Licence Appeal Tribunal
Appeal d'appel en Tribunal matière de permis
FILE: 8113/REBBA
CASE NAME: 8113 v. Registrar, Real Estate and Business Brokers Act, 2002
An Appeal from a Notice of Proposal by the Registrar, Real Estate and Business Brokers Act, 2002, S.O. 2002, c. 30, Sch. B – to Refuse Registration
Bernard Carlos Applicant
-and-
Registrar, Real Estate and Business Brokers Act, 2002 Respondent
REASONS FOR DECISION AND ORDER
ADJUDICATOR: Laurie Sanford, Vice-Chair
APPEARANCES:
For the Applicant: Bernard Carlos, self-represented
For the Respondent: Maya Sabharwal, Counsel
Heard in Toronto: November 21, 2013
REASONS FOR DECISION AND ORDER
This hearing arises from an appeal by Bernard Carlos to the Licence Appeal Tribunal (the “Tribunal”) from a Notice of Proposal issued by the Registrar (the “Registrar”), Real Estate and Business Brokers Act, 2002 (the “Act”) dated May 15, 2013 which proposes to refuse to grant the registration of Mr. Carlos as a salesperson under the Act.
FACTS
Mr. Carlos was first registered as a salesperson under the Act in 1989 and he remained registered more or less continuously until April, 2008 when he voluntarily terminated his registration. In his submissions, Mr. Carlos asserted that he resigned when his life lurched out of control and to avoid injuring any of his clients. However, no evidence was led to support this submission. What can be said is that there were no complaints lodged against Mr. Carlos while he was registered under the Act and the Real Estate Council of Ontario (“RECO”), the organisation that administers the Act, was not involved in Mr. Carlos’ decision to terminate his registration.
Mr. Carlos’ life appears to have begun to spin out of control sometime before 2008. In 1993, Mr. Carlos filed for bankruptcy and he remains an undischarged bankrupt. In 2002, Mr. Carlos was convicted of a failure to comply with a recognisance and was fined $1,000. In 2006, Mr. Carlos was convicted of two charges of possession of illegal drugs, crystal methamphetamine and marijuana, and one charge of possession of crystal methamphetamine for the purpose of trafficking. He was sentenced to time served plus one day on each count. In 2007, he was convicted of a failure to comply with a recognisance and sentenced to time served plus one day. In 2007, he was convicted of assault following an attack on his wife which took place in 2006. The assault was prolonged and took place in front of his young son. He was sentenced to time served plus seven days and probation for 18 months with a discretionary prohibition order for five years. Effective July, 2007, Mr. Carlos had a judgment debt of $4,373.71 plus costs owed to Scotia Property Management Inc. for unpaid rent. Effective April, 2008, Mr. Carlos had a judgment debt of $10,895.66 plus costs owed to the Bank of Montreal for credit card debt. Neither of these debts has been repaid. Mr. Carlos testified that he has made efforts to repay them and will do so when he is employed as a real estate salesperson.
According to the testimony of both a former employer and of Mr. Carlos, he was a very successful condominium salesperson until he began drinking to excess and taking drugs. His rehabilitation appears to have begun in the spring of 2010 when, during a family outreach, he and his family appeared at a local Pentecostal Church. According to the testimony of his then pastor, Mr. Carlos was “not in good shape” and came to the Church from a shelter. At first, he and his family came for the food that was served after the service. Gradually, Mr. Carlos began to ask questions and he became friends with his pastor. The pastor tried to teach him Christian values and eventually made Mr. Carlos, an accomplished musician, a music mentor of a youth group. Several members of that group testified about how Mr. Carlos had helped and encouraged them. Mr. Carlos became a “highlight” of the ministry and a candidate for baptism. He was a “testimony speaker” at the Church’s anniversary and spoke about the changes that had occurred in his life as a result of his involvement with the Church. The pastor testified that he has seen the change in Mr. Carlos. Mr. Carlos and his family have moved and are now living in a home in Hamilton. His former pastor testified that he has introduced Mr. Carlos to a Hamilton pastor so “he is in good hands.” Mr. Carlos also remains in touch with his first pastor.
