Citation: Kichian v. Tarion Warranty Corporation, 2026 ONLAT 16753 ONHWPA

Licence Appeal Tribunal File Number: 16753 ONHWPA

In the matter of an appeal from a decision of Tarion Warranty Corporation under the Ontario New Home Warranties Plan Act, R.S.O., c. O.31, denying a claim

Between:

Krikor Kichian

Appellant

and

Tarion Warranty Corporation

Respondent

DECISION

VICE-CHAIR:

Avril A. Farlam

APPEARANCES:

For the Appellant:

Krikor Kichian, Self-represented

For the Respondent:

Ayesha Mehreen and Amanda Cutinha, Counsel

HEARD In Writing

OVERVIEW

1Krikor (Greg) Kichian, the appellant, appeals the decision letter dated April 3, 2025 (“Decision”) issued by Tarion Warranty Corporation (“Tarion”) pursuant to s. 14 of the Ontario New Home Warranties Plan Act, R.S.O. 1990, c. O.31 (“Act”) which denied the appellant’s claim for compensation under s. 14(2) of the Act for the residence at 1 Sunny Brae Avenue, Nepean (the “home”) received by Tarion September 27, 2024 (the “Claim”). The Claim arises out of a contract dated July 3, 2023 between the appellant and and The Ansell Group Ltd. (the “builder”) for the construction of the home.

ISSUES

2The issues to be decided are:

i. Has the appellant proven that his Claim of financial loss is covered by the warranty under s. 14(2) of the Act?

ii. If so, what is the amount of the appellant’s entitlement for payment out of the guarantee fund?

RESULT

3Having considered all of the evidence, and for the reasons that follow, I find that the appellant has not proven that the Claim of financial loss is warranted under s. 14(2) of the Act. I direct Tarion to deny the appellant’s Claim.

ANALYSIS

The Statutory Warranty

4Under s. 14(2) of the Act, an owner of land who has entered into a construction contract, and who has a cause of action against the builder for damages resulting from the builder’s failure to substantially perform the contract, is entitled to receive payment out of the guarantee fund of the amount by which the amount paid by the owner to the builder under the contract exceeds the value of the work and materials supplied to the owner under the contract.

5Entitlement to compensation under s. 14(2) of the Act requires an owner to establish each of the following four requirements:

(i) The owner has a contract with a builder for the construction of a home.

(ii) The builder failed to substantially perform the contract. According to s. 2(1) of the Construction Act, R.S.O. 1990, c. C.30, (the “CA”) a construction contract is substantially performed when the building is ready for use or being used for the purposes intended, and the building is capable of completion at a cost of not more than 3% of the first $1,000,000.00 of the contract price.

(iii) The owner has a cause of action against the builder for damages resulting from the builder’s failure to substantially perform the contract.

(iv) The total paid by the owner to the builder under the contract exceeds the value of the work and materials provided by the builder.

6Although the Act is consumer protection legislation and should be given a liberal interpretation, the onus is on the appellant to prove, on a balance of probabilities, that the claim is covered by the warranty coverage. The Tribunal owes no deference to Tarion’s decision.

7If a claim is covered by s. 14(2) of the Act, the amount of compensation for a home is limited by s. 6(1)(b)(ii) of R.R.O. 1990, Reg. 892: Administration of the Plan, to $40,000.00.

8Following a hearing, the Tribunal may, pursuant to s. 14(19) of the Act, order Tarion to take such action as the Tribunal considers Tarion ought to take in accordance with the Act and the regulations, and for such purposes the Tribunal may substitute its opinion for that of Tarion.

Appellant Has Not Established that the Claim is Covered by the Warranty under s. 14(2) of the Act

9For the following reasons, I find that the appellant has not established that the Claim is covered by the warranty under s. 14(2) of the Act.

Facts not in Dispute

10Tarion does not dispute that there was contract between the appellant and the builder for the construction of the home. This is acknowledged in Tarion’s Conciliation Assessment Report dated February 21, 2025 (the “CAR”) and not disputed in the Decision.

11Tarion does not dispute that the builder failed to substantially perform the contract as that term is defined in the CA. This is acknowledged in Tarion’s CAR which sets out that, based on a contract price of $751,601.11 including HST, and Tarion’s estimate that the value in place at the time the contract ended was $233,747.95, the home was some 31.1% complete. However, Tarion states in the CAR and in the Decision that the builder’s ability to substantially complete the contract was removed when the appellant terminated the contract and therefore the appellant has not established that the builder breached or failed to substantially perform the contract.

12Tarion does not dispute that the total paid by the appellant to the builder under the contract exceeds the value of the work and materials provided by the builder. This is acknowledged in Tarion’s CAR which sets out that the appellant paid $575,800.55 to the builder under the contract, which is more than the estimated value in place at the time the contract ended. This is also acknowledged in the Decision which concludes that the appellant paid the builder $296,700.00 over the value of the work and materials the builder supplied.

13The real dispute between the parties is whether the builder failed to substantially perform the contract because the appellant terminated the contract, and whether the appellant has a cause of action against the builder for damages resulting from the builder’s failure to substantially perform the contract, both within the meaning of s. 14(2) of the Act.

Builder Did Not Fail to Substantially Perform the Contract

14For the following reasons, I find that the appellant has not established that the builder failed to substantially perform the contract. The appellant removed the builder’s ability to substantially perform the contract by terminating the contract prior to substantial performance.

