Licence Appeal Tribunal / Tribunal d'appel en matière de permis

DATE: 2016-04-25

FILE: 9881/REBBA

CASE NAME: 9881 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 Refuse Registration

Domenic Manicapelli Appellant

-and-

Registrar, Real Estate and Business Brokers Act 2002 Respondent

REASONS FOR DECISION AND ORDER

ADJUDICATOR: Mary Ann Spencer, Member

APPEARANCES:

For the Appellant: Ian Ball, Paralegal

For the Respondent: George Drametu, Counsel

Heard in Toronto: April 7, 2016

REASONS FOR DECISION AND ORDER

BACKGROUND

This is a hearing before the Licence Appeal Tribunal (the "Tribunal") arising out of a Notice of Proposal issued by the Registrar, Real Estate and Business Brokers Act 2002 (the "Registrar" and the "Act" respectively). The Notice of Proposal dated October 30, 2015 proposes to refuse to register Domenic Manicapelli as a salesperson under the Act.

Mr. Manicapelli was previously registered as a salesperson under the Act. Following a hearing on May 30, 2013, his registration was revoked by order of this Tribunal dated June 6, 2013. The Tribunal decision in 7490 v. Registrar, Real Estate and Business Brokers Act 2002, 2013 CanLII 32981 (ON LAT) reads:

The Tribunal concludes that Mr. Manicapelli's persistent deception of his regulator together with the outstanding criminal charges against him and his conduct in dealing with these charges raise serious concerns about his ability to conduct business in accordance with the law and with the honesty and integrity required by the Act. He has also failed the test set out in subparagraph 10(1)(a)(iii) of the Act.

The evidence showed that Mr. Manicapelli had provided false information on each of nine applications for registration and renewal submitted to RECO over a period of 19 years. He had failed to disclose his 1994 and 2010 bankruptcies, his directorships in two businesses, and outstanding criminal charges laid in Florida in 2001. The Tribunal noted that the persistent pattern of lying to the regulator "raised concerns about whether Mr. Manicapelli is governable, that is whether he will comply with the Act".

On July 30, 2014, the Registrar received an "Application for New/Reinstatement: Broker/Salesperson" from the Appellant. The Registrar proposes to refuse registration on the basis that, pursuant to section 17(b) of the Act, Mr. Manicapelli has not provided or made available any new or other evidence and has not made it clear that material circumstances have changed.

EVIDENCE AND FACTS

The Registrar's evidence consisted of a book of documents (Exhibit 3) and the testimony of Angela Volpe, Manager of Registration at the Real Estate Council of Ontario ("RECO"). The Appellant's evidence consisted of a book of documents (Exhibit 4) and the testimony of Mr. Manicapelli and three witnesses.

Mr. Manicapelli was registered as a real estate salesperson between 1994 and June 6, 2013, when his registration was revoked. There were no issues with respect to his conduct as a salesperson during the period of his registration. Mr. Manicapelli testified that he takes full responsibility for lying on his applications to RECO and admitted he was dishonest. He has changed as a result of his experience over the past two years and what he has put his family through. Real estate is all he has known. He was "careless and stupid" but has grown since his registration was revoked.

Ms Volpe testified that she both reviewed the documents submitted by Mr. Manicapelli in support of his application for registration (Exhibit 3, Tab 5) and met with him. The Registrar's assessment of his June 25, 2014 application and the decision to refuse registration was made in the context of the reasons for revocation cited by the Tribunal in its June 6, 2013 decision (Exhibit 3, Tab 3).

Mr. Manicapelli testified he has taken steps to address the issues which he failed to disclose to the Registrar on his previous applications.

