Licence Appeal Tribunal File Number: 16889/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:

Julie Serafin

Appellant

and

Tarion Warranty Corporation

Respondent

DECISION

ADJUDICATOR:

Bruce Stanton

APPEARANCES:

For the Appellant:

Julie Serafin, Self-represented

For the Respondent:

James Barbeau, Warranty Services Representative

Noah Eklove, Counsel

Hearing Reporter:

Shimin Rahman

Heard by videoconference:

January 19, 20, 21, 2026

OVERVIEW

1Julie Serafin, the appellant, appeals from a decision letter issued by Tarion Warranty Corporation, the respondent, dated March 4, 2025 (the “DL”), in relation to claim item 8 of the appellant’s year-end or “one-year” statutory warranty form (“Year-End Form”).

PRELIMINARY ISSUES

Notice of Motion

2The appellant filed a Notice of Motion on January 12, 2026 seeking an order from the Tribunal that certain documents she served and filed after the November 14, 2025 due date could be relied on in the hearing. She also sought confirmation from the Tribunal that she could rely on one of her witnesses as an expert, since the Acknowledgement of Expert’s Duty form (“AED”) in relation to the witness was filed late and did not include some of the required supporting documents, i.e., was not filed in accordance with Rule 10 of the Licence Appeal Tribunal Rules, 2023 (“Rules”),

3On January 14, 2026, the Tribunal directed that the motion be heard at the commencement of the hearing scheduled to commence January 19, 2026, pursuant to Rule 15.2.

Late filed documents

4The appellant submitted that she wished to rely on the following two documents:

i. Document 135G, a four-page document which included, at page 3, an email from Patrick Marquis, engineer at RJC Engineers, to the appellant on January 8, 2026, regarding the probable cost of repairs to the air barrier system at the location of the disputed claim; and

ii. Document 132G, an eight-page document of an email exchange between the appellant and the respondent between November 6, 2025 and December 29, 2025, on the subject of settlement.

5I find the appellant may not rely on documents 135G or 132G.

6Rule 9.3 sets out the basis for determining if a party, who has failed to comply with any Rule, direction or order with respect to the disclosure, exchange, or production of documents, may be permitted to rely on the documents or things that were not in compliance. The factors the Tribunal considers are:

i. The reasons for non-compliance;

ii. Whether a party will be prejudiced by the admission or exclusion of the evidence and the extent to which any prejudice can be mitigated;

iii. The extent to which the substance of the information lies within the knowledge of the other party;

iv. Whether the party opposes the admission of the evidence; and

v. The relevance of the document or thing to an issue in dispute in the proceeding.

7Rule 9.3 also stipulates that the parties will have an opportunity to make submissions on whether the documents, that are the subject of non-compliance, can be used at the hearing.

Document 135G – quotation by RJC Engineers, January 8, 2026

8The appellant submitted that she had requested RJC Engineers’ estimates of the cost to address the air leak deficiency in October 2025, but did not get their reply until January 8, 2026 and she disclosed it to the respondent as soon as she received it. The respondent claims it was not served a copy of the document until January 17, 2026, two days prior to the start of the hearing. The appellant submitted that RJC Engineers’ email of January 8, 2026 is based on the same deficiencies set out in a report by RJC Engineers dated September 4, 2025 (“RJC Report”) and since the respondent was in receipt of the report, it would have known that exploratory openings would be a necessary part of assessing the extent of repairs to the air leak/thermal barrier deficiency.

9The appellant submitted that the January 8, 2026 email provides a more complete cost-breakdown of the cost of damages arising from the breach of warranty. She submitted that it sheds new, relevant information in relation to the value of the damages and she should be able to rely on it despite it being filed late. The January 8, 2026 email sets out an estimated amount for each of the following activities:

a) exploratory openings and air testing;

b) removal of kitchen cabinetry;

c) cost of air barrier repairs; and

d) engineering fees and permits.

10The respondent submitted that the late filing of the document is not a minor non-compliance and imposes serious prejudice. As it only received the document on the eve of the hearing, the respondent had no time to review or consider the appellant’s document or call witnesses in relation to it.

11The respondent submitted that the Tribunal’s orders following the case conference of September 8, 2025, and set out in the Case Conference Report and Order of October 2, 2026 (“CCRO”), exist to avoid this very situation and the appellant gave no reasons why she could not have gotten the document by the disclosure deadline of November 14, 2025.

12I disagree with the respondent that the appellant gave no reasons for the document not being filed by the November 14, 2025 due date. The appellant explained that she had requested the document prior to the due date but it was not sent to her until January 8, 2026.

13I find, on a balance of probabilities, that document 135G cannot be relied on because the prejudice to the respondent from it being disclosed two days prior to the hearing, outweighs its probative value.

14I find there is some prejudice to the respondent from the late filing of the document because it will have had no time to prepare a response, but the prejudice is mitigated by the degree of uncertainty in the estimates. The author of the email states that the probable costs outlined in his estimates could range from 20% less, to 30% more. Given the uncertainty of the estimates and their lack of specificity, I disagree that they pose serious prejudice to the respondent’s position.

