Krystalynn Kaur Manu v. Registrar, Real Estate and Business Brokers Act 2002

Licence Appeal Tribunal Case Number: 12047/REBBA

Appeal from a Notice of Proposal to Refuse Registration as a Salesperson under section 10 of the Real Estate and Business Brokers Act, S.O. 2002, Chapter 30, Schedule C, and Regulations, as amended

Between:

Krystalynn Kaur Manu

Appellant

and

Registrar, Real Estate and Business Brokers Act

Respondent

DECISION AND ORDER

ADJUDICATOR: Harriet Lewis

APPEARANCES:

For the Appellant: Katherine McDonnell, Agent

For the Respondent: Jay Blair, Counsel

Shaun Chu-A-Kong, Co-Counsel

HEARD in Toronto on: September 16, 17, 18, 2019

REASONS FOR DECISION AND ORDER

OVERVIEW

1The appellant Krystalynn Kaur Manu (“Manu”), was registered as a real estate salesperson under the Real Estate and Business Brokers Act 2002 (“the Act”), from April 26, 2016 until her registration was terminated for failure to renew her registration on April 29, 2018.

2On or about October 2, 2018 Manu made an application for a new licence as a salesperson.

3Section 10 (1) of the Act entitles applicants to registration or renewal if they meet the prescribed requirements unless they are disentitled for the reasons set out in that section of the Act.

4On March 27, 2019, the Registrar, Real Estate and Business Brokers Act 2002 (“the Registrar’) issued a Notice of Proposal (“the Proposal’) to deny Manu’s registration. The Registrar takes the position that Manu is not entitled to registration on the following grounds:

i. Having regard to her financial position, Manu cannot reasonably be expected to be financially responsible in the conduct of business under s. 10(1)(a)(i) of the Act;

ii. Manu’s past conduct affords reasonable grounds for belief that she will not carry on business in accordance with law and with integrity and honesty under s. 10(1)(a)(ii) of the Act;

iii. Manu made false statements or provided a false statement in an application for registration or renewal and is therefore disentitled to registration under s. 10(1)(a)(iii) of the Act.

5Manu has appealed, stating that for reasons of procedural fairness she wishes to have an opportunity to address the allegations against her and present evidence which she believes will exonerate her from her prior conduct and provide the basis for her being licensed.

PRELIMINARY ISSUE

6At the outset of the hearing, Ms. McDonnell, acting on behalf of Manu, advised that she had only recently been asked to take carriage of this matter by her principal, Mr. Swales. She noted that the Registrar’s counsel had filed additional materials in the form of addenda to the Registrar’s Book of Documents, and a transcript of proceedings against her client in the Ontario Court of Justice. She asked that the transcript be excluded from evidence, having been filed after the date provided for the exchange of materials.

7Counsel for the Registrar noted that a disc containing the court proceedings had been provided to Mr. Swales for review within the time limits, and Ms. McDonnell acknowledged having reviewed the disc.

8I determined that Manu and her agent would be given time to review the transcript before any cross examination touching on matters contained therein and admitted the transcript as an exhibit.

ISSUES

9The issues to be determined in this appeal are as follows:

i. Is Manu’s financial position such that she cannot be expected to be financially responsible in the conduct of business?

ii. Is Manu’s past conduct such that it affords reasonable grounds for belief that she will not carry on business in accordance with law and with integrity and honesty?

iii. Has Manu made or provided a false statement in her application(s) for registration or renewal for registration?

10Having heard the evidence of the parties and for the reasons which follow, I find that the Registrar’s Proposal should be carried out and Manu’s registration as a real estate salesperson should be refused.

EVIDENCE

11The Registrar called six witnesses: David Tredrea, Anastasios Eracles, Mathieu Fitzgerald, Judith Kaake, Amandeep Judge, and Angela Volpe.

