Costello v. Ontario (Securities Commission), 2004 CanLII 2651 (ON SCDC)

COURT FILE NO.: Divisional Court 338/03

DATE: 20040712

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: Brian K. Costello, Appellant

-and-

Ontario Securities Commission Respondent

BEFORE: O’Driscoll, Lane and Jennings JJ.

HEARD: April 17, 2004

COUNSEL: Joseph Groia and Kellie Seaman, for the Appellant

Kelley M. McKinnon, for the Respondent

R E A S O N S F O R D E C I S I O N

LANE J.:

1The appellant appeals from the decisions of the respondent Commission on the merits (February 18, 2003) and as to penalty (April 29, 2003), finding him to have acted as an ‘adviser’¹ without being registered to do so pursuant to section 25(1)(c) of the Securities Act², (hereinafter ‘the Act’). The Commission did not find him guilty of failure to disclose certain conflicts of interest as required by section 40 of the Act because that section only applied to registered persons and not to one who ought to have, but had not registered. However it found his failure to make such disclosure was contrary to the public interest and invoked section 127. The Commission imposed a penalty of a reprimand; denied him for five years the benefit of the ‘writer’s exemption’³ in the Act; required him to submit to a review of his activities from November 11, 2002 to the date of the order; and ordered him to pay $300,000 in costs.

2An appeal to this court is provided by section 9(1) of the Act and the court is empowered to direct the Commission to make such decision as the court considers proper, having regard to the Act and the material before us. It is, therefore, not confined to questions of law.

Relevant Legislation:

3The Act provides:

Section 1: adviser means a person or company engaging in or holding himself, herself or itself out as engaging in the business of advising others as to the investing in or the buying or selling of securities.

Section 25(1): No person or company shall,

(c): act as an adviser unless the person or company is registered as an adviser …

Section 40. Subject to the regulations, every registered adviser shall cause to be printed in a conspicuous position on every circular, pamphlet, advertisement, letter, telegram and other publication issued, published or sent out by him, in which the adviser recommends that a specific security be purchased, sold or held, in type not less legible than that used in the body of the circular, pamphlet, advertisement, letter or other publication, a full and complete statement of any financial or other interest that he or any partner, director, officer or a person or company that would be an insider of the adviser if the adviser was a reporting issuer may have either directly or indirectly in any securities referred to therein or in the sale or purchase thereof, including,

(a) any ownership, beneficial or otherwise, that any of them may have in respect of such securities or in any securities issued by the same issuer;

(b) any option that any of them may have in respect of such securities, and the terms thereof;

(c) any commission or other remuneration that any of them has received or may expect to receive from any person or company in connection with any trade in such securities;

(d) any financial arrangement relating to such securities that any of them may have with any person or company; and

(e) any financial arrangement that any of them may have with any underwriter or other person or company who has any interest in the securities.

Section 127(1) The Commission may make one or more of the following orders if in its opinion it is in the public interest to make the order or orders:

1. An order that the registration or recognition granted to a person or company under Ontario securities law be suspended or restricted for such period as is specified in the order or be terminated, or that terms and conditions be imposed on the registration or recognition.

2. An order that trading in any securities by or of a person or company cease permanently or for such period as is specified in the order.

3. An order that any exemptions contained in Ontario securities law do not apply to a person or company permanently or for such period as is specified in the order.

4. An order that a market participant submit to a review of his, her or its practices and procedures and institute such changes as may be ordered by the Commission.

5. If the Commission is satisfied that Ontario securities law has not been complied with, an order that a release, report, preliminary prospectus, prospectus, return financial statement, information circular, take-over bid circular, issuer bid circular, offering memorandum, proxy solicitation or any other document described in the order,

i. be provided by a market participant to a person or company,

ii. not be provided by a market participant to a person or company, or

iii. be amended by a market participant to the extent that amendment is practicable.

6. An order that a person or company be reprimanded.

7. An order that a person resign one or more positions that the person holds as a director or officer of an issuer.

8. An order that a person is prohibited from becoming or acting as director or officer of any issuer.

9. If a person or company has not complied with Ontario securities law, an order requiring the person or company to pay an administrative penalty of not more than $1 million for each failure to comply.

10. If a person or company has not complied with Ontario securities law, an order requiring the person or company to disgorge to the Commission any amounts obtained as a result of the non-compliance.

The Salient Facts:

4The appellant is a well-known financial author, seminar speaker, radio personality and investment commentator on personal finance matters. He did no direct trading as part of his business, but he conducted many seminars for members of the public. When attendees at Mr. Costello’s seminars later purchased securities, they did so after dealing with or through others who were registered as advisers or dealers under the Act. Often FPG registered dealers/advisers were in attendance at the seminars and attendees would be advised of their presence and willingness to discuss the securities mentioned by the appellant⁴.

5In December 1992, the appellant signed a letter agreement establishing THE Financial Planning Group (FPG) through The Height of Excellence Financial Planning Group Inc. (FPG FundsCo) and DPM Securities Inc. (DPM). The latter two were registrants under the Act and they carried on business as FPG. The net profits of FPG flowed into another company, The Height of Excellence Financial Group Inc., (FPGServiceCo), which was not a registrant. The appellant, also not a registrant, was the Chairman and owned 47.5% of the shares of FPGServiceCo.

6The Commission found that the above business structure was devised as a means of allowing the appellant to participate in the control of FPG without having to become qualified as an officer or director of a registrant. In the agreement, the appellant agreed to become registered. He did not, however, do so. There was evidence from Mr. Calderisi,⁵ a principal of FPGServiceCo, that it was intended that, once the appellant became registered, FPGServiceCo would be wound up.

7Until approximately July, 1997, the appellant gave investment seminars on behalf of FPG. At these seminars, Mr. Costello spoke for approximately 1 ½ to 2 hours, to a diversified audience from “all walks of life”, and received a speaking fee of approximately $5,000.00 plus expenses for each seminar. The typical seminar began with general comments about the current state of the economy, interest rates, general market trends and political matters and concluded with comments about tax savings and investment strategies, which on some occasions included discussing specific securities. There was evidence before the Commission that two securities mentioned by the appellant at some seminars, were the limited partnership units of Synlan Securities Corporation (Synlan) and EnerVest Resource Management Limited, (Enervest). From June 1995 to July 1996, FPGServiceCo held a minority equity interest in Enervest, but the appellant’s indirect interest in Enervest through FPGServiceCo was not disclosed.

