Esuna Inc. v. Registrar, Home Construction Regulatory Authority, 2026 CanLII 53791

Licence Appeal Tribunal File Numbers: 17387 NHCLA and 17388 NHCLA

In the matter of an appeal of Administrative Penalty Orders under section 76 of New Home Construction Licensing Act, 2017, S.O. 2017, c. 33, Sched. 1.

Between:

Esuna Inc. and Paul Starkman

Appellants

and

Registrar, Home Construction Regulatory Authority

Respondent

AMENDED MOTION ORDER AND DECISION

ADJUDICATOR:

Rebecca Hines, Vice-Chair

APPEARANCES:

For the Appellant:

Paul Starkman, Counsel

For the Respondent:

Alex Alton, Counsel

Held:

By way of written submissions

BACKGROUND

1Esuna Inc. (“Esuna”) and Paul Starkman (“Mr. Starkman”) (collectively the “appellants”) appeal two Administrative Penalty Orders (“APOs”) issued on July 3, 2025, by the Home Construction Regulatory Authority (the “respondent”) pursuant to s. 76 under the New Home Construction Licensing Act, 2017, S.O. 2017. C. 33, Sched. 1 (the “Act”).

2The respondent alleges the appellants contravened s. 37(1) of the Act, by each selling a home without being licensed as a vendor as required by s. 37(1) of the Act, and without receiving confirmation that the home had been enrolled in the warranty plan as required by s. 10.1 of the Ontario New Home Warranties Plan Act, R.S.O. 1990, c. O.31 (the “ONHWPA”). The total amount of the penalty with regards to Esuna Inc. is $381,093.93. The total amount of the penalty with regards to Mr. Starkman is $460,963.47.

3The appellants dispute the grounds set out in the NOP for the reasons set out in the Notice of Appeal.

4I was assigned to a written motion hearing brought by the appellants seeking the production of various documents from the respondent, which will be addressed in this decision.

ISSUES

5The issue in dispute is:

a) Should the Tribunal grant the appellants’ motion for the production of various documents arising from the respondent’s investigation and calculation of the monetary penalty set out in the APOs?

RESULT

6After considering both parties’ submissions and evidence, the appellants motion for the production of documents is granted in part for the reasons discussed below.

ANALYSIS

7Rule 9.1 of the Licence Appeal Tribunal Rules (Rules) states that the parties shall exchange all documents, witness lists, and anything else they intend to rely on as evidence at the hearing. The Tribunal may, at any stage in a proceeding, order any party to provide such further particulars, disclosure, and production of documents and things that the Tribunal considers relevant to the issues in the proceeding.

8Rule 9.2.1 states that a party may request the Tribunal to order another party to disclose or produce any document or thing the Tribunal considers relevant to the issues in the proceeding.

9Rule 9.2.2 states that a party seeking production from a non-party may request an order from the Tribunal by filing a notice of motion and serving it on the other parties and the non-party. The party seeking a production order applying to a non-party must make reasonable efforts to obtain the requested document or thing without a production order.

10The appellant seeks an order from the Tribunal ordering the respondent to produce the following documents:

1. Documentation relied upon by the respondent to calculate the base penalty under the regulations;
2. The documents relevant to respondent’s authority to act on behalf of Tarion, which is a statutory authority under the ONHWPA Act;
3. All communication between Steven Chi and Paul Doucet of The Glynn Group with Justin Vetro of HCRA, and HCRA investigators regarding calculations, information and all documentation used to determine the construction costs of $482.00 per square foot;
4. All documents relevant to the calculation of the square foot price or any other amount of construction of 52 Cardigan Rd, Etobicoke, which was relied upon by the respondent with respect to the determination of the construction cost for three homes at 26, 28, 30 Durban Road;
5. All statements, interviews & communications with the owners of 26, 28 and 30 Durban Road and/or their real estate agents;
6. All Google searches and notes between the neighbours of 26, 28 and 30 Durban Road and the HCRA investigators;
7. Documents used by HCRA Inspectors including letters, emails, documents used to create “investigation notes” produced in the HCRA email of November 15, 2024;
8. All complaints and evidence received by Tarion or HCRA, including the complaint made by Michelle Manzon from March 1, 2023, and all subsequent emails and communication;
9. A breakdown of all calculations and categories, expenses included in the determination of cost of construction of $482.00 per square foot for 26, 28 and 30 Durban Road;
10. All communication between Tarion/HCRA and the City of Toronto, Committee of Adjustment (Etobicoke) and the Building Department (Etobicoke); and
11. All documents including original correspondence, emails, source documents and all other notes made after the events referenced in the Investigation Notes related to determining cost.

