Court File and Parties
DIVISIONAL COURT FILE NO.: 502/11
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
SACHS, WILTON-SIEGEL AND HERMAN JJ.
BETWEEN:
PETER MICHAEL DEEB and HAMPTON SECURITIES LIMITED Applicant (Moving Parties)
– and –
INVESTMENT INDUSTRY REGULATORY ORGANIZATION OF CANADA also known as “IIROC” Respondent (Responding Party)
Peter W. G. Carey and Grant Sawiak, for the Applicants (Moving Parties)
Brian Gover and Fredrick Schumann, for the Respondent (Responding Party)
HEARD at Toronto: June 11, 2012
Oral Reasons for Judgment
SACHS J. (orally)
1This is a motion pursuant to s.21(5) of the Courts of Justice Act, R.S.O. 1990, c. 43 to set aside the order of Pepall J. (as she then was) dated February 15, 2012, which was accompanied by reasons also dated February 15, 2012.
2On a motion pursuant to s.21(5), the standard of review is correctness on matters of law and palpable and overriding error on matters of fact or matters of mixed fact and law (see 3394603 Canada Inc. v. Ontario (Deputy Registrar of Motor Vehicles) 2008 CarswellOnt. 7769 (Div. Ct.)).
3The respondent, the Investment Industry Regulatory Organization of Canada (“IIROC”), issued a notice of hearing dated August 30, 2011 (the “Notice of Hearing”) naming the applicant Michael Deeb (“Deeb”). This commenced enforcement proceedings against Deeb under the IIROC Rules. The Notice of Hearing was preceded by an investigation by the IIROC enforcement division after it received three anonymous letters (the “Letters”).
4Before the Notice of Hearing was issued, Hampton and Deeb agreed in writing to “close supervision” of Deeb as a condition of IIROC re-approving Deeb as the “Ultimate Designated Person” for purposes of the registration of Hampton under the IIROC Rules and the Securities Act, R.S.O. 1990, c. S.O.
5In August 2011, IIROC sent Hampton its Business Conduct Report for the year 2010 (the “BCR”). The Business Conduct Compliance Staff of IIROC referred four matters in the BCR to the Enforcement Division of IIROC, which commenced an investigation of these matters on December 14, 2011. No notice of hearing has been issued in respect of this investigation to date.
6On November 3, 2011 the applicants commenced an application for judicial review under s.2(1) of the Judicial Review Procedure Act, R.S.O. 1990, c. J.1 (the “Act”). The notice of application sought the following relief:
(i) an order quashing the Notice of Hearing issued by IIROC;
(ii) an order compelling IIROC to retract the BCR;
(iii) an order compelling IIROC to produce the Letters; and
(iv) an order setting aside the “close supervision” to which Mr. Deeb had consented.
7The respondent moved to quash the application pursuant to s.21(3) of the Courts of Justice Act. The motion judge held that the test on the motion was whether it was plain and obvious that the application cannot succeed. She granted the motion on two grounds. First, the motion judge held that this court has no jurisdiction under the Act because IIROC’s disciplinary jurisdiction is not statutory but contractual, being based on contractual commitments made when applying for membership or registration as an “Approved Person” under IIROC’s Rules. Second, the motion judge held that the application was premature as there were ongoing proceedings before a constituted IIROC hearing panel. The motion judge held that all the issues raised by the application should either be determined at first instance by the IIROC hearing panel or, alternatively, were not ripe for such determination and she held that there were no exceptional circumstances that would warrant hearing the application even though it was premature. In particular, the motion judge held (1) that the IIROC hearing panel should decide at first instance the merits of any request to quash the Notice of Hearing and to compel disclosure of the Letters; (2) the BCR is in the nature of an administrative or investigative step and, in any event, it is open to the IIROC hearing panel to stay any resulting disciplinary proceeding for abuse of process if appropriate; and (3) in respect of the close supervision of Deeb, there was no decision to be reviewed as Deeb had consented to this status.
8We agree with the reasons of the motion judge by which she found that the application was premature. In view of this conclusion, there is no need to address the other ground upon which the motion judge quashed the application.
9For these reasons, the motion before us is dismissed.
COSTS
10I have endorsed the Record, “For reasons given orally by Sachs J., this motion is dismissed. On consent, the respondent is entitled to their costs of this motion, fixed in the amount of $15,000.00, inclusive of disbursements and HST.”
SACHS J.
WILTON-SIEGEL J.
HERMAN J.
Date of Reasons for Judgment: June 11, 2012
Date of Release: June 20, 2012
CITATION: Deeb v. Investment Industry Regulatory Organization of Canada, 2012 ONSC 3443
DIVISIONAL COURT FILE NO.: 502/11
DATE: 20120611
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
SACHS, WILTON-SIEGEL AND HERMAN JJ.
BETWEEN:
PETER MICHAEL DEEB and HAMPTON SECURITIES LIMITED Applicant (Moving Parties)
– and –
INVESTMENT INDUSTRY REGULATORY ORGANIZATION OF CANADA also known as “IIROC” Respondent (Responding Party)
ORAL REASONS FOR JUDGMENT
SACHS J.
Date of Reasons for Judgment: June 11, 2012
Date of Release: June 20, 2012