Licence Appeal Tribunal File Number: 17429/NHCLA
In the matter of an appeal from an Administrative Penalty Order made pursuant to section 76 of the New Home Construction Licensing Act, 2017, S.O. 2017. C.33, Sched. 1
Between:
10184110 Canada Inc.
Appellant
-and-
Registrar, Home Construction Regulatory Authority
Respondent
DECISION AND ORDER
ADJUDICATOR:
Colin Osterberg
APPEARANCES:
For the Appellant:
Jonathan Mesiano-Crookston, Counsel
For the Respondent:
Alex Alton, Counsel
Heard by videoconference:
November 24, 2025
OVERVIEW
110184110 Canada Inc. (the “appellant”) appeals the Administrative Penalty Order (“APO”) issued on July 18, 2025 by the Registrar, Home Construction Regulatory Authority (the “Registrar”) pursuant to s. 76 of the New Home Construction Licensing Act, 2017, S.O. 2017. C. 33, Sched. 1 (the “Act”).
2The Registrar alleges the appellant contravened ss. 3 and 13 of the Code of Ethics set out in Ontario Regulation 245/21 under the Act (the “Code of Ethics”) in that it treated purchasers of two properties unfairly by charging amounts that the purchasers had not previously agreed to pay, and provided false, misleading or deceptive information or documents to the Home Construction Regulatory Authority (“HCRA”). The appellant was ordered to pay penalties in the amount of $63,984.55.
3The appellant denies the allegations in the APO and denies that it charged the subject purchasers more than they had agreed to pay, or that it intentionally provided false, misleading or deceptive information or documents to the HCRA.
ISSUES
4The issues to be decided in this hearing are:
a. Whether the appellant has established that the assessor’s finding that the appellant contravened ss. 3 and 13 of the Code of Ethics was unreasonable; and
b. If not, whether the APO imposed by the Registrar as a result of the alleged contravention of ss. 3 and 13 of the Code of Ethics reasonable under the circumstances.
RESULT
5I find the appellant has not established that the assessor’s finding that the appellant contravened ss. 3 and 13 of the Code of Ethics was unreasonable.
6I find the APO imposed by the Registrar as a result of the contravention ss. 3 and 13 of the Code of Ethics was not unreasonable.
7Pursuant to s. 77(4) of the Act, I confirm the APO.
ANALYSIS
A. Reasonableness of the finding that the appellant contravened ss. 3 and 13 of the Code of Ethics.
8For the reasons that follow, I find the assessor’s finding that the appellant contravened ss. 3 and 13 of the Code of Ethics was not unreasonable.
9Section 76(1)(a) of the Act provides that an assessor may impose an administrative penalty against a person if the assessor is satisfied that the person has contravened a prescribed provision of the Act or the regulations. Pursuant to s. 76(2), the Code of Ethics is a prescribed provision of the Act or regulations for the purposes of s. 76(1)(a).
10Section 3 of the Code of Ethics provides that, in carrying on business, a licensee shall treat every person the licensee deals with fairly, honestly and with integrity.
11Section 13 of the Code of Ethics provides that a licensee shall not provide false, misleading or deceptive information or documents to the HCRA.
12The Registrar alleges that the appellant contravened s. 3 of the Code of Ethics in its conduct during the sale of two homes. With respect to a home described as Lot 1-512 Thornton Road North, Oshawa, Ontario (“Lot 1”), the Registrar alleges that the appellant failed to treat the purchaser fairly, honestly, and with integrity by charging more than the agreed upon amount for upgrades to Lot 1.
13With respect to a home described as Lot 5-512 Thornton Road North, Oshawa, Ontario (“Lot 5”), the Registrar alleges that the appellant failed to treat the purchaser fairly, honestly, and with integrity by charging development fees which were above a cap on development fees to be charged to the purchaser as set out in the Agreement of Purchase and Sale (“APS”) for that property.
14The appellant denies that it charged more than the agreed upon amount for upgrades with respect to Lot 1 and denies that there was an agreed-upon cap on development fees as alleged by the Registrar with respect to Lot 5.
