Jason C. Lilley and Northridge Funeral Home Ltd. v. Registrar, Funeral Burial and Cremation Services Act, 2002, 2021 CanLII 121066

Licence Appeal Tribunal

Date: 2021-11-22

Appeal from a Decision of the Registrar under the Funeral, Burial and Cremation Services Act, 2002, S.O. 2002 c. 33 to Revoke a Funeral Director Licence and a funeral Establishment Operator Licence

Between:

Jason C. Lilley and Northridge Funeral Home Ltd.

Appellants

and

Registrar, Funeral Burial and Cremation Services Act, 2002

Respondent

DECISION AND ORDER

ADJUDICATOR: Patricia McQuaid, Vice-Chair

APPEARANCES:

For the Appellants: Robert Sinding, Counsel

For the Respondent: Bernard LeBlanc, Counsel Anastasia Hountalas, Counsel

Hearing reporter: Sage Siegel

Heard by videoconference: October 13 and 14, 2021

OVERVIEW

1The Registrar under the Funeral, Burial and Cremation Services Act, 2002 (the “Act”), issued a Notice of Proposal (the “NOP”) on June 8, 2020 to revoke the funeral director licence of Jason Lilley and the funeral establishment licence of Northridge Funeral Home Ltd (“Northridge”), of which Mr. Lilley is the sole director and officer. The Registrar alleges that the past conduct of Mr. Lilley is inconsistent with the intention and objectives of the Act and warrants disentitlement to licensure; specifically, that pursuant to s. 14(1)(b)(ii) of the Act his past conduct affords reasonable grounds for belief that he will not carry on business in accordance with the law and with integrity and honesty. At the time of issuance of the NOP, Mr. Lilley was facing several Criminal Code charges arising from a misappropriation of funds from the Emo Lion’s Club (the “Club”) between 2014 and 2018.

2Mr. Lilley does not deny that he misappropriated money. In his appeal, he asserts that the revocation of the licences is not the appropriate sanction in the circumstances.

3The hearing of this appeal was delayed to allow for the resolution of the criminal charges. On May 19, 2021, Mr. Lilley entered a guilty plea to theft over $5000. On August 3, 2021, he was given a conditional sentence of 18 months, including six months of house arrest, with terms and conditions.

ISSUES

4The issues to be decided in this appeal is as follows:

1. Does Mr. Lilley’s past conduct afford reasonable grounds for belief that the appellants will not carry on business in accordance with the law and with integrity and honesty?
2. If the appellants are entitled to continuing licensure, is it appropriate to attach any terms and conditions on their licence?

5Pursuant to s. 18(5) of the Act, the Tribunal may direct the Registrar to carry out the proposal or may substitute its opinion for that of the Registrar and attach conditions to its order or to a licence.

RESULT

6After carefully considering the evidence and submissions, and for the reasons set out below, I direct the Registrar not to carry out the NOP. However, the appellants’ licences shall be subject to the terms and conditions as set out below.

EVIDENCE AND ANALYSIS

7In this hearing, I heard evidence from Carey Smith (the “Registrar”), Mr. Lilley and from William Earl Low, who gave character evidence in support of Mr. Lilley. I will address the evidence and submissions relevant to my analysis and the issues to be decided by me. I note here that the onus of proving that the appellants are no longer entitled to licensure is on the Registrar.

8The key facts in this matter are not in dispute. Mr. Lilley has been licensed as a funeral director since 1992 and Northridge as a funeral establishment since 2006. There is no record of public complaints against the appellants and the Registrar is not alleging that Mr. Lilley misappropriated or misused trust funds of his business. Further, the Bereavement Authority of Ontario (“BAO”) inspector who attended at Northridge to review its records in August 2019, after the criminal charges came to their attention, found nothing amiss.

9However, the uncontested evidence is that between January 2014 and June 2018, Mr. Lilley stole $86,400 from the Club while he was its charter president and/or treasurer. The theft occurred through approximately 50 different transactions during the four years. Generally, Mr. Lilley would use pre-signed cheques (two signatures were required on Club cheques-his and one other) and write cheques payable to Northridge. Most of the money was re-paid to the Club by Mr. Lilley throughout the four years. It was repaid before Mr. Lilley learned the Club was aware of the fraud and before he became aware that the police had been contacted regarding the theft. In total, he repaid $91, 264.84, approximately $5000 more than he took.

Are there reasonable grounds for belief that the appellants will not carry on business in accordance with the law and with integrity and honesty?