15I find the subject email is of little probative value because the email’s author, Patrick Marquis, of RJC Engineers, declares, at the start of the email, that, “It should be caveated that the extent and scope of the required repairs have not been confirmed, and would be informed by the exploratory openings.” It goes on to say that the estimates are based on a “worst case scenario” where significant repairs are required to the air barrier system. Put another way, RJC Engineers will not provide an informed estimate of the damages until they have undertaken exploratory openings to investigate the source of the air barrier defect. In essence, these estimates are based on RJC Engineers’ document review and interviews with the appellant and occupants of the home and will only be further refined by the engineers’ further investigations.

16On balance, considering the existence of some prejudice to the respondent from the late filing of this document, and its lack of probative value, I find that it cannot be relied on for the hearing.

Document 132G – settlement discussions

17The appellant seeks permission to rely on an eight-page document containing an email exchange between the appellant and counsel for the respondent between November 6, 2025 and December 29, 2025, on the subject of settlement of the issue in dispute.

18The appellant submitted that this document should be included because it demonstrates her willingness to reach a settlement, and it reveals to the Tribunal the implications of the respondent’s decision to deny the claim.

19The respondent submitted that this document should not be considered evidence. It relates to two prior settlement offers since the filing of the LAT appeal and should be excluded because it is protected by settlement privilege. The respondent submitted that it issued a supplementary decision letter dated December 11, 2025, which is properly before the Tribunal, and which reveals the current status of the dispute between the parties.

20I find the appellant’s document 132G cannot be relied on because it consists of settlement discussions which are protected by settlement privilege. Settlement discussions are privileged discussions between the parties which cannot be taken into evidence. The principle is found in Rule 14.4, as it relates to case conferences. Rule 14.4 stipulates that discussions put forward solely for the purpose of settlement are confidential and cannot be relied on in a hearing before the Tribunal without the parties’ consent. Although I am not relying on Rule 14.4 here, the principle of settlement privilege, i.e., protecting the private discussions of parties in relation to the settlement of a dispute, applies.

21I find the appellant’s document 132G cannot be relied on because it is protected by settlement privilege. Furthermore, the respondent’s issuance of a supplementary decision letter dated December 11, 2025, has rendered the email exchange irrelevant to the issue in dispute.

Expert witness

22I find that the appellant may rely on Patrick Marquis, of RJC Engineers, as an expert witness.

23The appellant submitted that she wished to call Patrick Marquis, engineer with RJC Engineers, who co-authored the RJC Report, as an expert witness. The appellant acknowledged that she was late filing the AED for Mr. Marquis, but pointed to the fact that the RJC Report was served in compliance with the CCRO, and she included a witness from RJC Engineers in her witness list, which was also filed in accordance with the CCRO.

24The appellant submitted that the respondent ought to have known that one of the two co-authors of the RJC Report would be a witness at the hearing. She submitted that the co-authors’ signatures to the report included their post-nominals and she had informed the respondent of their credentials in previous email correspondence.

25The respondent submitted that it only received the AED on January 17, 2026, two days before the hearing and it ought to have been filed 45 days prior to the date of the hearing, pursuant to Rule 10. It submitted that designating the witness an expert is extremely prejudicial to the respondent as it did not have the opportunity to prepare for Mr. Marquis’ testimony as an expert. It contends that accepting Mr. Marquis as an expert witness after such non-compliance is akin to rewarding the appellant for non-compliance with the Rules and is trial by ambush.

26The respondent submitted that the appellant also failed to submit a C.V. of Mr. Marquis with the AED, and neither did she file the other particulars that are required to accompany an acknowledgement of expert’s duty form, as set out in Rule 10.2.

27The respondent relies on a decision in Berlasso Moores v. Tarion Warranty Corporation, 2025 CanLII 1831 (ONLAT) (“Berlasso Moores”) in which the Tribunal precluded a witness from testifying as a professional engineer because the appellant, in that case, failed to file an acknowledgement of expert’s duty form or C.V., and the witness’s credential on an associated report listed him as a registered home inspector (not an engineer). The witness was allowed to testify as a registered home inspector provided that an acknowledgement of expert’s duty form and C.V. were filed. The Tribunal also stipulated that the witness’s testimony would be restricted to the four corners of the report filed in his name.

28I find the witness may testify as an expert witness, subject to the appellant serving and filing a C.V. for Mr. Marquis and that his appearance as a witness be restricted to the RJC Report.

29I am persuaded by the appellant’s submissions that she filed the RJC Report and included a witness from RJC Engineers in her final witness list ahead of the November 14, 2025, deadline set out in the CCRO.

30Although I recognize the appellant filed the AED late and not in compliance with Rule 10, I am not persuaded that Mr. Marquis should be excluded from testifying as an expert witness because the appellant included “a witness from RJC Engineering” in her witness list, which was filed on time, and Mr. Marquis was listed as the Project Engineer of the RJC Report, with his professional engineer designation.

31I find the respondent knew or ought to have known, that a representative of RJC Engineering would be called as a witness, and it had sufficient time to prepare for the possibility that Mr. Marquis, the Project Engineer and co-author of the RJC Report, would be that witness. The respondent was also in possession of the RJC Report ahead of the disclosure deadline.

