Mohammad Sabour Popalzai v. Registrar, Real Estate and Business Brokers Act, 2002, 2019 CanLII 32288

REASONS FOR DECISION AND ORDER

Date: 2019-03-25

File: 11603/REBBA

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

Between:

Mohammad Sabour Popalzai Appellant

and

Registrar, Real Estate and Business Brokers Act, 2002 Respondent

ADJUDICATOR: Patricia McQuaid, Vice-Chair

APPEARANCES:

For the Appellant: Patrick Bakos, Counsel

For the Respondent: Jonathan Hurter, Counsel

Heard in Toronto by Teleconference: February 12 and 13, 2019

REASONS FOR DECISION AND ORDER

BACKGROUND

1This is a hearing before the Licence Appeal Tribunal (the "Tribunal") arising out of a Notice of Proposal issued by the Registrar, Real Estate and Business Brokers Act, 2002 (the "Registrar" and the "Act", respectively). The Notice of Proposal (the "Proposal") dated August 16, 2018 proposes to refuse to grant the registration of Mohammad Sabour Popalzai (the "appellant") as a salesperson under the Act.

2The Registrar is proposing to refuse Mr. Popalzai's registration on the basis that he is not entitled to registration for the following reasons:

a. Having regard to his financial position, he cannot reasonably be expected to be financially responsible in the conduct of business;

b. His past conduct affords reasonable grounds for belief that he will not carry on business in accordance with law and with integrity and honesty; and

c. He made a false statement in his application for registration.

3These three grounds for the refusal to register reflect the tests for registration set out in section 10(1)(a) of the Act. As stated by the Registrar, a negative finding in relation to any one of the grounds disentitles the appellant to registration. The Registrar bears the onus to show that the appellant is not entitled to registration based on s. 10(1)(a) of the Act.

4The appellant is now a 35 year old man. He does not deny the fact of his criminal convictions and Highway Traffic Act ("HTA") offences, but states that they are dated and a part of his past. Further he states that he is a responsible and successful businessman and a respected member of his community. He states that he provided fulsome disclosure to the Registrar and if there are any inconsistencies in the information provided, it was not intentional.

5Pursuant to s. 14 of the Act, I may direct the Registrar to carry out the Proposal or substitute my opinion for that of the Registrar. Should I determine that the appellant is entitled to registration, I have the authority, under the Act, to attach conditions to the appellant's registration, if appropriate.

RESULT

6After carefully considering the evidence and submissions, and for the reasons set out below, I direct the Registrar not to carry out the Proposal. I find that the appellant is entitled to registration under the Act.

ANALYSIS

7The evidence will be analyzed by issue, as set out in section 10(1)(a) of the Act.

Issue: Financial Responsibility: s. 10 (1)(a)(i)

8Since 2003, Mr. Popalzai has had several charges and convictions under the Criminal Code. Several of these convictions resulted in fines levied against him. In the Proposal, the Registrar states that as of August 2018, the appellant had failed to pay a fine totalling $650 as a result of a conviction in December 2014.

9Angela Volpe is the manager of registration at the Real Estate Council of Ontario ("RECO"). In that role, she supports the Registrar in the administration of the Act, which is consumer protection legislation. Regarding the issue of the appellant's financial responsibility, she testified that the sole issue is the fact that the appellant had the outstanding fine, since December 2014, of $650. There are no other concerns about the appellant's financial position.

10The appellant has now paid the fine, as of February 11, 2019 - the day before the commencement of the hearing. The appellant's evidence is that he simply forgot to pay it. The court documents do state that a fine, if unpaid after 30 days, may result in a summons or arrest warrant, but clearly no such action was taken. The appellant, as part of his application process with RECO, obtained a document from the court on November 1, 2017 indicating that the fine was still outstanding. One can question why he did not at that point, having had his memory refreshed, immediately pay the fine. The evidence shows that he has paid, in a more timely way, other fines levied against him. While a lack of diligence regarding the fine cannot be condoned, it does not, standing alone, support a finding under s. 10(1)(a)(i) of the Act that "having regard to his financial position...the appellant cannot reasonably be expected to be financially responsible in the conduct of business."

11Ms. Volpe quite candidly stated in her evidence that this is a lesser ground in terms of the Registrar's concerns. The appellant, corroborated by several of his character witnesses, including his accountant and his insurance broker, testified to the financial success he has achieved in his current business, Built Custom Inc. But for the fact of an outstanding fine of $650 for a period of four years, there is no evidence whatsoever to reasonably suggest that the appellant is financially irresponsible or that his financial position is in any way concerning from a consumer or public interest perspective.

