[1]          Fraser Beach, a real estate broker and a member of The Toronto Real Estate Board (“TREB”), wanted to build a better mouse trap by moving his business of selling residential real estate into the world of “virtual offices”.  So, too, did Bell New Ventures.  Bell set up a company, BNV Real Estate Inc. (“BNV”), and hired Mr. Beach as its broker of record.  In April and early May, 2007, BNV used Mr. Beach’s access password to download large blocks of residential property listing information from the TREB Multiple Listing Service website, to store the information on its brokerage website, www.realestateplus.ca, and to enable consumers to search that data on its website for residential real estate listings in the core of the City of Toronto.  When TREB learned of this activity it cut-off the access of Mr. Beach and BNV to its MLS Database, a step it had not previously taken with any member. 

[2]          In this proceeding Mr. Beach contended that BNV’s operation of its Real Estate Plus website in 2007 conformed with all obligations that he, or BNV, owed as members of TREB, and he argued that TREB had violated its own rules and procedures by unilaterally, and without warning, cutting off his access to the MLS Database.  He sought declarations to that effect and re-instatement of his TREB membership.

[3]          TREB disagreed, contending that BNV’s launch of its website in May, 2007 was “a dramatic event” marking “a significant change” in the way TREB members conducted their business.  Why? Because for the first time a TREB member had sought to take all of the residential resale listing data for an area in Toronto and republish it on its own website without appropriate permission or authorization.

[4]          Originally commenced as an application, this proceeding was converted into a trial of issues.  Although the issues enumerated by the parties were many, they all revolved around one central issue:  was TREB justified in terminating the access of Mr. Beach and BNV to the MLS System in May, 2007 because BNV and Mr. Beach were violating their obligations to TREB by operating their Real Estate Plus website?

[5]          For the reasons that follow, I conclude that TREB was justified in doing so.

[6]          Before explaining how I arrived at that conclusion, let me emphasize the limited scope of my decision.  First, my decision is based on the contractual regime that existed in May, 2007, between TREB and its members, not on the regime that may exist today.  Second, it is not the place of this court to comment on whether TREB’s technology at any point of time was cutting edge or archaic; the quality and adequacy of TREB’s technology is a matter for that organization and its members to decide.  Finally, the parties agreed that the issue of whether TREB’s rules and policies regarding its members’ use of the MLS Database conformed to, or infringed, Canadian competition law was not before me to decide in this proceeding.  My decision must be read with those limitations in mind.

[7]           I will proceed with my reasons using the following structure.  First, I will describe how the MLS System and Database worked.[1]  Then I will review the events leading up to the dispute underlying this proceeding and how the BNV website worked.  Next, I will identify the issues requiring determination in this proceeding, and consider whether the operation of the BNV website violated any TREB rule or policy, after which I will consider Mr. Beach’s allegation that TREB failed to follow the proper procedures in responding to BNV’s operation of its website.  Finally, I will give directions about a motion against one of Mr. Beach’s counsel, Mr. Dale, which was brought at the start of the trial, but which I deferred until after I released this decision.

[8]          Fraser Beach has been a licensed Ontario real estate broker for about 30 years; his work has focused almost entirely on the resale residential market in the Greater Toronto Area.  After working for several large brokers, in 1991 he formed his own company, Select/Plan Real Estate.  His brokerage offered a lower commission rate to its clients than most other brokerages.  In the mid-1980s Mr. Beach served two terms as director of the Oshawa-Durham Real Estate Board and from 2001 until 2002 he was a member of TREB’s MLS Committee.

[9]          The Toronto Real Estate Board is a corporation without share capital operated as a trade association by members of the real estate industry in the GTA.  With just over 25,600 members as of April, 2007, TREB was, and remains, Canada’s largest local real estate board.  TREB is a member association of the Canadian Real Estate Association, or CREA.

[10]      For years TREB has operated a Multiple Listing Service through which its members can post and search for listing information about properties for sale in the GTA.  For a number of years TREB has posted listing information submitted by members in an electronic data base, the MLS Database, which members can access by using their TREB-issued passwords.  It is a practical reality of the market that a realtor who wishes to trade in resale residential properties in the GTA requires access to the MLS Database to carry on an effective business and, therefore, needs to be a member of TREB.

[11]      Since the main issues in this case involve the proper limits of a TREB member’s use of the MLS System, before recounting the events which gave rise to this proceeding it is necessary to describe how the MLS System worked in 2007.

[12]      TREB’s MLS System collected and recorded listing information provided by member brokers when they posted properties for sale or lease, as well as information about the pending or completed sale of properties.  Closed sales commonly were referred to as “solds”.  Until about the 1990s TREB members subscribed to a service which periodically sent them hard copies of new property listings; thereafter TREB offered members access to a computerized database of property listings, the MLS System. 

[13]      Data stored in the MLS System originated in information about a property collected from a vendor by a real estate agent.  I will discuss later the type of information collected using the MLS Data Information Form.  The listing broker transmitted the information on the Data Information Form to TREB which, in turn, electronically formatted and stored the data in the MLS System.

[14]      TREB members accessed the MLS System by using a personal ID and authorized password.  Upon gaining access to the database, a member could search all listings, both current and historical, as well as the detailed information about a listing.

[15]      According to Mr. Beach, prior to 2002 TREB members had to develop their own methods to respond to electronic inquiries from prospects about available properties, and many members purchased software programs to assist them in processing such inquiries.  Mr. Beach testified that members could use computer programs to download some, or all, of the MLS System database to their own computers in order to facilitate responding to such inquiries.  To assist in that process TREB made available a bulk download feature as part of the MLS System which permitted a member to download 100 listings at a time.  The bulk download feature was operational in 2007 when BNV started to operate and it was disabled only after BNV started to download significant portions of the MLS System database to its own website. 

[16]      By 2007 TREB had enhanced the ability of its members to search the MLS System.  By then a member could log onto the system and conduct a variety searches, differing in the type of listings searched (e.g. residential freehold, condominiums and commercial), as well as in the format by which the search results were presented.  To initiate a search on the system a member would complete a data input screen identifying the key features of properties it wanted to search – e.g., location, price, property characteristics, exterior, etc.  Submission of a request would generate a list of search results providing basic, or thumbnail, information about each property listed – location, price, type of house, listing broker and listing expiry date.  The member then could pull up more detailed information about a listed property, and print out or save the listing information for use in its business.

[17]      During a search the MLS System offered a member several formats in which retrieved listing information could be displayed, each of which differed in appearance and the amount of detail about a listing.   The most commonly used formats were “broker full”, “client full”, and “property match”.  A “broker full” format provided all stored information about a listing for a broker or agent and was designed to provide as much information as possible in order to assist an agent in preparing an offer.  The broker full format included a “remarks for brokerages” section which contained information that would be relevant for an agent showing the property to a prospective purchaser, such as entry security codes, times of showing, etc.  The other two formats displayed less information about a listing.

