) ) Nancy O’Dea Applicant – v. –, 2010 ONSC 6601

CITATION : O’Dea v. Real Estate Council of Ontario, 2010 ONSC 6601 COURT FILE NO.: 10-48252 DATE: 2010/11/30 ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: ) ) Nancy O’Dea Applicant – and – The Real Estate Council of Ontario, Richard Forster, Sharon McMillan and Cathy Chant Respondent ) ) ) ) ) ) ) ) ) ) Robert E. Houston, Q.C., for the Applicant/Respondent Party to the Motion to Quash Jane M.

Bachynski and Derek Leschinsky, for the Respondents/Moving Party on the Motion to Quash ) HEARD: August 12, 2010 rEASONS FOR DECISION The text of this decision was corrected on December 1, 2010 by appending the following statement to paragraph [42] “The request for injunctive relief by the applicant is denied.” R. SMITH J.

Overview [ 1 ] The applicant, Nancy O’Dea (“O’Dea”) is a real estate agent who seeks an injunction staying a disciplinary hearing set to proceed under The Real Estate Council of Ontario (“RECO”) because a Superior Court judge previously has found that O’Dea did not breach the Realtors’ Code of Ethics in a trial held in November of 2008. [ 2 ] O’Dea submits that the doctrines of abuse of process and issue estoppel should be applied to prevent the Discipline Committee from rehearing an issue that has already been decided by the Superior Court.

As part of her defence and counterclaim Assaly had alleged that O’Dea had breached several sections of the Code of Ethics for real estate agents, thereby disentitling her from receiving any commission on the sale. Preliminary Motion by RECO [ 3 ] RECO has brought a preliminary motion to quash O’Dea’s application on the grounds that the Superior Court did not have jurisdiction to hear O’Dea’s application. RECO submits that O’Dea’s application, is in substance an application for judicial review which can only be brought before the Divisional Court.

RECO submits that O’Dea’s application is premature because the Discipline Committee hearing has not yet been held, or a decision made, and that O’Dea has not exhausted her administrative remedies, including appeals available to her through Real Estate and Business Brokers Act (“ REBBA ”), as well as ultimately, judicial review of the Discipline Committee’s decision. [ 4 ] RECO submits that issue estoppel and abuse of process do not apply because the parties are not the same, that RECO has a different purpose, namely protecting the public, and also can impose different remedies from those available in a civil trial. [ 5 ] O’Dea responds that her application is not for judicial review and submits that the Superior Court has jurisdiction to apply the doctrine of abuse of process pursuant to s. 140 of the Courts of Justice Act and also has an inherent jurisdiction to prevent an abuse of process.

Issues [ 6 ] The following issues must be decided: 1. Does the Superior Court have jurisdiction to hear an application to determine whether the doctrines of abuse of process and issue estoppel apply to justify granting a stay of a discipline hearing before an administrative Tribunal? 2. If the Superior Court has jurisdiction; should the Court allow the Discipline Commitee to decide whether it is bound by the findings of McNamara J., namely that O’Dea’s conduct did not breach sections 3, 4, 5, or 39 of the Realtors’ Code of Ethics? 3.

If the answer to question #2 is negative; should a stay of the discipline hearing under RECO be granted on the basis of abuse of process or issue estoppel ? Background Facts [ 7 ] Nancy O’Dea was a sales representative working with Royal Lepage Performance Realty in the City of Ottawa in 2006. [ 8 ] O’Dea met Linda Assaly in May of 2006.

Assaly advised her that she had listed the property with another agency at an asking price of $679,000 and apparently had one offer at $525,000 during the currency of the listing agreement. [ 9 ] On May 9, 2006, Linda Assaly, the executrix of the estate of her mother, Mary Assaly, executed a listing agreement authorizing O’Dea to act on behalf of a vendor to market and sell the home of her late mother at 1351 Chattaway Avenue, Ottawa, Ontario.

The set agreement was for a six-month period and the property was listed with an asking price of $659,000. [ 10 ] No offers were received on the property until the Baumanns were introduced to the property in August of 2006. O’Dea’s belief, based on information from her colleagues and contractors, was that the asking price was too high considering the renovations that had to be completed on the Assaly home. [ 11 ] During the listing agreement the applicant O’Dea introduced Assaly to Alex and Tracey Baumann (the “Baumanns”).

In August of 2006, the Baumanns and Assaly exchanged numerous offers initially through O’Dea. [ 12 ] The Baumanns lived in Brisbane, Australia. There is a 14-hour time difference between Brisbane and Ottawa which became a significant factor in the events that transpired. [ 13 ] On August 15 th , the Baumanns executed a dual representation agreement which was also signed by Linda Assaly. Offers and counter-offers were made commencing on August 17, 2006. The Baumanns’ first offer was for $540,000. The offer was countered on August 19 th at $650,000 by Assaly.

