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ARBITRATION Under the Regulation Respecting the Guarantee Plan for New Residential Buildings (O.C. 841-98 June 17, 1998, c. B-1.1, r.0.2, Building Act, Revised Statutes of Quebec(R.S.Q.), c. B-1.1, Canada) |
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_______________________________________________________________________________ |
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Between |
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REETU SINGH MINHAS |
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Beneficiary |
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And |
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HABITATIONS GERMAT INC. |
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Builder |
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And |
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La Garantie des bâtiments résidentiels neufs de l’apchq inc. |
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Plan Manager |
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No. Ref. Guarantee Plan: |
062555-2 |
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No. Ref. GAMM: |
2009-19-006 |
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No. Ref. Arbitrator: |
13 185-58 |
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_______________________________________________________________________________ |
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ARBITRATION DECISION |
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_______________________________________________________________________________ |
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Arbitrator: |
Mtre. Jeffrey Edwards |
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For the Beneficiary: |
Ms. Reetu Singh Minhas |
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For the Builder: |
Mr. Régisse Daoust Mr. Stéphane Généreux Habitations Germat Inc. |
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For the Plan Manager: |
Mtre. Patrick Marcoux Savoie Fournier |
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Date of hearing: |
April 27, 2010 |
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Hearing location: |
177 Lamarche Street, Laval, Quebec |
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Date of decision: |
May 7, 2010 |
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After having read the proceedings, VISITED THE PREMISES, heard the PROOF and argumentS of all parties PRESENT AT THE HEARING, the Arbitration Tribunal renders its decision As follows:
1. FACTS AND PROCEeDings
[1] The Arbitration Tribunal is called upon to decide an arbitration application by the Beneficiary Reetu Singh Minhas of November 25, 2009 (Exhibit A-10) from a decision of the Plan Manager (Joanne Tremblay, T.P.) dated October 29, 2009 (Exhibit A-9) (“Decision”).
[2] On June 28, 2004, the Beneficiary Reetu Singh Minhas acquired with her grandfather Ranjit Singh Minhas and grandmother Kuldipkaur Minhas a property (“Property”) located in Laval. The house on the Property was built by the Builder. The grandfather died on June 19, 2007 in India. Subsequently, the ownership of the entire property was transferred to the Beneficiary Reetu Singh Minhas. The house was covered by a Warranty Plan Contract issued by the Plan Manager (Exhibit A-1). During the hearing, the Beneficiary was assisted by her father, Rajvir Singh Minhas.
[3] The Beneficiary first sent a letter dated November 19, 2004 (Exhibit A-4) to the Builder and to the Plan Manager notifying of various alleged defects and problems with the Property. The Builder did not respond and then the Beneficiary made a complaint and opened a file at the Plan Manager in accordance with Article 18 (2) of the Regulation respecting the Guarantee Plan for New Residential Buildings[1]. An inspection was made by Pierre Rocheleau of the Plan Manager and a decision was rendered by him on January 17, 2005 (Exhibit A-6). Thereafter, some of the work, agreed to by the Builder and confirmed by the Plan Manager in the decision (Exhibit A-6), was not completed.
[4] On June 20, 2005, the Beneficiary sent a new demand letter (Exhibit A-5) to the Builder and the Plan Manager complaining that the Builder was not complying with his commitments under the decision of January 17, 2005. The Plan Manager’s inspector, Pierre Rocheleau then inspected a second time and concluded that the work agreed to by the Builder was indeed not performed. On August 1, 2005, the Plan Manager issued an Addenda (Exhibit A-7) to the decision (Exhibit A-6). By its Addenda decision, the Plan Manager ordered the Builder to perform the work agreed to under the decision of January 17, 2005. According to the proof heard before the undersigned, most of that outstanding work was then performed by the Builder.
[5] However, the letter of the Beneficiary dated June 20, 2005 (Exhibit A-5) did not only complain that certain work agreed to was not completed. It also contained a 12 point list of new problems notified to the Builder and the Plan Manager. Some points on that list appear to have been repaired, others not (see annotations on letter Exhibit A-5 in the Binder of Exhibits of the Plan Manager).