[18]      In addition to accessing listing information for his own use, a TREB member could conduct a search of the MLS System in response to a specific inquiry from a prospective customer, and the member could instruct the MLS System to email the search results directly to the prospective client by selecting the “email report format”.  This service was known as the “Property Match” service.  The email sent to the prospective customer advised:

[19]      Through the Property Match service a TREB member could access and disseminate information not only about his or her own current listings, but of all, relevant current listings contained on the MLS System, regardless of who was the listing broker.  Thus the Property Match service provided an indirect way by which members of the public could search current MLS listings, but only through the intermediary of a TREB member real estate agent.

[20]      Although members of the public could not conduct searches directly on the MLS system, the TREB website enabled consumers to conduct limited, indirect searches of listing information on its system by referring them to the website operated by the Canadian Real Estate Association, realtor.ca.  Under an agreement with CREA, each night TREB uploaded certain listing information from the MLS System to the realtor.ca website which members of the public could then search.

[21]      The information accessible by TREB members on the MLS Database was more extensive than the range of listing information made available to the public through CREA’s website.  First, not all TREB MLS listing were transferred to the CREA website - TREB only uploaded to CREA information about a listing where the vendor had given permission on the Data Information Form to distribute the listing information to internet portals.  Moreover, the information for any listing constituted only a subset of the information for that listing stored on TREB’s MLS System.  It did not include, for example, (i) the fact that the property had been conditionally sold, (ii) the closing date, if the property was sold subject only to closing, (iii) the price at which the property was reported sold, (iv) any information that the property owner had told the listing broker to keep confidential and not display on the Internet, nor (v) information contained in the “remarks for brokerages” section of the broker full format for a listing.  According to Mr. Don Richardson, the CEO of TREB, this information was not made available to the public in order to protect client security and confidentiality.  When Mr. Beach operated his Select/Plus brokerage, its website contained a link enabling visitors to go to the CREA website to conduct listing searches.

[22]      Against that background, let me now turn to the events which gave rise to this proceeding.

[23]      For some time Fraser Beach had been interested in tapping the potential of developments in information technology to deliver realtor services to the public through what he called “a virtual realtor office”.  As a result of some internet postings Mr. Beach had written about using the internet to conduct a real estate business, in the late winter of 2007 Bell New Ventures approached him to participate in a new real estate brokerage venture they planned to launched called BNV Real Estate Inc., a registered Ontario real estate broker.  Mr. Beach agreed to join BNV, so he terminated the membership in TREB of his brokerage, Select/Plan, and he registered with TREB as BNV’s broker of record.  His wife also joined BNV as a registered salesperson.  BNV shared office space in downtown Toronto with Bell New Ventures.

[24]      BNV’s business model contemplated using its expertise in technology to provide residential real estate brokerage services to buyers and sellers of homes at rates substantially lower than those charged by other agents.  Instead of earning commissions on sales, BNV’s agents would earn a salary and be eligible for considerable additional bonuses.

[25]      Key to the success of BNV would be its ability to enable members of the public, potential clients, to search a comprehensive database of residential real estate listings accessible through a BNV-operated website with the business hope that those who used its website in turn would engage BNV to act as their agent on any real estate transaction.  Mr. Beach expressed optimism that with the advanced technological resources of Bell Canada behind BNV’s website, it could become one of the most popular real estate websites for prospective buyers and sellers of homes in Toronto and, eventually, across Canada, generating a vast number of prospective customers for BNV and its agents.

[26]      The business stakes involved in the BNV realtor venture were substantial.  According to Mr. Beach, Bell Canada had projected that BNV would generate a cumulative net cash flow of $331 million over the first five years of its business plan and, once operational, would create a business with a net present value of $1.4 billion.

[27]      Mr. Beach testified that he believed he had given TREB a “heads up” about BNV’s website initiative.  Mr. Beach arranged to meet with Mr. John DiMichele, TREB’s Chief Information Officer, on February 20, 2007, following a TREB members’ seminar on safe-guarding electronic data.  At the meeting Mr. Beach inquired about TREB’s position on virtual office websites, where the basic interaction between a broker and consumer occurred on a website.  Mr. DiMichele informed him that TREB did not have a policy on virtual office websites and, further, that TREB did not take any interest in the particular business model used by a member as long as the member complied with all of TREB’s rules, regulations and agreements.  Mr. Beach conceded that at the meeting he did not provide Mr. DiMichele with any particulars of BNV’s proposed website or the manner of obtaining information for it, and Mr. DiMichele testified that he certainly did not leave that meeting with any inkling of what BNV planned to do in the weeks ahead.

[28]      Then, on March 6, 2007, Mr. Mark Zimmerman, Vice President, Bell New Ventures, wrote to Mr. DiMichelle, informing him of Bell’s intention to create a “comprehensive Real Estate information portal” with a May, 2007 target launch date in the GTA.  Mr. Zimmerman wrote that Bell “would like to layer homes available for sale via a licensing arrangement with the Toronto Real Estate Board” and requested an opportunity to meet Mr. DiMichelle.

[29]      They met on March 8, at which time Mr. Zimmerman told Mr. DiMichele that BNV wanted to include on its new real estate website the contents of the MLS Database.  Mr. DiMichele responded that TREB could not share with BNV the listing information contained in the MLS Database without the written permission of the listing brokerages and the execution of appropriate licences, known as Data Licence Agreements.  Mr. DiMichele further explained that in recent years a number of third parties, including service providers, had gone to the trouble of obtaining written consents from brokers in order to access their listings.  Mr. Zimmerman made it clear at the meeting that although BNV was aware of those practices, it had no intention of taking the time or trouble to obtain such license agreements.

[30]      No further meetings took place between BNV and TREB before it launched its Real Estate Plus website.

[31]      On May 7, 2007 Mr. Beach wrote TREB to advise that he wished to terminate, effective that day, the membership of Select/Plan Real Estate Inc. as a brokerage member of TREB.  He went on to state that the existing TREB members registered with Select/Plan Real Estate Inc. wished to transfer to a new brokerage member, BNV, as soon as membership was granted to that firm.

[32]      The following day BNV and Mr. Beach applied for membership in TREB, with Mr. Beach as the broker of record.  Their signed application contained the following agreement:  “If accepted as a Member, I agree to be bound by the By-Laws, MLS Rules and Policies of TREB, a copy of which has been received, read and understood by me.”

