COURT OF APPEAL FOR ONTARIO
CITATION: Baxter v. Ontario (Real Estate and Business Brokers Act Registrar), 2012 ONCA 543
DATE: 20120820
DOCKET: C54783
Simmons, Blair and LaForme JJ.A.
BETWEEN
Timothy Baxter and T. Baxter Real Estate Ltd.
Applicants (Respondents)
and
Registrar, Real Estate and Business Brokers Act, 2002
Respondent (Appellant)
Robert A. Maxwell and George P. Drametu, for the appellant
Carolyn R. Brandow, for the respondent
Heard: May 28, 2012
On appeal from the order of the Divisional Court (Justices Kent and Aston; Justice Matlow, dissenting), dated July 12, 2011, with reasons reported at 2011 ONSC 2497, 282 O.A.C. 201, dismissing an appeal from the order of Vice-Chair Elizabeth L. Sproule of the Licence Appeal Tribunal, dated January 25, 2010.
Simmons J.A.:
(1) Introduction
[1] The Registrar under the Real Estate and Business Brokers Act, 2002, S.O. 2002, c. 30, sch. C, is responsible for determining whether real estate brokers and brokerages are entitled to registration, or to a renewal of their registration, under the Act. Where the Registrar proposes to revoke a registration, he or she is required to give notice to the registrant, and the registrant is entitled to a hearing before the Licence Appeal Tribunal. On the hearing, the Tribunal proceeds de novo and does not defer to the Registrar’s opinion.
[2] In this case, the Registrar proposed to revoke the registrations of a brokerage firm and the broker who was the principal of the brokerage firm under ss. 10(1)(a)(ii) and 10(1)(d)(iii) of the Act, because of their involvement in several transactions that resulted in mortgage fraud.
[3] Specifically, the broker and his firm acted for an individual who purchased several properties and then relisted them within a short period at significantly inflated prices. As a result of these transactions, mortgagees advanced funds based on the inflated prices, and eventually suffered losses.
[4] Following a hearing, the Licence Appeal Tribunal approved the proposal by the Registrar to revoke the registration of the brokerage firm, but directed the Registrar not to carry out his proposal to revoke the registration of the broker who was the principal of the brokerage firm.
[5] The Registrar appealed the decision of the Tribunal concerning the registration of the broker to the Divisional Court. A majority of the Divisional Court upheld the Tribunal’s decision.
[6] The Registrar raises multiple issues on appeal to this court. The main issues are: (i) whether the Divisional Court erred in failing to find that the Tribunal erred in its statement and application of the test for revocation under s. 10; (ii) whether the Divisional Court erred in failing to find that the Tribunal applied an incorrect standard of proof; (iii) whether the Divisional Court erred in failing to find that the Tribunal erred in its findings of fact.
(2) Background
(i) The Registrar’s Proposal and the Broker’s Response
[7] Timothy Baxter is a registered broker under the Act. Prior to the Licence Appeal Tribunal’s decision, he was also the principal of the registered brokerage firm, T. Baxter Real Estate Ltd. (“Baxter Real Estate”).
[8] In 2008, the Registrar proposed to revoke the registrations of Mr. Baxter and Baxter Real Estate under the Act.
[9] The Registrar alleged that Mr. Baxter and Baxter Real Estate acted on the purchase of several properties for business associates, and then knowingly assisted in re-listing these properties at greatly inflated prices. At least two consumers complained that they were harmed and various mortgage lenders reported losses.
[10] Relying on these allegations, the Registrar claimed that Mr. Baxter was no longer entitled to registration because, under s. 10(1)(b)(ii) of the Act, “[t]he past conduct of Baxter afford[ed] reasonable grounds for belief that he [would] not carry on business in accordance with law and with integrity and honesty.”
[11] In relation to Baxter Real Estate, the Registrar claimed that it was no longer entitled to registration because, under s. 10(1)(d)(iii) of the Act “the past conduct of Baxter, its sole officer and director, afford[ed] reasonable grounds for the belief that its business [would] not be carried on in accordance with the law and with integrity and honesty.”
[12] In response to the Registrar's allegations, Mr. Baxter denied any “knowledge of any suspicious business activity or conduct that [he or his brokerage] knew or ought to have known was improper, unethical, or illegal.”
