Licence Tribunal
Appeal d'appel en
Tribunal matière de permis
2017-02-28
FILE:
9965/REBBA
CASE NAME:
9965 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 a Registration
Marina Bulman and Distinction Realty Ltd. Appellants
-and-
Registrar, Real Estate and Business Brokers Act 2002 Respondent
DECISION AND ORDER
ADJUDICATOR:
Laurie Sanford, Vice-Chair
APPEARANCES:
For the Appellants:
P. James Zibarras, Counsel David Meirovici, Counsel
For the Respondent:
Maya Sabharwal, Counsel Robert Maxwell, Counsel
Heard in Toronto:
January 16, 17, 19 and 23, 2017
REASONS FOR DECISION AND ORDER
OVERVIEW
The Real Estate and Business Brokers Act, 2002, S.O. 2002, Sch. C. (the “Act”) sets out a registration and regulatory regime for those who wish to act for purchasers or sellers of real estate in Ontario. Marina Bulman has been registered under the Act for approximately 34 years and is currently a real estate broker. She also owns and operates a real estate brokerage, Distinction Realty Ltd. (“Distinction”). The Registrar under the Act (the “Registrar”) proposes to revoke the registration of both Ms. Bulman and Distinction under section 10 of the Act on the grounds that the past conduct of Ms. Bulman affords reasonable grounds for belief that she will not carry on business in accordance with the law and with integrity and honesty.
The past conduct of concern to the Registrar stems from a complex set of relationships and transactions that Ms. Bulman entered into with a foreign businessman, who shall be referred to as “VM”. Ms. Bulman not only acted as the real estate broker for VM, she also sat on the Board of Directors of several of VM’s investment companies. She provided property management services to VM and his companies as well as decorating services. VM granted her very broad powers to conduct business on his behalf.
The business relationship broke down in the fall of 2008 and the parties agreed to submit their disputes to arbitration (the “2013 Arbitration”) and agreed not to appeal the results. Four arbitral awards were made against Ms. Bulman and one against Distinction. These awards relate to two real estate transactions in which the arbitrator (the “Arbitrator”) found that Ms. Bulman breached her fiduciary duties and three other transactions in which the Arbitrator found Ms. Bulman and Distinction acted without authorization. The Registrar bases his proposal to revoke their registrations on the conduct which gave rise to these arbitral awards.
Based on the facts found and for the reasons given below, the Tribunal directs the Registrar not to carry out his proposal. The registration of Ms. Bulman and Distinction will be subject to certain conditions which are specified below.
ISSUES AND ANALYSIS
Background
The underlying facts in this case are not in dispute. They were established in the 2013 Arbitration and confirmed in the testimony of Ms. Bulman in this hearing as well as by the documentary evidence produced by both parties. VM was on a visit to Canada in either 1990 or 1991 when he met Ms. Bulman and her then husband. They became friends and entered into a series of business relationships and business transactions over the next 17 years. These business relationships encompassed a complex set of transactions through multiple companies and in multiple jurisdictions. Over time, Ms. Bulman assumed greater responsibility and authority over VM’s business affairs. She sat on the Board of Directors of two of VM’s Canadian companies and several more American corporations. She also sat on the Board of Directors of a condominium corporation (“MTCC”) representing VM’s interest in about 88% of the condominium units. In about 2002, the Canadian government denied VM permanent residency in Canada, a situation which persists. VM stopped visiting the country and in January, 2003, VM granted Ms. Bulman a very broad Power of Attorney (the “PoA”), including the power to buy and sell property, grant mortgages, sign cheques, settle disputes, including by arbitration, and to sell or transfer stocks and bonds. When the relationship broke down, the parties submitted their disputes to arbitration which resulted in four arbitral awards against Ms. Bulman and one against Distinction.
The issues between the parties in this hearing are: how the conduct of Ms. Bulman which led up to the arbitral awards should be characterized; what, if any inferences may be drawn from the findings of the Arbitrator; what, if any, effect should be given to Ms. Bulman’s explanations, and what weight ought to be given to Ms. Bulman’s past conduct outside the parameters of her dealings with VM.
