APPEAL LOSS FOR CREA and TREB

The Toronto Real Estate Board (TREB), CREA and 49 individuals named in a $540-million lawsuit launched by Realtysellers have lost an appeal to have the action dismissed. They now have 30 days to file statements of defence with the court.

“CREA spent years trying to avoid filing a defence because they don’t have one,” says Lawrence Dale, president and CEO of Realtysellers. “CREA got TREB and the individuals into this mess. I wonder if TREB will finally do the right thing and expose CREA for what they did.”

The court ruling was handed down on Friday by Justice J. Swinton of the Ontario Superior Court of Justice.

Dale and his cousin Stephen Moranis, a former TREB president, have filed several claims against TREB and CREA over the years relating to Realtysellers, the real estate company they formed in November 2000. The company offered discounted flat fee services. In 2002, TREB enacted new rules that required listing brokers to be involved in the offer negotiation process. Realtysellers sued TREB and filed a complaint with the federal Competition Bureau.

In January 2004, TREB and Realtysellers reached a settlement in which Realtysellers received $700,000 in compensation. TREB changed its rules to allow the flat fee program access to the MLS, and Realtysellers withdrew its complaints to the Competition Bureau, which closed its investigation into the matter.

But Dale and Moranis allege that in 2006, TREB and CREA conspired to force them to close down Realtysellers.  CREA implemented new offer negotiation rules in 2007. The Competition Bureau subsequently filed a complaint, which CREA and the bureau settled in 2010 with a 10-year binding consent agreement.

The current $540-million statement of claim names CREA, TREB, and 49 individuals who were  TREB or CREA directors or officers at the time, a former CREA president and Treb-Ren ventures, the entity that ran Real Estate News, the board’s now-defunct newspaper. None of the allegations have been proven in court.

In their appeals, TREB and CREA argued that because the lawsuit named the directors and officers personally, it “raises important issues relating to limited liability protection for corporate representatives.” But Justice Swinton says in the ruling: “I disagree, as the claim against these defendants is with respect to their individual actions, rather than their role as officers and directors.”

Dale says: “CREA leaders came up with a plan in 2006 to prevent me from operating. Now almost 50 people who let that happen must answer for letting that happen. They can’t plead ignorance anymore and they are now personally financially responsible.

“The consent agreement was the first step. Winning these motions was the second step. Now no more delays,” says Dale. “As is my right, I have chosen that a jury of common Canadians will decide this action. I am confident such a jury will see how unlawful they have acted and award a huge amount of damages that will teach the industry a lesson that they will never forget. Canadians know how protective this industry has been.”

In a statement, TREB said it is “pleased by comments from the court pointing to the lack of evidence in the case against them.”

TREB says: “The decision of the court was on a procedural matter and no decision has yet been rendered on the merits of the claim. TREB will continue to vigorously defend the proceeding. We are confident that when the court ultimately addresses the merits of the plaintiffs’ claim, it will be rejected by the court.”

CREA said in a statement: “The ruling was procedural and does not affect the fact that CREA still believes that the plaintiff’s claims are without merit and will be rejected by the court at trial.”