On October 29, 2014, the Court ordered his 2010 bankruptcy be discharged subject to the payment of $15,000 to Rumanek & Company Ltd., the trustee in bankruptcy. Mr. Manicapelli began to make payments shortly after the Order was issued. Referring to a January 12, 2016 statement from Rumanek (Exhibit 4, Tab 3), he testified he pays by automatic withdrawal from his bank account. Initially, his monthly payments were $150 but these have now been reduced to $50. He acknowledged that it would take a significant time to pay the trustee at this level of payment. He also noted that on June 16, 2014, the Bank of Montreal signed a release/agreement withdrawing its opposition to the bankruptcy (Exhibit 4, Tab 7). Ms Volpe noted that the bankruptcy has not yet been discharged and that the January 12, 2016 statement indicates that only two payments have been made to the trustee. Questioned about his e-mail correspondence in August, 2014 with Ms Volpe in which he indicated he was making monthly payments with respect to the bankruptcy, Mr. Manicapelli testified that although he was not required to make payments before the Order was issued, he had made two at the time he sent the e-mails.

Mr. Manicapelli testified he takes full responsibility for the criminal charges laid by the State of Florida. In 2001, he retained an attorney who failed to notify him about court proceedings; however, he admitted it was also his responsibility to ensure he knew the status of his proceeding. His failure to appear led to the issuance of a warrant for his arrest. The matter has now been resolved. In December, 2014, Mr. Manicapelli pled guilty to a lesser misdemeanor charge of "petit theft" and paid the fine levied and Court costs. He stated he had no excuse for the lengthy time it took him to resolve the matter. Ms Volpe noted that the letter from attorney Peter Macaluso (Exhibit 4, Tab 2) indicating that he expected that charges would not be pursued by the State was dated July 30, 2014. Her view is that the charges were taken care of only to support Mr. Manicapelli's application to RECO.

With respect to fines of $25,100 levied under the Provincial Offences Act ("POA") stemming from charges of providing false information to the Registrar, Mr. Manicapelli testified he made his first payment of $500 on July 24, 2014 and has entered into a payment plan with the City of Toronto for subsequent monthly payments (Exhibit 4, Tab 4). He has been making regular payments of $50 per month. Ms Volpe, however, noted that the first payment was made only the day before Mr. Manicapelli submitted his application to RECO and approximately 5 months after the application indicates he became employed and had a source of income. Mr. Manicapelli stated that he was unable to pay sooner because he had been unemployed, had limited resources and had obligations to support his children. He also noted that while the letter from the City of Toronto confirming the payment and payment plan is dated July 24, 2014, that he had conversations with City staff before that date.

Mr. Manicapelli also submitted letters outlining his charitable work with his application to RECO:

• A July 8, 2014 letter from Villa Colombo verifying the Appellant began to volunteer on July 4, 2014.
• A June 30, 2014 letter from the Vaughan Food Bank stating he began volunteering in November, 2013.
• E-mail correspondence from February, 2014 indicating that a donation had been made to the Hospital for Sick Children.
• A July 14, 2014 letter from the pastor of St. Margaret Mary Church indicating the Appellant is an active member of and contributor to the church.

Ms Volpe testified that the fact that the Appellant's efforts to address his POA fines and his Villa Colombo volunteer work started so soon before he submitted his application to RECO meant she did not assign them significant weight in assessing his application. No weight was assigned to the donation to the Hospital for Sick Children because the correspondence indicates it was made by Mr. Manicapelli's wife. Similarly, she did not assign significant weight to the letter from the church, noting that it was a general reference and did not highlight any special contribution made by the Appellant. More weight was assigned to the letter from the Vaughan Food Bank although Ms Volpe noted that the Appellant also began this volunteer work relatively recently.

The Tribunal asked Mr. Manicapelli if he was still volunteering at the organizations that provided letters. He indicated he was not, but that to set an example for his children, he had been doing volunteer work for a long time and that he was now volunteering at another organization.

Mr. Manicapelli testified that since October, 2015, he has been employed by Maverick Studio for Men. After his RECO registration was revoked, he was unemployed until February, 2014 when he joined Doorland as a commissioned salesperson. He stated that he was honest with his current employer about his situation and noted that it was difficult to get a job because people ask him why he left the real estate industry.

