DISCIPLINE DECISION IN THE MATTER OF A DISCIPLINE HEARING HELD PURSUANT TO BY-LAW NO. 10 OF THE REAL ESTATE COUNCIL OF ONTARIO

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1 Real Estate Council of Ontario BETWEEN: DISCIPLINE DECISION IN THE MATTER OF A DISCIPLINE HEARING HELD PURSUANT TO BY-LAW NO. 10 OF THE REAL ESTATE COUNCIL OF ONTARIO MANAGER OF COMPLAINTS, COMPLIANCE AND DISCIPLINE REAL ESTATE COUNCIL OF ONTARIO - AND- DAVID PEGORER & JOHN BRADLEY This document also contained the Appeals Decision: February 1, 2007 DATE OF DECISION: September 29, 2005 FINDINGS: David Pegorer FINDINGS: John Bradley PENALTY: David Pegorer PENALTY: John Bradley COSTS AND EXPENSES: In violation of Rules 21 & 23 of the RECO Code of Ethics In violation of Rules 21, 23 & 43 of the RECO Code of Ethics Administrative Penalty of $2, payable to RECO within 30 days of sending this decision. Administrative Penalty of $1, payable to RECO within 30 days of sending this decision. N/A WRITTEN REASONS: BACKGROUND TO HEARING: 1. David Pegorer ( Pegorer ) is a member of RECO and is a Registrant pursuant to the Real Estate and Business Broker s Act ( REBBA ). At all material times he was employed at Brokerage A. 2. John Bradley ( Bradley ) is the broker of record of Brokerage A. Page 1 of 23

2 3. In or about October of 2002 RECO received two written complaints alleging that billboards (located at Street A, north of Street B, and at the intersection of Street C and Street D in City A, respectively) were in contravention of the advertising standards set out in the REBBA. 4. The written complaints did not contain particulars of the alleged contraventions of the REBBA. However the letters contained a photograph of the billboards in question. 5. In response to the written complaints, RECO undertook an investigation in accordance with the procedures of the Complaints, Compliance and Discipline Department ( CCD ) which included: independent review by a RECO compliance officer, an exchange of correspondence between the CCD and the Respondents and their legal counsel; a meeting between the Manager of the CCD and Bradley; a meeting between the Manager of the CCD and Mr. Pegorer and his legal counsel. 6. By letters dated January 23, 2004 the Respondents were each provided with a written caution from the Manager of CCD pursuant to RECO s by-law 10 which required the Respondents to bring all billboards into compliance with applicable standards. In particular the Respondents were given the option to (a) discontinue Pegorer s current billboard advertising or (b) correct Pegorer s current advertising by having the full brokerage name large enough to be clearly visible from a vehicle traveling at the posted speed limit and by having Pegorer s registration status clearly visible from a vehicle traveling at the posted speed limit. The Respondents were given until April 30, 2004 to rectify the billboards. 7. The Respondents took no steps to dispute the written caution, or to take curative steps with respect to the billboards. 8. By letter dated January 25, 2005 the Manager of CCD referred the complaint to a Discipline Hearing and issued an Allegation Statement against the Respondents. THE HEARING: The hearing took place on September 29, Page 2 of 23

3 Mr. Pegorer and Mr. Bradley were represented by legal counsel, Lawyer A of the law firm of Lawyer B, Lawyer C & Lawyer A. Both Pegorer and Bradley were present in person for the proceedings. The case on behalf of RECO was presented by RECO Legal Counsel, legal counsel for RECO. The author of the initial letters of complaint was not called as a witness. Counsel for RECO advised the panel that efforts to locate the author of the initial complaint letters had been undertaken, without success. POSITION OF RECO: The position of RECO is set out on page 4 of the Allegation Statement dated January 25, 2005 (found at Tab 1 of Exhibit 1). RE: Mr. Pegorer: RECO alleges that Mr. Pegorer acted in an unprofessional manner by: a) using advertising in which the principal broker s full name is not displayed in a manner in which it clearly indicates the broker s own name as being a party to the advertisement; b) having advertising that does not have his broker s name prominently displayed to indicate that it is Brokerage A his employer that is carrying out the advertisement and not Pegorer personally; c) not clearly setting out in the impugned advertisements the status of Pegorer as an employee of Brokerage A; d) A reasonable person reading the advertisement may assume that Pegorer was a principal broker when that is not the case and therefore the advertising is misleading or deceptive; e) Pegorer did not comply with the caution and the requirements issued by the Manager of CCD. RECO alleges that, as a result of the foregoing acts, Mr. Pegorer breached Rules 21, 23 and 46 of the RECO Code of Ethics. Page 3 of 23

