DISCIPLINE COMMITTEE OF THE REAL ESTATE COUNCIL OF ONTARIO REGISTRAR UNDER THE REAL ESTATE AND BUSINESS BROKERS ACT, and -

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1 Real Estate Council of Ontario B E T W E E N: DISCIPLINE COMMITTEE OF THE REAL ESTATE COUNCIL OF ONTARIO ) ) Friday, the 16 th day of April, 2010 ) REGISTRAR UNDER THE REAL ESTATE AND BUSINESS BROKERS ACT, and - WINSTON LOWE & PAULA THOMAS ORDER THIS MOTION, made by Paula Thomas for an Order dismissing the Proceeding against Paula Thomas without a hearing, was heard this day April 16, 2010 at 3250 Bloor Street West, East Tower, Suite 501. ON READING the (i) Motion Record, Factum and Book of Authorities for Paula Thomas, and (ii) the Affidavit of RECO Investigator and on hearing the submissions of Lawyer A, counsel for Paula Thomas, and Counsel for the Registrar, Real Estate and Business Brokers Act, 2002 ( REBBA 2002 ), 1. THE DISCIPLINE COMMITTEE ORDERS that the Motion for an Order dismissing the Proceeding against Paula Thomas without a hearing be and is hereby dismissed. REASONS FOR DECISION INTRODUCTION On Friday, April 16, 2010 this Panel convened to consider a motion brought by Paula Thomas ( Ms. Thomas ) by her legal counsel, Lawyer A, seeking an Order dismissing the Proceeding against Paula Thomas without a hearing. The grounds for the motion were Rule 4.02(6)(a) of the Rules of Practice (REBBA 2002). Page 1 of 52

2 Also, in attendance were Counsel for the Registrar, Real Estate and Business Brokers Act 2002 ( REBBA 2002 ); RECO Investigator; and independent legal counsel to the Discipline Panel. Prior to the commencement of the hearing, the Panel asked that the Allegation Statement be entered as an Exhibit on the motion in case there were any need for reference to it. After a brief discussion both Parties agreed that the Allegation Statement could be entered as Exhibit #1. OPENING STATEMENT OF THE MOVING PARTY ON THE MOTION BROUGHT BY PAULA THOMAS In his opening statement, Lawyer A, counsel for Ms. Thomas, asked the Panel to determine that the prosecution of Ms. Thomas was undertaken in bad faith. He further submitted to the Panel that they had the option to dismiss the allegations against Ms. Thomas on the basis of bad faith. Lawyer A argued that there was a failure to follow applicable legislation, failure to abide by common law and failure to abide by common sense. Counsel for the Registrar, REBBA 2002, chose not to make an opening statement. EVIDENCE OF THE MOVING PARTY PAULA THOMAS The Panel previously reviewed the affidavit of Paula Thomas, sworn on March 11, At that point Ms. Thomas assumed the witness stand and was sworn in. She was then cross-examined on her affidavit. She was asked if she was still a registrant with the Brokerage and she replied in the affirmative. She was then asked if she knew Mr. Lowe from there and she confirmed it. She was asked about the buyers, Buyer 2 and Buyer 3, listed on the Agreement of Purchase and Sale for a property at 1-A Street (the Subject Property ). She said she had never met them. Counsel for the Registrar, REBBA 2002 asked Ms. Thomas to explain what she meant by "bad faith" in her affidavit. Her counsel objected to the question and the objection was overruled. Ms. Page 2 of 52

3 Thomas stated that she couldn't define it except as a feeling of discomfort, and intimidation. Counsel for the Registrar, REBBA 2002 produced several documents which he presented to the witness to ask if the signatures as "witness" on the documents were hers. Most of them she identified as her signature; Some she questioned; Others she confirmed were her signature but she said she could not say the date on which they were signed. She confirmed she was not present when the documents were signed by the prospective buyers. Counsel for the Registrar, REBBA 2002 then asked Ms. Thomas why she signed as witness if she didn't see the documents actually signed. She replied she was extremely busy and was preparing for the meeting but she then left the papers as she had to leave the office. Ms. Thomas was then asked how long she had been a Registrant under the Real Estate and Business Brokers Act. She replied that she was first registered in She was asked if she understood witnessing and she replied that she did. She then admitted that she did not witness the signatures. Ms. Thomas was shown an Amendment to Agreement of Purchase and Sale for the Subject Property which appears as Exhibit B to the affidavit of RECO Investigator. She stated that that was her signature on the document but she could not recall the date she signed as she had not dated her signature. Counsel for the Registrar, REBBA 2002 then moved to Exhibit D of RECO Investigator s Affidavit and asked her if that was her signature as witness. She replied that it was and again admitted under questioning that she had signed it blank and could not recall the date as she had not dated her signature. Counsel for the Registrar, REBBA 2002 proceeded by asking Ms. Thomas how many theories the investigator put forward during the interview with her. Ms. Thomas recalled that there were several theories but could not recall what they were. Counsel for the Registrar, REBBA 2002 asked if two of them might have been: (i) Page 3 of 52

4 the buyers were not real people, (ii) alternatively that it might have been an Oklahoma offer ; Ms. Thomas agreed that those were two of the theories. Counsel for the Registrar, REBBA 2002 moved forward to the second interview with RECO, he determined by questioning that Ms. Thomas attended her interview voluntarily. She didn't have a problem when called to attend the interview. She was not surprised that the interview related to the Subject Property. In fact Ms. Thomas testified that she was told on the phone that it was a follow-up to the previous interview. When asked if she was told she couldn't have legal counsel she replied no, but I was not told RECO would have a lawyer there either. Counsel for the Registrar, REBBA 2002 asked if the RECO Lawyer who attended the interview asked questions during the second interview and she replied she could not remember who asked questions but she said it was intimidating to have a lawyer in the room. Counsel for the Registrar, REBBA 2002 now asked if RECO Lawyer and RECO Investigator threatened her either physically or verbally and she replied no. She said she didn't like their tone and they were strong in a verbal and nonverbal way. She said they asked for her driver s licence and when she asked why, she was told "because you're going to Court". Counsel for the Registrar, REBBA 2002 asked Ms. Thomas if she knew that all the documents she witnessed were to be used in a real estate transaction and she replied that she did. When asked again why she felt intimidated, Ms. Thomas replied that "together they were intimidating, and they were not forthcoming, they did not inform me that legal counsel would be present during this interview and they tried to unduly influence me". Counsel for the Registrar, REBBA 2002 suggested that, in the interview, despite the claim of intimidation, Ms. Thomas had stayed steadfast and did not admit to anything, in fact, maintaining that she had not been involved in the transaction. Page 4 of 52