32I take notice that the respondent’s supplementary decision letter of December 11, 2025 is based on the RJC report, commenting that, “it directly addresses the root cause of the defect, namely, discontinuity in the air barrier and insufficient insulation.” The respondent’s reliance on the RJC Report for the supplementary decision letter adds credence to Mr. Marquis’ appearance as an expert witness.

33Rule 3.1 provides that the Rules be interpreted liberally to facilitate a fair, open and accessible process and allow the effective participation by all parties whether self-represented or having a representative. In this case, I find the appellant, who is representing herself in this matter, should not be prevented from a having a key witness testify as an expert by having missed the timeline and requirements of set out in Rule 10.

34I acknowledge there is prejudice to the respondent from allowing Mr. Marquis to testify as an expert, but it will be mitigated by the respondent’s ability to cross-examine his testimony, that his testimony will be confined to the RJC Report, and the appellant is required to serve and file his C.V. ahead of his appearance. I find the prejudice to the respondent from permitting Mr. Marquis to testify as an expert is outweighed by the probative value of his testimony as the principal author (Project Engineer) of the RJC Report, on which the respondent issued a supplementary decision letter, and on which the appellant has relied in meeting her onus in this proceeding.

ISSUE

35The issue to be determined is:

i. The amount of damages arising from the breach of warranty of claim item 8 of the appellant’s Year-End statutory claim?

RESULT

36The appellant is entitled to $15,000.00 from the Guarantee Fund (the “Fund”).

PROCEDURAL ISSUES

37Numerous objections were raised by the parties during the course of the three-day hearing regarding relevance of questions and proposed evidence, calls to speculation, the style of questions being posed to witnesses and the time taken for direct and cross-examination.

38Generally speaking, at each unique objection raised by a party, the proceeding was paused, and the parties were invited to give a brief oral submission on the objection. When appropriate, the witness currently before the Tribunal was removed to the waiting room until the objection was resolved.

39I heard many objections that were repetitive, i.e., an occurrence of the same or similar circumstance that had previously been determined. In cases where an objection on the same subject or circumstance was repeated, and for the efficient use of time in the hearing, I restated my decision from a previous occurrence and did not take further submissions.

Relevance

40The respondent objected to the appellant’s oral evidence not being relevant to the issue in dispute on several occasions. It submitted that the appellant’s testimony on subjects such as missed appointments with the builder, complaints to the Home Construction Regulatory Authority about the builder, and the time and expense relating to managing the warranty dispute, was not relevant to the amount of damages in claim item 8.

41It submitted that the secondary expenses and costs associated with the defect or deficiency related to claim 8 are excluded from the builder’s warranty. The respondent referred me to s. 13(2) (b) of the Act which excludes secondary damage caused by defects, such as property damage and personal injury.

42The appellant submitted that the Tribunal should recognize that she suffered a consistent pattern of administrative delay, missed appointments and countless calls and emails, all of which resulted in reduced employment income and fees, and these costs should be included in the damages arising from the breach of warranty.

43I accepted the respondent’s argument and asked the appellant to avoid oral testimony relating to secondary costs, fees, and displaced employment because they are not within the Tribunal’s authority to adjudicate, and not relevant to the issue in dispute. I reiterated that the Act restricts the Tribunal’s authority to decisions issued by the respondent under s. 14 of the Act. The Tribunal’s authority is limited to the question of whether there was a breach of the builder’s warranty, and if so, the amount or value of the damages resulting from the breach.

Admitting Evidence

44The parties objected to the admission of several documents into evidence on the basis they were not relevant to the issue in dispute.

45After considering submissions from the parties, I decided whether or not the document at issue would be admitted in accordance with Rule 9, which allows the Tribunal to admit the evidence it considers relevant, and s. 15(1) of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22 (“SPPA”) which provides the Tribunal discretion to admit as evidence at a hearing, any oral testimony, and any document or other thing that is relevant to the subject matter of a proceeding. If the document was admitted, it was assigned an exhibit number.

46In cases were the parties disagreed with my decision to admit evidence, they were invited to argue, in their closing submissions, the weight that ought to be assigned to the evidence.

Calls to speculation and style of questions put to witnesses

47The parties made several objections to the nature and style of questions put to witnesses, that questions put to witnesses were inviting speculation, and the testimony of witnesses was speculative. Objections on these matters were handled by inviting submissions and where appropriate, by asking a party to rephrase their question.

48I directed the parties to conduct direct examination using open-ended questions, and during cross-examination they could pose leading questions, in keeping with the conventions for administrative tribunal hearings.

49I declined to limit the testimony of witnesses on the basis it seemed too speculative. Rather, witnesses were permitted to express their opinions (in the case of the expert witness), beliefs and perspectives on the questions put to them, to help reveal the facts and circumstances of the issue in dispute.

Insufficient time

50At the end of the second day of the hearing, at approximately 5:05 p.m., the appellant objected to having not enough time to finish her re-examination of Mr. Marquis, her second witness.

51I informed the parties that, from the outset, days one and two would generally be used for the preliminary matter and the appellant’s two witnesses, herself and Mr. Marquis, and the third day would be allocated for the respondent’s two witnesses plus closing submissions.

52I reminded the parties that the hearing would adjourn at 5:00 pm each day. The start and end times for breaks during the day were agreed to by the parties.