15The Registrar alleges that the appellant contravened section 13 of the Code of Ethics by providing false, misleading or deceptive information or documents to an inspector appointed by the HCRA during the course of an inspection relating to the allegations regarding Lot 5.
16The appellant denies the Registrar’s allegations with respect to s. 13 of the Code of Ethics and takes the position that it acted in a forthright manner in its communications with representatives of the HCRA. The appellant says that any errors that were made were inadvertent and attributable to misunderstandings on the part of its employee, who was not familiar with the Lot 5 transaction when supplying information to HCRA’s inspector.
Lot 1
17The APO alleges that on February 15, 2023, a little over two months before the sale of Lot 1 was to close, the appellant emailed the purchaser stating that the cost of the upgrades the purchaser had selected was $109,599.00. When the sale was closed on April 25, 2023, the appellant charged the purchaser an additional $14,337.44 for the upgrades.
18The appellant denies that the February 15, 2023 email sets out the price of all of the upgrades the purchaser agreed to and the appellant alleges that there were a number of upgrades that the purchaser never paid for, and so, it actually undercharged the purchaser.
19The evidence presented at the hearing is that the APS for Lot 1 is dated October 14, 2020, with the purchase price set out as $925,000. Shortly after this APS was entered into, the appellant began experiencing significant increases in material costs which were alleged to have resulted from supply issues related to the COVID-19 pandemic. After consulting with the Tarion Warranty Corporation (“Tarion”), which is one of the bodies which regulates the purchase and sale of new homes, the appellant negotiated a new sale price with the purchaser of Lot 1 in May 2021. The new sale price was increased to $1,015,000 at that time.
20According to the appellant, this new purchase price did not include upgrades which had been requested by the purchaser from time to time, and which by June of 2021 totaled an additional $99,000.
21Then, on July 30, 2021, the appellant and the purchaser agreed to an Amendment to the APS which provided that the price of $1,015,000 is deleted and the following inserted:
“Purchase price – One Million One Hundred and Fifty Thousand Dollars ($1,150,000) – Including all upgrades”
22According to the appellant, the Amendment to the APS included the $99,000 in upgrades that had been requested by the purchaser up until June 2021 as noted above. On this basis, the purchase price before upgrades was now $1,051,000, an increase of $36,000 over the amount agreed to only two months before.
23I should note that the appellant did not at the hearing set out any contractual basis showing that it was entitled to increase the purchase price from the original $925,000, first to $1,015,000 and then to $1,051,000 plus upgrades.
24In any event, after the Amendment to the APS was entered into, the appellant says that the purchaser requested additional upgrades, which the appellant says total about $30,000. The appellant presented various emails which set out upgrades which were requested and installed after July 30, 2021.
25According to the purchaser, who testified at the hearing, he understood that the purchase price set out in the Amendment to the APS, $1,150,000 was made up of the first increase in price, $1,015,000 plus the upgrades of $99,000 to that point, and an additional $36,000 “buffer” for future upgrades yet to be determined. The purchaser testified that he wanted this buffer amount included because he was seeking mortgage pre-approval from the bank and he had not finally determined all of the upgrades to be requested or the price of those.
26On February 15, 2023, about 2 months before closing, the purchaser of Lot 1 says he was seeking the final total owing. A lot of upgrades had been requested and he wanted to know what the total cost of the home including upgrades was going to be. The total was requested in a zoom meeting between the appellant and the purchaser.
27On February 15, 2023, a representative of the appellant sent the purchaser an email stating that the “final upgrade amount after our zoom meeting” has come up to $109,599. The purchaser responded with an email which said:
“With this the purchase price will be 925 initial + 90 adjustment + 110 upgrades + 1.125M
Can we go ahead and proceed to mortgage with these figures?”
28The appellant responded with an email stating:
“There will be adjustment made based on your APS. Lawyer will send the statement of adjustment to your lawyer.”