4 RE: Mr. Bradley: RECO alleges that Mr. Bradley acted in an unprofessional manner by: a) failing to ensure that all advertising was in accordance with RECO s Code of Ethics and the Real Estate and Business Broker s Act; b) failing to monitor his employee, Pegorer, in an appropriate manner with respect to advertising that he (Bradley) is ultimately responsible for; c) failing to comply with the caution and the requirements issued against him by allowing the impugned advertising to remain, even though he is responsible for all advertising of Brokerage A and the Manager of CCD had given a specific deadline to deal with the advertisements and Bradley neglected to deal with them in that time frame. RECO alleges that, as a result of the foregoing acts, Mr. Bradley breached Rules 21, 23 and 43 of the RECO Code of Ethics. RESPONDENTS POSITION: The Respondents, through their counsel, advance the position that the impugned advertisements do not contravene any applicable Rule or standard of RECO since both the full brokerage name and Mr. Pegorer s registration status as broker are clearly visible from a vehicle traveling at the posted speed limit of the roadway where the impugned advertisements were erected PRELIMINARY OBJECTION: At the outset of the hearing the counsel for the Respondents made a preliminary objection. On behalf of the Respondents, counsel submitted that the hearing could not proceed in the absence of the individual who authored the original letters of complaint to RECO. Counsel took the position that the requirement of Natural Justice entitles the Respondents to face the Complainant. Counsel did not provide any case law or legal authority for his objection. After hearing submissions by counsel for both the Respondents and for RECO, and after receiving independent legal advice in the presence of the parties, the panel overruled this objection. It was the decision of the panel to proceed with the hearing. It was the view of the Page 4 of 23

5 panel that the Rules of Practice governing this hearing do not require the attendance of the individual complainant. In preparing these Reasons for Decision, the panel has subsequently been referred to the case of R. v. Levogiannis 1 OR (3d) 351 which is a decision of the Ontario Court of Appeal (appeal to the Supreme Court of Canada dismissed). The Court in Levogiannis refers with approval to the following quotation from MacDonald J. A. of the Nova Scotia Court of Appeal in the case of R.v. R. (M.E.) 49 CCC (3d) 113, wherein the learned Justice states: The right to face one s accusers is not in this day and age to be taken in the literal sense. In my opinion, it is simply the right of an accused person to be present in court, to hear the case against him and to make answer and defence to it. The Panel is of the view that the above quoted legal principle enunciated by MacDonald J. A. is applicable in the present case. Despite the absence of the author of original complainant letters, RECO, through its counsel, presented evidence to establish the commission of several breaches of the RECO Code of Ethics. The Respondents were present to hear the case against them and they were afforded the right to make answer and defence to the case. In light of this authority, we remain of the view that the absence of the author of the complaint letters at this hearing did not constitute a breach of Natural Justice. EVIDENCE TENDERED BY RECO*: RECO tendered a book of documents which was made Exhibit 1 to these proceedings. RECO called, as its only witness, RECO Researcher, a researcher employed by the Inspections and Investigations Department of RECO. RECO Researcher had been requested by RECO s CCD to take photographs of the billboards which were the subject of this hearing. RECO Researcher identified pages 1, 2 and 3 of Tab U of Exhibit 1 as photocopies of photographs he had taken of billboards located respectively at: 1. Street D and Street C; 2. Street A north of Street B; and 3. Street A south of Street C. Page 5 of 23

6 RECO Researcher also identified pages 2, 3, 4, and 5 of Tab BE of Exhibit 1 as photocopies of photographs he had taken of billboards located at: 1. Street A south of Street E (pages 2 and 3); and 2. Street A north of Street F (pages 4 and 5). In his evidence in chief RECO Researcher stated that, as a result of his attendance at the various billboards, he determined that the word Franchise was legible to a passerby, but the words Brokerage A could not be easily read. Under cross examination RECO Researcher stated: - the photographs presented by RECO were taken with a lower resolution digital camera likely 3.2 mega pixels and that a higher resolution digital camera, or a professional quality camera would produce photographs of clearer definition; - he could not state at what distance he was standing from the billboard at the time each photograph was taken; - he did not measure the billboard or the size of the lettering on the billboard; - he was unable to comment on how the representation of the billboard in the photographs would correlate with what the naked eye might discern when viewing the actual billboard. The billboards depicted in the photographs set out above are the billboards upon which the allegation statement has been presented by RECO. It is noted that these billboards are similar, but not identical, to the billboards depicted in the photographs which accompanied the original complaint letters found at Tab 3 B of Exhibit 1. EVIDENCE TENDERED BY RESPONDENTS* The Respondents called a total of seven witnesses. Five of the witnesses called by the Respondents gave evidence of their observations of the billboard. Each witness testified that while driving by the billboard at the posted speed limit (or, Page 6 of 23

