CT-20 11 -003 THE COMPETITION TRIBUNAL IN THE MATTER OF the Competition Act, R.S.C. 1985, c. C-34, as amended; AND IN THE MATTER OF an appl ication by the Commissioner of Competition pursuant to section 79 of the Competition Act;
ANO IN THE MATTER OF certain m ies, policies and agreements relating to the residentia l multiple listing service of the Toronto Real Estate Board
BETWEEN: THE COMMISSIONER OF COMPETITION Applicant - and -THETORONTOREALESTATEBOARO Respondent
REQU EST FOR LEAVE TO INTERVENE ON BEHALF OF REALTYSELLERS REAL ESTATE INC.
REAL TYSELLERS REAL EST ATE INC. ("Realtysellers") requests leave of the Competition Tribuna l (the "Tribunal") pursuant to subsection 9(3) of the Competition Act, R.S.C. 1985, c. C-34, as amended, and pursuant to subsection 46(2) of the Competition Tribunal Rules, to intervene in the above-noted proceedings. This request is made on behalf of Realtysellers by his Counsel, whose name and address is set fo11h below. In suppo11 of this request, Realtysellers intends to rely on the affidavit of Lawrence Mark Dale, President and CEO of Realtysellers, sworn August 3 1s i, 20 11.
- 2 -STATEMENT OF FACTS The following is a concise statement of facts presently known to Realtysellers on which thi s request is based: I . On May 25, 20 11 , the Commissioner of Competition (the "Commissioner") filed a Notice of Application (the "Application") pursuant to section 79 of the Competition Act, R.S.C. 1985, c. C-34, as amended (the "Act"), and naming as respondent: The Toronto Real Estate Board ("TREB"). 2. On Jul y 7, 20 11 the Commiss ioner filed an Amended Notice of Application. 3. On August 19, 201 1 the Respondent filed a Response. 4. In the Amended Notice of Application, the Commissioner applied to the Tribunal for an order as set in paragraph 66 therein. 5. Rcaltyscllcrs is a residential real estate resale brokerage and a member ofTREB. 6. As a result of the Commissioner securing a Consent Agreement with the Canadian Real Estate Associa tion ("CREA") that was filed with the Tribunal on October 25, 20 I 0 and the Commissioner filing its in itial Notice of Application in this proceeding on May 25, 2011 , Realtysellers finalized plans to enter the residential real estate brokerage marketplace in the Greater Toronto Area and e lsewhere in Canada. In the past two months, Realtysellcrs and its re lated parties (collectively "Realtysellers") have acquired brokerages in other provinces, became licensed as a brokerage or have taken steps to become licensed as a brokerage in several provinces and made a strategic investment in PropertyGuys.com Inc., Canada's largest franchise network helping private se llers sell their homes. 7. Realtyscllers' objectives arc to provide consumers with a different approach to obtaining residentia l real estate brokerage services at better value than provided by traditional agents and
- 3 -brokerages. Rcaltysellers' business philosophy is to offer a choice of services to consumers so that they only need to purchase the services they desired and to uti lize all avai lable technology to prov ide an efficient delivery of services and MLS property information at better value than provided by traditional agents and brokerages. 8. Even though Realtysellers has only been operating for less than two months o ffering very limited programs, Rea ltysellers has established itself as TREB's largest non-traditional brokerage. Realtysellers has a lso established itself as Canada's largest non-traditional brokerage. 9. Realtysellers is only offering limited ala carte MLS services such as a simple MLS posting for consumers who do not want to purchase any other brokerage services. To expand its programs and services, the restrictions that TREB has regarding communicating MLS information to customers and potentia l customers over the internet in a virtua l office environment must be removed as set out in the Proposed Order sought by the Commissioner in her Amended Notice of Application. I 0. In the less than two months since Realtysellers has launched its first programs, Realtysellcrs has posted more than 600 properties on real tor.ca and has commi tments with more than I 000 additional customers to post the ir properties on rea lt or.ca. Realtysellers currently is signing up more than I 00 customers per week, with that number growing each week. Realtysellers anticipates ass isting over 30,000 consumers with only its current li mited program offerings in the next 12 months representing approximately $4 billion in property transaction value. 11. However, Realtysellers is unable to materia lly expand its service offerings with the current restrictions that TREB has placed on its ability to provide the same MLS information that tradit ional agents and brokerages can provide to consumers by hand delivery. Realtyscllers does not want to provide any different information than what is provided by the traditional agents and brokerages, but wants to use what Realtyse llers believes is a better and more efficient delivery process for this same
-4-information, namely through the internet in a virtual office environment as apposed to by hand in a bricks and mortar environment as provided by traditional agents and brokerages. 12. If Realtysellers could provide information to customers and potential customers over the internet m a virtual office environment, Realtysellers can offer services to buyers and sellers at a cost substantially less than currently provided by typical traditional agents and brokerages through a bricks and mortar office environment. REALT YSELLERS JS DIRECTLY AFFECTED AND OFFERS A UNIQUE AND DISTINCT PERSPECTIVE TO THE PROCEEDING
13. Realtysellers is currently operating as a member of TREB offering innovative and non-traditional brokerage services. Even though it program offerings are restricted by the subject matter in these proceedings, in less than two months Realtysellers has established itself as a serious market participant. Realtysellers has posted more properties for sale on the TREB MLS system in the past two months than virtually any other brokerage member of TREB. 14. Realtysell ers is TREB 's largest non-traditional brokerage. 15. Realtysellers is likely TREB 's only non-traditional brokerage wanting to operate a true virtual office. 16. Realtysellers can offer a unique and distinct perspective to these proceedings. 17. Realtysellers is the only known non-traditional brokerage member in TREB that wants to operate a virtual brokerage but is prevented from doing so by TREB 's current rules and policies that the Commissioner seeks to remove in her Proposed Relief.
