Licence Appeal Tribunal File Number: 17164/ONHWPA

In the matter of an appeal from a decision of Tarion Warranty Corporation under section 14 of the Ontario New Home Warranties Plan Act, R.S.O. 1990, c. O.31 (the “Act”).

Between:

Gaynor Fletcher

Appellant

and

Tarion Warranty Corporation

Respondent

DECISION and ORDER

ADJUDICATOR:

Bruce Stanton

APPEARANCES:

For the Appellant:

Gaynor Fletcher, self-represented

For the Respondent:

Erin Cahill, Senior Warranty Services Analyst

Ayesha Mehreen, Counsel

Hearing Reporter:

Shimin Rahman

Heard: by videoconference

September 29, 2025 and October 1, 2025, followed by Closing Statements in writing

OVERVIEW

1Gaynor Fletcher, the appellant, appeals from a decision letter issued by Tarion Warranty Corporation (“Tarion”) dated April 22, 2025 (the “DL”), in relation to a deposit refund claim.

2The appellant entered into an agreement of purchase and sale with Northridge Homes Ltd. (the “vendor”) on June 13, 2023, an agreement which was later amended by an Amendment to Agreement of Purchase and Sale dated July 11, 2023 (“APS”), for a property located in Bayridge at the Gates of Meaford, in Meaford (the “home”).

ISSUE

3The issue to be determined is:

i. Whether the appellant is entitled to receive payment out of the guarantee fund for the amount she paid to the vendor as a deposit. This issue will depend on whether the appellant can show, pursuant to s. 14(1)(b)(ii), that the vendor has fundamentally breached the APS.

RESULT

4The vendor did not fundamentally breach the APS. The appellant is not entitled to receive payment out of the guarantee fund.

PROCEDURAL ISSUES

Appellant’s documents

5At the outset of the hearing, the appellant submits that the documents she filed for the hearing ought to be entered into evidence in their entirety.

6Tarion objected to the appellant’s proposal to enter all the documents she filed for the hearing into evidence because significant portions of the documents contained her own written submissions and legal arguments. It submits that the appellant’s documents include her own interpretations of the Act, caselaw and legal principles and, as such, they do not constitute evidence.

7The appellant submitted that the entirety of the documents should be entered into evidence and that it would be procedurally unfair to not admit them. She submits that she has spent significant amounts of time preparing these documents. She submits that, at the case conference, she was told that her case depended on whether the vendor breached the APS, so all her documents describe why and how she believes it did so.

8I was not persuaded that the written submissions and legal argument portions of the appellant’s documents should be regarded as evidence.

9Section 15(1) of the Statutory Powers Procedure Act allows the Tribunal wide latitude to admit into evidence anything that is relevant to the subject matter of the proceeding. This can include oral testimony or any document or thing relevant to the subject matter of the proceeding. The Tribunal may also exclude anything unduly repetitious.

10Relevance of evidence is based on its usefulness in proving or disproving a fact at issue. This is often referred to its probative value. If documents or things proposed to be entered into evidence do not prove or disprove a fact at issue, they may not be relevant and may therefore be inadmissible.

11I found that the admissibility of the various portions of the appellant’s documents should be considered at the time she proposes them to be admitted during the hearing, and if those portions are admitted they will be assigned an exhibit number by tab or page number and added to the exhibit list for the hearing. Accordingly, I found that the appellant may rely on the relevant portions of her documents to be admitted into evidence during the course of the hearing and any objections to their admissibility would be considered on their merits following the parties’ oral submissions on the objection(s).

Order of hearing

12Upon learning that she would present her evidence on the first day of the two-day hearing and Tarion would present its evidence on the second day, the appellant objected. She submits that the free day in between the two hearing days (Tuesday, September 30, 2025) had been intended to give her the opportunity to review and consider the evidence that Tarion put before the Tribunal such that she could then prepare further evidence to counter Tarion’s position.

13Tarion submitted that the appellant will have every opportunity to cross-examine its witnesses on the second day of the hearing and can include her reflections and counterarguments in respect of Tarion’s evidence in her closing statement.

