Eye On Regulation


A Case

In a very recent case, Kalia v Real Estate Council of Alberta, 2021 ABQB 950, the Alberta Court of King’s Bench considered whether to grant a stay of a temporary suspension that was imposed on a realtor pending completion of an investigation into complaints about his conduct and the outcome of the conduct proceedings.

The regulator imposed the temporary suspension after it identified substantial concerns including potential fraud, and determined the suspension was necessary to protect the public. The realtor argued that he was at an unfair disadvantage because the regulator relied on hearsay in imposing the temporary suspension. He said that the Court should reject this hearsay evidence and stay the temporary suspension.

The Court rejected this argument, and noted that the realtor’s position misunderstood the nature of a temporary suspension. The purpose of a temporary suspension is to protect the public, and in imposing the temporary suspension, the regulator is not deciding whether the complaints are true – rather, the regulator examines whether the evidence, if believed, covers all the essential elements of the alleged misconduct and would justify a finding against the regulated member in the absence of a valid defence, and if so, whether action is necessary to protect the public on an interim basis.

At this stage of proceedings, the regulator generally is dependant on hearsay, and timely protection of the public may not allow for a fulsome inquiry into the allegations. Furthermore (depending on the statute that the regulator is governed by), the laws of evidence applicable to judicial proceedings do not apply to conduct hearings, nor do they apply to a decision to issue a temporary suspension.

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Our Two Cents for Free

When deciding whether to issue a temporary suspension, a regulator is typically working with imperfect evidence, and courts recognize that regulators must make decisions for the protection of the public on that basis.

A Question

When issuing a temporary suspension, what evidence are you relying on – is it firsthand, or hearsay?

Eye on Regulation is RMRF’s monthly newsletter for the professional regulatory community. Each month we offer:

  • A Case: a (very) brief summary of a recent and relevant case;
  • Our Two Cents for Free: practical insight inspired by the files on our desks right now; and
  • A Question: something to get you thinking about ways to enhance your work.

This newsletter is for information only and does not constitute legal advice.

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