[6] However, despite her view that certain work had not been completed, the Beneficiary omitted to make a written complaint, open a claim with the Plan Manager or pay the prescribed fee in accordance with article 18 (2) of the Regulation in order to trigger the inspection and decision process by the Plan Manager. Therefore, no inspector of the Plan Manager was ever sent to examine and render a decision on the second list of points.
[7] Finally, on June 11, 2009, the Beneficiary made a complaint and opened a file with the Plan Manager (Exhibit A-11). The complaint included 4 points as well as a copy of the letter of June 20, 2005 (Exhibit A-5) which included the second list of 12 points and also complained that the work performed as ordered under the Addenda decision of August 1, 2005 (Exhibit A-7) was not properly carried out.
[8] What happened over the period from August 1, 2005 (Exhibit A-7) to June 11, 2009 (Exhibit A-11)? That is a period of almost 4 years or 46 months.
[9] The Beneficiary states that she called the Builder and the Plan Manager and that her calls were not returned or followed up upon. Mr. Rajvir Singh Minhas states the same thing. Mr. Minhas says he spoke to an attorney who said that he would have to wait for the administrative process to advance and be completed. It was also stated that the late Beneficiary Ranjit Singh Minhas, now deceased, was away in India for two years and could not complain about his lack of satisfaction. Finally, it was said that the late Mr. Ranjit Singh Minhas asked members of his family not to make a written complaint to the Plan Manager on the basis that the Builder is a large and reputable company and will do the necessary work.
[10] These various explanations are far from convincing to the undersigned. A certain delay could be accepted or extended if the Beneficiary showed diligence in pressing her rights. But a period of almost 4 years is completely excessive and unreasonable. The attorney of the Plan Manager acknowledges that the Plan Manager has a policy that grants the same legal protection (1 year, 3 years or 5 years) under the Warranty Plan for work performed under order of the Plan Manager. But the attorney also states that the requirement of written notification within 6 months of knowledge also applies and was not respected. The undersigned agrees in the circumstances with the assertion of the attorney of the Plan Manager in that regard for all work listed in the Beneficiary’s letter of June 20, 2005, Exhibit A-5 and listed in the Addenda Decision of August 1, 2005 (Exhibit A-7). In the Decision (Exhibit A-8), subject to the present arbitration application, the Plan Manager rejected that claim under point 4 for these reasons. The arbitrator agrees that that Decision on that point is well founded and should not be disturbed.
[11] In her complaint of June 11, 2009, the Beneficiary also complains that the Builder mismatched two colors of wood for the wood floors in the house. This was mentioned in the original demand letter of November 19, 2004 (Exhibit A-4) and decided upon and rejected in the first decision of the Plan Manager of January 17, 2005 (Exhibit A-6). There was a thirty (30) day period to ask for arbitration of that decision. At the time of writing of the present arbitration decision, the deadline to request arbitration had expired some 5 and half years ago. The Beneficiary complains that the notice regarding the right to arbitrate was not contained in that decision, as it was in the Decision dated October 29, 2009 (Exhibit A-9). The attorney of the Plan Manager explains that the policy regarding the insertion of the notice of appeal dates only from 2006. In any event, the right to ask for an arbitration of the Decision of January 17, 2005 was clearly stated at paragraph 2.1.2 of the Preliminary Contract and Contract of Warranty in the possession of the Beneficiary (Exhibit A-1). The Arbitrator finds no ground to intervene on this point.
[12] There are three (3) other points dealt with by the Decision (Exhibit A-9).