5 Counsel for the Registrar, REBBA 2002 next directed the witness to page 8 of the "Factum of Paula Thomas" in particular the statement therein that she had been irreparably harmed and unduly prejudiced by RECO Investigator s investigation, which commenced the proceeding against her in bad faith". When Ms. Thomas was asked to explain how she had been so harmed, she was unable to provide an answer. Ms. Thomas was then asked to refer to Exhibit C of her Motion Record and was asked if the notes contained an accurate reproduction of the questions she had been asked, and she confirmed that they did. She was then asked to refer to page 19 of the Motion Record, and she was asked how she knew that the buyers were the in-laws of the original people who wanted to buy the property, and she could not recall how she knew that. Counsel for the Registrar, REBBA 2002 went on to ask Ms. Thomas why Mr. Lowe would be giving her clients and she replied he would have to ask Mr. Lowe. Re-examination Counsel for Ms. Thomas asked her to explain how she felt intimidated, and she replied that it was just the fact that there was a lawyer in the room when she wasn't expecting it, and in general she felt intimidated. That concluded Ms. Thomas's testimony. EVIDENCE OF THE RESPONDING PARTY THE REGISTRAR, REBBA 2002 RECO Investigator was sworn in. As per RECO Investigator s affidavit, sworn on March 24, 2010, he stated that, prior to his employment at RECO, he had 30 years experience with the Toronto Police Service, primarily in criminal investigations, supervising units in various facets of police work. He further stated that his current duties included enforcing infractions under the REBBA 2002, conducting investigations and inspections regarding registration of registrants and into disciplinary matters relating to the Code of Ethics. Page 5 of 52

6 RECO Investigator confirmed under questioning that he has been employed by RECO since 2003 and that he is familiar with the Real Estate and Business Brokers Act, 2002, and in particular with section 19 of the REBBA RECO Investigator testified that investigators powers are not unfettered and that inspectors, such as himself, report to their manager and ultimately to the Registrar, REBBA Counsel for Ms. Thomas asked why Ms. Thomas was not sent a written request to be interviewed, and RECO Investigator replied that he has never done that. When asked if he was familiar with the written request to be interviewed form, he replied that he had heard of them but he believed that it had been used under By-law 10. Counsel for Ms. Thomas produced a copy of By-law 10 and began to ask the witness questions about it. There was an objection from Counsel for the Registrar, REBBA 2002 which was sustained after hearing both sides submissions. Counsel for Ms. Thomas asked RECO Investigator why Mr. Lowe got written notice of the interview and Ms. Thomas did not. RECO Investigator replied that at the time of the first interview with Ms. Thomas, he did not know the extent of her involvement in the transaction. He said that in the second interview, he first tried to have the interview taped and Ms. Thomas declined. RECO Investigator pointed to page 21 (Exhibit D ) of the moving party s Motion Record where Ms. Thomas was advised that she may be charged with offences under the Real Estate and Business Brokers Act, Finally, Counsel for Ms. Thomas asked if prior to the second interview Ms. Thomas was the subject of a complaint, and the witness confirmed that she was not. That ended the questioning of RECO Investigator, and Counsel for the Registrar, REBBA 2002 had no re-examination. Page 6 of 52

7 CLOSING SUBMISSIONS OF THE MOVING PARTY PAULA THOMAS Counsel for Ms. Thomas submitted that when she went to the first interview, there was no complaint, she had a brief interview, and she was cooperative and she answered the questions fully. Then in June she was called to be re-interviewed. Ms. Thomas counsel submitted that she was never advised of her right to legal counsel, prior to the second interview and though Ms. Thomas may have been given the warning on page 21 (Exhibit D ) of the moving party s Motion Record, she was kept in the dark until December when she received a notice of a Proceeding against her. Counsel for Ms. Thomas submitted that this was a clear violation of REBBA 2002 Section 19(2), (Page 4, Tab 2 of the Book of Authorities). The Panel was then referred to Tab 5 of the Book of Authorities, a discipline decision from January 13, 2006, Manager of Complaints, Compliance and Discipline v. Desmond Allen and specifically, to page 9 of 11 of that decision paragraph beginning Concerning Allen's decision.... Next the Panel was referred to Tab Four of the moving party s Book of Authorities; a decision from the Ontario Superior Court of Justice (Divisional Court), Abel v. Director (Penetanguishene Mental Health Centre (1979), 97 D.L.R. (3d) 305 (Ont. Div. Ct.), aff d (1981) 119 D.L.R. (3d) 101 (Ont. C.A.) in particular to paragraph 46 of said decision. Counsel for Ms. Thomas submitted that these examples clearly showed RECO Investigator's obligation and therefore the Allegation Statement is made in bad faith and these are grounds for a dismissal of the proceeding without a Hearing. Counsel for Ms. Thomas went on to suggest that the Panel should make an example of this particular situation for future Panels to follow. This concluded Counsel for Ms. Thomas closing submissions. Page 7 of 52

