By Neil Sharma

The long-awaited Competition Tribunal hearing, The Commissioner of Competition v. The Toronto Real Estate Board, will continue today after Chief Justice Paul Crampton dismissed TREB’s motion that he recuse himself from the proceedings.

TREB’s lawyers had requested he recuse himself from presiding over the case because of his participation in a similar lawsuit launched 13 years ago. TREB’s representatives said that could bias current proceedings.



Chief Justice Crampton was a partner in the business law firm Davies, Ward, Phillips and Vineberg LLP from 1992-2002.  TREB’s motion for recusal pertains to contact he had in 2001 with RealtySellers, a company that formally sued TREB and CREA for anti-competitive practices the following year, settling in 2004.

TREB’s defense team said on Monday that it only recently discovered the chief justice’s involvement in the case and did not have sufficient time to scrutinize all relevant documents. Counsel for the Competition Bureau, John Rook, agreed to an adjournment until TREB’s lawyers could ascertain whether or not Chief Justice Crampton played a role significant enough to warrant recusal, citing potential for undermined justice in the event that developments supporting TREB’s claim emerge later.

“We need to look at it from two perspectives,” said Rook.  “If it comes up at a later date it would undermine the administration of justice and would make the hearing (void). We need a fixed timetable.”

He added that future developments supporting TREB’s assertion could taint the other members of the hearing committee.

While Chief Justice Crampton recalled minimal involvement in the previous case, which he said concerned no more than a few phone conversations, TREB’s team spent the remainder of Monday performing due diligence.  They argued their motion to have the chief justice recuse himself on Tuesday morning, but it was dismissed.

The Competition Bureau alleges TREB is limiting consumer choice and the ability of its member real estate agents to offer innovative Internet services, namely virtual office websites (VOWs), using all relevant MLS data.

While TREB was previously cleared of stymieing competition, the Competition Bureau successfully appealed the case on the grounds that the previous committee improperly defined section 79 of the Competition Act – the “abuse of dominance” provision.

Proceedings are now scheduled to continue all this week in Toronto.

5 COMMENTS

  1. Rob Angus is 100% right in his assessment of the situation.

    I believe that the Competition Bureau of Canada’s notable interventions (Mere Postings and VOW’s) into organized real estate are entirely vexatious. The acronym “VOW” hasn’t even been accurately described as it relates to its potential basic meaning, which is really: Virtual Organization Website and not: Virtual Office Website. As part of the process at the Tribunal they must undertake to speak to consumer’s to see to what extent real estate consumer’s have confused and or mistaken a “VOW” as being a website they assumed was being run directly by a Real Estate Association, as opposed to a Brokerage, and as consequence believed such a site had preeminent authority status.

    For many years the real estate industry has been dominated by the large Franchised Brokerages, in terms of their market share. However some boutique type brokerages did enter the market over the years and managed to carve out their niche. Many independents still exist today, however I have noticed a number of mergers being announced recently (here on REM) that involve independents joining a major Franchised Brokerage.

    Many individual real estate practitioners (registrants) have it within their financial reach to be able to afford a personal and custom (non-VOW) real estate marketing website that can compete nicely — even with a Brokerages real estate marketing website. The aforesaid fact means that in terms of internet exposure we currently have the potential of a very level playing field, but not just in terms of Brokerage to Brokerage but also from practitioner to practitioner. This situation should be seen as most desirable from a competitive standpoint.

    A full-blown VOW type website platform, is an elitist concept from the perspective of cost and affordability to launch and operate. The Competition Tribunal must consider the full extent to which the VOW concept from an affordability to operate perspective becomes a barrier to the average practitioner — who might theoretically and otherwise entertain operating such a platform.
    The Competition Tribunal surely must reason the notion of innovation against the potential reality of exclusion, in a competitive marketplace that has been typically structured to enjoy a very high level of inclusion.

    The Tribunal should also consider how the way information is communicated to consumers who use a VOW may impact market perceptions and consequently market realities. I recently conducted a special open house where there was a very high traffic flow. I was surprised to the extent that quite a number of the mature visitors wrongly assumed what certain materials in the home were made from, and that in one case the visitor thought a basement was “above grade” because it had a certain feature. When the public has open and constant access to sale prices without the benefit of proper context and a home sells for tens of thousands of dollars below the assessed value, what do we suppose the consumer’s first impression will be — the sky is falling? A strong seller’s market may not be impacted by consumers having free and constant access to sales data without proper context, but what can we say the effect might be if a market could be viewed as level or declining? Who really expects that consumer’s should to be able to determine between what is an anomaly sale price, as opposed to what is indicative of a forming trend!

