Licence Appeal Tribunal File Number: 16008/NHCLA
In the matter of an appeal of an administrative penalty order under section 76 of the New Home Construction Licensing Act, 2017, S.O. 2017, C.33. Sched. 1
Between:
GC King Bond GP Inc.
Appellant
and
Registrar, Home Construction Regulatory Authority
Respondent
CONSENT ORDER
Vice-Chair: Jeffery Campbell
OVERVIEW
1The appellant, GC King Bond GP Inc. (the “Appellant”), appeals the administrative penalty order, dated June 4, 2024, issued by the Registrar, Home Construction Regulatory Authority (the “Registrar”), pursuant to section 76 of the New Homes Construction Licensing Act, 2017, S.O. 2017, C. 33, Sched. 1 (the “Act”).
2The parties advised the Tribunal that they had resolved the issues in dispute on the terms and conditions set out in the Amended Minutes of Settlement between the Appellant (signed November 19, 2024) and the Registrar (signed November 14, 2024). The Amended Minutes of Settlement shall constitute Schedule A.
3Further, both parties confirmed that pursuant to section 4.1 of the Statutory Powers Procedure Act, R.S.O. 1990, c. S 2 (the “SPPA”), both parties waive the requirements of a hearing. A copy of the agreement signed by all parties is attached as Schedule A to this Order.
ON CONSENT OF BOTH PARTIES, I ORDER:
4Pursuant to s. 4.1 of the SPPA and on the consent of the parties, I dispose of this proceeding without a hearing on the terms set out in the Amended Minutes of Settlement signed by the Appellant on November 19, 2024 and by the Registrar on November 14, 2024, a copy of which is attached to this order as Schedule A, which Schedule A is incorporated and made part of this Order.
LICENCE APPEAL TRIBUNAL
Jeffery Campbell, Vice-Chair
Released: November 21, 2024
SCHEDULE A
Tribunal File Number: 16008/NHCLA
LICENCE APPEAL TRIBUNAL
New Home Construction Licensing Act, 2017, S.O. 2017. C.33, Sched. 1
BETWEEN:
GC KING BOND GP INC.
(“GC King Bond”)
and
REGISTRAR, HOME CONSTRUCTION REGULATORY AUTHORITY
(“HCRA”)
Amended Minutes of Settlement
Whereas, GC King Bond is licensed to build and/or vend new homes in Ontario pursuant to the provisions of the New Home Construction Licensing Act, 2017, S.O. 2017, c. 33, Sched. 1 (the “NHCLA”).
Whereas, GC King Bond is building and vending a new home project in Richmond Hill, Ontario (the “Project”).
Whereas, GC King Bond began vending new homes in the Project in August, 2020.
Whereas, in May, 2022, GC King Bond sought to raise additional funds from its purchasers by requesting an increase in the purchase price of their units.
Whereas, on June 4, 2024, the HCRA issued an Administrative Penalty Order ordering GC King Bond to pay $16,476,838.54, alleging that these price increases contravened section 3 of the Code of Ethics (the “APO”).
Whereas, on June 19, 2024, GC King Bond exercised its statutory right to appeal the APO to the Licence Appeal Tribunal (the “LAT”).
Whereas, the LAT is scheduled to hold a hearing on GC King Bond’s appeal from November 26 to November 28, 2024.
Whereas, GC King Bond and the HCRA (collectively, the “Parties”) have reached a settlement of all matters in the APO on the terms set out in these Minutes of Settlement.
NOW IN FULL AND FINAL SETTLEMENT of all matters described herein, including all the matters forming the subject of the APO and all the allegations made therein, the mutual agreements and covenants herein contained, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties HEREBY AGREE as follows:
- The recitals set out above are substantially true and correct and form part of these Minutes of Settlement. All terms not defined herein are as defined in the NHCLA and Ontario New Home Warranties Plan Act, R.S.O. 1990, c. O.31 (the “ONHWPA”) and their respective regulations.