[33]      Then, on May 9, BNV launched its Real Estate Plus website.  In a public announcement of the launch Mr. Beach wrote:

[34]      The Real Estate Plus website, www.realestateplus.ca, provided prospective customers with general neighborhood and demographic information and enabled prospective customers to make search inquiries about properties of interest, in response to which the website would provide listing information on relevant properties.

[35]       There was no dispute between the parties that, when launched, the BNV Real Estate Plus website possessed two characteristics: (i) it contained detailed listing information about residential resale properties in the core area of Toronto, and (ii) the listing information had been obtained by BNV from TREB’s MLS Database.

[36]      BNV started obtaining information from MLS Database sometime between April 27 and May 9, 2007.   Using Mr. Beach’s member access code BNV downloaded all of the residential resale listings for the core of the City of Toronto, what TREB called “District C”.  Mr. Beach estimated that BNV likely downloaded from the MLS Database something in the order of 20,000 listings, and updated the database two or three times a day in order to capture the 500 or so changed listings TREB posted each day.  The evidence was clear that BNV only obtained listing information from the MLS Database.

[37]      After downloading the listing information from the MLS Database BNV extracted data about the identity of the listing brokerages and the listing agent and placed them in a separate database linked to the listing information.  BNV planned for this separate database to hold, at some point in the future, the names of all TREB members who had property listings on the MLS Database.

[38]      Mr. Beach stated that because of BNV’s in-house technological capabilities it did not need to use the services of a third party website provider to operate the Real Estate Plus website.  He was aware that some real estate brokers used third-party service providers to display their property listing information on their websites and that these brokerages used a data licence agreement developed by TREB under which a broker’s listings on the MLS Database could be provided to a third-party website provider who created and operated a website for the brokerage.

[39]      Mr. Beach acknowledged that BNV could have used existing TREB services to respond to listing inquiries from potential clients, but he viewed those services as too slow.  For example, BNV could have accepted through its website inquiries about properties from interested persons and, in turn, sent a similar inquiry to the MLS Database and used TREB’s Property Match  service to email the inquiry results directly to the inquirer from the MLS Database.  Mr. Beach testified that such a process would take about 60 seconds to complete and would require the broker always to have someone at a computer in order to forward to the MLS Database inquires made by prospective clients.  In order to provide prospective customers with a faster response time, BNV decided instead to download onto its own system electronic versions of large portions of information in the MLS Database and then respond directly to inquires made through the Real Estate Plus website.  Given the technological resources Bell Canada had committed to BNV, the company could respond in this way to a consumer inquiry in only a few seconds.

[40]      The home page of the Real Estate Plus website displayed a form on which a consumer could input criteria about the kind of property in which he or she was interested, such as location, pricing, and style of house.  The inquirer could then initiate a search.  In response to the search a list of truncated, or thumbnail, descriptions of relevant properties would appear, including a photograph of a property. 

[41]      There was a dispute in the evidence about whether a pop-up screen would appear when a person clicked on a thumbnail description of a property, prompting the user to enter his user name and password before the user could gain access to detailed information about the property listing.  Mr. Beach testified that a pop-up would appear and that a person could not proceed with his search until he entered his user name and password.  Mr. Beach’s evidence was supported by the findings of an investigatory report commissioned by TREB conducted by Net-Patrol International Inc. in October, 2007, which identified the existence of a pop-up screen requiring a user to register in order to login on the BNV site to conduct a search.  By contrast, Mr. Imran Ahmad, TREB’s Manager, Systems and Programming, testified that he could not recall encountering any pop-up login request when he investigated the BNV website in early May, 2007.  The weight of the evidence supports a finding that a pop-up screen would appear at this stage of the process, and I so find.

[42]      That said, I do not think much turns on the presence of the pop-up screen.  Mr. Beach testified that any person who accessed the BNV website could register as long as he provided an e-mail address and made up a password.  No restriction existed on who could register as a user of the BNV website, nor was a user required to agree to any terms of service before its registration was accepted.  In a very practical sense, any member of the public could access the information retrievable from the BNV website as long as he was prepared to submit his email address and create a password.

[43]      After a user entered his password, the full information about a particular property then would be displayed on the user’s screen.

[44]      A visitor to the BNV website could access property listing information via another route.  The Real Estate Plus website contained a map search function.  House icons populated the maps.  A user could zoom down to an area of the city in which he was interested and then click on a house icon in that area.  That would generate a thumbnail listing of the properties represented by the house icon.  By entering a user name and password a user could access the detailed information about those properties.

[45]       Mr. Beach took the position that no property information was displayed on the Real Estate Plus website.  As he viewed the matter, the website only displayed property information which responded to a specific inquiry or search made by a visitor to the site.  In more technical terms, Mr. Beach, testified that in response to a request made by a prospective consumer, information was requested by a BNV interface-based server to a BNV database server.  The database server sent information back to the interface server, which then sent the information requested to the inquiring party.

[46]       BNV’s Real Estate Plus website came to the attention of Mr. DiMichele at TREB on May 9, 2007, as a result of complaints from some TREB members that their property listings could be found on the site.  That day, or the next, Mr. DiMichele learned that the website was operated by BNV. 

[47]      Mr. DiMichele directed Mr. Ahmad to investigate the source of the listing information posted on the BNV website.  Mr. Ahmad conducted random searches of the realestateplus.ca website and compared the listing information on the BNV website with that in the MLS Database.  Mr. Ahmad concluded that the listing information on BNV’s site had been obtained by BNV using some kind of automated process to search the MLS Database and to obtain the listing data from it.  Mr. DiMichele testified that he learned BNV had downloaded virtually all of the MLS Database for the central core area of Toronto and was making that information available for public searches through the Real Estate Plus website.  TREB regarded that conduct as a violation of its rules, regulations and policies.

[48]      As part of his investigation Mr. DiMichele reviewed the access logs for the MLS Database user IDs issued to Fraser Beach and his wife, Ms. Joanne Goode-Beach.  In his view the access logs showed unusually high usage in the days leading up to May 11, 2007, together with long connection times, which led him to believe that Mr. Beach was using the bulk download feature of the MLS System in an inappropriate way to obtain large volumes of data from the MLS Database.  At the same time Mr. DiMichele conceded that TREB did not experience any problems with its MLS System in May, 2007, nor did TREB have any records or information that the MLS System had encountered any slow-downs that month.

[49]      Dorothy Mason was the President of TREB in May, 2007.  When she learned from TREB staff that a member was downloading large amounts of listing data, she viewed that conduct as constituting a serious threat to the integrity of the TREB system because (i) the BNV website would display listings that a client vendor had requested not be displayed via the internet and, (ii) the website would display “sold” listings, including some properties for which the transactions had not yet closed, enabling subsequent purchasers to learn the sale price in the event the deal fell through. 

