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Tribunal
d'appel en
Tribunal matière
APPEAL FROM A PROPOSAL OF THE REGISTRAR UNDER THE REAL ESTATE AND BUSINESS BROKERS ACT, R.S.O. 1990, CHAPTER R.4 AS AMENDED APPEARANCES: LORNE LEVINE, Counsel, appearing on behalf of the Applicant ROBERT MAXWELL, Counsel, appearing on behalf of the Registrar, Real Estate and Business Brokers Act REASONS FOR RULING
REGISTRAR’S MOTION TO DISMISS THE APPEAL

BACKGROUND:

This motion was brought by the Registrar at the onset of the hearing of this matter to
dismiss the appeal on the basis that it is frivolous and vexatious and an abuse of
process. The factual underpinning of the Registrar’s motion is not seriously in dispute
between the parties. It is as fol ows:
The Applicant was registered as a real estate agent on January 6, 1998. On June 18,
2004 the Registrar issued a Notice of Proposal to Revoke the registration of the
Applicant al eging involvement in three transactions whereby the sale price of properties
was inflated on Agreements of Purchase and Sale to secure higher mortgage financing
for the purchaser. Not disclosed to the mortgagees was the fact that the vendor would
make a substantial payment to the purchaser on closing to make the actual sale price
reflect the true market value of the property. The mortgage companies were kept in the
dark about the kick-back scheme and thus tricked into advancing greater financing than
the true value of the property would support. The Applicant appealed the Notice of
Proposal to this Tribunal and the matter was set down for a hearing. After an initial
adjournment the hearing date was set for February 8 and 9, 2005.
On January 26, 2005 the Applicant withdrew her appeal to this Tribunal and the
Registrar served a Final Notice under the Real Estate and Business Brokers Act
revoking the Applicant’s registration as a real estate salesperson on February 1, 2005.
On March 30, 2005, approximately eight weeks after the Final Notice, the Applicant applied to the Registrar for reinstatement of her registration as a salesperson and amended that application to apply as a broker on April 3rd. Before this Tribunal the Applicant has taken the position that she no longer seeks registration as a broker as she has been released from a franchise agreement that required her to hold a broker’s registration. The Registrar’s evidence before the Tribunal on this motion consisted of the Affidavit of Brian Schlotzhauer sworn the 16th day of September, 2005. The Applicant tendered her own affidavit sworn on October 24, 2005 in response to an order of this Tribunal dated October 11, 2005 that states in part: The Applicant shall no later than 20 days of date of this Order, serve upon the Registrar a responding affidavit to the affidavit dated September 16, 2005 of Brian Schlotzhauer more fully referred to at tab “B” of the Registrar’s Motion Record. The aforementioned responding affidavit of the Applicant shall set forth, in detail, any and all material changes in the Applicant’s situation or circumstances, as well as any fact or facts, upon which she will rely at the hearing as more fully referred to in paragraph 9 of Brian Schlotzhauer’s affidavit. Thus, as a result of the October 11, 2005 order, the Applicant’s affidavit is to represent the whole of the Applicant’s case with respect to s. 10 of the Real Estate and Business Brokers Act. Mr. Schlotzhauer’s affidavit sets out the factual underpinning as set out above. The Applicant’s affidavit raises the fol owing points. There has never been a hearing on the merits with respect to the al egations in the earlier Notice of Proposal; The Applicant was suffering from a medical disorder that was psychological in nature that made her particularly susceptible to being misled by the other agent in the wrongful scheme such that he convinced her it was, in fact, legal; and, The Applicant now understands her medical difficulties and is taking steps to deal with them by closely following the advice of her doctors. As evidence of her medical problem, the Applicant attached two reports from her
treating doctors as exhibits to her affidavit, one from Dr. Joseph Wong, a family
physician and the second from Dr. Gordon Baker, a psychiatrist.

ISSUES:
At issue in this motion is the statutory scheme for the revocation of registration, the
appeal process to this Tribunal and under what circumstances a registrant, having
exhausted remedies under the statute, can apply for reinstatement.
ANALYSIS:

The statutory scheme for revocation of registration and appeal set out in the Real Estate
and Business Brokers Act
is found in sections 6 through 9. By virtue of section 6 an
applicant is entitled to registration or renewal:
…except where, (a) having regard to the applicant’s financial position, the applicant cannot reasonably be expected to be financially responsible in the conduct of (b) the past conduct of the applicant affords reasonable grounds for belief that the applicant will not carry on business in accordance with law and with The Registrar’s right to refuse registration is found at s. 8. To put it simply, the Registrar may refuse to register or to renew a registration if, inter alia, the conditions set out in s. 6 are found to be present. S. 9 sets out the procedure that the Registrar must follow when a revocation or refusal to register is proposed. Chief among these is the right of a registrant to appeal to this Tribunal for a hearing on the merits of the Registrar’s proposal. Of particular note is s. 9 (3), the procedure in the event an applicant or registrant does not require a hearing. The subsection states: Powers of Registrar where no hearing


