Michael MacKinnon was still doing a slow burn 10 years after a fire ripped through the roof of his former Hamilton residence.

Why?

MacKinnon believed repairs performed by a contractor recommended by his home insurance company had cost him almost $30,000. When MacKinnon and his wife, Katherine, tried to sell their Forestgate Drive home in 2006, a home inspector hired by a potential buyer discovered mould in the attic.

The buyer backed out of the sale. The MacKinnons eventually did sell the house on Jan. 18, 2007, after their insurance company asked the contractor to fix the problem. The actual selling price was only $246,000.

"On July 1, 2006, a buyer signed an offer to purchase the house for $275,500, conditional on a home inspection," MacKinnon told Action Line. "A day or two later, the home inspection discovered mould in the attic and the buyer withdrew his offer. Our realtor attempted to persuade him with assurances that the mould would be removed, but he was not interested. As a result, we also incurred many additional expenses ... such as bridge financing costs, a higher real estate commission fee and utility bills."

When the mould was discovered, the Co-operators (General Insurance Company) hired an independent occupational hygienist to inspect the property.

"The OH reported that extensive fungal growth, insufficient roof vents and excessive insulation likely caused the problem. The Co-operators arranged for Service Master of Niagara to come back and fix the mould problem, which they did.

Unfortunately, we lost the sale and we were left trying to sell a house that had had a mould problem. Not easy to do. The fact that the mould had been removed was almost irrelevant. People just don't want anything to do with mould, cleaned up or not."

Since Co-operators had endorsed Service Master of Niagara, MacKinnon felt his insurance firm should compensate him for his loss. But the insurance firm says he should deal directly with the contractor.

"In all cases, it is up to our clients to decide who performs work on their house," Co-operators' media relations specialist Leonard Sharman told us. "In this case, Mr. MacKinnon signed a work agreement with Service Master to have the work completed as agreed. Because Service Master is one of our preferred vendors, the Co-operators guaranteed their work. We lived up to this guarantee by ensuring the contractor returned to fix the problems as soon as they were discovered."

Since Service Master of Niagara had no City of Hamilton contractor's licence, Sharman said the work on MacKinnon's home was performed by Service Master of Hamilton, which did have the proper building licence.

"We understand Mr. MacKinnon's frustration. We have suggested that he seek recourse from Service Master if he feels he has sustained damages, and my understanding is that dialogue is ongoing. We are hopeful there can be some resolution in the near future."

Action Line's calls and e-mail letters to Service Master of Niagara president Robert Osborne were not answered. In a May 23 letter to MacKinnon, however, Osborne terms the OT report very unfair and suggests the mould problem may have nothing to do with his firm's workmanship, but rather "ice damming."

Service Master of Niagara "reacted before thinking" and immediately responded to the Co-operators request to fix the mould problem, Osborne states. All parties should have investigated the cause of the problem more thoroughly, he adds. MacKinnon acknowledges the roof leaked sometime after it was originally repaired and Co-operators had the leak fixed.

In replying to Action Line, Peter Erwin of Service Master of Hamilton stated the matter was the responsibility of the Niagara franchise, not his.

"This claim was handled by Service Master of Niagara and the building permit was purchased by Service Master of Niagara," Erwin said. "All repairs were completed by sub trades hired and paid by Service Master of Niagara. All monies disbursed on this file by the Co-Operators were paid to Service Master of Niagara."

He said his only role was to "co- ordinate" the tradespeople and supervise the job.

Service Master of Canada would not comment on the dispute.

A spokesperson for the Financial Services Commission of Ontario said consumers can file complaints about "fairness" with the General Insurance Ombudsman (GIO), after first trying to resolve the issue with the insurance company's own ombudsman. GIO's website, giocanada.org, provides detailed information on the process.

"The consumer has a right under his contract to have repairs done to his home that are like kind and quality to what was damaged," Laura McLellan of FSCO's Corporate Policy and Public Affairs branch told Action Line. "The insurer is responsible to ensure that its contractors correct this problem (when they act as an agent of the insurer). The contract does not provide coverage for losses from the sale of a home. Normally, the limitation period for property insurance claims against the insurer is one year. However, a new limitation period may start from the date new damage is discovered."

It is also possible an insurer may feel a contractor has separate liability for problems that arise, McLellan noted. GIO can be contacted at 1-877-225-0446.

If you have a consumer problem, call 905-526-4665 or e-mail amacrury@thespec.com.

Not all calls and letters can be answered.