[50]      The TREB Executive Committee held a conference call on the morning of May 11, 2007 as a result of which they instructed TREB’s lawyers to send a cease and desist letter to BNV Realty.  Later that day TREB’s lawyers sent BNV a letter complaining that BNV was improperly making MLS data available to the public by way of the realestateplus.ca website.  Characterizing BNV’s use of the data as “little more than theft”, TREB demanded that BNV cease improperly accessing the computers on which the data resided and making the data available to the public. 

[51]      Although a memorandum of the discussions at the May 11 Executive Committee recorded a decision to monitor the activity on the realestatepluse.ca website over the next few days, as matters transpired later on May 11 TREB disabled the bulk download feature on its MLS Database, and Mr. DiMichele and Mr. Hugh Foy, TREB’s acting CEO, directed that BNV’s access to the MLS Database be suspended. 

[52]      Prior to May 11, 2007, TREB had never cut off the access of any member for alleged misuse of the MLS Database or breach of any of the MLS rules or agreements relating to the database.  When asked why TREB did not give Mr. Beach advance notice before cutting off BNV’s access to the MLS Database, Ms. Mason replied that if someone was doing something illegal, they usually would not get an advance call from the police; the police would just arrive.  That was the approach TREB took, and Ms. Mason justified it on the basis that BNV lacked any authority to use the listing information on the MLS Database the way it did.  Once TREB confirmed the source of the information on BNV’s website, it thought it was entitled to terminate immediately BNV’s access to the MLS Database.

[53]      Mr. Beach testified that without access to the MLS Database, the Real Estate Plus website could no longer operate.  On May 12, 2007, he responded to TREB’s lawyers’ letter expressing surprise at the allegations made against BNV:

[54]      Thereafter correspondence and meetings ensued between TREB and BNV, although Mr. Beach was not present at the meetings.  BNV that took the position that its operation of the Real Estate Plus website complied with TREB rules and demanded immediate restoration of its access to the MLS Database.  BNV contended that TREB’s suspension of BNV’s access to the MLS database contravened the Competition Act.  (As I noted above, the parties agreed that for the purposes of this trial no issue would be raised as to whether TREB’s conduct contravened the Competition Act.)  For its part TREB maintained its position that the Real Estate Plus website violated its rules.  In the result, the parties were not able to resolve their differences.

[55]      Although Mr. Beach testified that had he known how strong TREB’s reaction would be to the launch of the Real Estate Plus website he would have done some things differently, he acknowledged that BNV would not have changed the way it gathered information from the MLS System because “there was no other way that we could have done it.  The sophistication of this website was not in keeping with how the data is distributed through the data transfer process.” 

[56]      In the result, TREB did not restore BNV’s access to the MLS Database.  BNV could not carry on business, and Bell Canada decided to exit the residential real estate brokerage business.

[57]      That, then, summarizes the events that gave rise to this proceeding and I find, as facts, that the events unfolded as I have described them.

[58]      TREB argued that BNV’s operation of its Real Estate Plus website violated several agreements or rules governing the relationship between TREB and its members, specifically:

[59]      Mr. Beach denied that the BNV website violated any of these agreements, rules or policies.

[60]      TREB took the position that the manner in which BNV operated its website, by downloading large portions of the MLS Database, violated the following provisions of the Authorized User Agreement (“AUA”):

[61]      TREB also submitted that what BNV attempted to achieve on its website – giving the public direct access to property listings of other brokers – was not authorized by the AUA, but required BNV to enter into Data Transfer Agreements with each brokerage whose listings it wished to display.

[62]      To consider these allegations I propose to examine the general framework of contractual obligations that existed between TREB and its members in 2007, then to identify the various contractual agreements that touched upon the use of listing information from its origins with the vendor of a property through to a TREB member accessing the information on the MLS System and, finally, to consider each of the specific allegations made by TREB about how BNV’s website violated the Authorized User Agreement which existed between TREB and BNV and Mr. Beach.

[63]      But first, let me briefly state the general, and well-known, principles of contract interpretation which must guide my analysis. The primary goal of contractual interpretation is to give effect to the intentions of the parties by applying normal rules of construction to search for an interpretation which, from the whole of the contract, would appear to promote or advance the true intent of the parties at the time of entry into the contract:  Dunn v. Chubb Insurance Company of Canada, 2009 ONCA 538, para. 32.  In SimEx Inc. v. IMAX Corp. (2005), 2005 CanLII 46629 (ON CA), 11 B.L.R. (4^th) 214 (Ont. C.A.), at paras. 19 to 23, the Court of Appeal detailed the elements of this approach:

[64]      When Mr. Beach applied for BNV’s membership in TREB, he signed an application form in which he stated:  “If accepted as a Member, I agree to be bound by the By-Laws, MLS Rules and Policies of TREB, a copy of which has been received, read and understood by me.”  TREB’s By-Law is an extensive document, dealing with issues of its corporate status and governance, membership categories and fees, members’ voting rights, the composition of TREB’s Board of Directors and its committees, an arbitration process, and the maintenance of professional standards.  Article 2, Section 12.01(a) of the By-Law provided:

[65]      Rule R-101 of the MLS Rules and Policies provided that a member’s use of the MLS System was subject to the provisions of an Authorized User Agreement.  Before examining that agreement, it is necessary to go back up the data chain to the point where a TREB member receives information about a property from its vendor.

[66]      Data stored on the MLS System originated with the vendor of a property. The Listing Agreement entered into between a vendor and the listing brokerage authorized the listing brokerage to act as the vendor’s agent on the sale of the property and the agreement specified how the brokerage would market the property and the commission the vendor would pay in the event of a sale.  Section 11 of the 2007 version of the Listing Agreement contained the following broad grant of permission by the vendor to the listing broker to place listing information on the MLS Database:

[67]      Contemporaneously with entering into a Listing Agreement a vendor would provide detailed information about his property to the listing broker through the TREB Freehold – Sale/Lease MLS® Data Information Form which the vendor initialed and signed.  The form set out the detailed information about a property for inclusion on the MLS System.  Towards the end of the form the vendor was asked to indicate “yes” or “no” to three matters: “permission to advertise”; “distribute to internet portals”; and, “display address on internet”?  The listing broker transmitted the information on the Data Information Form to TREB which formatted and stored the data in the MLS Database.

[68]      Mr. Beach signed an AUA on March 17, 1998, and on two subsequent occasions agreed to the terms of updated AUAs.  On May 7, 2007, Mr. Beach, as part of his application as broker of record for BNV, agreed to be bound by the AUA which, by its terms, constituted a “legal agreement” between Mr. Beach, an Authorized User, and TREB.