7 in some cases, possibly higher than the posted speed limit) s/he was able to clearly read the sign including the full brokerage name of Brokerage A, and the designation of Mr. Pegorer s RECO registration status as Broker. (These witnesses were: 1) Witness 1, a sales representative with Brokerage 1; 2) Witness 2, President of Company 2; 3) Witness 3, a retired individual now engaged in selling homes for a private builder; 4) Witness 4, a senior business analyst with Financial Institution 4; 5) Witness 5, President and CEO of Company 5. Under cross examination, the witnesses agreed with the proposition put to them by RECO s counsel that that the words referencing Brokerage A were smaller than the other words on the billboard with the exception, noted by some of the witnesses, of the words indicating: *Some Restrictions Apply. Witness 6 was also called as a witness by the Respondents. Witness 6 is the owner Company 6 which produced the billboards at issue in this proceeding. In her evidence she stated: - she has produced the billboards for Mr. Pegorer for the past 15 years; - her concern, as a sign maker, is that the public can read her signs; - Mr. Pegorer was adamant that all text on the sign must be readable; - She has driven by the billboard at the posted speed limit and is satisfied that the signs were readable; - If she felt the signs weren t readable, she would have informed Mr. Pegorer; In cross examination Witness 6 stated: - Mr. Pegorer is responsible for the wording of the billboard; she is responsible for the layout; Mr. Pegorer approves the final product; - The words Brokerage A on the billboard are in 2 inch type, while the words *Some Restrictions Apply are one inch type; Mr. Bradley also gave evidence. His evidence will be summarized later in these Reasons*. Mr. Pegorer was not called as a witness in this proceeding. Mr. Pegorer did, from time to time throughout the proceedings, make extemporaneous comments in a manner clearly intended to be heard by the panel. Since Mr. Pegorer was represented by legal counsel, and since the Page 7 of 23

8 comments made by Mr. Pegorer were not elicited through his counsel, the panel did not note, or give consideration, to Mr. Pegorer s remarks. The panel relied upon the evidence and the submissions tendered by the Respondents legal counsel. Prior to the hearing date, Mr. Pegorer had submitted to the RECO Hearings Coordinator a bundle of documents, and a real estate sales advertising publication. These documents were in the possession of the panel members. These documents were not made exhibits and accordingly no reference was made to the documents in reaching the panel s decision with one exception: During the course of the hearing reference was made from time to time of a photocopy of the artwork of the billboard at the time of the complaint which was contained in the bundle of documents. For greater certainty, a photocopy of that document is appended to these Reasons as Schedule A since the panel did review and consider this document which clearly illustrated the words used in the impugned billboards which are the subject of the photographs at Tab U and Tab BE of Exhibit 1. NOTE: The summaries of the evidence set out in these Reasons do not purport to reference all of the evidence tendered by the parties. The summaries do, however, set out the evidence which the Panel considers to be germane to the decision reached in this case. FURTHER OBJECTIONS RAISED BY COUNSEL FOR THE RESPONDENTS: At the outset of the hearing, and before counsel for RECO could make his opening statement, counsel for the Respondents expressed his concern about what he alleged was the lack of specificity in the claim advanced by RECO. Counsel for the Respondent insisted that RECO s position should be clearly articulated before proceeding with the hearing. After considering this submission, the panel elected to proceed in the normal course by allowing RECO s counsel to make his opening statement. It was noted that if, after hearing RECO s opening, counsel for the Respondents felt that he was taken by surprise by RECO s position, then counsel would be at liberty to request an adjournment. No adjournment was requested by the Respondents counsel either before or after the opening remarks of RECO s counsel. Page 8 of 23

9 REASONS FOR DECISION: The panel wishes to state that it has some sympathy with the complaint, voiced by the Respondent s counsel during his submissions, to the effect that despite several written requests to RECO for clear direction on the steps to be taken by the Respondents in remedying the shortcomings of the impugned billboards, the response by RECO to those requests was not as clear as we would have hoped. While the panel accepts that RECO cannot provide individual direction to each registrant on the myriad of advertisements daily circulated by our profession, the panel does feel that some clearer direction from RECO to the Respondents may have avoided the necessity of issuing an Allegation Statement and of proceeding with this hearing. Despite our sympathy with the Respondent s complaints, the panel is compelled to find that breaches of RECO s Code of Ethics have occurred in the circumstances of this case, as detailed below. RE: Mr. Pegorer: Rule 21, Rule 23 and Rule 46: Rule 21 reads: A Member shall ensure that all advertising and promotion by or on behalf of the Member, including for properties and services, is not false, misleading or deceptive Rule 23 reads: A Member shall practice in accordance with all federal, territorial or provincial law or municipal by-laws relevant to the Member s fitness to practice. The panel finds that the impugned billboards were misleading (although not false or deceptive) in contravention of Rule 21. The panel further finds that the impugned billboards were in violation of s. 28 of REBBA in contravention of Rule 23. The panel further finds that Mr. Pegorer failed to comply with a requirement by the Manager of CCD under By-law 10, also in contravention of Rule 23. Page 9 of 23

