Licence Appeal Tribunal File Number: 17424/ONHWPA

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

Between:

Anil and Vasudha Kumar

Appellants

and

Tarion Warranty Corporation

Respondent

and

Losani Homes (1998) Ltd.

Added Party

DECISION

ADJUDICATOR: Michael Beauchesne

APPEARANCES:

For the Appellants: Anil Kumar, Self-Represented

For the Respondent: April Abreu, Warranty Services Manager Ayesha Mehreen, Counsel

For the Added Party: William Liske, Counsel

Court Reporter: Laila Butt

HEARD: by videoconference January 19-20, 2026

OVERVIEW

1Anil and Vasudha Kumar (together, the “appellants”) appeal a decision letter issued by the Tarion Warranty Corporation (the “respondent”) and dated on July 18, 2025, under section 14(3) of the Ontario New Home Warranties Plan Act, R.S.O. 1990, c. O.31 (the “Act”).

2While only Mr. Anil Kumar (“Mr. Kumar”) presented evidence and represented both himself and Mrs. Vasudha Kumar (Mrs. Kumar”) throughout the proceeding, I have used the term “appellants” and its corresponding pluralized pronouns throughout the written decision for continuity and ease of reference.

The progression of the appellants’ claim

3The appellants completed a two-year statutory warranty form on March 7, 2020. Item 1-10 on this form—the basis of the dispute between the parties in this matter—indicates “[a]ir coming at intersection of floor [r]im joist and 2nd floor along back wall of 2nd floor in master bedroom.” The respondent accepted this form as a warranty claim under the Act on March 7, 2020.

4The respondent subsequently undertook a conciliation assessment of the appellants’ two-year claim on October 31, 2022. The respondent concluded that further investigation was required by a “qualified third-party contractor” to inspect the concern of air leakage before an assessment could be completed. To that end, the respondent retained Seymour Consulting Home and Building Inspections (“Seymour”) and the inspection, completed in December 2022, determined air leakage was occurring. The respondent issued the conciliation assessment results on January 5, 2023, which determined claim item 1-10 was warranted.

5Seymour provided a follow-up report in June 2023 that confirmed air was leaking into the rear of the appellants’ home. The respondent then retained Stephenson Engineering Ltd. (“Stephenson”) to carry out a site inspection and submit a report on the “envelope condition” of the appellants’ home with recommendations for repair at the damaged locations. The Stephenson leak investigation assessment was completed in November 2023 and the corresponding report is dated December 18, 2023. The respondent issued a claim inspection report on June 7, 2023, after performing a May 2023 inspection that determined Losani Homes (the “added party”) had failed to resolve the defect in the post-conciliation period. Stepheson conducted a follow-inspection on May 13, 2024, to assess its earlier observations over a greater exposed area of the rear elevation. The respondent subsequently obtained a July 2024 tender and quote from Burke’s Restoration Inc., to effect warrantable repairs in the amount of $20,641.08 before applicable taxes.

6On October 22, 2024, the respondent offered compensation to the appellants in the amount of $20,641.08. While the appellants accepted and received this cash value from the respondent, they claim this compensation is insufficient and appealed the subsequent decision letter, dated July 18, 2025, to the Tribunal.

ISSUE IN DISPUTE

7At the outset of the hearing, the parties consensually amended the issue as it appears in the Case Conference Report and Order (“CCRO”) for this matter. The issue, as described in the CCRO, is whether the appellants have proven on a balance of probabilities that a warranty deficiency exists under the Act, and if so, to what quantum of damages or other relief are the appellants entitled?

8The parties confirmed that item 1-10 is warranted and agreed the appellants are entitled to compensation. The respondent explained the appellants had, in fact, already received compensation from the guarantee fund for claim item 1-10 in the amount of $20,641.08. The appellants concur with receipt of payment, but maintain that they are entitled to more compensation because the scope of work compensated by the respondent is inadequate to resolve the warrantable defect.

9As such, the issue before the Tribunal in this matter is to determine what additional quantum, if any, the appellants are entitled to receive to resolve the warrantable defect under the Act. The appellants bear the onus of proving quantum entitlement on a balance of probabilities.