53The appellant requested that Mr. Marquis be permitted to appear at the start of the third day; however, he was only available to testify on the second day (January 20, 2025).

54The appellant’s time for reply began at 4:50 p.m., after taking an approximately 15-minute break.

55After the second hearing day was adjourned at 5:09 p.m., the parties communicated and agreed that the appellant could propose her remaining questions to Mr. Marquis in writing, and submit his responses in writing, subject to the Tribunal’s agreement to receive the balance of the re-examination in this format.

56I agreed to admit the written responses to the appellant’s further questions, on re-examination, and the witness’s responses, as Exhibit 21.

57In the early afternoon of the third and last scheduled day of the hearing, the appellant objected to the time being taken by the respondent during direct examination of James Barbeau, a witness called by the respondent. He began his testimony at approximately 1:00 p.m.; the objection was at approximately 2:30 p.m. The appellant objected to the time being taken as it would impose on the time she wished for cross-examination of Mr. Barbeau.

58I acknowledged that this was the second and last witness of the respondent and that in order to provide sufficient time for the appellant, closing submissions may be made in writing.

59The respondent finished its direct examination of its second and final witness, Mr. Barbeau, at 3:07 p.m., at which time the hearing was paused until 3:35 p.m., to allow the appellant to review her notes and prepare to cross-examine Mr. Barbeau.

60At 3:35 p.m., the appellant requested a further 15 minutes to prepare for cross-examination, and requested that the oral hearing continue on a future day, to be scheduled.

61I declined to schedule a future day for the oral hearing because the order for the hearing was agreed to by the parties, and the parties had agreed to the schedule for the hearing on day one. To this point, the appellant had called only one witness (other than herself), two fewer than the appellant originally intended. I find that three days ought to have been sufficient for a total of four witnesses (2 for the appellant; 2 for the respondent).

62Throughout the hearing, the parties made numerous interventions for procedural objections, all of which took additional time for submissions. Being conscious of the time constraints, rulings on these objections were made orally and as efficiently as possible.

63I find that accommodating the completion of the appellant’s re-examination of Mr. Marquis by written questions and responses, and ordering the parties to file their closing submissions in writing, allowed considerable flexibility and optimum use of the time allotted for the oral hearing, such that the parties were afforded the greatest amount of time possible for oral evidence to be presented, cross-examined, and re-examined.

64In addition, the representative of the respondent helped facilitate the displaying of documentary evidence during the appellant’s direct and cross-examinations, which improved the efficiency of the hearing to the degree possible.

65I am guided by Rules 3.1 and 3.2 in facilitating a fair, open and accessible process to allow the effective participation by all parties, whether they are self-represented or have a representative. My orders and directions in respect to the time allocated for this oral hearing were intended to control the process sufficiently to ensure an efficient, proportional and timely resolution of the merits of the proceeding.

66I issued orders, orally with immediate effect, that the appellant file her closing statement/submissions in writing, no later than 4:30 p.m. January 26, 2026, up to seven pages, and the respondent must provide its closing statement/submissions in writing, up to seven pages, no later than 5:00 p.m. January 26, 2026.

ANALYSIS

The warranty claim

67The parties do not contest the following facts relating to the warranty claim:

i. This appeal concerns the appellant’s home at 18 Verglas Lane, Ottawa.

ii. The appellant took possession of the home on or about April 1, 2021 and filed the Year-end Form with the respondent on March 23, 2022. The Year-end Form included item 8, described as a cold air draft coming in from underneath the kitchen cupboards (that are above the garage on [the garage entrance] side).

iii. On November 24, 2022, the respondent issued a conciliation assessment report on the Year-end Form noting that a re-inspection of claim item 8 would be required during colder weather months so as to be comparable to the time of year the defect was reported. The re-inspection was conducted on February 2, 2023 and the respondent determined the defect to be unwarranted.

iv. The appellant listed the cold draft at the kitchen cupboard issue again, also as claim item 8, on her 2nd Year statutory claim form, on March 14, 2023.

v. The respondent contracted a consulting engineering company, Paterson Group, to investigate the air leakage issue in the appellant’s kitchen. Paterson Group issued its report on May 12, 2023 (“Paterson Report”) which confirmed air leakages in the subject area. Paterson Group recommended destructive investigation be undertaken to review the continuity of the air barrier at the wall and floor intersections. The respondent issued a conciliation re-inspection assessment report on May 23, 2023, declaring the defect in relation to claim item 8 a breach of the One-Year Workmanship Warranty.

vi. The respondent issued a claim inspection report on November 9, 2023 noting that claim item 8 was not resolved by the vendor.

vii. In July 2024, the respondent arranged for a contractor, Mighty Painting, to repair the warranted defect, including interior and exterior destructive investigations, adding spray-foam insulation to exterior areas (above the soffit of the over-hanging kitchen floor extension), and restoring the affected areas to their appropriate interior and exterior finishes.

viii. Following Mighty Painting’s work, on July 24, 2024, the Paterson Group conducted a follow-up test (blower door test achieving an interior-to-exterior pressure differential of 50 Pascals) which reported that while the blower door was operating, an air leakage was still detected. Paterson Group recommended caulking the gap between the lower cupboard kickplate and the adjacent baseboard at that location, to resolve the air leak.

