File Number: 11503/REBBA
Appeal under Section 14 of the Real Estate and Business Brokers Act, 2002. c.30, and Regulations from a Notice of Proposal to revoke the registration of Xue (Sherry) Hang, a salesperson pursuant to s.14(1) of the Act
Between
Xue Hang
Appellant
and
Registrar, Real Estate and Business Brokers Act 2002
Respondent
DECISION AND ORDER
Panel: Harriet Lewis, Member
Appearances:
For the Appellant: Michael Ostroff, Agent
For the Respondent: Sean Smith, Counsel
Heard in Toronto on: January 21, 22, 23, 2019
REASONS FOR DECISION AND ORDER
OVERVIEW
1This is an appeal from a Notice of Proposal to Revoke Registration issued on June 9, 2018, by the Registrar, Real Estate and Business Brokers Act (the “Act’) to revoke the registration of the appellant (“ Ms. Hang”) as a real estate salesperson under the Act. The Registrar proposes that Ms. Hang is not entitled to registration on two grounds:
i. That her past conduct affords reasonable grounds for belief that she will not carry on business in accordance with law and with integrity and honesty (s.10(1)(a)(ii) of the Act); and
ii. That she made and/or provided false statements in applications for registration or renewal of registration (s. 10(1)(a)(iii) of the Act).
2Ms. Hang has been registered as a salesperson since August 2008 and employed since that time by Real One Realty Inc. Her registration was last renewed in June, 2016.
3In April 2017, Ms. Hang was charged with five fraud and forgery offences in relation to an application made in 2011 to the Ministry of Training Colleges and Universities of Ontario (MTCU). The application was for an educational grant to pursue training as a paralegal. She was alleged to have made false statements on the application about her employment status, her place of residence and her level of income.
4In August 2017, she pleaded guilty to two of the fraud charges. She repaid the fraudulently obtained funds and was sentenced in October 2017 to a twelve-month conditional sentence, including electronic monitoring and a period of house arrest and curfew. She was given twelve-month’s probation. The other charges were withdrawn.
5Ms. Hang did not disclose the criminal charges to the Registrar when they occurred. Having become aware of the charges, the Registrar reviewed Ms. Hang’s previous applications for renewal. As a result he determined that she had failed to disclose or improperly disclosed other information about her being “employed or engaged in any other business, occupation or profession” as is required.
6Specifically she failed to notify the Registrar that she had become licensed as a paralegal in 2013 and had been licensed and worked as a mortgage broker in 2016.
7As a result of the discovery of the omissions, the Registrar charged Ms. Hang with failure to disclose the criminal charges and furnishing false information under s.40 (1)(a) of the Act. Ms. Hang pleaded guilty to two of the charges of furnishing false information by failing to disclose secondary employment as a mortgage agent and paralegal. The other charge was withdrawn.
8It is also alleged that throughout the period during which she was licensed, Ms. Hang did not truthfully disclose the nature and extent of her employment and duties with the Royal Institute of Science and Management (“RISM”), a private career college owned by her husband and operated by both of them.
9Given the foregoing, the Registrar asserts that Ms. Hang:
(i) Engaged in fraudulent conduct resulting in criminal convictions;
(ii) Engaged in conduct in breach of the Act resulting in convictions under the Act;
(iii) Failed to notify the Registrar of changes in answers provided in applications filed with the Real Estate Council of Ontario (RECO); and
(iv) Provided false and/or misleading information and statements to RECO regarding her employment with the RISM.
10On that basis the Registrar takes the position that Ms. Hang’s conduct constitutes grounds for revocation of registration pursuant to s.10(1) of the Act.
11Ms. Hang does not deny the bare facts pertaining to her fraud convictions, her failure to disclose information about registration as a paralegal or mortgage broker or her work with RISM. She expresses her deep regret and shame for her actions. She does take issue with some of the specifics of the allegations against her, but in essence asks that the Tribunal take into account her personal circumstances at the time of her fraud and failures to report, as well her acts of contrition and charity, as mitigating factors sufficient to find that revocation of her licence by the Registrar would be unreasonable.
