The appellants, Daniel Tiffin and Tiffin Financial Corporation (TFC), appealed convictions for provincial offences under the Securities Act, including trading in securities without registration, distributing securities without a prospectus, and trading while prohibited.
The central issue was whether promissory notes issued by Tiffin to clients, while he was subject to a cease trade order, constituted "securities" under the Act.
The trial judge had acquitted the appellants by applying the American "family resemblance test" to conclude the notes were not securities.
The Superior Court of Justice, on appeal, reversed this decision, declining to import the American test and finding the notes were indeed securities, thus substituting convictions.
The Court of Appeal upheld the convictions, agreeing that the "family resemblance test" should not be imported into Ontario securities law due to the distinct "catch and exclude" statutory scheme in Ontario.
However, the Court of Appeal allowed the sentence appeal, finding the six-month custodial term demonstrably unfit given mitigating factors such as the appellants' honesty in revealing their financial situation, their remorse, repayment efforts, and client support.
The probation and restitution orders were upheld.