(ii) The Hearing before the Tribunal
[13] Evidence at the hearing revealed that Mr. Baxter and Baxter Real Estate acted on nine or ten transactions between April of 2004 and November of 2007, in which a client purchased properties and then “flipped” them at inflated prices within a short period of time.
[14] The transactions all followed a similar pattern. Mr. Baxter received instructions by e-mail from a Mr. Alton concerning properties that Mr. Alton was interested in buying. Usually, Mr. Baxter did not view these properties with Mr. Alton. After a property was acquired, Mr. Alton provided instructions by e-mail or telephone, first regarding the relisting price, and then regarding the purchaser and the sale price. In all cases, the properties were relisted for amounts substantially more than the initial purchase price – more than double in a number of cases – within a very short period of time. In most instances, but not all, the ultimate purchasers were associates of Mr. Alton.
[15] Baxter Real Estate represented all parties in these transactions but no Baxter Real Estate representatives met with the parties, provided any market analysis or inspected the properties. Mr. Baxter was instructed not to put signs on the properties and not to show them to any buyer found by Mr. Alton – which all the buyers appear to have been. Mr. Baxter merely prepared the paperwork and provided it to Mr. Alton for the parties to sign.
[16] In his defence, Mr. Baxter claimed that Mr. Alton was a sophisticated investor who was inflexible in his demands. He also noted that all “re-sales” were conditional on financing and that he expected the appraisers would do their job. Finally, he relied on the fact that, in each case, he disclosed in the relevant documentation that he had not physically shown the property to the buyer.
(iii) The Tribunal’s Decision
[17] The Tribunal found that Mr. Baxter had been cooperative with the investigation by the Real Estate Council of Ontario and that the facts were not in issue. Rather, the real issue was how to characterize Mr. Baxter's conduct. The Tribunal summarized its conclusions as follows:
In summary, the Tribunal finds that Mr. Baxter knew that all the properties, (reviewed in these proceedings), that he helped Mr. A. sell were sold at inflated prices. He knew that sometimes they were being transferred to related parties and should have known that the MLS listings and agreements of purchase and sale he was producing did not accurately represent the value of the properties involved and that they could be used to misrepresent the value of the properties to mortgage lenders. The Tribunal also finds that in some instances Mr. Baxter did not know whether the purchasers were related. Yet he did not alter his conduct and provide them with any services notwithstanding Baxter Realty's representations to do so. He had early warnings by his own client’s conduct and by other parties that should have raised his suspicions but he chose to ignore them all.
Having considered all the evidence the Tribunal finds that Mr. Baxter's conduct has fallen well short of the standard expected of a broker. Even if he is given every benefit of the doubt and his claim of ignorance is accepted, his demonstrated level of understanding of an agent's duties and responsibilities to the parties of a trade in real estate has caused the Tribunal to have serious doubts as to whether Baxter Realty, under Mr. Baxter's direction, would carry on business with honesty and integrity in accordance with the law.
[18] Concerning Baxter Real Estate, the Tribunal rejected a suggestion that consumers could be adequately protected if the operations of the brokerage were supervised by another responsible experienced registrant. The Tribunal stated that because the brokerage is responsible for the conduct of its brokers and salespersons, “[t]here must be clarity as to who consumers can hold accountable and there must be certainty that the brokerage is being directed by a knowledgeable, competent, diligent, honest individual.”
[19] The Tribunal concluded that Mr. Baxter's conduct had demonstrated “if not a lack of honesty and integrity, then such a lack of understanding, or indifference, as to how Baxter Realty … should conduct itself, so as to provide reasonable grounds for the belief that Baxter Realty [would] not carry on business with honesty and integrity and in accordance with the law.” Thus, the Tribunal determined that Baxter Realty’s licence should be revoked.
[20] Concerning Mr. Baxter the Tribunal stated:
As stated above, the Tribunal finds that Mr. Baxter's failure to perform the duties expected of a registrant … demonstrates a serious lack of understanding of, and in some instances arguably wilful indifference to, the duties and obligations of a registrant. In coming to this conclusion the tribunal has given Mr. Baxter the benefit of any doubt. Although his conduct raises serious concern, in the Tribunal’s opinion it is not sufficient grounds to conclude that Mr. Baxter will not carry on business with honesty and integrity and in accordance with the law.
