Rogerson Law Group has won an important appeal against a Registrar’s ruling denying registration of a real estate salesperson on the basis of her past conduct.

The ruling makes clear that the Registrar must do more than simply rely on past misconduct to deny someone the right to register as a salesperson. Sean Larjani and Andrew Rogerson jointly acted for the client in this case.

What’s the background?

Our client faced regulatory problems when allegations of misconduct were made against her some years ago when employed as a sub-mortgage broker and real estate salesperson in British Columbia. An investigation took place into 21 mortgage transactions that were processed under her licence by her assistant, 15 of which were found to be ‘suspicious’. Her conduct included collecting fees from a consumer without proper disclosure to the broker.

Our client subsequently signed a Consent Order suspending her mortgage registration for life, agreeing to this on the basis that her interests lay in real estate rather than mortgages. She also took the view that signing the Order would have no effect on her registration as a real estate salesperson.

Subsequently, in 2009 the Real Estate Council of British Columbia’s (‘RECBC’) Qualification Hearing Committee suspended her for three years, after which she was permitted to re-apply for registration (subject to a qualification hearing).

Our client later moved to Ontario and, in 2012, unsuccessfully applied for registration as a real estate salesperson. The Registrar refused her application on the grounds that (relying on the conduct that was subject of the earlier BC proceedings) she could not reasonably be expected to be financially responsible in the conduct of business; and she would be unable to carry on business with honesty, integrity, or in accordance with the law. The Registrar’s refusal effectively ignored the fact that our client was forthright regarding her past, and had demonstrated she had learned from her mistakes. Furthermore, had she not been forthright, RECO may have never found out about her past in BC.

The Tribunal set aside the Registrar’s Proposal to Refuse Registration, but RECO then successfully appealed this decision to the Divisional Court on the basis that the Tribunal had erred by applying the wrong standard of proof (the balance of probabilities rather than reasonable grounds for belief). However, the Divisional Court sent the matter back to the Tribunal to be heard again, on the basis that applying the correct standard of proof did not necessarily mean RECO would achieve the result it wanted.

Notably, RECO refused to settle with our client both before the original hearing and the new hearing, with serious costs implications for our client, adding to her stress and increasing the time required to pursue the proceedings. Pending the conclusion of the case, our client was permitted to be registered as a salesperson. This meant our client could undertake employed work at a real estate brokerage, without any conditions imposed on her licence, for around 19 months while the matter was heard by the Tribunal.

The decision

The Tribunal heard favourable witness evidence from the supervising Broker, as well as evidence from our clients’ own customers that they were pleased with her performance and describing her as an honest and capable real estate professional. They provided the Tribunal with reference letters clearly stating they were aware of these proceedings and the reasons for them. RECO’s witness (its deputy Registrar) adopted what was described by us as a hostile attitude, dismissing the worth of many references and contradicting his own colleague who had testified at the first hearing on how forthright and cooperative our client had been. The Deputy Register was subject to intense cross examination and unfavourable comment by us in our final address to the Tribunal.

However, on the evidence, the Tribunal found our client to be a credible witness and ruled that there were no reasonable grounds for belief that she will not carry on business in accordance with the law and with integrity and honesty.

Bankruptcy

An additional factor raised by RECO for refusal was the fact that our client had declared herself bankrupt in 1998 (discharged the same year). The Tribunal rejected this as being relevant as the law requires the applicant’s current financial position to be considered – evidence of which was not put to the Tribunal. Her financial fitness was not, therefore, in question.

Success

The tribunal found favour with our arguments on behalf of the applicant, rejecting RECO’s above objections and ordered that a license be issued to her.

How can we help?

This Rogerson Law Group win send an important message to professionals and regulators alike: past misconduct and regulatory sanctions does not necessarily mean the end of a professional career.

Our experienced professional misconduct lawyers understand the seriousness of the potential implications on professionals who are subject to regulatory or disciplinary investigations or proceedings. If you are under investigation by a regulatory body or are having problems seeking registration, contact us for urgent advice.

Further information about our Professional Misconduct and Disciplinary Tribunals work

Rogerson Law Group provides professional misconduct and disciplinary tribunal services in the entire GTA including Toronto, Scarborough, Mississauga, Vaughan, Brampton, Richmond Hill, Etobicoke, and Barrie and surrounding areas with offices located in downtown Toronto, Barrie, and associated offices in Ottawa.