10 RE: Rule 21: In his submissions, counsel for RECO suggested that it was open for us to find that a reasonable person viewing the impugned billboard could reasonably form the impression that the impugned billboard is a David Pegorer ad. In other words, a reasonable person driving by the impugned billboard could assume that the agent and the broker were one and the same person. We agree with that submission. In reaching our decision we were not assisted by the evidence presented on the issue of the visibility of the words of the sign. We found all of the witnesses to be honest and credible. The best we could take from the conflicting evidence presented by the parties was that some individuals might not be able to read all of the words on the billboard while other individuals could while traveling in a vehicle at the posted speed limit. In our view, the layout of the billboard, in its totality, creates a misleading impression that Mr. Pegorer is the principal broker of Brokerage A. That is so whether one can read every word on the billboard or not. Re: Rule 23 re: s. 28 of the REEBA: We agree with the submissions of RECO s counsel that the cases decided to date support a proportionality approach to the issue of advertising. We agree that this concept of proportionality is applicable in this case. We also note that the Advertising Requirements Bulletin published by RECO makes reference to the fact that: In ALL forms of advertising the name of the salesperson may not be more prominent than the name of the broker/employer nor may the design of the media be such to mislead one to believe that that agent is other than the broker/employer. (Emphasis taken from original). (NOTE: The full text of this bulletin is found at Tab 4 B of Exhibit 1. It was, apparently, an enclosure to the letter dated January 3, 2003 To David Pegorer, and copied to John Bradley, from RECO Staff, Compliance / Mediation Officer with RECO. We note that, in questioning from the panel, Mr. Bradley acknowledged that he was aware of this bulletin and that he attempted to have those associated with Brokerage A comply with the bulletin). Page 10 of 23

11 The above referenced Advertising Bulletin is a publication by RECO intended to clarify the Registrar s interpretation of s. 28 of REBBA. As members of RECO the Respondents were obligated to give effect to the contents of this bulletin. In the impugned billboard, the name of the sales person was far more prominent than the name of the broker / employer. In addition, as a result of our finding that a reasonable person could reasonably form the impression that the agent was the principal broker, the design of the media was such as to mislead one to believe that the agent was other than the broker / employer. Under these circumstances we are satisfied that the impugned billboards breached s. 28 of the REBBA and therefore a breach of Rule 23 of the RECO Code of Ethics was committed. Rule 23 re: breach of Bylaw #10: Counsel for the Respondents forcefully submitted that our decision in this matter must turn solely on our findings as to whether the full brokerage name and Mr. Pegorer s registration status as broker were clearly visible from a vehicle traveling at the posted speed limit of the roadway where the billboards are located. Counsel submitted that this was the only position put forward by RECO, and by its counsel, in bringing this discipline complaint to a hearing, and in presenting the case before us. Counsel argued that RECO s case had changed during the course of the hearing and that the submissions advanced by RECO s counsel on the issue of proportionality at the end of the hearing represented an entirely new approach to the claim against the Respondents. With the greatest of respect, we do not agree with the Respondents submissions. The requirements that the full brokerage name, and Mr. Pegorer s registration status, must be visible from a vehicle traveling at the posted speed limit were contained in the letter of January 23, 2005 (Exhibit 1, Tab AY XYZ) ( the Caution ). The Caution constituted a formal warning by the Manager of CCD under the authority of s. 29 (d) of RECO s By-law No. 10. The remedial steps contained in the Caution could have been disputed by simply filing a formal notice of dispute pursuant to s. 30 of RECO s By-law No. 10. This notice of dispute would have then triggered a hearing by a panel of the Discipline Committee in order to determine whether the remedial steps required in the Caution were appropriate. Page 11 of 23

12 Sadly, the Respondents did not avail themselves of the procedure available to them under Bylaw No. 10. Instead the Respondents elected to take no action at all. The Respondents position was articulated in a letter dated February 4, 2004 from Mr. Pegorer (Exhibit 1, Tab BB). In essence Mr. Pegorer stated that, in his view, his billboard was in compliance, and always had been in compliance, and accordingly he was closing this file. In response to the failure of the Respondents to take remedial steps this matter was referred for further review and investigation by the Manager of CCD. This further review resulted in the issuance of the formal Allegation Statement (Exhibit 1, Tab 1). This hearing was based on the contents of the Allegation Statement not on the more limited contents of the Caution found at Tab AY XYZ. Had the hearing been based solely on the contents of the Caution the Respondents submissions on the issue of the visibility would have found some favour with this panel. The issues before this panel, as articulated in the Allegation Statement included the allegations by RECO that Mr. Pegorer acted unprofessionally by: (b) (c) (d) having advertising that does not have his broker s name prominently displayed to indicate that it is Brokerage A his employer that is carrying out the advertising and not Pegorer personally; a reasonable person reading the advertisement may assume that Pegorer was a principal broker when that is not the case and therefore the advertising is misleading or deceptive; Pegorer did not comply with the caution and requirements issued by the Manager of CCD. These issues were before the panel from the start of the hearing. Counsel for RECO adverted to these issues during both his opening and closing submissions. The Respondents submission that the issues changed during the course of this hearing is incorrect. In fact, the issues changed between the issuance of the Caution and the issuance of the Allegation Statement. Nothing which transpired during the course of this hearing should have taken the Respondents by surprise. In any event, the Respondents did not request an adjournment so Page 12 of 23