8It was submitted that the appellant’s interest, as it turned out, was totally insignificant monetarily, because the appellant’s indirect portion of ServiceCo’s. $500.00 equity investment in EnerVest was $237.50.⁶ However, that misses the point. No doubt the appellant made the investment expecting a return and he ought not to have recommended the security without revealing his participation.

9During the course of his seminars Mr. Costello informed his audience that he was not registered to sell securities, that he did not take clients and that they should consult a registered investment dealer or adviser. He did not meet one-on-one with any investors. He advised his audience that he had founded FPG and had handpicked its advisers. He did not disclose his interest in FPGServiceCo or that he was entitled to remuneration derived from the activities of FPG, including sales by FPG FundsCo and DPM of securities recommended by the appellant at the seminars.

10During the material time a monthly investment newsletter, entitled MoneyMatters, was published by the appellant. Most of the material was prepared by James Carr, a registrant. FPG bought copies of these newsletters and made them available free of charge to clients and prospects, including attendees at the appellant’s seminars. Mr. Costello was listed as the publisher, and featured on the masthead with a photograph and a list of accomplishments, but in practice he had little involvement with the content of the newsletter. He discussed the topics to be covered with Mr. Carr, but rarely revised the latter’s drafts. The Commission found that this practice, without a by-line on the stories, gave the impression that the material expressed the views of the appellant.

11On some occasions, the promoters of Synlan and Enervest paid fees to have articles written by themselves, promoting these investments, appear in the newsletter. The Commission found that the appellant permitted these paid advertisements, appearing without a by-line, to appear as his own views.

12The January, 1998 edition contained articles about three other investment funds, written by the fund promoters, also without disclosure of the authorship.

13The Commission found that on several occasions during his seminars, the appellant mentioned the Synlan and Enervest units in very favourable terms, including saying they were “the best I’ve seen.” He created a positive impression about these securities for investment purposes, often in terms similar, if not identical to the points made in the newsletter available at the seminar. He did not disclose that the newsletter articles were written by the promoters.

14At the seminars in which he referred to Synlan, the appellant would inform the audience that Mr. Smith, president of Synlan, would hold a follow-up seminar for those attendees who filled in a form indicating their interest. The appellant did not attend the Smith seminars, but the package given to those attending the Smith seminars would contain an issue of the appellant’s newsletter containing an article endorsing Synlan units. These follow-up seminars were arranged in advance, often in the same location as the Costello seminars and Smith made reference to Costello frequently.

15Most of the allegations against the appellant involved conduct prior to July 1997. In that month, the appellant sold his interest in FPGServiceCo for $2.75 million, a substantial gain on an investment of $82,000.

16The Commission found that the appellant understood the problem involved in making specific recommendations while unregistered. In 1994, as a result of complaints that the appellant was recommending specific partnership units in his seminars, the Saskatchewan Securities Commission advised the appellant that he could not make such specific recommendations unless registered, not even by way of example. He undertook not to do so, but there were further complaints and in 1995 he was advised again that he was not to talk about specific securities without registering.

The Appeal:

17The grounds of the appeal may be briefly summarized as follows:

(a) that the Commission erred in finding that the activities of the appellant constituted acting as an adviser and that he therefore required to be registered pursuant to s. 25(1)(c) of the Act;

(b) that the Commission erred in failing to find that restricting the activities of the appellant, by requiring him to be registered, infringed his freedom of expression as guaranteed by s. 2(b) of the Charter;

(c) that the Commission erred in applying the conflict of interest disclosure provisions of s. 40 of the Act to the appellant, as an unregistered person, by finding his conduct not to be in the public interest pursuant to s.127, thereby exceeding the true scope of both section 40 and s. 127;

(d) that the Commission erred by awarding costs against the appellant in a crushing amount and by denying him the opportunity to mount a meaningful challenge to the calculation of that amount.

18These grounds raise issues of statutory interpretation of the Commission’s constituting Act, (grounds (a) and (c)); a Charter issue (ground (b); and an attack on the exercise of a discretion coupled with an issue of due process (ground (d)). On what standard should these various decisions be reviewed?

The Standard of Review:

19In a series of cases, of which Pushpanathan⁷ is a prominent example, the Supreme Court has developed the pragmatic and functional approach to determining the standard of review of administrative decisions, and the degree of deference to be accorded to the various tribunals, which the courts are called upon to supervise. In this approach, the standard of review is determined by considering four contextual factors -- the presence or absence of a privative clause or statutory right of appeal; the expertise of the tribunal relative to that of the reviewing court on the issue in question; the purposes of the legislation and of the provision in particular; and, the nature of the question.

The First Factor: Right of Appeal:

20Applying the first factor to the case at bar, the statutory right of appeal is extremely broad and includes questions of law or fact or both. The Act does not contain a privative clause to screen the Commission from court scrutiny; instead it grants this very broad right of appeal. This factor tends towards a review on a searching standard.

The Second Factor: The Expertise of the Commission:

21The second factor, the expertise of the Commission in regulating the securities markets, tends toward a higher degree of deference. The Supreme Court of Canada has determined that bodies such as the Commission and professional governing bodies should be awarded a large degree of autonomy and their decisions should not be interfered with "unless judicial intervention is clearly warranted."⁸. Even where, as here, there is a statutory right to appeal, a reviewing court should defer to an administrative body, rendering decisions within the scope of its expertise. In Pezim v. British Columbia (Supt. of Brokers)⁹ the court stated:

Consequently, even where there is no privative clause and where there is a statutory right to appeal, the concept of the specialization of duties requires that deference be shown to decisions of specialized tribunals on matters which fall squarely within the tribunal's expertise.

22However, a tribunal may have greater expertise on some questions that come before it than on others. The more the issue falls within the tribunal’s expertise, the greater the deference that will be called for. Where the decision-making body is more expert than the courts and the issue falls within the scope of this greater expertise, a high degree of deference should be afforded¹⁰. Thus, the court must characterize the expertise of the tribunal in question; it must consider its own expertise relative to that of the tribunal; and it must identify the nature of the specific issue before the administrative decision-maker relative to this expertise.

23In Pushpanathan,¹¹ the Court observed that, in the usual case, the broader the propositions asserted and the further the implications of such decisions stray from the core expertise of the tribunal, the less likely it is that deference will be shown. Without an implied or express legislative intent to the contrary as manifested in the criteria above, legislatures should be assumed to have left highly generalized propositions of law to courts.

