Licence Appeal Tribunal
FILE: 7612/REBBA
CASE NAME: 7612 v. Registrar, Real Estate and Business Brokers Act 2002
Motion for Stay of an Order of the Tribunal pursuant to the Real Estate and Business Brokers Act, 2002, S.O. 2002, c. 30, Sch. C
Peter Racco Appellant
-and-
Registrar, Real Estate and Business Brokers Act 2002 Respondent
REASONS FOR DECISION AND ORDER
ADJUDICATOR: Patricia McQuaid, Vice-Chair
APPEARANCES:
For the Appellant: Emily Lawrence, Counsel
For the Respondent: Kelvin Kucey, Counsel
Heard in Toronto: May 19, 2015
REASONS FOR DECISION AND ORDER
In its decision released on March 18, 2015, the Tribunal directed the Registrar to carry out his proposal to revoke the Appellant’s registration as a real estate broker. The Tribunal found that Mr. Racco’s past conduct, in particular, his conduct surrounding his criminal conviction and his failure to disclose the PJR business to the Registrar, afford reasonable grounds for the belief that he will not carry on business in accordance with the law and with honesty and integrity. Mr. Racco has appealed the Tribunal’s decision to Divisional Court. That appeal is expected to be heard in the next 6-12 months. Mr. Racco brings this motion to stay the Tribunal’s order pending the Divisional Court appeal.
Counsel provided fulsome written and oral submissions on this motion, which were of great assistance in the Tribunal’s deliberations.
Section 14(9) of the Real Estate Business Brokers Act, 2002, S.O. 2002 c. 30, Sch. C (the “Act”) addresses the issue of a stay of the Tribunal’s order pending appeal. It states:
(9) Even if a registrant appeals an order of the Tribunal under section 11 of the Licence Appeal Tribunal Act, 1999, the order takes effect immediately but the Tribunal may grant a stay until the disposition of the appeal.
Mr. Kucey made submissions that the leading case in considering whether to grant a stay, RJR MacDonald Inc. v. Canada (Attorney General) [1994] 1 SCR 311, 1994 CanLII 117 (SCC), (“RJR” ) may be of less assistance because of its underlying issues of the constitutional validity of certain legislation and the alleged violation of the Canadian Charter of Right and Freedoms. Nonetheless, counsel did agree that the RJR decision does set out the applicable test for the Tribunal’s consideration, and framed their submissions accordingly. The test has three elements: is there a serious issue to be tried, will the failure to grant the relief sought cause irreparable harm to the Appellant, and does the balance of convenience favour the granting of a stay. No single element is determinative. Deficiency in one element may be offset by a strong case for a stay in another element. The overriding concern is to make a just decision based on weighing the three elements.
Serious Issue to be Tried
Despite the words of the first branch of the test, that there must be a “serious issue to be tried”, the threshold is not high. The Court in RJR stated:
What then are the indicators of "a serious question to be tried"? There are no specific requirements which must be met in order to satisfy this test. The threshold is a low one. The judge on the application must make a preliminary assessment of the merits of the case. The decision of a lower court judge on the merits of the Charter claim is a relevant but not necessarily conclusive indication that the issues raised in an appeal are serious: see Metropolitan Stores, supra, at p. 150. Similarly, a decision by an appellate court to grant leave on the merits indicates that serious questions are raised, but a refusal of leave in a case which raises the same issues cannot automatically be taken as an indication of the lack of strength of the merits.
Once satisfied that the application is neither vexatious nor frivolous the motions judge should proceed to consider the second and third tests, even if of the opinion that the plaintiff is unlikely to succeed at trial. A prolonged examination of the merits is generally neither necessary nor desirable.
The Appellant has exercised his right of appeal pursuant to s. 11(1) of the Licence Appeal Tribunal Act, 1990, S.O. 1999 c.12, Sched G. The Appellant sets out two broad grounds of appeal in respect of the findings of fact and the sanction imposed. He asserts: (1) that the Tribunal erred in law by making findings of fact and/or drawing inferences that were unsupported in the evidence or were contrary in law in relation to the conclusions regarding Mr. Racco’s conduct (resulting in a criminal conviction) with a female, JK, and in its characterization of PJR as a “business” for the purpose of the Act, and (2) failing to give sufficient weight to evidence of good character. Further, he asserts that the sanction of revocation was “excessive and disproportionate” to its findings. His livelihood is seriously impacted.
This Tribunal agrees with Mr. Kucey’s submission that a reading of Vice-Chair Sanford’s decision suggests that she was detailed and thorough in her assessment of the evidence and the conclusions she drew from that evidence. Mr. Kucey referred the Tribunal to a decision of the Divisional Court in Lonergan v. Ontario (Licence Appeal Tribunal), [2006] O.LA.T.D. No. 428, where the Court, on appeal of the Tribunal’s decision revoking a real estate licence, stated at paragraph 5:
The Tribunal carefully weighed and considered the evidence it heard. It made findings of credibility against the appellant, giving clear reasons for so doing.
