Realtor’s Appeal of Suspension Backfires

Administrative law – Decisions reviewed – Financial Services Tribunal –  Judicial review – Jurisdiction – Standard of review – Patent unreasonableness – Real estate agents – Disciplinary proceedings – Penalties

Behroyan v. Ontario (Financial Services Tribunal), [2022] B.C.J. No. 1285, 2022 BCSC 1190, British Columbia Supreme Court, July 14, 2022, N.P. Kent J.

Mr. Behroyan, a real estate agent, brought a judicial review of a decision of the Discipline Committee of the Financial Services Tribunal (FST) imposing a penalty revoking his license following findings of professional misconduct related to misrepresentation, non-disclosure, deceptive dealing, among other things.

The procedural history in this case is convoluted, involving multiple decisions by both the Real Estate Council and the FST. The original discipline and penalty decisions resulted in a suspension of Mr. Behroyan’s license for 12 months, a fine and payment of enforcement costs. The Superintendent of Real Estate filed an appeal of the penalty decision and Mr. Behroyan filed an appeal of both discipline and penalty decisions. The appeals were joined in a bifurcated hearing of the discipline matter and the penalty matter.

Upon appeal, the FST upheld three of the disciplinary charges but overturned two. A new panel of the discipline committee was appointed to consider the penalty decision. A new panel of the discipline committee instituted a harsher penalty, including a cancellation of his license, a five-year prohibition from applying for further license and payment of enforcement expenses.

Mr. Behroyan sought a judicial review of that final penalty decision of the FST on the basis that the FST did not have jurisdiction to direct the penalty reconsideration, and that the process followed was arbitrary and unreasonable resulting in two radically different penalty decisions based on a change in decision makers.

Reviewing the matter on a standard of patent unreasonableness, the Court agreed with the FST that it had the authority in the unique circumstances of this case to direct a penalty reconsideration pursuant to s. 242.2(11) of the Financial Institutions Act. The statutorily authorized reconsideration is a specific exception to the principle of functus officio.

With respect to Mr. Behroyan’s argument that the process followed was arbitrary and unreasonable, the Court acknowledged that the optics in this case were “unfortunate,” however, the penalty reconsideration decision was transparent, intelligible and justified and should not be set aside. Notably, the Court was displeased that Mr. Behroyan had raised objections during the judicial review that were not raised before the decision makers in the tribunals below, and that he was now objecting to procedures he himself had urged upon the tribunals below. The judicial review was dismissed.

This case was digested by Roshni Veerapen, and first published in the LexisNexis® Harper Grey Administrative Law Netletter and the Harper Grey Administrative Law Newsletter.  If you would like to discuss this case further, please contact Roshni Veerapen at rveerapen@harpergrey.com.

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