[21] The Tribunal noted that Mr. Baxter had “operated in the industry without incident for many years.” However it said that “given his conduct in the recent events it [was] clear that he require[d] further education and guidance regarding the roles and responsibilities of a registrant and the changing issues facing the real estate industry.” In the words of the Tribunal, “[r]egistration as a broker subject to [various conditions], including supervision and educational requirements would therefore be appropriate”.
(iv) The Reasons of the Majority of the Divisional Court
[22] The majority of the Divisional Court began by noting that there were conflicting decisions of the court concerning whether the Tribunal has jurisdiction to impose conditions on a person’s licence where it finds that person to be “entitled” to registration under s. 10(1) of the Act. The majority indicated that the issue was canvassed with counsel and that the court proceeded on the understanding that they would not need to address the conflicting authorities, because neither Mr. Baxter nor Baxter Real Estate were challenging the Tribunal's authority to attach conditions to Mr. Baxter's registration.
[23] The majority set out the standard of review as correctness on questions of general law that are not aspects of the core function of the Tribunal, and reasonableness on questions of “mixed fact and law, discretion, policy and the interpretation of sections 10, 13, and 14 of the Real Estate and Business Brokers Act”.
[24] The majority rejected the Registrar's argument that, by using the words “every benefit of the doubt” and “benefit of any doubt” in its reasons, the Tribunal held the Registrar to a higher, quasi-criminal standard of proof rather than the correct, “balance of probabilities”, civil standard. In the majority’s view, when considered in context, the impugned language was used “only in reference to a credibility consideration rather than a standard of proof consideration.”
[25] Concerning the Registrar's contention that, given the Tribunal's findings and observations concerning Mr. Baxter's credibility and knowledge, it was unreasonable for the Tribunal to fail to find that Mr. Baxter knowingly participated in a mortgage fraud scheme, the majority first observed that wilful blindness and recklessness can constitute imputed knowledge. The majority went on to opine that “it was unnecessary for the Tribunal to label or categorize [Mr.] Baxter’s state of mind.” In the majority’s view “[t]he germane issue was how to assess and weigh his culpability or misconduct in drawing any conclusions about how he would conduct himself in the future.”
[26] The majority noted multiple findings by the Tribunal concerning Mr. Baxter's state of mind. For example, the Tribunal’s statements: (i) “it is difficult to understand how an experienced real estate agent would not be suspicious”; (ii) “[c]learly Mr. Baxter would have known that the listing prices were a gross exaggeration”; (iii) “[h]e had early warnings … that should have raised his suspicions but he chose to ignore them all”; and, other similar statements.
[27] The majority concluded that the Tribunal went as far as it needed to go in its conclusions on Mr. Baxter’s state of mind. The Registrar's argument was effectively a request for the Divisional Court to substitute its own view of the evidence for that of the Tribunal.
[28] The majority also rejected the Registrar's arguments that it was improper for the Tribunal to have regard to mitigating circumstances in its s. 10 analysis and that the Tribunal's reasons were inadequate for meaningful appellate review.
[29] Finally, the majority concluded that the Tribunal understood the test under s. 10 of the Act and properly applied that test in its reasons.
(3) Subsections 10(1)(a)(ii) and 10(1)(d)(iii) of the Act
[30] Subsections 10(1)(a)(ii) and 10(1)(d)(iii) of the Act read as follows:
10 (1) An applicant that meets the prescribed requirements is entitled to registration or renewal of registration by the registrar unless,
(a) the applicant is not a corporation and,
(ii) 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
(d) the applicant is a corporation and,
(iii) the past conduct of its officers or directors or of an interested person in respect of its officers or directors or of an interested person in respect of the corporation affords reasonable grounds for belief that its business will not be carried on in accordance with the law and with integrity and honesty….
(4) Discussion
[31] The parties do not take issue with the Divisional Court’s statement of the standard of review applicable in this case.
