Euroworld Corporation v. Registrar of Private Investigators and Security Guards, 2025 CanLII 49182

Licence Appeal Tribunal

File Number: 16573/PSISA

Appeal from a Decision of the Registrar of Private Investigators and Security Guards to refuse a licence pursuant to ss. 13(2) and 16(7) of the Private Security and Investigative Services Act, S.O. 2005, c. 34

Between:

Euroworld Corporation Appellant

and

Registrar of Private Investigators and Security Guards Respondent

MOTION DECISION

Vice-Chair: Colin Osterberg Heard: In Writing

OVERVIEW

1Euroworld Corporation (the "appellant") appeals a Decision by the Registrar of Private Investigators and Security Guards (the "Registrar") to refuse the Appellant's application for a security guard agency licence pursuant to ss. 13(2) of the Private Security and Investigative Services Act, S.O. 2005, c. 34 (the "Act"). The decision was issued on November 12, 2024.

2The Registrar brings this motion to determine the procedure for this appeal. According to the Registrar, the appeal should be determined based on the record and the burden is on the appellant to prove the appeal should be allowed. The appellant submits that the appeal should take the form of a hearing de novo and that the burden is on the Registrar to prove that the appellant's application for a licence should be refused.

3The motion proceeded in writing with both parties making written submissions.

ISSUES

4The issues in dispute are:

i. whether this appeal is to proceed as an appeal of the Registrar's decision on the record or as a first instance, or de novo, hearing; and

ii. what is the issue to be determined on the appeal and which party has the onus.

RESULT

5The appeal shall proceed as an appeal on the record of the Registrar's decision.

6The issue for determination is whether the appellant has proven that the decision of the Registrar to refuse to issue a licence to the appellant under the Act was not reasonable.

ANALYSIS

7Where, as here, a statute allows an appeal from one administrative decision maker to another, determining the appropriate procedure and standard of review for that appeal is an exercise of statutory interpretation so that the Tribunal must read the words of the Act in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of the legislature: See Rizzo & Rizzo Shoes Ltd. (Re), 1998 CanLii 837 (SCC).

8In Ottawa Police Services v. Diafwila, 2016 ONCA 627, the Court of Appeal considered this issue in the context of the Police Services Act. That case involved the proper standard of review to be applied by the Ontario Civilan Police Commission ("OCPC") in an appeal from a first instance decision made by the Chief of Police's delegate. In making its determination, the Court of Appeal stated that:

...the standard of review that it [the OCPC] must apply is to be determined from the language of the enabling legislation: "in considering the jurisdiction of tribunals, the Supreme Court of Canada has adopted a functional and structural approach by looking to the function which the legislature has asked the tribunal to perform and to the powers and processes it has furnished to it" (College of Physicians and Surgeons of Ontario v. Payne (2002), 2002 CanLII 39150 (ON SCDC), 219 D.L.R.(4th) 350 (Ont. Div. Ct.), at para. 18).

9In Canada (Minister of Citizenship and Immigration) v. Huruglica, 2016 FCA 93, the Federal Court of Appeal held the following in determining the standard of review to be applied by the Refugee Appeal Division when reviewing decisions of the Refugee Protection Division:

...the determination of the role of a specialized administrative appeal body is purely and essentially a question of statutory interpretation, because the legislator can design any type of multi-level administrative framework to fit any particular context. An exercise of statutory interpretation requires an analysis of the words of the [statute] read in their entire context, in their grammatical and ordinary sense harmoniously with the scheme of the [statute] and its object.

10The Registrar submits that the Act contemplates that an appeal to the Tribunal is to proceed by way of a review of the record before the Registrar and that deference be given to the Registrar's decision.

11The appellant submits that the Act requires that the appeal be held as a hearing de novo and that the Tribunal should afford no deference to the Registrar's decision.

The Statutory Scheme

12The Registrar argues that the purpose of the Act is to ensure that Ontario communities are supported and protected by law enforcement and public safety systems that are safe, effective, efficient, and accountable. This requires that security guards and private investigators carry out their work professionally, effectively, safely, and lawfully. The appellant does not dispute this and I find that this is a fair description of the general purpose of the Act.