8 CLOSING SUBMISSIONS OF THE RESPONDING PARTY REGISTRAR, REBBA 2002 In closing submissions Counsel for the Registrar, REBBA 2002 submitted that the first interview required no warning (section 19(1) and (2) of REBBA 2002) of the Book of Authorities (of Ms. Thomas). Counsel for the Registrar, REBBA 2002 submitted that subsection 3 of section 19 of REBBA 2002 in Ms. Thomas Book of Authorities has no relevance to the matter. Counsel for the Registrar, REBBA 2002 submitted that Ms. Thomas herself in her evidence said she knew that she was coming in for questions regarding the Subject Property and in her own words she had nothing to do with it. The Panel was then taken to REBBA 2002 section 20(1)(b) to reinforce RECO s submission that written permission to be interviewed was not required. Counsel for the Registrar, REBBA 2002 then attempted to provide three cases to the Panel to further his case and there was an objection from Counsel for Ms. Thomas on the basis that he had not been given the cases in advance. The Panel heard both arguments and withdrew with Independent Legal Counsel to consider the arguments. Upon return, the Panel Chair advised both Parties that the Panel had decided to allow the cases so as to be more fully aware of both positions, and the Panel allowed Counsel for Ms. Thomas ample time prior to his reply to study those cases. The first case was the Law Society of Upper Canada v. William James Wise, 2008 ONLSHP In particular, we were referred to page 10 paragraph 45. Counsel for the Registrar, REBBA 2002 submitted as for this example Ms. Thomas was obliged to cooperate with her self-governing body. Counsel for the Registrar, REBBA 2002 sought to distinguish Manager of Complaints, Compliance and Discipline v. Desmond Allen as not applicable in these circumstances. Page 8 of 52

9 It was the contention of Counsel for the Registrar, REBBA 2002 that sections 19 and 20 of the Real Estate and Business Brokers Act, 2002, S.O. 2002, c. 30, Sch. C, reinforce the view that written notice of interview is not required. Counsel for the Registrar, REBBA 2002 referred to Rule 4.02(6) of the Discipline and Appeals Committees Rules of Practice (REBBA 2002), which states: A Panel may also dismiss a Proceeding if the Panel concludes that: (a) the Proceeding is frivolous, vexatious or is commenced in bad faith, Counsel for the Registrar, REBBA 2002 submitted that this proceeding did not meet either test. He referred to Rule 4.02(6)(a) and (b) of the Rules of Practice (REBBA 2002). Counsel for the Registrar, REBBA 2002 referred the Panel to section 21(4) of REBBA 2002 and submitted that the Panel has jurisdiction to decide whether the Allegation Statement was issued in bad faith. He submitted that this investigation and the interviews conducted fall far short of bad faith. Counsel for the Registrar, REBBA 2002 next introduced a case from the Ontario Supreme Court, Pritchard v. Ontario (Human Rights Comm.), 1999 CanLII (ON S.C.), in particular paragraph 16 of that document which he submitted was very much on point. Paragraph 16 stated, in part: The term bad faith normally connotes moral blameworthiness on the part of the person accused, encompassing conduct designed to mislead or pursued for an improper motive. The third case submitted by Counsel for the Registrar, REBBA 2002 was from the Ontario Supreme Court, R. v. Baptiste, 2000 CanLII (ON S.C.), and in particular paragraph 30, which stated the following: To the extent that these decisions affect the interest of the individual accused in the criminal process, those decisions are subject to review at tribunal. It is at the trial where the customary procedural safeguards affecting the rights of accused persons are engaged. Page 9 of 52

10 Counsel for the Registrar, REBBA 2002 also referred to paragraph 46 of the same case and in particular the last sentence of paragraph 46 which he submitted, defines bad faith: There must be conspicuous evidence of bad faith indicating an abuse of process. He referred to paragraph 49 of the same case which he submitted directs bad faith must only be used as grounds for dismissal in the clearest of cases. In concluding his submissions Counsel for the Registrar, REBBA 2002 suggested that the Panel had several options open to it, including the option to dismiss the Allegation Statement without a hearing, or to prohibit the use of either or both of the interviews as evidence at a hearing. REPLY SUBMISSIONS OF THE MOVING PARTY PAULA THOMAS Counsel for Ms. Thomas submitted that section 19(2) of REBBA 2002 leaves no doubt that a written request to be interviewed should have been sent to Ms. Thomas and that this would be mandatory if proper procedures had been followed. Further, he submitted the only logical conclusion was to find that the prosecution was undertaken in bad faith. In regards to jurisdiction, Counsel for Ms. Thomas submitted that the Panel has full jurisdiction to decide the issues on this motion. At this point the Chair thanked both Parties for presenting their evidence in a clear and concise manner and called the matter adjourned. The Panel retired to deliberate. DECISION OF THE PANEL Jurisdiction In deliberation the Panel first discussed the issue of jurisdiction, referencing the REBBA 2002, specifically Rule 4.02(6)(a) and (b) the Rules of Practice (REBBA 2002), which states: A Panel may also dismiss a Proceeding if the Panel concludes that: (a) the Proceeding is frivolous, vexatious or is commenced in bad faith; Page 10 of 52

11 or (b) the Proceeding relates to matters that are outside the jurisdiction of the Discipline Committee or Appeals Committee. After reviewing all documents and considering the oral evidence provided by both Parties, the Panel unanimously decided that it was within the jurisdiction of this Panel to make a decision on this motion. Request for Dismissal The issue of the request for dismissal and the allegations of bad faith were discussed at length. Each party made submissions regarding bad faith. The Panel reviewed the material provided, by both Parties; including Pritchard v. Ontario (Human Rights Comm.), 1999 CanLII (ON S.C.), and in particular paragraph 16 and the suggested definition of bad faith, The Panel found no conduct designed to mislead or pursued for an improper motive. Regarding Ms Thomas first interview, the evidence of RECO Investigator was that she was called in for the purpose of obtaining information. Ms. Thomas s evidence suggests that she agrees with that. Regarding the second interview, page 21 (Exhibit D ) of Ms. Thomas Motion Record, clearly indicates she was informed of the potential of being charged with offences under REBBA 2002, and that she was not obliged to answer any questions; on the same page, she further indicated that she understood this. Further, in paragraph 7 of Ms. Thomas affidavit, she states that because she was not involved in the transaction regarding the Subject Property and she had no hesitation in cooperating with the investigation, because during the phone call she had no knowledge of any complaints against her. This was borne out by RECO Investigator s testimony, that there were no complains or charges at that time. The Panel further referenced the cases provided; R. v. Baptiste, 2000 CanLII (ON S.C.) and Law Society of Upper Canada v. William James Wise, 2008 ONLSHP Page 11 of 52

