The problem was that the building had not been constructed to accommodate any differential movement whatsoever. Any seasonal movement would continue to cause damage in the same area. Logically, then, the house “was not constructed in accordance with … the requirement … to provide for the known soil movement in the design of the building.”

Builder liable to new home owners for damage caused by differential movement

by Michael MacKay

New Home Warranty • Damage caused by differential movement between house and garage • Major Structural Defect • Failure to design and build to Code • Breach of Warranty • Remedy • Declaration

Boak v. New Home Warranty Program of Manitoba Inc.

In February 1994, the Boaks bought a new home from the Builder, Park Valley Homes Inc. in south Winnipeg. A five-year warranty under Manitoba’s New Home Warranty Program covered the house for up to $30,000 in damages.

Justice Suche was called upon to determine whether the Warranty covered damage that appeared at the junction between the house and its attached garage and porch.

Background

The problem first appeared as minor cracks in the drywall on the walls and ceiling at the front of the house that, despite the Builder’s repairs, worsened and increased over time. In 1997, the front wall and ceiling started to separate. By May 1999, one of the columns overhanging the porch detached, and the garage appeared to be separating from the house.

In May 1999, the Boaks claimed under the Warranty. Their engineer concluded that the damage was due to differential movement between the foundations of the house and garage, which extended to the framing at the intersection of the two parts of the structure. If ignored, the problem would continue or get worse. He recommended structural repairs, in addition to repair of the cracking to various surfaces.

The Program had the Builder investigate. He said that the problem was not structural, but was due to the Boaks’ failure to maintain the grade along the front wall of the house, which caused the soil to swell around the front footing/wall system.

The Program denied the Boaks’ claim, saying that the foundation movement was normal and that the construction complied with the Manitoba Building Code.

The Boaks sued.

In summing up the problem, Justice Suche said:

Differential movement is not uncommon in structures supported by spread footing foundations built on this type of soil, [a highly plastic clay, which is susceptible to volume changes due to changes in moisture content]…. It is also not unusual for a certain degree of rebound of the soil to occur, due to the removal of the significant volume of soil when the basement is excavated. This typically appears within the first year following construction and will stabilize within a year or so after that. This was, in fact, the [Builder’s] initial assessment when it heard of the [Owner’s] complaints.

No one disputed that differential movement between the two different foundation systems used to support the home caused the damage. The house was on spread footings, while 20-foot friction piles supported the garage and porch. Thus, the main house, on spread footings, was affected by expansion or contraction of the underlying soil. The garage and porch, on the much deeper friction piles, were not.

To win, the Boaks had to first prove that there was a “Major Structural Defect” covered by the Warranty. For the Warranty to cover according to its terms, the Boaks had to establish that the Builder had not built to Code.

Issue: Was the House Built to Code?

The Builder admittedly did not carry out any specific subsurface investigation; it was not its practice to conduct soils tests for every house it builds. The soil conditions in the Winnipeg area are well-known and generally uniform.

The evidence satisfied Justice Suche that the Building Code did not specifically require the Builder to perform soil testing.

Winnipeg’s Plan Examination Administrator testified that the city did not require subsurface investigations for this type of building. The Code permits this explicitly, under section A-4.2.2.1, which states:

Where acceptable information on subsurface conditions already exists, the investigation may not require further physical subsurface exploration or testing…

and implicitly, under section 2.5.1.3, which provides that:

…methods of design and construction procedures not specifically described herein …may be used if it can be shown that these alternatives are suitable on the basis of past performance, tests or evaluations.

The Builder had done what the Code required in terms of subsoil investigations.

In addition, however, the Code required the Builder to accommodate some heaving and subsidence:

The foundation of a building shall be proportioned so that the estimated total and differential movements of the foundation are not greater than the movements that the building is designed to accommodate.

The evidence was that the Boaks’ “house foundation rose from 1 to 2 inches due to soil swelling beneath the footing” — a typical amount in south Winnipeg.

The problem was that the building had not been constructed to accommodate any differential movement whatsoever. There were no control joints between the house and the garage or porch, even at the interconnection of the garage roof trusses with the main house’s, to allow the house to move without having any impact on the garage and porch. Unless fixed, the shear plane created thereby would remain active throughout the life of the house, so that any seasonal movement would continue to cause damage in the same area.

Logically, then, the Boaks’ house “was not constructed in accordance with … the requirement … to provide for the known soil movement in the design of the building.”

Did Any Exclusion in the Warranty Apply?

The Boaks, having established a prima facie case that the Warranty applied, would succeed unless the Builder and the Program could prove that some term of the Warranty excluded or voided such coverage.

The Builder and the Program argued that two such terms applied: article 5(d) and article 15(e).

If the cause of the differential movement was simply soil subsidence or heaving, the Warranty would not apply: article 5(d) specifically excluded that situation from the definition of a Major Structural Defect.

Similarly, if the damage occurred because the Boaks failed to maintain adequate drainage or surface water away from the foundations walls, their breach of article 15(e) would void the Warranty.

Justice Suche rejected both arguments. She noted that article 5(d) simply means that subsidence or heaving is not a Major Structural Defect as defined by the Warranty. It does not eliminate the Builder’s more general obligation for damage due to defects in workmanship or materials in article 1(d) of the Warranty.

In fact, the exclusion for soil subsidence did not apply. It was the design and construction of the house so that the two parts responded differently to expected soil conditions, not the soil movement per se, that caused the damage. The main house would move as the soil heaved or subsided, while the attached garage and porch would not, invariably pulling the structure apart along the shear plane.

Similarly, Justice Suche concluded that the Builder and the Program failed to prove the Warranty void on the ground that the Boaks caused the problem because they failed to maintain adequate drainage of surface water away from the foundation wall. While there was evidence that the Boaks may have changed the grade to the south side of the house in a minor respect and on occasion failed to ensure that the downspout extensions were attached at all times, there was no evidence that this had any impact whatsoever. To the contrary, the weeping tile system and sump pump functioned properly, and had never been overcome — proof that the drainage was adequate and that excessive surface water was not accessing the foundation walls. Clear and cogent evidence of a breach of article 15(e) was necessary for the Boaks to lose the benefit of the Warranty. The evidence here simply did not meet that standard.

Liability

The defendant Program had breached its obligation under the Warranty to repair the Major Structural Defects. By the time of trial, however, the Boaks had not repaired the problem either. They did have an estimate of $49,891 to perform the remedial work: installing control joints between the house and garage, and cutting the existing piles under the garage and installing eight-foot bell piles.

Because they had not yet spent any money, the Boaks’ were not entitled to a cheque from the Builder and the Program. Instead, Justice Suche issued a declaration that a Major Structural Defect caused the damage to their house, which the Program was liable to repair. Upon the Boaks giving invoices to the Program of their actual repair costs, it would have reimbursed them up to the Warranty’s $30,000 maximum. In turn, the Builder would be required to reimburse the Program.

Manitoba Court of Queen's Park
   C. Suche J.
   August 20, 2007