AREA sued former director (Updated)

Note: This story originally was posted on July 14 and was updated on July 23, 2020 and November 7, 2023.

The Alberta Real Estate Association sued a former member of its Board of Directors and obtained an order directing civil enforcement agents to his home and office to collect data from his computers, smartphones and computer storage devices and documents. * The order was to prevent the member, David Lowe, from disclosing confidential information to third parties, which AREA alleges Lowe did on a number of occasions.

Recently Lowe filed a Statement of Defence in which he denies the allegations and says AREA’s legal action is “orchestrated to keep borderline and illegitimate AREA activities and decision-making secret, and to muzzle any opposition or criticism.” The statement says, “AREA governance is secretive and lacks transparency” and that “AREA routinely omits or refuses to disseminate the minutes of meetings to members and member associations, contrary to its own bylaws.”

None of the allegations have been tried in court.

The Statement of Defence says, “Lowe was given two options: for the bailiffs to execute search and seizures of Lowe’s computers and records at his home and place of business, which was to take four hours or less, or the option of having the computers removed for copying to take place, and be deprived of both his computers and smartphones for at least two days. Lowe elected the faster option.” However, the statement says Lowe’s business was closed for a full day.

“This improper search and seizure was deeply upsetting to Lowe, and to his family and associates,” says the statement. “Lowe’s wife and business partner both left him and the business shortly after the search was executed. Lowe’s employee immediately started looking for other work and left his employ. Members of the small community in which he lives and works asked if he was going out of business.”

The dispute is the latest in a years-long clash between AREA and some former members of the Real Estate Council of Alberta (RECA) and their supporters. After complaints about the regulator from the real estate industry, last year the government ordered an independent review that recommended “changing the individuals involved” on the council. Minister of Service Alberta Nate Glubish dismissed the council members and in June the province introduced a new act to restructure RECA.

Prior to the review, RECA filed an application to have one of AREA’s appointments to RECA, Robyn Moser, removed from council. In a legal document called an Originating Application, RECA claimed Moser had contravened a subsection of the province’s real estate act.**

“Ms. Moser has repeatedly and consistently impeded Council from effectively carrying out its purposes by disruptive conduct at Council meetings. This disruptive conduct has included repeated emotional outbursts, excessive focus on administrative details that has caused meetings to go materially longer than in the past and aggressive attacks on other Council Members and RECA staff,” said the Originating Application.

When the new act was passed last October, the Originating Application became moot, but in June 2020, Moser filed a Statement of Claim against former RECA members Brian Klingspon, Christine Zwozdesky, Krista Bolton, Bonny Clarke, Philip McDowell, Robert Telford and Bobbi Dawson, as well as former RECA executive director Bob Myroniuk and RECA general counsel Jean Flanagan.

The claim is for abuse of public office and “abuse of statutory authority and breach of natural justice.” The claim says Moser has suffered damage to her reputation and “the conduct of the Defendants was motivated by actual malice, (and) that their conduct was particularly high-handed or oppressive, thereby increasing Moser’s humiliation and mental distress and justifies her claim for aggravated damages.”

She is seeking general damages of $500,000; damages for abuse of office and powers of $2 million; aggravated damages of $2 million; and punitive and exemplary damages of $1 million. ***

In his Statement of Claim, Lowe says AREA is secretly paying for Moser’s legal fees, which he claims are “in excess of $500,000”. Lowe’s claim says, “The Moser litigation, and AREA’s surreptitious funding of the litigation, is in effect and in purpose an attempt to undermine and limit RECA and to increase AREA’s influence and role. AREA’s support of Moser in that action parallels AREA’s political advocacy to limit RECA, to discredit RECA’s executive director and for AREA to supplant many of RECA’s roles and responsibilities.

“Lowe’s disagreement that the Moser litigation funding and AREA’s true purpose in financing the Moser litigation should be kept secret from the membership of the association was the single greatest issue of contention between Lowe and the executive and directors of AREA,” says the Statement of Defence.

AREA CEO Brad Mitchell says in a statement to REM: “We do not comment on matters before the courts.”

But he says, “AREA maintains a member advocacy committee in order to assist members that in the opinion of the committee have been treated unfairly. The advocacy committee makes decisions based on a number of factors that are posted on our website for all members to see. AREA has and continues to assist members in regulatory and legal matters where these conditions are met. The program has been effective and is popular with our membership.”

In its Statement of Claim, AREA says that as a director of the board, Lowe “owed fiduciary duties of fidelity and good faith to AREA,” and that he breached those duties several times. It says Lowe secretly recorded an in-camera meeting of the Executive Committee of the board and distributed it to the president and president-elect of the Realtors Association of Edmonton (RAE) as well as the CEO of RAE and others. AREA alleges that Lowe told RAE that if appointed to the AREA board, he would report to RAE about issues that would affect its membership.