29According to the appellant, the upgrades of $109,599 in the February 15, 2023 email were intended to relate to the upgrades that were completed before July 30, 2021 only and there were another $30,000 worth of upgrades which were requested between July 30, 2021 and February 15, 2023. In my view, this explanation makes no sense. The purchaser’s stated purpose as set out in the emails when taken as a whole, was to find out the total owing for the purposes of obtaining a mortgage in preparation for the upcoming closing. The purchaser’s summary of costs totalling $1,125,000 make this clear to the appellant. I can think of no reason why the purchaser would be asking for the total purchase price but only as of July 30, 2021, at the time of this request, and there was no evidence presented by the appellant to establish this to have been the request that was made.
30The appellant’s response to the purchaser’s inquiry essentially confirms the purchaser’s understanding. The appellant provided no sensible explanation to support its suggestion that the upgrade amount it was quoting was only up to July 30, 2021. I find it implausible that in February 2023, the purchaser would be asking for the upgrade total from July 2021.
31I find the purchaser’s evidence more plausible and accept that in February 2023 the purchaser asked the appellant for the total purchase price of the home including all upgrades, and that the appellant told the purchaser that the upgrades totaled $109,599 and agreed that the all-inclusive purchase price was $1,125,000.
32When the sale of Lot 1 closed on April 25, 2023, instead of including in the purchase price upgrades in the amount of $109,599, the appellant charged the purchaser $123,936.44, which is $14,337.44 more than it had advised the purchaser was owing for those upgrades.
33As a result of the above, the Registrar determined that the appellant failed to treat the purchaser fairly, honestly, and with integrity by charging more than the agreed upon amount for upgrades to Lot 1 and is therefore in breach of s. 3 of the Code of Ethics.
34In my view, the Registrar’s conclusion is reasonable. The email exchange in February 2023 made it clear that the purchaser’s understanding was that upgrades totalled around $110,000 at that time and that the appellant knew this and did nothing to inform the purchaser differently. In fact, the appellant essentially confirmed the purchaser’s understanding. In all the circumstances, the Registrar’s conclusions that the appellant intentionally charged the purchaser more than it was entitled to charge, and that it misled the purchaser as to the correct amounts owing, were reasonable.
35I am not satisfied that the Registrar’s decision with respect to Lot 1 was unreasonable and am not satisfied that the decision to issue an APO was unreasonable.
Lot 5
36The Registrar alleges that, on September 7, 2020 the appellant entered into an APS for Lot 5 and that the parties agreed to a development fee cap of $5,000. Despite this agreement, when the transaction closed the appellant charged $17,473.19 in addition to the $5,000 cap.
37The appellant alleges that the development charge cap of $5,000 was never confirmed and that it never agreed to that cap.
38There were two versions of the APS filed as evidence at the hearing. Both versions are identical other than the fact that on one, there is a handwritten note at the bottom of the signature page which states “development charges will be capped at $5,000”.
39According to Zeeshan Jafri, the appellant’s representative who testified at the hearing, the APS was signed on September 14, 2020, when the handwritten note capping the development charges had not been added. This APS was filed as an exhibit. The next day, the purchaser asked about capping the development charge, and Mr. Jafri told the purchaser that the development charge would be $5,000 at most but that this was only an estimate and that he would have to ask his partners whether they would agree to cap the charge at that amount.
40On September 16, 2020, the purchaser came in with the APS which had the handwritten note about capping the development charges added. However, when Mr. Jafri asked his partners whether they would agree to capping the development charges at $5,000 they did not agree. According to the appellant, the issue was never raised again until 2022 when the appellant asked the purchaser to renegotiate the purchase price as the result of cost increases it says related to supply issues due to the COVID-19 pandemic.
41The appellant submits that in 2022 it asked the purchaser to renegotiate the purchase price. The purchaser refused but offered to allow the appellant to remove the cap on the development charges. Rather than agreeing to remove the cap as the appellant allegedly suggested, the appellant denied at that time that there was a cap. Because the appellant was concerned that the purchaser was of the belief that the cap was in place, Mr. Jafri went to his lawyer who then drafted a new amendment to the original APS which included all of the adjustments provided for in the APS and had that signed by the purchaser.