10In his evidence, the Registrar stated that while there is no allegation that trust funds were interfered with, he is of the belief that Mr. Lilley cannot be trusted with those funds especially as he is entrusted with funds by persons who are in a vulnerable position dealing with loss of a loved one. The Registrar characterized Mr. Lilley’s conduct as a calculated course of conduct in defrauding the Club, a charitable organization, which in his view is a significant breach of trust that warrants revocation. He referred to specific portions of the of the Agreed Statement of Facts¹ (the “ASF”) submitted in the criminal proceedings, which he asserts were not minor or incidental statements, but were materially misleading and reflect on Mr. Lilley’s conduct and credibility.² While it is true that Mr. Lilley adopted the ASF and its contents, it is also clear on the criminal transcripts filed as exhibits in this proceeding that the ASF was drafted by Mr. Lilley’s counsel and the Crown counsel, a not uncommon practice, to put before the court as a joint submission.

11In particular, the Registrar took issue with a statement in paragraph 3 of the ASF which states that “The Board’s analysis, relied on in the police and Bereavement Authority of Ontario investigations…” on the basis that it appeared to suggest that the BAO did an independent investigation into the theft, which it did not.³ While it may be poorly worded, I am not persuaded that it is a misleading statement as the Registrar suggests, or that it reflects negatively on Mr. Lillley’s credibility. It is clear that the BAO did conduct an investigation and sent a representative to the establishment in August 2019.

12In addition to this paragraph in the ASF, the Registrar took particular issue with paragraph 25 which states that “The fraud was off duty, did not involve his business…”. The Registrar’s point is that it did involve the business in that many of the cheques were made payable to Northridge to help pay its debts. I agree with the Registrar that while Mr. Lilley may suggest that it was “off duty” in that he was not acting as a funeral director at the time the cheques were written, it did nevertheless involve the business – the cheques were made payable to it. However, I also conclude that to focus on approximately five sentences in a six page document to reveal an inaccuracy or misstatement and then suggest that this not only was an attempt to mislead the court and impacts his credibility as a whole, is an overreach.

13The Registrar also put in evidence the transcript of the caution statement made by Mr. Lilley at the time of his arrest in April 2020. Mr. LeBlanc cross-examined Mr. Lilley on portions of that statement to highlight, it is suggested, an attempt by Mr. Lilley to resile from responsibility for the theft of funds by asserting the Club owed him at least some of these funds because of the support Northridge provided to the Club, either financial or by gifts in kind. However, compelling evidence of his acceptance of responsibility for the theft, and remorse was apparent through the caution statement itself, the transcript of court proceedings, and in Mr. Low’s and Mr. Lilley’s testimony at this hearing.

14There was testimony from Mr. Lilley as to why he – risking “everything” as he testified – took the money. His evidence at the hearing, and as set out in the ASF, was that he felt there were few other options available to him. He was in a commercial dispute arising from the construction of the Northridge building with a third party investor who was exerting pressure on him to pay what Mr. Lilley believes was more than he owed. He felt under duress. Objectively, he very likely had other options as the Registrar’s counsel submitted; subjectively, he did not see that he did. As the Court noted that circumstance did not make it right, and as Mr. LeBlanc stated, why he stole is less important than the fact that he did.

15The question to be determined is whether this conduct gives rise to a reasonable ground for belief that Mr. Lilley will not carry on business in accordance with the law and with integrity and honesty.

16In the context of counsel’s submissions on whether the appellants are disentitled to registration under the Act, I referred them to the jurisprudence that developed from the Ontario Court of Appeal’s decision in Ontario (Alcohol and Gaming Commission of Ontario) v. 751809 Ontario Inc. (Famous Flesh Gordon’s)⁴, which considered the concept of past conduct in the regulatory context. In that decision, the Court of Appeal stated that the purpose of the examination of the past and present conduct (referencing the language of the Liquor Licence Act which is virtually identical to that in this Act) is to see if there are reasonable grounds for belief that the person will, in future, carry on activity in a way that is contrary to the public interest. The Court of Appeal emphasized that any and all past or present conduct can and should be considered. The Tribunal must then consider the whole of the appellants’ conduct in determining whether it affords reasonable grounds to believe that the appellants will not act in accordance with the law, and with honesty and integrity.

17As noted above, despite there being no evidence that trust funds were interfered with, nor any evidence that the business itself was not financially viable, the Registrar is of the belief that Mr. Lilley cannot be trusted with those funds, especially as he is entrusted with funds by persons who are in a vulnerable position dealing with the loss of a loved one. However, when assessing whether there are reasonable grounds for revocation in the context of the principles enunciated in Famous Flesh Gordon’s, I conclude there are not. From 1992 when Mr. Lilley was first registered as a funeral director to 2014, there was no blemish on his record in terms of his business or personally. While it is true that the cheques were made payable to Northridge in many instances, the conduct was not industry-related in that there was never misappropriation of trust funds, and in particular no misuse of clients’ trust funds at a time when he was of the mindset that he had little options to meet demands for payment by the third party and thus may have viewed these funds as readily accessible. Nor did he take advantage of vulnerable persons who sought his services.⁵ The conviction is undeniably serious and recent; however, based on the evidence before me, such as the commendations to the appellants in various newspaper notices and the testimony of Mr. Low, I find that the Mr. Lilley’s criminal conduct was out of character. I find, based on Mr. Lilley’s evidence, that he does indeed appreciate the seriousness of his conduct and has insight into his misconduct.

