DATE: 20051110

DOCKET: C43248

COURT OF APPEAL FOR ONTARIO

RE:

THE SUPERINTENDENT OF FINANCIAL SERVICES (Appellant) v. SUSSMAN MORTGAGE FUNDING INC. (Respondent)

BEFORE:

DOHERTY, WEILER and MOLDAVER JJ.A.

COUNSEL:

Robert Conway

for the appellant

Henry Blumberg and Ronald Segal

for the respondent

HEARD:

November 7, 2005

On appeal from the order of the Divisional Court dated December 14, 2004.

E N D O R S E M E N T

[1] We agree with the Divisional Court that the Tribunal erred in failing to give Sussman an opportunity to make submissions to the appropriate penalty after its finding on the merits of the allegation. Unfortunately, the Divisional Court did not give any reasons for vacating the Tribunal’s order revoking the Sussman licence and substituting a penalty, which only placed certain terms on the licence. Absent reasons, it is impossible for the parties or the Tribunal to know why the Divisional Court made such a significant change in the penalty while at the same time accepting the strong findings made by the Tribunal. In these circumstances, the failure to give reasons constitutes an error in law.

[2] We think the Tribunal is in by far the best position to assess the seriousness of the conduct, the importance of the mitigating factors, and the feasibility of any terms or conditions that either party might seek. The Divisional Court should have remitted the matter to the Tribunal for the imposition of penalty. We now make that order.

[3] The assessment of penalty will proceed before a differently constituted Tribunal. Penalty will be determined based on the findings made by the Tribunal in its reasons of August 8, 2002 in so far as those findings describe Sussman’s conduct. The Tribunal is at liberty to hear any evidence relevant to penalty, including evidence of events that arose after August 8, 2002.

[4] The appellant has had partial success on the appeal. Costs to the appellant in the amount of $5,000.

“Doherty J.A.”

“K.M. Weiler J.A.”

“M.J. Moldaver J.A.”