42The appellant referred the Tribunal to Tarion’s Limited Use Freehold Form Schedule B dated January 27, 2023 (“Amended Schedule B”), which the appellant says was the amendment that it had the purchaser sign with the purpose of making it clear to the purchaser that there was no cap on the development fees. In fact, when the APS was initially entered into in 2020, this Schedule B was left blank, an omission which the Registrar says would have disentitled the appellant from applying any charge for adjustments provided for in the APS.
43Amended Schedule B lists 37 items for which the appellant intended to charge the purchaser on closing. Part II of Amended Schedule B lists 23 items for charges that are stated to be determined in accordance with the APS. Number 9 under Part II is described as “Increase in Development Charges” and refers the reader to “Section 6.1(f) of Schedule “A”” which in the APS provides that the appellant is entitled to charge the purchaser for any development charges which it is required to pay.
44In my view, it is reasonable to conclude based the evidence that the appellant and the purchaser agreed to cap the development charges at the time the APS was entered into. The handwritten notation on the APS stating that the development charges are capped at $5,000 is initialled by the appellant’s representative and was in the appellant’s possession when the respondent conducted its investigation. Despite the fact that the purchaser asked about the cap several times before September 16, 2020, brought the amended APS to the appellant, and that the appellant’s representative initialled the handwritten note, there was no evidence presented that the purchaser was ever advised that Mr. Jafri’s partners had not agreed to the cap. The appellant says the issues was never again raised until two years later when the appellant was asking for an increase in the purchase price.
45This evidence strongly supports the conclusion that the purchaser thought, and led by the appellant to believe, that the appellant had agreed to cap the development charges at $5,000 and that the appellant knew that the purchaser held that belief, and did nothing to try to change the purchaser’s belief in that regard.
46I do not accept that the January 2023 Amended Schedule B was an attempt by the appellant to ensure that the purchaser was clear that there was no cap on the development charges. First, the section of the Amended Schedule B which speaks to the development charges simply refers to the APS which itself was amended to include a cap on the development charges.
47Second, if the appellant wanted to make the issue clear to the purchaser it could have, and would have, simply stated “there is no cap on development charges” rather than referring the purchaser back to a section of the APS which was not particularly clear itself. This is particularly so where the appellant knew that the purchaser believed that there was a cap in place and where clarity was therefore important.
48Third, I do not accept the appellant’s evidence that the purchaser offered to forgo the cap on development charges when the appellant asked for an increase in the purchase price. I find that the appellant simply made this up in order to support its position that the Amended Schedule B was created in order to clarify the cap issue. It makes little sense for the appellant to have refused the purchaser’s offer to remove the cap and then argue that there was no cap in the first place as the appellant alleges.
49Finally, in its Notice of Appeal dated July 28, 2025, the appellant admits that it and the purchaser “entered into an APS with a mutual agreement to cap the development fee at $5,000”. The Notice of Appeal goes on to allege that the Amended Schedule B reflected an agreement by the purchaser that the development fees would no longer be subject to the cap. As I have determined above, I do not find that the Amended Schedule B alters the agreement set out in the handwritten note on the APS and I do not accept that the reference to the development charges in Amended Schedule B was done with the knowledge or agreement of the purchaser.
50I am not satisfied that the Registrar’s decision with respect to Lot 5 was unreasonable and am not satisfied that the decision to issue an APO was unreasonable.
Providing false, misleading or deceptive information or documents to the HCRA
51The Registrar alleges that, when the HCRA inspector requested a copy of the APS for Lot 5 in October 2024, the appellant provided a copy that did not show the handwritten note with respect to the development charge cap. When questioned further by the inspector, the appellant provided a copy of the APS with the handwritten note but falsely claimed that it had not agreed to the cap.
52At the hearing, M. Jafri testified that when he was asked to produce the APS, he asked his wife to do that and that she made a mistake and sent the wrong APS to the HCRA. When the HCRA asked again, Mr. Jafri’s wife sent the correct APS. Mr. Jafri argued that this was unintentional and should not be the subject of an APO.