Issue: Does the appellant's past conduct afford reasonable grounds for belief that he will not carry on business in accordance with law and with integrity and honesty: s. 10(1)(a)(ii)

12Ms. Volpe testified that the entire application relates to the 'fitness for registration' issue. The application is the means by which the Registrar assesses possible consumer protection concerns. With respect to s. 10(1)(a)(ii) of the Act, she stated that the appellant's past conduct reveals a pattern of not complying with the law, raising the question for the Registrar whether the appellant will be honest with consumers and act with integrity.

Past conduct

13The appellant's past conduct was reviewed in detail at the hearing. The criminal convictions are not disputed by the appellant. He did provide a criminal record check required as part of the application process. The criminal charges resulting in convictions are as follows:

1. 2003: Operating a motor vehicle with blood alcohol content greater than 80 mg Fraudulent personation (to avoid prosecution) Failure to comply with a condition of recognizance Conviction in December 2005

2. 2005: Fraudulent possession of credit card data Conviction in April 2006

3. 2006: Failure to comply with conditions of recognizance Obstruction of a peace officer by identifying himself as someone else Conviction in March 2006

4. 2007: Driving a motor vehicle while disqualified Conviction in September 2007

5. 2014: Obstructing justice by denying involvement and/or knowledge of a motor vehicle collision Unlawful possession of cannabis Conviction in December 2014

14Ms. Volpe highlighted several of the criminal convictions to support the Registrar's belief that the appellant will not carry on business in accordance with law and with integrity and honesty. The 2005 conviction for possession of credit card data is viewed as concerning because potential for fraud is taken very seriously. A real estate agent handles large sums of money, often for consumers who are not savvy, and is privy to a consumer's financial information. Failure to comply with recognizance orders or terms of probation (here for example, the appellant was out after the court imposed curfew) and obstruction (2014) present a concern about the appellant's likely compliance with RECO investigators. She stated that his conviction in 2007 for driving while disqualified (as a result of his prior impaired driving conviction) shows a pattern of noncompliance with the law. This too raises a concern for the Registrar about the appellant's ability to comply with regulatory requirements as a real estate agent or his cooperation and compliance with RECO in any investigation that might occur in the future.

15In addition, in February and May 2016, the appellant was charged under the HTA with 'stunt driving' involving excessive speed. These charges were withdrawn, but the appellant did have his driver's licence administratively suspended for seven days on each occasion. His driver's licence abstract also shows five speeding infractions between August 2016 and November 2017 resulting in six demerit points.

16From these HTA infractions, one conclusion that can be drawn is that the appellant drives too fast, frequently. He testified that he drives fast and powerful cars and sometimes does not realize how fast he is travelling. Ms. Volpe testified that it shows recent nonadherence with the law - repeated conduct of not complying with the law.

17Ms. Volpe acknowledged that some of the past conduct is dated and the Registrar does weigh the passage of time. She also noted that youth is a consideration. Here, the appellant was between 19-23 years of age when some of the most significant issues occurred. There is no doubt that those years are not an exemplar of good conduct. He finished his schooling at grade 10. Alcohol was a factor in several of the incidents, including the more recent 2014 conviction. The Tribunal can look to the circumstances giving rise to the criminal charges for the purpose of mitigation, but not for the purpose of re-litigation: Registrar, Motor Vehicles Act v. Jacobs, 2004 CanLII 9450 (Ont. Div. Ct.).

18The appellant testified that he is now married and the father of three children. He is a successful businessperson. His parents live with him as do two sisters. In 2014, one of his cousins died. He was close with this cousin and his passing affected him profoundly. He has since given up alcohol, become more religious and returned to his faith practice. This latter development is important. The appellant, as did several of his character witnesses, referred to change and maturation that came with his marriage and the birth of his first child. However, these life events pre-dated his 2014 convictions (arising from charges in 2013). What appears to have been especially impactful on him are the growth and success of his business, the death of his cousin and his return to his religious practice that followed.

Character evidence

19Nine witnesses were called to testify as character witnesses for the appellant. They are journalists, a real estate agent, an accountant, an insurance broker and businessmen in drywall and HVAC companies. Some of these witnesses have known him for over 20 years both as the young son of immigrants from Afghanistan, as a teenager and now as a respected member of the Afghan community in Toronto. Some, but not all, knew of his past criminal convictions. But they all spoke of him being hardworking and committed to the Afghan community through his participation at the mosque and charitable work including his work in bringing Afghan musicians to Toronto for festivals. Several of them have had the appellant's company do work in their homes and referred him to others, all without incident.