2013 Arbitration
The 2013 Arbitration and the arbitral awards made against Ms. Bulman and Distinction are at the centre of the Registrar’s proposal to revoke their registrations. In an earlier motion in this proceeding, the Tribunal ruled that the decision in the 2013 Arbitration was admissible in this hearing. The Tribunal also ruled it would be an abuse of process to re-litigate in this proceeding the material facts on which the arbitral awards are based and the findings of mixed facts and law necessary to them.
Having said this, it is important to note that the issues in the 2013 Arbitration are different from those to be decided in these proceedings. In the 2013 Arbitration, the Arbitrator stated, “the central issue that I have to determine is the legal nature of the business relationship” between the parties. In this hearing, the central question for the Tribunal to decide is whether the test set out in subsection 10(1) of the Act has been met for each of Ms. Bulman and Distinction. Subsection 10(1)(a)(ii), which applies to individuals, and subsection 10(1)(d)(iii), which applies to corporations, say, in part, that an applicant is entitled to registration unless the past conduct 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 . . . “. The Tribunal considers the totality of the past conduct in evidence before it in establishing whether or not the test has been met. On the other hand, the Arbitrator more narrowly considered whether a legal relationship giving rise either to a fiduciary duty or some other contractual obligation existed and whether that obligation had been met. Thus while the findings of the Arbitrator cannot be re-litigated in this hearing, the decision that the Tribunal must make is materially different. The Tribunal must come to its own determination as to how the provisions of the Act should apply in this case.
The Arbitrator noted that the task of determining the legal nature of the business relationship between the parties was made more difficult by the fact that “the parties deliberately did not commit significant matters to writing”. The Arbitrator found that the nature of the overall relationship was not a fiduciary one.
In short, this was not a single venture solely for the benefit of [VM] whereby his pecuniary interest was the only one engaged. It was, rather, a series of business arrangements with both sides acting in their own mutual interests.
The exception noted by the Arbitrator was when Ms. Bulman was acting as a real estate broker on behalf of VM. In these dealings, the Arbitrator found, she was acting in an established category of trust. Apart from that, the task the Arbitrator felt he had for each of the various contractual relations that the parties entered into over the years, was to “determine what each of them encompassed and what the reasonable expectations of the parties were”.
The arbitral awards made against Ms. Bulman and Distinction relate to two real estate transactions and three ancillary sets of transactions, including the provision of property management services by Distinction and Ms. Bulman’s charging of both credit card payments and the lease payments for a car to one of VM’s companies.
Rosehill
In July, 2007 Ms. Bulman acted as the real estate broker for VM’s sale of a condominium unit (“Rosehill”) through one of VM’s investment companies (“105”). According to the testimony of Ms. Bulman at this hearing and the documentary evidence submitted, VM advised her that he wanted to sell Rosehill and she listed the property in 2003 on his behalf for $1,150,000. The property was unsold after a year and the purchase price was lowered to $1,099,000, apparently with the consent of VM. Rosehill remained unsold for a further 125 days and, on Ms. Bulman’s recommendation, the unit was then rented for a period of two years. Because Ms. Bulman was a Director of 105, she signed the rental agreement on behalf of 105. There is no dispute that VM received the rent.
In the spring of 2007, Ms. Bulman met with VM and, according to her testimony, she advised him that a third party had expressed an interest in buying Rosehill for $890,000. According to Ms. Bulman, VM said he would accept $890,000. Her testimony was that she and VM agreed that if this offer fell through, she would buy the property herself as a favour to VM. When the $890,000 offer fell through, Ms. Bulman prepared and executed an agreement of purchase and sale signing both on behalf of the Seller, 105 and the Purchaser, a numbered company which she owned. According to her testimony, she arrived at a purchase price of $830,500, being $890,000 less a commission of $45,000 and some adjustments, including a condominium special assessment of approximately $20,000. Before the completion of the transaction, she directed that the sale be completed in her name rather than to her company. She testified that this change was on the advice of an accountant. A reporting letter from the lawyer on the transaction was sent to Ms. Bulman as a Director of 105.