Mr. Manicapelli also submitted letters of reference from Joe Mysak, Broker of Record, and Matt Mysak, Broker, both from Mysak Realty Inc., the Appellant's sponsoring brokerage, and from Karen Filice, the Broker of Record of Cirrius Realty Inc., all dated in July, 2014, The letter from Joe Mysak states:

As an owner of a small brokerage, I would not jeopardize my company's reputation. I have no reservations about Domenic's professionalism, honesty or integrity…and will ensure that he is under strict supervision.

Ms Volpe noted that while the sponsoring brokerage is small, that, "by definition", real estate salespersons are independent contractors. Conditions such as requiring the Appellant be supervised would therefore be difficult for the brokerage to enforce if a salesperson did not provide documents for review. This is a particular concern because the Appellant's failure to properly disclose and report was a significant issue with respect to the revocation of his registration. She also noted that reference letters do not constitute evidence with respect to the requirements of section 17 of the Act.

Ms Volpe acknowledged that Mr. Manicapelli has met the course requirements for registration and that he answered all of the questions on his current application truthfully and provided full disclosure. Asked if the Act specifies a timeframe within which a material change in circumstances must be demonstrated, Ms Volpe stated it did not, that this assessment is discretionary. Consideration was given to the letters Mr. Manicapelli submitted but, because some of his actions were recent, they were not assigned significant weight. Asked what would be given significant weight, Ms Volpe stated she would need to see that an individual had been in a position of trust financially and noted that Mr. Manicapelli had been untruthful for years. She stated that others have been reinstated after paying off their debts and coming to RECO "with a clean slate". She acknowledged that Mr. Manicapelli did not secure employment until February, 2014 and that a period of unemployment would limit his ability to make payments on his POA fines and to his trustee in bankruptcy.

Ms Volpe was challenged by Mr. Ball with respect to whether or not the fact Mr. Manicapelli had addressed the Florida charges, was paying off his bankruptcy and was involved in charitable work constitute new evidence before the Registrar. Asked what the Appellant could do to provide evidence, Ms Volpe stated that evidence he had paid off the POA fines and that the bankruptcy had been discharged would be considered.

Matt Mysak, Karen Filice and Domenic Bumbaca testified on behalf of the Appellant.

Mr. Mysak is a Broker at Mysak Real Estate which specializes in investment properties, primarily apartment building sales. His son is the Broker of Record. Mr. Mysak has been in business for 44 years and has served as a director of the Toronto Real Estate Board. He testified that Mr. Manicapelli worked for him between 1995 and 1999. He returned to work for him in 2011. Mr. Mysak is prepared to hire Mr. Manicapelli again. In Mr. Mysak's opinion, the fact that Mr. Manicapelli has been without his licence for three years is sufficient punishment. Mr. Mysak is aware of Mr. Manicapelli's bankruptcy and the Florida criminal charges although he did not become aware of them until after the fact. While he understands that Mr. Manicapelli was not honest with the Registrar, he also understands that Mr. Manicapelli has never appeared before RECO's ethics committee. Mysak Real Estate employs only three salespersons; Mr. Mysak believes that because the brokerage works in a "bullpen situation" that it would not be difficult to supervise Mr. Manicapelli.

Karen Filice has 25 years experience in real estate and is the Broker of Record at Cirrius Realty Inc. Ms Filice sits on the professional standards committee of the Hamilton Real Estate Board. She met Mr. Manicapelli through business dealings in 2012 and characterized him as a conscientious individual who works hard. After she saw the RECO decision revoking his registration, she contacted him. She testified that he has always been "up front" with her and she can think of no reason why he should not be reinstated, noting that, as a salesperson, he would be supervised. She believes in second chances and would be prepared to hire Mr. Manicapelli. She noted that people with worse records have been permitted to be registered. She noted that supervision would be difficult at large brokerages but that at her small brokerage, each offer must go through her before it is presented. However, she also agreed that disclosure could still be an issue.