18I have also considered the decision of the criminal court in coming to its sentencing decision in August 2021. Several factors are noted that I find have some bearing in this regulatory context.⁶ The Court concluded that the fraud was unsophisticated – Mr. Lilley made no effort to hide to whom the money was transferred. Mr. Lilley admitted to it immediately and fully cooperated with police in the cautioned video statement. It noted that Mr. Lilley’s moral blameworthiness was attenuated by paying back the money over the same period of time that he perpetrated the offence and before he was even aware that police had been contacted. The Court characterized the offence as unique in this respect. He had no previous issues with the regulator and had a positive work history. Until these circumstances, the appellant had a positive reputation in the community. Balanced against this, the Court noted some aggravating factors. He stole from a charitable organization with whom he had a position of trust, and it was a significant sum of money over a period of four years.

19The Court noted that normally an offence of this nature would lead to a sentence of imprisonment. However, when considering the purposes of sentencing: denunciation and deterrence, protection of the public and promoting a sense of personal responsibility and acknowledgement – the Court agreed with both the prosecutor and defence counsel that a conditional sentence was proportionate to the gravity of the offence.

20The Registrar’s mandate is to protect the public and the public interest. This is not a situation where there is no evidence by which to predict positive future conduct. Mr. Lilley’s record within the industry since 1992 has been unblemished with no issues with the regulator or the public. Between 2014-2018 when he stole the money from the Club, he did not compromise his clients in any way. Further, since 2018, his business has continued to serve the community in a positive way. Taken together, this a strong indication that he will continue to conduct business with honesty and integrity in the future. As the court noted, and as was clear on the evidence before me, these are a unique set of facts. And each case must be decided on the facts presented.

21Mr. Sinding urged that despite the seriousness of the offence, the appellant is deserving of a second chance to which I agree. Had there been interference with client trust funds and/or an abuse of the trust placed in him by the customers of Northridge, I would conclude otherwise. This is not a situation where the evidence suggests that public and consumer protection calls for revocation, even on the lower “reasonable grounds for belief” standard. While his criminal activity does indeed militate in favour of revocation, I am satisfied that the appellant’s evidence of positive conduct supports a finding that there are not reasonable grounds for belief that he will not act in accordance with the law, and with honesty and integrity.

Conditions

22The Registrar was asked whether there were any terms and conditions under which continued licensure could occur. He stated there were not. There was a suggestion through Mr. Sinding that conditions might be considered in relation to Mr. Lilley’s handling of trust funds; however, I do not find that this is warranted. Trust funds were not interfered with, despite his ready access to them, and further I find, based on the evidence, that the theft occurred in the context of, and in response to, unique circumstances. On the evidence, there is nothing to suggest that misappropriation of trust funds is a risk in the future.

23There was evidence before me that Mr. Lilley did not immediately inform the Registrar of the charges. This he should have done. The Registrar, in fulfilling its mandate of consumer protection must be able to make an informed decision about what action to take, if any, against a licensee in order to fulfill that mandate. Therefore, I will impose conditions on the licence responsive to this, to ensure that should there be any future conduct that leads to Mr. Lilley appearing before the courts, this will immediately be brought to the attention of the Registrar.

ORDER

24Having heard the evidence and submissions of the parties, and pursuant to the authority vested in the Tribunal pursuant to s. 18(5) of the Act, I direct the Registrar not to carry out the Notice of Proposal. The funeral director licence of Jason Lilley shall be subject to the following conditions.

1. Jason Lilley shall advise the Registrar withing five business days of any charges (and including breach of any terms of his conditional sentence) that he faces under a federal or provincial legislation and such notification shall disclose the full extent of those charges.
2. Jason Lilley shall fully and promptly cooperate in any inquiry made by the Registrar in respect of any such charges, findings or convictions related to him.

Footnotes

1. 1Exhibit 3 in this proceeding.
2. 2I note that the ASF was drafted after to the issuance of the NOP so there is no reference to it there or in any subsequent particulars.
3. 3The Board of the Club did the financial accounting analysis to determine the amounts taken by Mr. Lilley.
4. 42013 ONCA 157
5. 5In contrast to, for example, several of the cases cited by the Registrar in submissions, such as College of Ontario Nurses v. Mainoo, 2020 CanLII 119408, College of Ontario Nurses v. Owusu-Afriyie, 2020 CanLII 120850 and College of Ontario Nurses v. Hughes, 2019 CanLII 73944, where the nurses misappropriated funds from clients in circumstances of abuse or exploitation of personal trust. In each of these cases, a suspension of five or six months was levied. I note here that the Registrar also referred me to several cases of the Law Society Tribunal where lawyers misappropriated trust funds and had their licences revoked. The Registrar did not refer me to any cases under this Act or its predecessor.
6. 6Exhibit 10