- 5 -18. Two senior members of the Realtysellers executive group, Lawrence Dale and Fraser Beach, arc the only cuiTent non-traditional realtors who have ever operated a virtual office in TREB, albeit both for limited time frames until TREB stopped their previous activities. 19. Rcaltyscllcrs' President and CEO Dale brings an unique and distinct perspective to these proceedings as he has more experience operating and attempting to operate non-traditional brokerages than any member of TREB, having been pursing the cause for over a decade. In addition, Dale has also been involved with some of TREB 's largest traditional brokerage members including being President and CEO of the group of that in 2007 purchased 80% of Chestnut Park Real Estate Limited, one of TREB 's largest traditiona l brokerage members. Dale 's knowledge and experience that he acquired owning and operating both non-traditional and traditional brokerages will provide a distinct and unique perspective on the subject matter of these proceedings that cannot be provided by any other TREB member. 20. Rcaltysc llcrs is not able to ful ly expand it program offerings until it is able to operate a virtual office to provide M LS information to its customers and potential customers which would be permitted under the Proposed Order. 2 1. Realtyscllers is planning to provide additional innovative service programs for buyers and sellers that require that the MLS information be communicated to consumers through a virtual office environment to be more operationally efficient resulting in cost savings that can be passed on to consumers through lower costs and better value in the services they choose. 22. Rcaltyscllers can offer a unique and distinct perspective to these proceedings as it is currently operating as a successful non-traditional brokerage with a developed business approach to util ize a virtual office to expand it scope of program offerings if permitted to do so with the removal of TREB ' s current un lawfu l rules and policies.
- 6 -23. In the event that the Tribunal grants the re lief sought by the Commissioner in the Application, Realtysellcrs has plans to expand it services to including programs that requires Realtysellers to operate a virtual office as described by the Commissioner in her Amended Notice of Application.
TOPICS FROM THE MATTERS IN ISSUE WITH RESPECT TO WHICH THE PROPOSED INTERVENOR WISHES TO MAKE REPRESENTATIONS AND PROPOSED SCOPE OF THE PROPOSED INTERVENTION
24. If Rcaltysellers is granted leave to intervene, the topics that Realtysellers would like to intervene on are as fo llows: (a) How a brokerage like Rcaltysellers would operate a virtual office and provide MLS information to consumers over the internet as opposed to through a bricks and mortar office and by hand;
(b) The cost savings and operational efficiencies ofoperating a virtua l office and the savings that can be passed a long to consumers;
(c) The impact of the current TREB mies and policies including its recent VOW policy on a non-traditional brokerage like Realtysellers who wants to provide consumers with MLS information in a vi rtual office environment over the internet as apposed to through a bricks and mortar offi ce by hand;
(d) The absence of any privacy issues and other issues preventing virtual offices as described herein; and
(e) The Proposed Order and the impact it will have on non-traditional brokerages who want to provide consumers with MLS in formation through its virtual office over the internet as apposed to through a bricks and mortar office by hand.
25. If granted leave to intervene, Rea ltysellers requests that it be permitted, provided that the evidence provided by such wi tnesses is re levant and non-repetitive to call a maximum of three witnesses. 26. If granted leave to intervene, Realtysellers is prepared to produce a ll documents relevant to the topics of its intervention and deli ver an affidavi t of documents related thereto.