RESULT

10The appellants are entitled to have work performed or arranged by the respondent to mitigate the warranty breach in lieu of additional compensation from the guarantee fund. The work shall address the whole breach of warranty, which includes remediation of the air barrier system along the rim joist of the entire master bedroom exterior wall—and above the great room window—on the rear elevation of the home. The respondent’s liability to fund this scope of work shall be limited to only those costs that exceed the $20,641.08 earlier paid to the appellants.

PROCEDURAL MATTERS

The respondent asked to substitute a scheduled witness.

11I consented to a witness substitution requested by the respondent.

12At the outset of the hearing, the respondent advised that the Stephenson witness it had confirmed for the hearing would no longer be attending. Instead, the respondent had arranged for a different engineer employed by Stephenson—Mr. James Larmer (senior project manager)—to attend. The respondent acknowledged that, owing to the untimeliness of the switch, the Tribunal’s consent was required to make this change and requested leave for Mr. Larmer to appear as a witness. The added party consented to this, adding that Mr. Larmer would only be testifying to what is in the report as a representative of Stephenson.

13The appellant did not consent to changing the witness list as requested by the respondent, arguing that the intention was to hear evidence from the engineer who actually wrote the report and did the inspections.

14Rule 9.3 of the 2023 Licence Appeal Tribunal Rules (the “Rules”) establishes that—without the permission of the Tribunal—a party may not call a witness who is not included on a witness list filed in compliance with the Rules, directions, or orders of the Tribunal.

15I find Rule 9.3 is engaged in this case. The respondent was only entitled to rely on the witnesses it included on its list filed by the Tribunal-ordered deadline of November 21, 2025. Mr. Larmer did not appear on that list. In considering the factors at Rule 9.3, I determined that the respondent could call Mr. Larmer to testify at the hearing. While the reasons for non-compliance were unclear to me, I found that Mr. Larmer’s testimony would not prejudice the appellants because it would be constrained to the information in the Stephenson reports, which was well within the knowledge of the appellants. I voiced reservations on the relevancy of Mr. Larmer’s testimony, given that he did not attend the inspections conducted by Stephenson; did not write the corresponding inspection reports; and was not qualified as an expert witness under Rule 10. However, I considered that, to the extent Mr. Larmer’s testimony may help me arrive at a full and fair understanding of the matter, it was preferable to hear the evidence and let it go to weight. As such, I gave permission for Mr. Larmer to appear as a witness.

ANALYSIS

The weight afforded to the testimony of Mr. Larmer and Mr. Kumar.

16I diminished the weight of Mr. Larmer’s testimony and treated Mr. Kumar as a lay witness.

Mr. Larmer’s testimony merited little to no weight

17I find that the bulk of Mr. Larmer’s evidence was not relevant to the issue before the Tribunal. His testimony essentially served to repeat the air barrier system defects listed in the Stephenson reports, which is not disputed by the parties; a breach of warranty was ultimately determined. While he corroborated the respondent’s understanding of the scope of work—and specifically what aspect of the rear elevation was recommended for repair—I gave this testimony no weight in my analysis because Mr. Larmer had not visited the appellants’ home and therefore relied only on the report to inform his opinion. Similarly, I discounted the testimony that Mr. Larmer offered about incorporating the impact of construction material tariffs into his own cost estimates during cross-examination undertaken by the added party. I find this testimony is irrelevant because the parties did not establish that Mr. Larmer had any involvement in the quotes before the Tribunal in this matter.

18I also gave little weight to Mr. Larmer’s opinions about the suitability of materials used to assemble the air barrier system, which were often contradictory to the report findings. Mr. Larmer did not appear as an expert witness and he did not conduct the inspections in the report. Therefore, I find his thoughts on materials as they relate to the breach of warranty are of little probative value. In addition, I declined to her Mr. Larmer’s opinion on the Stonebridge quote because this aspect of his testimony was not in the “will say” earlier filed by the respondent. Further, the Stonebridge estimate is not addressed in the Stephenson reports, which the respondent and builder indicated as the basis for Mr. Larmer’s testimony.