14I order that the appellant will present her evidence first because the appellant has the onus to make her case on the issue in dispute. I agree with Tarion that the appellant’s cross examination of Tarion witnesses on day two of the hearing will provide her the opportunity to challenge Tarion’s case. She may also use closing statements to comment on why she may disagree with Tarion’s position or the weight that the Tribunal should assign Tarion’s evidence.

Additional hearing day

15At the start of day two of the hearing, the appellant proposed that the hearing be extended one additional day. She submits that Tarion has the benefit of counsel where she does not, she was not able to admit all the submissions in her documents filed for the hearing, and she needs additional time to cross-examine Tarion’s witnesses. The appellant submits that the additional day was needed to ensure she had an equal opportunity to present her case and failing to allow it would compromise her right to be heard.

16Tarion submits that two days were ordered for this hearing at the case conference of July 23, 2025, which the appellant attended and consented to. To allow more time for the appellant to cross-examine its witnesses on the second final day of the hearing, Tarion agreed to filing closing statements in writing, instead of taking time off the second day of the hearing.

17As it was the start of day two of the hearing, I initially reserved my decision on whether an additional day would be required. As the second day progressed, it became evident that the appellant’s cross-examination of the two Tarion witnesses was aptly and efficiently conducted and that moving the closing statements to written, post-hearing submissions, would provide sufficient time for the parties to complete the oral testimony portions of the hearing by the end of the second day.

18Accordingly, on October 2, 2025, I issued an order for closing statements to be submitted in writing no later than October 16, 2025. Both parties filed their written, closing statements by October 16, 2025.

ANALYSIS

Did the vendor fundamentally breach the agreement of purchase and sale?

19I find that the vendor did not fundamentally breach the APS because it did not deprive the appellant of substantially the whole benefit of the contract.

20The appellant claims a refund of a $100,000.00 deposit she provided the vendor for the construction of the new home and relies on s. 14(1)(b)(ii) of the Act which sets out that:

A person who has entered into a contract to purchase a home from a Vendor is entitled to receive payment out of the guarantee fund for the amount that the person paid to the Vendor as a deposit if, the person has a cause of action against the Vendor resulting from the fact that title to the home has not been transferred to them because the Vendor has fundamentally breached the contract.

21To succeed in her appeal, the appellant must show on a balance of probabilities that the vendor fundamentally breached the contract, the APS.

What constitutes a “fundamental” breach of the APS?

22The Court, in Spirent Communications of Ottawa Ltd. v. Quake Technologies (Canada) Inc. 2008 ONCA 92, (“Spirent v. Quake”) at paragraph 35, described a fundamental breach of contract as one that deprives the innocent party of substantially the whole benefit of the contract. At paragraph 36 of Spirent v. Quake, the Court outlined five factors that can be considered when determining whether conduct has deprived the innocent party of substantially the whole benefit. The five factors are:

i. The ratio of the party’s obligations not performed to that party’s obligations as a whole;

ii. The seriousness of the breach to the innocent party;

iii. The likelihood of repetition of such a breach;

iv. The seriousness of the consequences of the breach; and

v. The relationship of the part of the obligation performed to the whole obligation.

23Spirent v. Quake also sets out, at paragraph 37, the legal principles of an anticipatory breach of contract, which it defines as a breach sufficient to justify the termination of a contract if one party, by express language or conduct, repudiates the contract or demonstrates an intention not to be bound by the contract before performance is due.

24At paragraph 39, the Court further stated that a breach which has material consequences does not rise to the level of one that has deprived the innocent party of substantially the whole benefit of the contract. Therefore, a finding that there was a material breach of the APS would likely not be sufficient to prove there was a fundamental breach of it.

25The appellant alleges the vendor fundamentally breached the APS in three principal ways:

i. The vendor obstructed her ability to assign the APS;

ii. The standard and quality of the finishes in the home were less than promised; and

iii. The vendor issued her a notice that she had committed an anticipatory breach of the APS, resulting in her deposit being forfeited and the home being re-listed by the vendor.