The Arbitrator acknowledged that the above explanation might be true but concluded that it did not matter. The Arbitrator found:
The indisputable law and practice, which must have been known to [Ms. Bulman] as a licensed real estate broker, was that she was in a fiduciary relationship as the vendor’s agent and had a strict duty to act with the utmost good faith and loyalty to [VM] in the transaction. If she wished to purchase this unit for her own use, she had to inform [VM] of the previous offer for $890,000, inform him of the fact that it had fallen through, inform him that she wanted to purchase the property in a numbered company, and that she intended to pay $830,500 for the property. She then required a written acknowledgement from him that she could proceed to acquire the property for that price. Absent a clear written authorization to do so, she was in breach of her fiduciary obligations. The manner of the purchase and the reporting of the same to [VM], leads me to the conclusion that she was not transparent, that she attempted to hide the true facts from [VM], and that there was no attempt to comply with her fiduciary obligations.
The Registrar submits that the fiduciary duty of real estate agents and brokers is codified in O. Reg. 580/05 to the Act, which sets out a Code of Ethics. There are specific requirements for brokers generally and in particular requirements to inform clients of material facts in a transaction. These include notifying a client in writing when the broker is acting for both the purchaser and seller. As well, the Code of Ethics obliged Ms. Bulman, when she put in an offer through her company, to inform VM of this in writing and to obtain his consent. These obligations existed despite any conversation Ms. Bulman had with him.
Both parties led evidence and made submissions about the valuation of Rosehill, specifically whether or not the property was undervalued in the sale to Ms. Bulman. The Registrar led evidence of an independent valuation which was presented as evidence in the 2013 Arbitration which showed values of $1.4 million to $1.5 million. There were two other valuations referred to in this proceeding, including a 2008 MPAC valuation of $904,000. However, there was no testimony given concerning these two other valuations in this case or in the 2013 Arbitration. Ms. Bulman testified that the valuation used in the 2013 Arbitration was made without seeing the interior of Rosehill, which she described as dated. The Tribunal notes that Rosehill languished on the market at a listed price of over $1 million. In the 2013 Arbitration, the valuation was a secondary issue in the arbitral award, given that the Arbitrator found there was a constructive trust for the benefit of VM and decided that VM could purchase Rosehill for the same price that he received from the sale in 2007. In his decision, the Arbitrator found that evidence of undervaluation of Rosehill was corroborative of his finding that Ms. Bulman breached her fiduciary obligations and the structure of the sale, with the purchaser being a numbered company owned by Ms. Bulman was “an attempt to hide from [VM] that she was the purchaser”.
The Tribunal finds that Ms. Bulman breached the Code of Ethics in the Rosehill sale in material ways in not providing the detailed written disclosure of her dual agency, as required by section 16 of the Code of Ethics. She failed to comply with her obligations to disclose her personal interest as a Purchaser as required under section 32 of the Act and section 18 of the Code of Ethics. She disclosed her personal interest to herself as a Director of 105 but did not obtain an acknowledgement of this interest from VM, despite the fact that her status as the purchaser created an obvious conflict of interest. By failing to inform VM of the material facts of the transaction, she breached her duty as a real estate broker. Moreover, by setting up the transaction as a sale to a numbered company and by having the reporting letter sent to herself as a Director of 105, she showed a lack of transparency in her dealings with her client VM. Concerning the evidence of valuation, the evidence before the Tribunal on this point was inconclusive and the Tribunal makes no finding on the point.
Bloor
At roughly the same time that Rosehill was being sold, VM’s company, 105, also sold a condominium unit (“Bloor”), using Ms. Bulman as his broker. Ms. Bulman testified that she talked to VM about the valuation of Bloor and he agreed to a sale price of $480,000. Her testimony was that she entered into an agreement of purchase and sale with a client of hers at that price. After the purchaser signed, Ms. Bulman telephoned VM with the news that an agreement to buy Bloor had been signed. According to Ms. Bulman’s testimony, corroborated by the testimony of the purchaser, VM told her during that telephone conversation that he had changed his mind and now wanted $525,000. The purchaser decided that she was willing to pay the higher price and the sale was completed. A report of the sale was sent to VM by Distinction and included a purchase price of $480,000. Ms. Bulman’s testimony was that this price was included in the report due to a mistake made by her secretary, who had worked with Distinction for many years. The lawyer’s reporting letter correctly states the selling price as $525,000 but this letter was sent to Ms. Bulman as a Director of 105. There is no evidence that the lawyer’s reporting letter was received by VM. Ms. Bulman testified that she believed she was entitled to $45,000 from this transaction due to several sales she made to VM of artwork. Accordingly, she deducted the $45,000 from the sale proceeds and transferred the net amount of $480,000 to 105. She testified that VM had consented to her deducting this amount from the sale price. However, she acknowledged that the Arbitrator made a finding that VM was not aware of the deduction and conceded that she was bound by that finding.