[69]      For the purposes of this proceeding the key definitions in the AUA are those for the terms “Services”, “MLS Database”, and “Content”.  The AUA defined “Services” to mean:

[70]      Section 5 of the AUA dealt with the “uploading” of listing information submitted by a broker to TREB for posting on the MLS System.  The authorized user (i.e. broker) effectively represented to TREB that it possessed the right to submit the Content to TREB and granted TREB a very broad right to use and fully exploit the Content.  Section 2 of the AUA then described the licence TREB granted an Authorized User in respect of the MLS Database and Services:

[71]      TREB’s grant of license was followed immediately by this acknowledgment in Section 2 by the authorized user:

[72]      Section 3(b) of the AUA stated that under the licence an authorized user could “make Copies solely for the purpose of Business”, with “Copies” defined as “hard copy print outs and electronic versions of the reports, results, and other information or materials generated from Authorized User’s access and use of the Services and MLS Database.”  Business was defined as the business of trading in real estate.

[73]      Section 4 of the AUA placed certain restrictions on the use of the MLS Database.  The restrictions at issue in this case are the following:

[74]      Section 7 then dealt with issues of Intellectual Property.  The provisions at issue in this proceeding were the following:

[75]      The MLS Database, and the Services provided to enable access to the MLS Database, were “the sole property of TREB” and “proprietary and confidential to TREB”: AUA, section 7(a).  By signing an AUA every member acknowledged those facts and, as well, by applying for membership in TREB, every member agreed that its use of the MLS System would be subject to the provisions of an Authorized User Agreement: MLS Rules and Policies, Rule R-101.  While section 2 of the AUA granted a member a broad licence to use the Services and to access the MLS Database for the purpose of the “ordinary carrying on of its business”, such use was to be limited to its “exclusive and internal use”.

[76]      BNV utilized the authorized passwords of Mr. Beach and his wife to use the Services which enabled it to search, retrieve and download data stored in the MLS Database.  Mr. Beach conceded that the MLS Database was the sole source of the listing information stored on BNV’s website.  That also was the conclusion reached by TREB when it investigated BNV’s website in May, 2007.  Although BNV reformatted the data so that when accessed on its website it was displayed in a different manner than on the MLS Database, I find that the listing information stored on the BNV website was data that originated in, and was transferred to BNV from, the MLS Database.

[77]      The definition of “Content” in the AUA was a broad one, encompassing all data and images.  In the AUA the term, “MLS Database”, meant not only the “aggregation of all Content”, but also “its…selection, assembly and arrangement, that from time to time comprises the Internet based service currently known as the Multiple Listing Service…”  I find that BNV accessed a large portion of that Content through the TREB internet-based system (i.e. used Services) in order to transfer to its own website the Content for District C, the core of the City of Toronto.

[78]      Was such access and use of the Services and MLS Database for BNV’s “exclusive and internal use”?  I conclude that it was not.  In the ordinary course a member of the public did not enjoy access to the MLS Database.  It had to make an inquiry to a TREB member about properties of interest.  The member would search the MLS Database, locate relevant properties, and then either printout information for use by the consumer or link the consumer’s email address to the TREB-authorized Property Match system.  Under either approach searches of the MLS Database were conducted by the TREB member or its technological surrogate, the Property Match program.

[79]      By contrast, a member of the public could search directly that portion of the MLS Database for District C through the BNV website because BNV had accessed the MLS Database and copied the entirety of that portion of the MLS Database to its own web-accessible database.  (BNV eventually planned to copy to its database all of the MLS Database, but limited its start-up, or beta, phase to the Content for District C.)  Although at a certain stage of the search of the BNV website the inquirer was required to enter its name and password, the evidence showed that this requirement did not restrict or vet access to BNV’s web-accessible repository of property listings; it was a mere formality with which any person could comply.  Once the searcher’s name and password was entered, the person had direct access to listing information which came from only one source – the MLS Database.

[80]      I therefore conclude that through its realestateplus.ca website, BNV made available, for direct search and retrieval by members of the public, Content from the MLS Database.  In so doing BNV breached section 2 of the AUA because it did not confine its access and use of the Services and MLS Database to its exclusive and internal use.  It accessed and used the Services and MLS Database for external use by members of the public.

[81]      A major thrust of Mr. Beach’s testimony and submissions was that the service BNV offered to the public through its website was a “good thing”, embracing as it did advances in information technology, enhancing consumer choice, and bringing the trading of residential real estate into the 21^st Century.  I repeat that it is not the place of this court to adjudicate the wisdom of the policies selected by an organization, such as TREB, by which it offered services to its members or the public.  In 2007 TREB decided that public access to listing information stored on the MLS Database would be limited to the information it made available to the publicly-searchable realtor.ca website operated by the Canadian Real Estate Association.  Each member acknowledged that to be the case when he signed an AUA, section 4 of which exempted from restrictions on use “that part of the MLS Database, as formatted by TREB, which is publicly available without breach of any obligation by Authorized User.”  Whether that decision by TREB was a progressive or antiquated one is not for me to comment on; TREB’s members agreed to it.  Mr. Beach was free to build a better mouse trap to offer realtor services to the public; but, as a member of TREB, he had to use the MLS Database, and its related Services, in accordance with the AUA.  I have found that he did not.

[82]      Mr. Beach also argued that the information BNV provided to the public through the realestateplus.ca website was no different in kind than information other TREB members gave to the public which originated in the MLS Database.  Mr. Beach pointed to websites operated by other brokers or agents which required a person only to submit an email address in order to obtain listing information from the agent or broker.  However, the evidence before me clearly indicated that the listings posted on other brokers’ websites were confined to their own listings and did not include the listings of other brokers.  By contrast, the BNV website facilitated searches of listing of numerous brokers.  Moreover, although the websites of other TREB member brokers permitted consumers to email requests for listing information on properties of interest, those requests were handled by using the TREB-approved Property Match program to access relevant listings in the MLS Database.  There was no evidence led before me that any other TREB member did what BNV was doing on its website – making available for direct public search listing information from the MLS Database about all listings within certain geographic areas.

[83]      Mr. Beach also submitted that the information a member of the public could obtain from the BNV website was no different in kind than that handed out by other TREB members that originated from the MLS Database.  He recounted attending an open house on June 7, 2009, held by a real estate agent from the Chestnut Park Real Estate Brokerage.  During his visit the agent gave him a package of some twenty-three MLS listings in the neighborhood; each listing was in the broker full format and obviously had been printed off the MLS Database.  Several of the properties listed in the package had already been sold.