13Section 13(2) of the Act sets out the circumstances in which the Registrar may decline to issue or renew a licence under the Act. Section 16 sets out the procedure to be followed if the Registrar proposes to refuse to issue or renew a licence, apply conditions to a licence or revoke a licence. Under ss. 16(1) and 16(2) the Registrar is required to serve the applicant or the licensee with written notice stating the reasons for its proposed action and informing the person that they are entitled to an opportunity to be heard by the Registrar to show cause why the Registrar should not take the proposed action.

14Under s. 16(3) of the Act, the affected person may request an opportunity to be heard and, if they do so, then the Registrar is required under s. 16(5) to give the person an opportunity to appear before the Registrar in person to show cause why the Registrar should not take the proposed action. The person may be represented by counsel at the hearing.

15Of some significance, s. 16(7) sets out the type of decision open to the Registrar following the show cause hearing. Section 16(7) provides:

(7) if the Registrar decides that an applicant or licensee has not shown cause why the Registrar should not take the proposed action,

(a) the Registrar shall inform the applicant or licensee in writing; and

(b) if, within 14 days of being informed under clause (a), the applicant or licensee requests written reasons, the Registrar shall serve written reasons for his or her decision on the applicant or licensee within 14 days of the request being mad.

16The nature of the decision the Registrar is authorized to make is, in my view, an important component of the issue in this motion. Under the Act, the Registrar is authorized to make two decisions. The first is whether to issue a notice of proposal to refuse or to revoke a licence pursuant to s. 16(1). If the applicant or licensee does not request a show cause hearing then the Registrar may take the proposed action.

17If the applicant or licensee requests a show cause hearing then the hearing is required to take place within 90 days and following the hearing the Registrar is authorized to make another decision and that is whether the "applicant or licensee has not shown cause why the Registrar should not take the proposed action" pursuant to s. 16(7).

18There is no provision in the Act which sets out that the Registrar may take the proposed action in the event the applicant or licensee appeals the Registrar's decision under s. 16(7). However s. 17(2) provides that an appeal to the Tribunal does not have the effect of staying that decision and that neither the Registrar nor the Tribunal has the authority to stay the decision pending the hearing of the appeal.

19Further, s. 17(1) provides that the applicant or licensee may appeal the Registrar's decision to the Tribunal and s. 17(5) provides that, on hearing an appeal, the Tribunal may uphold the Registrar's decision, vary or set aside the Registrar's decision, grant or restore a licence or impose conditions on a licence.

20In my view, despite the fact that the Act does not specifically provide for a "decision" of the Registrar resulting in the refusal to issue or a revocation of a licence, the decision of the Registrar made pursuant to s. 16(7) amounts to a decision to refuse or revoke the licence. If that were not the case, then the provisions in s. 17 with respect to an appeal of the Registrar's decision and providing that an appeal does not stay the Registrar's decision would not have any meaning.

21In short, I find that a decision under s. 16(7) that the applicant or licensee has not shown cause why the Registrar should not take the proposed action amounts to a decision by the Registrar to take the proposed action.

22I also find that the show cause hearing under s. 16 of the Act is subject to the procedural requirements of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22 ("SPPA"). Section 3 of the SPPA provides that it applies to a proceeding by a tribunal in the exercise of a statutory power of decision conferred by or under an Act of the Legislature, where the tribunal is required by or under such Act or otherwise by law to hold or to afford to the parties to the proceeding an opportunity for a hearing before making a decision.

23The decision of the Registrar to take the action proposed under s. 16 of the Act is one where the Registrar is required to hold or to afford to the applicant or licensee an opportunity for a hearing before making the decision and, given that there is no provision of the SPPA or the Act which negates the application of the SPPA to the hearing under s. 16, I find that it applies.

Form of proceeding at the Tribunal

24The Act does not specifically state whether the appeal under s. 17 is to be on the record, whether the Registrar's decision is to be treated with deference, or whether the hearing at the Tribunal is to proceed de novo with no deference to the Registrar's decision. Therefore, determining the proper format of this appeal is a matter of statutory interpretation and legislative intent. In my view, the contextual interpretation of s. 17 of the Act supports a finding that an appeal on the record is required as is deference to the Registrar's decision.

25First, I find it meaningful that the Registrar is required to hold a hearing before making a decision pursuant to s. 16(7). Although the Act places the onus on the applicant or licensee to show why the Registrar should not take the proposed action, the hearing is required to comply with the SPPA and the person is entitled to representation at the hearing. The decision is required to be in writing and the Registrar must provide reasons if requested. I find it unlikely that the Legislature would require the Registrar to hold a hearing before making its decision and then require the Tribunal to hold another first instance hearing with respect to the same issue.

