Motion pursuant to s. 14(9) of the Real Estate and Business Brokers Act, 2002, S.O. 2002, c.30, Sch. B, to Stay of an Order of the Tribunal to revoke registrations.
Between:
Amarjot Lamba and Whitehill Realty International Inc.
Appellants/Moving Parties
-and-
Registrar, Real Estate and Business Brokers Act, 2002
Respondent/Responding Party
DECISION and ORDER
ADJUDICATOR:
Stephen Scharbach, Member
APPEARANCES:
For the Appellant/ Moving Party:
Carolyn Brandow, Counsel John A. M. Petrella, Counsel
For the Respondent:
Jonathan Miller, Counsel
Heard at Toronto, Ontario:
April 28, 2022
A. Overview
1This is a motion brought by the appellants, Amerjot Lamba and Whitehill Realty Inc. (“appellants”), requesting a stay of a March 3, 2022, Tribunal order pending their appeal of that order.
2The order directed the Registrar under the Real Estate and Business Brokers Act, 2002 (“Act”) to revoke Mr. Lamba’s registration as a real estate broker, and to revoke Whitehill Realty International Inc.’s (“Whitehill”) registration as a real estate brokerage. Mr. Lamba is a director and broker of record for Whitehill.
3By way of background, in April 2021 the Registrar issued a notice of proposal to revoke the appellants’ registrations. The appellants requested a hearing before this Tribunal.
4A hearing was held, and the Tribunal issued the March 3, 2022 decision and order (“decision”) to revoke the appellants’ registrations. The appellants have appealed that decision to the Divisional Court.
5The decision was based on the Tribunal’s conclusion that:
- Mr. Lamba’s past conduct afforded reasonable grounds for belief that both he and Whitehill will not carry on business in accordance with law and with integrity and honesty, and
- Mr. Lamba knowingly made a false statement in his registration renewal application by denying that there were any outstanding orders or judgements against him.
6In accordance with the Tribunal’s decision, the Registrar revoked the appellants’ registrations effective March 5, 2022.
7Under s.11 of the Licence Appeal Tribunal Act,1999, a party may appeal a Tribunal decision or order made under the Act to the Divisional Court. Leave to appeal is not required.
8On March 30, 2022, the appellants filed a notice of appeal of the Tribunal’s decision with the Divisional Court. Counsel informed me that the date for the appeal has now been scheduled for September 15, 2022, about four months from now.
9The appellants brought this motion seeking a stay of the Tribunal’s decision pending their appeal. Their motion is made under s.14(9) of the Act which provides that:
Even if a registrant appeals an order of the Tribunal under section 11 of the Licence Appeal Tribunal Act, 1999, the order takes effect immediately but the Tribunal may grant a stay until the disposition if the appeal.
10If granted, the effect of the stay would be to reinstate the appellants’ registrations and allow them to resume trading in real estate until the appeal is heard.
B. Decision
11For the reasons set out below. I decline to grant a stay of the Tribunal’s March 3, 2022 decision.
C. Analysis
The Test on a Motion for a Stay Pending Appeal
12The parties agree on the test to be applied on a motion for a stay pending appeal. It is well established and is derived from the 1994 Supreme Court of Canada case RJR-MacDonald Inc. v. Canada (Attorney General)1 (“RJR”). The party seeking the stay must prove on a balance of probabilities that:
(i) the appeal raises a serious issue to be tried.
(ii) the applicant will suffer irreparable harm if the stay is not granted; and
(iii) the balance of convenience favours granting the stay.
13Those three criteria are not “watertight compartments”. They are factors to be considered in totality to determine the fundamental issue on such a motion which is whether the interests of justice do or do not justify issuance of a stay2.
14The parties referred me to a number of Court and Tribunal decisions that have considered the RJR analysis in cases which, like this one, involve a motion to stay a decision to revoke a licence or registration to carry on business. I have taken those cases into account and refer to some of them below.