20For those that did know the details of his past charges and convictions they commented on a young man who was careless, with a sense of invincibility, who 'hung with wrong crowd' and then highlighted a change to a responsible, reliable and trustworthy man. As one witness stated, "we all make mistakes; he made some big ones."

21Registrar's counsel submitted that little weight ought to be given to the character evidence. I do note that the appellant also submitted letters from several organizations attesting to his character. The authors of the letters were not called to give oral testimony. While the content of the letters generally reflected evidence given by the character witnesses at the hearing- for example, the letter from the Afghan Women's Organization, I do give these less weight.

22But when considering the appellant's past conduct it is incumbent upon me when determining whether there are reasonable grounds to believe that he will not, in the future, carry on business in accordance with law and with integrity and honesty, to consider whether there is evidence that the appellant has taken any steps to turn his life around and whether those steps have been significant. Character witness evidence is given some weight in this context. This is not a situation like that in 11025 v. Registrar, Real Estate and Business Brokers Act, 2002, 2018 CanLII 107930 (Stolberg), where only one character witness was called and she had very limited knowledge of why the person's conduct, which involved an industry related offence, had been called into question.

23Character witnesses testify to vouch for the integrity of someone whose conduct has been called into question. When no such evidence is proffered, it can be weighed against an appellant in cases such as these. Credibility of such evidence can vary considerably. Here, the witnesses were all credible and at least four of the witnesses were able to speak knowledgably to the appellant's past, and his present.

Analysis of the s.10(1)(a)(ii) issue

24It is useful to consider the jurisprudence flowing from tribunal and Court decisions on this issue of whether there are reasonable grounds to believe that an appellant will not, in the future, carry on business in accordance with law and with integrity and honesty, as enunciated in s. 10 of the Act and in the similar, if not identical, wording in several other statutes. The courts have stated that reasonable grounds will exist where there is an objective basis for the belief which is based on credible and compelling evidence. The Court of Appeal in Ontario (Alcohol and Gaming Commission of Ontario) v. 751809 Ontario Inc. (Famous Flesh Gordon's), 2013 ONCA 157 stated that the purpose of the examination of the past and present conduct is to see if there are reasonable grounds for belief that the person will, in future, carry on activity in a way that is contrary to the public interest. The Court of Appeal emphasized that any and all past or present conduct can and should be considered. The Tribunal must consider the whole of an appellant's conduct, including the conduct since the past conduct – here, the criminal conduct – occurred.

25The jurisprudence also suggests that past conduct which involves criminal conduct may not, in and of itself, preclude registration, especially if it is dated or a minor conviction: Ontario v. Mander, 2018 ONSC 1795 (Div. Ct.). Nor is there a prescribed time period over which "good behavior" must be shown, as indicated by Ms. Volpe. As she stated, the Registrar will look at global past conduct, but here they did not consider his most recent conduct, because, as she stated, that type of information was not available to them when they made the decision to issue the Proposal refusing registration.

26After assessing whether there is an objective basis for the Registrar's belief, based on credible and compelling evidence, I conclude there is not. The majority of the criminal convictions are quite dated and occurred at a very different stage of life than where we see the appellant now. The Registrar has highlighted the April 2006 conviction relating to the charge of being in possession of credit card data without "colour of right". In his explanation of that incident provided as part of the application process, the appellant wrote that "a former friend of mine was pulled over and had illegal information in his possession. He told the police officer that I was the holder of that information. Due to back and forth between myself and my former friend, the officer charged us both". Ms. Volpe stated that it is 'our belief' that this explanation was inaccurate and that the appellant did not take ownership for this incident. But there is no compelling evidence proffered in support of that 'belief'. As the jurisprudence makes clear, there must be an objective basis for the 'reasonable grounds for belief to support a finding under s. 10(1)(a)(ii). The Registrar may not like the way the explanation was framed- he may not feel it reflects ownership of the incident, but this does not meet the standard required: an objective basis for the belief which is based on credible and compelling evidence.

27It is important to note that when weighing the evidence, I do not conclude that the appellant is attempting to resile from his prior criminal convictions. He is not unrepentant. His explanations may not express an acceptance of responsibility in a manner that satisfies the Registrar, which I can appreciate, but he is not disputing that finding of guilt which is crucial. As clearly stated in Jacobs, cited above, an appellant before this Tribunal cannot be permitted to re-litigate the essential elements of their criminal convictions.