ix. The respondent issued a decision letter on claim item 8 on March 4, 2025, offering $500.00 compensation for the appellant to accomplish the caulking work described in the Paterson Group follow-up test of July 24, 2024. As the appellant refused the offer of $500.00, the respondent denied claim item 8.

x. The appellant filed an appeal of the DL on March 23, 2025.

xi. Thereafter, the appellant engaged a construction contractor, I-con Project Management (“I-con”) and a consulting engineering firm, RJC Engineers, to further investigate the defect.

xii. On December 11, 2025, the respondent issued a supplementary decision letter (“SDL”) in relation to claim item 8, proposing a payment of $15,000.00 from the Fund to resolve the air leak issue, underpinned by RJC Engineers’ recommendation and proposed scope of work. The appellant did not accept the proposal. The respondent denied claim item 8.

Claim item 8 – amount of damages

68I find on a balance of probabilities that the appellant is entitled to $15,000.00 from the Fund for damages relating to claim item 8.

69There is no dispute that claim item 8 is a warranted defect. At issue is the amount to address/repair the defect.

70The appellant has the onus of demonstrating on a balance of probabilities that the amount of damages exceeds the $15,000.00 proposed by the respondent.

71The appellant submits that the damages amount to $60,000.00, anchored by two estimates she obtained in 2023 to address the damages, and RJC Engineers’ report of the defects she obtained in 2025. Her claim for damages includes an undisclosed amount for secondary costs including out-of-pocket expenses and professional involvement.

72The respondent submits that the appellant has not presented any evidence to support entitlement to $60,000.00 in compensation and that she has not met her burden to prove entitlement beyond the $15,000.00 offered in the SDL.

73The respondent seeks an order from the Tribunal upholding its decision to award the appellant $15,000.00 in compensation for claim item 8.

What “amount” is covered under the warranty?

74Under s. 13(1) of the Act, every vendor or builder of a new home warrants to the owner that it is constructed in a workmanlike manner and is free from defects in material, is fit for habitation, and constructed in accordance with the Ontario Building Code. The builder also warrants to the owner such other warranties as are prescribed by the regulations.

75Section 14 of the Act sets out the basis for compensation for a homeowner when there is a breach of warranty under s. 13. Section 14(3) stipulates that, subject to the regulations, a homeowner is entitled to receive payment out of the Fund for damages resulting from a breach of warranty.

Secondary damages not warranted

76I find that the amount of damages for the purposes of this appeal is limited to that which will address the deficiencies outlined in claim item 8 and that any costs that are secondary to the expense of repairing those deficiencies fall outside the purview of the Tribunal and are not relevant to the issue in dispute.

77From the outset of the hearing, and in her closing statement, the appellant sought compensation for her professional involvement and expenses relating to the time and exigencies of the warranty process.

78The appellant testified that although she does not occupy the home at 18 Verglas Lane, she has tenants who reported the air draft at the lower kitchen cupboard at the corner against the exterior wall, starting in January 2022. She testified that months went by with no resolution of the defect by the builder despite numerous attempts and missed appointments in the process. She testified that she sought conciliation of the claim with the respondent.

79The respondent submits that the appellant has provided no legal authority to justify her claim for secondary damages such as professional involvement and out-of-pocket expenses, and s. 13(2) (b) of the Act excludes secondary damages from warranty coverage.

80While I acknowledge that attempting to resolve deficiencies and warranty claims can be a time-consuming, arduous process, that can involve abundant correspondence, appointments at the home for inspections, and related communications, the scope of the Act, in relation to appeals of decision letters is precise and limited.

81In considering the amount of damages resulting from a warranted claim, I find the Tribunal’s authority is limited to the amount required from the Fund to repair or address the defect or deficiency related to the claim item.

82The Act does not define the scope of “damages resulting”, but I take guidance from the Divisional Court in Liddiard v. Tarion Warranty Corp., 2009 CanLII 65801 (ON SCDC), at paragraph 52, which described the limits of s. 13(1) of the Act regarding warranty coverage, as follows:

What is conferred by the warranty is the right to have done that which should have been done correctly in the first instance or a sum of money to purchase the labour and materials to do so. Any loss or damage that is derivative of the failure to construct in accordance with s. 13(1) is secondary and therefore excluded.

83In addition, the Tribunal can only exercise its authority to order payments from the Fund in relation to claim items listed in a decision letter of the respondent, nothing more. I take notice that Gale v. Tarion Warranty Corporation, 2024 ONLAT ONHWPA 15612, at paragraphs 74 and 75, underlines this principle in stating that “damages” unrelated to repairing the defect in the decision letter are denied.

84Section 5.1(4) of O. Reg. 892 (the “Regulation”) stipulates that when a vendor or builder does not complete the repairs or pay the compensation (in respect of a warranted claim) the respondent will, subject to s. 6 of the Act, pay compensation out of the Fund to the owner or shall perform or arrange for the performance of the repairs. In my view, the plain meaning of this provision is that the “amount of compensation” is exclusively for the performance of repairs to the defect reported in the claim, in this case, the air leak or the break in the air barrier that is allowing the air leakage at the intersection of the lower cabinets and exterior wall and floor assemblies, identified by the Paterson Group’s blower door test of July 24, 2024.