PRELIMINARY MOTION
12At the outset of the hearing, Ms. Hang’s agent brought a motion to exclude exhibit number 9 in the Registrar’s Book of Documents on the grounds that the document was hearsay and prejudicial to the appellant.
13The document in question is entitled “Particulars of a Notice of Revocation of Registration” and is issued pursuant to Section 49 (1) of the Private Career Colleges Act, 2005 by the Office of the Superintendent, Ministry of Colleges and Universities of Ontario. It is dated July 30, 2015 and was publically posted on the MTCU web site. The notice pertains to 1563786 Ontario Inc. o/a Royal Institute of Science and Management, the college owned by Ms. Hang’s husband.
14After hearing arguments of the parties on the motion, it was dismissed for the following reasons:
No notice had been given of the motion.
Whether or not the document is hearsay, it may be relevant and this Tribunal has discretion to admit any evidence which may be relevant to the matters in issue.
ISSUES
15The issues to be determined are:
(i) Has the Registrar established that Ms. Hang’s past conduct affords reasonable grounds for belief that she will not carry on business in accordance with law and with integrity and honesty?
(ii) Has the Registrar established that Ms. Hang provided false information on applications for renewal such as to provide grounds to revoke her registration?
(iii) Based on the findings on issues (i) and (ii), should the Tribunal order the Registrar to carry out the proposal?
CONCLUSION
16The evidence in this case when taken together, supports a determination by this Tribunal to order the Registrar to carry out the Proposal.
EVIDENCE
17The Registrar’s witness was Ms. Angela Volpe, the Manager of Registration for RECO. She described her duties as being the support of the Registrar in the administration of the Act. She gave evidence on the obligations of a licencee under the Act, and the regime of self-regulation and self-reporting under which brokers and salespersons function in the interest of protecting the public. She emphasized that honest, accurate and timely disclosure is at the core of the licencing system.
18Ms. Volpe became aware of issues with respect to Ms. Hang in 2016 as a result of a complaint received by RECO from a police officer who was investigating an alleged fraud by Ms. Hang against the MTCU. Sometime after, RECO became aware of misrepresentations and omissions in Ms. Hang’s renewal applications. Specifically, she failed to appropriately disclose her licensure and activity as a paralegal and as a mortgage broker.
19In April 2017, the Registrar determined that the circumstances were appropriate for charges of “furnishing false information” under the Act and in May 2017 laid charges to which Ms. Hang ultimately pleaded guilty and was fined.
20In August 2017 Ms. Hang entered a guilty plea to two counts of fraud with respect to the MTCU grant application. In October she was sentenced as noted above and made restitution of the full amount of the grant.
The Fraudulent Application to the Ministry of Training, Colleges and Universities
21The Registrar provided evidence of the charges against Ms. Hang, her guilty plea and her sentence, as well as a transcript of the pre-trial hearing before the court. Included among the false statements made in the MTCU application were the following:
Home address: she provided the address of a cottage she co-owned with a friend rather than her primary residence. The difference in address qualified her for a travel supplement to the basic grant.
Marital status: Ms. Hang indicated she was separated from her husband although she was not; and
Annual income: she stated that she was unemployed although her income as a real estate agent at the time was some $72,000.
22Ms. Hang described the circumstances that led her to make a fraudulent grant application. She badly wanted to train as a paralegal in order to gain financial independence from her husband who maintained sole control over their finances. The marriage is not a happy one. At the relevant time the relationship was deteriorating and she wanted to be able to support their son should the marriage dissolve. Her husband would not support her paralegal training. On occasion, when her home circumstances were particularly bad and if her husband was in Canada, she stayed at a cottage which she co-owned with a friend. Her husband travels back to their country of origin twice a year, often staying as long as 10 weeks each visit. When he was away she lived in the family home. Ms. Hang admitted that she knew that what she did was wrong, and that is why when charged, she admitted guilt and made full restitution of the funds received. By way of community service following the charges she also volunteered at Justice Net, a non-profit access to justice program, and at a law office.