(3) Where an applicant or registrant does not require a hearing by the Tribunal in accordance with subsection (2), the Registrar may carry out the proposal stated in the notice under subsection (1). S. 9 (3) is applicable to our facts with respect to the Registrar’s proposal dated June 18, 2004. On January 26, 2005 the Applicant reversed her previous desire for a hearing and advised the Tribunal and the Registrar that she no longer required a hearing. Having waived a hearing on the merits, under what circumstances, if any, should the Tribunal permit the Applicant to re-open the issues raised in the earlier proposal? It is of paramount importance that proceedings before courts and tribunals have a mechanism to bring finality to the process. In the Real Estate and Business Brokers Act finality is brought to the process when the applicant’s or registrant’s rights are exhausted under s. 9. In the statutory scheme it is immaterial whether that finality arises out of the withdrawal of the appeal or out of a final order of this Tribunal. In rare cases, where the evidence discloses that an applicant is incapable of making an informed decision, it may be appropriate to reconsider the earlier process. Does the Applicant fal into that category? Put another way, has the Applicant satisfied the Tribunal that on January 26, 2005 she was incapable of making an informed decision? A review of her evidence in that regard is appropriate. Exhibit “B” to the Applicant’s affidavit is a letter from her psychiatrist, Dr. Gordon A. Baker, to Dr. Alvin Boxer, dated November 13, 2000. Dr. Baker diagnosed: “Panic attacks, with anxiety and phobia formation. Depressive mood disorder, (unipolar mood depression), co existing with the panic disorder.” Dr. Baker prescribed Paxil and goes on to state that the Applicant’s symptoms are diminishing and to refer her back to Dr. Boxer, her family physician as of November 13, 2000, for ongoing treatment. It appears that she did not see Dr. Baker again until September 2005. Accordingly Dr. Baker can tell us nothing of the Applicant’s mental condition in January, 2005. It appears that the Applicant must have had more than one family physician since she also produced a letter dated October 11, 2005 from Dr. Joseph Y. K. Wong, a family physician, which states that the Applicant had been under Dr. Wong’s care since 1994. It appears that Dr. Wong did not refer the Applicant to Dr. Baker. Dr. Boxer did. Dr. Wong notes that the Applicant had mild symptoms of anxiety and depression in 2000 which became a lot worse in 2002 and 2003. According to Dr. Wong she has been improving gradually since 2003 and as of October 11, 2005 “has been getting remarkably better this year, especial y re: her ability to relate to reality and her relationship with people and her husband. My professional opinion is that <Applicant’s name> is now in remission…” Nothing in Dr. Wong’s report suggests that the Applicant was unable to make informed decisions in January of 2005. There is no evidence before this Tribunal to support a conclusion that the Applicant was incapable of making an informed decision on January 26, 2005. The Applicant’s appeal rights having been exhausted, there is no basis upon which this Tribunal can re-open the proceeding arising out of the Registrar’s proposal dated June 18, 2004. Any other determination would simply make a mockery of the statutory provisions and time limits. The Notice of Proposal dated June 18, 2004 and the resulting revocation of the Applicant’s registration dated February 1, 2005 on the grounds set out in the proposal are now part of the Applicant’s permanent record and may not be re-litigated before this Tribunal as part of the current appeal. Notwithstanding that the Applicant may not re-litigate the al egations in the June 18, 2004 Notice of Proposal, the matter does not end there. By virtue of s. 10 of the statute: 10. A further application for registration may be made upon new or other evidence or where it is clear that material circumstances have changed. Thus it is open to the Applicant to demonstrate that the provisions of s. 10 apply to her. What is perhaps of more importance to this consideration is whether the Applicant’s appeal rights can be disposed of in the context of this motion or whether the statute guarantees her the right to a ful hearing on the issue of whether there is new or other evidence or a clear material change in circumstances. It is the position of Counsel for the Registrar that this motion satisfies the statutory requirement for a hearing. When viewed together with the October 11, 2005 order of this Tribunal requiring the Applicant to make full disclosure of any fact or facts upon which she intends to rely to establish the application of s. 10, this submission has much substance. The Registrar relies on s. 8 of the Licence Appeal Tribunal Act, 1999, S. O. 1990 Chapter 12 Schedule G. which states: Frivolous or vexatious application 8. If, on the application of a party to a hearing before the Tribunal with notice to the other parties, the Tribunal is satisfied that the application for the hearing is frivolous or vexatious, the Tribunal may refuse to grant the hearing or may terminate the hearing at any time and make an order of costs as it considers appropriate in the The impact of s. 8 of the Licence Appeal Tribunal Act, 1999 is to answer in the affirmative the question concerning the disposition of an application by way of motion. The Tribunal may dispose of an application by way of motion where it is satisfied that such the application is frivolous and vexatious. To succeed on this motion the Registrar must satisfy the persuasive onus of establishing that the Applicant’s appeal is frivolous and vexatious with respect to the test set out in s. 10 of the Real Estate and Business Brokers Act. The combined effect of the wording of s. 10 and the October 11, 2005 order of this Tribunal puts an evidentiary onus on the Applicant to demonstrate, at least on a prima facie basis, that there is, in fact, new or other evidence or that it is clear that material circumstances have changed. In the1997 case of Potocnik v. Thunder Bay (City) 29 C.H.R.R. D/512 an Ontario Board of Inquiry had to consider whether a complaint was “trivial, frivolous, vexatious or made in bad faith.” under s. 41 (4) of the Human Rights Code with respect to considering an award of costs. On the facts, after 25 days of hearing evidence and three days of motions the Board found it unnecessary to ask the City of Thunder Bay to present its case in defence of the al egations against it. The Board of Inquiry considered the words “trivial” and “frivolous” in the following terms: I also favour using the ordinary meaning of the words “trivial,” “frivolous” and
vexatious,” rather than the more esoteric definitions contained in Black’s Law
Dictionary. Thus, for the complaint to be trivial or frivolous, the issues must be
unimportant, petty, silly, or insignificant enough to be a waste of the tribunal’s time. In
addition, a complaint completely without factual or legal basis might be considered trivial
or frivolous. A vexatious complaint is one that aims to harass, annoy or drain the
resources of the person complained against.
The meaning of frivolous and vexatious relating to the unlikelihood of success was considered by Dambrot J. in 876502 Ontario Inc. v. I.F. Propco Holdings (Ontario) 10 Ltd. (1997) 37 O.R. (3d) 70, 17 C.P.C. (4th) 78 (Ont. Gen. Div.). The definition is set out at paragraph 18 of the decision as fol ows: These words are often used compendiously, without any individual definition, and