85I find that the amount of compensation for the damages arising from the warranted claim is therefore the sum of money required to purchase the labour and materials sufficient to affect repairs to the air barrier at that location.

The OHS and PF&D Estimates

86The appellant seeks a payment of $60,000.00 from the Fund, which she submits is a reasonable range of remediation costs, based on the repair estimates of both Ottawa Home Solutions (“OHS”) and Pro-Fence and Decks Inc. (“PF&D”), professional involvement, out-of-pocket expenses, and a foreseeable escalation of costs associated with the concealed remedial work. As noted above, the expenses for professional involvement and out-of-pocket costs are outside the purview of this matter.

87The appellant testified that she got a quote/estimate from OHS dated December 4, 2023, for $46,454.30 including HST, to address the air leak issue. The estimate sets categories of work activities such brick veneer on the exterior wall, soffit and insulation, floor assembly work and drywalling.

88The appellant testified that OHS attended the property in the latter part of 2023 and that her instructions to them were to follow the recommendations of the Paterson Report, as suggested by the respondent.

89The appellant testified that, in the latter part of 2023, she also arranged an estimate from PF&D to undertake repairs to the air leak issue. She testified that, like OHS, PF&D attended the home and reviewed the Paterson Report in preparing the estimate. Their estimate for the repairs was $49,700.00 plus HST for a total of $56,161.00. The estimate lists the materials that will be used in the work, for example, brick veneer, studs, insulation, strapping, gypsum board, and aluminum soffit.

90The appellant submits that both estimates show real-world repair costs from two separate contractors, and that the scope of work set out in them reflects the requirements to address the defect, as described in the Paterson Report.

91The appellant testified that the respondent rejected the two quotes from OHS and PF&D because they did not reflect the scope of work required to repair the defect. An email from Gord MacGregor, senior warranty services representative of the respondent, on January 18, 2024, in Exhibit 13, notes that the two quotes do “not reference the recommended scope of work set out on page 3 of the Paterson Report and do not meet the criteria that Tarion requires in order to be considered.”

92The respondent submits that the appellant’s quotes from OHS and PF&D have no probative value because neither contractor did any testing, assessments or investigations to determine the cause of air penetration.

93During cross-examination, James Barbeau, a warranty services representative of the respondent who coordinated the work of Mighty Painting, testified that the OHS and PF&D estimates did not set out the appropriate scope of work to address the defect. He testified that the work must be limited to the area of the defect, being the corner where the kitchen cabinets meet the exterior wall. He testified that “the quotes were too broad and should not, for example, involve replacing a whole facing wall.”

94The appellant submits that the respondent presented no evidence that either company was incapable of performing the work, and she rejects the claims of Mr. Barbeau, that the two suppliers did not meet criteria, because he is not an engineer and has no schooling related to building envelopes or air leaks.

95I take notice that the Paterson Report, at page 3, lists the required scope of work as:

i. Further destructive investigation to expose the 6mil polyethylene sheet from the inside and Tyvek membrane detailing from the exterior to further review the continuity of the intended air barrier membrane at the wall/wall and floor/wall intersections; and

ii. Once the 6mil polyethylene sheet and Tyvek building wrap is exposed, a repair can be completed. The repair may include taping unsealed seams and/or holes in the air barrier materials and/or installation of 2lb spray foam insulation.

96I am persuaded by the testimony of Mr. Barbeau, and the documentary evidence of Mr. McGregor, that the scope of work in the OHS and PF&D estimates was too broad and not specific to the warranted defect.

97I give little weight to the estimates of OHS and PF&D because they did not specify the scope of work in relation to the area of the claim (the floor area where the air leak was detected), they did not make any investigations into the cause of the defect, and their proposals pre-dated the investigations by Mighty Painting, I-con, and RJC Engineers.

Mighty Painting attempted repairs – June/July 2024

98As noted above, in June 2024, the respondent arranged for Mighty Painting to conduct repairs to the subject area and in July 2024, the Paterson Group did a follow-up blower door test which indicated there was still an air leak at the location.

99Although the work conducted by Mighty Painting did not completely correct the air leak defect, as evidenced by the follow-up blower door test, the exploratory openings it conducted in the kitchen wall behind the cabinets and in the cantilevered overhang, revealed the likely source of the air leak.

100Mr. Barbeau testified that, although he has no academic training, he has been a carpenter in residential construction for over 30 years, including new-builds and renovations. He has been employed by the respondent as a warranty services representative for 2.5 years doing about two inspections per day, many involving air barrier breaches.

101Mr. Barbeau testified that he attended the home during the Mighty Painting repair work. He testified that they removed the kitchen cabinets and opened an exploratory opening in the drywall behind the cabinets to investigate possible sources of air leakage. They cut the vapour barrier to see if any moisture was present. He testified that the insulation was dry; there were no signs of moisture.

102Mr. Barbeau testified that there was no evidence of the wall system (behind the cabinets) air barrier having been breached; if there had been an air leak there, at the corners where these usually would occur, some moisture would have been evident. He testified that there were no obvious breaches in the 6mil polyethylene inside the wall, and the wall system showed no signs of an air leakage. He testified that the source was more likely the cantilevered kitchen floor assembly.