53While it is possible that the appellant’s employee made a mistake by providing the wrong APS to the HCRA, I think that is unlikely in the circumstances. First, the only evidence presented was that of Mr. Jafri and not the employee who allegedly made this mistake. While Mr. Jafri’s evidence is admissible, it is not the best evidence on the subject since he was not the person who actually searched for the document or provided it to the HCRA.
54Further, Mr. Jafri’s position at the hearing was that the APS that was initially provided, that is the one that does not contain the handwritten note adding the cap on development charges, was the APS which governed this sale. If that were the case, then that would have been correct APS to provide to the HCRA. The appellant’s allegation that this was a mistake is not consistent with its position that the APS with the handwritten note was not the APS which was in effect. It is, however, consistent with the Registrar’s allegation that the APS without the handwritten note was provided to the HCRA in an attempt to mislead the HCRA as to the correct terms of the sale agreement.
55In my view, the Registrar’s finding that the appellant breached s. 13 of the Code of Conduct is reasonable. The appellant provided an APS which did not contain the provision which was the subject of the investigation and was therefore “false, misleading, or deceptive”.
I find that the APO imposed by the Registrar is reasonable under the circumstances.
56For the following reasons, I find the APO imposed upon the appellant is reasonable under the circumstances.
57Section 76(1) of the Act gives the Registrar authority to impose the APO. It provides that “[a]n assessor may, by order, impose an administrative penalty against a person in accordance with this section and the regulations made by the Minister if the assessor is satisfied that the person has contravened or is contravening, (a) a prescribed provision of this Act or regulations, . . .”
58Further, the reasons for imposing an APO are set out in s. 76(4) and may include:
(a) To ensure compliance with the Act, regulations and by-laws;
(b) To prevent a person from deriving, directly or indirectly, any economic benefit as a result of contravening the Act, regulations or by-laws.
59Section 76(5) provides that the amount of an administrative penalty shall reflect the purpose of the penalty and shall be determined in accordance with the regulations and shall not exceed $50,000.
60The amount of any APO is determined by an assessor in accordance with s. 12 and 13 of Ontario Regulation 573/22 under the Act (“Regulation”). The APO amount consists of two components: the base penalty, and the monetary benefit. In the present case, the Registrar assessed base penalties of $13,043.48 for each s. 3 violation, $6,086.96 for the s. 13 violation, and $31,810.63 in respect of the monetary benefit. The total APO is therefore $63,984.55.
61With respect to the monetary benefit component, this is to be guided by the factors set out in section 13 of the Regulation. Section 13 focuses on the amount that accrued to the person as a result of their contravention, including:
i. The costs that they avoided by failing to comply, or the costs they delayed incurring by delaying compliance; and
ii. The gain the person accrued or losses they avoided by failing to comply with provisions of the appellant’s licence.
62The appellant did not argue that the monetary benefit was not calculated reasonably based on the Registrar’s allegations as to the s. 3. violations. The Registrar’s position that the appellant received a benefit of $14,337.44 with respect to the violation regarding Lot 1 and $17,473.19 with respect to the violation regarding Lot 5, is reasonable and is supported by the evidence presented at the hearing as discussed above. These two amounts total $31,810.63.
63I find that the monetary benefit component of the APO is reasonable.
64The assessor’s determination of the base penalty amount is to be guided by the factors set out in section 12 of the Regulation, including:
i. The impact on the Registrar’s ability to carry out its purpose;
ii. The impact on purchasers or owners of new homes or other persons;
iii. In respect of the persons who carried out the contravention, their history of non-compliance and whether they acted to remedy the contravention, and if so, how urgently; and
iv. Whether the contravention was deliberate.
65The APO not only penalizes non-compliance, it also signals to new home sellers, buyers and owners that failing to abide by the licensing scheme could carry a significant financial penalty. The APO the Registrar assessed in the present case was imposed after it considered the factors set out in s. 12.