Errors or omissions amounting to misconduct with respect to applications filed with RECO
23Ms. Volpe testified as to Ms. Hang’s failures throughout her period of licensure, to appropriately notify the Registrar of changes in her circumstances and to accurately and truthfully answer questions on her applications with respect to her registration as a paralegal and mortgage broker and her employment with RISM.
24For example, in Ms. Hang’s original application for a licence in 2008, she answered “no” to the question of whether she was “engaged or employed in any other business, occupation or profession” when she was working with her husband at RISM. Ms. Volpe testified that the training materials for salespersons are clear that “employment” includes any occupation, paid or not and Ms. Hang had that training.
25Ms. Hang also did not properly disclose the nature of her role at RISM in applications for renewal in 2010, 2012 and 2014, or various changes to the role she played in RISM throughout the period of its operation. She did not disclose the charges for the fraud against the MTCU until she had no choice but to do so.
26Ms. Hang’s failure to disclose her registration and role as a paralegal or to make timely disclosure of her registration and activity as a mortgage broker formed the basis of two of the three charges against her for breaching the Act. As noted above, the third charge pertained to the MTCU fraud and was withdrawn.
27Ms. Hang admits that she chose to plead guilty to two of the charges and paid the fines required by the judgment in respect to her breaches under the Act. Notwithstanding, she maintains that she did not intentionally make a false report with respect to her employment status with RISM. She explained in some detail, the complicated relationship she had with RISM until its dissolution in 2015.
28Ms. Hang says that for most of the period in which RISM was operating, she was not paid for the services she provided. For example, when she made her first application for licensing in 2008, although she played a role at RISM, she was not being paid. In 2010, when she was being paid, she answered “yes” to the question of employment, and indicated that she was employed in the role of a “training counsellor”.
29She testified that her husband is unable to communicate well in English, so for much of the time RISM was operating, she acted as an intermediary on his behalf with staff, students and government. Since she was not paid for this work, she did not consider herself to be “employed” and therefor did not answer “yes’ to the question. Her husband’s inability to communicate in English was also her answer as to why she had been the liaison with the MTCU and with RISM students when the school was closed.
The Appellant’s Work as a Real Estate Salesperson
30In her testimony on behalf of the Registrar, Ms. Volpe acknowledged that RECO had received no complaints in respect to Ms. Hang’s work as a real estate salesperson.
31Ms. Tina Chen, a broker and partner in Real One Realty Inc., testified on behalf of Ms. Hang. The firm has two offices in the Toronto region, and she works out of the same office as Ms. Hang. There are approximately 260 salespersons working out of that office. Of that number, about 50 are what Ms. Chen called “very active’. Ms. Hang is not one of those considered very active. She usually comes into to the office about twice a month. Ms. Chen has known Ms. Hang for the ten years that Ms. Hang has been with the agency and Ms. Chen considers her a friend. She is aware of the criminal proceedings and the proceedings under the Act that were brought against Ms. Hang.
32Ms. Chen described Ms. Hang as an “average agent” (determined by number of sales) who makes approximately ten sales per year. In her opinion Ms. Hang cares for her clients, is diligent and careful and Real One Realty Inc. has not had any complaints about her work.
33In Ms. Chen’s opinion, if Ms. Hang is allowed to maintain her licence, she will carry on her business with honesty and integrity. Both Ms. Chen and Mr. Max Gong, the other principal in the company, are prepared to “keep a close eye” on Ms. Hang should she be allowed to maintain and renew her licence.