LAT Order
- GC King Bond and the HCRA, in accordance with section 4.1 of the Statutory Powers Procedure Act, hereby waive the requirements of a hearing and irrevocably consent to an Order of the LAT pursuant to section 77(4) of the NHCLA substantially in the form attached hereto as Schedule “A” containing the following terms (the “LAT Order”):
a. GC King Bond neither contests, nor admits, any of the allegations contained in the APO, however, it has agreed to pay the Administrative Penalty to support the interests of its purchasers.
b. GC King Bond shall pay an Administrative Penalty of $6,415,100. This penalty includes:
i. $1,100,000 in monetary benefit from the original purchasers who accepted the price increase amendment initiated by GC King Bond (the “Price Increase Purchasers”); and
ii. Foregoing $5,315,100 in monetary benefit from 34 purchasers who did not accept the price increase or agree to terminate the agreement (the “Undecided Purchasers”).
- GC King Bond shall provide each of the Price Increase Purchasers who close on their agreement with GC King Bond with a credit on their Statement of Adjustments on closing equal to the purchaser’s proportionate share of the $1,100,000 in this LAT Order. For greater clarity, to ensure a fair distribution of the LAT Order funds, each Price Increase Purchaser is entitled to receive a credit on their statement of adjustments calculated by multiplying $1,100,000 by a fraction determined by dividing the amount of the increase in their respective purchase price (net of any additional incentives granted to them at the time the purchaser agreed to an increase in the purchase price) (“Net Price Increase”) by the total amount of the Net Price Increases across the Price Increase Purchasers who close on their agreement with GC King Bond.
- Within 30 days of this Order, GC King Bond can satisfy the $5,315,100 portion of this Order by sending a letter, substantially in the form attached as Appendix A, to the Undecided Purchasers advising these purchasers of this resolution and confirming that GC King Bond is no longer seeking an increased price for their unit.
e. Within 30 days of this Order, GC King Bond shall send a letter, substantially in the form attached as Appendix B, to the Price Increase Purchasers advising these purchasers of this resolution and the amount that will be credited to the purchaser as an adjustment on closing.
Regulatory Action
The HCRA agrees that this settlement represents the full and complete penalty and licensing action for the price increase and subsequent actions by GC King Bond in relation to the price increase and that no further action may be raised in relation to the matters addressed in the APO.
GC King Bond acknowledges that nothing in this agreement restricts the HCRA from taking any action against it with respect to any new information or matters that come to the HCRA’s attention that are unrelated to the price increase that is the subject of the APO.
For greater clarity, GC King Bond acknowledges and agrees that the HCRA will pursue additional regulatory action if GC King Bond fails to abide by the terms of this agreement.
General
These Minutes of Settlement shall be construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein.
These Minutes of Settlement constitute the entire agreement between the Parties hereto with respect to all of the matters set out herein and its execution has not been induced by nor do any of the Parties rely upon or regard as material any representation either oral or in writing not incorporated herein or made a part hereof. These Minutes of Settlement shall not be amended, altered or qualified except by an agreement in writing signed by both Parties.
These Minutes of Settlement shall enure to the benefit of and shall be binding upon the Parties.
The Parties agree that should any provision or portion of these Minutes of Settlement be voided and/or nullified by a court or tribunal of competent jurisdiction, said provision or portion shall be severed from these Minutes of Settlement and the remainder of these Minutes of Settlement shall remain binding upon the Parties.
These Minutes of Settlement may be executed by facsimile or email scan and in counterparts, each of which so executed shall be deemed to be an original and such counterparts together shall constitute one and the same instrument.
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By their respective signatures below, the Parties indicate agreement to the terms of this agreement.
Witness GC KING BOND GP INC.
Name:______________________
Title:_______________________
Date:_______________________
I have authority to bind the corporation
Witness For the REGISTRAR, HOME CONSTRUCTION REGULATORY AUTHORITY
Name:______________________
Title:_______________________
Date:_______________________