11The appellants argue that they have not received sufficient disclosure from the respondent regarding how its expert, Paul Doucet (“Doucet”), calculated the cost of $482.00 per square foot in arriving at the cost of construction in coming to the penalties set out in the APOs. The appellants submit that Doucet used amounts that he arrived at in a report done on another property (52 Cardigan Rd) in the same neighbourhood as the properties which are the subject of this dispute and the respondent has not produced this report. The appellants assert that the quantum of the penalty is one of the central issues in dispute and the respondent has produced minimal disclosure. In addition, the respondent has not produced any of the documents relevant to its investigation such as the investigator’s email communications with witnesses, witness statements, google searches or communications with Tarion or the City of Toronto. Finally, the appellants submit that they have made several attempts to obtain these records.

12The appellants rely on the Ontario Court of Appeal decision in R. v. Truscott, 2006 CanLII 60337 (ON CA) which discussed the admissibility of evidence in a criminal proceeding. The court stated “evidence is relevant if, as a matter of logic and human experience, it renders the existence or absence of a mater fact in issue more or less likely.” The appellants argue that all of the requested documents are relevant because they are referenced in the investigator’s notes and the APOs themselves. Further, it would be a breach of the appellants’ right to procedural fairness if these records are not produced.

13The respondent argues that the appellants’ motion for production is an attempt to transform the appeal from the APOs into a wholesale review of the HCRA’s investigative file. It submits that granting the motion would alter the nature of an APO appeal, import quasi-criminal disclosure obligations into a non-punitive regulatory regime, and undermine the legislature’s choice to provide a streamlined appeal process. The respondent maintains that it has already disclosed all the records that were before the Assessor when he decided to issue the APOs. The respondent submits that the sole question is whether documents that were not before the Assessor and not relied upon in the decisions under appeal are relevant to the reasonableness of those decisions.

14The respondent submits that Stinchcombe disclosure (See: R. v. Stinchcombe, [1991] S.C.R. 326) is not required in administrative penalty cases. It relies on the Federal Court of Appeal’s decision in Sheriff v. Canada (Attorney General) (F.C.A.), 2006 FCA 139, [2007] 1 FCR 3 where the court distinguished between cases where the defendant would experience economic hardship versus a loss of livelihood. It also argues that unlike cases involving Notice of Proposals revoking a licence, it is the appellants’ onus in this case to prove that the Assessor’s APOs are unreasonable. Further, the appellants rely on speculation as opposed to direct evidence from the investigator about what documents exist that has not already been disclosed. It also relies on the affidavit of Dawn Vanderstarren, investigator (“investigator”) which set out the steps of her investigation and documents collected in the process.

15I note that the parties do not dispute that it is the appellants onus to prove that the Assessor’s decision was unreasonable.

16The Tribunal’s Rules and the Statutory Powers Procedure Act provide the Tribunal with broad discretion in ordering a party to disclose documents or things that are relevant to a proceeding. Although I find the Sheriff case relevant as far as discussing the level of disclosure required in administrative penalty proceedings, I find that this case involves an order of a significant monetary penalty against the appellants in the amount of $842,057.40. I find the amount of the APOs requires more fulsome disclosure because it is the appellant’s onus to prove that the APOs were unreasonable. In addition, the Tribunal’s authority in this case will be to decide whether to uphold, dismiss or vary the APOs. As a result, I find that the Tribunal should hear evidence regarding the mathematical calculations used to calculate the APOs. For these reasons, I find that the appellants should receive full disclosure of any of the primary documents collected by the investigator which the Assessor used to make findings of fact and/or to calculate the monetary penalty in the APOs.