Mr. Carlos’ last employer testified that Mr. Carlos’ productivity slipped dramatically but that there had been no complaints about him from clients. The same employer did sponsor one of Mr. Carlos’ applications for reinstatement but withdrew his sponsorship on learning of Mr. Carlos’ past and on hearing from RECO that Mr. Carlos had not fully disclosed his past. The employer testified that he would not hire Mr. Carlos today because of his low productivity. While the employer testified that Mr. Carlos’ past was “not something I would look forward to” in deciding whether to employ Mr. Carlos, it was his production that was the primary consideration.
One of Mr. Carlos’ friends, who has known him for 30 years, testified. Mr. Carlos comes from a loving and tight knit family, according to this witness. This friend worked with Mr. Carlos in the early days of his real estate practice and noted Mr. Carlos professionalism, hard work and punctuality, calling Mr. Carlos “an inspiration”. The friend testified that he knew about Mr. Carlos’ criminal record and felt that Mr. Carlos was not acting in accordance with his character. “There were points in his life when he wasn’t around – that’s when he got into trouble,” according to this witness. Mr. Carlos is remorseful now about those times, according to this friend.
Mr. Carlos testified that he has made mistakes but is turning his life around. He is now licenced as a mortgage broker and wishes to resume his career in real estate.
Of concern to the Registrar is Mr. Carlos’ lack of candour on his various applications for registration. Mr. Carlos did disclose his bankruptcy on his 2000 application for renewal but did not disclose it on his renewal applications of 2003, 2005 and 2007. Mr. Carlos also did not disclose his criminal charges on his 2007 renewal application. Mr. Carlos made three applications for reinstatement. The first of these was in 2010. In that application, Mr. Carlos did not disclose the two judgment debts outstanding against him. He did disclose the bankruptcy and he did disclose that he had been convicted of an offence under the law. In each case, his sponsoring broker noted “in RECO’s file”, in the apparent belief that RECO had the details on file. Before the application could be processed, Mr. Carlos’ broker withdrew his sponsorship which effectively ended the application. Mr. Carlos testified that he did not intend to mislead RECO. He believed his judgment debts had been paid because there was a garnishment order issued against his last employer and he believed that the employer had withheld and remitted enough money to, more or less, satisfy the judgments. In March, 2012, Mr. Carlos again applied for reinstatement of his registration and this time he disclosed his bankruptcy, his criminal record and his judgment debts. This application was also abandoned. Mr. Carlos applied for a third time in July, 2012. Again, Mr. Carlos disclosed his bankruptcy, his judgment debts and his criminal record with the notation in each case “on file”, meaning that RECO had the details on file. The Registrar is concerned that this disclosure was not fulsome.
The Registrar proposed to refuse Mr. Carlos’ registration request but it appears that the Registrar had some incorrect information before him in reaching that decision. The Notice of Proposal states that in his 2010 application, Mr. Carlos answered “No” to the question about whether he had any prior criminal charges or convictions. In fact, Mr. Carlos correctly answered that question “Yes”. The Notice of Proposal also states that Mr. Carlos has not looked for work since 2008 and lives on his wife’s Ontario Disability Support Program benefits. At the hearing, Mr. Carlos referred to, but did not testify about, a series of work applications he has made since 2008, amounting to over 120 pages. Although not formally entered as evidence, the Tribunal accepts that Mr. Carlos did attempt to find employment after 2008.
