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Arora Zbar LLP Reduces a BCFSA Penalty by 80%: The Value of Early Legal Advice
Our recent win highlights why it’s never too early to call a lawyer if you’re facing BCFSA regulatory issues.
Eli Zbar
June 25, 2025
No mortgage broker or real estate agents wants to navigate a BC Financial Services Authority (BCFSA) regulatory investigation or disciplinary process.
Recently, Robert Peake and Ravneet Arora of Arora Zbar LLP successfully appealed a BCFSA penalty in Manjot Khunkhun v Registrar of Mortgage Brokers, 2025 BCFST 3, reducing the broker's penalty by 80%, from $37,500 to $7,500. This decision underscores how critical it is to seek experienced legal guidance as early as possible.
In 2018, Ms. Khunkhun created certain falsified commitment letters. Ms. Khunkhun admitted to creating and presenting the false documents and cooperated with the BCFSA. The BCFSA imposed an administrative penalty of $37,500. Mr. Peake and Mr. Arora represented Ms. Khunkhun in her appeal of the BCFSA penalty to the BC Financial Services Tribunal (BCFST).
This month's newsletter goes through the important lessons from the Khunkhun decision, and how anyone regulated by the BCFSA can better protect themselves.
You Can Admit Liability and Fight the Penalty
A key lesson from Khunkhun: even if you've done something wrong, the BCFSA must act reasonably in handing down a penalty. Further, you need not deny wrongdoing in order to dispute the penalty. You can admit liability, cooperate with the investigation, and only dispute the penalty. The sooner you get legal advice, the sooner you can determine how best to engage with the BCFSA right from the start, including deciding what exactly to dispute.
The BCFSA Overweighted Certain Factors, and Underweighted Others
The BCFST found the BCFSA focused too much on “specific deterrence” which is aimed at preventing the specific person from reoffending, and downplayed significant mitigating factors:
"I have found the Decision was unreasonable in the treatment of various mitigating factors. In particular, the failure to specifically address and take into account the Appellant’s admission of misconduct and cooperation with the regulator in fashioning the penalty was unreasonable and led to a penalty which was unfair and harsher than would otherwise have been the case.
Further, in failing to adequately explain and attribute the appropriate weight to be given to the other mitigating factors involved with the Appellant’s remedial action, I find the penalty which was imposed was unreasonable in the circumstances.... Similarly, having found that the Decision was unreasonable in overemphasizing specific deterrence, I find that the penalty imposed was unreasonable because it was based on such reliance on specific deterrence. As previously noted, without such reliance on specific deterrence, other penalty matters would have been more properly considered.
The reasonable application of specific legal tests to the facts of a given case is a complex and nuanced exercise. A lawyer will understand the applicable legal tests, and present your case within their parameters. We can help you respond to allegations in a way that maximizes your chances of a fair and reasonable outcome, right from the start.
Mitigating Factors Matter, Raise Them Properly
Personal circumstances, such as mental health challenges or extraordinary pressure, can and should be part of your defence. A lawyer can help prepare this evidence and present it to the BCFSA at first instance. Engaging a lawyer as soon as you become aware of a BCFSA investigation or disciplinary process ensures your side of the story is presented clearly and persuasively.
The BCFSA was found to have failed to consider the following mitigating factors:
acknowledgment of misconduct and cooperation with the regulator in arriving at the penalty;
seeking assistance for her mental health; and
removing herself from the industry related solely to her mental health issues. (para 112).
📌 What You Should Do
If you hear from the BCFSA, don’t panic, and don’t try to handle it yourself. Get legal advice early, let the lawyer do their job so you can focus on doing yours!
A lawyer will help you:
Gather and present evidence that actually moves the needle;
Make sure your side of the story is heard (not just the BCFSA's version);
Push back if the BCFSA is overreaching or missing the real context, including appealing their decision to the BCFST if needed; and
Protect your license, your reputation, and your future.
🤔 Did You Know?
We offer real estate agents and mortgage brokers complimentary short phone consultations. Message me on WhatsApp, or book a call.
A reminder that Arora Zbar LLP has 5 lawyers offering services in real estate transactions, construction disputes, corporate law, commercial litigation, tenancy/strata disputes, and estate planning.
We offer services in English, Punjabi, Hindi, and Farsi.
We are super transparent about pricing, check out our app at www.pricemyconveyance.com - it calculates property transfer tax, too!
Contrary to what people think, a lawyer is not more expensive than a notary. Remember that all lawyers are notaries, but notaries are not lawyers. In my experience, most notaries refer clients to a lawyer as soon as there’s a problem with a deal. Why not start with a lawyer?
Sincerely, Eli Zbar Lawyer |  |
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