12 The Panel felt on many occasions that the questioning of Ms. Thomas was excessive and seldom reached the promised point. Ultimately, the Panel felt that the crux of the matter revolved around the issue of section 19 of REBBA 2002 and the Panel unanimously decided that this section does not require written permission to be interviewed to be issued to a registrant. As a result, based on the evidence, there was no bad faith. On that basis, the motion is denied. Page 12 of 52

13 Real Estate Council of Ontario DISCIPLINE DECISION IN THE MATTER OF A DISCIPLINE HEARING HELD PURSUANT TO THE REAL ESTATE AND BUSINESS BROKERS ACT, 2002, S.O. 2002, c. 30, Sch. C BETWEEN: REGISTRAR UNDER THE REAL ESTATE AND BUSINESS BROKERS ACT, AND- WINSTON LOWE and PAULA THOMAS DATE OF DECISION: June 7, 2010 Winston Lowe FINDINGS: In violation of Sections 3, 4, 5, 17, 21(1), 37(1), 37(2), 38 and 39 of the Code of Ethics ORDER: Fine of $15, payable to RECO within 90 days of sending this decision. Paula Thomas FINDINGS: ORDER: In violation of Sections 3, 4, 5, 21(1), 37(1), 37(2), 38 and 39 of the Code of Ethics Fine of $7, payable to RECO within 90 days of sending this decision. Successful completion of the Real Property Law in-class course and provide RECO with confirmation of successful completion within 6 months of sending this decision. COSTS AND EXPENSES: N/A WRITTEN REASONS: Page 13 of 52

14 REASONS FOR DECISION INTRODUCTION This hearing was held on June 7, 2010 in the presence of the Respondents, Winston Lowe ( Mr. Lowe ) and Paula Thomas ( Ms. Thomas ); Counsel for the Registrar, Real Estate and Business Brokers Act 2002 ( REBBA 2002 ); and independent legal counsel to the Discipline Panel. ALLEGATIONS BY THE REGISTRAR, REBBA 2002 In its allegation statement RECO alleged the following: Mr. Lowe is a member of RECO and at all relevant times was registered as a salesperson with the Brokerage. Ms. Thomas is a member of RECO and at all relevant times was registered as a salesperson with the Brokerage. In October 2008 RECO received a complaint letter from Seller concerning a trade involving the property at 1-A Street ( Subject Property ) which he owned at the relevant time. The Seller lived in part of the Subject Property and he rented out part of it to tenants. As a result of the Seller s letter, the Office of the Registrar asked RECO Investigator to look into the circumstances surrounding the sale of the Subject Property. During the course of RECO Investigator s inquiry, RECO received a letter dated April 17, 2009 from Buyer 2 concerning the same trade involving the Subject Property. On or about April 4, 2008 Mr. Lowe had the Seller sign the seller s Acknowledgement portion of the document entitled Working With A Realtor The Agency Relationship (the Agency Information Document 1 ). On both the seller s and the buyer s portion of the Agency Information Document 1 the brokerage was identified as Brokerage. Page 14 of 52

15 On or about April 4, 2008, Mr. Lowe had the Seller enter into a Listing Agreement (the Listing Agreement ) as a Multiple Listing Service (the MLS ) Agreement for the Subject Property with the Brokerage, and Mr. Lowe signed as the person authorized to bind the Brokerage as the listing brokerage. The list price on the Listing Agreement was $409,000.00, which was the list price Mr. Lowe suggested to the Seller. The Listing Agreement expired on September 29, 2008 and provided for a commission of 4.5% of the sale price with 2.25% for the co-operating brokerage. The holdover period was blank. Mr. Lowe provided a copy of the Agency Information Document 1 and the Listing Agreement to the Brokerage, but he failed to provide a copy to the Seller. Approximately six weeks after he signed the Listing Agreement with only a few showings of the Subject Property, the Seller contacted Mr. Lowe to inquire about lowering the list price, whereupon Mr. Lowe told the Seller that this had already been done, and the property was now listed for $397, Records produced by the Brokerage show that the list price of the Subject Property was reduced on the MLS from $409, to $397, on April 11, At no time did the Seller sign any documentation to lower the listing price. Nor did Mr. Lowe contact the Seller to seek his prior permission or authorization to lower the list price. Nor did Mr. Lowe give the Seller any documentation with respect to the lowering of the list price of the Subject Property. Mr. Lowe told the RECO Investigator that the Seller did not sign any documents in relation to the change in the list price because it slipped their minds. Mr. Lowe did not provide the Brokerage with any documentation signed by the Seller authorizing the reduction in the list price. Page 15 of 52