24In the present case, grounds (a) and (c) involve the interpretation of the Commission’s constituting legislation with which it deals on a daily basis, and in respect of which it has policy functions of great importance. The issue in ground (a) involves the concept of ‘adviser’ and the nature and regulation of the ‘business’ of advising the public on securities. These are concepts at the heart of the expertise of the Commission. To this extent, the expertise of the Commission would appear to be greater than that of the courts. This factor tends, therefore, to a review of ground (a) upon a standard of reasonableness.

25As submitted by the appellant, ground (c) raises an issue as to the true scope of s.40 of the Act, a matter of law and jurisdiction requiring review upon a standard of correctness. The section imposes obligations of disclosure upon registered advisers. The Commission held that the conduct of the appellant in not making disclosure was not a breach of s.40, but was conduct contrary to the public interest. The appellant submits that this was an improper extension of s.40. He submits that it is significant that the Commission referred twice in its reasons to the need for amendment to s.40 to catch persons like the appellant, who ought to have been registered but were not.

26A decision that a statute, which expressly applies to a registered person, may also apply directly to an unregistered person performing the same act, would involve a general question of statutory interpretation where the court has the advantage, relative to the Commission, in expertise and the standard of correctness should be applied. However, the Commission did not so read s.40. Acknowledging that s.40 had not been breached, as the appellant was not registered, it interpreted its public interest jurisdiction, under s.127, as broad enough to allow it to find that the activities of the appellant were not in the public interest, even though he admittedly had not actually contravened s.40.

27The actual issue is, therefore, not s.40, but s.127. That section falls squarely within the expertise and experience of the Commission. Determining what is in the public interest in the regulation of the securities markets is the heart and soul of the jurisdiction granted to the Commission by the Legislature. The standard of review of the public interest jurisdiction of provincial Securities Commissions has been discussed in the Supreme Court of Canada. Of particular importance, because it deals with the Ontario Securities Commission itself, is Asbestos Minority¹², where, writing for the Court, Iacobucci J. wrote:

¶ 45. In summary, pursuant to s. 127(1), the OSC has the jurisdiction and a broad discretion to intervene in Ontario capital markets if it is in the public interest to do so. However, the discretion to act in the public interest is not unlimited. In exercising its discretion, the OSC should consider the protection of investors and the efficiency of, and public confidence in, capital markets generally. In addition, s. 127(1) is a regulatory provision. The sanctions under the section are preventive in nature and prospective in orientation. Therefore, s. 127 cannot be used merely to remedy Securities Act misconduct alleged to have caused harm or damages to private parties or individuals.

¶ 48 …In fact, in my view, this Court's decision in Pezim is particularly applicable to the present appeal, since both cases concern the exercise of a provincial securities commission's discretion to determine what is in the public interest.

¶ 49. In this case, as in Pezim, it cannot be contested that the OSC is a specialized tribunal with a wide discretion to intervene in the public interest and that the protection of the public interest is a matter falling within the core of the OSC's expertise. Therefore, although there is no privative clause shielding the decisions of the OSC from review by the courts, that body's relative expertise in the regulation of the capital markets, the purpose of the Act as a whole and s. 127(1) in particular, and the nature of the problem before the OSC, all militate in favour of a high degree of curial deference. However, as there is a statutory right of appeal from the decision of the OSC to the courts, when this factor is considered with all the other factors, an intermediate standard of review is indicated. Accordingly, the standard of review in this case is one of reasonableness.

28The present case, like those just cited, involves a consideration of the scope of the Commission’s power under s.127 to determine the public interest and whether to intervene in these facts. It also involves the issue of the proper interpretation of the definitions of ‘adviser’ in s.1 of the Act and Regulation 1015:98, s.99. These are matters with which the Commission is intimately involved on a daily basis. The relative expertise of the Commission tends to indicate that the appropriate standard of review in this aspect of this appeal is reasonableness.

29It is not necessary to consider the standard of review applicable to decisions of the Commission on the Charter issue raised by ground of appeal (b), because the Commission did not make such a decision. It refused to do so on the ground that the appellant had failed to comply with the statutory requirement of serving a Notice of a Constitutional Question¹³ in advance of the hearing on the merits. The situation was not altered by the service of such a Notice shortly before the penalty hearing, because there was still an insufficient record before the Commission to make a decision, particularly one which, as the appellant himself submitted, would turn on evidence as to whether the restriction on his freedom of speech could be saved by s. 1 of the Charter.

30Later in these reasons, I will discuss the jurisprudence as to the need for a proper evidentiary foundation for the disposition of Charter issues, which jurisprudence the Commission followed. Viewed as a procedural matter, declining to act in the absence of a proper record of evidence is a matter of discretion as to which the Commission is the master, subject to the over-riding requirement of natural justice and fairness.¹⁴ This issue falls to be decided, not on one of the standards we have been discussing, but on the court’s finding on the fairness of the procedural decision. Where a tribunal is said to have failed to give a party natural justice, the court does not engage in an assessment of the appropriate standard of review, but evaluates whether the rules of procedural fairness or the duty of fairness have been adhered to. The court assesses the specific circumstances and determines what safeguards were required to comply with the duty to act fairly¹⁵.

31Finally, the standard of review on the penalties ordered against the appellant must be considered. Here again, the Commission has an expertise in the regulation of the markets and is entitled to deference as to its view of the appropriate penalty. We ought not to disturb the penalty imposed unless there is an error in principle or the punishment clearly does not fit the crime¹⁶. Decisions as to penalty tend to be fact-intensive mixed questions of fact and law and are rarely determinative of future cases. In Ryan, the Supreme Court said:¹⁷

The question of what sanction Mr. Ryan should face as a result of his misconduct is a question of mixed fact and law since it involves the application of general principles of the Act to specific circumstances. The Court of Appeal impugned the weight that the Committee assigned to particular mitigating evidence and also disapproved of the Committee's selection of factually similar cases. These are fact-intensive elements within the question of mixed fact and law. They do not involve easily extracted and discretely framed questions of law. The Committee's decision on sanction is not one that will determine future cases except insofar as it is a useful case for comparison. The decision is intricately bound to many factual findings and inferences about the misconduct of Mr. Ryan and the interests of the public and the profession. The Committee clearly benefited from the opportunity to hear the testimony and cross-examination of Mr. Ryan and of the expert witnesses. All this suggests that a higher degree of deference should be afforded to the Disciplinary Committee.

32These considerations indicate that the appropriate standard of review for the penalties is reasonableness.

