Licence Appeal Tribunal File Number: 16866/ONHWPA

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

Between:

Ali Novin

Appellant

And

Tarion Warranty Corporation

Respondent

DECISION and ORDER ON MOTION TO ADD A PARTY

ADJUDICATOR:

Bruce Stanton

APPEARANCES:

For the Appellant:

(no submissions filed)

For the Respondent:

Ayesha Mehreen, Counsel

For the proposed added party:

Christie Woods

Heard by way of written submissions

OVERVIEW

1Ali Novin (the “Appellant”) appeals from a decision letter issued by Tarion Warranty Corporation (“Tarion”) dated March 5, 2025, pursuant to s. 14(13) of the Act, in respect of denied claim items on his Year-End statutory warranty claim form.

2The Appellant filed a Notice of Appeal of the decision letter on March 26, 2025 with the Licence Appeal Tribunal (the “Tribunal”).

3The parties attended a case conference on July 14, 2025 in which a resumption of the case conference was ordered for October 2, 2025, pursuant to the associated Case Conference Report and Order (“CCRO”) issued July 16, 2025.

4The CCRO also ordered a written hearing on the motion to be held August 12, 2025, to decide whether Caivan Barrhaven Conservancy Inc. (the “Builder”) should be added as a party to the proceeding. The CCRO set due dates for the parties and the Builder to make written submissions on the motion.

ISSUE

5The issue to be determined is:

1. Whether the Builder should be added as a party because it has a significant interest in the proceeding.

RESULT

6The Builder does not have a significant interest in the proceeding. The Builder will not be added as a party to the proceeding.

ANALYSIS

Significant Interest

7I find on a balance of probabilities that the Builder does not have a significant interest in the proceeding. It has an interest, but its interest does not rise to the level of significant.

8Section 14(18) of the Act stipulates that Tarion and the claimant are parties to a proceeding under s. 14(13), however, s. 12 of O. Reg. 627/20 (the “Regulation”) under the Act, provides that the Tribunal may specify additional parties in accordance with its Rules.

9Rule 3.6 of the Licence Appeal Tribunal Rules, 2023 (“Rules”) gives the Tribunal discretion to add a person as a party to a proceeding if the party has a significant interest in the proceeding.

10The Rules do not define “significant” for the purposes of Rule 3.6. The Tribunal has found in M.W. and D.W. v. Tarion Warranty Corporation, 2018 CanLII 43768 (ON LAT) (“M.W. and D.W.”) that for a person to be added as a party there should be evidence that the outcome of the proceeding may result in an order affecting that person’s interests. An interest is demonstrated by providing evidence that a person’s substantive rights are being decided or affected by the potential order of the Tribunal.

11Tarion submits that the Builder’s interest in the proceeding is significant and meets the requirements of Rule 3.6, such that the Tribunal should add it as a party, for the following reasons:

1. The Builder is ultimately responsible and liable for the statutory warranties under the Act, and the Builder is statutorily obligated to indemnify Tarion for any amounts paid by Tarion for breaches of warranty. The Act grants Tarion a statutory right of subrogation that allows Tarion to bring an action against a builder to recover any expense incurred by Tarion as a result of warranty breaches.

2. If the Tribunal ordered Tarion to compensate the Appellant from the Guarantee Fund (the “Fund”), Tarion would, in turn, seek indemnification from the Builder for any such payment. Tarion directed me to a previous Tribunal decision in S.J. v. Tarion Warranty Corporation, 2018 ONLAT ONHWPA 11280 (“S.J. v. Tarion”), at paragraph 29, in which the Tribunal adjudicator reasoned, “if the appellant is successful resulting in a payment to him by Tarion, the builder will likely be invoiced by Tarion for what it pays plus 15%. Therefore, it is evident to me that … any adverse decision on this issue will directly and significantly impact the builder”. Tarion submits that the decision in S.J. v. Tarion confirms that the Tribunal has considered builders or vendors in these proceedings to ultimately be the party responsible to indemnify Tarion for any payment it is ordered to make arising from a breach of warranty;

3. The Builder has a reputational interest in the proceeding because the outcome of the hearing would form part of the public record and a finding that a home built by the Builder contained warrantable defects would negatively impact its reputation with future homebuyers, owners of homes built by the Builder, suppliers, creditors and tradespeople in the construction industry;

4. The Builder is deeply familiar with the Appellant’s home and warranty process thus far and therefore has unique and specialized knowledge that no other party can offer to these proceedings. Tarion submits that adding the Builder would ensure that the Tribunal and all parties has access to the full evidentiary record of the warranty process and allow the parties to potentially narrow the issues in dispute and reach a more expeditious settlement, possibly even negating the need of a hearing. It referred me to the Tribunal’s decision in S.J. v. Tarion noting that the adjudicator opined that “the builder’s participation will ensure that the Tribunal has the best available materials and information in arriving at its decision …”;

5. Administrative boards and tribunals executing public duty are expected to comply with the rules of natural justice and be procedurally fair in its proceedings. Tarion submits that Canadian courts have uniformly recognized “the right to be heard” as a fundamental principle of the Canadian justice system. It submits that the Builder’s responsibility for indemnification of any payments, reputational risk, and primary responsibility for the warranty make it liable for any remedies the Tribunal might order and therefore, its interest is not only significant, but inseparable from and fundamental to the fair and just determination of this proceeding. It submits, therefore, that the Builder ought to have the right to be heard, to make submissions, participate in settlement discussions, offer evidence and if necessary, appeal any order made by the Tribunal. It submits that those avenues would only be open to the Builder if it is added as a party.

12The Builder submits that it does not take a position on the issue of being added as a party.