(i) Did the Divisional Court err in failing to find that the Tribunal erred in its statement and application of the test for entitlement to registration under s. 10 of the Act?
[32] The Registrar raises several arguments under this heading. First, the Registrar submits that the Tribunal erred in its statement of the test for entitlement to registration under s. 10 of the Act.
[33] I recognize that in, at least three places in its reasons, the Tribunal misstated the test under s. 10 as being whether Mr. Baxter’s conduct affords reasonable grounds “to conclude” that he and/or Baxter Real Estate would not carry out on business in accordance with law and with integrity and honesty. The proper test is whether the conduct affords reasonable grounds “to believe” that they would not do so. However, the Tribunal stated the test under s. 10 correctly when setting out the issue in the case and in several other places during the course of its reasons.
[34] As the Registrar points out in his factum, because the test under s. 10 involves predicting future conduct based on past conduct, it is impossible on a practical level to arrive at “conclusions” about future conduct. Instead, one can only form beliefs.
[35] Reading the Tribunal’s reasons fairly and as a whole, in my view, it is apparent that the Tribunal was using the word “conclude” in a vernacular sense and treating it as a synonym for “believe”. Therefore, I am not persuaded that the Tribunal’s misstatement of the test constitutes reversible error.
[36] The Registrar also argues that, after finding Baxter Real Estate was not entitled to registration, it was an error for the Tribunal to determine that Mr. Baxter was entitled to registration based on identical facts and the same legal test.
[37] I do not accept this submission because, in my view, the issues presented by the legal test are different when applied to a broker and a brokerage.
[38] Mr. Baxter is a broker; Baxter Real Estate is a brokerage. As pointed out by the Registrar, a brokerage has additional responsibilities under the Act, such as for accounting and supervision of salespersons, beyond those possessed by a broker.
[39] When applied to Mr. Baxter, the legal test under s. 10(1)(a)(ii) of the Act is whether his past conduct affords reasonable grounds to believe that he will not carry on business as a broker appropriately. When applied to Baxter Real Estate, the legal test under s. 10(1)(d)(iii) of the Act is whether the past conduct of its officers and directors affords reasonable grounds for belief that its business as a brokerage will not be carried on appropriately. Because a brokerage has greater responsibilities than a broker under the Act, the term “business” as it appears in s. 10 has a broader scope in relation to a brokerage than it does in relation to a broker.
[40] The Tribunal demonstrated that it was alive to this distinction when it said the following:
The brokerage is the agent and a separate legal entity, responsible for the conduct of its brokers and salespersons, supervision does not change this. There must be clarity as to who consumers can hold accountable and there must be certainty that the brokerage is being directed by a knowledgeable, competent, diligent, honest individual. The Tribunal concludes that Mr. Baxter's conduct has demonstrated, if not a lack of honesty and integrity, then such a lack of understanding, or indifference, as to how Baxter Realty, as an agent should conduct itself, so as to provide reasonable grounds for the belief that Baxter Realty will not carry on business with honesty and integrity and in accordance with the law.
[41] In my view, because a brokerage has greater responsibilities, it was open to the Tribunal to find that Mr. Baxter’s past conduct supported a finding that Baxter Realty was not entitled to registration under s. 10, even though it did not reach the same conclusion with regard to Mr. Baxter, himself.
[42] The Registrar also argues that the Tribunal erred in law by making its determination of Mr. Baxter’s continuing entitlement to registration contingent on conditions without making a threshold determination that Mr. Baxter was not entitled to registration under s. 10(1)(a)(ii) of the Act.
[43] I do not accept this argument. In its reasons, the Tribunal stated:
Although his conduct raises serious concern, in the Tribunal’s opinion it is not sufficient grounds to conclude that Mr. Baxter will not carry on business with honesty and integrity and in accordance with the law.
[44] Although the Tribunal imposed conditions on Mr. Baxter’s registration, it did not indicate that its finding that Mr. Baxter’s past conduct had not met the threshold under s. 10(1)(a)(ii) for deregistration was contingent on those conditions.
[45] As the majority of the Divisional Court noted, Mr. Baxter did not cross-appeal to the Divisional Court. It was, thus, unnecessary for the Divisional Court determine whether the Tribunal had jurisdiction to impose conditions in the absence of a threshold determination under s. 10(1)(a)(ii) that Mr. Baxter was not entitled to registration. Similarly, it is unnecessary that we make such a determination.