D. Application of the Test in the Present Case
(a) Serious Issue to be Tried
15The threshold to meet this aspect of the test is a low one. The appellant need not establish that the appeal will likely be successful, only that it has some chance of success. The cases state this in different terms such as the appeal must be at least arguable3, it must raise a serious issue to be tried4, or the appeal must be neither frivolous not vexatious.5
16I conclude that in this case the appeal raises serious issues to be tried and is neither frivolous nor vexatious. Accordingly, this branch of the test weighs in the appellants’ favour.
17The appellants allege in their Notice of Appeal that the Tribunal made various errors including:
- Unreasonably finding that the Registrar proved that appellants will not carry on business in accordance with the law and with integrity and honesty, and that Lamba made a false statement in his application,
- Failing to engage in a proper analysis and providing inadequate reasons for concluding that no terms or conditions would adequately protect the public,
- Making findings of fact that were unsupported by the evidence,
- Giving insufficient weight to affidavit evidence and evidence of Mr. Lamba’s good character,
- Failing to ensure procedural fairness by denying the appellants’ request that the hearing be recorded once the appellants became unrepresented and denying the appellants an opportunity to call evidence to show that the Registrar was seeking revocation because Mr. Lamba had criticized RECO’s management and operation.
18The Registrar acknowledges that the appellants’ appeal is likely not frivolous and vexatious, and meets the low threshold required to meet this branch of the test. However, the Registrar argues that the appellants’ appeal is weak. Many of the grounds lack specificity and others call into question the Tribunal’s assessment or weight of the evidence which, in the absence of a demonstrated palpable and overriding error, are generally not reviewable on appeal. According to the Registrar, while the appeal probably meets the minimum threshold, its low chance of success suggests that this factor should weigh only minimally in the appellant’s favour.
19I decline to assign weight to this factor based on an analysis of the strength weakness or strength of the appellant’s appeal. The cases to which I was referred to do not take that approach, in fact they suggest that the appellant need not establish likelihood of success, merely that the grounds of appeal are not frivolous and vexatious.
20I am not in a position to comment on likelihood of success of any of the grounds for appeal but I conclude that the appellant’s appeal is not frivolous or vexatious and this aspect of the test weighs in the appellants’ favour.
(b) Irreparable Harm
21With respect to this criterion, the issue is whether a refusal to grant a stay will likely cause harm to the appellant that cannot be remedied if the appeal is ultimately successful.
22According to RJR:
“irreparable “refers to the nature of the harm rather than its magnitude. It is harm which either cannot be quantified in monetary terms or which cannot be cured, usually because one party cannot collect damages from the other. Examples… include instances where one party will be put out of business by the court’s decision, … where one party will suffer permanent market loss or irrevocable damage to its business reputation… or where permanent loss of natural resources will be the result when challenged activity isn’t enjoined.6
23Evidence of irreparable harm must be clear and not speculative7.
24The appellants argue that if the stay is not granted, they will suffer irreparable harm in two ways.
25Firstly, the sole source of the appellants’ income comes from trading in real estate. At present they cannot do business because of the revocation. If a stay is not granted and they are later successful on appeal, the income lost due to the revocation cannot be recovered - there is no mechanism that would allow them to restore that lost income.
26The amount of that loss had not been quantified but the appeal is now scheduled to be heard on September 15, 2022. If the stay is not granted and the appeal is successful, the period during which the appellants will be prevented from trading in real estate will be just over four months from now, or six months since the revocation (on March 5, 2022).
27Secondly, according to Mr. Lamba, he has been in the real estate sales business as a salesperson or broker for almost two decades and has built up a clientele who use his services and refer him to other clients, companies, and organisations with which he does business. He has also developed reliable business relationships with service providers necessary for his business such as mortgage brokers, stagers and advertisers.
28According to Mr. Lamba, if he remains out of business pending the appeal, he will likely lose his client base as well as his relationships with service providers. That will damage his business and likely result in ongoing professional and monetary loss that also cannot be recovered if his appeal is successful.
