Rakesh Madhok v. Registrar, Real Estate and Business Brokers Act, 2002, 2018 CanLII 128751

Date: 2018-09-27

An Appeal from a Notice of Proposal of the Registrar, Real Estate and Business Brokers Act, 2002, S.O. 2002, c.30, Sch. C – to Refuse Registration.

Between:

Rakesh Madhok

Appellant

and

Registrar, Real Estate and Business Brokers Act, 2002

Respondent

REASONS FOR DECISION AND ORDER

ADJUDICATOR: Avvy Go

APPEARANCES:

For the Appeliant: Rakesh Madhok, Self-Represented

For the Respondent: Maya Sabharwal, Counsel

HEARD in Toronto: September 6, 2018

REASONS FOR DECISION AND ORDER

Background

1By Notice dated January 23, 2018, the Registrar, Real Estate and Business Brokers Act, 2002 (the “Registrar” and the “Act”, respectively) proposed to refuse to register the appellant as a salesperson under the Act.

2The appellant appeals that decision to the Licence Appeal Tribunal (the “Tribunal”).

3The Registrar proposes to refuse registration on the basis that it has reasonable grounds to believe that the appellant will not conduct business with honesty, integrity or in accordance with law because of his prior criminal convictions and failure to pay a fine, and that the appellant cannot reasonably be expected to be financially responsible in the conduct of his business because of his failure to pay the fine.

4For reasons set out below, I dismiss the appeal and order the Registrar to carry out the Proposal to refuse the registration.

Evidence and Facts

5The appellant was previously registered as a salesperson under the Act, for the period of April 5, 2005 to December 18, 2008, when he voluntarily terminated his registration.

6As a result of a complaint made against him, the appellant was found by the Discipline Panel of the Real Estate Council of Ontario (RECO) to be in violation of several sections of By-law 10, essentially the Code of Ethics for real estate salespersons. In a decision dated July 24, 2009, the Discipline Panel ordered the appellant to pay a fine of $10,000, of which the appellant has only paid $1,200 to date. The appellant appealed the order of the Discipline Panel which was upheld by the Appeal Panel in a decision dated February 1, 2010.

7The appellant has applied for his registration to be re-instated three times, in November 2010, April, 2011 and most recently November 2016. The appellant abandoned the first two applications after he was advised by the Registrar that his application would likely be refused in light of his failure to pay the fine previously imposed on him.

8The appellant has two assault convictions in September 2014 which arose from a domestic incident involving his wife and two young children. The appellant received a conditional discharge after he completed the Partner Assault Response (PAR) Program.

9Concerned about his failure to comply with the Discipline Panel order and his criminal conviction, the Registrar thus proposed to refuse the appellant’s request for reinstatement.

Respondent’s Evidence

10The Respondent called Angela Volpe, Manager of RECO, as a witness.

11Ms. Volpe went through the application materials submitted by the appellant, the Discipline Panel’s decision, the criminal conviction (including the transcript of the sentencing decision by Justice Kastner of the Ontario Court of Justice) and the communications between the appellant and RECO staff during the registration application process.

12Ms. Volpe testified that the complaint which led to the Discipline Panel’s order revolved around a property owned by the appellant and his then wife, which had been listed for sale. The appellant proceeded to enter into two different Agreements of Purchase and Sale for that property with two different buyers, despite the fact that the first buyer had delivered certified deposit funds to his brokerage to secure the transaction.

13The Discipline Panel also found the appellant improperly encouraged the first buyer to terminate his contractual relationship with another real estate salesperson who represented him in that transaction.

14The decision of the Discipline Panel was upheld on appeal. The appeal process allowed the appellant a further six months to pay the fine, which deadline expired on August 1, 2010. Eight years have passed, and the appellant has paid only $1,200 towards the administrative penalty and remains in non-compliance with the Order of the Discipline Panel.

15With respect to the assault convictions, Ms. Volpe testified that the Registrar was concerned about the seriousness of the crimes and the convictions, as well as the appellant’s apparent lack of remorse as noted by Justice Kastner. The Registrar was also concerned about the appellant’s lack of co-operation when asked to submit the transcript of the sentencing proceeding. Ms. Volpe took the panel through a number of email communications between the appellant and the Registrar, starting in December 2016 when Ms. Volpe said the request for the transcript was made and ending in July 2017 when the appellant finally submitted the transcript to the Registrar. Citing the Act, Ms. Volpe explained that the Registrar has the right to request information when determining whether the registration should be granted; the failure of the appellant to co-operate raised a red flag for the Registrar.