103Mr. Barbeau testified that cantilevered floor assemblies such as this one are often the source of issues with air leakage and insufficient insulation because the underside of the cantilevered floor assembly is exposed to the exterior elements. He testified that ensuring a continuous air barrier sounds easy, but it is not. He testified that the best way to insulate exterior cantilevered areas, also referred to as “bump outs”, is using spray-foam insulation with an R3 value per inch.

104For the exterior investigation by Mighty Painting, Mr. Barbeau described the work undertaken as, “removing the soffit and opening up the underside of the cantilevered floor assembly”. Upon doing so, he, and Mohammed, the owner of Mighty Painting, noticed large gaps in the insulation adjacent the ends of I-beams extending into the home. Mr. Barbeau testified that the floor joists of the kitchen floor would sit immediately above the I-beams. What they observed, he testified, was an eight-inch gap under the floor allowing cold air to get into the I-beam space below the floor.

105To correct the gaps in insulation, Mr. Barbeau and Mohammed applied spray foam insulation. Mr. Barbeau testified that, after completing the additional insulation they closed up the openings and replaced the soffit with the unperforated type. He noted that the soffit used by the builder was the “vented” type, which was not appropriate for an overhanging floor such as this.

106Mr. Barbeau testified that, “I am confident that the only place air is coming in is the “bump-out” (the cantilevered floor assembly).

107The respondent submits that the appellant has not provided any evidence to suggest that there is a separate breach in the wall air barrier in addition to the clear gaps observed and identified in the cantilever soffit.

108Lee Hickmott, senior project manager for building sciences at the Paterson Group, testified that he attended the home for the follow-up blower door test, July 24, 2024, after Mighty Painting had completed its attempted repairs. He confirmed that with the blower in operation, there was still an air leak. He testified that the scope of work described in the I-con estimate and RJC Report are both reasonable considering the circumstances, since I-con proposed to focus on the exterior, cantilevered floor assembly, and RJC Engineers planned to investigate both the exterior cantilevered floor and the interior wall assembly behind the cupboards. He testified that RJC Engineers’ work appears to ensure that the issue of ongoing air leakage would be corrected.

109I give considerable weight to the testimony of James Barbeau, who has three decades of experience as a carpenter and who personally attended to investigations of both the wall assembly behind the kitchen cabinets, and the bump-out area of the cantilevered floor assembly. Mr. Barbeau was the only witness with first-hand knowledge, through direct observation, of the exploratory openings of areas suspected to be the source of the air leak. His testimony is most compelling.

110Mr. Barbeau essentially ruled out the wall assembly as a source of the air leak because when the exploratory opening was made, there were no signs of moisture and the insulation and 6mil barrier all seemed to be in good order. On the other hand, his and Mohammad’s observations of the underside of the floor assembly reported large gaps in insulation which they attempted to repair using spray foam insulation (the Mighty Painting repairs).

111I am persuaded by Mr. Barbeau’s testimony and the reports that this cantilevered floor assembly is the likely source of the air leak. His observation is supported by Mr. Natoli’s reports (I-con) of the defect area as well. The evidence suggests this is the most likely source of the air leak. While Mighty Painting’s work did not solve the overall issue, its findings help focus the additional work that will be required, to the likely source of the defect.

The appellant’s further investigations of the air leak

112The appellant testified that upon realizing that Mighty Painting’s work did not correct the air leak, she sought other contractors to address the defect.

113The appellant testified that she underwent the time and expense to engage I-con and RJC Engineers because Mighty Painting’s attempted repairs the previous month were unsuccessful and the Paterson Group’s suggestion of caulking the joint between the kick-plate and the baseboard would not resolve the source of the air leak.

I-con investigation and estimate

114In April 2025, the appellant engaged I-con to conduct thermal imaging, investigate the source of the of the air barrier defect, and provide an estimate for the work required to repair the defects or deficiencies they discovered.

115The appellant testified that she requested that I-con provide an estimate of what it would take to redo the work of Mighty Painting and correct the air leak. At Exhibit 18, in an email from Tony Natoli, the principal of I-con, to the appellant on April 17, 2025, Mr. Natoli describes an investigation that he conducted at the home using a thermal imager and opines that “there is still an air leakage occurring”, and “it is clear there is a minor thermal break occurring at the cantilevered second floor.”

116Mr. Natoli set out the following scope of work at cost of $2,300.00 plus HST:

i. Removing soffit and spray foam that was added to beam where venting is located;

ii. Remove the brick that was outlined in the photo, along with the mortar;

iii. Thermal image and check the temperature difference and inspect for any damage;

iv. Inspect that there are no voids in framing and/or any additional steel that could be causing cold transfer;

v. Re-insulate with 2-pound close cell spray foam; and

vi. Re-install soffit along with any caulking required.

117The appellant testified that she ultimately did not contract I-con to complete the work because “re-doing Mighty Painting’s unsuccessful repair would not solve the issue.” The appellant submits that the I-con estimate is irrelevant because the repairs contemplated by I-con are the same as those undertaken by Mighty Painting, which failed to correct the defect.