26In legislation where the Tribunal is asked to conduct a hearing de novo, the Tribunal hearing is typically the first time the applicant or licensee is afforded the opportunity to participate in a hearing on the issue of whether the licence should be issued or revoked. In the present case, to require the Registrar to conduct a hearing governed by the requirements in the SPPA and then require the Tribunal to effectively conduct another hearing dealing with essentially the same issue is an unlikely interpretation.

27Second, as noted above, s. 17 of the Act provides that the applicant or licensee may "appeal the Registrar's decision" to the Tribunal. Section 17(5) provides that the Tribunal may uphold the "Registrar's decision", vary or set aside the "Registrar's decision", grant or restore a licence or impose conditions on a licence. In doing so, the Act places the focus of the Tribunal's authority on the Registrar's decision rather than on whether or not the applicant or licensee meets the criteria required under the Act to entitle it to a licence.

28In my view, this is significant since, in other statutes regulating occupational licensing in which the Tribunal is required to conduct a hearing de novo, the Tribunal is not instructed to hear an appeal of the regulator's decision but is simply instructed to hold a hearing in the context of a notice of proposed action issued by the Registrar. Here the Tribunal is dealing with a "decision" which is being "appealed", which supports the Registrar's position that deference should be given to that decision and that the intention was that the Tribunal conduct an appeal on the record.

29Third, I note that there is a significant difference between the process described in s. 16 of the Act in comparison to that described in s. 17. In s. 16, in response to the Registrar's notice of proposed action, the applicant or licensee may "request an opportunity to be heard" whereas s. 17 provides that the person "may appeal" the Registrar's decision made after the hearing held pursuant to s. 16. While the use of the word "appeal" is not determinative, the fact that the Legislature used different language to describe the person's remedies with respect to the Registrar's actions in sections in close proximity in the same statute supports the conclusion that different processes are intended.

30Fourth, as the Registrar notes, s. 17(5) of the Act does not provide the Tribunal the authority to "substitute its opinion" for that of the Registrar. This is a phrase that is often used to indicate the intention of the legislature that the hearing at the Tribunal is to be a de novo proceeding. While its absence is not determinative, in this context it is a further indication that the Legislature did not intend the Tribunal to conduct a first instance hearing.

31The appellant argues that the Court of Appeal in Johal v. Financial Services, 2012 ONCA 785 ("Johal"), held that a provision authorizing a tribunal to "substitute its opinion" for that of a decision maker "constitutes a statutory direction that appeal proceedings before the Tribunal are de novo". The appellant refers to paragraph 4 of the Johal decision.

32The appellant argues that, although the Act does not empower the Tribunal to "substitute its opinion" for that of the Registrar, it does authorize the Tribunal to "vary or set aside the Registrar's decision, grant or restore a licence or impose conditions on a licence". The appellant argues that the authority to "vary" and "set aside" convey the same meaning as "substitute its opinion" since varying or setting aside a decision of the Registrar necessarily implies the broad discretion to make changes or modifications to the Registrar's decision, which changes or modifications could constitute an entirely new decision.

33Further, the appellant cites this Tribunal's decision in Monga v. Registrar of Private Investigators and Security Guards, 2021 CanLii 97101 (ON LAT) ("Monga") which noted that the publication McCauley & Sprague, Practice and Procedure Before Administrative Tribunals, at 35:14, states that the authority to vary the underlying decision has traditionally been interpreted as a broad discretion:

The words "change", "alter" and "vary" (or any combination thereof) have a very broad meaning amounting to the ability for the reviewing body to substitute its own decision for the original including reversing it.

34I do not accept the appellant's position with respect to the impact of the authority granted by the Act to the Tribunal in s. 17(5). The Court of Appeal in Johal states that the phrase "substitute its opinion" for that of the decision maker implies a direction that the hearing be de novo. In my view substituting an opinion is different than substituting a decision. The ability of the Tribunal to "vary" or "alter" the decision of the Registrar is not the same as the authority to "substitute its opinion" for that of the Registrar. The former is an authority which resides in any appellate body and is specific to the decision made – in this case the decision to refuse a licence. The latter is an authority to alter the conclusions to be drawn from the review of the evidence presented at the hearing. For example, whereas the Registrar may form the opinion that past conduct of the applicant affords reasonable grounds to believe that they will not carry on business in accordance with the law and with integrity and honesty based on evidence showing that the applicant has a history of criminal convictions, a Tribunal authorized to substitute its opinion for that of the Registrar may form a different opinion from the same evidence.