66The Registrar assessed that the appellant’s attempt to mislead the inspector by providing inaccurate information represented a moderate impact on the HCRA’s ability to carry out its purpose in that it hindered the HCRA’s ability to investigate a consumer’s complaint and ensure that the appellant was abiding by its obligations under the Act. I agree. The HCRA’s ability to properly assess a licensee’s actions is dependant on the licensee providing it with accurate information and it is clear that this is hindered when the licensee provides documents which do not reflect the true facts. In this case in particular, the HCRA’s ability to assess whether or not the appellant had agreed to cap the development charges was hindered by the appellant failing to provide the APS which contained that provision.
67The Registrar assessed that the two s. 3 violations had minimal impact on the HCRA’s ability to carry out its purpose. I accept the Registrar’s assessment in this regard.
68With respect to the impact on purchasers, I think that the Registrar’s conclusion that the s. 3 contraventions had a significant impact on purchasers in that they were required to pay more for their homes than they would have otherwise. I find that this is reasonable. The amounts involved were not insignificant and the purchasers were required to either refuse to close the purchase transactions and accept the legal consequences of that or pay the extra charges and then try and recover the amounts in dispute.
69With respect to the appellant’s history of compliance, the Registrar takes into account that the appellant does not have a history of non-compliance states in the Notice of APO that this is a mitigating factor.
70With respect to whether the contraventions were deliberate, the Registrar notes that the purchasers complained about the inaccurate charges and the appellant insisted on applying the disputed charges. The appellant also submitted misleading information to the HCRA in an apparent attempt to conceal the scheme. I also note that the appellant changed its position after submitting the Notice of Appeal. In the Notice of Appeal the appellant admitted that it had agreed to a cap on the development charges regarding Lot 5 but at the hearing it alleged that there was no agreement.
71I agree with the Registrar’s assessment that the appellant’s actions appear to be deliberate, and I think that is a reasonable conclusion based on the evidence at the hearing.
72I have reviewed the authorities referenced by the appellant. The appellant argues that the base penalty applied to the appellant is excessive compared with the base penalties applied in other, more serious, circumstances. In an order for administrative penalty issued to another GC King Bond GP Inc. on June 4, 2024, the Registrar applied a base penalty of $17,663.04 per s. 3 contravention. In an order for administrative penalty issued to 2363823 Ontario Inc. on July 31, 2024, the Registrar applied a base penalty of $8,250 per s. 3 contravention. In the present case, the Registrar assessed a base penalty of $13,043.48.
73The appellant argued that the contraventions in those other matters were more serious largely on the basis that the contraventions resulted in a larger gain for the vendor than in the current case. The appellant’s argument implies that the seriousness of the contravention is significantly impacted by the monetary gain which resulted from the contravention. In my view, the amount of the gain, that is the impact of the contravention on the purchaser, is only one of the factors required to be taken into account in determining the base penalty.
74The nature of the contraventions in the cases referenced by the appellant is different than in the current case. In both of those other cases, the builder had pressured purchasers to agree to a higher purchase price than called for in the original agreements despite there being no obligation on the purchasers to do so. The s. 3 contraventions in the present case involved charging amounts to which the appellant was not entitled in the APS. The contraventions in the present case involve an element of deception that is not present in the other two.
75In any event, the issue before the Tribunal is whether the appellant as shown that the amount assess was unreasonable. While consistency with previous penalties is an element in determining whether a penalty is reasonable in terms of fairness, I do not conclude that the amounts assessed in respect of the base penalties in the present case are inconsistent with those assessed in the matters referred to by the appellant as to result in unfairness to the appellant.
76In my view, the base amounts assessed in the present case are reasonable.
CONCLUSION
77I find the appellant committed the contraventions of the Code of Conduct as alleged by the Registrar and the APO imposed by the Registrar as a result of the contraventions are reasonable under the circumstances. I confirm the APO.
ORDER
78Pursuant to s. 77(4) of the Act, I confirm the APO.
LICENCE APPEAL TRIBUNAL
Colin Osterberg
Released: January 23, 2026