The Arbitrator found, “Thus it appears that there was a deficiency of $45,000 between the registered price of $525,000 and the reported price to [VM] of $480,000. [Ms. Bulman] had no credible explanation for this difference of $45,000. [Ms. Bulman] got the benefit of the $45,000 and she must pay it to [VM].”
In this transaction, as in Rosehill, Ms. Bulman was acting for both the seller and the purchaser. The Registrar submitted that this is a practice that is discouraged but when it does occur, it is necessary that the parties be informed of the dual agency. Ms. Bulman disclosed the dual agency to the purchaser of Bloor as required. However, she did not disclose the dual agency in writing to VM. She also failed to disclose the correct selling price in writing to VM, understating the sale proceeds by $45,000. Further, she took $45,000 from the sale proceeds with no effective notice to VM. Ms. Bulman’s conduct in this sale is a significant breach of the Code of Ethics.
MTCC Management Fees
Using a second numbered company, “106”, VM purchased about 88% of the units in a commercial condominium development. The units were acquired in a power of sale and were unfinished. VM hired Ms. Bulman to finish the units and to rent them out on his behalf. VM agreed to pay Ms. Bulman $5,000 a month for these and other property management services Ms. Bulman undertook for other properties VM owned. VM also provided Distinction with one of the condominium units rent free. As part of the services, Ms. Bulman retained lawyers and obtained approximately $4 million in vacancy tax rebates for 106.
In 2000, Ms. Bulman became a Director of MTCC, as part of a board of three. According to the testimony of one of the other board members, Ms. Bulman and a second board member represented the interests of VM on the board. Around this time, Ms. Bulman, through her real estate brokerage Distinction, began providing property management services to MTCC. These services included maintenance for the common elements of the development. By regularising the management of taxes, Ms. Bulman saved MTCC approximately $2 million in interest penalties for overdue taxes. One of the other MTCC board members testified that the Board was pleased with Ms. Bulman’s services and was satisfied with the arrangement and the fees being paid. In 2005, these services were reduced to writing in a management agreement between MTCC and Distinction. The services to be provided were specified and the fee was set at $54,000 per year. The contract ran until 2009.
In the 2013 Arbitration, the Arbitrator accepted that Ms. Bulman had provided the services to MTCC. However, the Arbitrator found that VM was unaware of the management agreement. He found that as an officer and director of 106, Ms. Bulman “did have a fiduciary duty to inform [VM] and to obtain his agreement to Distinction becoming the manager of the Condominium Corporation and receiving a separate fee therefor.” The Arbitrator awarded VM $306,270 “for management fees and office expenses, payable by Distinction.”
Counsel for Ms. Bulman characterized this award as puzzling, given that the contract was between MTCC and Distinction and addressed completely different services than those provided to 106, which related only to the condominium units, not to the common elements. Counsel for the Registrar characterized the arrangement as “double dipping” by Ms. Bulman. Given that the two service agreements were with different entities and covered different services on different elements of the condominium, the Tribunal finds no evidence of duplicative or overlapping fees. The Tribunal notes that Ms. Bulman was found to have breached her fiduciary duty to VM with regard to the management fees. However, the Tribunal also finds the fact that Ms. Bulman provided the services to the satisfaction of MTCC is a mitigating factor.
Canadian Credit Cards
Ms. Bulman charged 106 for various amounts charged on her personal Canadian credit cards. The Arbitrator found that Ms. Bulman had incurred expenses for her work with VM on a foreign bank card and allowed those charges. However, the Arbitrator found that Ms. Bulman could not adequately explain the expenses charged to 106 on her Canadian credit cards. The Arbitrator found that VM had satisfied his onus that these expenses were not authorised. An award of $194,377 was made against her for these expenses.
