Licence Tribunal

Appeal d'appel en Tribunal matière de permis

DATE: 2016-12-29

FILE: 9510/REBBA

CASE NAME: 9510 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, to Refuse Registration.

Hadi Mahmoodi Appellant

-and-

Registrar, Real Estate and Business Brokers Act, 2002 Respondent

MOTION DECISION

ADJUDICATOR: Harinder Gahir, Vice-Chair

APPEARANCES:

For the Appellant: David Burke, Counsel

For the Respondent: Jonathan Miller, Counsel

Hear by way of written submissions

Procedural History

1. This motion to quash the Appellant’s appeal arises in the course of an appeal by Hadi Mahmoodi (the “Appellant”) before the Licence Appeal Tribunal (the “Tribunal) from a Notice of Proposal dated April 2, 2015, and Supplementary Notice of Proposal dated October 9, 2015, issued by the Registrar, Real Estate and Business Brokers Act, 2002 (the “Registrar” or “Respondent” and the “Act” OR “REBBA” respectively.) These Notices propose refusing registration of the Appellant as a salesperson under the Act.

2. The hearing in this matter commenced before the Tribunal on August 26, 2015 (the “RECO hearing”).

3. Before the continuation of the RECO hearing scheduled for October 22, 2015, the Respondents learned that the Appellant had another appeal pending before a different panel of the Tribunal, against the decision of the Registrar for the Ontario Motor Vehicle Industry Council (“OMVIC”) dated June 18, 2015 to refuse registration as a salesperson pursuant to the Motor Vehicle Dealers Act, 2002 (the “OMVIC hearing”). Previously, the Tribunal revoked the Appellant’s licence to act as a motor vehicle ‘salesperson’ and ‘dealer’ on May 29, 2012. The OMVIC hearing proceeded on November 3 and 4, 2015, and the Tribunal’s decision was released on November 19, 2015.

4. In its decision dated November 19, 2015, the Tribunal refused the Appellant’s appeal on the basis that there were reasonable grounds to believe that the Appellant would not carry on business in accordance with the law and with integrity and honesty (9660 v. Registrar, Motor Vehicle Dealers Act 2002 -“the OMVIC Decision”).

5. Following the Respondent’s discovery of the OMVIC proceedings, the Respondent issued a supplemental Notice of Proposal which laid out additional grounds for refusing the Appellant’s application.

6. On consent, the Tribunal adjourned this matter multiple times, and held mid-hearing case conferences to permit the Appellant opportunity to pursue an appeal from the OMVIC Decision to the Divisional Court. The Respondent had not pursued this appeal as of the date of the RECO hearing.

7. The Respondent thereafter brought a motion to quash this appeal.

Grounds of the Registrar’s Motion

8. The Respondent brought this written motion seeking to quash the Appellant’s appeal in the RECO hearing. The Respondent argues that a continuation of this appeal would constitute a ‘re-litigation’ of the issues already litigated in the OMVIC hearing, such that re-litigating these issues would constitute an abuse of process.

9. The Respondent argues that the Appellant admitted under cross-examination in the RECO Hearing that he made a false statement in his present RECO application. The Respondent also argues that the Appellant made a false statement in his OMVIC application.

(OMVIC Decision at page 8)

10. The Respondent refers to the 2012 Tribunal Decision revoking the Appellant’s OMVIC registration, and points out that the Tribunal found the Appellant to be totally lacking in credibility, and that the Tribunal found that the Appellant engaged in a clear attempt to mislead the Tribunal. The Tribunal, in its November 2015 decision, also expressed concerns about the Appellant’s understanding of his statutory obligations in a regulated industry.

Appellant’s Response

11. The Appellant submits that, in the RECO appeal, the Appellant intends to provide witness testimony to supplement the character reference letters he provided. He relies on the Tribunal’s observation in the OMVIC Decision that the “oral testimony (of the referees) may have assisted Mr. Mahmoodi in his quest for reinstatement”.

12. The Appellant acknowledges that some issues may overlap between the OMVIC and the RECO hearings. The Appellant argues that the hearings are different, as the training and education requirement is significantly higher in the case of his registration under the Act. Moreover, he argues that he would be working as a salesperson under a broker, whereas he was working in a supervisory capacity when his OMVIC licence was revoked in 2012.

13. The Appellant argues that the kind of position that he is seeking in the real estate industry is sufficiently different from his position in the car sales industry such that different considerations should be considered by the Tribunal in assessing whether there are reasonable grounds to believe that the Appellant will not conduct his business in accordance with the law and with integrity and honesty. The Appellant argues that additional evidence might be submitted before this Tribunal that the Tribunal would not have been privy to in coming to their decision in the OMVIC hearing. The Appellant argues that this difference is sufficient to justify holding a new hearing regarding these issues.

