TORONTO - A lawyer for a Cambridge real estate broker says a discipline hearing into allegations against his client should be dropped because of an "abuse of process" by Ontario's real estate regulator.

Steve Bailey is accused of multiple ethical breaches of the laws governing the province's real estate industry, and is facing a disciplinary hearing this summer.

On Friday, his lawyer Lorne Honickman told a Real Estate Council of Ontario (RECO) panel that the regulator acted in bad faith in pursuing complaints against the broker - and urged them to throw out the case.

A lawyer for RECO argued in response the regulator has not been unfair to Bailey, the case is in the public interest and the evidence against the broker must be heard in a public discipline hearing.

He said it would be "unprecedented" to throw out a case in a professional discipline procedure before it reaches trial.

Bailey, Honickman alleged, wasn't informed for months that RECO was probing allegations he tried to broker a private sale for his parents that offered a Waterloo woman about $300,000 less than the market value of her Beechwood home in the fall of 2016.

He met with a RECO investigator in May 2017, after anonymous complaints were called into RECO, but wasn't formally told he was under investigation until August 2017.

Bailey was on the regulator's board of directors at the time, and so RECO handled his case differently than others, the lawyer said.

He said the rules were not followed, and tried to paint the lead investigator as dishonest.

"They were like the police who broke into a house to get the evidence, then said 'Whoa, we should go get a warrant and do this the right way,'" he said.

"What happened to Mr. Bailey will hopefully never happen again."

Honickman told the panel his client's reputation was also damaged by a public statement RECO issued, where it detailed the allegations against Bailey. RECO has said that statement was issued to reassure the public that it takes all complaints seriously.

His client's rights were trampled, and that hurts the "integrity of the judicial process," Honickman argued.

RECO panel chair Paul Kupferstein interrupted the lawyer and asked how a judicial hearing is supposed to weigh an accused's rights versus the public interest without getting all the evidence first.

"How do you determine that without a trial?" he asked.

Bailey is also accused of ethical breaches after a controversial house sale in Plattsville involving his mother-in-law, who is also a real estate agent at the Bailey Group. The would-be buyers complained to RECO that Bailey approved a deal where the seller received thousands less than their offer on the table.

RECO's lawyers disputed the claim that Bailey has suffered from any abuse of process, and said the regulator had acted in good faith in handling the complaints.

The law does not require Bailey be informed when a complaint has been filed against him until a formal investigation begins, Christopher Bredt argued.

"RECO acted in good faith in a complex matter," the board's lawyer said.

Even in a criminal investigation, investigators routinely gather information before disclosing anything to an accused, Bredt said.

Loading... Loading... Loading... Loading... Loading... Loading...

Complaints about fairness during that process can only be dealt with in a judicial hearing, he added.

Both the public, and those who filed complaints, have a right to hear the evidence against the broker, he said.

Laureen St. Denis, the Waterloo home owner who Bailey "tried to silence" with a legal release letter required to kill the private sale, has a right to tell her side of things, he said.

"There's no basis to stay this proceeding. To the contrary, these are very serious allegations and they deserve a public hearing," Bredt said.

"Mrs. St. Denis should not be silenced. She should be allowed to tell the panel how she was treated by Mr. Bailey."

He agrees RECO did treat the complaints against Bailey differently because he was a board member - but that's because they wanted to be certain there was substance to the allegation before launching a formal investigation, Bredt said.

RECO sought external legal advice to ensure it handled the complaints properly, he added.

The case must proceed to a formal hearing, the lawyer urged the panel. The three-person panel will issue its decision on the motion at a later date.

"There's a public interest in ensuring real estate agents act in a certain manner," he said.

gmercer@therecord.com

Twitter: @MercerRecord