Licence Tribunal Appeal d'appel en Tribunal matière de permis

DATE:

2014-12-29

FILE:

8650/REBBA

CASE NAME:

8650 v Registrar, Real Estate and Business Brokers Act 2002

Appeal from a Proposal of the Registrar under the Real Estate and Business Brokers Act, 2002, S.O. 2002, c. 30, Sch. C - to Revoke Registration

Allan D. Shepheard

Appellant

-and-

Registrar, Real Estate and Business Brokers Act 2002

Respondent

AMENDED REASONS FOR DECISION AND ORDER

ADJUDICATOR:

Douglas R. Wallace, Vice-Chair

APPEARANCES:

For the Appellant:

Jaye Hooper and Jeremy Rubenstein, Counsel

For the Respondent:

George Phillip Drametu and Jay Blair, Counsel

Heard in Ottawa:

August 12, 13, 14, and 15, 2014 and October 1 and 2, 2014

AMENDED REASONS FOR DECISION AND ORDER

BACKGROUND

This hearing arises out of a Notice of Proposal dated January 30, 2014 by the Registrar, Real Estate and Business Brokers Act 2002 (the “Registrar” and the “Act” respectively) to revoke the registration of the Appellant as a salesperson under the Act.

PRELIMINARY MOTIONS

At the outset of the hearing, Counsel made four motions:

1. A motion by the Appellant for disclosure of documents relating to an audit or inspection of the books of the brokerage presently employing the Appellant

2. A motion by the Appellant for an order lifting the suspension of the Appellant’s registration

3. A motion by the Appellant for an order excluding witnesses until called to testify

4. A motion by the Registrar for an adjournment.

The Tribunal’s rulings on these motions are set out below.

The first motion was dismissed as Counsel for the Registrar advised the Tribunal that the documents requested by the Appellant arose solely in the course of a routine inspection of a brokerage by the Real Estate Council of Ontario (“RECO”) that was unrelated to these proceedings. Counsel advised the Tribunal that the inspection showed nothing about the conduct of the Appellant either before the proposals or subsequently. The Tribunal accepted Counsel’s advice that these documents were irrelevant and did not have to be disclosed. The Tribunal also noted that Appellant’s Counsel intended to call the broker of record of the brokerage in question and was free to summons that witness to attend with any documents he deemed relevant to the Appellant’s conduct. The Tribunal ruled that it would not embark on a review of the three volumes of documents disclosed by the Registrar’s Counsel to determine whether the Registrar improperly interpreted the scope of documents for which the Registrar could properly claim litigation or solicitor-client privilege.

The second motion requested that the Appellant’s registration suspended by an earlier order of the Tribunal, be reinstated pending a decision in this proceeding. The Registrar resisted this motion on the basis that the harm to the Appellant in prolonging the length of his suspension was outweighed by the risk of harm to the public arising from the Appellant’s continued practice of his profession. Counsel for the Appellant submitted evidence that any continued risk to the public could be reduced if not eliminated entirely by imposing a condition that the Appellant’s trade in real estate be restricted to a practice within a named reputable brokerage. Having considered the nature and seriousness of the allegations against the Appellant and the extent of supervision which could be provided by the proposed broker, the Tribunal found that limiting the trade in real estate in the manner proposed by the Appellant’s counsel would not provide sufficient protection to the public to guard against the risk of financial loss. Recognizing the principle enunciated by Vice-Chair Flude in Baldwin Travel & Tours Ltd. (c.o.b. Dynasty Travel Advisors), [2006] O.L.A.T.D. No.442, that the public interest must take precedence over private interests in cases arising under consumer protection legislation, the Tribunal ruled that the Appellant’s registration must remain suspended pending the completion of this hearing.

The Registrar consented to the third motion that witnesses with the exception of the Appellant and Ms. Volpe whose presence was necessary to instruct counsel for the Registrar be excluded until called to testify, and the Tribunal so ordered.

With a number of witnesses being present and in a position to proceed, the Tribunal dismissed the Registrar’s motion for a further adjournment and ruled that the matter proceed with the witnesses who were available notwithstanding the fact that some witnesses might have to be heard out of the normal order.