26Erin Cahill, a senior warranty services analyst at Tarion, testified that the appellant’s Deposit Refund Claim was assessed on the basis of whether there was a fundamental breach of the APS by the vendor as set out in s. 14(1) of the Act. She testified that a “fundamental” breach is one that goes to the core of the contract, where the purchaser is deprived of the whole of the contract. She stated that a “material” breach of contract is not a “fundamental” breach.

27Tarion submits that the appellant has not established that the vendor fundamentally breached the APS.

28My analysis follows, based on the three grounds the appellant alleges the vendor breached the APS.

Assigning the APS

29I find that the alleged obstruction of the appellant’s assignment rights is not a fundamental breach of the APS.

30The appellant testified that the APS added Clause 8 to the original agreement, allowing the appellant to assign the APS on the condition that:

i. No further assignment could be made; and

ii. The appellant would pay additional deposits to the vendor, such that total deposits equal 25% of purchase price.

31An assignment provides that a purchaser can enter into an agreement with a third a party, effectively a different purchaser, such that the third party would assume the obligations of ‘purchaser’ in the agreement of purchase and sale. Clause 8 of the APS provided that the appellant could exercise that option, subject to the two conditions noted above.

32The APS established a closing date to July 31, 2024; however, the appellant testified that she did not close on July 31, 2024 because she decided to assign the APS. She testified that, at that time, she was considering not proceeding with the purchase of the home, stating, “it was not what we planned on; pricing and selections were limited”. She decided to assign the APS to a new purchaser. At the appellant’s request, between May and July of 2024, several realtors visited the home and discussed an assignment sale with the appellant.

33On May 31, 2024, the vendor and appellant signed an amending agreement to the APS which extended the closing date to September 30, 2024.

34The appellant testified that the vendor had promised to help her with an assignment sale but when she attempted to contact its agent, Matthew Lidbetter, her calls and emails were not returned. She testified that when the realtors, whom she engaged for the purpose of an assignment, approached the vendor, the vendor informed them that the home was already sold. The appellant submits that the rebuffed attempts to contact Mr. Lidbetter and the vendor’s characterization of the home as being ‘sold’ constitutes obstruction of her assignment rights.

35The appellant testified that her efforts to assign the APS ended on August 6, 2024, when the vendor advised her that she was in anticipatory breach of the APS and would lose her $100,000.00 deposit. The appellant testified that, thereafter, she did not pursue any further steps to assign the APS.

36Tarion submits that the appellant has not provided any evidence to suggest the vendor interfered with her right to assign the home, nor that she had any potential buyers for her to exercise her assignment rights.

37Ms. Cahill testified that Tarion did not agree that the builder was inhibiting the process of assignment, noting that the DL explained that none of the texts and emails of the appellant’s communications with potential realtors included any request to assign the APS.

38To Tarion’s question of whether the vendor was willing to help with the assignment, Dave Rai, representative of the vendor, testified that, “Yes; they were. They suggested [to the appellant] she could use our realtor, perhaps do a clean up of the house to prepare to present it.”

39To Tarion’s question of why the vendor would say the house is sold, Mr. Rai testified, during direct examination, that, “while he was not privy to those conversations, the vendor’s realtor can only say it is already sold. He cannot market the home. It would put us on thin ice. Whether assignment was discussed or not, we were not aware of the house being assigned.”

40Tarion submits that the vendor confirmed with the appellant, in writing, that she had a right to assign and that the vendor would try to help her in any way possible. Tarion submits that Mr. Rai’s testimony noted the appellant brought no potential buyers to the vendor.

41Tarion submits that no weight should be given the realtors’ letters (noting they visited the home and discussed an assigned sale), because the appellant did not produce the realtors to be cross-examined or provide context, and the letters provided no indication that the vendor was obstructing the appellant from exercising her right to assign the APS.