Point 1: Cap missing from plumbing vent
[13] The inspector of the Plan Manager confirmed that the plumbing vent cap was missing but did not consider that it was covered by the Warranty Plan since at the time of the complaint only the legal protection of five (5) years for a major construction defect was still effective. As this is a defect, irrespective of the coverage under the Warranty Plan, the Builder’s representatives agreed at the hearing to perform the repair work to eliminate the problem. The time period agreed to effect this repair is thirty (30) days from the present arbitration decision. The Arbitration Court takes act of that agreement between the Builder and the Beneficiary. That agreement does not bind the Plan Manager and the arbitrator does not set aside the conclusion on this point in the Decision.
Point 2: Water infiltration in the Kitchen
[14] There have been intermittent water leaks in the ceiling of the kitchen. It has been difficult to know what the cause is. Damages were at first minor. As the problem was intermittent, it was difficult for the Beneficiary to ascertain the nature, existence or seriousness of the problem. When the Beneficiary did make the complaint on June 11, 2009 (Exhibit A11), the cause of the problem was still not known or understood. From the proof, the Beneficiary did verbally advise the Builder (a certain Dany) but despite promises, nothing has been done by the Builder. It appears that it was just before or soon after June 11, 2009, that the problem manifested itself for the first time its importance and extent. In fact, soon after the complaint was made, the Beneficiary and Mr. Ranjit Singh Minhas explained to the Arbitration Court that now, every time it rains hard, water comes in from the cieling. They stated that water had even come in above the ceiling lamps, which were luckily turned off at the time. The defect causing this problem as well as the damage have appeared gradually. In accordance with the interpretation of Article 1739 C.C.Q.[2], Article 2926 C.C.Q., and article 27,5o of the Regulation, it is clear that the Beneficiary only discovered for the first time the seriousness of the defect and the damage within a period of six (6) months from the date of June 11, 2009.
[15] The undersigned examined the damages caused by the water infiltration into the ceiling of the kitchen. The damages are extensive: the ceiling gyprock joints are showing, the gyprock is deformed and there are large water stains all over the ceiling. There is no doubt substantial further water damage, the extent of which has to be determined by opening the ceiling and other required areas, behind the gyprock ceiling and the other affected finishings. The undersigned is of the opinion that this is a major defect satisfying the criteria of Article 2118 C.C.Q. The water infiltration is already causing an electrical safety risk and in the short and mid-term, the continuing damage will cause a partial loss to the building.
[16] Accordingly, the Builder will have to determine the cause of the problem and make all necessary repairs to fix it.
Point 3: Water infiltration in THE UPSTAIRS’ bathroom
[17] The proof regarding this problem is less clear. The inspector of the Plan Manager considered that the water leaking at the base of the bathroom windows was due to condensation. The undersigned suspects that that conclusion of fact is erroneous since the water is not simply running off the windows. The wall adjacent to the lower corner of the window molding and around the windows show water stains. However, without further proof, the Arbitrator is not convinced that the seriousness of this defect is one that meets the criteria of partial loss under Article 2118 C.C.Q. As such, without affecting any right at civil law of the Beneficiary vis à vis the Builder, the Arbitrator will not revise this point of the Decision.
[18] However, the investigative work to determine the cause of the water infiltration in the kitchen for the previous point (Point 2) may show that it is the same cause as the problem in the upstairs bathroom. In that case, the work to eliminate the water infiltration problem in the kitchen may also resolve the bathroom problem.
2. Arbitration costs
[19] In accordance with Article 123 (2) of the Regulation, as the Beneficiary obtained a favorable decision on at least one of the elements of her claim, the arbitration costs are to borne by the Plan Manager.
For these reasons, the Arbitration Tribunal:
GRANTS in part the Arbitration Application;
ORDERS the Builder Habitations Germat Inc. to perform the work stated at paragraphs 15 and 16 of the present Arbitration Decision, according to the rules of the trade, within a period of forty five (45) days of receipt of the present decision;
On default of the Builder to perform the above stated work within the stipulated time period, ORDER the Plan Manager to perform the said work within a supplemental period of forty five (45) days;
ORDERS that the costs of the present arbitration be borne by
the Plan Manager.
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Mtre. Jeffrey Edwards, arbitrator |