THE ISSUES

The primary issue is whether the Appellant is disentitled to registration under the Act. As section 14 of the Act, which requires the Tribunal to hold a hearing, authorizes the Tribunal to substitute its opinion for that of the Registrar and to attach conditions to its order or to a registration, the further issue arises whether any conditions should be attached should it find registration appropriate.

THE FACTS

The Appellant was first registered as a salesperson in February 1995 and has been continuously registered from this time until his registration was suspended pending this hearing. He was employed in the Re/Max Realty Solutions Inc. (Brokerage 1) from January 2009 until June 20, 2013, and with the Re/Max Alliance Ltd. (Brokerage 2) from this time until February 2014.

The grounds for the Registrar’s Proposal are alleged violations of all clauses in subsection 10(1)(a) of the Act as well as a violation of subsections 10(1)(f) and 10(1)(g) and clause 34(i) of O. Reg. 597/05.

These provisions are as follow:

10. (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;

(f) the applicant is in breach of a condition of the registration; or

(g) the applicant fails to comply with a request made by the registrar under subsection (1.1)

(1.1) The registrar may request an applicant for registration or renewal of registration to provide to the registrar, in the form and in within the time period specified by the registrar,

(a) information specified by the registrar that is relevant to the decision to be made by the registrar as to whether or not to grant the registration or renewal

(b) verification, by affidavit or otherwise, of any information described in clause (a) that the applicant is providing or has provided to the registrar.

O. Reg. 597/05

34 (1) If there is a change to any information that was included in the registrant’s application under section 3, the registrant shall notify the registrar, in writing within five days after the change takes place and shall set out the nature of the change

The facts are set out in some detail in the Notice of Proposal, a Supplemental Notice of Proposal and an Amended Notice of Proposal dated April 24, 2014 and several volumes of documents filed as exhibits. They were not disputed by the Appellant and may be summarized under the following headings.

The Appellant’s financial position: s. 10(1)(a)(i)

In January 2012, a search by the Registrar revealed three declarations of bankruptcy and one Commercial Proposal by the Appellant. All were filed between 1993 and 2002. Absolute discharges have been granted for each of the declarations of bankruptcy but the Commercial Proposal dating from 1997 and showing liabilities exceeding assets by approximately $100,000 remains in default.

A search by the Registrar in the Sheriff’s Office, carried out following the Appellant’s 2010 application for renewal of his registration, revealed that four Writs of Execution had been issued over the previous four years to secure payment of judgments totalling approximately $500,000. When the Registrar brought these executions to the attention of the Appellant, the Appellant provided him with an undertaking to use his best efforts to ensure that these judgments would be satisfied prior to the date of the next application for renewal of his registration. The undertaking was a condition of the Appellant’s 2010 registration, and went on to provide that if the Appellant did not satisfy the judgment by the next renewal date he would provide a sheriff’s report with his application for registration, a written update and proof of correspondence of his attempts to satisfy and settle his judgments as well as an explanation as to why any judgments had not been satisfied.

Although details showing the Appellant’s efforts to satisfy the judgments which gave rise to the four Writs of Execution were not provided to the Registrar in a timely fashion as required by the Appellant’s undertaking, by the time of this hearing, the Appellant was able to provide evidence indicating that one of the judgments had been paid in full and agreements reached with two of the remaining three judgment creditors to accept the payments made to date together with monthly payments in an agreed amount. A list of the amounts owing to satisfy the Appellant’s outstanding debts was filed as an exhibit, and showed monthly payments of approximately $1,800 owing to pay off debts of some $163,000. Another $44,000 is shown as owing to pay monetary penalties ($20,000) imposed by the Real Estate Council of Ontario (RECO) and fines ($24,000) imposed by the Provincial Court as a result of two breaches of the Real Estate and Business Brokers Act, 2002 in 2013 ($24,000).

The Appellant’s past conduct: s. 10(1)(a)(ii)

Trading in Real Estate

Four complaints concerning the Appellant’s role in a number of real estate transactions were brought to the attention of the Real Estate Council of Ontario (RECO) Discipline Committee.