Mr. Kumar did not seek standing as an expert witness

19Throughout the hearing, Mr. Kumar emphasized his experience and standing as a “professional engineer” who is qualified on the Ontario Building Code (“OBC”). He also minimized the need to obtain expert reports to support his case because of his engineering qualifications and experience. While it may be the case that Mr. Kumar has expertise in engineering and the OBC, it remains that Mr. Kumar did not seek to provide expert testimony in accordance with Rule 10. As such, I did not consider his evidence to constitute expert testimony.

What is the compensation quantum for claim item 1-10 on the appellant’s statutory claim form?

20I find the appellants have shown they are entitled to further compensation for this claim item under the Act.

21Section of 14(3)(b) of the Act provides that the appellants are entitled to receive payment out of the guarantee fund for damages resulting from a breach of warranty if they have a cause of action against the added party for damages resulting from the breach of warranty.

22The appellants submit that no air barrier was installed on the entire exterior rear wall of their home. As such, they submit that the scope of work should be to install a continuous air barrier on the whole rear elevation, which involves removing and replacing all the exterior brick finishing on that elevation. The appellant relies on the Seymour inspection reports to show a thermal scan revealed air leakages from different locations, including along the rim joist that services both the second-floor master bedroom and ground-floor great room. The appellants also rely on the Stephenson reports to show air barrier defects throughout the entire underlying area of the brick exterior on the rear of their home. To support the quantum of warrantable damages, the appellants rely on a quote by Stonebridge Masonry (“Stonebridge”) dated October 3, 2025.

23The respondent argues that the compensation payable from the guarantee fund should be limited to the scope of work proposed in the June 2024 Stephenson assessment report. As such, the respondent maintains that the scope of work and quantum claimed by the appellants is excessive because it applies to the entire rear elevation and not just the exterior of the master bedroom as specified in the appellant’s statutory claim form and the decision letter. The respondent relies on the evidence of Ms. April Abreu (warranty services manager) and Mr. Larmer, as well as the Seymour and Stephenson reports in addition to the Burk’s quote. For its part, the added party reiterates that the extent of the defect is limited to the area identified in the decision letter, which is just one room and not the entire house.

What is the physical area of the warranty breach for which compensation has already been remitted from the guarantee fund?

24I am satisfied that the appellants were compensated $20,641.08 for a breach of warranty that encompasses a physical area of brick exterior on the rear elevation on their home, which runs the full width of the space between the bottom of the master bedroom window on the second floor and the top of the window in the great room on the ground floor.

25While Ms. Abreu agreed during cross-examination that the physical dimensions of the warrantable repair area were not specified in either Stephenson report, she maintained that the Burke’s quote was nevertheless based on Stephenson’s June 2024 recommendations. I find those recommendations are articulated as follows:

“…carrying out brick removal along the east wall [rear elevation] at the location of the knee wall…”.

During cross-examination, Ms. Abreu was unable to confirm what was meant by “knee wall,” but explained that her understanding of this location was informed by the “15 courses of brick” removed in May 2024 by Burke’s between the sill of the master bedroom window and straight down to the top of the great room window.

26I afford weight to Ms. Abreu’s understanding of the warrantable area because she testified that she visited the home twice—once to perform the initial conciliation assessment and then again with a Stephenson engineer. As such, I accept she was aware of the area being investigated. I further find her testimony on the warrantable repair location is supported by the documentary evidence in this case. I reviewed the drawn-to-scale schematic of the rear elevation that was referenced by the parties during the hearing and counted 20 courses of brick depicted in the area described by Ms. Abreu. A photo of the deconstructed area in evidence shows at least 14 courses of brick. So, I accept that 15 courses of brick could be removed in this location.