42I find that the appellant did not direct or point me to evidence that the vendor obstructed her from assigning the APS. It seems evident that the appellant had the right to assign the APS. She and the vendor acknowledge that. She made inquiries and had discussions and site visits with realtors about pursuing an assignment, but ultimately decided not to proceed with an assignment.

43I am not persuaded that the unreturned calls and emails to Mr. Lidbetter rises to the level of obstruction. It is clear from the language of Clause 8 that the “purchaser” may assign the APS, subject to the two stated conditions. It leaves me with the impression that the purchaser bears the responsibility for taking the steps necessary to affect an assignment. I do not put unreturned calls and emails in the category of obstruction or preventing a purchaser from exercising their rights under an APS.

44I give weight to Tarion’s testimony that they had no evidence of an assignment being undertaken, and Mr. Rai’s testimony, that the vendor remained ready to facilitate an assignment sale should the appellant wish to proceed in that direction.

45I find the appellant has not demonstrated that the vendor obstructed her right to assign the APS. Accordingly, I find the appellant has not shown that obstruction of her assignment rights resulted in depriving her of the substantial whole of the benefit of the contract. Therefore, the alleged obstruction of the appellant’s assignment rights does not constitute a fundamental breach of the APS.

Standard of quality of the built home

46I find the appellant’s concerns with some of the interior finishes and materials in t home do not constitute a fundamental breach of the APS.

47The appellant alleges that the finishes in the home were not to the standard she expected and was promised by the vendor and that these misrepresentations constitute a material breach of the APS. The appellant alleges that from May 2023, before she signed the APS, to June of the following year, through her discussions and exchange of emails with the vendor, the vendor misrepresented the standard of materials and finishes that were installed in the home, and information on pricing and selection of possible upgrades was not provided in a timely manner, such that she could avoid unexpected costs. She testified that flooring, cabinets, countertops, painting and ductwork were not completed to the standard that was expected.

48The appellant testified that these deficiencies of material and finishes and the misrepresentations the vendor engaged in between May 2023 and August 2024 constitute material breaches of the contract.

49Tarion submits that the Court, in Spirent v. Quake, was clear that a breach having material consequences does not rise to the level of one that has deprived an innocent party of substantially the whole benefit of the contract, i.e., a fundamental breach.

50Ms. Cahill testified that the appellant’s concerns regarding finishes not meeting the standards she was promised do not meet the threshold of a fundamental breach. Further, she testified that material breaches of the APS involving defects or deficiencies of materials, workmanship or contraventions of the Ontario Building Code, are covered by other Tarion warranties which come into effect from the date of possession.

51Tarion referred me to a Divisional Court decision in 1157391 Ontario Inc. v. Ortiz 2021 ONSC 5923 where the Court considered whether a fundamental breach of a construction contract had occurred. Tarion notes that in that case, Justice Sachs, at paragraph 16, confirmed that a fundamental breach had to be serious and work that is merely “bad or defective” will not entitle an owner to terminate a contract.

52Tarion submits that the vendor remains willing and ready to close on the home and the home is ready to be occupied.

53I am not persuaded that the appellant’s concerns with interior finishes and materials reach the threshold of a fundamental breach. They may well constitute a breach of the vendor warranty which could, as Ms. Cahill noted in her testimony, be warranted and subject to remedies under the Act and regulations.

54The appellant’s submissions and evidence suggest there may be material breaches of the APS, but as noted by the Court in Spirent v. Quake, material breaches to do not rise to the level of a fundamental breach. Considering the factors set out by the Court when considering whether conduct has deprived the innocent party of substantially the whole benefit, the ratio of the vendor’s obligations not performed, in this case the alleged substandard finishes and other deficiencies noted by the appellant, would not be insignificant, but their cost would represent a relatively minor share of the overall cost of the home. In terms of their seriousness as a breach, the defects and deficiencies the appellant raised can likely be resolved through the warranty process and none of them raise serious issues concerning the land or major structural elements of the home.