Domenic Bumbaca is the managing director of Maverick Studio for Men. Mr. Manicapelli worked for Mr. Bumbaca before he became a real estate agent. Mr. Bumbaca hired him again four months ago. He believes Mr. Manicapelli has the potential to work as a manager and perhaps as an owner. However, contrary to what Mr. Bumbaca wrote in his letter of reference, Mr. Manicapelli is an assistant manager and is not responsible for banking. Mr. Bumbaca is aware of Mr. Manicapelli's bankruptcy and his misdemeanor charges. He stated that he could not testify that he has seen any improvement in Mr. Manicapelli because he has never known a bad side of him; he's a "great" man.

THE LAW

Section 17 of the Act provides:

17. A person whose registration is refused, revoked or refused renewal may reapply for registration only if,

(a) the time prescribed to reapply has passed since the refusal, revocation or refusal to renew; and

(b) new or other evidence is available or it is clear that material circumstances have changed.

ANALYSIS

The issue to be decided is whether or not the Appellant has met the requirements to reapply for registration as a salesperson under the Act.

There is no dispute that Mr. Manicapelli has met the requirements of section 17(a) of the Act. His application was submitted to RECO after the prescribed 12 month period had passed following the revocation of his registration. At issue is whether he has met the requirement of section 17(b); is new or other evidence available or it is clear that material circumstances have changed since that revocation?

Mr. Ball argued that the Appellant has changed his life and that he should be registered with appropriate conditions. He submitted that the test to be applied in this case is "reasonable grounds for belief" and referred the Tribunal to its decision in 8113 v Registrar, Real Estate and Business Brokers Act, 2012 CanLII 83560 (ONLAT), ("Carlos"). While there are some similar facts in that the Appellant in Carlos had been convicted of criminal charges and was an undischarged bankrupt, the Appellant in Carlos had voluntarily terminated his registration and therefore his application was considered under section 10 of the Act. Mr. Ball also referred the Tribunal to Asadi v. Registrar, Real Estate and Business Brokers Act, 2014 ONSC 6517, ("Asadi"), in which the Court noted:

In reaching this conclusion, we accept that while past conduct can provide the necessary basis for reasonable grounds for belief, it does not have to. That conduct must be weighed against any evidence of the respondent's more recent circumstances, including any evidence that would point to the fact that the conduct of concern will not be repeated.

The Tribunal notes that Asadi was a case of an initial application for registration in Ontario which was also considered under section 10 of the Act. Both cases can be distinguished from the case currently before the Tribunal. Mr. Manicapelli's registration has been revoked. Therefore, it is section 17, not section 10, of the Act which applies. Section 17 does not include any reference to "reasonable grounds for belief".

Section 17 places the onus on the Appellant to provide new evidence and/or to demonstrate that material circumstances have changed. It is the position of the Registrar that Mr. Manicapelli has failed to so.

Mr. Ball submitted that there is new evidence and a material change in circumstances. He summarized that evidence as follows:

• The 2010 bankruptcy has been conditionally discharged and Mr. Manicapelli is making payments on the $15,000 required to be paid to the trustee;
• A payment plan is in place for fines levied under the POA;
• The 2001 criminal charges in Florida have been addressed;
• Mr. Manicapelli has done and continues to do charitable work;
• Mr. Manicapelli completed his June 2014 application for registration properly and with full disclosure; and,
• Mr. Manicapelli has been honest with his current employer, Mr. Bumbaca, and with his sponsoring brokerage.

The Act is designed to protect the public interest. Registrants are required to carry on business in accordance with law and with integrity and honesty. Mr. Manicapelli's registration was revoked, in part, because of his long standing failure to make full disclosure to the Registrar. In its June 6, 2013 decision, the Tribunal noted "the persistent pattern of lying to his regulator is not only a violation of subparagraph 10(1)(a)(iii) but it also raises concerns about whether Mr. Manicapelli is governable, that is whether he will comply with the Act". The Tribunal must assess whether there is sufficient evidence to conclude that the Appellant's conduct in the future will meet the standards required of registrants.