Third Factor: The Purpose of the Legislation as a whole and of the Section in particular:

33It is trite to say that the purpose of the Act is to protect the public, but that fundamental fact must inform all approaches to review of the decisions of the Commission. In Gregory¹⁸, the Supreme Court said:

The paramount object of the Act is to ensure that persons who, in the province, carry on the business of trading in securities or acting as investment counsel, shall be honest and of good repute and, in this way, to protect the public … from being defrauded … .

34In the quotation from Asbestos Minority set out above, the Supreme Court made clear the primary place of the Commission in developing, enunciating and protecting the public interest, and its expertise in doing so. In the recent decision in Re Cartaway ResourcesCorp.¹⁹, an appeal from the British Columbia Securities Commission, the Supreme Court said at paragraph 46:

¶ 46. Although courts are regularly called on to interpret and apply general questions of law and engage in statutory interpretation, courts have less expertise relative to securities commissions in determining what is in the public interest in the regulation of financial markets. The courts also have less expertise than securities commissions in interpreting their constituent statutes given the broad policy context within which securities commissions operate: National Corn Growers Assn. v. Canada (Import Tribunal), [1990] 2 S.C.R. 1324, at p. 1336.

¶ 47. A reviewing court must consider the general purpose of the statute and the particular provision under consideration with an eye to discerning the intent of the legislature: Dr. Q, supra, at paras. 30. The adjudicative function of the Commission in enforcement proceedings under s. 162 would generally call for less deference. In the present case the Commission is called upon to adjudicate a bipolar dispute rather than exercise a pure policy decision. Nevertheless, the Commission also plays a principal role in policy development, in the management of a complex securities regulation scheme and in reconciling the interests of a number of different groups and in protecting the public: Brosseau v. Alberta Securities Commission, [1989] 1 S.C.R. 301, at pp. 313-14. This calls for some deference by the reviewing court: Pezim, supra, at p. 591.

35Thus, the policy role granted to the Commission by the Act also tends toward a higher standard of deference. Overall, the third factor tends to support a high degree of deference to the decisions of the Commission.

The Fourth Factor: The Nature of the Question:

36The nature of the questions at issue has been discussed in the course of reviewing the other factors. They are questions involving statutory interpretation, the public interest jurisdiction of the Commission and the discretion of the Commission in procedural matters. They involve mixed questions of fact and law. They are all linked to a larger issue. The statute being interpreted is the Commission’s ‘home’ statute in the reading of which it is entitled to some deference. The broad underlying policy question is the degree of regulation to be applied to individuals who engage in giving advice, including references to specific securities in terms that amount to a recommendation of those securities, to a mass audience, rather than through the one-on-one technique. This is a policy question lying at the heart of the Commission’s mandate and also of its expertise. The fourth factor tends towards a deferential standard of review.

Conclusion on the Functional and Pragmatic Analysis:

37In summary, although there is a statutory appeal from decisions of the Commission, its expertise, its policy role, the purpose of its enabling statute, and the nature of the questions in dispute, all suggest a more deferential standard of review than correctness. These factors suggest that the Legislature intended that the Commission would be a specialized body with the primary responsibility to promote the objectives of the Act, by overseeing the capital markets generally and the conduct of individuals working in them, to promote honest conduct and, where necessary, selecting appropriate sanctions. The consideration of these factors in the functional and pragmatic analysis leads to the conclusion that the standard of review of this decision as to the points in issue is reasonableness.

The Task of the Reviewing Court:

38In Cartaway, supra, at paragraphs 49 and 50, the Supreme Court set out the approach to be taken where the balance of factors in the pragmatic and functional analysis points towards the standard of review of reasonableness and away from the more exacting standard of correctness:

¶ 49. ….. The reviewing court must therefore ask whether there is a rational basis for the decision of the Commission in light of the statutory framework and the circumstances of the case. Do the reasons as a whole support the decision: Law Society of New Brunswick v. Ryan, [2003] 1 S.C.R. 247, 2003 SCC 20 at paras. 56? Specifically, is it reasonable for the Commission to consider general deterrence in determining whether a sanction under s. 162 would be in the public interest?

¶ 50 In applying the standard of reasonableness, the reviewing court should not determine whether it agrees with the determination of the tribunal. Such a conclusion is irrelevant: Canada (Director of Investigation and Research) v. Southam Inc., [1997] 1 S.C.R. 748, at paras. 80. The focus should be on the reasonableness of the decision or the order, not on whether it was a tolerable deviation from a preferred outcome.

39In short, our role is not to conduct a rehearing of the merits of the case against the appellant, but to consider the reasonableness of the decision of the Commission on each of the points at issue.

Issue # 1: Did the Commission Err in Finding the Appellant had acted as an “adviser” within s. 25(1)(c) of the Act?

40An adviser is defined in s.1 of the Act:

adviser means a person or company engaging in or holding himself, herself or itself out as engaging in the business of advising others as to the investing in or the buying or selling of securities.

41Accordingly, the Commission held²⁰ that the trigger for registration as an adviser is not the doing of one or more acts that constitute the giving of advice, but engaging in the business of advising. It first considered whether the appellant was giving advice and then considered whether he was in the business. The Commission commented that the unique facts called upon its knowledge and expertise on methods of advising.

42On the first question, whether the appellant provided advice, the Commission referred, at paragraph 28, to its own decision in Canadian Shareowners²¹, as support for the view that:

Providing mere information as to specific securities does not constitute the giving of advice, but providing an opinion on the wisdom or value or desirability of investing in specific securities does.

43At paragraph 31, the Commission found that the appellant had given advice as to the wisdom or value of investing in securities of Synlan and EnerVest on several occasions in his seminars and in his newsletters, as well as giving advice in a radio spot about the securities of Retrocom. There was ample evidence in the record to support this finding.

44The appellant submitted that an “adviser” as defined by the Act, is an individual or company who engages in the business of advising someone else, and who recommends an investment in an issuer or the purchase or sale of an issuer’s securities to someone else on a one-on-one individualized basis. This is not what Mr. Costello did. He educated the Canadian investors at large, and did not provide tailored advice attuned to any investors’ specific needs or circumstances.

45In support of this submission, the appellant referred us to the U.S. authorities, because this is a case of first impression in Canadian courts. The U.S. Supreme Court considered the definition of “adviser” in Lowe v. SEC.²² At that time, the definition of adviser contained in the U.S. legislation²³ was:

Investment adviser means any person who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing or selling securities, or who, for compensation and as part of a regular business, issues or promulgates analyses or reports concerning securities.