Ms. Bulman testified that she provided services for VM on the basis of their friendship and with no expectation of being paid. She located a school for VM’s son and met with the son’s teachers. She found home furnishings for the condominium units VM planned to use as his residence. This does not excuse or mitigate the fact that she charged credit cards without authorization but it does provide a context for the dealings between the parties. There was obviously a lot of trust reposed in Ms. Bulman by VM. This fact underscores the seriousness of her breaching her fiduciary duty in various transactions that gave rise to the arbitral awards.
Ms. Bulman also testified that many of the business transactions between her and VM were not part of the 2013 Arbitration, such as the purchase of both Rosehill and Bloor, the purchase of the MTCC condominium units and the purchase of a number of American properties. As well, a number of the claims made by VM in the 2013 Arbitration were denied. This too provides a context for the 2013 Arbitration but does not excuse or explain her conduct in the five transactions at issue.
Counsel for Ms. Bulman suggested the Arbitrator attempted to connect the results in his finding concerning the credit cards; that is, Ms. Bulman was granted the expenses on the foreign credit cards but charged for those on her Canadian credit cards. There is no evidence that the Arbitrator took this approach. Each set of transactions was assessed and the finding concerning the use of the Canadian credit cards without authorization stands on its own.
Lease of BMW
Ms. Bulman charged the lease of a BMW automobile to 106. The Arbitrator found that she had no need for a leased car to perform her duties in managing the condominium units owned by 106. He concluded, “She did not obtain the authorization from [VM] to lease this car. She took advantage of her relationship with [VM] and his absence from Toronto to benefit herself. I find that this claim is made out and that she should reimburse [VM] in the sum of $35,008.”
The Registrar submits that this automobile lease is a form of fraud because Ms. Bulman leased the car with no authorization. The Registrar concludes that Ms. Bulman fraudulently misrepresented the situation by her silence to VM while charging the lease payments to 106. Thus, in the Registrar’s submission, she knowingly took something she had no colour of right to and falsely failed to disclose it. The Registrar submits that there has to be an underlying cause of action to support the Arbitrator’s findings and, in the case of the automobile lease, the finding of fraud can be derived from the findings of the Arbitrator. Counsel for Ms. Bulman submits that the Arbitrator made no finding of fraud and fraud was not an issue in the 2013 Arbitration. Ms. Bulman’s counsel submits that Ms. Bulman did not defend herself against any allegation of fraud in the 2013 Arbitration because it did not come up. It would be a violation of natural justice to reach a conclusion of fraud with no opportunity given to Ms. Bulman to defend herself, according to her counsel. Finally, her counsel notes that it was open to the Registrar to introduce evidence of fraud in this hearing, at which time; Ms. Bulman would have had an opportunity to defend herself.
The Tribunal agrees with the submissions of Ms. Bulman’s counsel. It was open to the Registrar to bring evidence of fraud forward in this proceeding. The Registrar chose instead to rely on findings of the 2013 Arbitration, which did not address the issue of fraud. It is not appropriate to re-interpret the results of the 2013 to demonstrate more serious misconduct than the Arbitrator found.
Counsel for Ms. Bulman submitted that the issues of the lease of the BMW and the Canadian credit cards might be characterized as “technical breaches”. This is not consistent with the findings of the Arbitrator and the Tribunal rejects this characterisation. In each of the lease and the credit cards, Ms. Bulman acted without authorization and in a way which benefited her at the expense of VM. This is past conduct which calls into question her ability to conduct her business with integrity.
Other Past Conduct
The Tribunal finds some aspect of Ms. Bulman’s testimony problematic. In particular, her explanation that her secretary mistakenly transmitted an incorrect selling price to VM for the Bloor property is implausible. It is not, however, unbelievable given that there were two offers for the property on the same morning. While the Tribunal was not persuaded by some of Ms. Bulman’s testimony, the Tribunal found nothing that would undermine her credibility generally. Where Ms. Bulman testified with both credibility and sincerity was in commenting on the services she provides her clients. She spoke with pride about the level of service she provides.
Ms. Bulman testified that she is a professional engineer by training and never thought she would enjoy the real estate business. However, she found that she loves the business and loves working with people. She feels that her clients like her. She has done over 1,000 real estate transactions during her 33 year career as a real estate agent and broker. Her testimony was that over 99% of her business is either from referrals or from repeat clients.