27While I agree the June 2024 Stepheson report does not specify how many courses of brick were actually removed by Burke’s, it does relate that an area was opened “… on the east [rear] elevation of the property … between the [g]reat [r]oom … and [m]aster [b]edroom …”. This area was further defined in that report as being “between the living room window header and master bedroom windowsill.” This specific location is reinforced by Stephenson’s December 2022 report where it says two “localized cut tests” were performed to determine the cause of persistent air leakages “over the east facing [rear] ground floor living room and the bedroom directly above.” Given that the 2024 follow-up inspection involved an “enlarged area on the east [rear] elevation of the property in order to expose the entire area between the window head of the [g]reat [r]oom and the window [sill] of the [m]aster [b]edroom,” I find Ms. Abreu’s description of the warrantable area to be accurate.

28When I take all this evidence together on a balance of probabilities, I accept the appellants were compensated for a warrantable defect that applies to the exterior area of rear elevation which encompasses the full width of the space located between the top of the great room window and the sill of the master bedroom window.

Does the warranty breach extend beyond the physical area for which the appellants received compensation?

29In contrast to the physical area the appellants received compensation to remediate, I find the air barrier system warranty breach extends further to include the full width and height of the second-floor master bedroom, not including the ensuite, and the rim joist area above the ground floor great room.

30I agree that section 14(14) of the Act limits the scope of appeal to the respondent’s decision on a breach of warranty. While the claim item specified in the decision letter speaks only to air leakage in the master bedroom, I am satisfied that the respondent decided the great room also forms part of the appellants’ entitlement to compensation for a breach of warranty.

31The respondent paid $20,641.08 to the appellants from the guarantee fund to resolve claim item 1-10. When I consider the Burke’s quote that formed the basis for this payment, I find $4,464.22 of this compensation was allocated to remedy air leakage around the window of the great room. While I accept the scope of this work in the great room did not specifically address the exterior air barrier system in the great room, I find it did involve remediating the area above the window where the rim joist is located, and where both the Seymour and Stephenson reports agree that outside air is infiltrating the home interior because of air barrier defects. In fact, the decision letter confirms “…significant air leakage at the rim joist and the great room window. These deficiencies are shared between the two rooms.” The decision letter goes on to say that “the building envelope at the rim joist of the second-floor master bedroom and the great room window does not meet the [OBC] requirements in effect at the time of permitting.” When I consider this evidence together on a balance of probabilities, I find it shows the respondent accepted the great room as part of claim item 1-10.

32To address the scope of repair in the master bedroom specifically, I find that the compensation falls short of remedying the warrantable defect. The Burke’s quote contemplates remedial masonry work only in the “localized area,” which I accept to be the area that was opened up for deconstructive exploration as defined by Ms. Abreu’s testimony and documentary evidence. However, in my view, the claim item as specified in the appellants’ statutory claim form includes the entire length of rim joist in the master bedroom on the rear elevation (i.e. “along back wall of 2nd floor in master bedroom”). Judging by the floor plans entered as evidence, this “back wall” length extends beyond just the full width of the master bedroom window.

33The decision letter says the appellants complained about a draft at the master bedroom window “near the baseboard” at the time the conciliation assessment was done. During cross-examination, when asked whether claim item 1-10 means the whole master bedroom wall, Ms. Abreu testified that the investigation involved only the baseboard at the master bedroom window because it was limited to the area reported by the appellants. In my view, this strict interpretation of what constitutes the scope of the appellants’ claim is a rigid, restrictive approach that is not compatible with the Act’s consumer protection mandate. It is well settled by the courts that the Act is remedial consumer protection legislation that should be given a fair, broad and liberal interpretation [see, for example: para 59 of Liddiard v. Tarion Warranty Corporation, 2009 CanLII 65801 (ON SCDC)].

34In this case, the evidence supports air infiltration along the entire length of the master bedroom’s exterior wall. For example, the Seymour report does not specify that the leaks were constrained to the length of wall immediately below the master bedroom window. In November of 2022, the thermal scan it conducted showed a “large air leakage deficiency in the rim joist.” This was confirmed again in Seymour’s July 2023 report, where it says the air leakage was “predominantly” at the rim joist assembly in the master bedroom.” During the hearing, I was not pointed to any aspect of the Seymour report that supported air infiltration occurring only beneath the master bedroom window.