The evidence indicates that a discharge of Mr. Manicapelli's 2010 bankruptcy was ordered on October 29, 2014 subject to the payment of $15,000 to the trustee. Referring to the Rumanek & Company report dated January 12, 2016, Ms Volpe stated that only two payments had been made. The Tribunal notes that the report is in fact an account summary which does not provide the details of the number of payments made or their amounts. Mr. Manicapelli testified that monthly payments of $50 are being made by automatic withdrawal from his account. The date when these began is unclear. However, the Tribunal notes that the trustee's report indicates that $800 has been paid with respect to the Order, an amount consistent with Mr. Manicapelli's testimony.

Ms Volpe also suggested that full discharge of the bankruptcy would have been assigned weight by the Registrar in its assessment of Mr. Manicapelli's application. In its June 6, 2013 decision, the Tribunal concluded that the Registrar had not provided sufficient evidence with respect to Mr. Manicapelli's two bankruptcies to demonstrate that he could not be expected to be financially responsible in the conduct of business. Given the 2010 bankruptcy was not a factor considered in the revocation of Mr. Manicapelli's registration, it is unreasonable to suggest that discharge should be an important consideration for its reinstatement. However, the fulfillment of financial obligations does address the integrity required of registrants under the Act. With respect to the bankruptcy, the evidence is that Mr. Manicapelli has been making regular, if small, payments since the Order was issued.

In its June, 2013 decision, the Tribunal noted that in 2011 Mr. Manicapelli had been charged with 15 counts of falsifying information and had been fined with respect to 7 of those charges. The letter from the City of Toronto verifying the institution of a payment plan for the POA fines is dated July 24, 2014, the day before Mr. Manicapelli signed his application to RECO. He explained that he did not make any payments before that date because he had obligations to his family. However, his application indicates he became employed by Doorland on February 1, 2014, six months before that first payment. There is no evidence to indicate whether or not there was any interim period of unemployment before he began to work for Maverick in October, 2015.

The Tribunal is concerned that there was a lengthy delay before a first payment was made. And, the Tribunal cannot determine if Mr. Manicapelli has been making payments consistently. The letter from the City indicates the payment plan was for $500 to be paid monthly. Mr. Manicapelli testified he had been making regular monthly payments of $50. The most current receipt provided, however, is dated November, 2015. Given the hearing date, the Tribunal questions why more current evidence of payments was not provided by the Appellant.

Mr. Manicapelli testified that real estate is all he has known and sought reinstatement almost immediately after he was eligible to do so. Therefore, the Tribunal would have expected him to have addressed his fines for past violations under the Act on a priority basis. However, it appears that the POA fines did not become a priority for the Appellant until he was ready to submit an application to RECO. The Tribunal finds it difficult to rationalize that Mr. Manicapelli should be allowed to participate in the industry while showing apparent disregard for the penalties for his violations during his past participation.

The Tribunal also questions the length of time it took for Mr. Manicapelli to address the outstanding 2001 criminal charges in Florida. While the Tribunal acknowledges that the evidence shows that the charges were dealt with by the Florida Court on December 10, 2014, the July 30, 2014 letter from attorney Peter Macaluso provides no indication of when he was retained. The Tribunal would be more convinced that Mr. Manicapelli's behaviour had changed if he took steps to address the charges soon after his revocation took place. However, The Tribunal is left to speculate whether Mr. Manicapelli wished to deal with the charges because he is law-abiding or if he only retained Mr. Macaluso in anticipation of the filing of the application for reinstatement of registration.

Mr. Manicapelli submitted two letters with respect to volunteer work to support his application. The letter from Villa Colombo indicated he had started volunteering only on July 8, 2014, very shortly before he submitted his application to RECO. When asked by the Tribunal if he continued to work at the two charities whose letters he submitted, Mr. Manicapelli stated he did not but that he was now volunteering at another organization. Mr. Manicapelli has failed to demonstrate that his commitment to community work is consistent or long standing. And again, the Tribunal is left to speculate as to whether his volunteer references were obtained solely for the purpose of his application.