17I will now address the parties’ submissions regarding the productions requested and my decision regarding which documents should be produced.

18The respondent submits that the records listed in items 1 to 6 above either do not exist or the relevant records have already been disclosed to the appellants. I will address each in turn.

1) Documents relied upon by HCRA to calculate the base penalty

19The respondent submits that it has disclosed all documents that the Assessor used to calculate the base penalty. It asserts that the Assessor considered the factors outlined in the Administrative Penalties Regulation (O. Reg. 573/22) and provided a detailed explanation of each factor in coming to the base penalty amounts in the APOs. The respondent asserts that it disclosed the Administrative Penalty Assessment Form that the Assessor relied upon in making his decision and every document considered.

20I find that in the APOs, the Assessor discusses the regulation and factors he considered in calculating the base penalty. I find the appellants have not provided any evidence to support that the respondent is withholding any documents which were used by the Assessor to calculate the base penalty. As a result, I decline the appellants request for these records.

2) Documents relevant to HCRA’s authority to act on behalf of Tarion

21The respondent argues that its authority to issue APOs is designated by the HCRA and not from Tarion, which was already addressed by the Tribunal in its motion decision issued in December 2025. Further, that its authority to act on behalf of Tarion is not an issue in this matter

22The appellants did not explain in its motion submissions how these documents are relevant to this dispute. I find that this request is not relevant to the issue in dispute and that the respondent has already responded to this request. Further, the issue of jurisdiction was already addressed in the motion decision of the Tribunal issued in December 2025, which the appellants have appealed to the Divisional Court. Consequently, I decline the appellants request for these documents.

3) Communications between HCRA and The Glynn Group

23The respondent submits that it has already disclosed all communications between the HCRA and The Glynn Group regarding this case.

24The appellants state that they have been provided with emails dated August 28, 2024 and September 9, 2024, but another email from September 9, 2024 referred to in the investigators notes refer to costs relied upon by Doucet (including city fees, new service connections, design fees, insurance lender fees for construction advances and management fees has not been produced) which has not been produced.

25I find it unclear what emails were already provided by the respondent because an email between the investigator and Doucet from September 9, 2024, was included in the appellants’ motion record. However, I find that if there is another email from September 9, 2024, between the investigator and Doucet, in relation to the costs provided by Doucet then I find it relevant and that it should be disclosed.

4) Documents relating to the calculation of construction cost for 52 Cardigan Road

26The appellants argue that the quantum of the APOs is a central issue in this appeal. Further, the price of $482 per square foot for construction costs provided by Doucet to the investigator was from a report Doucet did on 52 Cardigan Road. Further, this amount was heavily relied upon by the Assessor in calculating the APOs and as a result is relevant to the issues in dispute. In addition, since Doucet is the respondent’s expert it has an obligation to disclose the report, or it will not be able to rely on it.

27The respondent submits that it has disclosed all documents in its possession relating to the cost estimate that was provided by Doucet on behalf of The Glynn Group. It relies on the affidavit of the investigator which states that no report was received from Doucet in relation to this property. Further, the only documents which exist are emails between Doucet and the investigator confirming the cost of construction for 52 Cardigan Road. It argues that these documents have already been produced. The respondent asserts that it does not have possession or control over The Glynn Group’s records or Doucet’s report on another property and cannot be compelled to produce third party documents that are not in its possession or control.

28I find that the report arising from the calculation of the construction cost for 52 Cardigan Road is relevant to the issue in dispute because the amount Doucet provided on a comparable property was used by the Assessor to calculate the construction cost in coming to the monetary penalties set out in the APOs. In this case, the total monetary penalty outlined in the APOs is $842,057.40 which is significant. As a result, I find the appellants should have access to all information relevant to the amount of the monetary penalty in order to defend their position.