[84]      Pointing to this experience, Mr. Beach submitted that the BNV website did not display data from the MLS Database or the listings of other brokers, but merely responded to inquiries from the public in a manner analogous to an agent handing out listing print-outs at an open house. In his testimony he repeatedly attempted to distinguish “displaying” information on a public website from “responding to requests” made through a website.  I see no merit in that distinction.  True, one could say that a user of the BNV website initiated a request for information about certain types of properties, to which the website responded.  But such a description masks the reality of what was going on.  BNV offered the public the opportunity to search large parts of TREB’s MLS Database which it had copied onto its own system.  It put in the hands of a member of the public the same ability to search portions of the MLS Database as available to a TREB member.  BNV did so notwithstanding that Mr. Beach had acknowledged in the opening sentence of section 4 of the AUA that the MLS Database “has a special value due to access only by TREB Members and users authorized by TREB”, and in section 2 of the AUA he had agreed to use the MLS Database for his “exclusive and internal use”.  In short, BNV’s website did that which Mr. Beach, its broker of record, had promised it would not do.

[85]      Nor could the search capability offered to the public by the BNV website be equated, for the purpose of the AUA, to handing out hard copies of listing information printed off the MLS Database.  Section 3 of the AUA permitted Authorized Users to make “Copies solely for the purpose of Business.”  As noted above, the AUA defined “Copies” to mean “hard copy print outs and electronic versions of the reports, results, and other information or materials generated from Authorized User’s access and use of the Services and MLS Database.”  Accordingly, it was open to an authorized user to conduct a search of the MLS Database, locate a property of interest, print out a copy of the listing results, and use it for its business of trading in real estate.  Providing a member of the public, who expressed some interest in buying or selling real estate, with a print out or report of a listing from the MLS Database was an authorized use of the Services and MLS Database.[2]

[86]      By contrast, BNV copied a large part of the MLS Database and its website enabled members of the public to search directly the data that was stored on the copied portions of the MLS Database.  That activity was not simply printing out copies of some listings, or making available some electronic versions of the reports to interested consumers; it was the fundamentally different activity of copying and making available for public search the entirety of the listing data stored in the MLS Database for a geographic area.  That was not a permitted use under section 3 of the AUA; it was an unauthorized use contrary to section 4(c) which prohibited a member from copying “the MLS Database…in any manner except to authorized users who have a valid Authorized User Agreement.”

[87]      That same reasoning distinguishes a broker who used the Property Match feature of the MLS System to ensure a consumer received updated listings on properties of interest from BNV whose website enabled a consumer to search the same data stored in the MLS Database for properties of interest.  So while the evidence showed that in 2007 real estate agents in Toronto freely gave prospective customers listing information obtained from the MLS Database without requiring from them any financial or contractual commitment, that marketing activity was permitted under the AUA, whereas the direct access the BNV website gave to data from the MLS Database to consumers was not.

[88]      In all cases of the activity of other brokers described by Mr. Beach, the broker, or agent, stood as a buffer between the consumer and the listing information data stored in the MLS Database.  Such listing information only made its way into the hands of the consumer through the agency of a broker/agent, or a TREB-controlled service such as Property Match.  BNV’s realestateplus.ca website removed that buffer; it provided consumers with the ability to search directly listing information that reposed in the MLS Database which BNV had downloaded and stored on its website.  By removing that buffer BNV breached section 2 of the AUA requiring an authorized user to access and use Services and the MLS Database for its “exclusive and internal use”.

[89]      Mr. Beach attempted to keep any comparison of BNV’s activity with those of other brokers at a very general level.  For example, he testified that the AUA permitted each broker to take any information entered on the MLS System, including other brokers’ listings, and share it in any way they chose with potential customers and clients.  On cross-examination Mr. Beach put the matter this way:

[90]      Before moving to the next of Mr. Beach’s arguments, let me deal briefly with one argument which, while not advanced strongly at trial, was open to Mr. Beach to make on the language of the AUA.  Section 4 of the AUA provided, in part: “Except as expressly authorized in this Agreement, Authorized User shall not…(c) copy…the MLS Database…in any manner except to authorized users…and except to persons or entities who desire or may desire to acquire or dispose of certain of their rights respecting real estate.”  Would that language enable Mr. Beach and BNV to copy the MLS Database and facilitate its search by members of the public who were looking to buy or sell real estate?  In my view it does not.  First, the language of “double exception” used in the drafting directs one to find some express authorization elsewhere in the agreement for BNV to do what it did.  For the reasons given above, I can find no such authorization.  Second, one must interpret the AUA as a whole, in a commercially reasonable way.  When read in its entirety, the AUA clearly treats the MLS Database as the confidential property of TREB, made available by license to TREB members for their internal use in conducting their real estate businesses: AUA, sections 2, 3, 4, 7(a), 7(c)(ii) and 7(f).  To interpret the language of section 4(c) as permitting a member to copy the MLS Database for the purpose of public search would run completely counter to the main thrust of the AUA.  Finally, although the AUA was drafted by TREB, one must recall that TREB is a member-controlled and directed organization.  Mr. Beach could not point to any other instance where a TREB member had attempted to make available for public search large portions of the MLS Database, a fact which should inform the interpretation of the AUA and which, in my view, reinforces the view that the AUA did not permit that which BNV attempted to do.

[91]      TREB had developed a Data License Agreement, commonly called a Data Transfer Agreement (“DTA”), by which a broker could authorize TREB to transfer its listing data from the MLS Database to a third party. 

[92]      Ms. Joanne Barker, a systems analyst in TREB’s Information Services Department, testified that currently TREB administers between 2,500 and 2,800 DTAs, mostly involving third party service providers who create web sites for realtors, with a very small percentage of DTAs involving realtors who wish to have their own listing data in TREB-format transferred back to them.  Mr. Richardson testified that he viewed DTAs as the means by which TREB could transfer, at the request of a listing broker, its listing information stored on the MLS Database to a third party service provider chosen, if they wanted to transfer the information to some other party to place it on a website.  Mr. Richardson stated that DTAs were premised on the principle that a brokerage owned its listing information.

[93]      Mr. Beach understood DTAs to provide a mechanism by which TREB facilitated providing a data feed of a broker’s listings to a third party.  He thought that the reason other brokerages used DTAs was because they lacked the internal technical ability to transfer the information from the MLS Database to their own websites, whereas BNV possessed the technology to do so itself.  Consequently, Mr. Beach thought that the reason other brokers did not display on their websites listings from other brokers had nothing to do with whether such a practice was permitted, but with the brokers’ lack of technical capability to do so.

