Registrar, Real Estate and Business Brokers Act v. Stolberg, 2017 ONSC 5904
CITATION: Registrar, Real Estate and Business Brokers Act v. Stolberg, 2017 ONSC 5904
DIVISIONAL COURT FILE NO.: 262/16
DATE: 20171012
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Marrocco A.C.J.S.C., Swinton and DiTomaso JJ.
BETWEEN:
REGISTRAR, REAL ESTATE AND BUSINESS BROKERS ACT, 2002
Appellant
– and –
MICHAEL STOLBERG
Respondent
COUNSEL:
Jonathan Miller and Rob Maxwell, for the Appellant
W. Xavier Navarrete, for the Respondent
HEARD at Toronto: September 28, 2017
Swinton J.:
Overview
[1] The Registrar, Real Estate and Business Brokers Act, 2002 (the “Registrar”), appeals from a decision of the Licence Appeal Tribunal (the “Tribunal”) dated May 5, 2016, which ordered the Registrar not to carry out a proposal to revoke the registration of the respondent Michael Stolberg, a real estate salesperson. The Tribunal ordered the Registrar to register the respondent subject to a number of conditions on the registration.
[2] For the reasons that follow, I would allow the appeal on the basis that the Tribunal reached an unreasonable decision because of its treatment of opinion evidence, the failure to watch relevant video evidence, and the imposition of unreasonable conditions on the respondent’s registration.
Factual Background
[3] The respondent admitted that on October 20, 2015, he stole batteries and some cash when he was alone at a condominium unit. He had gone to the unit for the purpose of inspecting the property for a client, and no other person was present in the unit. However, his conduct was captured on video cameras placed by the homeowner in two rooms of the unit. During the respondent’s time in the unit, he went through drawers in various pieces of furniture, and he took batteries from a shelving unit and money from a piggy bank.
[4] On learning of the misconduct, the Registrar imposed an interim suspension and issued a Notice of Proposal to revoke the respondent’s registration as a real estate salesperson pursuant to ss. 13(1) and 14(1) of the Real Estate and Business Brokers Act, 2002, S.O. 2002, c. 30, Sch. C (the “Act”), because the respondent was not entitled to registration under s. 10(1). Pursuant to s. 10(1), an applicant who meets the prescribed requirements is entitled to registration unless he or she comes within certain exclusions. For purposes of this appeal, the applicable exclusion is s. 10(1)(a)(ii), namely that “the past conduct of the applicant … affords reasonable grounds for belief that the applicant will not carry on business in accordance with law and with integrity and honesty.”
[5] The respondent appealed to the Tribunal. He admitted to the facts set out in the Notice of Proposal, except the amount stolen. He claimed the sum was about $20, while the homeowner claimed it was between $200 and $300. A hearing was then held by the Tribunal to determine the appropriate remedy.
[6] The Tribunal found that the respondent’s conduct at the home was both criminal and a breach of trust. However, the Tribunal found that there were not reasonable grounds for belief that he would not carry on business in accordance with law and with integrity and honesty, and his registration should not be revoked. However, the Tribunal imposed eight conditions on the registration, two of which I shall discuss in detail later in these reasons.
The Issues
[7] The Registrar raises three issues:
• whether the Tribunal erred in admitting and relying on opinion evidence of the respondent’s therapist,
• whether the Tribunal erred in refusing to view the video of the respondent’s misconduct, and
• whether the Tribunal imposed conditions that were unreasonable and unenforceable.
The Standard of Review
[8] While the Registrar argues that the standard of correctness applies to the first two issues, I disagree.
[9] The role of this Court, on this appeal, is to determine if the Tribunal reached an unreasonable decision with respect to the application of s. 10(1)(a)(ii) to the facts of this case (2193145 Ontario Inc. o/a Boston Pizza v. Registrar, Alcohol and Gaming, 2016 ONSC 3552 (Div. Ct.) at paras. 27-28).
[10] The Tribunal’s refusal to view the video does not amount to a denial of procedural fairness, attracting a correctness review. Nor does its treatment of opinion evidence invite review on a standard of correctness. Rather, the task of this Court is to consider whether the Tribunal’s treatment of the video and the opinion evidence, alone or taken together, resulted in an unreasonable decision by the Tribunal.
Analysis
[11] A court applying a reasonableness standard of review to a decision looks to the reasons and outcome, asking whether the decision falls within a range of reasonable outcomes, given the applicable facts and law. As the Supreme Court of Canada stated in Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190 at para. 47, reasonableness is a deferential standard of review:
In judicial review, reasonableness is concerned mostly with the existence of justification, transparency and intelligibility within the decision-making process. But it is also concerned with whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law.