13 that they could reconsider RECO s case; instead they chose to rely on the limited defence of visibility which was insufficient to rebut the allegations set out above. For the reasons set out above, we find that Mr. Pegorer is in breach of Rules 21 and 23 of the RECO Code of Ethics. We do not find that Mr. Pegorer s conduct amounts to a breach of Rule 46. Re: Mr. Bradley: Mr. Bradley was called as a witness during the course of this hearing. Mr. Bradley is the broker / owner of Brokerage A. In his evidence in chief Mr. Bradley confirmed that he had driven by the signs at the posted speed limit and he was able to read all words on the billboard without any problem. In his view, the billboard was in compliance with all applicable RECO guidelines. In cross examination Mr. Bradley acknowledged that he is the principal broker of Brokerage A. In that regard his role is different from the other brokers associated with his company since he is the one responsible for the administration of the trust account. He agreed that the font used in the billboard to designate his company s name was smaller than the font used to identify Mr. Pegorer. In cross examination, and in questions from the panel, Mr. Bradley confirmed that he is aware of the RECO advertising requirements (Tab 4B of Exhibit 1). Re: Rule 21 and 23: Mr. Bradley, as the principal broker, is responsible to the public for the advertising put forward by Mr. Pegorer. For the reasons set out earlier in this decision, we find Mr. Bradley to be in breach of Rules 21 and 23 of the RECO Code of Ethics. Page 13 of 23

14 Re: Rule 43: As the broker responsible for Mr. Pegorer, and for the reasons set out earlier in this decision, we also find Mr. Bradley to be in breach of Rule 43 of the RECO Code of Ethics. PENALTY: Taking into account all the circumstances giving rise to the breaches of the RECO Code of Ethics, as set out above, we order the following penalties: RE: David Pegorer: Administrative Penalty of $2, payable to RECO within 30 days of sending this decision. RE: John Bradley: Administrative Penalty of $1, payable to RECO with 30 days of sending this decision. Page 14 of 23

15 Real Estate Council of Ontario BETWEEN: APPEALS DECISION IN THE MATTER OF AN APPEALS HEARING HELD PURSUANT TO BY-LAW NO. 10 OF THE REAL ESTATE COUNCIL OF ONTARIO DAVID PEGORER & JOHN BRADLEY - AND- MANAGER OF COMPLAINTS, COMPLIANCE AND DISCIPLINE REAL ESTATE COUNCIL OF ONTARIO DATE OF DECISION: February 1, 2007 FINDINGS: PENALTY: The Appeal is dismissed. The Discipline Committee penalty is upheld. David Pegorer Administrative Penalty of $2, payable to RECO within 30 days of sending this decision. John Bradley Administrative Penalty of $1, payable to RECO within 30 days of sending this decision. COSTS AND EXPENSES: No costs awarded. WRITTEN REASONS: REASONS FOR DECISION Background The case before the Appeals Committee of the Real Estate Council of Ontario ( the Appeals Committee or this Panel ) involved the appeal of a decision of the Discipline Committee of the Real Estate Council of Ontario ( the Discipline Committee or Lower Panel ) that was heard on September 29, The Appellants were David Pegorer ( Pegorer ) a broker registered with Brokerage A and John Bradley ( Bradley ) who at all material times was and continues to be the broker of record for Brokerage A. Page 15 of 23