55I find that the defects and deficiencies the appellant raises can best be characterized as material breaches. I take guidance from the Court in Spirent v. Quake, that such breaches generally do not rise to the level of a fundamental breach. As noted above, the proportion of the home implicated by the allegations of defects and deficiencies in ratio to the whole substantial benefit of the vendor’s obligations under the APS, is minor, and the defects and deficiencies can be addressed through the Tarion warranty process if necessary.

56I take guidance from the Court decision in 1157391 v. Ortiz in which Justice Sachs confirmed that work that is merely “bad or defective” is insufficient grounds to terminate a contract. I find the decision in 1157391 v. Ortiz to be consistent with the Court decision in Spirent v. Quake in establishing that breaches of material consequences likely do not reach the threshold of a fundamental breach.

57For the reasons described above, I find that, while the inferior interior finishes and standards may be material breaches of the APS, they do not deprive the appellant of substantially the whole of the benefit of the contract. Therefore, they do not constitute a fundamental breach of the APS.

Letter of anticipatory breach

58I find that the letter advising the appellant she was in anticipatory breach of the APS is not a fundamental breach of the APS.

59The appellant testified that the vendor’s lawyer, Ajay Duggal, sent her a letter accusing her of anticipatory breach of contract on August 6, 2024. The letter, dated August 4, 2024 (“Duggal letter”), states that after the Amending Agreement of May 31, 2024, the appellant exchanged several emails with the vendor in which she exhibited her intention not to close the transaction scheduled for September 30, 2024, and in so doing, she was in ‘anticipatory breach of the contract’. As such, the letter explained, her deposit was now forfeit and the vendor will now re-list the home for sale.

60The appellant submits that the Duggal letter repudiates the APS because it states the deposit is “now” forfeit and the home “shall now” be relisted. She disavows the attempt by the builder representative, David Rai, who testified that the Duggal letter was merely intended to put her on ‘notice’ of the consequences of not closing the sale on September 30, 2024. The appellant submits the Duggal letter unequivocally terminates the APS.

61On the question of whether the Duggal letter declaring the appellant in anticipatory breach constituted a fundamental breach of the APS, Ms. Cahill stated that this would be something a purchaser’s lawyer would typically respond to and noted that two different lawyers did so on behalf of the appellant, both expressing the appellant’s intention to not close on the closing date.

62Tarion refers me to the Court’s decision at paragraph 37 of Spirent vs. Quake in which the Court defines an anticipatory breach being sufficient to justify the termination of a contract if one party, by express language or conduct, repudiates the contract or demonstrated an intention not to be bound by the contract before performance is due. Tarion notes that the Court established a test of whether the party in breach has shown such an intention, which is to ask whether a reasonable person would conclude that the breaching party no longer intends to be bound by it. Further, in determining whether the party in breach had repudiated or shown an intention not to be bound by the contract before performance is due, the Court asks whether the breach deprives the innocent party of substantially the whole benefit of the contract.

63Tarion submits that the appellant, through her correspondence, informed the vendor of her intention not to close on the home. Tarion submits the appellant’s legal counsel, Mark Graham, confirmed that intention by sending a letter to the vendor on August 2, 2024 expressing a desire that the appellant be released from the contract.

64Mr. Rai testified that the Duggal letter was intended to put the appellant on notice that she was in anticipatory breach and that her deposit is forfeited. Tarion notes that, as a reply to the Duggal letter, counsel for the appellant, Faisal Agha, stated that his letter serves as formal notice of the appellant’s intention to terminate the APS, and it requested the return of her deposit. Tarion submits that, since Mr. Agha’s letter, the appellant has not closed on the home.

65Mr. Rai testified that the closing date of September 30, 2024 came around and there was no sale so they re-listed the home on October 4, 2024. As of the date of the hearing, the home remains unsold.