(i) 2001 Complaint (Pinhey)

In this case, the Appellant acted as the listing salesperson and was either the buyer or the buyer’s agent. The allegation was that (1) he misrepresented his personal interest in the transaction when he stated that he was simply a friend of the buyer when he was really the buyer and (2) he failed to meet financial and other obligations to the Seller pursuant to a guarantee he had given the Seller. Following a full hearing, the Discipline Committee panel found the Appellant had breached Rules 1(1), 1(2), 1(5), 2, 5, 10, 45, and 46 of RECO’s Code of Ethics and concluded that the Appellant’s conduct was “unfair and unethical, lacking in integrity, misleading and financially irresponsible” for the following reasons:

(a) he provided monthly rent cheques to the Seller which failed to clear the bank;

(b) he secretly executed a lease without the Seller’s knowledge or consent;

(c) he failed to ensure that all utilities for the Property were promptly paid;

(d) he failed to advise the Seller of the disconnection of the gas service to the Property and the outstanding gas bills;

(e) he failed to properly maintain the Property and then failed to advise the Seller of the work order issued against the Property;

(f) he provided a guarantee when he was financially incapable of meeting the obligations under the guarantee (i.e. when he was an undischarged bankrupt);

(g) he tried to effect a settlement between two clients who were obviously adverse in interest to each other; and

(h) he put his own interests ahead of his clients by making a settlement offer which had not been authorised by Buyer and which was not in his client’s best interests”

In April 2002, the Discipline Committee imposed an administrative penalty of $12,000 and costs, and placed the Appellant on two years’ probation.

An appeal by the Appellant to the Discipline Committee Appeal Panel was dismissed with costs.

(2) 2010 Complaint (Provender Ave.)

In this case, the complainant (seller) alleged that the Appellant, who was acting for both the seller and the eventual buyer, put his interests before the seller’s in a real estate trade that involved a total of four agreements of purchase and sale (APS) during 2008 and 2009. The fourth APS ended in a sale to the Appellant’s wife with a delayed closing date during which the Appellant’s wife would rent the premises.

The hearing before the RECO Disciplinary Committee proceeded on the basis of an Agreed Statement of Facts. The Agreed Statement of Facts contained the admission by the Appellant that he had acted unprofessionally and had breached the following sections of the Code of Ethics:

3. A registrant shall treat every person the registrant deals with in the course of a trade in real estate fairly, honestly and with integrity

4. A registrant shall promote and protect the best interests of the registrant’s clients.

5. A registrant shall provide conscientious service to the registrant’s clients and customers and shall demonstrate reasonable knowledge, skill, judgement and competence in providing those services.

6. (1) A registrant shall demonstrate reasonable knowledge, skill, judgement and competence in providing opinions, advice or information to any person in respect of a trade in real estate.

7. A registrant shall be financially responsible in the conduct of business

8. A registrant shall use the registrant's best efforts to prevent error, misrepresentation, fraud or other unethical practice in respect of a trade in real estate.

9. A registrant shall not, in the course of trading in real estate, engage in any act or omission that, having regard to all of the circumstances, would reasonably be regarded as disgraceful, dishonourable, unprofessional or unbecoming a registrant.

Having considered all the facts set out in the detailed Agreement of Fact and Penalty, the Discipline Committee ordered the Appellant to pay a monetary penalty of $20,000 on or before February 7, 2014.

(3) 2011 Complaint

In this case, the Appellant acted as the salesperson for the seller. An inspection prior to closing the sale of the property revealed that the cover of a well on the property was rotten and required replacement. The seller agreed to replace the cover and the Appellant undertook to do so at his own expense should the seller fail to do so. This undertaking was given in November 2010 and was not satisfied until June 2011, long after the transaction had closed and after many telephone calls from the buyer and a complaint to RECO. Although the oral evidence indicated that this complaint resulted in a written Warning & Requirement that the Appellant take a course on Real Property Law offered by RECO (and the Appellant did take such a course a number of times in 2012 and 2013), neither the Warning nor the condition requiring the Appellant to take the course were filed as exhibits.