29I accept that an inevitable result if the stay is refused will be the loss of income that the appellants would otherwise earn from trading in real estate, and that loss will not be recoverable if the appeal is successful.
30I also accept that during the time the appellants are without registration, some existing clients will likely move on, and some referrals will be lost. That may well result in an unquantifiable increase of expense or reduction of income until those relationships are re-established or replaced.
31In summary, I accept that if the stay is not granted and the appeal is successful, the appellants will likely suffer some irreparable harm in the sense that they will experience financial loss that will not be recoverable due to:
- the loss of income while the registrations remain under revocation pending appeal, and
- a potential reduction of income associated with loss of clients and referrals while the registrations remain under revocation.
(c) Balance of Convenience
32This criterion involves a determination of which of the two parties will suffer the greater harm from the granting or refusal of the stay pending the appeal.8
33In this case the Registrar administers the statutory framework for the regulation of real estate brokers and brokerages. The purpose of this regulation is to protect the public by ensuring that those who are registered under the Act and offer their services to the public do so in accordance with the law and with integrity and honesty. Thus, for the purposes of this proceeding, the Registrar represents the public interest.
34This branch of the test therefore involves an assessment of the appropriate balance between the appellants’ private interests and the public interest in ensuring that the public receives competent and honest services from real estate brokers and brokerages.
35After weighing those considerations, I conclude that the balance of convenience weighs in the Registrar’s favour. The potential harm to the public if the stay is granted outweighs the harm to the appellant if the stay is denied.
36With respect to the harm suffered by the appellant if the stay is denied, as described above I conclude that the appellants will likely suffer some unrecoverable financial loss.
37While that harm is irreparable in the sense that such financial losses cannot be recovered, I note that whenever an appeal is taken from a decision to revoke a licence or registration, financial loss will inevitably result. In that connection the Court of Appeal for Ontario has stated:
In virtually all cases where a governing body of professionals decides to revoke a member’s privilege to practice, a financial inconvenience or loss will inevitably result. Thus, although it is a proper factor to consider, it will generally be far from dispositive.9
38I must balance that with the public interest as represented by the Registrar. The Registrar administers the Act and its regulations to ensure that registered brokers and brokerages provide services to the public in accordance with the law, and with integrity and honestly. If a stay is granted, the appellants will be permitted to resume trading in real estate until the appeal is heard.
39In assessing the balance of convenience, I proceed on the assumption that the findings of the Tribunal are correct.10 When I consider those findings, I conclude that the potential harm to the public if a stay is granted clearly outweighs the harm to the appellants if a stay is refused.
40The Tribunal found that Mr. Lamba’s conduct on several occasions was contrary to law, dishonest and lacked integrity. Those findings were made in relation to Mr. Lamba’s conduct both with his clients and with the Registrar. The Tribunal’s findings are detailed and extensive and I will not summarize all of them here. However, they include findings that Mr. Lamba:
- improperly transferred or authorised the transfer of trust funds ($5,000) from Whitehill’s trust account to its general account because the general account had insufficient funds,
- falsely accused his bookkeeper of making the transfer without Lamba’s authorisation or knowledge,
- submitted an affidavit he knew was false that contained a fabricated account of the transfer,
- altered, or caused to be altered, bank statements and created false reconciliation statements which were submitted to RECO to hide the improper use of trust funds,
- improperly withheld trust funds from a client in part to force him to agree to paying a higher commission than the listing agreement provided for,
- threatened to disparage a client to the client’s business contacts in an effort to force the client to pay more commission than was required under the listing agreement,
- told a client’s lawyer that the client is a fraud and will not pay his legal bills,
- sent a threatening text to a client the day before that client was scheduled to give evidence at the Tribunal hearing regarding his dealings with Mr. Lamba,
- demanded a client pay $4,268 to cancel a listing agreement despite agreeing to do so in the agreement, and later threatened to report the client to the Law Society and her employer about his contractual dispute with the client,
- demanded commission payments from another client whose purchase fell through due to lack of financing. When payment was refused, the appellant sent threatening and abusive communications to the client threatening to call Child Services regarding the client’s son and report the client’s alcohol use to his employer and the police. He also sent a letter to the client’s ex-wife criticizing the client’s conduct as the father of her child. All of this was done to force the client to pay commissions that were in dispute,
- failed to respond in a timely way to requests from RECO staff for his response to complaints made by members of the public and was abusive and insulting in some of his communications with RECO staff,
- called 9 character witnesses at the hearing but lied to them regarding the nature of the proceeding. To all but one of them he claimed he was being considered for a seat on the Board of Directors of RECO and they were being asked to testify with respect to his character, professionalism, and honesty,
- knowingly made a false statement in a February 2021 application for registration by denying that there were any unpaid debts or judgements against him or his company. In fact there was an Employment Standards Act order, a judgement for failure to pay rent, and a further judgement for unpaid advertising, all outstanding.