[46] Therefore, the Registrar’s request that this court resolve, what the Registrar submits are, conflicting authorities from the Divisional Court on this point must await another case.
(ii) Did the Divisional Court err in failing to find that the Tribunal erred in its application of the standard of proof?
[47] The Registrar argues that two passages in the Tribunal’s reasons demonstrate that the Tribunal held the Registrar to a higher, quasi-criminal, standard of proof than the applicable standard of proof namely, on a balance of probabilities. The two impugned passages read as follows:
Having considered all the evidence the Tribunal finds that Mr. Baxter's conduct has fallen well short of the standard expected of a broker. Even if he is given every benefit of the doubt and his claim of ignorance is accepted, his demonstrated level of understanding of an agent's duties and responsibilities to the parties of a trade in real estate has caused the Tribunal to have serious doubt as to whether Baxter Realty, under Mr. Baxter's direction, would carry on business with honesty and integrity in accordance with the law.
As stated above, the Tribunal finds that Mr. Baxter's failure to perform the duties expected of a registrar, in the series of transactions focused on, demonstrates a serious lack of understanding of, and in some instances arguably wilful indifference to, the duties and obligations of a registrant. In coming to this conclusion the Tribunal has given Mr. Baxter the benefit of any doubt. Although his conduct raises serious concern, in the Tribunal's opinion it is not sufficient grounds to conclude that Mr. Baxter will not carry on business with honesty and integrity and in accordance with the law. [Emphasis added.]
[48] I agree with the majority of the Divisional Court that the impugned passages do not reflect the Tribunal's application of the standard of proof.
[49] In the first passage, the Tribunal was saying that even if it had accepted Mr. Baxter’s claim of complete ignorance, it would still find that Baxter Realty's registration should be revoked. In other words, even if the Tribunal had not found Mr. Baxter both wilfully blind and reckless, the Tribunal would still have approved the Registrar’s proposal to revoke Baxter Realty’s registration.
[50] It is true that the second passage could have been articulated much more clearly. Considered in the context of the Registrar’s claim that Mr. Baxter was a knowing participant in a fraudulent scheme, arguably this passage suggests that the Tribunal required the Registrar to prove the relevant claims on, at least, a quasi-criminal standard. However, I do not accept that such an interpretation of this passage is the correct one.
[51] Read fairly, in my view, the Tribunal was simply saying that, in coming to its conclusion that Mr. Baxter had demonstrated a serious lack of understanding of his duties and wilful blindness, the Tribunal had given Mr. Baxter every benefit of the doubt. Accordingly, I do not read this passage as saying that the Tribunal held the Registrar to a quasi-criminal standard of proof in establishing the allegations against Mr. Baxter.
(iii) Did the Divisional Court err in failing to find that the Tribunal erred in its findings of fact?
[52] The Registrar advances three interrelated arguments concerning the Tribunal's findings of fact. First, the Registrar says the Tribunal erred by making what appear to be equivocal findings of fact. Second, the Registrar argues that the Tribunal erred by failing to make clear findings about Mr. Baxter's state of knowledge in relation to the mortgage fraud. Third, the Registrar argues that the Tribunal’s reasons are inadequate for meaningful appellate review.
[53] I do not agree with the Registrar’s arguments. In my view, the Tribunal’s reasons are not equivocal and do, in fact, make a finding as to Mr. Baxter’s state of knowledge regarding the fraud. The reasons indicate that the Tribunal was satisfied that Mr. Baxter was wilfully blind and reckless – and therefore had imputed knowledge of the mortgage fraud; however, the Tribunal was not satisfied that Mr. Baxter actually turned his mind to the fraud. Further, the reasons indicate that the Tribunal was satisfied that the primary cause of the appellant’s misconduct was his failure to appreciate the full scope of his duties, rather than dishonesty per se. Finally, while I agree that portions of the Tribunal’s reasons could have been clearer, when read as a whole and in context, I am satisfied that the Tribunal’s reasons are adequate for the purposes of appellate review.