On August 20 th , the Baumanns countered this proposal at $560,000. Assaly countered this offer to purchase $636,000, “$600,000 for purchase of house” and “$36,000 for a commission to Royal Lepage for dual representation”. [ 14 ] During the exchange of offers, the Baumanns identified a home inspector and had the Assaly property inspected. [ 15 ] On August 24 th , the Baumanns presented another offer to purchase at $585,000.

On August 24 th , O’Dea forwarded an e-mail to Assaly reporting that the Baumanns had based their offered price on a reputable structural engineer’s building inspector report, and the views of two friends who were both lawyers who lived in the same area. O’Dea also advised Assaly that the Baumanns were getting tired as they had asked her to visit another property on the following day on August 25, 2006. Assaly countered this proposal at a price of $625,000 and suggested that O’Dea consider reducing her commission. Assaly’s counter offer was forwarded by fax to the Baumanns.

On August 27, 2006, O’Dea advised Assaly that the buyers had decided to pass for the moment. [ 16 ] On August 28, 2006 the Baumanns made an offer to purchase a different property known as 7 Southern Hills in the City of Ottawa. Their offer to purchase was faxed from Australia at 6:44 a.m. on August 28 th and received in Ottawa at 4:44 p.m. on August 27, 2006. At 6:10 p.m. on August 27 th , O’Dea faxed the offer to the listing agent for 7 Southern Hills. [ 17 ] At 9:30 a.m. on August 29 th , O’Dea received an e-mail from the Baumanns asking if Assaly would reconsider their last offer, which was at $585,000.

At 11:25 a.m. Ottawa time on August 29 th , O’Dea wrote to the Baumanns and told them that she had advised Assaly they were not prepared to proceed but they might come back and the door was still open. The agent also offered some comments to the Baumanns on her estimate of the cost of renovating the Assaly property, at approximately $100,000 plus $25,000 for the master and $15,000 for the main floor.

She then recommended that the Cedar Hill property was a better investment for the Baumanns. [ 18 ] On August 29 th at 4:29 p.m., O’Dea e-mailed Assaly to inquire if she would entertain an offer from the Baumanns at their previously offered price of $585,000. [ 19 ] On August 29 th at 5:24 p.m., O’Dea received a signed acceptance of the counter-offer on the 7 Southern Hills property from the Baumanns at $675,000.

[ 20 ] On August 30 th at 11:13 p.m., after the Baumanns had accepted the counter-offer on the other property, Assaly forwarded an e-mail to O’Dea telling her that she would entertain the Baumanns’ offer and asked them to put it in writing. Assaly also wanted a response to her suggestion that there should be some adjustment to the agent’s commission. [ 21 ] Assaly sent a second e-mail on August 31 st at 2:40 p.m. O’Dea responded to Assaly by e-mail on August 31 st at 5:27 p.m. stating she had left messages on Baumann’s cell and telephone.

Assaly wrote again on August 31 st at 7:15 p.m. stating that she had not been informed of what was happening with the Baumanns’ offer. O’Dea responded to Assaly on September 1 st at 9:40 a.m. and advised her that the Baumanns had considered her request and decided not to follow through. [ 22 ] On September 2, 2006, Assaly contacted the Baumanns directly in Australia. On September 3 rd , Assaly e-mailed the Baumanns and asked if they were prepared to buy her house for $585,000 without paying any real estate commission.

Assaly’s lawyer prepared an agreement of purchase in sale dated September 5, 2006 for a purchase price of $585,000 and sent it to the Baumanns. The Baumanns signed the offer on September 9 th and Assaly accepted their offer at $585,000 on September 11, 2006. The sale of Assaly’s home to the Baumanns was completed on December 15, 2008. Proceedings in the Superior Court [ 23 ] On June 11, 2007, Royal LePage Performance Realty and Nancy O’Dea commenced action against Assaly in the Superior Court to recover real estate commission of six per cent of the sale price of $585,000 as agreed in the listing agreement.

In July 2007, Assaly filed a defence and counter-claim alleging that O’Dea had breached the Realtors’ Code of Ethics under REBBA as set out in Ontario Regulation 580-05 .