35I find the investigative results of the Stephenson reports also support remediation along the entire exterior wall of the master bedroom—albeit less conclusively than Seymour. While I accept Stephenson examined the air barrier defect only in the “localized area,” I find that the warranty breach is not necessarily restricted to the area where the exploratory cuts were made. Stephenson’s December 2023 report indicates that because “localized exploratory openings [were only competed] on the east [rear] elevation, the possibility of this substitution [of materials used to assemble the air barrier system] occurring elsewhere remains.”

36When I take the Seymour and Stephenson reports together, I find they harmonize to show that the respondent’s statutory liability to the appellants, who are entitled to receive protection under the Act, involves remediating the warranty breach by replacing the air barrier system along the entire rear wall length of the master bedroom at the rim joist. As indicated in the decision letter, Stephenson’s inspection identified several issues with this air barrier system as follows:

“The air barrier was not installed continuously on the OSB sheathing [i.e., the engineered compressed wood used to construct the exterior walls]; instead, it was returned beneath the floorplate, allowing air to infiltrate the wall assembly. Additionally, the through-wall flashing above the great room window was poorly installed—it was wrinkled, not fully extended, and not secured to the substrate, rendering it ineffective.

It was also discovered that the house wrap used at the window openings did not match the specified product outlined in the permit drawings. The material appeared to be a coated polyethylene fabric with perforations, which may have degraded due to exposure. Furthermore, the wrap lacked proper seam tape or sealant, as required by the [OBC]. The air barrier was also misrouted, traveling upward along the rim board but not extending over the OSB

sheathing, which allowed air to continue infiltrating the interior space.”

37Given that the parties agree the rim joist forms part of the great room below, and that the air leakage deficiency is shared between both the master bedroom and the great room along the rim joist, it follows that the air barrier must also be remediated along the rim joist that spans the top of the great room window where Seymour has also detected “predominant” air leakage.

What quantum are the appellants entitled to receive?

38I find that the appropriate resolution for this case is for the respondent to perform or arrange for the performance of work to remedy the breach of warranty.

39Section 14(19) of the Act says the Tribunal may, by order, direct the respondent to take the action the Tribunal considers ought to be taken in accordance with the Act. Section 14(12) of the Act enables the respondent to perform or arrange for the performance of work in lieu of or in mitigation of damages that are claimed.

40I am not satisfied that the Stonebridge quote produced by the appellant is consistent with the scope of work required to remedy the breach of warranty. The appellants testified that the quote, which estimates $59,042.50 in remedial costs, applies to the entire rear elevation of their home. However, I do not agree that the appellants have shown the entire rear elevation needs to be addressed on a balance of probabilities. Despite the appellants’ testimony that there are air leaks coming in various directions throughout the whole house—including the front elevation where they have taken to wearing blankets to cope with drafts—I am persuaded that the bulk of the evidence in this case points only to air leakages along the master bedroom rim joist and the top of the great room window per the Seymour and Stephenson reports. As such, I am not persuaded that air barrier system defects occur elsewhere throughout the rear elevation as exploration occurred only in the “localized area” and this is insufficient evidence to support the appellants’ claim.

41I find the Stonebridge quote is structured such that it is not possible to proportionally allocate costs to the scope of work I have determined the appellants are entitled to receive. As such, in lieu of ordering additional compensation to remedy the expanded scope of warranty breach, I find it appropriate to direct the respondent to perform or arrange for the performance of work to mitigate the claimed damages. According to section 14(6) of the Act, the respondent’s liability to fund this work from the guarantee fund shall extend only to the amount that exceeds the $20,641.08 already paid to the appellant.

ORDER

42The appellants are entitled to have work performed or arranged by the respondent to mitigate the warranty breach in lieu of additional compensation from the guarantee fund. The work shall address the whole breach of warranty, which includes remediation of the air barrier system along the rim joist of the entire master bedroom exterior wall—and above the great room window—on the rear elevation of the home. The respondent’s liability to fund this scope of work shall be limited to only those costs that exceed the $20,641.08 earlier paid to the appellants.