CITATION: Registrar, Funeral, Burial, and Cremation Services Act, 2002 v. Thomas, 2021 ONSC 4283
DIVISIONAL COURT FILE NO.: 600/20
DATE: 20210615
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Penny, Sutherland and Favreau JJ.
BETWEEN:
Registrar, Funeral, Burial, and Cremation Act, 2002
Appellant
– and –
Simone Thomas
Respondent
Anne Marshall, for the Appellant
Michael Burokas, for the Respondent
Douglas Lee, for the Intervenor, Licence Appeal Tribunal
HEARD at Toronto (by videoconference): June 9, 2021
FAVREAU J.:
Introduction
[1] Simone Thomas, the respondent on this appeal, is a licensed funeral preplanner under the Funeral, Burial and Cremation Services Act, 2002, S.O. 2002, c. 33 (the Act). In 2019, soon after she obtained her licence, Ms. Thomas misused payments made by two sets of clients. Her employment was terminated, and the Registrar under the Act issued a notice of proposal to revoke her licence. Ms. Thomas appealed to the Licence Appeal Tribunal (the “LAT”). In a decision dated November 24, 2020, the LAT directed the Registrar not to carry out the proposal to revoke Ms. Thomas’s licence finding that, while Ms. Thomas exercised poor judgment, she had not personally benefitted from the transactions and there was no reason to believe that she could not perform her duties in accordance with the law and with honesty and integrity in the future.
[2] The Registrar appeals the LAT’s decision. The Registrar argues that the LAT failed to make a finding that Ms. Thomas mishandled trust moneys, which should have led to an automatic revocation of her licence. The Registrar also argues that the LAT should not have considered whether Ms. Thomas benefitted personally from the transactions at issue and that the LAT failed to have regard to all relevant facts in an agreed statement of facts.
[3] For the reasons below, I find that the LAT made no reviewable errors and the appeal is dismissed.
Statutory scheme
[4] The Bereavement Authority of Ontario administers the Act. The Registrar is appointed under the Act to enforce its provisions.
[5] The Act and its regulations set licensing requirements for different aspects of the funeral industry. This includes a requirement that funeral preplanners obtain a licence.
[6] Section 14 of the Act sets out the general requirements for obtaining and maintaining a licence under the Act. Section 14(1)(a)(i) provides that an applicant is entitled to a licence unless the applicant “is in contravention of the Act or the regulations”. Section 14(1)(b)(ii) provides that an applicant that is not a corporation is entitled to a licence unless “the past conduct of the applicant … affords reasonable grounds for belief that the applicant will not carry on business in accordance with the law and with integrity and honesty”.
[7] Section 17 of the Act gives the Registrar the power to revoke a licence if he is of the opinion that a licensee does not meet the requirements under section 14 of the Act.
[8] Section 18 of the Act sets out the process the Registrar is to follow when proposing to revoke a licence. The Registrar must first give the licensee notice of the proposal, including the “reasons for the proposed action”. A licensee who disagrees with a proposal made by the Registrar can request a hearing before the LAT. Section 18(5) gives the LAT the power to “direct the registrar to carry out the registrar’s proposal or substitute its opinion for that of the registrar and may attach conditions to its order or to a licence”.
Factual background and LAT decision
[9] Ms. Thomas obtained her funeral preplanner licence on April 5, 2019. At that time, Ms. Thomas was employed by Arbor Memorial Inc. (“Arbor”). Arbor terminated her for cause on October 11, 2019, on the basis that she mishandled client funds.
[10] On November 22, 2019, the Registrar issued a Notice of Proposal to revoke Ms. Thomas’s funeral preplanner licence. The particulars set out in the notice were brief and included the following:
MISAPPROPRIATION OF CONSUMER FUNDS
Between April and October of 2019 (inclusive), the Licensee was employed at the Glendale Funeral Home & Cemetery, an operating arm of Arbor Memorial Inc. (the "Employer").
At all material times, the Licensee was responsible for accepting monies from consumers on behalf of the Employer.
During the period of her employment, the Licensee accepted monies from consumers intended to be held in trust for the Employer.
During the period of her employment, the Licenses diverted the monies received from consumers to her benefit and did not cause them to be deposited to the Employer's account.