16 On an unknown date subsequent to the signing of the Listing Agreement, Mr. Lowe met with Buyer 1, because Buyer 1 was considering the purchase of a property for himself, his girlfriend and her father since they were currently sharing monthly rental payments (the Initial Meeting ). At this time Buyer 1 s annual income was between $8, to $15, At the Initial Meeting, after asking Buyer 1 a number of questions regarding his credit, Mr. Lowe indicated that Buyer 1, his girlfriend and her father would not normally qualify for a mortgage, Mr. Lowe could make it work. At the Initial Meeting, Mr. Lowe told Buyer 1 that he had several listings for properties. One that was specifically mentioned was the Subject Property. Mr. Lowe instructed Buyer 1 to sign a number of documents in his presence. Buyer 1 did so, although he had no idea what the documents were. Buyer 1 never met with any other sales representative, other than Mr. Lowe, during the Initial Meeting. Mr. Lowe did not provide Buyer 1 or the Brokerage with copies of those documents. Sometime in early June of 2008, Mr. Lowe contacted the Seller to advise that an offer to purchase the Subject Property for $370, had been received (the First Offer ). The First Offer was from Buyer 1. Buyer 1 s signature on the First Offer was dated May 31, 2008 and allegedly witnessed by P. Thomas. Notwithstanding the fact that the witness is P. Thomas, Buyer 1 does not know who P. Thomas or Ms. Thomas is. On the First Offer the typed-in purchase price was $370,000.00, the closing date was August 29, 2008 and the Brokerage was listed as dual agent acting both as listing brokerage and co-op/buyer brokerage. Page 16 of 52

17 Mr. Lowe gave the Seller a copy of the First Offer, which shows a hand-written increase in the purchase price from $370, to $392, and certain other hand-written changes, allegedly initialled by the Seller. The Seller never countered the First Offer or affixed his signature to the First Offer, so it died. After the death of the First Offer, Buyer 1 s Mother, Buyer 2, initiated contact with Mr. Lowe in order to purchase a property, which she would in turn rent to Buyer 1. Sometime after the First Offer died, Buyer 2 attended at the Subject Property to view it. Mr. Lowe was not present, but a female sales representative allowed them access to the property, and the Seller was present in the home. While it was apparent that some obvious repairs were needed to the Subject Property, Buyer 2 agreed to make an offer to purchase. Allegedly on June 22, 2008 Mr. Lowe signed the Confirmation of Co-operation and Representation with respect to the transaction of the Subject Property (the Confirmation of Co-operation ) for the Brokerage as the listing brokerage and Ms. Thomas signed for the Brokerage as the co-operating brokerage, and Buyer 2 and Buyer 3, son of Buyer 2, signed as buyers and the Seller signed as the seller on the Acknowledgement portion of the Confirmation of Co-operation. Curiously, the Consent for Multiple Representation box of the Confirmation of Representation was left blank in that it was not initialled by either the Seller or Buyer 2 and Buyer 3. Allegedly on June 22, 2008, Buyer 2 and Buyer 3 as the buyers and Seller as the seller signed in their respective places on the Acknowledgement portion of the document entitled Working With A Realtor The Agency Relationship (the Agency Information Document 2 ). Page 17 of 52

18 However, the name of the brokerage acting for Buyer 2 and Buyer 3 on the Agency Information Document 2 was blank, although Buyer 2 and Buyer 3 initialled the choice below the blank name of the brokerage, which read as follows: Representing my interests, to be documented in a separate written agency representation agreement, and I understand the brokerage may represent and/or provide customer service to other buyers and sellers. However, the name of the brokerage acting for Seller on the Agency Information Document 2 was blank, although Seller initialled the choice below the blank name of the brokerage, which read as follows: Representing my interests, to be documented in a separate written agency representation agreement, and I understand the brokerage may represent and/or provide customer service to other buyers and sellers. Sometime subsequent to Buyer 2 viewing Subject Property, Mr. Lowe met with her at her home (the Offer Signing Meeting ) with an offer he had pre-typed for the purchase price of $380, (the Second Offer ). At some point prior to or at the Offer Signing Meeting, Buyer 2 discussed with Mr. Lowe that she was not pre-qualified for a mortgage, whereupon Mr. Lowe reassured her that he had all the contacts in the banks and the mortgage companies and he would look after this. Buyer 2 trusted Mr. Lowe was going to arrange the financing and believed he was representing her in the purchase of the Subject Property and protecting her interests. Buyer 2 and her other son, Buyer 3, signing the Second Offer in front of Mr. Lowe, allegedly on June 22, 2008, and no sales representative, other than Mr. Lowe, was present during the Offer Signing Meeting. Buyer 2 s and Buyer 3 s signatures were dated June 22, 2008 and the witness is stated to be Ms. Thomas (it is noted that Ms. Thomas signature on the Second Offer appears Page 18 of 52

19 to be completely different from the signature, P. Thomas, made by an unknown hand which appears as the witness for Buyer 1 on the First Offer). Buyer 2 does not know who P. Thomas or Ms. Thomas is, because they never met. Ms. Thomas failed to explain or discuss the Confirmation of Co-operation, the Agency Information Document 2, or the Second Offer with Buyer 2 and Buyer 3. Nor did she witness them signing the Second Offer despite her representing that she was a witness to their signatures. Ms. Thomas told the Investigator at the end of her interview that she had never met Buyer 2 and Buyer 3, and in reality she had nothing to do with the trade of the Subject Property other than signing documents presented to her by Mr. Lowe, who referred them to her, and pretending on paper that she was the co-operating sales representative in the transaction. The Second Offer had a closing date of August 29, 2008, and was stated to be irrevocable by Buyer 2 and Buyer 3 until 10:00 p.m. on June 25, 2008 and the deposit (the Deposit ) was $5, payable upon acceptance to the Brokerage. The Second Offer was conditional for five banking days upon Buyer 2 and Buyer 3 arranging satisfactory financing and obtaining a satisfactory inspection report. Sometime subsequent to the Seller s review of the First Offer, Mr. Lowe contacted him and asked him to attend at his office, because another offer to purchase the Subject Property had been received. The Seller went to see Mr. Lowe at his office, at which time Mr. Lowe said that he had an offer to purchase the Subject Property for $392,000.00, but the Seller would be required to refund $12, to the buyers on closing. Mr. Lowe explained to the Seller that the buyers were approved for $392,000.00, but they only wanted to pay $380, for the Subject Property. Page 19 of 52