66Tarion refers me to the Court decision in Fram Elgin Mills 90 Inc. v. Romandale Farms Limited, 2021 ONCA 201 at paragraph 259 which states,

An anticipatory breach does not, in itself, terminate the contract. Once the offending party shows its intention not to be bound by the contract, the innocent party has a choice. The innocent party may accept the breach and elect to sue immediately for damages, in which case the innocent party must “clearly and unequivocally” accept the repudiation to terminate the contract. Alternatively, the innocent party may choose to treat the contract as subsisting, continue to press for performance, and bring the action only when the promised performance fails to materialize. However, by choosing the latter option, the innocent party is bound to accept performance if the repudiating party decides to carry out its obligations.

67The appellant did not clearly state that Fram v. Romandale confirms her belief that the vendor essentially repudiated the contract by issuing the Duggal letter, but her previous testimony and submissions leave little doubt that she believed the letter declaring her to be in anticipatory breach, was the equivalent of repudiating, i.e., terminating, the contract.

68Tarion submits that the appellant chose to terminate the contract on August 15, 2024, a fact that was subsequently demonstrated by her not closing on the home on September 30, 2024.

69I find the appellant has not shown that the letter of anticipatory breach was a fundamental breach of the APS.

70I take guidance from the Court in Spirent v. Quake which defines an anticipatory breach as being sufficient to justify the termination of a contract if one party, by express language or conduct, repudiates the contract or demonstrates an intention not to be bound by the contract before performance is due. Considering the “would a reasonable person conclude” test that the Court set out to consider whether the party in breach has shown such an intention, the evidence before me suggests that a reasonable person would conclude the appellant no longer intended to be bound by the APS. The appellant expressed those intentions in emails to the vendor, and two of her counsel sent letters expressing her intention to withdraw from the APS.

71I also take guidance from the Court in Fram v. Romandale, which defines an anticipatory breach as one which does not, in itself, terminate a contract. If applied to the case before me, the Court’s decision in Fram v. Romandale suggests that the vendor, as the innocent party, could have sued the appellant for damages, or simply fulfilled its obligations under the APS by the closing date. The facts before me suggest the vendor took the latter course since the home was completed and available to be occupied on the closing date, the vendor did not re-list it until October 4, 2024, four days post-closing, and Mr. Rai testified that the vendor remained ready to fulfill its obligations under the APS through to the closing date, The evidence does not suggest that the APS was, at the time, repudiated or terminated by virtue of the Duggal letter.

72Mr. Rai, in email correspondence, expressed the position of the vendor, that it needed assurance that the appellant would pay for the home on the closing date. The vendor had incurred all of the costs of completing the home to that point and had only the appellant’s $100,000.00 deposit in its possession. It depended on the APS to ensure that it would be paid for the home, as contracted.

73In the her testimony, the appellant confirmed that she agreed to the original APS of June 13, 2023 which, at Clause 27, states that if the purchaser does not pay the balance of the APS by 4:00 p.m. on closing day, they shall be deemed to be in default, meaning that the purchaser is in fundamental breach of the APS, which gives rise to the vendor’s right to terminate the agreement and retain all deposits paid to date. Accordingly, I find the appellant was aware, or ought to have been aware, of the consequences of not closing on the home.

74I am persuaded by Tarion’s submissions and give weight to Mr. Rai’s testimony, that the home was available as of the closing date and the vendor remained ready and willing to fulfill its obligations to the APS on that date.

75I am not persuaded by the appellant’s argument that the letter declaring her to be in anticipatory breach constituted a fundamental breach of the APS because it seems that her rights as the purchaser in the APS were not interrupted by it. I find the Duggal letter did not deprive the appellant of substantially the whole benefit of the contract therefore it did not rise to the level of a fundamental breach of the APS.

Conclusions

76I find that the appellant has not demonstrated on a balance of probabilities that the vendor fundamentally breached the APS.

77I find the appellant is therefore not entitled to receive payment out of the guarantee fund for the amount she paid to the vendor as a deposit.

ORDER

78I order the following:

i. Pursuant to s. 14(19) of the Act, I direct Tarion to deny the Deposit Refund Claim.

Released: October 29, 2025

__________________________

Bruce Stanton

Adjudicator