LAW AND ANALYSIS;
34Clause 10(1)(a) of the Act provides that an applicant that meets the prescribed requirements is entitled to registration or renewal unless:
the applicant is not a corporation and,
(i) the past conduct of the applicant or of an interested person in respect of the applicant affords reasonable grounds for belief that the applicant will not carry on business in accordance with law and with integrity and honesty; or
(ii) the applicant or an employee of the applicant makes a false statement or provides a false statement in an application for registration or for renewal of registration.
35Section 13(1) of the Act provides that:
the registrar may refuse to register an applicant or may suspend or revoke a registration or refuse to renew a registration if, in his or her opinion, the applicant or registrant is not entitled to registration under section 10.
36Because the legislation speaks to the entitlement of the applicant to a licence, the burden of proving disentitlement falls on the Registrar. In the case of past conduct, the standard is one of “reasonable grounds for belief”.
Does the Registrar have reasonable grounds for belief that Ms. Hang will not carry on business in accordance with the law, and with integrity and honesty?
37Ms. Hang appears to be a loving and concerned mother and grandmother. She immigrated to Canada with her husband and children and worked with her husband to create and operate a successful business. She also appears to be highly intelligent. She was an electrical and mechanical engineer in her country of origin. She had the determination and ability to become a moderately successful real estate salesperson and to earn credentials as a paralegal and a mortgage broker. She provided in evidence, transcripts of continuing education courses taken to enhance her real estate credential that indicate her excellent command of the material.
38Ms. Hang expressed her remorse about her actions. She relies on the fact that when her fraudulent behavior was discovered and she was charged, she admitted the fraud, made restitution and served the terms of her sentence. As noted, she also pleaded guilty to two provincial offences under the Act and paid her fine.
39It is unclear from the evidence however whether Ms. Hang has understood and addressed the reasons for her actions and the serious nature of her crime. Nor is it clear that she understands that her past dishonesty supports the Registrar’s position that there are reasonable grounds for belief that she will not conduct herself with honesty and integrity in the future within a regime that depends on high ethical standards and accurate self-reporting.
40In both her testimony and in argument, Ms. Hang attributed her actions to anxiety and depression brought on by her marital circumstances. She referred to certain cultural norms from her country of origin which she said dictate that she remain in an unhappy marriage, obey her husband’s direction, work without remuneration in a family business which he controlled and turn over all of her real estate earnings to him.
41As unfortunate as her domestic circumstances may be, I cannot find that they are factors which can negate Ms. Hang’s responsibilities with respect to her professional life as a real estate salesperson, or for that matter as a mortgage broker or paralegal. She became qualified and able to do these apart from her husband and RISM. All are regulated professions which require strict adherence to codes of behavior for the protection of the public.
42In argument, Ms. Hang’s agent noted that the MTCU fraud occurred several years ago. Evidence was led and an argument made that while Ms. Hang had made some poor choices in the past, her contrition, the contribution through RISM that she made to the training of numerous individuals, her volunteer work with Justice Net and her charitable donations all bode well for her future conduct. That may be true.
43However, Ms. Hang did not provide evidence as to a change in her personal life. Nor did she provide any evidence of having sought help for the anxiety and depression that she says led her to commit fraud. Her circumstances, if not worse, remain the same.
44I am therefore satisfied on all of the evidence, based on Ms. Hang’s past conduct, that there are reasonable grounds for the Registrar to believe that Ms. Hang will not carry on business in accordance with the law and with integrity and honesty in the future.
Did Ms. Hang provide false information on her applications for renewal such as to provide grounds to revoke her registration?
45A great deal of evidence was given by both parties as to Ms. Hang’s roles with RISM; specifically whether, when and in what capacity she was employed. She continued to assert that certain answers to questions on her renewal applications were errors due to misunderstanding the meaning of “employment’, which she understood to mean only her paid work, and not the various other duties she discharged on her husband’s behalf and without pay. I do not find that explanation credible given the evidence. She excelled in her required real estate courses which addressed that issue. She was instrumental in creating and building the RISM business, having worked in a similar institution when she first came to Canada. She wrote and appeared as the signatory on official documents and communications as the representative of RISM. She operated her real estate practice out of the RISM offices and was there frequently. In evidence and argument she relied on RISM’s track record in graduating qualified students as a community service for which she claims some credit.