[12] In my view, the Tribunal’s decision is not reasonable, given the cumulative effect of errors in the treatment of the therapist’s evidence, the refusal to watch the video, and the imposition of unreasonable conditions on the respondent’s registration that fail to adequately consider the consumer protection purpose of the Act.
The treatment of the therapist’s evidence
[13] David Feder is a social worker who provided psychotherapy treatment to the respondent after the theft was discovered. The respondent sought to have him qualified as an expert witness “in mental health issues”, but the Tribunal, in an oral ruling, refused to qualify him as an expert. The member stated that she would accept Mr. Feder’s evidence “in terms of his professional relationship” with the respondent (Transcript, p. 84). The member never explained what this entailed, and she did not refer to the ruling in her reasons.
[14] Despite the ruling that Mr. Feder was not qualified to give expert evidence on mental health issues, the report that Mr. Feder had prepared for the proceeding was tendered as an exhibit, and it was relied upon by the Tribunal in the reasons. That report contained opinions about the respondent’s prognosis.
[15] Moreover, despite the earlier ruling, Mr. Feder gave evidence about the likely cause of the respondent’s theft and his prognosis for repeating the conduct. Some of the evidence was elicited as a result of questions posed by the Tribunal – for example, about the nature of cognitive distortions and their impact on the respondent’s behaviour. No objection was made by the Registrar’s counsel to these questions.
[16] Mr. Feder’s evidence about the respondent’s mental state and his prognosis with respect to further thefts was heavily relied on by the Tribunal. For example, the Tribunal stated at p. 11 of the reasons:
Mr. Fetter [sic] explained that intermittent stealing of small items averts the depression that can result when Mr. Stolberg feels out of control over aspects of his life. He noted that before the October, 2015 [sic], Mr. Stolberg minimized the impact of his action; he testified that because Mr. Stolberg thought no one was getting hurt, there was no reason to stop. However, he further testified that the October, 2015 incident has had a significant impact on Mr. Stolberg. Mr. Fetter’s report notes:
This time is different because he was caught and held accountable for his actions. This time he felt such feelings including guilt, shame and embarrassment as a result of his choice to take things that did not belong to him. Mr. Stolberg presents with appropriate remorse and he is motivated to address any underlying issues that he may have so he does not re-offend in the future.
Mr. Fetter noted that Mr. Stolberg is very family conscious and that this, along with his understanding of the consequences of his actions, would act as a deterrent to future thefts. He testified that, based both on what Mr. Stolberg had told him and his own assessment, that he believes there has been no reversion to Mr. Stolberg’s past behaviour….
[17] The Registrar argues that the Tribunal improperly accepted and relied on opinion evidence from Mr. Feder that Mr. Feder was not qualified to give – in particular, about mental health issues such as depression and cognitive distortion and the prognosis for the respondent.
[18] The respondent argues that there was no error, submitting that the Tribunal accepted Mr. Feder as a “participant expert”, to use the term from Westerhof v. Gee Estate, 2015 ONCA 206.
[19] In that case, the Court of Appeal dealt with the application of rule 53.03 of the Rules of Civil Procedure, which deals with the requirements for introducing expert evidence at trial. The Court drew a distinction between participant experts (such as treating physicians), non-party experts, and litigation experts (at para. 6), holding that participant experts and non-party experts can give opinion evidence without complying with rule 53.03 (at para. 14). Accordingly, treating physicians can generally testify about their treatment, observations, diagnosis and prognosis without filing an expert’s report in accordance with the requirements in rule 53.03.
[20] Nothing in Westerhof suggests any change to the gatekeeper role that an adjudicator must exercise in relation to opinion evidence. At para. 60, the Court of Appeal stated,
… a witness with special skill, knowledge, training, or experience who has not been engaged by or on behalf of a party to the litigation may give opinion evidence for the truth of its contents without complying with rule 53.03 where
The opinion to be given is based on the witness’ observation of or participation in the events at issue;
The witness formed the opinion to be given as part of the ordinary exercise of his or her skill, knowledge, training and experience while observing or participating in such events.
The Court went on to emphasize that judges retain their gatekeeper role in respect of opinion evidence given by participant experts and non-party experts (at para. 64). Thus, judges and adjudicators have a responsibility not to admit opinion evidence where the witness is not properly qualified to give such evidence (see R. v. Mohan, 1994 80 (SCC), [1994] 2 S.C.R. 9 at paras. 17, 27).
[21] There are a number of problems with the Tribunal’s treatment of Mr. Feder’s evidence. First, he was allowed to give evidence about the respondent’s mental health, even though the Tribunal had ruled that he was not qualified to do so. For example, he said that the respondent “may” have a low grade depression, although he then said that the respondent’s stealing is a high risk behaviour that would be a way of averting the depressive state, and that is what motivates the behaviour. He also spoke about the impact of cognitive distortion on the respondent’s behaviour.