(a) The Tribunal’s findings are not equivocal
[54] I disagree with the Registrar that the Tribunal’s reasons are internally contradictory.
[55] Many passages in the Tribunal's reasons make it clear that the Tribunal was satisfied that Mr. Baxter was both wilfully blind and reckless. The following portion of the Tribunal’s summary is sufficient to illustrate the point:
In summary, the Tribunal finds that Mr. Baxter knew that all the properties, (reviewed in these proceedings), that he helped Mr. A sell were sold at inflated prices. He knew that sometimes they were being transferred to related parties and should have known that the MLS listings and agreements of purchase and sale he was producing did not accurately represent the value of the properties involved and that they could be used to misrepresent the value the properties to mortgage lenders. The Tribunal also finds that in some instances Mr. Baxter did not know whether the purchasers were related. Yet he did not alter his conduct and provide them with any services notwithstanding Baxter Realty's representations [sic] to do so. He had early warnings by his own client’s conduct and by other parties that should have raised his suspicions but he chose to ignore them all. [Emphasis added.]
[56] A significant part of the problem which the Registrar points to in its argument arises from the sections in which the Tribunal set out its dispositions in relation to Baxter Real Estate, and Mr. Baxter, respectively. I have already quoted from these sections, in part, above. Read superficially, the portions of these passages emphasized below potentially contradict the Tribunal's earlier findings of wilful blindness and recklessness:
Having considered all the evidence the Tribunal finds that Mr. Baxter's conduct has fallen well short of the standard expected of a broker. Even if he is given every benefit of the doubt and his claim of ignorance is accepted, his demonstrated level of understanding of an agent's duties and responsibilities to the parties of a trade in real estate has caused the Tribunal to have serious doubt as to whether Baxter Realty, under Mr. Baxter's direction, would carry on business with honesty and integrity in accordance with the law.
The Tribunal concludes that Mr. Baxter's conduct has demonstrated, if not a lack of honesty and integrity, then such a lack of understanding, or indifference, as to how Baxter Realty, as an agent should conduct itself, so as to provide reasonable grounds for the belief that Baxter Realty will not carry on business with honesty and integrity and in accordance with the law.
As stated above, the Tribunal finds that Mr. Baxter's failure to perform the duties expected of a registrant, in the series of transactions focused on, demonstrates a serious lack of understanding of, and in some instances arguably wilful indifference to, the duties and obligations of a registrant. In coming to this conclusion the Tribunal has given Mr. Baxter the benefit of any doubt. Although his conduct raises serious concern, in the Tribunal's opinion it is not sufficient grounds to conclude that Mr. Baxter will not carry on business with honesty and integrity and in accordance with the law.
[57] However, in my view, interpreting these passages as contradictory to the Tribunal’s findings of wilful blindness and recklessness is not a fair reading of these sections in the context of the reasons as a whole. As I have said already, in my opinion, the first quoted paragraph simply reflects a determination by the Tribunal that, even if Mr. Baxter's claim of complete ignorance was accepted, Baxter Real Estate's registration should be revoked. As for the second and third paragraphs, I read them as poorly worded findings that – although Mr. Baxter had failed in his duties and, in doing so, had been wilfully blind – a primary cause of Mr. Baxter’s professional failings was his “serious lack of understanding” of his duties.
(b) The Tribunal’s reasons do include a finding as to Mr. Baxter’s knowledge or lack of knowledge of fraud
[58] The Registrar also argues that the Tribunal erred in failing to find, or to explain why it did not find, that Mr. Baxter was a knowing participant in the fraud, and, in any event, in failing to conclude that Mr. Baxter’s past conduct afforded reasonable grounds to believe that he would not carry on business in accordance with law and with integrity and honesty.
[59] I do not accept these arguments. In my view, it is clear that, although the Tribunal found that Mr. Baxter was both wilfully blind and reckless, the Tribunal was not satisfied that he actually turned his mind to the presence of fraud. I have already reviewed the portions of the Tribunal’s reasons that demonstrate its findings of wilful blindness and recklessness.