46There were a number of exemptions, including one for any bona fide newspaper, news magazine or business or financial publication of general and regular circulation.

47In Lowe, the petitioners were publishers of securities newsletters containing “non-personalized” investment advice and commentary. The Court said that, on its face, this definition applied to the petitioners, but then extensively analyzed the legislative history in Congress and concluded that it demonstrated that Congress was primarily interested in regulating the business of rendering personalized investment advice, and being plainly sensitive to First Amendment considerations, made it clear that it did not intend to regulate non-personalized publishing activities.²⁴ As a result of this analysis of the legislative history and the existence of the newspaper exemption, the Court held at page 207-8:

The Act was designed to apply to those persons engaged in the investment-advisory profession – those who provide personalized advice attuned to a client’s concerns, whether by written or verbal communication. The mere fact that a publication contains advice and comment about specific securities does not give it the personalized character that defines a professional investment adviser. Thus, petitioners’ publications do not fit within the central purpose of the Act because they do not offer individualized advice attuned to any specific portfolio or to any client’s particular needs. On the contrary, they circulate for sale to the public at large in a free, open market – a public forum in which typically anyone may express his views.

48The appellant submitted that this is the proper interpretation of the definition of ‘adviser’ in s. 1(1) of our Act, and that Mr. Costello’s references to specific securities were merely to provide investors with specific examples of investment products he would discuss.

49The Commission rejected this submission in the decision under review. As a factual matter, the evidence does not support the view that the appellant was giving examples only and not recommending the securities in question to his audience. As a matter of law, the Commission rejected Lowe, stating that our Act did not require a one-on-one relationship. It held that the clear intention of the Act was to define ‘adviser’ broadly and to provide exemptions for specific limited circumstances that were not met in this case. The Commission relied on its previous decision in Canadian Shareowners. Given that this appears to be the first occasion for the court to consider this matter, I propose to consider Canadian Shareowners at some length.

50In Canadian Shareowners, supra, the Commission reviewed the legislative history of the definition of adviser in Ontario, beginning at page 646. The Securities Act, 1945, contained a definition of ‘investment counsel’, which is substantially the same as the definition before the U.S. Supreme Court in Lowe. It also contained an exemption for newspapers in terms similar to the U.S. legislation. This provision appears to have been influenced by the 1944 report of the Ontario Mining Commission that registration be required of all investment counsellors “who, through circulars or other media, advise the public regarding purchase or sale of securities.”

51The Securities Act, 1947, contained a definition of ‘investment counsel’ as one in the business of advising others “either directly or through publications or writings as to the advisability of investing in or purchasing or selling specific securities”. This definition appears to cover both the one-on-one case and the giving of advice by publications. The exemptions for bona fide newspapers, etc. were continued.

52In 1953 the definition of investment counsel was amended to confine it to persons “primarily engaged in giving continuous advice as to the investment of funds on the basis of the individual needs of each client.” At the same time a new definition of ‘securities adviser’ was added, being anyone in the business of advising others “either directly or through publications or writings as to the advisability of investing in or purchasing or selling specific securities”. These two definitions appear to cover those dealing exclusively one-on-one and those dealing both directly and through publications. The exemptions were made applicable to both categories of adviser.

53The Securities Act, 1966 maintained these definitions. In 1968-9, by S.O. ch. 116, the definitions were replaced by a single definition of ‘adviser’ essentially as it is before us. At the time of this change, Regulation 208 of 1970 was enacted, dividing advisers into two categories, one corresponding to the ‘investment counsel’ who gives continuous advice to clients based on their needs; and one corresponding to the ‘securities adviser’.

54The revision of the Securities Act in 1978 and Regulation 478 of 1979 created a third category of adviser, ‘portfolio manager’ and added extensive new conditions of registration as to capital, records, and proficiency requirements. The Commission, in Canadian Shareowners, found the requirement to be registered was an occupational requirement and the conditions of such registration to be “concerned with investor protection matters and the maintenance of healthy and credible capital markets and not with an infringement of freedom of expression.”²⁵

55Having reviewed the Ontario legislative history, the Commission rejected the approach of Lowe as inapplicable to Ontario. In my opinion, the Commission was correct to do so for the reasons which it gave. (Part of the reasons in Canadian Shareowners relates to submissions made as to the Charter and freedom of expression. That issue is not before us and my comments do not relate to it.)

56Returning to the case at bar, the form of the Regulation that was in force during the period of the impugned activities, 1992 to 1997 approximately, was section 99 of Regulation 1015 under which there are five categories of ‘advisers’. Category 2, ‘investment counsel’ is persons in the business of advising others, primarily being engaged in giving continuous advice on the basis of the particular objectives of each client. Category 4, ‘securities advisers’ are in the business of advising others, “either through direct advice or through publications or writings”, as to securities, but “not purporting to be tailored to the needs of specific clients.” There is also Category 1, ‘financial advisers’ who are engaged in advising others as to investing on a basis not caught by the other categories. This version of the Regulation leaves no room for doubt: anyone in the business of advising others on the suitability of specific securities for investment must be registered, whether it is one on one or through written or broadcast material.

57Since Canadian Shareowners, there have been two cases before Securities Commissions that have followed the same line. In Re Donas²⁶, the B.C. Securities Commission said

As indicated by the definition of “advice”, the nature of the information given or offered by a person is the key factor in determining whether that person is advising with respect to investment in or the purchase or sale of securities. A person who does nothing more than provide factual information about an issuer and its business activities is not advising in securities. A person who recommends an investment in an issuer or the purchase or sale of an issuer’s securities, or who distributes or offers an opinion on the investment merits of an issuer or an issuer’s securities, is advising in securities. If a person advising in securities is distributing or offering the advice in a manner that reflects a business purpose, the person is required to be registered under the Act.

58Also in Re Donas, the BCSC determined that the issue of whether a person is “engaging in the business” of advising as contemplated by the definition of an “adviser” in the Act is satisfied if the person is “distributing or offering the advice in a manner which reflects a business purpose”. The BCSC set this “business purpose” threshold very low, observing that “his business was nascent, but it was still a business.” In Re Maguire²⁷, the business purpose was evidenced by an advertisement in the Yellow Pages for “Investment Advisory Services” and by the receipt of a fee or commission relating to the investment made by the party acting on the advice. The major business of Maguire was the giving of tax planning advice, and the securities advice was given in that context. Nevertheless, Maguire was within the section.