David Tredrea’s Evidence

12David Tredrea (“Tredrea”) is an investigator with The Real Estate Council of Ontario (“RECO”) and was assigned to conduct the investigation of complaints made against Manu. Prior to joining RECO, Tredrea had over 30 years experience as a detective with Toronto Police Services.

13In the course of his investigation Tredrea spoke with two individuals who had laid complaints against Manu: Mr. Eracles and Mr. Fitzgerald. He also spoke to Manu’s sister Sara Manu, and Manu herself.

14During the course of his investigation Tredrea spoke with two individuals who had laid complaints against Manu: Mr. Eracles and Mr. Fitzgerald. He also spoke to Manu’s sister Sara Manu, and Manu herself:

i. Furnishing false documents relating to a trade in real estate in respect to an Agreement to Lease dated June 30, for a property located at 601- 36 Lisgar Street, Toronto, contrary to s. 35 of the Act. Manu was fined $2500 for this offence and ordered to pay restitution of $3500 to the property manager of the rented property for costs associated with enforcing an Order of the Landlord and Tenant Board.

ii. Accepting a commission for trading in real estate from a person other than the brokerage that employed her contrary to 31(2) of the Act. Manu was fine $4500 for this offence.

iii. Failing to notify the Registrar of her change of address within five days of the change, contrary to 34(1) of O. Reg 567/05. Manu received a suspended sentence for this offence.

iv. Furnishing false information in an application under the Act, contrary to paragraph 40(1)(a) of the Act. Manu received a suspended sentence for the offence

15In addition to the foregoing, Manu was placed on probation for one year. Copies of the Record of Conviction, the transcript of the sentencing hearing and the Probation and Restitution Order Work Sheet were provided as part of the Respondents Book of Documents.

Anastasios Eracles’ Evidence

16Mr. Eracles (“Eracles”), an owner of a property management company for approximately 35 years, agreed to assist the owner to lease a property described as 601-36 Lisgar Street Toronto, (“Lisgar Street”). Matthieu Fitzgerald (“Fitzgerald”) was the leasing agent for Lisgar Street:

17The appellant and her sister Sara Manu apparently agreed to an 18-month lease for Lisgar Street and to provide 10 post dated cheques before taking possession.

18Despite this condition, the tenants were given permission by the landlord to take possession of Lisgar Street without providing the post-dated cheques.

19Sara Manu subsequently denied having any knowledge of the lease. She maintained that she had not signed it, not made any payment towards the first and last month’s rent, nor made and mailed any post-dated cheques. She had no intention of occupying the premises.

20Eracles recalled that Manu did take possession of Lisgar Street but appeared to have vacated the premises after the first month. The owner was then forced to bring an action under the Residential Tenancies Act against Manu and Sara Manu for a declaration that the tenancy was terminated and for arrears of rent. The owner was awarded $3,108.79 for arrears of rent, interest and costs. Eracles confirmed that no payments toward discharging this award have been made.

Matthieu Fitzgerald’s Evidence

21Fitzgerald has been a licensed real estate agent for 10 years. He confirmed being the listing agent for the rental of Lisgar Street and to dealing with Eracles on behalf of the owner and with Manu as agent on behalf of the tenants who he believed were Manu and her sister Sara.

22Fitzgerald has laid a complaint with RECO against Manu arising out of his dealings with her in respect to the rental of Lisgar Street.

23The Offer to Lease and Lease for Lisgar Street were prepared showing Manu and Sara Manu as tenants, and the documentation was returned, apparently signed by both Manu and Sara Manu.

24Manu also provided credit reports for herself and Sara Manu, and two letters attesting to Sara Manu’s employment status. Based on this documentation, and because Manu was a fellow realtor, Fitzgerald recommended the tenancy to his client. Manu received a commission of some $900 as a result of her role as the tenants’ agent on the transaction.

25Also, because he trusted Manu as a fellow agent, Fitzgerald arranged for her to take possession without prior to delivery of the post-dated cheques on the understanding that Sara had put the cheques in the mail.

