The respondent real estate broker charged vendors a non-refundable membership fee in addition to a commission if the property sold.
The discipline committee found this practice violated the Real Estate Brokerage Act, which requires a sale before a broker is entitled to compensation.
The Court of Appeal set aside the decision, finding the provisions were not mandatory.
The Supreme Court of Canada allowed the appeal, applying a reasonableness standard to the discipline committee's decision.
The Court held that the legislation is designed to protect consumers and explicitly restricts freedom of contract by making the compensation clause, which ties payment to a sale, a mandatory requirement.