28The Registrar also relies on the HTA violations which are more recent. The appellant is not without his faults - as his more recent driver abstract shows.

Ms. Volpe's evidence was that to her, "as a citizen", the speeding charges are serious. That view is understandable and correct. It was echoed by the character witness who is an insurance broker. But driving infractions such as these, are not probative of the appellant's lack of adherence with the law and industry regulatory requirements in the future.

29The Act is essentially consumer protection legislation. Past conduct may be an indicator of future conduct, especially vis-à-vis consumers. However, as stated in evidence, the Registrar put a great deal of weight on the conduct pre-dating 2014 and very little weight on the appellant's subsequent, positive, conduct. For example, little consideration seems to have been given to the appellant's success in his business, Custom Built Inc., which is primarily a home renovation business, though he provided information regarding the business as part of his application. In that business, the appellant engages with homeowners, he is working in their homes and dealing with significant sums of money. Customer satisfaction is key to the success of the business. The evidence from the appellant and from some of his character witnesses depicts a responsible, trustworthy person, working in a consumer context. This is not a situation where there is no credible and recent evidence by which to predict future conduct.

30As stated by the Divisional Court in Mander, the test regarding an appellant's ability to "carry on business" in accordance with the law" encompasses more than just dealing with consumers. It also includes their relationship with the regulatory agency charged with administering the legislation in question. Ms. Volpe emphasized this point, citing for example his failure to comply with court orders. I do note that at the appellant's court appearance in September 2007 to plead guilty to his February 2007 charge of driving while disqualified, the judge noted that it was to his favour that he accepted responsibility early and admitted his wrongdoing on the spot, but also pointed out that the appellant did have a propensity for failing to comply with recognizance orders. At this time the appellant was 23 years old. While not an excuse for the action, it does provide context by which to assess that incident as an indicator of future conduct.

31Does the fact that the appellant has as recently as 2014 been convicted of attempting to obstruct justice by denying their involvement in a motor vehicle collision, to shield a cousin according to the appellant, reasonably suggest that he would not cooperate with RECO investigators? He has not denied that they quite wrongly attempted to assert that there was no accident. Is it reasonable to extrapolate from these incidents that he has shown a pattern of not complying with the law such that he would not be honest with consumers or RECO investigators? I conclude that it is not. At that time, alcohol was involved. The appellant has now given up drinking. The evidence of the appellant's personal growth and the growth of his business which is dependent upon being responsive to consumer issues, developing their trust and satisfaction suggest that it is unlikely that previous patterns of noncompliance will recur. On the facts before me, the reasonableness of relying on past breaches of the law to ground an inference concerning future risk to the public (including the regulator) may well be affected by the passage of time. Here there is evidence before me on the basis of which I can conclude that the character traits which led the appellant to behave in the past would not likely cause him to behave in a manner of concern again.

32Based on the evidence before me, I do not find that there are reasonable grounds for the belief that the appellant will not observe RECO's regulatory requirements nor that the Registrar has met the onus of demonstrating that the past conduct of the appellant affords reasonable grounds for the belief that he will not carry on business in accordance with the law and with integrity and honesty.

Issue: Has the appellant provided a false statement in his application for registration: s. 10 (1)(a)(iii) of the Act

33The Registrar relies heavily on the application for registration; it is the means by which an applicant introduces themselves to the Registrar. Here, the Registrar concedes that the appellant provided voluminous material which was helpful to their assessment of his 'fitness for registration'. He disclosed his criminal record and provided court transcripts that were available to him.

34The appellant's application was received by RECO on October 3, 2017. The questions to which the Registrar alleges that the appellant provided a false statement are on page 3 of the application. Question 5 asks whether there are "any unpaid judgments and/or unpaid debts outstanding including but not limited to, CRA requirement to pay and garnishments". The appellant responded "no". The Registrar states that this is incorrect given the outstanding $650 fine arising from the 2014 conviction. Ms. Volpe acknowledged that the word "fine" is not used in the question. This may have resulted in some misunderstanding on the appellant's part. And while he could have called someone at RECO to get clarification if he was confused, it is important to note that when he provided the Registrar with the documentation relating to his charges and convictions, he included the documentation relating to the outstanding fine. There was no apparent intent to mislead the Registrar about this.

35The next question on the application which causes the Registrar concern is question 6: "have you ever had a registration and/or licence or professional status of any kind refused, suspended, revoked, or cancelled...". The appellant responded "no". In fact, his driver's licence had been suspended, several times. Shortly thereafter, and of his own accord, he provided a replacement page and responded "yes" to this question. That incorrect answer, rectified by him, cannot be reasonably be considered to be a false statement. Rather, it falls into the category of innocent mistake made, and corrected.