[22] Second, and more importantly, this evidence was relied upon by the Tribunal, and it appears to have had a significant impact on the Tribunal’s decision to reject the Notice of Proposal. From the passage quoted above, it is evident that the Tribunal accepted that the respondent suffered from depression, although there is no medical evidence to this effect. The Tribunal accepted that depression and cognitive distortions caused the respondent to steal. Again, there was no medical evidence to this effect, and Mr. Feder was not qualified to give such evidence. Indeed, the respondent stated that he stole to feel empowered and in reaction to stressors in his life, and he took things because he was thinking only of himself.
[23] Third, the Tribunal also relied on Mr. Feder’s opinion with respect to prognosis despite having refused to qualify him as an expert and without considering whether he was qualified to make a prognosis about the likelihood of further acts of dishonesty.
[24] Moreover, the Tribunal brings minimal critical scrutiny to this evidence. For example, the member accepts Mr. Feder’s view that the respondent has not engaged in further thefts, without considering the fact that Mr. Feder could rely only on the respondent’s reporting to reach this opinion.
[25] Finally, even if the Tribunal did not err in considering this evidence respecting future conduct, the member was selective with respect to Mr. Feder’s evidence. In particular, she does not address the significance of Mr. Feder’s evidence that the respondent needed further treatment, and part of that treatment would be a return to work as a real estate salesperson so that he could regain the trust of his peers in the industry. This evidence is relevant to whether there are reasonable grounds to believe that the respondent would not carry on business in accordance with honesty and integrity.
[26] Even though there was no objection to the scope of Mr. Feder’s testimony, the Tribunal had an obligation to act as gatekeeper with respect to the opinion evidence, and it should not have relied on much of Mr. Feder’s evidence. Given the importance of this evidence to the Tribunal’s decision, the decision on remedy is unreasonable on this ground of appeal alone.
The refusal to view the video
[27] The homeowner’s video of the respondent’s conduct was tendered as an exhibit at the remedy hearing. The Registrar’s counsel requested that the Tribunal view the video, which is about 15 minutes in length.
[28] The Tribunal refused to view the video because the member did not believe that it would contribute to the assessment of the appropriate penalty.
[29] The video is relevant evidence to the determination of the remedy because it shows the actual misconduct of the respondent. Given that the video was admitted into evidence as part of the Registrar’s Book of Documents, the Tribunal should have viewed it. See, for example, R. v. Hunt, 2002 ABCA 155 at para. 16 on the obligation of a sentencing judge to view images that depict a crime – in that case, photos in a child pornography case.
[30] The Ontario Court of Appeal approved of Hunt in R. v. P.M., 2012 ONCA 162 at para. 31, stating, again in the context of a sentencing hearing, that a judge should ordinarily view evidence of the commission of an offence if asked to do so. The majority of the Court also spoke of the need for a court to view images in order to understand the nature of the offence committed (at para. 33). However, in P.M., the majority found that the sentencing judge had excluded the particular evidence (photos of child pornography and videos of sexual assault) because its prejudicial effect outweighed its probative value, and there was no basis for appellate intervention in the “unusual circumstances of this case” (at para. 37).
[31] In the present case, the video was admitted as an exhibit. There was no ruling about the probative value versus the prejudicial effect. Accordingly, the Tribunal should have watched the video, which was only 15 minutes in length.
[32] I have reviewed the video. It is highly relevant evidence to show the nature of the respondent’s misconduct, which was not only the act of theft, but also a serious invasion of the homeowners’ privacy. It shows how long the respondent was in the home, how he rifled through drawers and cupboards, including storage containers under the baby’s crib, the drawers in what appears to be a buffet, drawers in the upstairs bedroom, and the shelves under the television. He was in the baby’s room for almost three minutes. He was in the master bedroom, living room and kitchen for a much longer time. This was very deliberate and intrusive action by the respondent, and that is relevant to the consideration of remedy and the assessment of the risk of further acts of dishonesty and lack of integrity.
[33] This failure to consider relevant evidence is a further factor that leads me to conclude that the decision is unreasonable.
The unreasonableness of the conditions
[34] The Tribunal imposed eight conditions on the respondent’s registration. I take from this that the Tribunal concluded there was a risk to consumers without the imposition of such conditions. The member imposed two conditions that the Registrar submits are unreasonable, in that they fail to adequately protect the consumer public.
[35] The two conditions are the following:
For a period of three years from the date of this order, Mr. Stolberg shall not attend any property unless it is occupied or he is accompanied by client(s) and/or another registrant under the Act.
For a period of three years from the date of this Order, Mr. Stolberg shall maintain a formal independent log of all properties at which he attends. This log shall include the property address, the date and time of his attendance, and the name and contact number of either the client(s) and/or registrant who either accompanies him or who is present at the property. This log shall be immediately provided to either Mr. Stolberg’s broker of record and/or the Registrar for their inspection at their request.