16 The matter before the Discipline Committee had its genesis in written complaints by a member of the public concerning various billboards located in the west end of the greater City B area that the Appellant Pegorer used for the purposes of promoting himself as a real estate broker. The complaint letters did not contain particulars of any contraventions of the Real Estate and Business Brokers Act ( REBBA ) or the Real Estate Council of Ontario s Code of Ethics ( the Code ), but were accompanied by a photograph of the billboards that were the subject of the complaints. After a lengthy and bewildering exchange of correspondence between RECO s Manager of Complaints, Compliance and Discipline ( CCD ) as well as a meeting with the Manager of CCD and Bradley, Pegorer and his counsel, the Manager of CCD issued Bradley and Pegorer with a Caution pursuant to By-law No. 10. The Appellants took no steps to dispute the written Caution or to alter the billboards. The Manager of CCD subsequently referred the complaints to a Discipline Hearing and issued an Allegation Statement against the Appellants. RECO s position was that the Appellant Pegorer acted unprofessionally by: a) using advertising in which the principal broker s full name is not displayed in a manner which clearly indicates the broker s own name as being a party to the advertisement; b) having advertising that does not have the broker s name prominently displayed to indicate that it is Brokerage A, Pegorer s employer and broker, that is carrying out the advertisement and not the appellant Pegorer personally; c) not clearly setting out in the billboards the status of Pegorer as an employee of Brokerage A; d) a reasonable person reading the advertisement may assume that Pegorer was a principal broker. Since he was not the principal broker of Brokerage A this was deemed to be misleading or deceptive; and e) the Appellant Pegorer did not comply with the Caution and requirements of the Manager of CCD. As a result of the foregoing allegations, it was RECO s position that Pegorer had breached Rule 21, 23 and 46 of the RECO Code of Ethics. With respect to Bradley, it was RECO s position that Rule 43 of the RECO Code of Ethics rendered the broker of record responsible for the professional conduct and action of Pegorer and since he knew of Pegorer s billboard advertising and permitted its continuance, he had breached Rules 21, 23 and 43 of the Code of Ethics. Page 16 of 23

17 The Discipline Committee found that Pegorer breached Rules 21, 23 and 46 of the Code of Ethics, and that the Appellant Bradley was in breach of Rules 21, 23 and 43. Rule 21 provides: A Member shall ensure that all advertising and promotion by or on behalf of the Member including for properties and services is not false, misleading or deceptive. Rule 23 provides: A Member shall practice in accordance with all federal, territorial or provincial law or municipal by-laws relevant to the Member s fitness to practice. Rule 43 provides: A Broker shall be responsible for the professional conduct and professional actions of the Members registered with that broker. And lastly, Rule 46 provides: A Member shall not engage in an act or commission relevant to the practice of the profession that having regard to all the circumstances would reasonably be regarded by Members or the public as disgraceful, dishonourable or unprofessional. Also considered by the Discipline Committee, and in the opinion of the Appeals Committee of fundamental importance, was RECO s Advertising Requirements. The Advertising Requirements are a set of guidelines developed by RECO to assist and guide all RECO Members in advertising matters. Amongst other things the Advertising Requirements provide: In ALL forms of advertising the name of the salesperson may not be more prominent than the name of the broker employer nor may the design of the media be such to mislead one to believe that agent is other than the broker/employer. The Discipline Committee found that the photograph of the billboard, attached to the Reasons for Decision of the Committee, was similar to all the billboards in question. The Appellants did not dispute that it accurately reflected the nature of the billboard advertising that Pegorer was using. The billboard advertising shows a large photograph of the Appellant (about one-third of the billboard) with a large caption If I don t Sell it.i ll BUY IT! The caption is then followed by the appellant s name DAVID PEGORER with his registration in smaller print. The brokerage s name is also on the lower right had side of the billboard, but in substantially smaller print than the name DAVID PEGORER. There are a number of other notations on the billboard Page 17 of 23

18 (telephone numbers, websites, and a disclaimer). These notations are not relevant to the disposition of this matter. It was the decision of the Discipline Committee that these billboards were misleading and that they violated Section 28 of REBBA. Further the Lower Panel concluded that Pegorer s failure to respond to the Manager of CCD s Caution pursuant to Section 29 (d) of RECO By-Law No. 10 contravened Rule 23. The Discipline Committee considered whether the Appellant Pegorer s decision to ignore the Manager of CCD s Caution and his failure to take action as a result of it constituted a breach of Rule 46. It found that his actions did not amount to a breach of that Rule. Grounds of Appeal The Appellants appealed on three grounds. Specifically that: (i) The Discipline Committee failed to properly consider the facts that were presented to the lower panel in evidence. (ii) The Discipline Committee failed to properly interpret the law and the regulations and by-laws in the Real Estate and Business Brokers Act and the Code of Ethics; and thirdly, (iii) That the Discipline Committee drew conclusions and made decisions, which were not before the tribunal as issues to be decided upon by the Committee. Counsel for the Appellants----- it should be noted that Mr. Bradley did not appear before the Appeals Committee but was represented by Counsel made very brief, helpful submissions, to the Appeals Committee. In his submissions he outlined the history of the complaints, the manner in which they were dealt with by the Manager of CCD, and reiterated on a number of occasions that in his and his clients opinion it was still not clear how the billboards violated Rules 21 and 23 and section 28 of REBBA. It was Counsel for the Appellants position that a reasonable person driving by any of the billboards could see the name of the broker (David Pegorer) and the name of the brokerage (Brokerage A). There was no confusion and that all the requisite and material requirements of Section 28 of REBBA were apparent and therefore there was compliance with that Section of the Act. Page 18 of 23