29Having said that. I find that this report is a third-party record that is not in the respondent’s possession or control. Rule 9.2.2 supports that a party seeking production from a non-party may request an order from the Tribunal by filing a notice of motion and serving it on the other parties and the non-party. The appellants have not brought a motion for third-party records and did not serve the non-party. I have no submissions from the non-party, to whom Rule 9.2.2 requires the Tribunal to give an opportunity and, in any event, would be properly briefed in a non-party production order. Consequently, I decline to order the respondent to produce this report because it is not in its possession or control. I also find that item 9 above is a duplication and would be covered under this category as the emails between the investigator and Doucet and the report done on this property appear to be the only documents referred to or relevant to the calculation of $482 per square foot for the cost of construction.

5) Any email communications between the owners of 26, 28 and 30 Durban Road, their real-estate agents and neighbours.

30The appellants submit that there are various entries in the investigator’s notes which refer to statements, conversations and emails between the investigator and the owners of the properties, real estate agents and neighbours which are relevant to this dispute.

31The respondent argues that it has already disclosed this information which is contained in the investigation notes and that statements were not recorded separately. Moreover, it submits that there are no audio or visual recordings of the statements. The respondent relies on the affidavit of the investigator which states that all of their interactions (in person or by phone) with the owners of 26, 28 and 30 Durban Road and their real estate agents are documented in the investigation notes. Further, when communications took place by email the investigator provided a summary of what was sent and when it was sent in their notes which was already produced. In addition, the underlying emails were not before the Assessor, and as a result are not relevant.

32I have addressed the appellants request for any documents pertaining to interviews or email communications with neighbours set out in item 6 under this category. I find that the respondent has not disclosed all of the relevant documents pertaining to communications between the HCRA and the owners, real estate agents or neighbours of the property because the investigator’s notes refer to various email communications which have not been disclosed to the appellants. I find that any email communications between the investigator and owners of the subject properties, their real-estate agents and neighbours are relevant to the issues in dispute because they form the basis of the investigation and the facts set out in the APOs. In addition, the investigator’s notes refer to summaries that they found relevant to include in their notes. I find that there may be relevant information in these emails that the investigator did not find relevant but may be relevant to the appellants to challenge the foundation of the facts set out in the APOs. Further, as highlighted by the respondent, it is the appellants’ onus to prove that the Assessor’s decision was not reasonable. As a result, I find the appellants should have the relevant documents which formed the foundation of the investigation and order that these documents be produced.

33Regarding the request for notes, the investigator’s affidavit indicated that these are encompassed in her investigative notes Regarding the request for witness statements, the investigator’s affidavit states that there were no witness statements taken separately and that the interviews are reflected in the investigator’s notes. I have no evidence to the contrary to support that additional notes or separate witness statements were taken or exist and therefore I decline to order the respondent to produce these records.

6) Google Searches

34The appellants did not specifically address why the Google searches are relevant. The respondent submits that it does not have copies of the investigator’s Google searches and that these are referenced in the investigation notes. Further, these records were not relied on by the Assessor in the APOs and are not relevant.

35I accept the respondent’s submissions that these records do not exist. Consequently, there are no records to be produced, and I decline to order to produce same.

7) Documents used by HCRA Inspectors

36The appellants request all of the documents referred to in the investigation notes which include letters, emails and any documents used to create investigation notes produced by the HCRA in an email dated November 15, 2024.

37The respondent relies on the affidavit of the investigator which states that as part of the process for the APOs, they were responsible for providing information from the investigation to the Assessor. The affidavit states that the investigator does not provide every letter, email or document gathered during the investigation process. Instead, she provided the relevant letters, emails, and/or documents to the Assessor to review. If the Assessor decides to issue a notice of intention (“NOI”) or an APO then she compiles all of the letters, emails, and/or documents into a disclosure package to provide to the subject of the NOI, which ensures that the subject of the NOI has access to all of the same information that the Assessor had when he reviewed the case.