Finally, Mr. Ball submitted that Mr. Manicapelli had been honest and made full disclosure on his current application before RECO and to his current employer. The Tribunal cannot give credit to the Appellant for making his first full disclosure to RECO given that his failure to do so over a period of 19 years is what directly led to the revocation of his registration. As Ms Volpe testified, this is not new evidence, this is expected. With respect to his current employer, the Tribunal notes that Mr. Bumbaca has known Mr. Manicapelli for many years, having employed him before he became a real estate salesperson. His testified he is aware of Mr. Manicapelli's past and that he believed Mr. Manicapelli has the potential to become either a manager or owner in the business. However, he also testified, contrary to his January 12, 2015 letter of reference, that Mr. Manicapelli was not in a manager's position and was not responsible for banking. Further, even if Mr. Manicapelli was in a more senior position of trust, the Tribunal notes that he has been employed at Maverick only since October, 2015. Evidence of employment in a position of trust for a period longer than six months is required to convince the Tribunal that there has been a material change.

Mr. Ball submitted that Mr. Manicapelli could be registered with conditions. He highlighted the following from the Tribunal's decision in Carlos:

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.

Mr. Mysak testified on behalf of Mr. Manicapelli's sponsoring brokerage. Mr. Mysak agreed that Mr. Manicapelli had not been honest in the past and suggested that the brokerage was both prepared and well situated to supervise him. His view was that three years without registration was sufficient penalty and that Mr. Manicapelli had "paid his dues".

The issue before the Tribunal is not simply about paying penalties. Rather, it is about whether there is evidence to confidently determine that Mr. Manicapelli will conduct himself honestly and with integrity in the future. While the sponsoring brokerage might be prepared to supervise Mr. Manicapelli, there is a legitimate question, as Ms Volpe noted and as Ms Filice testified, about how well even a small brokerage can supervise a salesperson, particularly when a key issue has been failure to disclose and supervision, to a large extent, is dependent on a salesperson's disclosure of his activities.

The Tribunal notes that all of the referees who submitted letters in support of Mr.Manicapelli, including the pastor of his church, knew him before his registration was revoked. Mr. Mysak, Ms Filice and Mr. Bumbaca all testified that they were unaware of the Appellant's criminal charges until after the revocation of his licence. All appear to be prepared to support him on the strength of their past experience with him. To some extent, they are overlooking his past dishonesty: Mr. Mysak testified that he did not believe Mr. Manicapelli had ever appeared before RECO's ethics committee and noted "real estate agents aren't saints"; Ms Filice stated she believed in second chances, and noted that others with worse records are permitted to work in the industry; Mr. Bumbaca stated that he had never seen a bad side of the Appellant. Unfortunately, these referees appear to discount the past behaviour of Mr. Manicapelli and did not speak to the type of positive change required to demonstrate a material change in circumstances.

Mr. Manicapelli was dishonest with the regulator for a period of 19 years and did not address his criminal charges for 13 years. The Tribunal acknowledges that Mr. Manicapelli has taken some steps towards addressing this past long standing pattern of failing to conduct himself in accordance with law. However, the evidence he has presented to support his changed behaviour is insufficient to convince the Tribunal that he should be registered at this time. He is fulfilling some of his obligations and has resolved the criminal charges. However, he has not fully met his obligations with respect to his POA fines, he has not demonstrated a sustained commitment to the charitable work in his community which he presented as evidence of his change and he has not been in a position of trust with his current employer for a significant period of time. And, while Mr. Manicapelli testified that he accepted responsibility for his past actions, the Tribunal, as noted above, has reason to question why the POA fines were only addressed in July, 2014, the same month Mr. Manicapelli submitted his application to the Registrar. Similarly, there is no evidence that Mr. Manicapelli made efforts to address the criminal charges before July, 2014.

Therefore, the Tribunal finds that the steps Mr. Manicapelli has taken do not yet comprise sufficient new evidence or clearly demonstrate a material change in circumstances to warrant his registration, 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 to Refuse Registration dated October 30, 2015.

LICENCE APPEAL TRIBUNAL

_______________________

Mary Ann Spencer, Member

RELEASED: April 25, 2016