20 Since the Seller would receive $380, out of this offer, he agreed to the price of $392, with the $12, refund to the buyers, but no Agreement of Purchase and Sale or any other documentation was signed or presented to him at that time. Sometime subsequent to this meeting at Mr. Lowe s office, Mr. Lowe met with the Seller and gave him the Second Offer. On the Second Offer, the Brokerage was listed as agent acting both as listing brokerage and co-op/buyer brokerage. Mr. Lowe had the Seller sign the Second Offer and initial hand-written changes on the Second Offer changing the irrevocable clause so it became a seller`s counter-offer and increasing the purchase price to $392, Mr. Lowe witnessed the Seller`s signature on this counter-offer to the Second Offer and it was dated June 23, The Investigator was told by the Seller that he did not sign this counter-offer to the Second Offer on June 23, 2008, but upon some unknown date after June 23, The Investigator was further told by the Seller that Mr. Lowe continued this process of back-dating documentation signed by the Seller throughout the dealings with the Subject Property. Buyer 2 and Buyer 3 accepted the Sellers`s counter-offer to the Second Offer, allegedly on June 24, 2008, and so it became a firm and binding Agreement of Purchase and Sale (the APS ) with Mr. Lowe signing the Commission Trust Agreement as authorized to bind the listing brokerage, Brokerage, and Ms. Thomas signing as authorized to bind the co-operating brokerage, Brokerage. Although Buyer 2 and Buyer 3 were committed to the APS to providing the Deposit upon acceptance of the APS, Ms. Thomas as the co-operating sales representative did not request or obtain the Deposit from Buyer 2 and Buyer 3 upon the acceptance of the APS. Nor did Mr. Lowe. Page 20 of 52

21 The records produced by the Brokerage show that the Deposit, being a bank draft in the amount of $5,000.00, dated August 29, 2008 and payable to the Brokerage, was only received at its head offer on September 2, 2008 and deposited into its trust account on September 4, On an unknown date, allegedly on June 26, 2008, Buyer 2 and Buyer 3 signed an offer to amend the APS (the Deposit Amending Agreement ) whereby the clause, Deposit of $5, upon acceptance, was replaced with the phrase, Deposit of $5,000.00: No later than 4 p.m. on 31 st of August, The Deposit Amending Agreement was stated to be irrevocable by Buyer 2 and Buyer 3 on June 26, 2008 at an unknown time because the time space was left blank. Mr. Lowe witnessed the signature of Buyer 2 on the Deposit Amending Agreement, but no witness signature appears beside the signature of Buyer 3. Curiously, under the Deposit Amending Agreement, Buyer 2 and Buyer 3 were not obliged to pay the Deposit until August 31, 2008, which was two days after the closing date of August 29, 2008 in the APS. On the Deposit Amending Agreement the Seller allegedly affixed his signature indicating his acceptance on June 26, 2008 and such signature is witnessed by Mr. Lowe, the Seller allegedly affixed his signature on the Confirmation of Acceptance on the Deposit Amending Agreement at 2:00 p.m. on June 26, 2008 and acknowledged receipt of it on the same day. The Seller told the Investigator that he never signed the Deposit Amending Agreement, he was unaware of its existence and Mr. Lowe never gave him a copy. In viewing the Deposit Amending Agreement, the Seller said his signatures are forgeries and he does not know who signed it. Page 21 of 52

22 When Mr. Lowe provided a copy of the Deposit Amending Agreement to the Brokerage, he misled his brokerage insofar as the brokerage relied on a forgery with respect to the Deposit Amending Agreement. On an unknown date, allegedly on June 27, 2008, Buyer 2 and Buyer 3 signed an offer to amend the APS (the Inspection Condition Amending Agreement ) replacing the inspection condition with the following: This Offer is conditional upon the inspection of the subject property by a home inspector at the Buyer s own expense, and the obtaining of a report satisfactory to the Buyer in the Buyer s sole and absolute discretion. Unless the Buyer gives notice in writing delivered to the Seller or the Seller s agent by August 10 th, 2008 [sic] that this Offer shall be null and void and the deposit shall be returned to the Buyer in full without deduction. The Seller agrees to co-operate in providing access to the property for the purpose of this inspection. This condition is included for the benefit of the Buyer and may be waived at the Buyer s sole option by notice in writing to the Seller or the Seller s agent within the time period stated herein. The Inspection Condition Amending Agreement was stated to be irrevocable by Buyer 2 and Buyer 3 until 6:00 p.m. on June 27, Mr. Lowe witnessed the signatures of Buyer 2 and Buyer 3 on the Inspection Condition Amending Agreement. In response to an inquiry from the Investigator as to why Mr. Lowe witnessed the signatures of the buyers on the Inspection Condition Amending Agreement, Mr. Lowe responded that: Paula was busy. I had more rapport with the people. In all honesty, I did everything on this deal. Mr. Lowe brought the Inspection Condition Amending Agreement to the Seller who signed it on an unknown date. Mr. Lowe signed as a witness to the Seller s signature on the Inspection Condition Amending Agreement and it was backdated to June 27, Page 22 of 52

23 Mr. Lowe failed to provide a copy of the Inspection Condition Amending Agreement to the Brokerage. On an unknown date, allegedly on June 30, 2008, Buyer 2 and Buyer 3 signed an offer to amend the APS (the Financing Condition Amending Agreement ) replacing the financing condition with the following: This Offer is conditional upon the Buyer arranging, at the Buyer s own expense, a new first Charge/Mortgage satisfactory to the Buyer in the Buyer s sole and absolute discretion. Unless the Buyer gives notice in writing delivered to the Seller or the Seller s agent on or before July 7 th (hand-written)10 th, 08, that this condition is fulfilled, this Offer shall be null and void and the deposit shall be returned to the Buyer in full without deduction. This condition is included for the benefit of the Buyer and may be waived at the Buyer s sole option by notice in writing to the Seller or the Seller s agent within the time period stated herein. The Financing Condition Amending Agreement was stated to be irrevocable by Buyer 2 and Buyer 3 until 6:00 p.m. on June 30, Although Ms. Thomas signed as a witness to the signatures of Buyer 2 and Buyer 3 on the Financing Condition Amending Agreement, Ms. Thomas did not meet or explain the Financing Condition Amending Agreement with Buyer 2 and Buyer 3. Nor did she witness them signing the Financing Condition Amending Agreement, despite her signing as a witness to their signatures. Mr. Lowe brought the Financing Condition Amending Agreement to the Seller who signed it on an unknown date. Mr. Lowe signed as a witness to the Seller s signature on the Financing Condition Amending Agreement and it was backdated to June 30, Page 23 of 52