35On the other hand, the authority to vary or substitute a decision, speaks to the outcome which follows from the findings of the Tribunal. In my view that does not provide authority for the Tribunal to substitute its opinion for the Registrar's in terms of whether the facts as determined by the Registrar should lead to a different opinion than the Registrar's. It does indicate, however, that the Tribunal may review the Registrar's reasons using the appropriate standard of review to determine if those reasons meet that standard and vary or substitute its own decision for that of the Registrar.

36As an example, an appellate body may form the opinion that the facts in a given matter should result in a finding that the Registrar has failed to prove that that the applicant will not carry on business in accordance with the law. If the Act gives the appellate body the authority to substitute its opinion for that of the Registrar, then that would be an indication that a de novo hearing is required because the issue is not whether the Registrar's decision was reasonable, but whether the facts, in the opinion of the appellate tribunal lead to that conclusion. Where the authority given is only to substitute the appellate authority's decision for that of the Registrar, the implication is that the Registrar's decision should stand if it is reasonable, whether or not the appellate tribunal would have come to the same opinion on the issues as did the Registrar.

37The appellant argues that, if the legislative intent was that the appeal be on the record, then the Act would explicitly state that. In my view, the fact that the Act does not specify either an appeal on the record or a de novo hearing does not favour one outcome over the other. In my view determining the proper format of this appeal is a matter of statutory interpretation and legislative intent.

38Finally, the appellant argues that the Tribunal in Monga found that the Act required a de novo hearing, supporting the appellant's position on this appeal.

39To be clear, the Tribunal in Mongo did not find that appeals under the Act were to take the form of a de novo hearing as is suggested by the appellant. Rather, the Tribunal held that the issue to be determined was whether the Registrar's decision to refuse a licence in that case was reasonable. That determination by the Tribunal implies that deference to the Registrar's decision be given. The fact is that in Monga, the reasons provided by the Registrar were insufficient and the evidentiary record was non-existent so that it would not be possible to determine the reasonableness of the decision without admitting evidence.

40In the present case, the Registrar has provided fulsome reasons for its decision and has maintained a record of the evidence it considered in making its decision, including the evidence submitted by the appellant in that regard. The record also includes a recording of the show cause hearing along with a "transcript" of that hearing, albeit not prepared by an official court reporter. In my view, the reasons for the Registrar's decision and the evidentiary record appear to be largely sufficient in order to conduct an appeal on the record, although that does not preclude the parties from seeking to present additional evidence if that evidence is necessary and satisfies the traditional four-part test for the admission of fresh evidence as set out in R. v. Palmer, 1979 CanLII 8 (SCC).

Apprehension of Bias

41The appellant argues that the Registrar's decision under s. 16(7) of the Act is tainted by a reasonable apprehension of bias on the part of the Registrar. In particular, the appellant argues that prior to the show cause hearing, the Registrar made statements to the effect that he would never grant a licence to the appellant's principals.

42In addition, one of the appellant's principals made a complaint against the Registrar prior to the show cause hearing, which the appellant says may have impacted the Registrar's decision which another basis for the appellant's allegation that the decision is tainted by a reasonable apprehension of bias.

43In my view, the issue as to whether there was a reasonable apprehension of bias does not go to the question of the proper procedure on appeal. Raising the issue that there was a reasonable apprehension of bias would not convert an appeal on the record to a de novo hearing nor would the appellant be without a remedy should such a finding be made on appeal.

Conclusions

44I find that the appellant's appeal to the Tribunal shall proceed as an appeal of the Registrar's decision based on the record of proceedings at the show cause hearing conducted pursuant to s. 16(7) of the Act.

ORDER

45The Tribunal Orders:

i. The appeal will proceed as an appeal on the record of the Registrar's decision.

ii. The issue for determination is whether the appellant has proven that the decision of the Registrar to refuse to issue a licence to the appellant under the Act was not reasonable.