46The evidence is clear that Ms. Hang was charged and pleaded guilty to two counts of “furnishing false information in an application under the Real Estate and Business Brokers Act” by failing to disclose secondary employment as a paralegal and mortgage agent.
47Counsel for the Registrar has made the argument that Ms. Hang’s failure to comply with application and notification requirements itself requires revocation and creates a bar to Ms. Hang’s continuation as a salesperson.
48He relies on the decision of the Ontario Divisional Court in Registrar of Alcohol and Gaming v. Hosseini-Rad (“Hosseini-Rad”), [2004] CanLII 34450. In that case, the issue was whether the Tribunal erred by approving a registrant’s registration despite finding that he provided false information in an application contrary to s.6 (2)(e) of the Liquor Licence Act (the LLA). The Court held that the Tribunal erred in doing so. It held that the combined language of ss. 6(2)(e) and 10(2) of the LLA meant that the Tribunal did not have the discretion to approve a licence once it found that the applicant had provided false information on his application.
49Registrar’s counsel in this matter compares the statutory provisions in the LLA with ss.9 and 10(1)(a)(iii) of the Act, and submits that like in Hosseini-Rad, the Tribunal has no jurisdiction to order Ms. Hang’s registration once it has determined that she provided false information with her applications.
50I do not agree that the strict test in Hosseini-Rad is applicable in this case. This is an appeal of a Notice of Proposal issued under s.s.13 and14 of the Act. Section 13 of the Act states that, subject to the right of appeal established by s.14:
51The registrar may refuse to register an applicant or may suspend or revoke a registration or refuse to renew a registration if, in his or her opinion, the applicant is not entitled to registration under section 10.” [Emphasis added].
52This language is clearly discretionary. Section 13(2) goes on to allow the registrar to impose conditions on registration “as he or she considers appropriate”. The Act also does not contain a provision that is identical to s.10(2) of the LLA, which appears to have been a central consideration in the Court’s decision in Hosseini-Rad. In my view, if the Tribunal determines that the applicant provided false information in an application, it has discretion to determine the appropriate outcome from the available options, including registration with or without conditions, refusal, revocation or suspension.
53The Registrar asserts that in the original application in 2008, and in the renewal applications of 2010, 2012 and 2014, Ms. Hang made false statements with respect to her employment with RISM, and failed to make required disclosure of her changed circumstances, her criminal charge and her occupation as a paralegal and mortgage agent.
54I find that Ms. Hang’s guilty pleas to the provincial offences and misrepresentation of her role at RISM on her applications are relevant in this case to a consideration of whether past conduct may affect Ms. Hang’s future conduct.
Is this an appropriate case for the imposition of conditions as an alternative to revocation?
55In argument, Ms. Hang’s agent maintained that this was an appropriate case for conditions. He proposed that his client would engage in continuing education classes at RECO, meet with her brokers every three months and vet her re-licensing applications with her broker before submitting them to RECO. He referred to Ms. Chen’s evidence that she and Mr. Gong would be willing to oversee Ms. Hang’s work as an agent.
56I do not see this as an appropriate case for imposing conditions as an alternative to a revocation order. The evidence is that Ms. Hang committed several instances of fraud, misrepresentation and non-disclosure over a number of years, going back to the beginning of her registration as a salesperson, and not limited to her engagement in that role. She has shown remorse, but has not demonstrated that she has taken steps to deal with the issues that she says led to her dishonest behavior.
ORDER
57Pursuant to subsection 14(5) of the Act, the Tribunal directs the Registrar to carry out the Notice of Proposal to Revoke Registration, dated June 9, 2018.
LICENCE APPEAL TRIBUNAL
Harriet Lewis, Member
Released: March 8, 2019