On July 1, 2021, the provincial government introduced O. Reg. 245/21: Code of Ethics and Discipline and Appeals Committee (the “Code of Ethics”) made under the New Home Construction Licensing Act (the “Act”). The Code of Ethics not only establishes standards expected of registered builders, but also disciplinary mechanisms to enforce compliance with these standards.

The standards imposed by the Code of Ethics apply not just to how builders operate their businesses, such as ensuring business is carried on conscientiously and competently (s.6 of the Code of Ethics) or that advertising is accurate (s.17 of the Code of Ethics), but also to them personally. For example, s. 3 of the Code of Ethics requires a licensee to treat every person they deal with fairly, honestly and with integrity. Further, s.4 of the Code of Ethics requires a licensee to not only act without discrimination (also prohibited by federal and provincial human rights codes) but also to refrain from conduct that could be characterized as harassment and bullying.

Of particular concern for licensees is s. 8 of the Code of Ethics, which requires a licensee to avoid conduct that is “disgraceful, dishonourable, unprofessional, unbecoming of a licensee or likely to bring the sector into disrepute.” What makes this provision so concerning is the wide range of conduct that could be captured by its wording. Conceivably, all manner of conduct could engage this provision and attract an investigation and/or disciplinary action.

In all likelihood, s.8 of the Code of Ethics will be interpreted in light of the seminal case of Ontario (Alcohol and Gaming Commission of Ontario v 751809 Ontario Inc. (Famous Flesh Gordon’s) (“Famous Flesh Gordon’s”). In this case, the appellant Robert Barletta’s liquor license was revoked on the grounds that he was allegedly a full patch member of the Hells Angels. Despite Barletta having no criminal record, no infractions under the Liquor License Act and no pending charges, the Registrar of the Alcohol and Gaming Commission of Ontario revoked his liquor license. The revocation was upheld on appeal by the Divisional Court and subsequently by the Court of Appeal for Ontario, with both appellate courts holding that Barletta’s association to the Hells Angels alone was sufficient to revoke his liquor license. This decision has been applied in hundreds of regulatory cases in Ontario alone, whether involving liquor licenses, motor vehicle dealer registrations and will be relied upon in any proceedings involving breaches of the Code of Ethics.

Just as formal a conviction was unnecessary to revoke Mr. Barletta’s liquor licence in Famous Flesh Gordon’s, so too is it probable that credible allegations will be sufficient to find a breach of s.8 of the Code of Ethics and result in the issuance of a Notice of Proposal to refuse, suspend or revoke a license/registration under the Act.

If you are a licensed/registered builder and are facing allegations of breaching the Code of Ethics, the experienced lawyers at Chand & Co. can assist you. We have proven experience assisting builders navigate investigations by the Home Construction Regulatory Authority and representing clients in license/registration suspensions, denials and revocations before the License Appeal Tribunal. Call 416-583-2377 today for a consultation to discuss your matter.

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