In a letter from AREA president Jennifer Gilbert to RAE that’s included in the Statement of Defence, Gilbert says, “It appears from recent emails and recordings that the RAE Executive and James Mabey (a CREA director-at-large) may have been receiving confidential and/or incorrect information about AREA, by way of Mr. Lowe, for some time. Further, Mr. Lowe’s private and public communications during his time as a director of AREA contain numerous inaccurate, false and misleading statements. It is unfortunate that RAE leadership has chosen not to seek clarification from AREA, nor been forthcoming about these inappropriate communications.”

AREA says Lowe also demonstrated a “lack of collegiality and solidarity with the board by repeatedly making statements, both publicly published and private, in opposition to the official stance of the board, and damaging the reputation of AREA.”

This included two Letters to the Editor that Lowe sent to REM last year, in which he was critical of CREA’s lobbying efforts. The letters “presented a viewpoint and opinions critical (of CREA) and at odds with the official position of AREA with respect to those viewpoints and opinions, causing reputational damage to AREA,” says the association’s Statement of Claim.

He then wrote an apology for the letters directly to CREA CEO Michael Bourque, “thereby pre-empting the planned and authorized response of the board,” says the AREA statement.

Lowe’s claim says he was ultimately coerced to resign after AREA threatened to convene professional disciplinary proceedings against him through CREA.

AREA says it asked Lowe to return all of the association’s property and digital records, but that Lowe did not respond. AREA’s claim said “continued possession of the AREA property enables him to make further disclosures, creating a substantial risk to the plaintiff….he is likely to be in possession of, either on his computer, phone or reproduced in a physical format, additional confidential material, the knowledge of which only he possesses.”

Calgary real estate lawyer Lou Pesta wrote on his LinkedIn blog, “This begs the question of what Mr. Lowe could possibly know and what secret records he could have had for AREA to go to these extreme lengths and costs to silence him.” Pesta, who served as a volunteer on AREA’s Standard Forms and Practice Committee, says he resigned from the committee when the “culture of secrecy started at AREA roughly five years ago”. He is not involved in these proceedings.

Lowe denies each allegation in the Statement of Claim. He is seeking to be indemnified for all his actions as a director and is asking for damages for losses resulting from what his Statement of Claim calls “the search of his home and business office”, damages for mental suffering, and an order for exemplary or punitive damages and legal costs. He is also seeking costs personally from Jennifer Gilbert and Steven Robertson, AREA’s solicitor.

A resolution

The matter has been resolved and on October 17, 2023, the following statement was posted on AREA’s website:

Message from AREA Chair David P. Brown:

We are pleased to announce the consent dismissal of the lawsuit filed by Mr. Lowe against the AREA Board of Directors. The resolution did not involve a payment to either party. We appreciate Mr. Lowe’s passion for the industry and his willingness to volunteer.

Mr. Lowe issued the following statement as part of the settlement.

“During my time on the Board, I at times pursued interests and concerns which were influenced in part by my appointment to the AREA Board by the REALTORS^® Association of Edmonton (“RAE”).

Following a publication in the Real Estate Magazine of an opinion article I submitted, I was called to attend a videoconference meeting of the Executive Committee of AREA, wherein my resignation was requested I recorded the videoconference without notifying the Executive Committee and provided a recording of this videoconference to my Broker and members of RAE’s Executive, who were not authorized to receive the recording, and I subsequently tendered my resignation to the AREA Board of Directors.

I retract the negative statements I have made about AREA. I have full trust and confidence that AREA, its board, and staff are working hard in the members’ best interest.

I gained much valuable insight into proper governance, and I thank my co-directors, administration, and staff during my tenure for indulging my numerous and repeated inquiries for information, and I apologize for the disrespect I showed my colleagues and AREA staff.

Finally, I want to express my appreciation for the experience and learning opportunities provided to me during my tenure as a Director from 2018 to 2019.

* The original version of this story said AREA had Lowe’s home and office searched. AREA says the order did not request that bailiffs conduct a search. It says the order required that Lowe deliver all devices to the civil enforcement agents so their contents could be preserved, not searched. Lowe’s Statement of Claim says the order was improperly executed and that he was not advised of the procedural protections he was entitled to. None of the allegations have been tested in court.

** The original version of this story said RECA claimed Moser violated conflict of interest rules. This was not alleged in the Originating Application.

*** Details from the Originating Application and Moser’s June 2020 Statement of Claim were not included in the original version of this story.