DECISION
Regarding the right to registration, the Act states in subsection 6(1):
An applicant that meets the prescribed requirements is entitled to registration or renewal of registration by the registrar unless,
(a) the applicant is not a corporation and,
(i) having regard to the applicant’s financial position or the financial position of an interested person in respect of the applicant, the applicant cannot reasonably be expected to be financially responsible in the conduct of business,
(ii) the past conduct of the applicant or of an interested person in respect 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, or
(iii) the applicant or an employee or agent of the applicant makes a false statement or provides a false statement in an application for registration or for renewal of registration;
The Registrar is proposing to refuse to register Mr. Carlos on all three grounds. First, the Registrar submits that Mr. Carlos’ undischarged bankruptcy is evidence of financial irresponsibility as is his outstanding judgment debts. The Registrar points to Mr. Carlos’ past criminal behaviour as evidence of a lack of honesty and integrity. Finally, the Registrar notes that Mr. Carlos did not disclose his bankruptcy on his final applications for renewal and did not disclose his judgment debt on his first application for reinstatement of his registration in 2010. Concerning his lack of disclosure, the Tribunal is satisfied that Mr. Carlos did disclose his past financial and criminal misconduct on multiple recent applications. While the disclosure might not have been fulsome, it was certainly sufficient to disclose key issues to the Registrar.
This is not a straightforward matter. Based on his criminal record and the continuing lack of payment of the judgment debts, there is legitimate concern about Mr. Carlos’ financial responsibility and his honesty and integrity. As well, Mr. Carlos has a tendency to minimise his past, despite testifying repeatedly that he had to accept responsibility for his actions. For example, he submitted that most of his problems stem from one bad year, 2006. While there may be some truth to that statement it is plainly not the whole truth. His problems appear to have both preceded and followed his nadir year of 2006. Further, during the hearing, Mr. Carlos at times struggled to control his temper. Given his previous record of assault and given the highly stressful and emotional nature of real estate sales, this is a concern.
In reaching a decision, the Tribunal must consider the totality of Mr. Carlos’ past conduct, including his conduct in the years after his troubles. This conduct goes a long way to addressing the Registrar’s concerns. The Tribunal accepts that Mr. Carlos has made serious efforts to turn his life around. We have the testimony of his first pastor, several young people he has helped and a long-time friend. Both the pastor and the friend have seen real changes in Mr. Carlos and the friend testified to Mr. Carlos’ remorse. In applying the test established in the Act, the Tribunal is mindful that Mr. Carlos is entitled to registration unless one of more of the three subparagraphs of subsection 6(1) of the Act applies. In this case, the Tribunal accepts that Mr. Carlos is on the right path and is turning his life around. The question is whether enough time has passed since Mr. Carlos began to change his life to determine that his past misconduct will not recur. The Tribunal would be concerned if Mr. Carlos were registered without condition. The practice of real estate sales, as noted above, can be a highly stressful occupation and it is often conducted in isolation from other real estate salespeople. Weighing all these factors, the Tribunal concludes that this registration may be granted if there are appropriate conditions attached to the registration. Some conditions would be needed for the protection of the public and to permit Mr. Carlos to have some initial structure in his practice. These conditions should permit Mr. Carlos, his broker and the Registrar to monitor key aspects of Mr. Carlos’ conduct for some reasonable period of time.
During the hearing, the Tribunal suggested that the parties should be given an opportunity to make presentations about any conditions imposed. This opportunity should be in person to permit the Tribunal to explore options with the parties. As well, although the sponsoring broker is not a party to these proceedings, he should have an opportunity to attend and make presentations about any conditions that he will undertake.
At a minimum, it would be useful for the Tribunal to hear submissions about conditions related to Mr. Carlos’s repayment of his outstanding judgment debts and completion of an anger management course, preferably one that is suitable for the high pressure work Mr. Carlos will be doing. Finally, there needs to be some monitoring mechanism to confirm that Mr. Carlos has not resumed his out of control drinking and drug taking.
ORDER
Pursuant to the authority vested in it under the provisions of the Act, the Tribunal directs the parties to attend on January 10, 2014 date at 9:30 am at the offices of the Tribunal to make submissions as to the terms and conditions which ought to attach to the registration of Mr. Carlos as a real estate salesperson under the Act.
LICENCE APPEAL TRIBUNAL
Laurie Sanford, Vice-Chair
Released: December 10, 2014