The Court went on to say that there was ample evidence to support the Tribunal’s conclusions and that they were eminently reasonable. Further, at paragraph 8 of its decision, the Court stated:
The question of penalty is one that squarely falls within the expertise of the Tribunal. Considerable deference is due to decisions of Tribunals charged with the responsibility of disciplining licensees.
Based on the reasoning in Lonergan, Mr. Kucey suggests that the Vice-Chair Sanford’s decision would be assessed similarly, leading to a conclusion that there is indeed no serious issue to be tried.
However, the Tribunal notes that the issues to be addressed on appeal, as various cases cited to the Tribunal illustrate, have given the Courts pause, especially when a person’s livelihood hangs in the balance. The Court of Appeal in the decision of Ontario (Alcohol and Gaming Commission) v. 751809 Ontario Inc. (Famous Flesh Gordon’s, 2013 ONCA 157 stated:
[35] The Registrar argues that if the Board had used the proper standard of proof and applied the proper test, revocation would have been the only result that the Board could reasonably have reached on these undisputed facts.
[36] I do not agree. There is no doubt that the evidence about the Hells Angels as a criminal organization, with its troubling code of conduct, and Mr. Barletta’s role in the organization, was clear. However, so was the fact that, while a member, he had apparently acted lawfully, with honesty and integrity, and had operated his licensed establishment properly for almost ten years. While Mr. Barletta’s association with the Hells Angels is in our view powerful evidence pointing that way, I cannot say that revocation is the only reasonable conclusion the Board could reach on a proper application of s. 6(2)(d). I would therefore reject this argument
It is not the role of the Tribunal, at this juncture, to act as a reconsideration body; rather, it is sufficient to determine that the grounds do not appear to be frivolous. Nor is it the Tribunal’s role to assess in any fulsome way the likelihood of success or failure on the appeal. Given the very low threshold, the Tribunal finds that Mr. Racco has satisfied this branch of the test.
Irreparable harm
The second part of the test concerns irreparable harm to the Appellant. The Tribunal accepts Ms Lawrence’s submission that Mr. Racco intends to proceed with his appeal expeditiously. However, that will still mean that the appeal is not likely to be heard for 6-12 months from now. She argues that revocation of his registration will have social, professional, reputational and financial ramifications. In his affidavit, Mr. Racco states that he has worked as a broker since 1989. He is now unemployed and living on his RRSPs. In her submissions, Ms Lawrence stated that a lengthy absence from the business will detrimentally affect his ability to maintain and attract clients, an issue that cannot be remedied if the appeal is successful.
Yet it cannot be said that the consequences which Mr. Racco asserts he is suffering are the result of this revocation alone. In his affidavit, Mr. Racco at paragraph 9 states: “I have faced serious and professional consequences as a result of this isolated incident with Ms. J.K. , in addition to the stigma that came with the criminal finding of guilt.” His divorce proceedings have also had a toll financially. The evidence at the hearing before Vice-Chair Sanford was that Mr. Racco was in arrears on child support at that time, and was in fact looking for a reduction in those payments because his income had dropped between 60-75% since the divorce proceedings commenced. His fears that he may not be able to meet his support obligations appear to have pre-dated the Tribunal decision.
In every case of revocation of a business registration, with the time away from the business, it could be argued that this, in and of itself, results in irreparable harm. Mr. Racco’s position is that the harm is the loss of his registration as a broker and the loss of what he says is his sole source of income. Yet the loss of income that flows from a loss of licence is, as a matter of course, a likely outcome in all such cases. Reasons similar to that advanced by Mr. Racco were considered by the Tribunal, on a motion for stay in the case of Rajkumar (Re), [2010] O.L.A.T.D. No.19. Vice-Chair Sproule stated:
The evidence of the Applicant is that if he is prevented from participating in the real estate industry while waiting for his appeal to be heard, he will lose his contacts, which are the basis of his business, and as a consequence his career will be destroyed. …He has been in the industry for 21 years, and undoubtedly has made hundreds if not thousands of contacts. However, the Applicant’s evidence on the impact of his absence from the industry for a finite period of time appears to the Tribunal to be simply speculative. (emphasis added).
Although the Tribunal accepts that the Applicant’s evidence that selling real estate is his only source of income and assumes that being deprived of that income in the interim will have an impact of some kind, there was no evidence that the economic impact would amount to some irreparable harm.
That reasoning applies equally here. A bald assertion of irreparable harm does not suffice, especially where such an assertion could be made in every appeal from a revocation of licence. The facts do not support a conclusion that irreparable harm would occur as a result of a stay not being granted.