26Fitzgerald later learned that Manu and her then fiancé were the intended tenants of the unit and that Sara Manu had no knowledge of the transaction, had not signed the offer to lease or lease documents and had no knowledge of the letters of reference purporting to have been submitted in respect to her employment.

27Fitzgerald attested to the difficulties that followed these events and to his distress in realizing that he had trusted Manu as a fellow real estate professional. His credibility with his clients suffered. The owner decided to sell the unit, but the closing could not take place until the tenants were formally evicted. This transaction has diminished the trust he formerly had in other agents to the point that he no longer acts on lease transactions.

Judith Kaake’s Evidence

28Judith Kaake (“Kaake”) is an operations manager with Marda Management, a property management company in Windsor Ontario. In that capacity, she had an interaction with Manu in October 2018 which caused her a great deal of upset.

29At the time of the interaction, Marda Management was the newly appointed property manager of 1042 Elm Street, Windsor, Ontario, (“Elm Street”). Manu was the tenant of that property and had been renting it out on Airbnb.

30There were problems with the tenancy. The rent was in arrears and Manu had failed to transfer the utilities bills into her name as she had had agreed to do. As a new property manager, Marda did not have keys to the premises, so Kaake decided to have the locks replaced. On October 3, 2018 Kaake had posted on the premises, a notice that a locksmith would be attending to change the locks on October 5. Kaake intended to provide copies of the new keys to Manu.

31As arranged, the locksmith attended to change the locks, accompanied by Kaake’s assistant. Shortly afterwards, having heard from her Airbnb tenant about the lock change, Manu arrived, and an altercation occurred. Kaake testified that during the altercation, Manu assaulted the locksmith and threw his tools out of the house, narrowly missing her assistant.

32When Kaake arrived at Elm Street she found the locksmith with injuries to his forehead and one side of his head, and her assistant in tears. When Kaake asked Manu to wait for police, Manu began to berate her and made insulting comments about her body.

33When she returned to her office, Kaake called Century 21 Regal Realty in Toronto, which she understood was Manu’s Broker of Record. She was told that Manu was no longer a registered real estate agent. Later that day, because she felt strongly that Manu’s behaviour was egregious and demonstrated a lack of professionalism, she made a complaint to RECCO.

34Manu vacated the property on October 16, 2018 without proper notice and in arrears of rent. At the post-tenancy inspection Kaake found that all of the lights had been left on and that several items, including a television, a toilet seat and the hardware for the back door were missing from the furnished premises.

Amandeep Judge’s Evidence

35Amandeep Judge (“Judge”) has been the Broker of Record for Coldwell Banker Sun Realty in Mississauga Ontario, (“Sun Realty”) since 2015.

36The agency first employed Manu as an office assistant and then as an agent sometime in early 2016. On September 17, 2017 Judge terminated Manu’s employment with the agency as a result of her dealings at Lisgar Street and a property at 609 Dominion Avenue, Midland, Ontario (“Dominion Avenue’).

37The listing agent for Dominion Avenue was Team Hawke Realty (“Team Hawke”) and Manu was the purchaser’s agent, apparently acting on behalf of her sister Sara whose name appeared on the deed. When the transaction closed at the end of May 2017, Sun Realty was entitled to a commission. When Judge did not receive the commission cheque from Team Hawke as expected, he had his office contact Team Hawke to follow-up. Team Hawke ‘s representative told the Sun Realty representative that the commission cheque had been issued to Sun Realty as payee on June 2, 2017, picked up by Manu and deposited shortly thereafter. Judge was able to obtain a copy of the cheque which shows that the cheque was endorsed by Manu and deposited into her account on June 6, 2017.

38When contacted by Sun Realty, Manu admitted that she had deposited the cheque to her personal account. Several notes were exchanged between Sun Realty and Manu concerning the return of the funds which were finally returned by Manu to Sun Realty on August 22, 2017.

39When asked his opinion as to the suitability of Manu for re-registration, Judge spoke to the issue of trust and honesty. Given his experience of her behaviour, he could not recommend that Manu be re-registered.