[11] Following the issuance of the Notice of Proposal, Ms. Thomas requested a hearing before the LAT. In advance of the hearing, the parties entered into an Agreed Statement of Facts. Initially, the Agreed Statement of Facts addressed Ms. Thomas’s dealings in four separate matters. However, by the time of the hearing, the Registrar advised that he only relied on the facts related to two matters.
[12] The hearing before the LAT took place over two days. There were a number of witnesses, including Ms. Thomas, Peter Jordan (on behalf of the Registrar), family members involved in the transactions at issue and some character witnesses.
[13] The LAT released its decision on November 24, 2020.
[14] Based on the Agreed Statement of Facts and the evidence of the witnesses, the LAT found that Ms. Thomas’s past conduct did not give reason to believe that she would not operate in accordance with the law and with honesty and integrity in the future.
[15] In its decision, the LAT reviewed the evidence related to the two sets of transactions.
[16] The first one involved MW, who was planning a funeral for her brother. Ms. Thomas advised MW that she could e-transfer the amount owing to her own personal bank account, and then Ms. Thomas would transfer the funds to Arbor’s trust account. Ms. Thomas testified that she suggested this option because MW lived in Ottawa, did not have a credit card, and could not pay with her debit card over the phone or online. Ms. Thomas believed the e-transfer method would be most convenient for MW. MW sent money in instalments to Ms. Thomas’s account. Ms. Thomas transferred all but the final instalment of $1000, sent on August 15, 2019, to the trust account. Ms. Thomas claimed that she did not receive an email notification that MW had transferred the last installment, so she was not aware that she had received it. She did acknowledge, however, that MW advised her on August 6that she would be sending the money on August 15, and that MW had sent a follow-up email on August 17 confirming that she had sent the money. Ms. Thomas eventually reimbursed the $1000 to MW.
[17] The second matter involved payments from two families. Ms. Thomas dealt with DF, who entered into a contract for internment spaces and a monument worth approximately $50,000. DF did not want his family to know about these arrangements, but he ran into problems paying off this amount. Shortly before DF died, Ms. Thomas visited him in the hospital. DF told Ms. Thomas that he was having financial difficulties. Ms. Thomas withdrew $1,652.95 in cash from the T. family account, a family unrelated to DF, and gave it to DF expecting that he would pay her back. DF did not pay her back before he died. When making DF’s funeral arrangements with DF’s widow, ACF, Ms. Thomas processed two credit card payments. One of the payments was in the amount of $1,652.95, which Ms. Thomas used to pay the T family back. Ms. Thomas believed the credit card was a joint card between ACF and DF, but acknowledged that she did not have ACF’s permission to make the payment.
[18] With respect to the transactions involving MW, the LAT found that Ms. Thomas “failed to act in a timely manner to ensure that MW’s final e-transfer was ultimately received by Arbor” but that all other e-transfers were immediately paid to Arbor. The LAT concluded that there was “no evidence of a pattern of delay or of attempts by Ms. Thomas to misappropriate MW’s funds to her own benefit”. With respect to ACF, the LAT found that Ms. Thomas should have explained that she intended to use the credit card for money she had advanced to DF, but that, while the communications were “deficient and could have been more professional”, the transaction did not lead to a concern about Ms. Thomas’s trustworthiness or integrity.
[19] The LAT concluded as follows:
In summary, I conclude that the evidence presented simply does not support the Registrar's proposal to revoke Ms. Thomas' licence. There is no pattern of suspicious conduct; no evidence that Ms. Thomas used any of her clients' funds for her own benefit; and ultimately no evidence of harm to her clients. While I have found that Ms. Thomas' actions were deficient in her dealings with both families, I have also found that she did not act in a deceitful or untrustworthy manner. I find that the Registrar has not established that there are reasonable grounds for belief that the appellant will not carry on business in accordance with the law and with integrity and honesty.
Given this experience, I expect that Ms. Thomas has learned that she must do a better job separating her personal relationships with her clients from her professional role. No matter how convenient, she should not have accepted e- transfers into her personal account, even though it was not prohibited by her employer.
Court’s jurisdiction
[20] Pursuant to section 11(1) of the Licence Appeal Tribunal Act, 1999, S.O. 1990, c.12, Sched. G, an appeal from the LAT lies to the Divisional Court on a question or law or fact or both.
Standard of review
[21] In accordance with Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, the appellate standards of review apply to an appeal from the LAT to the Divisional Court. Errors of law are to be reviewed on a standard of correctness, and errors of fact or mixed fact and law are to be reviewed on a palpable and overriding error standard (unless there is an extricable error of law in which case the correctness standard applies).