59In Re Hrappstead,²⁸ the business purpose element was satisfied even though there was no evidence that any investors had acted on Hrappstead’s advice or that he had received a payment of any kind in return for his advice. Hrappstead, under a business name, held information sessions with members of the public and distributed material about “High Yield Investment Programs” which were represented as possibly earning very high returns from 4% per month to 100% per month. He recommended a particular investment to the investigating under cover police officer, but could not accept her proffered investment because he had no actual program available at the time. The Commission held he went well beyond merely giving information; he gave his opinion on the merits and recommended the investment. As to his business purpose, “one need look no further than what he stood to receive if the Investment Programs were successful: a commission equal to one half of the astronomical returns that he stated the Investment Programs would generate.”

60In these cases, the Commission has applied the test of whether there was a business purpose to the activities in question in order to determine if the appellant was in the business of advising others as to investments.

61Counsel for the appellant submitted that Mr. Costello gave innumerable seminars on RRSPs and tax planning, where no securities were mentioned. The determination that Mr. Costello was in the business of advising as a result of certain isolated incidents in the evidence is an overextension of the application of section 1(1) of the Securities Act. The Commission itself referred to Mr. Costello’s business as a “financial speaker and commentator.”

62These submissions cannot be accepted. There is nothing in this legislation to suggest that the business of advising must be the only business in which a person must be involved in order to trigger the requirement of registration. Further, the Commission found quite specifically in paragraphs 35, 36 and 37 of its reasons that there were more than isolated incidents involved. It found that isolated incidents would not have been enough; that the totality of the evidence showed that Costello offered advice in a manner reflecting a business purpose; his newsletters on Synlan, EnerVest and Retrocom, and the use of those newsletters at the seminars; the fact that the Smith follow-up seminars were arranged in advance and were announced when Costello spoke about Synlan; his arrangement with FPG to benefit from revenue from sales of these products by FPG; were all indicia sufficient to show that he was engaged in the business of advising. In paragraph 36 the Commission made the finding that his recommendations of specific securities were an integral part of his business as a financial speaker and commentator.

63The Commission further addressed the issue of whether the main purpose of the appellant’s business activities was education or marketing, in its sanction reasons at paragraphs 24 to 28. It observed that counsel for the appellant repeatedly portrayed the appellant as principally an educator, but the evidence did not support this ‘altruistic’ portrayal. Rather the evidence repeatedly showed that a principal purpose of the seminars was lead generation. The techniques employed included collecting the names of participants; distributing marketing material to them; using hyperbole to describe investments; failing to discuss risk and risk tolerance; encouraging the use of borrowed money by focusing solely on the upside; and stressing tax advantages without pointing out the need for such products to make sense as investments. The Commission observed that good educational material is balanced, free from marketing bias and does not lead the participant to specific securities. It concluded that it could not find that the appellant’s seminars were primarily educational.

64To the extent that these are findings of fact, there is ample evidence to support them. To the extent that they are mixed questions of law and fact, they fall squarely within the Commission’s expertise and are entitled, as discussed above, to deference. The reasons of the Commission set out a careful analysis leading to the conclusion that the appellant was in the business of advising as to the buying and selling of securities without registering, contrary to sec. 25(1)(c). In my view these findings and inferences are entirely reasonable and I would not interfere with them.

Issue # 2: Did the Commission Err in Respect of the Appellant’s Freedom of Speech Argument?

65In paragraph 33 of its Reasons, the Commission observed that counsel for the appellant, in his closing argument, raised for the first time, a submission that the proposed interpretation of ‘adviser’ would result in a violation of the appellant’s right to freedom of expression under the Charter.

66The transcript reveals that counsel for the appellant conceded in his closing submissions that counsel for the Commission would be entitled to call evidence on the constitutional issues, particularly the section 1 issue and, in passing, invited the calling of such evidence²⁹. Counsel for the Commission declined the invitation, stating that if it was to be an issue there would have been a notice and there was none³⁰.

67The Commission, in its Merits Decision, simply stated that, as the required notice had not been given, it would not take the constitutional question into account in deciding the case on the merits. As has been noted earlier in these reasons, declining to act in the absence of a proper record of evidence is a matter of procedural discretion as to which the Commission is the master, subject to the over-riding requirement of natural justice and fairness.³¹ In my view, there was no unfairness in the refusal of the Commission to embark upon an inquiry for which there was no evidentiary foundation due to the failure of the appellant to raise the issue in a timely way.

68At the hearing as to sanction, the appellant again raised the issue of an unconstitutional restriction on his freedom of speech, as guaranteed by the Charter. He had served a Notice of Constitutional Question in an attempt to overcome the objection made to his belated raising of this issue at the merits hearing. In the appeal factum,³² the appellant summarized his argument to the Commission: that the sanctions proposed would infringe his freedom of expression and, further, that any³³ sanction was unconstitutional because the finding that the appellant was an ‘adviser’ was itself unconstitutional. This was an obvious attempt to re-open the Commission’s decision, in its earlier reasons, not to address the point. The Commission gave the submissions consideration in paragraphs 21 to 23 of its sanction reasons. Its reasons were confined to whether the sanctions it was actually imposing constituted any restriction on the appellant’s freedom of speech. It concluded that they did not.

69In the appeal factum, the appellant complained that the Commission’s response was sparse and failed to address the issue. The focus of the constitutional issue, as presented to us, was the finding that the appellant was an ‘adviser’ and the submission that this finding was a breach of the appellant’s freedom of expression. In paragraph 55 of his factum, the appellant asserts that his proposed Charter issue stands to be determined solely on the basis of whether the Commission’s interpretation and application of “adviser” can be saved under s. 1 of the Charter:

Therefore, it is submitted that the issue turns on whether it can be demonstrated, on a preponderance of probability, that the restrictions which flow from this interpretation are reasonable and demonstrably justified in a free and democratic society.

70We were thus invited to rule on the very issue that the Commission had declined to deal with on the merits hearing. Much of the appellant’s argument was based on inapplicable U.S. law, which turned on their First Amendment. Under our constitution, the effect of section 1 and the test in Oakes involve the balancing of a number of competing interests and are therefore decided upon a record of evidence which does not exist before us, just as it did not exist before the Commission, due to the failure of the appellant to deliver the required Notice.

71As a result of the appellant’s failure to give the Notice, this Court is not only deprived of the benefit of “section 1” evidence, but also of the reasons that the Commission would have given. In Eaton³⁴, the Supreme Court was clear that reviewing courts should not entertain Charter issues on appeal at first instance:

“The absence of notice [under s. 109 of the Courts of Justice Act] and the absence of a record developed in the courts and tribunals below are far from technical defects.”