In her defence, Assaly alleged that O’Dea breached sections 3, 4, 5, 6, 21, 23, 37, 38, 39 and 41 of the Realtors’ Code of Ethics and that O’Dea’s breaches disentitled her to receive any real estate commission on the sale to the Baumanns. [ 24 ] A full trial was held before McNamara J. who heard evidence related to two main issues, namely, whether any real estate commission was payable to O’Dea by Assaly and whether O’Dea had breached the provisions of the Realtors’ Code of Ethics.

The issue of whether O’Dea had breached the sections of the Code of Ethics referred to in the Statement of Defence was a central issue in the trial before McNamara J. [ 25 ] In his reasons for decision, McNamara J. stated as follows.

I have considered all of the alleged breaches complained of within the context of the facts as I found them, and I am not persuaded that there was any conduct on the part of either plaintiff that would constitute a breach by them of the provisions of the Act and/or of the Codes of Ethics. [ 26 ] On October 22, 2007, after filing her Statement of Defence, Assaly had filed a complaint with RECO making the same allegation that O’Dea had breached the sections of the Code of Ethics under REBBA .

On November 23, 2009, two years after the complaint was filed by Assaly, the Registrar of REBBA advised O’Dea that he was referring Assaly’s complaint to a hearing before the Discipline Committee of RECO. RECO’s Allegation Statement “alleges” that O’Dea breached sections 3, 4, 5 and 39 of the Code of Ethics. These same sections of the Code of Ethics are referred to in Assaly’s Statement of Defence and were in issue before McNamara J. [ 27 ] RECO has appointed a Disciplinary Committee consisting of a real estate broker, a real estate agent and a member of the public to conduct the hearing.

Analysis Issue #1 Does the Superior Court have jurisdiction to hear an application to determine whether the doctrine of abuse of process applies, justifying granting a stay of a discipline hearing before an administrative Tribunal ? [ 28 ] The respondents (collectively referred to as “RECO”) submit that the Superior Court of Justice does not have jurisdiction because the application before me is in substance one of judicial review. RECO submits that it is premature, as O’Dea has not engaged let alone exhausted the remedies available to her under REBBA .

RECO submits that O’Dea’s remedies are to defend herself at the discipline hearing and if dissatisfied with its decision, to appeal to the Appeals Committee, and ultimately to seek judicial review before the Divisional Court. [ 29 ] O’Dea submits that she is not seeking judicial review of any administrative decision but rather seeks injunctive relief which the Superior Court has jurisdiction to grant.

O’Dea also submits that the Superior Court has jurisdiction to grant a stay on the basis of abuse of process pursuant to s. 140 of the Courts of Justice Act and also has inherent jurisdiction to grant relief which would avoid working on injustice and to maintain the integrity of the administration of justice. [ 30 ]

Section 6 of the Judicial Review Procedure Act , R.S.O. 1990, c. J.1 states that “an application for judicial review shall be made to the Divisional Court.” I agree with RECO’s submission that if O’Dea was seeking judicial review of an administrative Tribunal’s decision that the application must be made to the Divisional Court. [ 31 ] In Canada Post Corp. v.

C.U.P.W. (1989) 72 O.R. (2d) 394 (H.C.) at 397-398 , Doherty J. (as he then was) held that: the High Court has no jurisdiction under Rule 14.05 to hear an application where the relief claimed is in the nature of a declaration, or prohibition, or certiorari in relation to the exercise of a statutory power of decision. Such relief is only available by way of an application to the Divisional Court.

[32] In Canada Post Corp. v.

C.U.P.W., supra, at p. 398 the court held that “[a]pplications for judicial review include those inwhich the applicant seeks to prohibit the exercise of a statutory power of decision.” RECO submits that this is in substance what O’Deais seeking as she seeks an order staying the disciplinary hearing which is proceeding under RECO. [33] O’Dea submits that she is not seeking judicial review of a decision of the Discipline Committee because no decision has beenmade other than the Registrar’s decision to refer the matter to a hearing before the Discipline Committee. [34] Superior Courts have a residual discretion to prevent an abuse of the court’s process.

In Toronto (City) v. C.U.P.E., supra, theSupreme Court quoted Goudge J.A. from the decision of Canam Enterprises Inc. v. Coles (2000) (ON CA), 51 O.R.(3d) 481 (C.A.) dissenting (approved 2002 SCC 63 , [2002] 3 S.C.R. 307) at paras. 55-56: The doctrine of abuse of process engages the inherent power of the court to prevent the misuse of its procedure, in a way that would bemanifestly unfair to a party to the litigation before it or would in some other way bring the administration of justice into disrepute.