[94]      When asked why BNV did not enter into DTAs with other brokers to post on BNV’s website the listing information the brokers had placed in the MLS Database, Mr. Beach responded:

[95]      As I have found, the AUA did not permit BNV to access and use listing information on the MLS Database in the way that it did.

[96]      In the Issues List which, pursuant to my order of June 4, 2009, constituted part of the Trial Record, TREB contended that BNV’s website was “designed to use the data to drive traffic to the site in order to earn advertising revenue from Google and to generate sales leads for other members.”  TREB further alleged that there was “no evidence that all users were accessing the site for purposes directly related to the business of real estate.”

[97]      Although these issues were not pursued with vigour at trial, I see no merit in them.  The following language headed the home page of the realestateplus.ca website:  “Find your home, your way with innovative tools, interactive maps and personalized search capabilities.”  On my review of the extracts from the realestateplus.ca website filed in evidence, I find that the primary purpose of the website was to provide information related to the business of trading in real estate, within the meaning of “Business” contained in the AUA.  I see no breach of those portions of section 3, 4(a), 4(b) and 4(c) of the AUA which limited use of the MLS Database to the business of real estate.

[98]      I am very reluctant to decide this issue for several reasons.  First, as I noted at the beginning of these Reasons, the parties agreed that it was not before me to decide the issue of whether TREB’s rules and policies regarding its members’ use of the MLS Database conformed to, or infringed, Canadian competition law.  To decide this third allegation might require me to stray indirectly into an area the parties had agreed was off-limits at this trial.  Second, during the cross-examination of Mr. DiMichele by Mr. Dale on June 26, 2009, I expressed concern that Mr. Dale was touching on areas that dealt with competition policy, not for my benefit, but for the benefit of others in the audience.  Third, it is not necessary for me to decide this issue, in light of my finding that BNV’s operation of its website violated section 2 of the AUA.  Although this issue does call for the interpretation of one of the contractual terms between the parties, for these reasons I decline to decide the issue.

[99]      I would note simply that the evidence showed that TREB’s MLS Database performed two functions.  First, it enabled member brokers to post to a common database their listing information; second, it permitted member brokers to search that common database for listing information of interest.  By contrast, BNV’s website did not perform the first function; as to the second, it enabled any member of the public, including other brokers, to search its database for listings of interest. 

[100]                          Few submissions were made on this issue.  As I have noted, section 7(a) of the AUA stated that the Services and MLS Database were the “sole property of TREB”.  As such, TREB enjoyed the right to regulate how its members used the Services and MLS Database; it did so through the AUA.  I have found that BNV breached section 2 of the AUA by using the Services and MLS Database in an unauthorized way and, by so doing, BNV impaired TREB’s rights and interests in them contrary to section 7(d) of the AUA.

[101]                          Canadian copyright law generally protects derivative works in their own right as long as the originality required by the Copyright Act, R.S.C. 1985, c. 10, as amended, is present.  A derivative work is viewed as one which is substantially derived from pre-existing material:  Fox on Canadian Law of Copyright and Industrial Designs, Fourth Edition, page 4-9.  Under section 7(c) of the AUA an authorized user was prohibited from creating “derivative works of the …MLS Database…”  I have found that all of the listing information contained on BNV’s website was taken from the MLS Database.  Accordingly, since the content of BNV’s website was substantially derived from pre-existing material - the Content of the MLS Database - BNV breached section 7(c) of the AUA by creating a derivative work of the MLS Database.

[102]                          By way of summary, I conclude that the way in which BNV operated its website, realestateplus.ca, breached sections 2, 7(a),(c)(ii) and (d) of the AUA.

[103]                          TREB published a policy entitled, “The Toronto Real Estate Board Email, Electronic Communications and MLS System Acceptable Use Policy.”   Under the Policy users agreed to use the System, which included the MLS System, in accordance with the Policy.  In the section entitled, “Usage Rules”, the Policy identified, as an unacceptable usage, the “scraping or downloading of information without the proper authority or consent”.  The Policy also stated that “using automated or robot software to directly access the MLS System is prohibited and considered a violation of this policy.”

[104]                          During the course of the evidence TREB did not prove which, if any, MLS System Acceptable Use Policy was in force at the material time.  In his closing Mr. Sasso acknowledged that he could not say whether the version before me (Ex. 6, Tab 4) was in place in May, 2007.  He referred to the document as providing context to inform the issues.  In the absence of proof that the Acceptable Use Policy was in place in May, 2007, I conclude that no evidence exists to support any finding that BNV breached it.  Accordingly, I give no effect to this ground advanced by TREB to justify its termination of the access of Mr. Beach and BNV to the MLS Database.

[105]                          TREB published MLS Rules and Policies to which members were required to adhere. Two rules are in issue in this case, Rules R-430 and R-431, which provided as follows:

[106]                          TREB alleged that BNV’s website violated both rules by publishing data about the listings offered by other brokers without their consent.  Mr. Beach did not regard the information provided by BNV in response to a consumer’s inquiry as an advertisement of any property; he regarded it as providing information about a property to a prospective client in the same way as other agents provided such information to prospects.

[107]                          Much ambiguity surrounded these two rules.  The MLS Rules and Policies did not define “advertising”, nor did section 36 of the Code of Ethics made under the Real Estate and Business Brokers Act, 2002 (Ont. Reg. 580/05) which imposed certain disclosure requirements on advertising by registrants.  When Mr. Foy, the acting CEO of TREB in May, 2007, was asked about a “Frequently Asked Questions” publication prepared by TREB on the issue of advertising, he talked about advertising in terms of placing ads in newspapers. By contrast, 2006 “Advertising Guidelines” published “to assist registrants in complying with advertising requirements found in the RECO Code of Ethics” contained an expansive definition of advertising, including representations in any medium, such as print, radio, television or the Internet.

[108]                          According to the 11^th Edition of the Concise Oxford English Dictionary, the word, “advertise”, bears a broad meaning: to publicize a product or service in order to promote sales, to make known or to notify. Taking the meaning at its broadest, one could say that BNV was advertising the listings of other brokers by making that information accessible to the public through its website.  But on that basis, so too were those agents whom Mr. Beach testified provided him with printouts of broker full reports for other brokers’ listings.  None of the TREB witnesses were prepared to commit, unequivocally, to the position that handing out such reports at open houses, or responding to property inquiries by interested parties, constituted impermissible advertising under the MLS Rules and Policies; no doubt because the evidence suggested that the practice was widespread.

