March 2020, which has obviously passed.
[12] According to Tarion and the homeowners, while the remedial work has been delayed - due in large part to the current public health crisis (Covid-19) - the work is scheduled to occur before next winter. This is significant for several reasons. First, the deficiency in the floor makes it difficult to heat the units which obviously creates a hardship for the homeowners. Second, this is a particularly acute concern given the advanced age of many of these homeowners.
[13] Even though the Builder Repair Period had expired when I made the January order, I granted it any event determining the elements of r. 32.01 were met and that there would be no prejudice to either Tarion or the homeowners. Those conditions no longer exist.
[14] A balance must be struck between the Plaintiff’s desire to collect evidence and adequately prosecute its claim, and the need to allow the process Tarion and the homeowners are currently involved in to proceed in a timely manner. This balancing is precisely why an order under r. 32.01 is discretionary, and in this case I decline to exercise my discretion to allow further testing. In arriving at this conclusion I am mindful of the fact that the very purpose of the legislation is to protect consumers; folks in circumstances like these homeowners. At this stage their needs must take priority.
[15] The bottom line is this: The Plaintiff, as vendor, had its opportunity to remedy the deficiencies in question. While I did extend to them one opportunity to conduct testing and collect data, to grant another order would be to, in effect, needlessly inject them back into the claims process. While the Plaintiff makes this request in good faith and for a reasonable purpose, to grant the motion in these circumstances would be to allow it to disrupt a claims process which appears designed to exclude them.
[16] The work scheduled to proceed once the public health crisis subsides, which is hopefully before the cold weather returns, must be allowed to proceed unimpeded.
[17] The rule contains permissive language which, in this case, means that even though the proposed inspections and data collection might be necessary and allowed for under the provision, it is not appropriate given the unique circumstances. Beyond the current public health crisis, and whatever else might be slowing the work down, I simply cannot permit any further delay to the compensation process.
[18] The Plaintiff’s motion is, therefore, dismissed.
[19] No order for costs.
Justice Jonathon C. George
Date: April 14, 2020