16Ms. Volpe also pointed to specific findings of Justice Kastner concerning the appellant, which called into question his willingness to take responsibility for his actions and to change. Ms. Volpe stated that this raised question whether the appellant is someone who is governable.

Appellant’s Evidence

17The appellant admitted that he made a mistake which led to the discipline order made against him, although he suggested it was due to his lack of understanding of the rules at the time.

18With respect to his failure to pay the remaining fine, the appellant testified that he wanted to first secure a payment plan with the Registrar before making the payment, because he could not come up with $10,000 all at once, and if he only made a partial payment, the Registrar would still take the position that he was in default.

19The appellant also testified that, despite now making $225,000 to $250,000 a year working as a mortgage advisor, he has a lot of family responsibility, including paying for child and spousal support at $2,500 a month, covering some of his spouse’s household expenses, and supporting his parents who are living with him. The appellant can only pay back the fine over time (e.g. a six month period), and he would do so if the Registrar is willing to work out a payment plan with him.

20With respect to the criminal conviction, the appellant testified that he accepted the judge’s decision, although he continues to maintain his own version of what happened during the domestic dispute. The appellant also confirmed that on top of completing the PAR program, he has taken an anger management program as part of the parenting course, as recommended by the judge in his sentencing decision.

21The appellant denied being un-cooperative when asked by the Registrar’s office to provide the court transcript. He explained he could not order the transcript directly from the Court, and that it had to be done through a third party. After the transcript was prepared, it had to be signed off by Justice Kastner before it could be released. The appellant testified that he never refused to provide the transcript, just as he never refused to pay the fine.

22The appellant confirmed that while at the time of the trial he was behind in child support, it was because there was a no-contact order between him and his spouse, and the matter of child support had not yet been put before the family court. Since then, the Family Responsibility Office has taken over the administration of support and the appellant has been in compliance with the support order and is not in arrears.

23Finally, although not relevant to the matter before me, the appellant pointed out that RECO has exempted him from certain educational courses that new registrants are required to take, and that his registration was “accepted” by the Registrar each time he applied for reinstatement.

The Law

24As set out in paragraph 3, above, the Registrar proposes to refuse registration on the basis that it has reasonable grounds to believe that the appellant will not conduct business with honesty, integrity or in accordance with law, and that the appellant cannot reasonably be expected to be financially responsible in the conduct of his business, as set out in section 10 of the Act.

25On appeal to the Tribunal, s.14(5) of the Act states that the Tribunal may “direct the registrar to carry out the registrar’s proposal or substitute its opinion for that of the registrar and the Tribunal may attach conditions to its order or to a registration.”

Analysis

26The onus is on the Registrar to prove that the appellant cannot reasonably be expected to be financially responsible in the conduct of business; that there are reasonable grounds for belief that the appellant will not act in accordance with the law, with integrity and with honesty; or that the appellant made a false statement on his application for registration.

27For the reasons set out below, I find that the Registrar has not discharged the burden of demonstrating that there are reasonable grounds for belief that the appellant will not act in accordance with the law, with integrity and with honesty. However, the proposal to refuse should be granted because the Registrar has shown the appellant cannot reasonably be expected to be financially responsible in the conduct of business.

Integrity and Honesty

28With respect to the question of whether there are reasonable grounds for belief that the appellant will not conduct business in accordance with the law and with integrity were he to be registered as a salesperson under the Act, the standard to be applied by the Tribunal in making its determination is set out in Ontario (Alcohol and Gaming Commission of Ontario) v. 751809 Ontario Inc. (Famous Fish Gordon’s) 2013 ONCA 157:

[19] […] The Registrar does not have to go so far as to show that Mr. Barletta’s past or present conduct makes it more likely than not that he will not carry on business as required.

29The Registrar’s concern regarding integrity and honesty is based partly on the appellant’s failure to pay the fine, and partly on his criminal conviction. For reasons set out below, I find the Registrar has failed to discharge their burden in this respect.

30First dealing with the appellant’s failure to pay the fine, the appellant did offer an explanation, albeit one that is somewhat difficult to understand, as to why he has not paid the fine fully to date. The appellant stated that he is willing to pay if the Registrar allows him to work out a payment plan.