19 The Appellant Pegorer also made submissions. His submissions echoed those of his Counsel, namely that since all the requirements of Section 28 of REBBA were set out on the billboards (registrant s name, his title, and the name of the brokerage) and since they could all be seen by a reasonable person driving at the posted speed limit there was compliance. There were no submissions made with respect to the role of the broker of record, Bradley, and why the Discipline Committee had erred in finding him in breach of Rules 21, 23 and 43. Although the submissions made by Counsel for the Appellant Pegorer and by Mr. Pegorer himself did not directly and specifically make reference to the individual grounds of appeal, the thrust of the Appellants submission was that the Discipline Committee did not properly consider the facts before it, nor did it interpret the law as it related to the facts. The third ground of appeal was not addressed. Counsel for RECO made submissions that related directly to the grounds of appeal. RECO s counsel advocated that there were only two bases upon which the appellants could succeed. Firstly that there must be a clear and palpable error made by the Discipline Committee as disclosed by the record before the Appeals Committee, and secondly that the record must disclose that the Discipline Committee misinterpreted the law related to advertising by members. RECO s Counsel made submissions with respect to the rule violations that the Discipline Committee found against Mr. Pegorer and Mr. Bradley. The evidence in the record is clear that the brokerage s name is smaller than Pegorer s. It is so small that a member of the public would reasonably conclude that the brokerage is Pegorer. It was lack of prominence of the brokerage s name compared to that of Pegorer s that the Discipline Panel correctly interpreted as a breach of Rule 21 of the Code of Ethics. Counsel for RECO submitted that the Advertising Requirements developed by RECO as an interpretive guideline are designed to provide members with direction as to their advertising and further are designed to enable the public to see and understand the role of sales representatives, brokers and brokerages. Counsel for RECO reiterated that the Advertising Requirements made it clear that an advertisement could be misleading because of the Page 19 of 23

20 proportionality of names, even though all the parties and the designations associated with the advertisement had been correctly identified. Counsel for RECO also made submissions related to the Appellant Bradley. He argued that if the Discipline Committee was correct in concluding that Pegorer s advertisements were misleading, and Bradley permitted or consented to these billboard advertisements, then he was derelict in his responsibilities pursuant to Rule 43, and therefore, in breach of Rule 21 and 23. First Ground of Appeal The evidence before the Appeals Committee consisted of the Book of Documents and Record of Documents, which included the Reasons for Decision of the Discipline Committee. Transcripts of the Discipline Hearing were not ordered and therefore not before the Appeal Panel. The facts before the Discipline Committee were not disputed in either the submissions of the Appellants or RECO. The evidence before the Lower Panel consisted of photographs of the billboards in question, seven witnesses produced by the appellants, including the Appellant Bradley, and a witness produced by RECO. The witnesses for the Appellants testified that while driving by a billboard at the posted speed limit they were able to clearly read Pegorer s advertisement, including his designation as a broker, and the full name of his brokerage, Brokerage A. The evidence that was presented did not challenge the fact that in all the billboard advertisements the Appellant s name was substantially larger than that of his brokerage, and much more prominently displayed. This Panel holds that the Lower Panel properly considered the facts before it and made decisions that correctly interpreted the facts. The Lower Panel accepted that all relevant information required by REBBA and the Code of Ethics related to the identification of the Appellant as a broker and the brokerage that employed him were set out in advertisements on all the impugned billboards. The Lower Panel then concluded that notwithstanding the presence of all relevant information, the layout of the billboards, in their totality, created a misleading impression that the Appellant Pegorer is the principal broker, and not simply employed at Brokerage A. Based on the facts before it, this was a reasonable conclusion and one which this Panel holds was an interpretation consistent with the available facts. Page 20 of 23