Preliminary issue regarding fresh evidence
[22] There is no transcript from the hearing before the LAT. There is some dispute between the parties about whether, at the hearing, the Registrar pursued an argument that Ms. Thomas’s licence should be revoked on the basis of section of 14(1)(a)(i) (contravention of the Act) or whether the Registar only pursued revocation based on section 14(1)(b)(ii) (past conduct). The significance of this distinction is that the Registrar says that Ms. Thomas contravened the trust account provisions of the Act and regulations and that the LAT should have revoked her licence on that basis alone. In contrast, Ms. Thomas’s position is that the Registrar did not pursue this argument at the hearing, but instead argued that Ms. Thomas’s past conduct in handling the client funds gives reason to believe that she would not perform future duties in accordance with the law and with honesty and integrity.
[23] In advance of the hearing, Corbett J., in his role as case management judge, gave the parties permission to file affidavit evidence on this issue, with the proviso that the panel hearing the appeal would determine its admissibility.
[24] The lawyer who represented Ms. Thomas at the hearing before the LAT, Hayley Smith, swore an affidavit in support of Ms. Thomas’s position that the Registrar only pursued revocation on the basis of section 14(1)(b)(ii) of the Act. She states that she contacted John Park, who was the Registrar’s lawyer at the LAT, in advance of the LAT hearing to seek clarification about the scope of issues being pursued by the Registrar. She says that Mr. Park advised her that the Registrar was only proceeding under section 14(1)(b)(ii). She also says that, at the hearing, the Registrar only relied on section 14(1)(b)(ii) and did not make any submissions that Ms. Thomas contravened the provisions in the Act or the regulations dealing with trust moneys.
[25] In response to Ms. Smith affidavit, the Registrar has submitted an affidavit made by Peter Jordan, the Manager of Compliance with the Bereavement Authority of Ontario. Mr. Jordan was a witness on behalf of the Registrar at the LAT hearing. In his affidavit, Mr. Jordan gives some evidence about the basis for the Notice of Proposal against Ms. Thomas, he says that he has no knowledge of the conversation between Ms. Smith and Mr. Park and he confirms that Mr. Park stated at the beginning of the hearing that he was only relying on two of the four incidents in the Agreed Statement of Facts. Mr. Jordan also states that he believes that, in his evidence, he referred to Ms. Thomas’s obligation to deposit all prepaid money into appropriate trust accounts.
[26] I find that Ms. Smith and Mr. Park’s evidence is generally admissible. It relates to the proceedings before the LAT and, in the absence of a transcript, there is no other way for the Court to know what was submitted by counsel or the parties at the LAT. However, I give no weight to Mr. Jordan’s evidence about the basis on which the Registrar issued the Notice of Proposal against Ms. Thomas as it is not relevant to what happened at the LAT hearing. In addition, I note that Mr. Jordan does not contradict Ms. Smith’s evidence that the Registrar only relied on section 14(1)(b)(ii) of the Act at the hearing. This is consistent with the decision which only addresses the test under that provision.
[27] Accordingly, to the extent that the fresh evidence is relevant, it confirms Ms. Thomas’s position that the Registrar only sought to revoke her licence based on section 14(1)(b)(ii) of the Act.
Analysis
[28] The Registrar argues that the appeal should be allowed on the three following grounds:
a. The LAT should have found that Ms. Thomas breached the provisions of the Act and regulations dealing with trust moneys and this should have led to an automatic revocation of her licence;
b. The LAT considered irrelevant factors, including that Ms. Thomas did not personally benefit from the transactions at issue; and
c. The LAT improperly ignored parts of the Agreed Statement of Facts.
[29] I do not accept these arguments and, in my view, the LAT made no reversible errors.
Alleged breach of trust account obligations
[30] Originally, in his factum, the Registrar argued that the LAT failed to consider that Ms. Thomas contravened the trust account provisions of the Act, which he claimed would give rise to grounds for revoking her licence under s. 14(1)(a)(i) of the Act. However, as reviewed above, the Registrar did not seek revocation of the licence on this basis at the hearing before the LAT.