- 7 -27. If granted leave to intervene, Realtysellers will produce a representative for discovery in relation to the topics of its intervention. 28. If granted leave to intervene, Realtysellers asks that, subject to any confidentiality orders, Realtysellers is to be served with the pa1ties' productions and affidavits of documents as they become avai lable. 29. If granted leave to intervene, Realtysellers asks that it be entitled to be present at the discoveries and to ask questions only on the topics of its intervention but not to repeat any questions already asked by other counsel. 30. If granted leave to intervene, Realtysel lers asks that at the hearing it be entitled to cross-examine witnesses only on the topics of its intervention but not to repeat any questions already asked by other counsel. 31. If granted leave to intervene, Realtysellers asks that it can make oral and written submissions which are not repetitive only on the topics of its intervention as well oral and written submissions as to the Proposed Order. NAME OF THE PARTY THE PROPOSED INTERVENOR INTENDS TO SUPPORT 32. Realtysellers intends to support the Commissioner's position genera lly. 33. While Realtysellers supports the Commissioner's position generally, Realtysellers is in a unique and distinct position to pa1ticipate in these proceedings in the limited way proposed. Realtysellers is the largest innovative brokerage member in TREB wanting to offer the very type of services that the Commiss ioner has alleged TREB has prevented through anti-competitive conduct. The outcome of these proceedings will directly materially affect the business of Realtysellers. Realtysellers has established itself as significant market participant and will become a much more vigorous and effective competitor once TREB's anticompetitive rules are eliminated. Realtysellers is directly affected by any
- 8 -Order made in this proceeding and would like the opportunity to intervene in the limited manner proposed. The Commissioner has a broader public interest mandate to serve, whereas Realtysel lers has . a unique and distinct perspective as an innovative brokerage seeking to compete in the market. This perspective will allow Rcaltyscllcrs to assist the Tribunal by asking unique, non-repetitive questions of witnesses by presenting a li mited amount of evidence if such evidence has not been put forward by the Commissioner and by making a fina l argument that will likely not be advanced by the Commissioner. OFFICIAL LANGUAGE TO BE USED 34. Realtysellers requests that any hearing of the Request for Leave to Intervene and, if such leave is granted, the proceedings relating to the Appl ication be conducted in the English language. DA TED at Toronto, Ontario, this I st day of September , 20 11 Gowling Lafleur Henderson LLP I First Canadian Place I 00 King Street West Toronto, ON, Canada MSX I GS
Mark Nicholson Phone: (4 16) 369-7396 Fax: (416) 862-766 1 Counsel for Realtysellers Real Estate Inc.
TO: THE REGISTRAR The Competition Tribunal 600 - 90 Sparks Street Ottawa, Ontario KIP 5B4
Phone: (613) 957-785 1 Fax: (6 13) 952-11 23
AND TO: BENNETT JONES LLP One First Canadian Place Suite 3400, P.O. Box 130 Toronto, Ontario M5X IA4
John F. Rook, Q.C. (LSUC# l3786N) Phone: (4 16) 777-4885
Andrew D. L ittle (LSUC#34768T) Phone: (4 16) 863- 17 16 DEPARTMENT OF JUSTICE CANADA Competition Bureau Legal Services place du Potage, Phase l 50 Victoria Street, 22"d Floor Gatineau, Quebec KJA OC9
Roger Nassrallah Counsel for the Applicant
AND TO: AFFLECK GREENE McMURTRY LLP 365 Bay Street, Suite 200 Toronto, Ontario M5H 2Vl
Donald S. Affleck, Q.C. Phone: (4 16)360- 1488
Renai E. Williams Phone: ( 4 16) 360-0668
Michael l. Binetti Phone: (416) 360-0777
Counsel for the Respondent
- l 0 -CT-2011-003 THE COMPETITION TRIBUNAL IN THE MATTER OF an application by the Commissioner of Competition pursuant to section 79 of the Competition Act, R.S.C. 1985, c. C-34, as amended
BETWEEN: THE COMMISSIONER OF COMPETITION Applicant - and -THE TORONTO REAL EST ATE BOARD Respondent
REQUEST FOR LEA VE TO INTERVENE ON BEHALF OF REALT YSELLERS REAL ESATATE INC.
Gowling Lafleur Henderson LLP I First Canadian Place 100 King Street West Toronto, ON, Canada MSX I GS
Mark Nicholson Phone: (4 16) 369-7396 Fax: (4 16) 862-766 1 Counsel for Realtysellers Real Estate Inc.