[109]                          As a result, I am not prepared to interpret Rules 430 and 431 as bearing such a broad meaning.  One must remember the context of this proceeding.  TREB suspended the access of Mr. Beach and BNV to the MLS System and has refused to re-instate Mr. Beach’s membership in TREB.  Under those circumstances, any ambiguity in the Rules must be resolved in favour of the member upon whom TREB imposed sanctions.  While I have found that the mechanism BNV used to access and download listing information from the MLS Database breached the AUA, the end product that it published to the public – the listing information – did not differ in kind from the listing information handed out by agents at the open houses referred to by Mr. Beach.  As a result, I find that BNV and Mr. Beach did not breach Rule 430.

[110]                          As to Rule 431, the same conclusion results.  The information about a listing published by BNV on its website did not differ in kind from many aspects of that provided by agents at open houses when they gave out copies of broker full format MLS listings.  Under those circumstances, I see no breach of Rule 431.

[111]                          TREB alleged that BNV’s website breached sections 36(8) and (9) of the Code of Ethics under the Real Estate and Business Brokers Act, 2002, which read as follows:

[112]                          Since I have found that BNV’s publication of listing information on its website did not constitute advertising, BNV did not violate either section 36(8) or (9) of the Code of Ethics.

[113]                          For the reasons given above I have found that BNV’s website breached the AUA.  Was TREB justified in suspending the access of Mr. Beach and BNV to the MLS Database?  Section 12 of the AUA provided:

[114]                          TREB acknowledged that it did not give Mr. Beach or BNV an opportunity to cure any of the alleged breaches of the AUA prior to being cut off from the MLS System.  The letter of May 11, 2007 from TREB’s lawyers called on them to cease and desist from their activities, however by that time TREB staff had already suspended the access of Mr. Beach and BNV to the MLS Database.  Prior to May 11, 2007, TREB had never cut off the access of a member for alleged misuse of the MLS Database or breach of any of the MLS Rules or agreements relating to the database.

[115]                          While it is a very serious matter for an organization to depart from its established procedures to deprive a member of services, in the particular circumstances of this case I conclude that TREB was justified in suspending access to the MLS System by BNV and Mr. Beach without giving them an opportunity to cure the alleged breaches.  First, the magnitude of the breach was significant, involving as it did moving huge volumes of listing information from the MLS Database to the BNV website.  Transfers of that magnitude had not happened before.  Mr. Beach estimated that BNV likely downloaded from the MLS Database and placed on its own website something in the order of 20,000 listings.  The volume of the listings downloaded, coupled with the frequency and duration of BNV’s activities in accessing the MLS Database (Ex. 4A, Tab 34) and the limited number of staff employed by BNV, very strongly suggested that BNV used some form of automated software to access the MLS System and to download listing information from it.  The TREB Executive and staff regarded those circumstances as exigent in nature, and they acted at once to stop the unauthorized flow of data.  I regard such a reaction as reasonable in those circumstances.

[116]                          Second, MLS Policy 508 implicitly recognized that a need to act quickly might exist in some circumstances because it provided that “TREB in its sole discretion, may terminate or suspend a Member’s user name and Password code in the event of any unauthorized or improper use of the MLS Online system.”

[117]                          Finally, and more to the point of the purpose of affording a person an opportunity to cure any breaches, the reality of the situation was that neither BNV nor Mr. Beach could have done anything to cure their breaches other than to stop downloading listing information from the MLS Database.  As Mr. Beach stated in his testimony, BNV would not have changed the way it gathered information from the MLS System because

[118]                          On February 4, 2008, Mr. Beach delivered a request to TREB’s membership department for the termination of the membership of BNV as a brokerage member of TREB, the reinstatement of the membership of his prior real estate company, Select/Plan Real Estate Inc., and the transfer of his individual membership from BNV to Select/Plan.

[119]                          The TREB membership application provided that applications would be processed within 24 hours.  When he did not hear from TREB, Mr. Beach sent an e-mail to Mr. Richardson on February 8, 2008, asking him to look into the status of his application.  Receiving no response, Mr. Beach sent a letter on February 21, 2008, to Ms. Linda Aucoin, TREB’s Director of Membership Services, asking her to inquire into his application.

[120]                          Mr. Beach sent a follow-up letter to Mr. Richardson on February 26, 2008.  Mr. Richardson replied the next day, writing:

[121]                          There then followed a letter from TREB, dated April 28, 2008, which claimed that Mr. Beach owed the organization $49,500 in costs related to its termination of his access to the MLS System.  The letter stated that Mr. Beach was in breach of unstated provisions of the TREB By-law and the TREB MLS Rules and Policies, and relied on the indemnity provisions in section 11 of the AUA to seek costs from Mr. Beach.  Section 11(d) of the AUA provided, in part:

[122]                          Further negotiations to resolve the matter were unsuccessful.  TREB’s final position, as outlined in its counsel’s letter of July 15, 2008, was that in order to reinstate his membership Mr. Beach would have to (i) pay TREB $49,500 by way of indemnity, (ii) release TREB from all claims in respect of the matter, and (iii) sign an acknowledgement that TREB would have the right to permanently terminate his membership should it, in its “sole and absolute discretion”, determine that Mr. Beach was misusing the MLS Database.

[123]                          For the purposes of Article 4, Section 2 of the TREB By-law, Mr. Beach is considered a “Defaulting Member”.  Section 2.03 enables a Defaulting Member to dispute an amount alleged owing to TREB by invoking the hearing procedures before the Professional Standards Hearing Committee set out in Schedule “D” to the TREB By-Law.  Mr. Beach has not engaged that process.  Given the availability of an internal method to dispute the fees TREB claims by way of indemnity, it would be premature for a court to intervene in this aspect of the dispute between the parties, and I decline to do so.

[124]                          For the reasons given, I dismiss Mr. Beach’s application and do not grant any of the relief he requested at trial.

[125]                          I would encourage the parties to attempt to settle the issue of costs.  If they cannot, TREB may serve and file with my office written cost submissions, together with a Bill of Costs, by December 18, 2009.  Mr. Beach may serve and file with my office responding cost submissions by January 8, 2010.  TREB may serve and file brief (i.e. no greater than three pages) reply cost submissions by January 15, 2010.

[126]                          At the start of the trial TREB brought a motion against Mr. Dale, one of Mr. Beach’s counsel, seeking a declaration that he had breached the deemed undertaking rule, together with certain related relief.  I declined to deal with the motion at that time and, instead, held that I would hear submissions at the end of the trial on how to proceed with the motion.  At the end of the trial I further deferred the matter to these Reasons.  If TREB intends to pursue this motion, I direct that it serve and file with my office written submissions by December 18, 2009, indicating how it proposes to proceed with its motion.  If TREB does not file any submissions by that date, I will treat the motion as abandoned.  If TREB does file submissions, then Mr. Dale, or his counsel, may file responding submissions by January 8, 2010.  After reviewing those submissions I will issue further directions.