Angela Volpe’s Evidence

40Angela Volpe (Volpe) is the Manager, Registration for RECO, a position she has held for thirteen years. She manages the registration department and supports the Registrar in the administration of the Act. The Registrar maintains oversight of the real estate market “from a consumer protection perspective”.

41She spoke to the importance of assessing past conduct of proposed salespersons, particularly their honesty and integrity, given certain facts and factors. These include the solitary nature of the salespersons’ work, the size and importance of the transactions to the clients and the self-reporting structure of the Act and Regulations. The self-reporting structure and regulations exist because of the impossibility of keeping a close eye on the number of real estate agencies and agents in Ontario.

42Volpe had not been involved in reviewing the file when Manu made her initial application for registration. However, because this is an appeal concerning an application for re-registration, and because only days before her re- application, Manu had pleaded guilty and been convicted in Provincial Court with respect to offences which she committed during her registration, Volpe was interested in Manu’s file. She was specifically concerned about what the conviction illustrated about Manu’s conduct during her period of licencing, When Volpe looked at Manu’s application for re-registration, she noted the false and misleading statements made on that application with respect to her convictions and her bankruptcy proposal.

43It is Volpe’s view that Manu should not be re-registered, and she does not see the possibility of the Tribunal imposing appropriate and enforceable conditions in this case were this Tribunal to allow this appeal.

The Appellant’s Case

44In her opening statement Manu’s agent noted that it was not Manu’s intention to relitigate Manu’s provincial offences convictions, but rather to provide some explanations of the incidents which led to her behaviour and her guilty pleas.

45The appellant’s agent called 4 witnesses: Julia Gonsalves, Abdelraheem Adas, Manu and Nawaz Mahmood.

Julia Gonsalves’s Evidence

46Since 2013 Julia Gonsalves, (“Gonsalves”), has been the Broker of Record at Century 21 Regal Inc., (“Regal”). Regal has about 140 salespersons who operate throughout Ontario. Gonsalves recalls Manu transferring to her brokerage in 2017 and recalls personally training her in office procedures. Thereafter her experience with Manu was not extensive but in general, she found her responsive and interested in doing well.

47Gonsalves estimated that while with Regal, Manu handled five or fewer transactions, generally leases. She recalls speaking with a property manager about the incident at Elm Street and advising her that Manu was no longer a licenced salesperson. When asked if she would consider hiring Manu again, she indicated that she likely would, but would expect to have to oversee all her paperwork.

Abdelraheem Adas’s Evidence

48Mr. Adas (“Adas”) is Manu’s former fiancé and appeared as a character witness. He is a registered real estate salesperson with Zolo Realty.

49He was a partner with Manu, her sister Sara and one other individual in Dominion Avenue and lived with Manu in Lisgar Street. Both properties had been put in Sara Manu’s name because of the poor credit ratings of himself and Manu.

50Adas recalls Manu’s picking up the commission cheque for Dominion Avenue and depositing it into her account through an ATM. He says she believed the cheque was for her as she was entitled to buyer’s commission.

51He believes that Manu is a good person who tries to “do the right thing”. He is currently giving Manu money monthly to help her pay her rent and living expenses.

Manu’s Evidence

52Manu became interested in real estate in 2009 and became licensed in 2016. She admits disappointment in herself and says she takes responsibility for her actions. She says she should have known better. She believes Julia Gonsalves would mentor her if she regained her licence. She is passionate about real estate and wants to be “part of the excitement”.

53She has a degree and a certificate in Business and Finance from Guelph University/ Humber College. Prior to being licenced as a salesperson, she worked for some time as a restaurant manager for Papa’s Pizza /Mama’s Chicken, a business owned by her parents from whom she is now estranged.

54She has been married and divorced, and at the time of divorce was left with substantial debt leading her to make a Consumer Proposal under The Bankruptcy and Insolvency Act. Although she made some payments to creditors over a period of five years, she did not make all of the payments. The proposal has since been annulled. Her intention is to file for bankruptcy should her real estate licence not be reinstated.