41The Tribunal found that in respect of these matters and others the appellant demonstrated a lack of professionalism, integrity, honesty and a contempt for the law and ordered the immediate revocation of the appellants’ registrations.
42I understand that the appellant takes issue with the Tribunal’s findings, its interpretation and characterisation of the evidence, and the overall procedural fairness of the hearing. However, for the purposes of this motion, I assume the Tribunal’s finding are correct.
43Based on those strong findings of misconduct, I conclude that granting a stay and restoring the appellant’s ability to conduct real estate business pending the appeal will create a harm - a risk to the public - that substantially outweighs the harm the appellant will experience if the stay is refused.
D. Summary
44Taking into account the three RJR factors together, I conclude that the justice of the case requires that the request for a stay be denied.
45The appellants’ appeal is not frivolous and vexatious, and the appellants will suffer unrecoverable financial loss if the stay is refused.
46However, the most significant factor in this case is the public interest. Given the Tribunal’s findings regarding the appellants’ lack of suitability to provide services to the public and lack of co-operation with the regulator, I conclude that the Registrar’s interest in protecting the public outweighs the appellants’ financial interests for the relatively short period until the appeal is concluded.
47The appellant suggested as a solution that Whitehill remain closed, but a stay be granted in respect of Mr. Lamba’s registration so that he can continue to trade in real estate with another brokerage, while being monitored by another unspecified broker. He would have no control over trust funds.
48I decline that suggestion. Mr. Lamba has been found to have misused trust funds, was abusive, threatening and harassing toward clients and the regulator, knowingly provided the regulator with false information, submitted an affidavit he knew was false, lied to witnesses he called in his defence, and threatened a witness just before the hearing. The misconduct took place on multiple occasions despite previous warnings.
49These findings seriously call into question the Mr. Lamba’s honesty and integrity and suggest that he is unwilling or unable to comply with regulatory requirements inherent in doing business in a regulated industry.
50Much of the work of a real estate broker involves unmonitored interactions with clients. Based on the evidence available I am not satisfied that the serious concerns involving Mr. Lamba’s conduct can be realistically and effectively addressed by Mr. Lamba working under another broker.
51In summary, in my view, after applying the analysis from RJR, I conclude that the appellants’ request for a stay should be denied.
E. Order
52Pursuant to s 14(9) of the Real Estate and Business Brokers Act, 2002, the appellants’ request for a stay of the Tribunal’s Order dated March 3, 2022 pending the appellants’ appeals is denied.
LICENCE APPEAL TRIBUNAL
Stephen Scharbach, Member
Released: May 16, 2022
Footnotes
- RJR-MacDonald Inc. v. Canada (Attorney General), 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311.
- Law Society of Ontario v. Fuhgeh, 2021 ONLSTA 24 at paragraph 12
- Fuhgeh at paragraph 12
- RJR, p. 334
- Sazant v. College of Physicians and Surgeons, 2011 CarswellOnt 15914 (ONCA) at paragraphs 6-7
- RJR, p. 341
- Sazant at paragraph 11
- RJR, p. 342
- Sazant at paragraph 11
- Fuhgeh at paragraph 12