14. The Appellant argues that outright denial of registration is excessive in the circumstances of the case, and that he is willing to work under the close supervision of a mentor and supervisor in the real estate industry for a time prescribed by the Tribunal.

15. The Appellant alleges that he was unable to afford counsel on his OMVIC appeal, and as such he struggled to represent himself effectively in that proceeding. The Appellant alleges that he failed to recognize the impact of failing to produce witness testimony in support of his position because of his lack of legal representation.

16. The Tribunal in the OMVIC hearing addressed issues related to the OMVIC application and did not speculate or make decisions on different evidence that may arise or pertain to a RECO hearing.

The Test for Registration: OMVIC vs RECO

17. Under the MVDA, 2002, the Tribunal applied subsection 6(1)(a)(ii) to find that the Appellant was not entitled to registration as a motor vehicle salesperson. That section reads as follows:

6. (1) an applicant that meets the prescribed requirements is entitled to registration or renewal or registration by the registrar unless,

a) The applicant is not a corporation and,

(ii) The past conduct of the applicant or 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

18. The Respondent relies on subsection 10(1)(a)(ii) of REBBA in refusing registration of the Appellant. As such, in coming to a decision this Tribunal must consider whether “the past conduct of the applicant or 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”.

19. Subsection 10(1)(a)(ii) of REBBA is identical to subsection 6(1)(a)(ii) of the Motor Vehicle Dealers Act, 2002. Subsection 10(1)(a)(ii) of REBBA reads as follows:

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,

(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

[bolded for emphasis]

20. Where the statutory tests are identical and the demands under both Acts are the same, this Tribunal has previously found it useful to determine the eligibility of an applicant who has applied to both OMVIC and RECO. See Buckman (Re), [1994] O.C.R.T.D. No. 96, whereby the Applicant was denied registration to both OMVIC and RECO by the Tribunal in a single hearing because he didn’t meet the subsection 10(1)(a)(i) and (ii) tests under REBBA and the equivalent MVDA subsections.

Buckman (Re), [1994] O.C.R.T.D. No. 96 at para 22

The Doctrine of Abuse of Process

21. The Supreme Court of Canada in Toronto (City) v. C.U.P.E., Local 79, [2003] 3 SCR 77, 2003 SCC 63, at para 37 observed that Canadian courts have applied the doctrine of abuse of process to preclude re-litigation in circumstances where allowing the litigation to proceed would violate the principles of judicial economy, consistency, finality and the integrity of the administration of justice.

37. In the context that interests us here, the doctrine of abuse of process engages “the inherent power of the court to prevent the misuse of its procedure, in a way that would . . . bring the administration of justice into disrepute” (Canam Enterprises Inc. v. Coles (2000), 2000 CanLII 8514 (ON CA), 51 O.R. (3d) 481 (C.A.), at para. 55, per Goudge J.A., dissenting (approved 2002 SCC 63, [2002] 3 S.C.R. 307,). Goudge J.A. expanded on that concept in the following terms at paras. 55-56:

The doctrine of abuse of process engages the inherent power of the court to prevent the misuse of its procedure, in a way that would be manifestly unfair to a party to the litigation before it or would in some other way bring the administration of justice into disrepute. See House of Spring Gardens Ltd. v. Waite, [1990] 3 W.L.R. 347 at p. 358, [1990] 2 All E.R. 990 (C.A.).

[Emphasis added.]

As Goudge J.A.’s comments indicate, Canadian courts have applied the doctrine of abuse of process to preclude relitigation in circumstances where the strict requirements of issue estoppel (typically the privity/mutuality requirements) are not met, but where allowing the litigation to proceed would nonetheless violate such principles as judicial economy, consistency, finality and the integrity of the administration of justice. This has resulted in some criticism, on the ground that the doctrine of abuse of process by relitigation is in effect non-mutual issue estoppel by another name without the important qualifications recognized by the American courts as part and parcel of the general doctrine of non-mutual issue estoppel. [Citations omitted.]

22. Arbour J. goes on to outline at para. 51 of the C.U.P. E. three parts to the rationale for the doctrine of abuse of process, which may be summarized as follows:

a. There can be no assumption that relitigation of the issue will yield a more accurate result than the original proceeding.

b. If the same result is reached in the subsequent proceeding, the relitigation will prove to have been a waste of judicial resources as well as an unnecessary expense for the parties and possibly an additional hardship for some witnesses.

c. If the result in the subsequent proceeding is different from the conclusion reached in the first on the very same issue, the inconsistency, in and of itself, will undermine the credibility of the entire judicial process, thereby diminishing its authority, its credibility and its aim of finality.