pleadings are said to be frivolous and vexatious for fact specific reasons, without any
delineation of a test. A frivolous action has been defined, however, to be one which, on
its face, is so unreal that no reasonable or sensible person could bring it. A frivolous
and vexatious pleading has been defined as one which is “hopeless factually”, and
which it is “plain and obvious…cannot succeed.” (Zurich Investments Ltd. v. Excelsior
Life Insurance Co. (1988), 28 C.P.C. (2d) 264 (Alta. C.A.).
In light of this definition it is necessary to examine the evidence put forward by the Applicant in support of her position that she has new or other evidence or it is clear that material circumstances have changed. It is worthy of note that nowhere in her affidavit does the Applicant attempt to set out grounds why evidence that she now tenders was not available to her in January 2005 when she made her decision to withdraw her appeal to this Tribunal. The Applicant’s affidavit is replete with her beliefs concerning her medical condition. It refers to the report from Dr. Baker dated in the year 2000. It also attempts to elevate the involvement of Dr. Baker well beyond the truth. Dr. Baker’s report states that he stopped seeing the Applicant in 2000 and referred the matter back to Dr. Boxer. The Applicant deposes that she has been “seeing a psychiatrist since October 2000” implying that she has been continuously under Dr. Baker’s care, which fact is patently untrue. There is also the report of Dr. Wong relating to events that occurred between 2000 and 2005. It has already been stated above that neither of these opinions states categorical y or even by necessary implication that the Applicant was incapable of making informed decisions, either in 2003 when the events giving rise to the June 18, 2004 proposal arose or in January 2005 when she withdrew her application. With respect to those parts of the report of Dr. Wong that relate to the Applicant’s condition in 2003 through January 2005, there is no explanation why this evidence could not have been brought forward in time for the hearing in February 2005. Accordingly, there is a complete dearth of “new or other evidence” and it is clear that the Applicant’s appeal in relation to “new or other evidence” is “hopeless factual y” and it is “plain and obvious” that it cannot succeed. What then of a “material change in circumstances?” In considering changed circumstances, the first issue is to consider the timing. It appears from the Applicant’s affidavit that her position is that she is now a better person than she was in 2003 as a result of understanding her il ness and taking her medication. It is the position of the Registrar that the appropriate time for the consideration of such evidence is between February 1, 2005 and March 30, 2005, that is the date the Proposal was implemented and the date of the new application. In keeping with the policy of the legislation to bring finality to a Registrar’s decision to deny an applicant or registrant, it fol ows that any circumstances that may have been advanced in mitigation in the original application to this Tribunal cannot now form the basis for an appeal. In looking for clear evidence of a material change in circumstances under s. 10, the starting point must be the date the previous proposal became final, that is, February 1, 2005. It does not follow that the end point for such an analysis must be the date of application. It would be open to the Tribunal hearing the appeal to hear evidence of changed circumstances right up to the hearing date, especial y where the evidence relates to a process of recovery. By way of example, where the changed circumstances relate to control ing substance abuse, it would be open to an applicant to put forward evidence that there has been no further abuse up to the hearing, a length of time that may be significantly longer than the date of the application for reinstatement. Having stated that the Tribunal will consider evidence of changed circumstances up to the hearing date, there remains one procedural point arising in this matter. Appended to the Applicant’s factum was a report from Dr. Baker dated December 27, 2005. This report was not entered in evidence on the motion in any of the normal y acceptable ways, either as an exhibit to a supplementary affidavit of the Applicant or as an exhibit to an affidavit by Dr. Baker himself. Notwithstanding the Tribunal’s grave doubts about whether the report is properly before it, its contents will be taken into consideration at the Applicant’s request and in the lack of serious objection by Counsel for the Registrar. The Applicant sets out what she believes to be the changed circumstances at paragraph 14 of her affidavit in the fol owing words: I believe that there has been a material change in my circumstances because I now understand my medical difficulties and I am taking steps to deal with them by closely following the advice of my doctors. Her doctors appear to differ, not only with her but with each other. In his opinion dated October 11, 2005, after reviewing the Applicant’s improvement demonstrated over 10 visits in 2005, Dr. Wong concludes that she is in remission. At the same time Dr. Baker advises that the Applicant visited him on September 22, 2005 with a recurrence of her anxiety symptoms. He advises that she is, as of the date of the letter, undergoing a course of treatment involving the use of Paxil and attendance at his office every week or second week. Of particular note is the comment at page 2 of the December 27 letter: In summary, while she suffers a bout of this mood depression, one could not expect her to be at her best, or to be using her best judgment. The medical evidence proffered by the Applicant, notwithstanding its internal contradiction, fal s far short of establishing that “it is clear that there has been a material change of circumstances”. Indeed, it was the Applicant’s position that the reason she got into trouble in 2003 in the first place was because she was unable to exercise good judgment because of her medical disorder. Nothing has changed. Absent the December 27, 2005 letter of Dr. Baker, would the Tribunal’s opinion have been different? The onus on the Applicant was to establish at least a prima facie case that it is clear that there has been a material change in circumstances. At best, the October 11, 2005 letter from Dr. Wong states his belief that the Applicant is in remission and currently understands the nature of her il ness and the necessary treatment. It states nothing about the likelihood of a recurrence of the symptoms and conditions which, according to the Applicant, led to her being easily led into wrongful behaviour by an unscrupulous fellow agent. In fact, it was the Applicant’s position that her ability to make informed decisions was
stil significantly impaired in late January 2005 such that the Tribunal should al ow her to
re-open her earlier appeal and set aside her decision to withdraw. The marked
improvement in her condition in 2005 reported by Dr. Wong has not withstood the test of
time to determine if it is permanent or simply an interstitial between bouts of depression.
Remission is not a cure. The Applicant has failed to establish on a prima facie basis
that it is clear there has been a material change in circumstances.
DECISION:

In light of all the evidence, the Tribunal concludes that this is an appropriate case for the
application of s. 8 of the Licence Appeal Tribunal Act, 1999. The Tribunal finds that the
Applicant’s appeal is hopeless factual y, it is plain and obvious that it cannot succeed
and that it is frivolous and vexatious. Accordingly, pursuant to the provisions of s. 8 of
the Act, the Tribunal refuses to grant the Applicant a hearing, dismisses the Applicant’s
appeal and directs the Registrar to refuse to register the Applicant in accordance with
the Notice of Proposal dated April 14, 2005.
LICENCE APPEAL TRIBUNAL ________________________ RELEASED: February 17, 2006 FILE NAME: 3013.rebba.ruling.doc The hearing was recorded. Transcripts can be made available at your expense. The period to appeal a decision to the Superior Court of Justice or Divisional Court is 30 calendar days from the date of release of the decision. Please arrange to pick up your Exhibits within 30 days after that period has passed. The Tribunal requires seven days notice prior to releasing Exhibits. This decision wil also be available on Quicklaw at a later date. The Applicant’s name does not appear in the decision nor does the name of any witnesses (unless they took part in the hearing in a professional capacity or as a regulator).

Source: http://www.reco.on.ca/publicdocs/3645387%20Kathleen%20Tran.LAT%20Decision.pdf

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