(4) 2014 Complaint (Joe’s Lake)

A fourth real estate transaction was brought to RECO’s attention in May 2014 but originated in 2011 when the Appellant acted as the salesperson for the complainants in the sale of their existing house at Joe’s Lake. When the complainants found a new home, the Appellant acted as their agent in the purchase of that home and agreed to rent their house at Joe’s Lake to assist the complainants in obtaining financing for their purchase. When the Joe’s Lake house did not sell, the Appellant offered in November 2011 to enter into a “rent to own” agreement with the complainants. His offer was accepted and contained the following terms:

a. The completion date of the transaction was May 3, 2013;

b. Deposit of $1,000.00 was payable upon acceptance of the offer;

c. The last month’s rent of $1,000.00 was to be applied to the down payment for the offer;

d. The Appellant was to pay a monthly rent of $1,500.00 commencing December 1, 2011. Of the $1,500 rent, $500.00 was to be applied to the down payment for the purchase and $1,000 to rent;

e. The sum of $10,495.00 plus HST in the amount of $1,364.35 for a total of $11,859.35 was due to the complainants as a down payment;

f. The Appellant was responsible for all utilities, maintenance and repairs of the property as if it were his own; and

g. In the event the transaction did not close and an amicable solution was possible, all accumulated deposits would be forfeited to the complainants

The evidence revealed that the very first two payments due to the complainants under this agreement were paid by cheques that were returned NSF and that many subsequent payments were paid by dishonoured cheques or simply missed in their entirety. By May 2013, the Appellant owed the complainants in excess of $9,000.00. The Appellant indicated at this time that he did not have the funds required to complete the purchase in November in accordance with his obligations under the agreement to purchase, and entered into a new agreement to pay the outstanding balance of $9,040.00. No payments have been made under this agreement and the full amount remained outstanding as of the date of this hearing.

In addition to these four transactions that were reported to RECO, another two transactions resulted in prosecutions in the Ontario Court of Justice for violations of the Real Estate and Business Brokers Act, 2002:

In the first case (Craig St.), the Appellant, acting as agent for the seller, accepted a sizeable commission on the sale of a property directly from the seller contrary to section 31(2) of the Act, thereby depriving his employing brokerage and a commission advance company of funds to which they were entitled.

In the second case (Cedardown, Private), the Appellant, acting on behalf of the seller, received an offer conditional on financing and a home inspection Although the condition relating to financing was never met, the Appellant fraudulently signed a Notice of Fulfillment of Conditions on behalf of the buyer. By falsely indicating that the condition had been met, the Appellant was able to obtain payment of the commission due on the sale of the property.

The Appellant pleaded guilty to the charge in the first case of accepting a commission from someone other than a broker, contrary to section 31(2) of the Act, and was fined $12,000. He pleaded guilty to two charges in the second case and received a $12,000 fine on the charge of falsifying information on a document relating to a trade in real estate contrary to section 34 of the Act, and a suspended sentence on the charge of furnishing a false document relating to a trade in real estate contrary to section 35 of the Act. He was placed on probation for two years, expiring on December 18, 2015.

A complaint was also filed with the Registrar of RECO concerning the Cedardown transaction and resulted in a written Warning being issued to the Appellant on September 13, 2013.

Making a false statement or providing a false statement: s. 10(1)(a)(iii)

Being in breach of a condition of registration: s. 10(1)(f)

Failing to comply with a request for information by the Registrar: s. 10(1)(g)

The evidence was clear and undisputed that the Appellant provided false and misleading information to the Registrar in connection to both his 2010 and 2012 applications for registration. In his 2010 application, he indicated that information concerning his bankruptcy and outstanding judgments was “already on file” when in fact it wasn’t. The result of this misrepresentation was the attachment of the condition to his registration requiring him to keep the Registrar informed of progress towards reducing the size and number of judgments against him.

The situation was similar with respect to the 2012 application but exacerbated by the fact that the failure to disclose information concerning judgments was in breach of the 2010 conditions attached to his registration and was compounded by the fact that the information eventually provided was itself false and misleading.

The Appellant’s Evidence

While the Appellant readily admitted the facts set out above and agreed that his conduct had been “shameless and unprofessional” in the past, he stated that he acted for buyers or sellers in approximately 1,400 real estate trades without complaint over the 19 years he was registered as a salesperson.