23. The Supreme Court of Canada in C.U.P.E. at paragraph 52 identified three circumstances where relitigation will enhance, rather than impeach, the integrity of the judicial system. These circumstances are as follows:

1. when the first proceeding is tainted by fraud or dishonesty;

2. when fresh, new evidence, previously unavailable, conclusively impeaches the original results; or

3. when fairness dictates that the original result should not be binding in the new context.

Analysis

24. The issue before the Tribunal is whether Appellant’s RECO hearing would be an abuse of process in light of the recent OMVIC Decision, where a different Tribunal panel refused Appellant’s registration. The narrower doctrines of res judicata or issue estoppel do not apply because the parties are different – the Respondent regulator is different.

25. This Tribunal has sometimes adopted the abuse of process doctrine to bar re-litigation. See, for example, 7612 v. Registrar, Real Estate and Business Brokers Act 2002, 7612/REBBA, November 10, 2014, at pages 3-5, TAB 5 (“Racco”); and 9965 v. Registrar, Real Estate and Business Brokers Act 2002, 9965/REBBA, May 27, 2016, TAB 6 (“Bulman”).

26. As noted in C.U.P.E., the issue is whether “allowing the litigation to proceed would nonetheless violate such principles as judicial economy consistency, finality and the integrity of the administration of justice.” The Respondent RECO argues that the 2015 OMVIC Decision represents a broader finding about the Appellant’s general lack of compliance with law and his general lack of honesty and integrity that applies to any regulatory regime. The Tribunal notes that s. 6(1)(a)(ii) of the MVDA is substantially identical to s. 10(1)(a)(ii) of the REBBA, in referring to “reasonable grounds for belief that the applicant will not carry on business in accordance with law and with integrity and honesty.”

27. However, the identical wording of s. 10(1)(a)(ii) of REBBA and s. 6(1)(a)(ii) of the MVDA does not mean that the issues to be determined are the same. The question of whether the Appellant’s past conduct affords reasonable grounds to believe that the Appellant will not conduct business as a motor vehicle salesperson under the MVDA in accordance with law and with integrity and honesty is not the same question as whether his past conduct affords reasonable grounds for belief that he will not conduct business as required as a real estate broker under REBBA. The MVDA and REBBA are two separate legislative schemes which impose different obligations and responsibilities on their registrants.

28. Because the ultimate issue in the present appeal was not decided in the OMVIC proceeding, it cannot be said that it is being re-litigated. Accordingly, the appeal itself is not an abuse of process. However, it may be an abuse of process for the Appellant to attempt to re-litigate specific findings of fact made in the OMVIC proceeding with respect to the Appellant’s past conduct. This was the case in Racco, where the Tribunal did not permit a party to re-litigate a criminal conviction or the specific findings of fact made by the criminal court.

29. There is no possibility of conflicting decisions between two different panels of this Tribunal, as the ultimate question to be determined in each case is distinct. Although it may be efficient in some cases to join two proceedings under different regimes if there is an overlap in the past conduct at issue in both, the Tribunal ultimately must make separate findings in the context of each regime. The Tribunal will not allow the Appellant to use this RECO appeal to make a collateral attack on the previous OMVIC Decision. The Appellant had the opportunity to pursue an appeal of this decision and chose not to do so. The Tribunal in this RECO hearing will not take on the role of sitting in review of the Tribunal’s OMVIC Decision, for example, in terms of whether it was wrong in its analysis of the evidence at that OMVIC hearing.

30. At the same time, the Tribunal must weigh any concerns that findings of fact made in the OMVIC proceeding may be attacked with the consequence of the Appellant losing his right to be heard for his appeal of RECO’s decision. It should only be in clear cases when this right to be heard is taken away. The Tribunal finds that the circumstances of this case are not enough to merit an early dismissal of this appeal without a hearing.

31. The Tribunal must consider the whole of the Appellant’s conduct, and this may include conduct in the full year that has elapsed since the OMVIC Decision. Furthermore, the Appellant at this RECO hearing will be presenting a plan for a condition that will require him to work under close supervision of a mentor and supervisor in the real estate industry for a period prescribed by the Tribunal. This presents different circumstances that the Appellant should be entitled to have considered.

32. In this RECO appeal, the Appellant should have the opportunity to propose a condition that he did not have available to him in the earlier OMVIC hearing, which involved a different occupation and different work arrangements over a year ago.

33. For these reasons, the Tribunal dismisses the Respondent’s Motion. The Appellant’s appeal will be scheduled for a case conference and a hearing.

LICENCE APPEAL TRIBUNAL

Harinder S. Gahir, Vice-Chair

Released: December 29, 2016