Balance of Convenience
The third part of the test is that the balance of convenience and the public interest favour the granting of a stay. The Act which regulates the real estate industry is consumer protection legislation and the Registrar does have a duty to ensure that the public is protected from registrants who act contrary to the public interest. The Registrar is of the view that permitting the Appellant to carry on business exposes women with whom he might deal to undue risk of sexual assault. For the Registrar, it is the criminal conduct which tips the balance.
The conduct was indeed reprehensible. That being said, this was a first offence and there have been no further charges or incidents alleged in the period of time between May 2010 and the Tribunal hearing which concluded in February 2015, and during which time Mr. Racco was working, with conditions on his registration. The incident occurred in May 2010. Mr. Racco was found guilty of one charge of sexual assault in October 2011. He appealed the conviction and the sentence. His conviction was upheld; however, his sentence was reduced from 60 days in jail and a two year probation order to a six-month conditional sentence. Mr. Kucey suggested that the “public” has been waiting since August 2012 to have this issue determined. The Registrar rightly characterizes his role as protection of the public, but to suggest that the public has been waiting for the outcome of the Registrar’s proceedings against the Appellant, and the revocation order, is, with respect, an overstatement.
Further, it is unlikely that public confidence in the integrity of the Registrar’s regulatory process will be diminished should a stay be granted. If that were so, Mr. Kucey’s suggestion that to mitigate financial loss Mr. Racco could continue to work in the real estate business in a role that did not require registration would surely not have been advanced.
Unlike the Appellant in Baksh (Re), [2007] O.L.A.T.D. No. 253, Mr. Racco has provided evidence from two brokers in support of his motion. Mr. Tersigni, with whom Mr. Racco worked briefly before his registration was revoked, is aware of his criminal conviction and the Tribunal hearing. He is prepared to have him return to work at his brokerage and is also prepared to supervise him as required.
The Tribunal notes too that on the facts before it, the appeal is being pursued with diligence, albeit there is no specific information as to when the appeal will be heard. The Tribunal takes Ms Lawrence at her word when she indicated the appeal has, and will be, pursued expeditiously. There was nothing to suggest otherwise.
In the face of the facts put before the Tribunal, it seems unlikely that the protection of the public requires the Appellant to be excluded from his business as a real estate broker while awaiting the outcome of his appeal to Divisional Court. The balance of convenience is in favour of the Appellant.
In considering the three elements of the test in total, they argue in favour of granting the stay. The deficiency found in the second part of the test is offset by the strong case for a stay in the other two elements. The Tribunal therefore concludes that the overall justice of the matter weighs in favour of the stay. Ms. Lawrence, in her submissions, stated that Mr. Racco was prepared to have conditions attach to his registration, similar to those that he was subject to in the three years leading up to the Tribunal hearing. The Tribunal concludes, in the context of the findings made by Vice-Chair Sanford, it is appropriate and in the public interest that reasonable restrictions on his registration be put in place.
Order
Therefore, the stay is granted for a period of nine months from the date of release of this decision. During that time, the Appellant will perfect the appeal and take all reasonable steps to ensure a hearing before the Divisional Court is scheduled at the earliest possible time. At the end of nine months, the stay may be extended until the Divisional Court releases its decision, either on consent of the parties or on motion by the Appellant. On such motion, the Registrar may raise any unreasonable delay in prosecuting the appeal as a ground for denying the extension.
Furthermore, the Appellant’s registration shall be reinstated on the following terms.
Mr. Racco shall inform the Registrar, within 5 days, of any changes that may affect his registration.
Mr. Racco shall notify the Registrar, within 2 days, if charged with, or convicted of any offence under any federal, provincial or other statute (except municipal parking violations).
Mr. Racco shall be monitored by Vincenzo Tersigni of Royal LePage Elite Realty and shall work under his close supervision.
Mr. Racco and Mr. Tersigni shall advise the Registrar immediately of any and all complaints made about Mr. Racco from any source, and without limiting the generality of the foregoing, including consumer complaints lodged with the broker and/or complaints lodged with any real estate boards by either consumers or registrants.
Mr. Racco shall not apply for a transfer of his registration without the prior approval of the Registrar.
In submissions, counsel highlighted the fact that the renewal term of Mr. Racco’s registration was on May 20, 2015. Reinstatement will therefore require a renewal application. Mr. Kucey advised that in the normal course, a registrant is permitted to continue working during the renewal application process. In the spirit of this order, the Tribunal expects that the “usual” practice will prevail for Mr. Racco’s renewal application and that processing of that application will not be unreasonably delayed or withheld.
LICENCE APPEAL TRIBUNAL
Patricia McQuaid, Vice Chair
RELEASED: June 9, 2015