The Appellant also provided by way of explanation for his lack of judgment during the trades in question, the fact that he was under a lot of stress during this period arising out of the breakdown of his marriage and eventual divorce. He stated that his dismissal from Brokerage 1 and the loss of registration came as a shock to him and that he has changed completely and is now a new person. Among the changes which have helped him get his life under control are a new, supportive girlfriend and the support of a friend who has offered him employment in his new brokerage (Brokerage 2) and assistance in managing his finances.

With respect to the large debt he is carrying, the Appellant provided a listing of creditors indicating the original amounts owing, amounts either paid or negotiated off each, and amounts still owing. He had no repayment plan but advised that he could pay 20 per cent of his income each year towards the repayment of his debt. He attributed the cause of his debt giving rise to his proposal in bankruptcy to arrears of income tax and GST incurred prior to 2002 and stated that he had incurred no debt since 2001.

The Appellant voluntarily admitted that he failed to notify the Registrar of a change in address when he left his matrimonial home in or about the month of January, 2014, as required by section 28 of the Act and that he failed to successfully complete a course in business law required as a condition of his registration in spite of four attempts.

Two witnesses were called to testify as to the willingness of Brokerage 2 to accept the Appellant as a salesperson with that brokerage. The first was the office administrator, Fiona McKenny. She is the only one other than the broker of record who has access and makes entries on the computer program (Lone Wolf) used in the brokerage. This program keeps track of Listings, Agreements for Purchase and Sale, Notices of Fulfillment, Trade Records, commissions and most importantly, advances to salespeople working for the firm. It was her evidence that it would be very difficult if not impossible for a salesperson to obtain either a commission or an advance on a commission on a trade for which all the necessary documents had not been verified and entered on the system.

The second witness from Brokerage 2 to testify was the broker of record, Robin Chinkiwsky. He indicated that he knew the Appellant from the time they had worked together at a former brokerage firm and was pleased to offer him a position as a salesperson in his brokerage when he found out he had been fired from Brokerage 1. The Appellant worked for his firm for approximately six months until his registration was suspended, and he handled about a dozen transactions with no cause for concern. The broker confirmed his office administrator’s view that his computer program for tracking real estate trades left little room for unauthorized transactions. He knew of the Appellant’s difficulties with the Registrar’s office and in Provincial Court before offering him a position in his firm. He was confident that the Appellant could pay off his debts and he was willing to make personal calls to other brokers to confirm that transactions for which the Appellant claimed a commission were firm, before approving any advances to him. In cross-examination, he agreed with Counsel’s suggestion that a transaction could theoretically circumvent the Lone Wolf computer program if it were not listed on the multiple listing system or if there was collusion between the Appellant and a fictitious buyer.

Two additional witnesses called by the Appellant testified that they had retained the Appellant to act for them on several occasions and were favourably impressed with the quality of service he offered them. They both knew the basic facts surrounding his current difficulties but not the full details. When the details of his conduct were explained to them, they said that that did not sound like the person they knew but would not change their opinion of him as “every one deserves a second chance.”

The final witness was a cousin of the Appellant, working as an administrative assistant in the office of Brokerage 2. She considered her cousin a good family man who loved his work. She was surprised at some of the things he did, but found him a changed man since passing through this patch of difficult times.

APPLICATION OF LAW TO THE FACTS

Section 10 of the Act establishes a right to registration subject to a number of exceptions. The Registrar’s position is that the evidence clearly showed that the Appellant falls within each of the exceptions set out in this section.

With respect to subsections of section 10 (1)(a)(iii) relating to the making of false statements in an application for registration and subsections 10(1)(g) and 10(1)(f) (failing to provide requested information), the Registrar submitted that a breach of any one of these provisions is an absolute disqualification to registration which justifies the revocation of the Appellant’s registration without regard to his future conduct. The Tribunal finds that it is not necessary to decide whether the slightest breach of any one of these subsections disentitles an applicant to registration as suggested by the Registrar: it is sufficient to say that the breaches of these subsections in this case are so egregious that they justify the revocation of the Appellant’s registration. The violations consist of the following:

1. Failing to provide the Registrar with the information on his 2012 application for renewal of his registration as required by the conditions attached to his 2010 renewal. Failure to do so was a breach of section 10(1)(f) and 10(1)(g) of the Act;

2. Failing to provide the Registrar with notice of his change in address within five days as required by O. Reg. 597/05; and

3. Advising the Registrar in his applications for the renewal of his registration in both 2010 and 2012 that information concerning his bankruptcy and judgments was “on file” when this was, to the Appellant’s knowledge, untrue. The Appellant must have known that this information was critical to the Registrar’s decision whether to renew his registration and either deliberately or through inexcusable negligence failed to ensure that the Registrar had accurate and up-to-date details of all bankruptcies and judgments as required by section 10 (1) (a) (iii).

Each of these violations speaks of a deliberate intent by the Appellant to deceive the Registrar as to matters fundamental to his qualifications for registration.

With respect to the qualification set out in subsection 10 (1)(a)(ii), the Registrar submits that the past conduct of the Appellant when looked at in its totality, constitutes reasonable grounds to believe that the Appellant will not conduct his business in accordance with law and with honesty and integrity.

While the Appellant did not dispute that his conduct in the past contained a number of instances of unacceptable behaviour, he directed the Tribunal’s attention to authorities stressing the Tribunal’s obligation to look at these incidents in the context of the totality of a registrant’s past conduct. When we do, he submitted, we see a small number of unacceptable incidents relative to the total number of transactions handled. He pointed out that none of the incidents of unacceptable behaviour took place while he was employed in the office of Brokerage 2 and that he showed remorse and fully accepted responsibility for his past conduct. He testified that he is now a changed man. Finally, he submitted that any concerns the Tribunal might have concerning his future conduct could be allayed by attaching a condition to the renewal of his registration restricting his trading in real estate to trades carried out while employed by Brokerage 2.

Having reviewed all the evidence, the Tribunal is not persuaded by the Appellant’s submission in this regard. Rather, it finds that the Appellant’s impugned conduct took place over a sustained period of time and continued until shortly before the revocation of his registration.

The first transaction occurred in 2001 when he misrepresented his personal interest in a property to his client (seller), acted irresponsibly in providing his client with cheques which were dishonoured by his bank and in general put his personal interests before those of his client. His actions were found to be in violation of eight section of RECO’s Code of Ethics and were described by RECO’s Discipline Committee as having been “unfair and unethical, lacking in integrity, misleading and financially irresponsible.” The Appellant does not appear to have accepted the Discipline Committee’s decision imposing a substantial administrative penalty and period of probation as a wake-up call. This, in spite of the warning by the Discipline Committee that the penalty and period of probation it was imposing were appropriate “to make it clear that unfair, misleading, and unethical conduct on the part of RECO members will not be tolerated”.

The actions giving rise to the hearing before the Disciplinary Committee in 2013 occurred in 2008 and 2009. Here again the Appellant acted in his own and his wife’s personal interests at the expense of the interests of his client, the seller. The decision of the Disciplinary Committee, which is a tribunal of competent jurisdiction over such matters, was based on an Agreed Statement of Facts and Penalty, and concluded that the Appellant breached sections 3, 4, 5, 6(1), 35, 36, and 39 of the REBBA 2002 Code of Ethics. The Agreed Statement of Fact and Penalty indicates acts which were dishonest, financially irresponsible, lacked integrity, and were unethical and unprofessional. Again, neither the decision nor the substantial monetary penalty imposed ($20,000) appear to have acted as a wake-up call.

The conduct that gave rise to the 2011 complaint occurred in 2011 and was admittedly minor in comparison with the other transactions reviewed. Nevertheless, it involved a breach of an undertaking given by the Appellant in his capacity as a real estate salesperson and demonstrates a lack of integrity in carrying out his duties as a registered salesperson under the Act.

Additional conduct between 2011 and 2013 resulted in a 2014 complaint to RECO arising out of the Appellant’s failure to meet the financial obligations he incurred when he entered into a rent-to-own agreement with his client, the seller of property at Joe’s Lake. The Appellant did not dispute the allegations that he failed to meet his financial obligations under this agreement and failed to act in the seller’s best interests.