55Manu is currently living in Windsor in a rental house with four roommates. She works part - time for minimum wage as a bar tender, a house cleaner and a dog walker. She is unable to make ends meet. She has not been able to pay her fines and has had to rely on Adas for support. She has had to borrow $10,000 from another friend.

56Manu acknowledges pleading guilty to four of the provincial charges against her and testified that her pleas were made on the understanding that if she pleaded guilty, her licence would be reinstated. Her background explanations for her actions are as follows:

i. Forging signature /furnishing false documents: She explains her behavior by saying that she and Adas had not been successful in getting an apartment in Toronto and knew that that their credit ratings were too poor to get a lease on their own. She maintains that the use of Sara Manu’s name on the lease, her creation and signing of the fabricated employment letter and affixing of Sara’s signature to the lease documents, were all with Sara’s permission. It was never intended that Sara occupy the premises. Manu admits that a disagreement with her sister about renovations to Dominion Avenue made her so angry that she lied and deflected the blame for non- payment of the rent for Lisgar Street on to Sara.

ii. Accepting payment for trading in real estate from a person other than her brokerage: Manu maintains that she mistakenly believed the commission cheque from Team Hawke for Dominion Street was hers to deposit. She said the envelope had her name on it and she did not look at the cheque before endorsing it and depositing it into her account. The delay in reimbursing Sun Realty was because she was required to personally deliver a certified cheque to Sun Realty’s offices in Midland although she was living in Windsor at the time.

57Manu admitted that she had failed to provide accurate or full information on her 2018 application which is the subject of this appeal as follows:

i. She failed to disclose the fact that she had made a 2011 Consumer Proposal which had failed and was annulled in 2016. She decided not to disclose the proposal, thinking that because it had failed and been annulled, it was “done”.

ii. On her application Manu falsely disclosed that she had pleaded guilty to two offences and that she was fined $10,000: She plead guilt to four offences, and in addition to fines, was to make restitution. She maintains that her statement was a mistake and thought she had made a correct statement.

Elm Street Incident

58Manu admits to the dispute and the incident with the locksmith and Kaake but denies that she intended to injure the locksmith and does not believe he was injured. She admits to making demeaning references to Ms. Kaake’s appearance and says that she would be willing to apologize for her remarks if Kaake “feels she needs an apology”. In general, she regrets the incident.

Financial Status

59When asked when she was last financially sound, she testified that she has never been financially sound. She offered no evidence of a financial plan going forward except to say her plan is to earn money from real estate if she regains her licence but provided no particulars. She made no reference to a plan to discharge her obligations but testified that she intends to file for bankruptcy if her appeal fails. She has not been able to support herself with her part time work and relies on Abas and a loan from another friend to help with her living costs.

60Manu has not sought any personal counselling other than from the youth pastor at her church in Brampton approximately three years ago.

61Manu entered into evidence a letter from Alumni Services, University of Guelph/ Humber, attesting to involvement in the alumni community as a volunteer. She also filed a recent unsigned letter of reference from a client who attests to Manu’s help having been “invaluable” in finding her a rental home in 2017.

Nawaz Mahmood’s Evidence

62Nawaz Mahmood (“Mahmood’) is a licenced but inactive real estate agent who owns and runs another business. He appeared as a character witness for Manu, who he has known and associated with continually since their university days.

63In his experience, Manu is someone who can be trusted. He observed her to be a functional and reliable member of a study/project group of which they were both members at university, and he believes that she did a good job when running one of her parents’ restaurants. In his experience, she is a good communicator, is always organized and courteous, and presents herself as a “sophisticated professional”.

LAW AND ANALYSIS

64As noted at the outset, s. 10 of the Act provides that an applicant shall be entitled to registration unless a tribunal finds that it is reasonable for the Registrar to conclude that the applicant will not be financially responsible; that an applicant’s past conduct affords reasonable grounds to believe that they will not act with integrity, honesty and in accordance with the law; and that false statements were provided in an application for registration.