72The Supreme Court emphasized that it is important for its own purposes [and presumably equally important for any lower court] that it “…have the benefit of a record that is the result of thorough examination of the constitutional issues in the courts or tribunal from which the appeals arise”.

73It has already been noted that the appellant served his Notice in advance of the sanction hearing, on the Commission and the Attorneys General. However, the appellant’s written submissions on the Charter point stated:

“In the alternative, this Commission can avoid any effect of that infringement by making an order which does not prevent Mr. Costello from carrying on his activities, speaking or writing in public, for remuneration, provided he does not recommend specific securities.”

74The Commission found that none of the sanctions ordered by the Commission encroached on Costello’s freedom of expression. In my opinion that conclusion was correct.

75For these reasons, I would decline to enter into the constitutional point in this court, nor would I refer the matter back to the Commission. The Commission’s decision to decline to entertain the Charter issue was in accordance with the jurisprudence, is at the worst, reasonable, and should not be disturbed on appeal.

Issue # 3: Did the Commission Err in Finding that the Appellant’s Failure to Make Disclosure of his Conflicts was Contrary to the Public Interest?

76Section 40 of the Act requires ‘every registered adviser’ to make disclosure in a specified manner of any financial interest the adviser may have in any securities being recommended by that adviser. The Commission staff charged the appellant with a breach of this obligation, but the Commission found that the appellant was not registered at the time and the section did not apply to him. It stated at paragraph 44:

Accordingly, Costello’s failure to disclose his many conflicts did not constitute a breach of section 40 of the Act.

77The Commission however, was alert to the fact that the appellant was not a registrant solely because he had failed in his obligation to register. No doubt reluctant to see him benefit from his own wrong-doing, it went on to state:

However, his failure to make the full, complete and conspicuous disclosure that he would have been required to make had he not failed to become registered as an adviser was contrary to the public interest.

78In the sanctions reasons, the Commission acknowledged that its public interest jurisdiction under s.127 of the Act was limited to being prospective and preventive:

In exercising its discretion, the OSC should consider the protection of investors and the efficiency of, and public confidence in, capital markets generally. In addition, s. 127(1) is a regulatory provision. The sanctions under the section are preventive in nature and prospective in orientation. Therefore, s. 127 cannot be used merely to remedy Securities Act misconduct alleged to have caused harm or damages to private parties or individuals.³⁵

79The appellant submitted that the Commission was in error in making any order based upon a failure to make the disclosure mandated by s. 40, when that section, in terms, did not apply to him, as a non-registered person. He was not in breach of the section, nor was the Commission acting before any breach had occurred, in a preventive manner. Counsel went so far as to suggest that the Commission was saying that: “to obey the law would be contrary to the public interest.” This characterization of the appellant as “obeying the law” is bizarre, to put it mildly. The Commission found that the appellant should have registered. He did not register. Because of this breach of the law, the section did not apply to him as a non-registered person, even though he failed to disclose his interest in the securities he was advising people to buy. He therefore escaped being found in violation of s.40 only because he had disobeyed s.125. His conduct overall, even though he technically did not breach s.40, gave the Commission ample reason to be concerned about his conduct in the future, and so to invoke its s. 127 jurisdiction.

80The appellant submitted that the review of his practices directed by the Commission could not be ordered because the appellant was not a ‘market participant’ at any time, but the Commission correctly held that a market participant includes a ‘registrant’ and a registrant includes one who ought to have been registered. The review would determine if the appellant was still a market participant.

81The appellant further submitted that the review was inappropriate because he has left the business that he was carrying on prior to July 1997. There was no occasion for a prospective sanction, such as an order to alter his practice, in such circumstances. However, the Commission noted that no evidence was given to that effect, as the appellant had not testified at the hearing³⁶. Further, the guidelines for the review are all directed to determining whether he is still in the business of advising the public. They ask whether he maintains a website, publishes a newsletter, gives seminars or publishes materials, any of which contain recommendations as to specific securities. These are prospective or preventive issues, clearly related to the function of the Commission’s s.127 jurisdiction: to protect the integrity of the market and prevent likely future harm from those whose conduct in the past has been abusive.³⁷ In my opinion, the Commission had proper grounds for the order of review. Its decision was reasonable and I would not interfere with it.

82Objection was made to the Commission’s decision to reserve the right to consider further sanctions after the report of the review. Given that there is little or no evidence as to the current activities of the appellant, this is a reasonable order and I would not interfere with it. Should further sanctions be proposed, there will no doubt be a further hearing.

Issue # 4: The Costs Order:

83The Commission directed that the appellant pay costs in the amount of $300,000, which it described as one-half of the actual costs. The evidence in support of this order consisted of a single page “Staff’s Bill of Costs” showing approximately 1260 hours of investigation and 1965 hours of litigation time for two employees of the Commission resulting in a total costs claim of just under $619,000, plus disbursements of almost $30,000. No supporting material was presented. Counsel for the Commission asked for an award against the appellant of about half, that is $300,000. In his submissions to the Commission at the sanction hearing, counsel stated that³⁸:

The amount that we are seeking to recover reflects the costs, not just of the two staff counsel listed. That’s how the bill of costs is being itemized and was done in the Donnini matter. But as the reasons noted in Donnini, it reflects the costs of all administrative and support staff involved in conducting the hearing. It involves all the time, for instance, incurred by Mr. DelFrate, our articling student, who has been with us every step of the way, research by Staff’s lawyer, conducting the hearing itself, the registrar and the court reporter’s attendance. That also includes assigning you, the vice chair and two of your fellow Commissioners to have this panel. No doubt you have spent time, not only the hours in this hearing room, but considerable hours outside the hearing room reviewing documentary records, the testimony, deliberating, writing your reasons, etc.

CHAIR: But none of that was reflected in the Bill of Costs that you submitted?

MR. CORBETT: Its not reflected directly in the bill of costs.

CHAIR: The overhead.

MR. CORBETT: But it is recovered in the amounts. We are not simply saying $300,000 pays Mr. Pilkey’s and my wages. We are saying that $300,000 is the amount that the Commission should recover in respect of all of the costs.