31The appellant has applied for reinstatement three times. Each time, the appellant was advised that his registration would not be reinstated if he does not pay the fine fully. Yet, the appellant continued to request the Registrar to enter into a payment plan with him – something that Ms. Volpe explained cannot be done because the decision was made by the Discipline Panel, which is independent from the Registrar.

32To repeatedly ask for a payment plan before agreeing to pay the fine in full despite repeated rebuffs, in my view, does not suggest a lack of integrity and honesty. It does, however, call into question the appellant’s judgment. After three tries, the appellant ought to have known by now that his proposal for a payment plan will not be accepted by the Registrar.

33Having said that, I find no evidence to suggest that the appellant knew the Registrar would not agree to a payment plan and that therefore he could say he had tried to repay but could not. In any event, such a tactic has not assisted the appellant in reinstating his licence. However, I do find the appellant’s inability to repay reflects poorly on his financial management capability, particularly in light of his present financial situation, a point I will return to later in my decision.

34With respect to the criminal convictions, I share the Registrar’s concern that these are very serious matters. I too question whether the appellant has fully accepted his responsibility for his actions, noting, for instance, his description of the assault on his wife and children as a “family dispute” in his email to the Registrar. Even his statement to the Registrar as part of his application for registration would suggest that he still does not see his action as a crime. Instead, he described how he “picked up” his son during the incident, who at the time had a cast on his foot, and did not even mention what he may or may not have done with respect to his spouse.

35Yet notwithstanding the seriousness of the crime, and the lack of remorse, Justice Kastner saw fit to issue a conditional discharge and probation for two years, along with a DNA order and community service.

36The appellant has served his sentence. He has, as noted above, completed the PAR program and taken a parenting and anger management course. He has also been in compliance with his child support order. Thus, at one level, the appellant has accepted his responsibility.

37The criminal conviction took place four years ago, with no further charges or convictions since then. As the appellant has testified, apart from that one complaint which gave rise to the Discipline Panel order of a fine, the appellant has not received any other complaints from his customers, particularly those he has been dealing with at the bank where he has been employed since 2009. The appellant worked his way up at the bank and is now a mortgage advisor. This would also suggest that the appellant has, at least in the context of his current employment, been able to work with certain degree of integrity and honesty. I note that the appellant’s testimony with regard to his current employment and complaint history was not challenged by the Respondent.

38I also do not find the appellant was being uncooperative when asked to provide transcript of his sentencing hearing. Granted, the process took several months to complete and the appellant did suggest at some point that the transcript may not be necessary. However, he never refused to provide the transcript; he did provide the transcript in the end; and the process to obtain a court transcript is not as straightforward as suggested by the Registrar.

39Based on all of the above, I therefore find that the Registrar has not discharged the burden of showing that the appellant will not conduct his business with honesty, integrity, or in accordance with the law.

Financial Responsibility

40The Registrar also argued the appellant cannot reasonably be expected to be financially responsible in the conduct of his business because of his failure to pay his fine.

41As noted above, the appellant’s explanation for not paying the fine is somewhat dubious. He also argued that the Registrar did not execute a writ based on the outstanding fine until April 26, 2017, and it was done without his knowledge. The appellant further submitted that apart from this fine, he is not in debt and has never filed for bankruptcy. The appellant testified that he can pay off the fine if only he is given a timeframe to do so.

42In addition to my above-noted concerns, I find the appellant’s failure to pay the fine reflects poorly on his ability to take financial responsibility. This is so particularly in light of his current reported income. It may well be that when the fine was first imposed the appellant was not in a position to pay as he testified he was making about $35,000 a year at the time. But since then, his income has continued to rise to now exceeding $225,000 a year. There is simply no reason why, if the appellant so eagerly wants his real estate registration to be reinstated, that he could not work out a budget himself to pay off an $8,800 fine, rather than waiting for the Registrar to sign off on a payment plan.

43If, as the appellant repeatedly stated, he has never refused to pay the fine, then his failure to do so, in light of his present income, only reflects that much more poorly on his ability to be financially responsible.

44For the reasons stated above, I therefore find the Registrar has proven the appellant cannot reasonably be expected to be financially responsible in the conduct of his business.

Order

45Pursuant to the authority vested in it under the provisions of the Act, the Tribunal orders the Registrar to carry out the Proposal to Refuse Registration dated January 23, 2018.