COURT FILE NO.: 531/02
DATE: 20041020
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
ferrier, ground and crane jj.
B E T W E E N:
SUSSMAN MORTGAGE FUNDING INC.
Appellant
- and -
THE SUPERINTENDENT OF FINANCIAL SERVICES
Respondent
Henry G. Blumberg, Ronald S. Segal and John De Vellis, for the Appellant
Robert Conway, for the Respondent
HEARD: October 20, 2004
FERRIER J.: (Orally)
[1] We shall deal with the question of a breach of s.8 of the Statutory Powers Procedure Act first because if there has been such a breach, the appeal would on that ground alone have to be allowed.
[2] We are satisfied that there was no such breach. The delivery of “NFOP#1” and “NFOP#2” provide further particulars of the core allegation of the Superintendent that “SMFI” and the Sussmans exhibited a protracted pattern of behaviour designed to avoid regulation and compliance with the Mortgage Brokers Act and the regulations thereunder.
[3] We do not accept the argument of the appellant that these particulars constitute new allegations.
[4] As to the merits concerning the breaches of the Mortgage Brokers Act, this involved an examination of the conduct of the registrant in the context of regulatory requirements which is a question of fact. The standard of review is reasonableness. We are satisfied, looking at the totality of the evidence that there was ample evidence upon which the Tribunal could reasonably make the findings it did.
[5] As to the requirement in law that the Tribunal was obliged to apply an elevated standard of proof, in view of the fact that the appellant’s livelihood was threatened, we acknowledge that the Tribunal did not expressly address the standard of proof. Nevertheless, it is apparent from the reasons that the Tribunal was satisfied that the required level of proof had been achieved at the hearing. Witness the findings concerning the overwhelming evidence of breaches of the Mortgage Brokers Act. Accordingly, the appeal on the merits is dismissed.
[6] As to the question of bias, we are not satisfied that the reasons reflect any apprehension of bias on the part of the Tribunal. The references to the strained regulatory relationship and the confrontational attitude of the appellants appear to us to be simply statements of fact.
[7] The reference to the formal court-like manner in which the proceedings were conducted may well indicate that the proceedings had been conducted in a manner beneficial to the applicants and in full compliance with the Statutory Powers Procedure Act.
[8] Concerning the appellant’s motion before the Tribunal to enforce an alleged settlement, it is implicit from the findings of the Tribunal that the motion would have been dismissed in any event. Because of the findings made, the Tribunal could not have granted the order sought in the motion. As to the award of costs by the Tribunal, in our view it was eminently reasonable in the circumstances.
[9] On the question of penalty, we are of the view that the Tribunal erred in law in imposing a penalty without:
(i) having given the appellants opportunity to make submissions as to penalty;
(ii) considering alternatives that might be imposed, and
(iii) reviewing or considering the penalties imposed in similar cases.
[10] Accordingly, the order revoking the licence of “SMFI” is set aside. An order will go that the following terms will henceforth apply as conditions to the licence of the appellant:
(i) the appellant shall continue to file monthly trust reconciliations with the Superintendent within 15 days of the end of each month, for the period ending December 31, 2006;
(ii) Murray Sussman and Sanford Sussman and the Directors, Officers and employees of the registrant will, as required, by the Superintendent or her representative, forthwith:
(1) produce documents at the expense of the registrant;
(2) provide information, and
(3) attend interviews
with respect to the business activities of “SMFI” and of any business entity under the direction or control of SMFI, Murray Sussman or Sanford Sussman.
[11] The appeal book will read: “For oral reasons delivered this day, the appeal on the merits is dismissed. Order as to penalty is set aside. New order made imposing terms. No order as to costs.”
FERRIER J.
GROUND J.
CRANE J.
Date of Reasons for Judgment: October 20, 2004
Date of Release: November 5, 2004
COURT FILE NO.: 531/02
DATE: 20041020
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
ferrier, ground and crane jj.
B E T W E E N:
SUSSMAN MORTGAGE FUNDING INC.
Appellant
- and -
THE SUPERINTENDENT OF FINANCIAL SERVICES
Respondent
ORAL REASONS FOR JUDGMENT
FERRIER J.
Date of Reasons for Judgment: October 20, 2004
Date of Release: November 5, 2004