84Counsel for the appellant, at page 84 of the transcript, pointed out that he had no way of testing the Staff submission. There were no dockets, and no detail as to what was shown on the bill. As well:

... they are asking to be paid for things that are not in the bill of costs and that the bill of costs is intended to pick up your [the Commissioners] time, for example or the hearing room’s time.

and later:

I cannot respond to the amount of the costs in any way, shape or form, because you are not giving me a process to do that. … this Commission has to come up with a process that’s fair to Mr. Costello, and just letting the staff pick numbers out of the air and then say its to pay for a whole bunch of other stuff as well, that’s not fair. It’s as simple as that.

85The basis on which the requested sum is arrived at is impossible to discern. The apparently straightforward Bill of Costs is not actually what it purports to be. Even as a Bill it is unsupported, but Commission counsel’s submissions, noted above, make it clear that there is a great deal more to the situation than appears in the Bill. In its sanction reasons, the Commission accepted the staff recommendation, referring to its acceptance of the methodology in Re Donnini³⁹. That case was appealed to this court which returned the costs order to the Commission for reconsideration and required it to make available to counsel for the registrant all necessary material to enable an inquiry to be conducted into the amount.⁴⁰ The case was further appealed to the Court of Appeal and is pending there. In its factum, the Commission submitted that considerable deference was in order regarding a costs award, citing the decision of the Supreme Court in Pezim⁴¹ and that the Commission was the procedural master in its own house, citing Prassad⁴².

86I agree entirely that the Commission is master of its procedure, subject to the requirement, noted earlier in these reasons, that whatever procedure it adopts meets the test of fairness. The refusal of the Commission to provide any real support for its assessment of the costs is, with great respect, manifestly unfair to the appellant. It is not for this court to devise a procedure for the Commission, nor, in my view, did the panel in Donnini (of which I was a member) purport to do so. But the decision to levy such a costs penalty cannot stand in the absence of a fair opportunity for the appellant to test the validity of the demand. I would remit the amount of the costs to the Commission for reconsideration on the basis set out in Donnini, or in accordance with whatever procedure the Commission adopts in lieu thereof to meet its obligation of fairness and due process to the appellant.

87The appellant also submitted that the amount of costs was ‘crushing’ and this was a further ground on which the costs order should be varied. I agree with the submission of counsel for the Commission that there is no evidence to support this submission, particularly bearing in mind the sale of the appellant’s business at a substantial price. I would leave it in the discretion of the Commission whether to permit the appellant to give evidence on this point at any further costs hearing.

Disposition:

88In summary, I would remit the costs order to the Commission, as set out above. In all other respects, I would dismiss the appeal. Success being divided, I would make no order as to the costs of this appeal.

Lane J.

O’Driscoll J.

Jennings J.

Footnotes

1. 1As defined in section 1(1) of the Securities Act, R.S.O. 1990 C. s.5
2. 2Ibid.
3. 3Sec. 34(d)
4. 4See for example the evidence of Mr. Tweedy of FPG, transcript, November 13, 2002, pages 14 to 31 where he describes a typical seminar with the appellant.
5. 5Transcript; November 11, 2002, page 106.
6. 6Examination of Valente, November 22 transcript, p. 25, Appeal Book, Tab 4D
7. 7Pushpanathan v. Canada (Minister of Citizenship and Immigration), [1998] 1 S.C.R. 982. More recently see B.C. College of Physicians v Dr. Q, 2003 SCC 19, [2003] S.C.J. No. 18; April 3, 2003.
8. 8Pearlman v. Manitoba Law Society Judicial Committee, [1991] 2 S.C.R. 869 at 888.
9. 9[1994] 2 S.C.R. 557 at 591.
10. 10see Moreau-Bérubé v. New Brunswick (Judicial Council), [2002] 1 S.C.R. 249, 2002 SCC 11, at para. 50
11. 11supra, note 4, at para 33.
12. 12Committee for the Equal Treatment of Asbestos Minority Shareholders v. Ontario (Securities Commission), [2001] S.C.R. 132 at pages 152-3.
13. 13Courts of Justice Act, R.S.O. 1990, c. C. 43, s. 109.
14. 14Prassad v. Canada (Minister of Employment and Immigration) (1989), 57 D.L.R. (4th) 663 at 679-81 (S.C.C.)
15. 15London (City) v. Ayerswood Development Corporation, [2002] O.J. No. 4859 (C.A.) at paragraph 10.
16. 16Takahashi v. College of Physicians and Surgeons (1979), 26 O.R. (2nd) 353 (Div. Ct.).
17. 17Law Society of New Brunswick v. Ryan, 2003 SCC 20, [2003] S.C.J. No. 17
18. 18Gregory & Co. Inc. v. Quebec Securities Commission, [1961] S.C.R. 584 at 588 per Fauteux J.
19. 19Re Cartaway Resources Corp 2004 SCC 26; [2004] S.C.J. No.22.
20. 20Reasons on the Merits, para. 25.
21. 21Re Canadian Shareowners Association (1992), 15 O.S.C.B. 617.
22. 22472 U.S. 181 (1985)
23. 2315 U.S.C. 80b-2(a)(11)
24. 24472 U.S. at page 204
25. 25Canadian Shareowners, supra, page 652.
26. 26Re Donas, [1995] B.C.S.C.W.S. Ed. 95:14 page 39 (April 7, 1995)
27. 27Jack Maguire and J.K. Maguire & Associates (1995), 18 O.S.C.B. 4623
28. 28Hrappstead (Re), [1999] B.C.S.C.W.S., Edition 99:15, p. 13.
29. 29Transcript of Submissions, December 9, 2002, page 64.
30. 30Transcript of Submissions, December 9, 2002; page 89.
31. 31Prassad v. Canada (Minister of Employment and Immigration) (1989), 57 D.L.R. (4th) 663 at 679-81 (S.C.C.)
32. 32Paragraph 51.
33. 33Emphasis in the original.
34. 34Eaton v Brant Board of Education (1997), 142 D.L.R. (4th) 385 (S.C.C.)
35. 35Asbestos Minority, supra, Note 9.
36. 36Counsel for the appellant made written and oral submissions to this effect, but no evidence was called.
37. 37See: Asbestos Minority, supra note 9; paragraphs 40 to 45.
38. 38Transcript, March 31, 2003 page 42 to 46.
39. 39Re Donnini (2002), 25 O.S.C.B. 6225
40. 40Re Donnini, [2003] O.J. No. 3541 (Div. Ct.)
41. 41Pezim v. British Columbia (Sup’t. of Brokers), [1994] 2 S.C.R. 557 at 562.
42. 42Supra, note 30.