Ms. Bulman testified that VM is the only client who has ever complained about her conduct to the Registrar. A witness for the Registrar confirmed that the Registrar had never investigated or sanctioned Ms. Bulman other than as a result of VM’s complaint. Ms. Bulman testified that in the over nine years since the Rosehill and Bloor transactions, she has continued as a real estate broker without further complaints.
Ms. Bulman called as witnesses the purchaser of Bloor, a fellow member of the Board of MTCC and the bookkeeper for VM’s companies. The purchaser of Bloor testified that she has known Ms. Bulman for 15 years. Ms. Bulman has represented her in about 20 purchases and sales of real estate and continues to represent her today. The purchaser of Bloor described Ms. Bulman as professional and very responsible and compared her favourably to other real estate brokers she has worked with. The Director of MTCC testified that he was aware of the services Ms. Bulman provided to MTCC and stated that the current property manager is doing “nowhere near as good a job as [Ms. Bulman] did”. Ms. Bulman retained a “brilliant” maintenance manager and the property was very well maintained during her tenure. The bookkeeper for 106 had fewer interactions with Ms. Bulman but he collaborated her account of obtaining millions of dollars in vacancy rebates for 106 in her capacity as the property manager for 106’s units in MTCC.
Ms. Bulman also introduced nine letters of reference. The Tribunal notes that these letters were not formulistic reference letters but were individualised and many were very detailed. The letters were from former and current clients and speak to Ms. Bulman’s professionalism, attention to detail, and trustworthiness. These letters, which Ms. Bulman reviewed and commented on, leave the clear impression that these clients regarded Ms. Bulman as not only a responsible real estate broker but an exemplary one.
Ms. Bulman accepts responsibility for the results of the 2013 Arbitration. She has many regrets over the result of her dealings with VM – she testified that she had lost a friend as well as a business associate. She also suffered significant monetary losses. She is resolved to avoid the kind of entanglements that led to the 2013 Arbitration and has volunteered never again to sit as a Director on a client’s company and never to accept a power of attorney from a current client. Above all, she has resolved to keep meticulous written records of all her business dealings. She noted that one of VM’s claims at the 2013 Arbitration was denied because she was able to produce evidence that she bought extensive furnishings and furniture for some of VM’s other condominiums. She believes that the outcome of the 2013 Arbitration would have been different had she been able to produce written records of her other business dealings with VM.
Consequences
Based on the above findings, the question is what the consequences should be to Ms. Bulman and Distinction? In considering the question, the Tribunal is mindful that the purpose of the Act is not to punish registrants but to protect the public in what, for most people, is their most significant financial transaction. The public needs to have confidence that real estate brokers will conduct themselves in accordance with the law and with honesty and integrity. The law that applies in the case of real estate brokers and brokerages includes both the Act and the Code of Ethics.
The test in section 10 of the Act involves considering the past performance of a registrant and determining whether the past conduct of, in this case Ms. Bulman and Distinction, “affords reasonable grounds for belief” that they “will not carry on business in accordance with law and with integrity and honesty . . . “. In considering the past conduct of Ms. Bulman and Distinction, there is, of course, the history of Ms. Bulman’s business relationship with VM. That history extended over 17 years. There were numerous transactions in which Ms. Bulman and Distinction provided real estate and ancillary services to VM. Not all of these transactions gave rise to issues between the parties and not all the issues that did arise were resolved in favour of VM. This is not to diminish the nature of the conduct leading to the arbitral awards made against Ms. Bulman. In two property transactions she clearly breached her fiduciary duties to VM, a serious breach of the standards established by the Code of Ethics and of the Act. While there are mitigating circumstances in the services provided to MTCC, there is no excuse for the unauthorized use of the Canadian credit cards or the automobile. The Tribunal also notes that, apart from her dealings with VM, Ms. Bulman has an unblemished record and a number of her past and present clients gave her strong recommendations. The Tribunal found Ms. Bulman to be sincere in talking about the pride she takes in the service she provides to clients. She appeared to sincerely regret her dealings with VM and to accept responsibility for the results. She testified that she never wanted to be in this situation again.