    • I should provide some context (one example) regarding what I see as a potential consequence to a prospective buyer (not to mention the seller) regarding a website platform such as a VOW, either as a preeminent authority or a primary resource because of open and unqualified access to information.

      One of the sale conditions that has been available to licensed practitioners for a very long time is known as: Subject to Sale of Purchaser’s or Buyer’s property”. The aforesaid clause isn’t as likely to show up in competing situations, however it is an established clause or condition. When said clause is accepted as part of a Buyer’s accepted offer, the clause may be referred to by an acronym such as: SOPB or SOBP, alongside of other abbreviations for any other conditions of the: Accepted, Conditional, Offer. While whatever acronym or other abbreviations that may be used to describe a Buyer’s purchase conditions should be routinely understood by Practitioner’s or Registrants, we certainly can’t expect the same level of awareness or understanding from consumer’s — as this would be absurd.

      So, what could the potential downside be when an active Buyer encounters a listed property that is presently a “Conditional Sale” but doesn’t realize the distinction when said sale is subject to the sale of the buyer’s existing property, and that they could potentially still make an offer and try their luck? Of course, the reason that they (a prospective buyer) might not make the appropriate distinction is because a VOW is typically about not putting the REALTOR between the consumer and that real estate data or information that they want to avail for themselves, directly. The obvious downside or consequence to this potential situation, would be that such a Buyer could very likely pass on pursuing such an MLS listing due to their, innocent, ignorance — and as a result a quicker or more assured sale for the seller could be stymied!

      This year, I met a couple of gentlemen who attended an open house that I was hosting. They were house hunting for their families. They are long-term friends who wanted to live close by to each other in the same neighborhood. During the course of our discussion I mentioned that a home in the area was sold, however it was sold: Subject to the Sale of the Buyer’s Property (SOBP). One of these gentleman asked me what that meant, for a home to be sold subject to said particular clause, and I explained it as I have many times before. The gentleman struggled to understand the concept of the SOBP clause and my explanation. His friend however understood my explanation and jumped in to help explain how the SOBP clause works, and I believe we were all finally clear, but some more one on one may have been necessary. The point is that the many details of our industry are too complicated for this industry to be viewed as a self-serve industry, and this can apply to consumer’s of all stripes and educational backgrounds. The gentleman who was having difficulty understanding my one on one explanation of the “Subject to Sale of Buyer’s Property Condition”, told me that he was a high level I.T. Professional employed by the Government of Canada.

  2. I agree with Rob 100%. We tend to view this latest assault on our business as only Toronto’s problem but it will eventually affect us all.

  3. Notwithstanding that this current round is with TREB, in my view CREA has dropped the ball in the scrap with the Competition Branch since day 1. The TREB case is sure to affect all other boards and all Realtors across the country if TREB does not prevail. In essence, the Competition Branch feels that Realtors MUST give all our proprietary information to anyone who wants it including our direct competitors, for free. Yet all the information they claim we’re withholding is available to anyone who wants to get it by paying the required fees at land titles offices, taxation and assessment authorities and the like.

    We pay about $300 per year per agent to CREA, $25 per month. I’d be happy to triple the amount, to a whopping $75 or $80 per month per agent, to fund a war chest to enable CREA to mount a viable, vigorous, long-term and multi-pronged defense of our industry through the courts, through political lobbying and in the court of public opinion.

    Our industry, every one of us personally, is under attack. The very nature of our business is threatened by a bureaucracy that doesn’t understand what we do, but would like to ensure others enjoy the fruits of our labour at no cost. If won’t defend ourselves, no one else will.

    • Rob, CREA knowingly forced every mls system in Canada to revise their mls rules and copyright restrictions in 2012 to allow non-member non-registant real estate brand franchise companies to gain access to active mls data through the ddf.

      That rendered any rebuttal by CREA in the treb complaint potentially damaging to treb.

      AGAIN CREA was warned what would happen but like zoocasa and comfree told 400 members it would never happen. Today remax corporate and brookfeild are earning money from your mls data. That nail was put to bed in 2012.

Leave a Reply