24 Mr. Lowe failed to provide a copy of the Financing Condition Amending Agreement to the Brokerage. On an unknown date, allegedly on July 7, 2008, Buyer 2 and Buyer 3 signed a Notice of Fulfillment of Condition (the Financing Fulfillment Document ) confirming that the financing condition to the APS had been fulfilled, and Ms. Thomas signed as a witness to the signature of both Buyer 2 and Buyer 3. The receipt acknowledged portion of the Financing Fulfillment Document was left blank. Of note is that the financing condition typed on the Financing Fulfillment Document refers to it expiring on July 7, 2008, which date was struck out and replaced with July 10, 2008 on the Financing Condition Amendment Agreement. Ms. Thomas did not meet or explain the Financing Fulfillment Document with Buyer 2 and Buyer 3. Nor did Ms. Thomas witness Buyer 2 and Buyer 3 signing the Financing Fulfillment Document, despite her signing as a witness to their signatures. Ms. Thomas told the Investigator that Mr. Lowe told her that the financing was in place for Buyer 2 and Buyer 3. Ms. Thomas failed to confirm whether financing was in place for Buyer 2 and Buyer 3. After the home inspection of the Subject Property on an unknown date, the Seller and Buyer 2 and Buyer 3 agreed that Buyer 2 and Buyer 3 would receive a credit of $5, on closing, allegedly because of the condition of the property. On an unknown date, allegedly on August 10, 2008, Buyer 2 and Buyer 3 signed an offer to amend the APS (the Credit for Repairs Amending Agreement ) inserting The Seller agrees to credit a sum of Five Thousand Dollars ($5,000.00) to Buyer 2 and Buyer 3 on closing to effect repairs as per inspection report. The Credit for Repairs Amending Agreement was stated to be irrevocable by Buyer 2 and buyer 3 until 10:00 p.m. on August 10, Page 24 of 52

25 Mr. Lowe witnessed the signatures of Buyer 2 and Buyer 3 on the Credit for Repairs Amending Agreement. On the Amending Agreement the Seller allegedly affixed his signature indicating his acceptance on August 10, 2008 and such signature is witnessed by Mr. Lowe, the Seller allegedly affixed his signature on the Confirmation of Acceptance on the Credit for Repairs Amending Agreement at 8:00 p.m. on August 10, 2008 and acknowledged receipt of it on the same day. The Seller told the Investigator that he never signed the Credit for Repairs Amending Agreement, he was unaware of its existence and Mr. Lowe never gave him a copy. In viewing the Credit for Repairs Amending Agreement, the Seller said his signatures are forgeries and he does not know who signed it. When Mr. Lowe provided a copy of the Credit for Repairs Amending Agreement to the Brokerage, he misled his employing brokerage and therefore the brokerage was relying on a forgery with respect to the Credit for Repairs Amending Agreement. On an unknown date, allegedly on August 10, 2008, Buyer 2 and Buyer 3 signed a Notice of Fulfillment of Condition (the Inspection Fulfillment Document ) confirming that the inspection condition to the APS had been fulfilled. While Mr. Lowe signed as a witness to the signature of Buyer 2 on this Inspection Fulfillment Document, there was no witness signature to the signature of Buyer 3, and the receipt acknowledged portion of the Inspection Fulfillment Document was left blank. Since Ms. Thomas never met Buyer 2 and Buyer 3, she failed to explain any of the various amending agreements and notices of fulfillment to them. Mr. Lowe failed to inform the Seller that he was also representing Buyer 2 and Buyer 3 and Mr. Lowe failed to inform Buyer 2 and Buyer 3 that he was also representing the Seller. Page 25 of 52

26 As August 29, 2008 drew closer, the Seller tried unsuccessfully to reach Mr. Lowe because he had heard nothing regarding the closing of the APS and he had tenants, so he was unsure what was happening with the closing. The Seller called the Brokerage and complained to the office manager regarding his lack of ability to make contact with Mr. Lowe. Mr. Lowe called the Seller within minutes of the phone call being placed to the office manager of the Brokerage and told him to attend at his office to sign papers. The Seller met Mr. Lowe at his office approximately two days before the closing date of August 29, 2008 (the August Meeting ). At this August Meeting, Mr. Lowe told the Seller that the closing date had been changed to September 10, The Seller was unaware that the closing date had been changed to September 10, The Seller did not sign any amending agreement or other documentation changing the closing date to September 10, Records produced by the Brokerage show that the sale of the Subject Property was reported on the MLS system as being sold firm on September 3, 2008 with a closing date of September 10, 2008 for a purchase price of $392, with Ms. Thomas as the co-operating sales representative. Neither Mr. Lowe, nor Ms. Thomas, provided the Brokerage with any amending agreement changing the closing date to September 10, 2008 signed by the Seller and Buyer 2 and Buyer 3. Mr. Lowe provided the Brokerage with a Sales Report, signed by Mr. Lowe on unknown date, which Sales Report indicates that the completion date for the Subject Property was September 10, Page 26 of 52