The Tribunal considered whether revocation might be the most appropriate result. If Ms. Bulman’s past conduct were viewed only through the prism of her dealings with VM, then her past conduct would give rise to reasonable grounds for belief that she will not carry out her business in accordance with law and with integrity and honesty. However, when Ms. Bulman’s past conduct is viewed in totality, the result is different. The business relationship with VM was very different from the straightforward real estate relationships Ms. Bulman has enjoyed in approximately 1,000 past transactions. Based on her 33 years in the business without other complaint, there is ample evidence that when Ms. Bulman restricts herself to acting as a real estate broker, she can be expected to conduct her business within the law and with integrity and honesty. While the Tribunal would be concerned if Ms. Bulman and Distinction were free to continue their businesses without any condition on their registration, the Tribunal is satisfied that conditions can be fashioned to adequately protect the public. Revocation is not the appropriate result in this case.
The Registrar, at the request of the Tribunal, made submissions as to conditions might be appropriate. The Registrar submits the following terms and conditions would be required:
Ms. Bulman shall be suspended for one year, at a minimum;
Neither Ms. Bulman nor Distinction shall act on their own account in a real estate transaction. They would need third party, arm’s length brokers;
When either Ms. Bulman or Distinction sells their own property, they must deal through an arm’s length third party;
Neither Ms. Bulman nor Distinction will act in a dual capacity, that is for both the purchaser and the buyer;
Ms. Bulman and Distinction will provide details of any transactions that the Registrar requests;
Ms. Bulman will not have access to clients’ funds or signing authority on behalf of clients;
There should be restrictions on other employment Ms. Bulman can undertake on behalf of clients, and
Ms. Bulman must successfully complete a two day ethics course offered by the Real Estate Institute of Canada.
Ms. Bulman’s counsel suggested the following terms and conditions be attached to her registration and noted that Ms. Bulman would be content to have these conditions on her registration indefinitely:
Ms. Bulman will not take a power of attorney from a client while acting for that client as a real estate broker;
Ms. Bulman will not be a Director of a client company while acting as that company’s real estate broker;
If Ms. Bulman is dealing with her own property, she will not be a dual agent, representing both herself and the other party;
Ms. Bulman will accept restrictions on other dealings with real estate clients; and
Ms. Bulman will take any ethics course recommended by the Registrar.
The goal of any conditions is to prevent the kind of complex and intermingled business interests that characterized Ms. Bulman’s dealings with VM. Concerning the duration of the terms and conditions, the Tribunal considers that restrictions for a period of ten years will be ample. The Tribunal also considered whether a suspension, which was requested by the Registrar, might be appropriate. However, in view of the fact that Ms. Bulman has conducted her business for over nine years since the Rosehill and Bloor transactions without issue, it seems unnecessary to suspend Ms. Bulman’s registration. The Registrar requested as a condition that Ms. Bulman disclose details of transactions as requested. Under section 20 of the Act, the Registrar has broad powers of inspection. The Tribunal concludes that disclosure conditions are not required. The other terms and conditions set out below will exclude the intermingling of Ms. Bulman’s responsibilities as a real estate broker with the sort of other business relationships she had with VM.
ORDER
For the reasons given above, the Tribunal directs the Registrar not to carry out his proposal to revoke the registration of Ms. Bulman or Distinction.
For a period of ten years from the date of this Order, the registrations of Ms. Bulman, Distinction or both, as specified below, will be subject to the following terms and conditions;
By December 31, 2017, Ms. Bulman will successfully complete the two day ethics course offered by the Real Estate Institute of Canada. Ms. Bulman will provide the Registrar with evidence of the successful completion of this course.
Neither Ms. Bulman nor Distinction will accept a power of attorney from a client while acting for that client as a real estate broker or real estate brokerage.
Ms. Bulman will not act as an officer or director of any company owned by any individual client or for any client corporation while acting for that client as a real estate broker.
If either Ms. Bulman or Distinction is selling or buying a property in which they, or either of them, have any ownership interest, they will retain an arm’s length third party real estate broker to represent them.
Ms. Bulman will not perform any property maintenance, furnishing or decorating services for any client while acting for that client as a real estate broker.
LICENCE APPEAL TRIBUNAL
Laurie Sanford, Vice-Chair
Released: February 28, 2017