It is aflexible doctrine unencumbered by the specific requirements of concepts such as issue estoppel.” [35] The Supreme Court went on to state that: As Goudge J.A.’s comments indicate, Canadian Courts have applied the doctrine of abuse of process to preclude relitigation incircumstances where the strict requirements of issue estoppel (typically the privity/mutuality requirements) are not met, but whereallowing the litigation to proceed would nonetheless violate such principles as judicial economy, consistency, finality and the integrity ofthe administration of justice. [36] I am satisfied that the Superior Court has jurisdiction to decide whether the doctrine of abuse of process applies in theparticular circumstances of the case before me for the following reasons: (

a) s. 140 of the Courts of Justice Act specifically gives the Court jurisdiction to apply the doctrine of abuse of process; (

b) the Court has an inherent power to prevent the abuse of its procedure and to decide whether allowing the disciplinary hearingto proceed would violate such principles as consistency, finality, and the integrity of the administration of justice; (

c) if the doctrine of abuse of process applies, then granting relief would be the most expeditious, just and least expensivemanner to decide the issue as it would prevent the expense and time associated with proceeding with further discipline hearing where thesame issues have already been decided; (

d) the doctrine of abuse of process involves the application of a legal doctrine recognized by the courts and is not in substance ajudicial review of a decision of an administrative tribunal; and (

e) the unique circumstances before me raise a legal question, namely: Does the fact that the same issue has been previouslydecided by a Superior Court judge in a civil trial, trigger the application of the doctrine of abuse of process? Issue #2 If the Superior Court has jurisdiction; should the Court allow theDiscipline Committee decide whether it is bound by the findings of McNamara J.,namely that O’Dea’s conduct did not breach sections 3, 4, 5 or 39 of the Realtors’Code of Ethics? [37] The normal process for tribunals such as RECO, that have administrative authority to administer ‘Complaints, Inspection andDiscipline’ under

Part V of REBBA, would be for the Discipline Committee to decide matters that have been delegated to it. [38] I find that in these circumstances, the preferable procedure would be to allow O’Dea to proceed before the DisciplineCommittee to determine: (

a) Whether it would be an abuse of process to allow Assaly to proceed with a complaint to RECO, and for RECO to proceedwith a hearing of Assaly’s complaint; (

i) when she previously raised the same issues, namely that O’Dea had breached sections 3, 4, 5 and 39 of the Code of Ethics,in her defence to O’Dea’s claim; and (ii) when she elected to have these issues determined in a full trial in the Superior Court which found that O’Dea’s conduct hadnot breached any of the above sections of the Code of Ethics?; and (

b) Does the doctrine of issue estoppel or abuse of process apply to prevent a matter from proceeding to a full disciplinaryhearing to avoid violating the principles of judicial and quasi judicial economy, to avoid inconsistent findings, to promote finality of legalproceedings, and to preserve the integrity of the administration of justice?

[ 39 ] The Discipline Committee would decide whether failing to apply issue estoppel and requiring O’Dea to go through a second hearing to address the same issues would be unfair or unjust to her, as well as balancing the other factors that must be considered to decide if issue estoppel or abuse of process, namely, determining that the same issues had been decided, are the purposes different, the absence of a financial stake in the outcome, the expertise of the Court in making its finding, the failure of Assaly to appeal the Superior Court decision, and the degree of involvement of Ms.

Assaly in both procedures. [ 40 ] The decision on such an application to the Discipline Committee would be subject to judicial review by either party on how the Discipline Committee applies the legal principles of issue estoppel and abuse of process. The Discipline Committee would not be deprived of their jurisdiction, and the Discipline Committee’s decision in applying the doctrines of issue estoppel and abuse of process would be subject to judicial review by the Divisional Court. In my view, this is the appropriate manner for these issues to be considered.

Disposition [ 41 ] RECO’s preliminary motion or seeking a declaration that the Superior Court lacks jurisdiction is dismissed. [ 42 ] Ms. O’Dea’s application for a stay of the Discipline Committee hearing based on the doctrines of abuse of process and issue estoppel is to be decided by the Discipline Committee whose decision will be subject to judicial review. The request for injunctive relief by the applicant is denied. Costs [ 43 ] If the parties are unable to agree on costs, they may make brief written submissions within fifteen (15) days. Mr. Justice Robert J.

Smith Released: November 30, 2010 CITATION : O’Dea v. Real Estate Council of Ontario, 2010 ONSC 6601 COURT FILE NO.: 10-48252 DATE: 2010/11/30

ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: Nancy O’Dea Applicant – and – The Real Estate Council of Ontario, Richard Forster, Sharon McMillan and Cathy Chant Respondent rEASONS FOR DECISION Mr. Justice Robert J. Smith Released: November 30, 2010