36When cross-examined, Ms. Volpe stated that despite receiving all the information requested, it is the explanation provided by the appellant regarding several of the charges and convictions that are the real concern. The Registrar believes that the appellant downplayed his participation and culpability in some of the occurrences, in particular, the April 2006 and the September 2007 convictions.

37I have referred to the explanation given for the April 2006 conviction at paragraph 26 above. Again, the Registrar's evidence is that they believe that this is not truthful, but could provide no basis for that belief. Ms. Volpe acknowledged that the appellant provided all documentation available relating to this occurrence, but they are simply not satisfied with the explanation. This is not a situation where the appellant provided a version of events in the explanation that cannot be reconciled with the facts when he plead guilty. There is no evidence that the appellant here has misrepresented the circumstances of his 2006 conviction.

38Regarding the 2007 conviction, the Registrar appears greatly troubled by the explanation provided. The appellant stated that he drove while his licence was suspended and "although I have no excuse for this; I had to drive home due to a family emergency". Subsequent to providing this written explanation to the Registrar, the appellant provided the transcript of the proceeding at which he pled guilty. His lawyer stated to the court that the appellant really had no reason why he was driving, stating on the record: "I asked him about that, and there wasn't any emergency or anything like that." In light of this statement in the transcript, the Registrar concluded that the appellant's explanation, citing a family emergency, was misleading. Ms. Volpe stated that though they did not ask for clarification, she would have expected that one would be forthcoming. He did not properly revise his explanation in their view.

39In cross-examination, the appellant agreed that he did not correct his lawyer in court. He also conceded that on reflection, his being in the car may have had nothing to do with a family emergency. The question is whether this, in light of all the disclosure that was provided to RECO with his application in October and November 2017, can be reasonably characterized as a false statement that should disentitle him for registration. Why he was driving is less important than the very fact that he was driving when he was prohibited from doing so. He did acknowledge that he had no excuse for driving. He was not shirking culpability nor do I find that he knowingly made a false statement in his 2017 explanation regarding an event in 2007. The passage of 10 years is not insignificant in terms of recollection. Extracting from the entirety of the explanations provided on dated offences a statement which could possibly be interpreted as false, given the extensive disclosure provided by the appellant, suggests a level of scrutiny which, on these facts, seems unwarranted. This is not a case where, as in Registrar, Motor Vehicle Dealers Act, 2002 v. Vernon, 2016 ONSC 304 (Div. Ct.), the Tribunal can reasonably conclude that the appellant knowingly made false statements about important facts.

40The facts, especially in the context of the fulsome disclosure provided by the appellant, do not support a conclusion that the appellant knowingly made a false statement on his application for registration which disentitles him to registration.

Other business

41In the appellant's testimony, he disclosed that he is involved in a charitable event business. While he disclosed his Custom Built business in response to question 2 on the application form: "Are you, or will you be, registered/licensed, engaged or employed in any other business, occupation or profession?" he did not disclose this enterprise. Because it was new information to the Registrar at the hearing, it did not form part of the Notice of Proposal. He was, however, cross-examined by Registrar's counsel about the fact that he did not disclose it. His explanation was that he did not consider it to be captured by that question. It is a charitable event for the Afghan community. Afghan musicians are brought to Canada to perform and money raised supports the community. It is not a yearly event.

42This is not a business carried on for gain or profit. There is no suggestion that this work by the appellant is a business or occupation that would raise concerns about a conflict of interest, such as, for example, a mortgage broker business. Therefore, I do not find that this was a material failure to disclose by the appellant.

Terms and Conditions

43Ms. Volpe stated that the Registrar looks at terms and conditions as an option permitting registration. She noted that a real estate agent is largely an unsupervised profession and for that reason the Registrar needs to have faith that a registrant will conduct himself accordingly with consumers. It is the Registrar's position that in circumstances such as this, the Registrar has concerns about an applicant's past conduct and ability to comply with the law, conditions are deemed not to be appropriate.

44In light of the findings I have made in this decision, I have concluded that conditions on the appellant's registration are not warranted. In the circumstances of this case, the Act and its regulations, which codify the professional, ethical and disclosure obligations of real estate agents, are appropriate to meet the consumer protection mandate.

ORDER

45Having heard the evidence and submissions of the parties, and pursuant to the authority vested in the Tribunal under Act, I direct the Registrar not to carry out the Proposal to refuse registration to the appellant.