[60] In my view, it is implicit in its reasons that the Tribunal was not satisfied that Mr. Baxter recognized the presence of fraud given that: (i) the Tribunal did not make a finding that Mr. Baxter actually recognized the presence of fraud; and, (ii) its finding that a primary cause of Mr. Baxter’s misconduct was his “serious lack of understanding” of his duties.
[61] As I read the Tribunal’s reasons, its explanation for concluding that Mr. Baxter did not recognize the presence of fraud was grounded in, among other things, the facts that Mr. Baxter was completely co-operative with the investigation, that he made no effort to mislead the investigators, and that he had 31 years of involvement in the industry with no complaints of prior fraudulent conduct. The Tribunal relied on the same factors in concluding there were not sufficient grounds to find that Mr. Baxter would not carry on business in accordance with law and with integrity and honesty. The Tribunal made the following observations, juxtaposing the facts of this case to those in Khetani (Re), [2006] O.L.A.T.D. No. 473, where the registrant’s licence was, in fact, revoked:
It has been emphasized and the Tribunal accepts, that Mr. Baxter has been completely co-operative with RECO in its investigations. He made full disclosure and there was no attempt to falsify documents or mislead RECO in any way. Also, that there have been no prior complaints against Mr. Baxter and he has never been convicted of a crime. As stated he has been in the industry 31 years.
In [Khetani (Re)], the Tribunal found that the registrant “knew she was involving herself in a series of questionable transactions, even if she might not have understood the full extent of the fraud, and by not performing the essential services that a realtor provides she prlayer a role in the fraudulent transactions.” Where the facts differ from the present case is that the registrant Khetani bore false witness to signatures and her testimony was not found to be credible. The Tribunal found this to be evidence of her honesty and integrity. Notwithstanding that Mr. Baxter has significantly failed to properly carry out his duties as a registrant over a series of transactions, there is no evidence, as in the Khetani case, of falsified documents or false testimony.
Although his conduct raises serious concern, in the Tribunal’s opinion it is not sufficient grounds to conclude that Mr. Baxter will not carry on business with honesty and integrity and in accordance with the law. Mr. Baxter has operated in the industry without incident for many years. However, given his conduct in the recent events it is clear that he requires further education and guidance regarding the roles and responsibilities of a registrant and the changing issues facing the real estate industry.
[62] While the factors on which the Tribunal relied may not have persuaded other triers of fact, in my view, it was open to the Tribunal to rely on these facts in both declining to find that Mr. Baxter was a knowing participant in the fraud, and concluding that a primary cause of Mr. Baxter’s misconduct was his “serious lack of understanding” of his duties.
[63] The assessment under s. 10(1)(a)(ii) involves making a prediction about future behaviour based on past conduct. It required the Tribunal to consider, not only Mr. Baxter’s revocation-related past misconduct, but also his past conduct, in general. In my view, particularly in the light of the Tribunal’s finding that a “primary cause” of Mr. Baxter’s misconduct was his lack of understanding of his duties, it was open to the Tribunal – even in the face of findings of wilful blindness and recklessness –to find that Mr. Baxter’s past conduct did not afford reasonable grounds to believe he would not carry on the business of a broker in accordance with law and with integrity and honesty in the future.
[64] I also note that the assessment under s. 10 is within the scope of the Tribunal’s core competency. Like the majority of the Divisional Court, the Registrar’s argument on this point ultimately strikes me as a request to substitute our view of the evidence for that of the Tribunal. That is not this court’s role on appellate review.
(c) The Tribunal’s reasons are not insufficient
[65] Finally, despite the Registrar’s arguments on sufficiency, I am satisfied that, on the whole, the Tribunal’s reasons are sufficient.
[66] As noted above, I agree that some sections of the Tribunal’s reasons could have been clearer. However, when read as a whole and in context, I am satisfied that the Tribunal’s reasons are adequate for the purposes of appellate review.
(5) Disposition
[67] Based on the foregoing reasons, the appeal is dismissed.
[68] If so advised, the parties may make brief written submissions concerning
costs. The respondent may make submissions within 14 days and the appellant within 21 days, following the release of these reasons.
"Janet Simmons J.A."
"I agree R.A. Blair J.A."
"I agree H.S. LaForme J.A."
Released: "R.A.B." August 20, 2012