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Beach loses appeal in TREB MLS access case

An appeal by Fraser Beach, who unsuccessfully took legal action against the Toronto Real Estate Board (TREB) after it suspended his access to the MLS database in 2007, has been dismissed by the Court of Appeal for Ontario.

TREB shut down Beach’s MLS access in May 2007, after learning that the broker had downloaded a large number of listings from the board’s MLS database onto his website and was making them available to the public – in effect giving consumers the same ability as a member of TREB to search portions of the MLS database. When TREB refused to restore Beach’s MLS access he took it to court, claiming he was being discriminated against as a discount brokerage.

TREB said that Beach and his corporate partner BNV Real Estate Inc. (a subsidiary of Bell Canada) had breached provisions of TREB’s Authorized User Agreement (AUA), which limited the use its members could make of data obtained from its MLS database to the member’s “exclusive and internal use”. Justice David Brown of the Superior Court of Justice sided with TREB.

In the appeal, Beach’s lawyers argued that the trial judge erred by determining that Beach breached agreements with TREB; that TREB was not obliged to provide notice of default and later to restore Beach’s access to the MLS data; and that the BNV website was a “derivative work” as outlined in section 7 of the AUA.

In a decision released Dec. 21, appeal court judge S.E. Lang wrote that, “The trial judge’s conclusion is clear that, in making the database available to the public for direct search, ‘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.’ This interpretation, in my view, is unassailable.”

The judge also found that “in light of my conclusion regarding the plan breach of section 2 of the AUA, it is unnecessary to consider the alternative argument regarding whether the BNV website constituted a ‘derivative work’”.

The Court of Appeal said TREB was within its rights to deny MLS access to Beach on the basis of MLS Policy 508, which says the board can “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.”

It awarded $23,500 in court costs to TREB.

Prior to May 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.

One of Beach’s lawyers is Lawrence Dale, the founder of controversial discount brokerage Realtysellers. During the recent dispute between CREA and the Competition Bureau over MLS access, Dale applied unsuccessfully for intervenor status in support of the bureau’s allegations that CREA’s MLS access rules were anti-competitive. The commissioner of competition included some of Dale’s information in her filings with the tribunal. That dispute was settled out of court in October, when CREA’s membership ratified a Consent Agreement between the association and the commissioner. Dale has since publicly commented that he expects to see further action against organized real estate pursued by the commissioner.

Dale has also filed another lawsuit against TREB and several real estate companies and individuals – this action is still outstanding.