Manu’s Financial Position

65On the basis of the evidence, I find that Manu cannot reasonably be expected to be financially responsible in the conduct of business as is required under s.10(1)(a)(i) of the Act.

66Manu is in financial difficulty and has been for some time. She says she has never been financially sound. Both she and Adas testified that their credit rating was so poor that they used Sara Manu’s name and credit status to lease Lisgar Street, and that they placed the title of Dominion Street in Sara Manu’s name in order to obtain a mortgage.

67The evidence is that Manu cannot currently support herself and relies regularly on funds from Adas to meet her basic living expenses. She has admitted to being party to a failed Consumer Proposal for debts which remain owing. She intends to file for bankruptcy should her licence not be reinstated. She has not paid her provincial offences fines, nor has she made restitution in accordance with the restitution order made by the Provincial Court. She left both Lisgar Street and Elm Street rental properties with rent owing. She did not suggest that she has any plan for discharging her indebtedness were she to regain her licence, other than to say that she does not expect to have funds to buy and flip houses in the future. She says that her intention is to remain in Windsor because she believes it is an emerging real estate market with the potential for transactions.

68Manu says that she loves numbers and that she has a degree in Business and Finance, but her evidence illustrates that this has not enabled or assisted her in establishing or maintaining financial independence and stability nor led to her discharging her financial responsibilities, either past or current. Instead, there is unrefuted evidence that she repeatedly failed to pay her rent even while a licenced agent and is now dependent on regular financial assistance from Adas and a loan from another friend to meet her daily expenses.

Manu’s Past Conduct

69Manu’s past conduct affords reasonable grounds for belief that she will not carry on business in accordance with law and with integrity and honesty as is required under s. 10(1)(a)(ii) of the Act.

70Manu has plead guilty and been convicted of four provincial offences in respect to her earlier registration. These offences and the testimony concerning behaviour then and since then, illustrate her seriously unprofessional behaviour, including towards fellow agents and others engaged in the real estate business. I do not believe her explanation as to why she endorsed and deposited a cheque payable to Sun Realty to her own account, nor do I find that her explanations of her other behaviour mitigate the seriousness of her actions themselves. While Manu has expressed some regret for her actions, her testimony indicates that she has not accepted responsibility for her behaviour and continues to place considerable blame on others, most particularly but not only on her sister Sara. She has not sought help in managing either her anger or her expectations, nor has she sought credit or other financial counselling. I therefore conclude that it is not unreasonable to expect that inappropriate conduct that occurred in the past would occur again in the future.

False Statements on an Application for Registration

71There is uncontradicted evidence of two false statements made by Manu on her 2018 application. She answered “no” to the question of whether she had ever been involved in personal bankruptcy or insolvency proceedings or filed a consumer proposal. She admitted that she decided not to disclose her proposal because it had been annulled. She misrepresented the details of her guilty plea and conviction in Provincial Court, by disclosing a plea to only two of the four offences, and omitting reference to the order to pay restitution of $3500. While on their own these omissions may not have been enough to determine that Manu should not be licenced, they do speak generally to her conduct such that they support the position that her problematic conduct continues.

Is this a case for licencing with conditions?

72There is some, although not strong evidence that Gonsalves would consider re-hiring and mentoring Manu should conditions be placed on her registration. However, Gonsalves’ weak evidence on that point, coupled with the large number of Regal agents and their way of working, leads me to the conclusion that even with good intentions, the time available and Manu’s intention to remain in Windsor limit the likelihood of any effective supervision.

73In conclusion, I find that there is enough evidence on all three grounds provided in s. 10(1)(a) to conclude that Manu’s appeal of the Registrar’s Proposal should fail and that Manu’s application for registration as a real estate salesperson should be refused.

ORDER

74I order that the Registrar carry out the Proposal and refuse to register the appellant as a real estate salesperson.