A B.C. Supreme Court judge has affirmed the powers of the provincial real-estate superintendent to compel the industry regulator to reopen investigations into alleged agent misconduct, a ruling that underscores the new oversight of a sector that lost the ability to police itself two years ago.
The decision, handed down at the end of last month, stated that the superintendent has the power to force the Real Estate Council of British Columbia, which he oversees under provincial legislation, to hold a new disciplinary hearing even after the regulator's complaints committee has reviewed a case and decided that it is unnecessary.
Justice Elliott Myers wrote in his Aug. 31 decision that 2016 amendments to the provincial Real Estate Services Act, which were enhanced after The Globe and Mail revealed widespread problems in the industry, make it clear that the superintendent has this ability.
The council had argued that it would be unfair to allow the superintendent to compel it to reopen any file "months or even years" after the regulator had investigated, dropped a complaint and notified all the parties involved.
"Here, the council is not reconsidering its own decision, either of its own volition or at the request of a party. Rather, the council is being directed by the superintendent to issue a notice of hearing under a separate statutory provision from that which initially brought the matter before it," the ruling stated.
Though the judge underscored the superintendent's powers, the ruling said that the particular case in question could not be reopened because the realtor was not notified that his alleged misconduct was drawing new attention from the superintendent. The superintendent's spokesperson said his office is adapting its procedures to now give realtors this notice to adhere to the judgment.
A spokesperson for superintendent Micheal Noseworthy, a former real estate lawyer, issued a statement on Friday praising the court for providing clarity around his oversight role and giving the public more confidence that the council is investigating misconduct properly.
"This decision will ensure that our office can continue to review cases such as this to ensure effective oversight of the council’s investigation and discipline process," the statement said.
The council declined to comment, noting its lawyers were still reviewing the decision.
The alleged misconduct at the heart of the very public legal spat involved a realtor in McBride, B.C., a village in the Kootenays on the boundary with Alberta. In his initial claim, the superintendent had stated that he was contacted by a couple last March who alleged the realtor messed up a deal on a piece of farmland but the council's complaints committee decided against pursuing any disciplinary action against the agent. The superintendent reviewed the applicable materials and determined it was in the public interest to direct the council to revisit its decision to drop the complaint.
Two months later, after receiving these instructions from the superintendent, Erin Seeley, the council's executive officer, replied, stating that she was refusing to follow the order, according to the lawsuit. She claimed the council was functus officio – a common-law doctrine that means it had fulfilled its statutory duty and, as such, had no further ability to revisit the decision, according to the lawsuit.
The judge ruled that provincial legislation was clear enough to override this doctrine, which he stated is not an absolute concept nor to be given the status of a constitutional right.
The council's decade of self-regulation, which gave the body full control over licensing, regulation and discipline, was ended in 2016 by former premier Christy Clark after The Globe uncovered widespread realtor misconduct in Metro Vancouver's heated housing market.
A Globe investigation into more than 100 of the council’s disciplinary proceedings showed real estate agents in Metro Vancouver faced fines and suspensions that were dwarfed by the hefty commissions they earned. The council has since increased its maximum disciplinary penalty from $10,000 to $250,000 for each contravention, but no hearings have concluded into alleged misconduct that occurred after these new rules kicked in.