13The Appellant did not make submissions on the issue.

14I find the Builder will not be added as a party to the proceeding.

15I take guidance from the Divisional Court in Yildirim v. Tarion Warranty Corporation, 2019 ONSC 945 (“Yildirim”) that reinforced the principle that the warranty scheme managed by Tarion is, first and foremost, a consumer protection scheme. It is remedial legislation designed to give homeowners a clearly defined avenue to claim compensation for defects and deficiencies in their home that have not, in the homeowner’s opinion, been satisfactorily resolved by the builder or vendor.

16Put simply, the Tarion warranty is precisely what Tarion itself proclaims, a “backstop” for situations when the homeowner and builder have been unable to resolve disputes on their own. It is an alternative means, bypassing the builder, of securing compensation for defects found to be warrantable under the Act and its regulations. The Act contemplates that the parties to these appeals will presumptively be the homeowner/claimant and Tarion.

17I am not bound by previous decisions of the Tribunal; however, in this case, I find that M.W. and D.W. establishes a reasonable test for “significant interest” in considering whether it has been proven on a balance of probabilities that an order of this Tribunal would impede the Builder’s substantive rights. I am not persuaded that such an order would impede the Builder’s substantive rights.

18I agree with Tarion that the Builder has economic interests in this proceeding, but I find they do not rise to the level of significant because a potential order of this Tribunal would not impede the Builder’s substantive rights to, for example, pursue legal remedies in the event Tarion made a claim for indemnification. In that scenario, Tarion would have to prove that the Builder failed to diligently perform the obligations imposed on it under the Act and the warranty scheme.

19Section 13 of the Regulation sets out the indemnification obligations of a builder or vendor to Tarion. The provision clearly establishes that a vendor or builder’s obligations would be by reasons of their failing to diligently perform or causing to be performed its obligations imposed by the Act and regulations. A builder or vendor’s ability to defend its position in such a cause would not be impeded by a decision of the Tribunal.

20I am not bound by the previous Tribunal decision in S.J. v. Tarion that favoured adding a builder as a party and find that S.J. v. Tarion predates the court’s decision in Yildirim which gave priority to the consumer protection prerogatives of the warranty scheme over considerations of a builder’s interest in the proceeding.

21I agree with Tarion that the Builder has a reputational interest in the proceeding, but I find it to be secondary to the remedial, consumer protection tenets of the legislation that give homeowners a means to pursue compensation for defects and deficiencies through Tarion when their attempts to negotiate resolution with a builder have failed. I am not persuaded by Tarion’s submissions that the Builder’s reputational interests reach the threshold of “significant” for the purposes of Rule 3.6.

22I am persuaded by Tarion’s submission that the Builder’s unique and specialized knowledge of the Appellant’s home and warranty process would benefit the proceeding and help a hearing adjudicator to gain insights into the facts and circumstances of the claim items in dispute. However, Tarion can call a representative or representatives of the Builder, or its contractors or sub-contractors, to testify on the facts that are relevant to the disputed claim items. In this way, the Builder does not need to be a party to the proceeding to present facts and evidence in relation to Tarion’s decision. Similarly, as the statutory respondent, Tarion may advance any legal arguments that the Builder might wish in disputing the Appellant’s warranty claim.

23For the purposes of the case conference resumption, a representative of the Builder may attend the case conference if the parties agree that the Builder’s participation would aid settlement discussions. Not adding the Builder as a party does not exclude the Builder’s participation in settlement negotiations.

24I am not persuaded by Tarion’s submission that the Builder must be added as a party so that the Tribunal will have a full evidentiary record available to it. Both the Appellant and Tarion can exercise their rights as parties to summon witnesses and request production orders for such things as documents and expert reports that they feel are relevant to the disputed claim items. In the same vein, I am not bound by the Tribunal’s decision in S.J. v. Tarion to add a builder on the basis that its participation would ensure the best available materials and information. As noted above, the parties to these appeals are presumptively the homeowner and Tarion and the Tribunal provides tools for both to ensure the relevant facts and circumstances of the case are revealed to the hearing.

25I agree with Tarion that the principles of natural justice and procedural fairness ought to provide the Builder with the opportunity to defend its reputational and economic interests in the warranty process. I find, however, that the statutory warranty process itself provides builders with rights and access for these purposes. The Act and regulations provide statutory periods for the repair and resolution of deficiencies and a process of conciliation, and if they fail to reach resolution at those stages, the negotiation of damages arising from any defects or deficiencies. Each stage provides an opportunity for builders to weigh their economic and reputational interests into the warranty process.

26If a builder and homeowner reach an impasse on the disputed claims and the homeowner appeals a decision letter to the Tribunal, Tarion’s position as the statutory respondent in the appeal, as noted above, provides an avenue for the Builder to testify and present evidence and legal arguments in defence of the disputed warranty claims, as Tarion deems appropriate.

27For the reasons discussed above, I find the Builder’s interest in this proceeding is secondary to the consumer protection focus of the Act in helping consumers obtain compensation quickly and affordably and by side-stepping any protracted dispute with the Builder.

28In addition, I find that Tarion has not demonstrated on a balance of probabilities that the Builder’s substantive rights are being decided or affected by the potential order of the Tribunal.

29I find on a balance of probabilities that the Builder’s interest does not rise to the level of significant for the purposes of Rule 3.6. Accordingly, I find that the Builder does not have a significant interest in the proceeding and will therefore not be added as a party to the proceeding.

ORDER

30Pursuant to Rule 3.6, the Builder, Caivan Barrhaven Conservancy Inc., is not added as a party to the proceeding.