Sep 23, 2020

The fascinating case of Registrar, Real Estate and Business Brokers Act v. Stolberg, 2017 ONSC 5904 provides guidance on the challenges of regulating dishonesty by practitioners. Mr. Stolberg was a real estate salesperson who was caught on camera stealing small objects and money from a piggy bank when inspecting a home by himself. The regulator proposed to revoke his registration, however, the Licence Appeal Tribunal replaced the revocation with terms and conditions (e.g., only visiting a property in the presence of a client or colleague, keeping a written log of all of his visits to properties). The Divisional Court found the Tribunal’s decision to be unreasonable and returned the matter to the appeal Tribunal for a new hearing. The Court had three concerns about how the Tribunal dealt with the issue of dishonesty.

The Court was concerned that the Tribunal relied on the expert opinion of Mr. Stolberg’s social worker as to the reasons for the conduct (related to depression and cognitive distortions) and his prognosis for future similar behaviour. The Court indicated that the Tribunal should not have done so after holding that the social worker was not qualified to provide the opinion. The Court held that even though there was no objection to the consideration of the expert report, the Tribunal had an ongoing gatekeeper role to consider and rely only on expert opinions that the person was qualified to give. The Tribunal also had a duty to critically evaluate the opinion (e.g., accepting that there had been no further thefts even though this statement could only be based on Mr. Stolberg’s own assertions).

Interestingly, the Court assumed that the distinction between the notice requirements for independent experts and provider experts, discussed in the civil case of Westerhof v. Gee Estate, 2015 ONCA 206, applied.

The Court was also concerned that the Tribunal did not view the video of the theft. The Court found that watching the fifteen minute video provided valuable insights into the nature, extent and intrusiveness of the dishonesty.

The Court was also troubled by the proposed terms and conditions and found them to be unreasonable. They imposed a monitoring duty on persons who would be unaware of their role (i.e., clients and colleagues) and who would not be present with the practitioner throughout the entire property visit. In addition, the terms and conditions depended on the honesty of the practitioner for their effectiveness, which is the very thing that required monitoring.