Finally, in the Craig St. transactions, the Appellant pleaded guilty to accepting a commission that should by law have been paid to his broker. This act was dishonest, illegal and deprived others of funds to which they were lawfully entitled. The same can be said with respect to the charges arising out of the Cedardown transaction where the Appellant fraudulently completed a document and used it for his own benefit. The actions in both cases took place in 2012 and 2013 and the Appellant is still on probation for the commission of these offences.

In all, there are six transactions between 2001 and 2014 demonstrating a shocking lack of integrity and honesty, and the failure to conduct business in accordance with law.

In answer to the Registrar’s submission that a review of the Appellant’s financial position reveals that the Appellant cannot reasonably be expected to be financially responsible in the conduct of his business as required by section 10(1)(a)(i) of the Act, the Appellant testified that he would devote a percentage of his earned commission on the sale of all properties to the reduction of his debts. He also indicated his acceptance of Robin Chinkiwsky’s offer to ensure that he does not receive commissions to which he is not entitled in the future. While the Tribunal does not doubt the Appellant’s sincerity in this regard, the size of the Appellant’s present indebtedness and the deceit practiced by the Appellant in the real estate transactions reviewed leads the Tribunal to the conclusion that there is a significant risk that the Appellant will return to his past conduct in the future, in spite of his best intentions.

The past bankruptcy, dishonoured cheques, outstanding judgments and debts clearly indicate that the Appellant is not in a position to meet his financial obligations at the present time. Further, although the Appellant has indicated he would like to commit a set percentage of future income to the payment of his debts, he produced no plan showing which debts would be discharged, in what priority or over what period of time. In the absence of such a plan, the Tribunal considers this evidence more a statement of best intentions than a concrete, reliable plan of financial management which will ensure his ability to be financially responsible.

The Tribunal considered at length the issue of whether it should order the Registrar to register the Appellant subject to conditions relating to his financial accountability. Having reviewed the authorities submitted by both parties in this regard, it concludes that it should not.

In the case of Re. Andrew C. Tulloch v. Registrar, Real Estate and Business Brokers Act, 2002 (released November 20, 2009), Vice-Chair Flude provided a list of the steps the Tribunal should take in determining whether the facts in an individual case lean toward rejecting a registration or to granting it with conditions attached. While the list may not be exhaustive, the Tribunal finds it helpful in focusing attention on the facts which separate the two lines of cases. The steps are as follows:

a) The Tribunal should consider the seriousness of the crime

b) There must be a clear demonstration of repentance and remorse and there must be acceptance of responsibility for the impugned behaviour

c) The span of time during which the criminal activity was undertaken must be considered

d) The Tribunal must review the Appellant’s record since the crime in question and

e) The Appellant must have learned from his mistakes and be a different man

Interpreting “crime” and “criminal activity” broadly as including all forms of impugned behaviour, the Tribunal finds that the impugned behaviour is extremely serious as evidenced by the two criminal convictions and the findings of RECO’s Discipline Committee. Further, the impugned conduct continued over a sustained period of time and despite several clear warnings by the Appellant’s governing body—warnings which should have acted as a wake-up call. While it may be that the Appellant intends to change his ways as indicated, there has been inadequate time for the Appellant to give effect to this intent by concrete action

In addition to the steps listed above, the Tribunal has given serious consideration to the following key question in a case such as this: Will the conditions suggested by the Appellant meet the goal of ensuring that there is no repetition of the conduct which led to the Registrar’s Notice of Proposal? Considering the evidence as a whole, the Tribunal is not satisfied that they will. The control that even the best-intentioned broker can exercise over a salesperson is limited both by time and by the distance between the two offices. Further, one of the key causes of the Appellant’s wrongful acts, the Appellant’s precarious financial position, has not been satisfactorily addressed.

In conclusion, the Tribunal does not believe that the consumer protection purpose of the Act would be well served by ordering the registration of the Appellant at the present time, even with conditions.

ORDER

Pursuant to the authority vested in it under the provisions of the Act, the Tribunal directs the Registrar to carry out the Proposal.

LICENCE APPEAL TRIBUNAL

Douglas R. Wallace, Vice-Chair

Released: December 29, 2014