38I find that the documents used or collected during the investigation process such as letters, emails and any documents gathered by the investigator are relevant to the APOs and ought to be produced. Of note, I find the investigator’s affidavit unclear with respect to what documents were provided to the Assessor and what documents the investigator chose to exclude and why. The Investigator’s affidavit did not explain. Consequently, I do not have any evidence of what was included or excluded in the disclosure package to assess the relevance. Further, although the investigator may not find certain documents relevant, I find that these documents may assist the appellants in challenging certain facts discussed in the APOs. As a result, I find these documents relevant and order the respondent to produce same.

8) Complaints received by the HCRA

39The respondent relies on the affidavit of the investigator in support of its position that because these documents were not before the Assessor when he considered the APOs they are not relevant to the dispute.

40The appellants submit that no communications between the complainant and HCRA have been produced, although they are fundamentally relevant to the issues of the APO and the limitation period.

41I find that the only complaint referred to in this matter and received by the HCRA, is the complaint of Michelle Manzon dated March 1, 2023. I find that any emails or communications regarding this complaint are relevant to the issues in dispute because it led to the HCRA’s investigation and issuance of the APOs. As a result, I order the respondent to produce any documents in its possession relevant to this complaint.

42However, I find the only complaint referred to in the investigator’s notes is from Michelle Manzon. As a result, I find the appellants’ request to be overly broad, and I am not convinced that any other complaints exist. Further, I find the appellants’ request for any complaints to Tarion is not relevant to the issue in dispute and is also a request for a third-party record. As highlighted above, the appellants have not followed Rule 9.2.2 for the production of documents from a non-party. As a result, I decline the appellants’ request for any complaints made to Tarion.

10) All communication between HCRA, Tarion, the City of Toronto, Committee of Adjustment (Etobicoke) and the Building Department (Etobicoke)

43The respondent relies on the investigator’s affidavit which states that any conversations she had with Tarion, or the City of Toronto are reflected by way of summary in her investigation notes. In addition, the investigation notes also contain a summary of any emails sent or received. Finally, the respondent has already disclosed everything that was before the Assessor in relation to this category.

44In the appellants’ submissions and the affidavit of Paul Starkman numerous email communications are highlighted which have not been produced. Similar to my finding above, I find that any emails or communications between the respondent, Tarion, the City of Toronto, Committee of Adjustment (Etobicoke) and Building Department (Etobicoke) set out in the investigator’s notes are relevant to the issue in dispute because the APOs refer to documents and communications from these organizations in the APOs. As a result, I find these documents are relevant to the issues in dispute and should be disclosed.

11) All documents including original correspondence, emails, source documents and all other notes made after the events referenced in the Investigation Notes related to determining cost.

45I find the appellants’ request in item 11 to be unclear and overly broad. Further, if the appellants are requesting documents regarding the breakdown of the cost of construction per square foot in calculating the APO, this is duplicative and has already been addressed above. As a result, I decline the appellants’ request for the production of these records.

ORDER

46For the above-noted reasons I order the respondent to produce the following records within 15 days of the release of this order:

i. Any other email between Doucet and the investigator from September 9, 2024, discussing the cost breakdown of the cost of construction costs in arriving at $482.00 per square foot if not already produced.

ii. Any email communications between the investigator and owners of 26, 28 and 30 Durban Road, their real estate agents and neighbours;

iii. Documents used by HCRA Inspectors including letters, emails, documents used to create “investigation notes” produced in the HCRA email of November 15, 2024;

iv. The complaint made by Michelle Manzon to the HCRA from March 1, 2023, and all subsequent emails and communication; and

v. Any email communications between Tarion/HCRA and the City of Toronto, Committee of Adjustment (Etobicoke) and the Building Department (Etobicoke) referred to in the investigator’s note.

47I decline to order the respondent to produce the balance of the records requested for the reasons noted above.