[36] The purpose of a remedy under the Act is not to punish the registrant, but rather to protect the consumer public (Racco v. Registrar (Real Estate and Business Brokers Act, 2002), 2015 ONSC 6233 (Div. Ct.) at para. 37).
[37] In the present case, the respondent engaged in theft and what the Tribunal described as a “fundamental” breach of trust in October, 2015. The respondent also admitted to having engaged in theft in the past, stealing “a few” items like chocolate bars from a grocery store or Walmart on more than one occasion. I observe that the Tribunal downplayed the significance of these other thefts, stating that the number and timing was not known. Nevertheless, these were prior acts of dishonesty by the respondent.
[38] The Tribunal imposed the condition that the respondent not attend at a property alone: the property must be occupied, or he must attend with a client or another agent. Presumably, the Tribunal believed that this would protect the homeowner.
[39] The Tribunal based this condition on one imposed by his current broker. However, there is a difference in the wording of the broker’s condition, which requires that the respondent be accompanied by a client “at all times”. There is no wording in the condition imposed by the Tribunal that requires the respondent to constantly be with the client or another person, and that is a cause for concern.
[40] In any event, the Tribunal assumes that the respondent will be monitored by the client or another registrant or the person who is occupying the premises when he is in a home. The problem with the efficacy of this condition is that it imposes a monitoring role on clients and registrants who do not have to be informed of their role as monitor, and who have not agreed to take on this role. Moreover, the clients and selling homeowners are those whom the legislation is meant to protect. It is not their role to monitor the registrant salesperson.
[41] As well, this condition is problematic in that it assumes the respondent is easily monitored. Tarik Gidamy, the broker by whom the respondent was employed at the time of the theft, gave evidence that monitoring by another staff member would be expensive. He testified that he could not afford the time and money to monitor (Transcript, pp. 24-25). He also said it was practically impossible to monitor a salesperson (at p. 26), and that people could do wrong things even if other people were there (at p. 30). Angela Volpe from the Registrar’s office gave evidence that monitoring a registrant’s behaviour is “virtually impossible,” because the Registrar cannot impose obligations to supervise on another person (at p. 42).
[42] The Tribunal did not discuss the likely efficacy of the monitoring condition. The member took comfort in the fact that the respondent’s present broker had imposed a similar condition. However, that broker did not give any testimony about how the condition was being enforced and whether it was effective.
[43] The second condition, the log, was added by the Tribunal itself as a way to assist in enforcement of the first condition. The underlying assumption must be that there is no real risk that the respondent might go to a home alone, if he has access to a lock box or a key, and that he would honestly maintain the log.
[44] The problem with this condition is its dependence on the respondent’s honesty in keeping the log, given the respondent’s history of dishonesty. He has stolen in the course of his work, and he has stolen on other occasions. He has engaged in a serious breach of trust in going through a homeowner’s furniture and private spaces. Furthermore, his therapist testified that the respondent required further treatment. In the circumstances, the Tribunal’s assumption that the log would be an effective mechanism to monitor the respondent was not reasonable.
[45] The respondent, in his factum, states that the conditions have been observed since he returned to work. There is no affidavit evidence to support this assertion.
[46] In light of the evidence, the nature of the respondent’s work, and the nature of his misconduct in October 2015 and his past thefts, the conditions were not a reasonable, justifiable method to protect the consumer public against a risk of theft or further improper conduct like that seen on the video.
Conclusion
[47] The Tribunal’s task was to determine whether there were reasonable grounds to believe that the respondent would not carry on business in accordance with law and with integrity and honesty. The decision of the Tribunal is unreasonable because of the reliance on Mr. Feder’s opinion evidence on matters outside his expertise; the failure to review the relevant evidence found in the video; and the conclusion that the conditions with respect to monitoring and a log would be a reasonable and workable way to protect the interest of consumers. For these reasons,
the appeal is allowed. The decision of the Tribunal is set aside, and the matter is remitted to the Tribunal to be determined by a different panel member. Costs to the Registrar are fixed at $3,000 plus HST, an amount agreed upon by the parties.
Swinton J.
I agree _______________________________
Marrocco A.C.J.S.C.
I agree _______________________________
DiTomaso J.
Released: October 12, 2017
CITATION: Registrar, Real Estate and Business Brokers Act v. Stolberg, 2017 ONSC 5904
DIVISIONAL COURT FILE NO.: 262/16
DATE: 20171012
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Marrocco A.C.J.S.C., Swinton and DiTomaso JJ.
BETWEEN:
REGISTRAR, REAL ESTATE AND BUSINESS BROKERS ACT, 2002
Appellant
– and –
MICHAEL STOLBERG
Respondent
REASONS FOR JUDGMENT
Swinton J.
Released: October 12, 2017