118Although the appellant regards the I-con estimate as irrelevant, and I agree that it has since been subsumed by the respondent’s supplementary decision letter, it serves to reinforce the likelihood that the source of the air leak is in the cantilevered overhang below the kitchen floor.

The RJC Report

119The appellant testified that she engaged RJC Engineers to complete a document review of the air leak defect.

120RJC Engineers issued its report on September 4, 2025 recommending further exploratory testing to better identify the source of the air leakage and conduct remedial repairs to ensure a continuous air barrier is provided at the affected area, at an estimated cost of $12,500.00 plus HST, and that amount could vary depending the final cost of the required repairs.

121Patrick Marquis, the project engineer and co-author of the RJC Report, testified that they reviewed all relevant documents including, architectural drawings, the Paterson Report, correspondence of the appellant, reports and photos of Mighty Painting’s work, and photos of the thermal images gathered by I-con. He testified that, based on their review, they could not sufficiently see the source of the air leak. They suggested doing exploratory openings in the kitchen wall behind the cupboards, and above the soffit into the cantilevered floor at that location, and as the source of the leak became apparent, complete the repairs.

122Mr. Marquis testified that the $12,500.00 estimate is a “best case” scenario, that would be sufficient to determine the source of the air leak and affect relatively simple repairs while the openings allowed access. The RJC Report’s recommended scope of work, at Tab 13 of Exhibit 3, includes making exploratory openings, repairing deficiencies, and conducting a blower door test to confirm performance of the repairs in accordance with the Ontario Building Code. Mr. Marquis testified, in his written responses to the appellant’s re-examination questions, that the cost of the blower door testing was not included in the $12,500.00. I take notice that Mr. Marquis’ oral evidence is inconsistent with the scope of work described in the RJC Report in respect of the post-repair blower door test.

123Mr. Marquis testified that the $12,500.00 does not include the cost of removing the kitchen cabinets to conduct exploratory openings to the wall assembly behind the cupboards.

124The RJC Report notes that the estimate reflects “probable costs”, and the “final costs” will not be known until such time as the work is tendered and completed, and final required repairs are completed. It stated that the final costs could be 20% lower or 30% higher than the $12,500.00, that soft costs (engineering fees and permit fees) could add another 10 to 15% on top of that, and the final amount would be subject to HST.

125Under cross-examination, Mr. Marquis testified that he was not aware of the extent of the gaps in insulation under the cantilevered kitchen floor discovered by Mighty Painting. He testified that he stood by RJC Engineers’ report in addressing the defect, subject to the uncertainties of the source of air leakage and the extent of costs to repair it, i.e., that they will not know how extensive or costly the repairs will be until they confirm the source of the leakage.

126Mr. Marquis testified that neither he, nor the other co-author or the report, Kailey Bertrand, attended the home in the course of their investigations. Their review was by way of documents and an interview with the appellant and her mother, Joanne Serafin.

127The respondent submits that the scope of work in the RJC Report is reasonable and will comprehensively address the warranted defect. It submits the $15,000.00 amount was based the $12,500.00 estimate in the RJC Report, and adding 20%, which was determined by adding 5% for variability (the average of minus 20% and plus 30% identified in the report), plus an additional 15% for soft costs.

128Mr. Barbeau testified that, although he believed the $500.00 for caulking would likely have corrected the air leak, after seeing the RJC Report and reviewing its scope of work, he concluded that it would make sense, and ultimately, the respondent agreed with the $12,500.00 proposed in the RJC Report. He said the offer of $15,000.00 far exceeds what he would consider necessary to correct the air leak and it should be more than sufficient to do the exploratory openings, conduct the repairs, and complete a post-repair blower test to confirm the air leak is resolved.

129I agree with Mr. Barbeau’s assessment that, based on the evidence heard at this hearing, $15,000.00 is more than sufficient to repair the air leak, including the cost of a follow-up blower door test to confirm the air leak has been corrected.

130I am persuaded by Mr. Marquis’ testimony that RJC Engineers stands behind their estimate of repairs, at $12,500.00, however I give the RJC Report less weight than Mr. Barbeau’s observations because RJC Engineers’ assessment is based entirely on documents and interviews, while Mr. Barbeau made direct observations of the very areas that RJC Engineers proposed to conduct exploratory openings at.

131I am not persuaded by the appellant’s claim for $60,000.00 in compensation because an undisclosed portion of that amount is for secondary damages (professional involvement and out-of-pocket expense), and an unidentified portion of that amount is informed by the OHS and PF&D estimates to which I attribute little weight.

132I am persuaded by the respondent’s position that $15,000.00 is an appropriate amount to compensate the appellant because Mr. Barbeau recommends it is more than sufficient to address the defect, the cause of which is more than likely in the cantilevered overhang area, and it is informed by the RJC Report, adjusted for uncertainties and soft costs.

Conclusion

133I find on a balance of probabilities that the appellant has not demonstrated that the amount of damages arising from claim item 8 exceeds $15,000.00, the amount proposed in the Supplementary Decision Letter of the respondent.

ORDER

134I order the following:

i. Pursuant to s. 14(19) of the Act, I direct the respondent to carry out the Supplementary Decision Order of December 11, 2025 and pay compensation to the appellant in the amount of $15,000.00.