21 Second Ground of Appeal One of the issues before the Discipline Panel was whether the Advertising Requirements developed by RECO pursuant to REBBA are binding on RECO Members. Counsel for the Appellants submitted that they were not. In his submission he argued that they were not law but simply guidelines. Further he, and Pegorer himself, argued that all requirements related to advertising were visible (designation, brokerage, disclaimers etc), that there was compliance and the Advertising Requirements either did not apply or had been complied with. This Panel disagrees with that position. Section 28 of REBBA is that section in the Act that deals with advertising. It states: Every broker shall when advertising to purchase, sell or exchange or lease shall real estate clearly indicate the broker s own name as being the party advertising and that he, she, it is a broker and any reference to the name of a salesperson in the advertisement shall clearly indicate the broker as being the employer of the salesperson. It is the determination of this Panel that even without the assistance of the Advertising Requirements, the Lower Panel correctly interpreted Section 28 and found the Appellants in violation. Section 28 states any advertisement must clearly indicate the brokers own name as being the party advertising and further that any reference to the name of a salesperson in the advertisement shall clearly indicate the broker as being the employer of the salesperson. Pegorer s advertisements do not comply with these statutory requirements. Pegorer s billboards did not clearly indicate that Brokerage A was the party advertising. Without a detailed examination of the billboard advertising it would appear to a reasonable member of the public that the Pegorer was the brokerage, and not the employee of the brokerage, and therefore misleading. The Discipline Panel concluded that the Advertising Requirements are binding on all RECO members. This Panel agrees with that determination. All regulatory bodies have a responsibility to their memberships to assist them in their professional activities so as to ensure compliance with their governing legislation and codes of professional conduct and standards. The Advertising Requirements are a guideline developed by RECO to ensure that its members Page 21 of 23

22 comply with prevailing legislative requirements, in this case Section 28 of REBBA. It is the position of this Panel that if the guidelines are reasonable and a consistent interpretation of Section 28, they must be binding on the Members of RECO. The Appeals Committee has found nothing in the Advertising Requirements that could be considered unreasonable. The guidelines are not only reasonable but of great assistance to the members. In particular the guideline provides that In ALL forms of advertising the name of the salesperson may not be more prominent than the name of the broker/employer. This guideline helpfully and unequivocally sets out how the requirement of clarity demanded by Section 28 of the Act. The Discipline Committee considered the Appellant Pegorer s billboard advertising to determine if it complied with the Advertising Requirements. It correctly concluded that it did not. Pegorer s name is substantially more prominent than the name of his brokerage. In their submissions the Appellants never contended otherwise. The billboards were clearly in breach of the prominence requirement set out in the Advertising Requirements. The Discipline Committee was correct in concluding that the Advertising Requirements applied to all RECO members and further that Pegorer s advertisements were in violation of these guidelines. Third Ground of Appeal Counsel for the Appellants did not make submissions directly related to this ground of appeal, namely that the Discipline Committee drew conclusions and made decisions which were not before the tribunal as issues to be decided upon by the Committee. This Panel has reviewed the Record before it and has not found that the Lower Panel dealt with any issues that were not before it. The issue before the Discipline Committee related to the appropriateness of Pegorer s billboard advertising and his employer s acquiescence to that advertising. The Committee focused on the potential breaches of Rule 21, 23, 43 and 46, as well as Section 28 of REBBA. The Lower Panel also considered the application of the Advertising Requirements and By-Law No. 10 and the issues as set out in the Allegations Statement, which initiated the discipline proceedings against the Appellants. After hearing the evidence and applying the law, Code of Ethics and RECO s By-laws, which were properly interpreted by the Discipline Committee, it correctly concluded that Pegorer was in breach of Rule 21 and 23 of the Code of Ethics, and Bradley was found in Page 22 of 23

23 breach of these Rules as well as Rule 43, which is designed to ensure that a brokerage properly supervises the activities of its employees. Counsel for the Appellants, and Pegorer himself, make submissions during the appeal hearing that at no time did they understand why the billboard advertising was offensive, and that it was only at the Discipline Hearing that RECO began to formulate its case. This position is disingenuous, and is in complete disregard of the fact that the Allegation Statement, in some detail, sets out the nature of RECO s position, and that prior to the issuance of the Allegation Statement RECO had provided both Appellants with a copy of the Advertising Requirements. No new issues were introduced at the Discipline Hearing and the Committee faithfully restricted itself to the issues and submissions it heard before it rendering its decision. Findings of the Appeals Committee After reviewing the Book of Documents, the Record of Documents, which included the Reasons for Decision of the Discipline Committee and the Appellants grounds of appeal, it is the finding of the Appeals Committee that the decision of the Discipline Committee be upheld. Specifically, that by placing the billboard advertising in question, the Appellant David Pegorer breached Rule 21 (Advertising), and then taking no curative action, the Appellant David Pegorer breached Rule 23 (Obedience to Law) and failed to comply with a requirement of the Manager of CCD under By-Law 10, which is also a contravention of Rule 23. John Bradley, as the principal broker, ignored the contraventions by David Pegorer and his advertising and therefore is also in contravention of Rule 21 (Advertising), Rule 23 (Obedience to Law) and Rule 43 (Broker Responsibility). It was the view of the Appeals Committee that the administrative penalties impose by the Discipline Committee were unduly moderate but since there were no submissions as to penalty the administrative penalties imposed by the Disciple Committee are upheld. David Pegorer is to pay an Administrative Penalty of $2, to RECO within 30 days of this decision and John Bradley to pay an Administrative Penalty of $1, to RECO within 30 days of this decision. There is no order as to costs. Page 23 of 23