15Tarion concludes in the CAR and in the Decision that the builder’s ability to substantially complete the contract was removed after the appellant terminated the contract. The Decision states: “As of February 2024, you and the builder were communicating regarding the redesign of the home and next steps to move forward with the project. ….On May 8, 2024 you notified the builder that you would be terminating the contract and expected a refund of $296,700. The builder’s ability to substantially complete the contract was removed when you terminated the contract.”

16Although the appellant submits that he had “no choice” but to terminate the contract with the builder after discovering a breach of contract, this submission is not supported by the appellant’s documents.

17The evidence is clear from the affidavits and documents submitted by Tarion that the appellant terminated the contract with the builder for his own various construction-related reasons.

18On February 9, 2024 the builder sent an email to the appellant stating “This morning I have had conversations with my roofing company and my framer relating to Suzy calling them and asking them, without my prior knowledge, to complete the front roof line alterations and the side entrance portico.”

19On February 11, 2024 the appellant sent an email to the builder stating that the appellant was meeting with an architect “who will be willing to help us out”, requesting all structural, civil, and grading drawings, floor and truss layout and other documents and told the builder: “Please leave this re-design in my hands to sort out with the architect”.

20On May 8, 2024, the appellant’s lawyer Stephane P. Bond wrote to the builder stating, “Despite your interest our clients are not prepared to move forward with The Ansell Group Ltd. (“Ansell Group”) as our clients continue to uncover facts that are not compatible with your response” and demanding that the builder reimburse $296,700.00 to the appellant. This letter is clear that the contract is terminated by the appellant.

21The builder took the May 8, 2024 correspondence as terminating the contract. On May 13, 2024, the builder wrote back noting “It’s disappointing that your clients are not prepared to move forward with The Ansell Group since we have a signed contract with them…. We also don’t agree with your clients terminating the contract before the build is complete and for no good reason.”

22Given the termination of the contract, I find that the appellant removed the builder’s ability to proceed under the contract and substantially complete the home. The builder did not fail to substantially perform the contract, one of the requirements for entitlement under s. 14(2) of the Act. The contract was terminated by the appellant before substantial performance was achieved. This was a choice made by the appellant.

23Nothing in the appellant’s evidence or submissions persuades me otherwise. Further, in his submissions, it appears that the appellant does not seriously dispute the fact that the builder did not complete the contract because the appellant had terminated it.

Appellant Has Not Established A Cause of Action Against the Builder

24For the following reasons, I find that the appellant has not established that he has a cause of action against the builder for damages resulting from the builder’s failure to substantially perform the contract within the meaning of s. 14(2) of the Act.

25The appellant has not submitted any evidence that establishes that he has a viable cause of action against the builder.

26I have already found that it is the appellant, not the builder, who terminated the contract before substantial performance was achieved.

27From the evidence before me, I find it is more likely than not that the builder was not provided with an opportunity to substantially perform the contract and was terminated. As a result, the appellant has not established a cause of action against the builder for damages resulting from the builder’s failure to substantially perform the contract, within the meaning of s. 14(2) of the Act, one of the requirements for entitlement under s. 14(2) of the Act.

28Although the appellant submitted a Statement of Issues in Superior Court of Justice court file no. CV-24-00097384-000 (the “action”) dated August 6, 2025 which shows that the appellant and Suzy Mouradian are plaintiffs in an action against the builder and others, the Statement of Issues refers to allegations in the action, this document is authored by the builder’s lawyer and only shows that allegations have been made and are being vigorously defended by the builder.

29Given that any person can bring an action in court against another person, a purposive reading of the reference in s. 14(2) to “a cause of action against the builder for damages, resulting from the builder’s failure to substantially perform the contract” leads me to conclude that the cause of action must appear to be reasonably capable of success, or viable, to be a cause of action within the meaning of s. 14(2).

30On the evidence before me, the appellants cause of action here seems to be unlikely to succeed given the termination of the contract by the appellant before the builder had an opportunity to substantially perform. I make this comment only within the context of s. 14(2) of the Act and the appellant’s Claim before me.

Other Considerations

31For the following reasons, I find that in addition to the specific eligibility requirements of s. 14(2) set out above, which I find the appellant has failed to establish, it is more likely than not that the appellant knew the home was not eligible for warranty coverage as an owner-built home under the Act.

32There is ample evidence that the appellant and Suzy Mouradian knew the home was not eligible for warranty coverage under the Act.

33The affidavit of Russell Ansell, a director of the builder, sworn November 24, 2025, filed by Tarion, confirms that in June, 2023 the appellant signed a Letter of Confirmation Application Form indicating that the home is an owner-built home and is not covered under Tarion’s warranty, that the appellant will be responsible for hiring the trades and making major decisions in the construction of the home. The affidavit of Taryn Morris, Tarion’s warranty services analyst, sworn November 24, 2025, filed by Tarion, contains her testimony corroborating the Letter of Confirmation Application Form testified to by Mr. Ansell in his affidavit.

34Further, Mr. Answell’s testimony in his affidavit is that the appellant confirmed by email February 10, 2024 that the appellant is the owner builder, he controls the project and ultimately is responsible for the project. Ms. Morris’s affidavit contains her testimony corroborating this statement.

The Appellant is not Entitled to Payment Out of the Guarantee Fund

35Having found that the appellant has not met his onus to establish that he is entitled to compensation for financial loss under s. 14(2) of the Act, the appellant is not entitled to any payment out of the guarantee fund

36For all of the foregoing reasons, I find that the appellant has not met his onus to establish that he meets all four eligibility requirements under s. 14(2) of the Act.

Conclusion

37The appellant has not established that his Claim of financial loss is warranted under s. 14(2) of the Act.

ORDER

38For the reasons set out above, I direct Tarion to deny the appellant’s Claim.