27 After being told at the August Meeting that the closing date had been changed to September 10, 2008, the Seller asked Mr. Lowe whether the completion date could be changed to the end of the September to allow his tenants time to locate a new residence, and he too had to find a place to reside. Mr. Lowe said he would work on this and would call him back the next day, but Mr. Lowe failed to call. At the August Meeting, the Seller asked Mr. Lowe for copies of all the paperwork so he could present the papers to his lawyer for closing. Mr. Lowe questioned the fact that the Seller had his own lawyer and informed the Seller that he already had a lawyer working on behalf of the Seller. At the August Meeting, Mr. Lowe made it clear that if the Seller used his own lawyer, the deal would be more complicated and would have to start over. Due to this fact, the Seller agreed to proceed with the lawyer that Mr. Lowe had enlisted and Mr. Lowe provided the Seller with the name of the lawyer known as Individual and provided a phone number. Since Mr. Lowe did not call the Seller the day after the August Meeting to advise that the closing date had been changed to the end of September, the Seller believed that the completion date remained at September 10, The Seller rented an apartment for himself and paid first and last month s rent plus the balance of the rent for September 10 to the end of the month. In addition, the Seller took September 8 and 9, 2008 off work to move himself and his tenants, and he rented a truck and a storage facility to accommodate his move. On September 9, 2008, Individual called the Seller, who had at that point had fully loaded the moving truck, and advised that the completion date had been changed to September 30, Page 27 of 52

28 The Seller called Mr. Lowe and insisted that he receive a copy of the amendment changing the completion date to September 30, Mr. Lowe did not provide one. Approximately a week went by and Mr. Lowe had not called. When Mr. Lowe did finally call he told the Seller that the completion date had been changed yet again to September 26, Mr. Lowe told the Seller that he could not produce the amendment changing the completion date, because it was being faxed to him. On or about September 26, 2008 Mr. Lowe appeared at the Subject Property and asked the Seller to sign a document in relation to the APS which was an offer to amend the APS (the Completion Date Amending Agreement ) deleting Completion Date: This Agreement shall be completed by no later than 6:00 p.m. on the 29 th day of August 2008 and inserting Completion Date: This Agreement shall be completed by no later than 6:00 p.m. on the 26 th day of September 2008, allegedly signed by Buyer 2 and Buyer 2 on August 29, The Completion Date Amending Agreement was stated to be irrevocable by Buyer 2 and Buyer 3 until 9:00 p.m. on August 29, Mr. Lowe witnessed the signatures of Buyer 2 and Buyer 3 on the Completion Date Amending Agreement. The Seller signed the Completion Date Amending Agreement and Mr. Lowe signed as a witness to the Seller s signature on the Completion Date Amending Agreement and it was backdated to August 29, Mr. Lowe did not provide the Seller with a copy of the Completion Date Amending Agreement. Nor did Mr. Lowe provide a copy to the Brokerage. The unsigned Confirmation of Acceptance on the Completion Date Amending Agreement states the time for confirmation of acceptance to be 7:30 p.m. on August 29, 2008, one and half hours after the 6:00 p.m. deadline in the APS for completion on August 29, Page 28 of 52

29 On September 26, 2008 the APS did not close and the Seller could not contact Mr. Lowe. Subsequently, the Seller listed the Subject Property with another brokerage and it sold in November of 2008 for $354, Mr. Lowe admitted to the Investigator that: a) He asked Ms. Thomas to sign documentation which would indicate that she represented and provided services to Buyer 2 and Buyer 3, even though he was in fact representing and providing services to both the Seller as the seller and Buyer 2 and Buyer 3. b) He enlisted the services of a law clerk ( Individual turned out to be a law clerk and not a lawyer) or lawyer to act on the Seller s behalf with respect to the APS without his knowledge or permission. Ms. Thomas admitted to the Investigator that: a) Mr. Lowe had asked her to appear as the co-operating sales representative on the APS and that Mr. Lowe, not she, represented and provided services to Buyer 2 and Buyer 3. b) She did not know whether Buyer 2 and Buyer 3 had obtained financing or not, other than relying on representations made to her by Mr. Lowe. c) She did not know why the APS did not complete. d) She never actually witnessed Buyer 2 and Buyer 3 signing any of the documents in relation to the Subject Property. e) She would sign as a witness on the documentation in relation to the APS, when Buyer 2 and Buyer 3 s signatures were not affixed and then provide such documentation to Mr. Lowe, who would then obtain Buyer 2 s and Buyer 3 s signatures. f) She had never met or spoken to Buyer 2 and Buyer 3. Page 29 of 52

30 Winston Lowe RECO alleged that Mr. Lowe acted unprofessionally including as follows: 1. Mr. Lowe mis-represented himself and what representation he would provide in the APS to the Seller, the Buyers, the Brokerage and the real estate industry at large by showing himself solely as the listing sales representative on the APS, on the June 22, 2008 Working with a Realtor booklet and on the MLS system, when he was also fulfilling the function or providing the services of the cooperating sales representative. 2. As the listing and co-operating sales representative in the APS, Mr. Lowe either failed to provide accurate and complete documentation relating to the trade of the Subject Property to the Brokerage, the Buyer and the Seller and/or he provided incomplete, false or misleading documentation to them. 3. Without the knowledge, consent or participation of the Seller and without proper documentation, he unilaterally changed or caused the list price of the Subject Property to be lowered on MLS system and he unilaterally changed or caused the closing date of the transaction to September 10, He enlisted the services of a law clerk to act on the Seller s behalf with respect to the APS without his knowledge or permission. 5. He induced and/or assisted and/or collaborated with Ms. Thomas in the creation and furnishing of false and/or misleading documents in relation to the trade of the Subject Property. 6. As the co-operating sales representative in the APS, Mr. Lowe failed to provide conscientious service to the buyer clients and/or failed to represent them including, without limitation, taking instructions from the Buyers, advising the Buyers regarding the terms and the impact of the APS, the Financing Condition Amending Agreement, the Financing Fulfillment Document and a buyer representation agreement. 7. As the listing sales representative in the APS, Mr. Lowe failed to promote and protect the best interests of the seller client (the Seller) including, without limitation, causing him damages by changing the closing date to September 10, 2008, exposing him to having to sue the Buyers for damages for the non- Page 30 of 52