[31] At the hearing of the appeal in the Divisional Court, counsel for the Registrar resiled from the argument in the factum and submitted instead that section 14(1)(b)(ii) of the Act also requires a finding that Ms. Thomas contravened the Act, and that the LAT erred in not making a specific finding that Ms. Thomas breached the trust account provisions of the Act and regulations under the Act. The Registrar further argued that such a finding should have led to the revocation of Ms. Thomas’s licence.
[32] There are at least two problems with this argument.
[33] First, there is no indication that this argument was made at the LAT. It would be improper for this Court to find that Ms. Thomas breached trust account obligations and that her licence should have been revoked on that basis when that argument was not made at the LAT. To do so would be procedurally unfair and is not the proper role of appellate review. In this respect, I note that there is a dispute between the parties about whether the sections of the Act dealing with trust moneys apply to Ms. Thomas. Ms. Thomas points out that most of the relevant provisions in the Act and regulations impose obligations on “operators”, and Ms. Thomas is not an “operator” as defined in the Act. However, as pointed out by the Registrar, section 52(4) of the Act imposes an obligation on “licensees”, not operators, “to pay the money that is required to be held in trust into a trust account within the prescribed time”. Ms. Thomas may have contravened this aspect of the Act in handling MW’s funds but, as discussed below, given that the Registrar proceeded under section 14(1)(b)(ii) of the Act, this does not end the inquiry.
[34] Second, and most significantly in my view, the Registrar’s argument rests on a misapprehension of section 14(1)(b)(ii) of the Act. As reviewed above, the wording of the provision is as follows:
14(1) An applicant is entitled to a licence or to a renewal of the licence unless,
(b) the applicant is not a corporation and,
(ii) the past conduct of the applicant or of an interested person in respect of the applicant affords reasonable grounds for belief that the applicant will not carry on business in accordance with the law and with integrity and honesty…
[35] The purpose of this provision is to look at past conduct to determine if it gives rise to a belief that Ms. Thomas will not perform her duties in accordance with the law and with honesty and integrity in the future. The past conduct can include a specific breach of the Act, but it may also include any number of issues. In this case, as referred to above, based on the Agreed Statement of Fact, there was no dispute that Ms. Thomas misused client funds. The LAT’s focus was on the circumstances of the misuse of the funds for the purpose of assessing Ms. Thomas’s future conduct. The LAT did not have to make a finding that Ms. Thomas contravened a specific provision of the Act in order to conduct this assessment. Past misconduct was admitted. The LAT’s role was to assess the nature and severity of the misconduct to predict Ms. Thomas’s future conduct.
[36] The Registrar relies on the decisions of this Court in Ontario (Registrar of Real Estate & Business Brokers v. Vogelsberg), 1994 O.J. 226 and Lapcevich v. Registrar, Real Estate & Business Brokers Act, 2010 ONSC 1145 to argue that Ms. Thomas’s alleged breach of her trust account obligations should have led to an automatic revocation of her licence. However, these decisions do not stand for that proposition.
[37] In Vogelsberg, the Court allowed an appeal from a decision of the Commercial Registration Appeal Tribunal. In that case, the Tribunal was dealing with a provision similar to section 14(1)(b)(ii) of the Act. The Court found that the Tribunal made an error in failing to make a finding on whether the respondent had breached his trust account obligations. The Court held that whether clients are harmed or not is irrelevant to the issue of whether there was a breach of the respondent’s trust account obligations. More significantly, the Court emphasized that the analysis the Tribunal should have undertaken has two steps: first, whether there was contravention of the legislation and, second, whether that contravention gives reason to believe that the respondent would not carry on business in accordance with the law and with integrity and honesty. The Court remitted the matter back to the Tribunal to conduct this analysis. In Lapcevich, which was decided several years later, this Court endorsed and echoed this approach.
[38] Neither of these decisions suggests that the mishandling of trust moneys on its own should lead to a revocation of Ms. Thomas’s licence under section 14(i)(b)(ii). Rather, they support the approach taken by the LAT in this case. Here, the misuse of funds was admitted. Quite properly, the LAT focused its analysis on the nature and severity of the misconduct in determining whether it gave rise to reason to believe that Ms. Thomas cannot perform her functions in accordance with the law and with honesty and integrity.
[39] The LAT committed no error of law in articulating the relevant test and no palpable and overriding error in the application of the test.
Irrelevant considerations
[40] The Registrar argues that the LAT erred in considering that Ms. Thomas had not personally benefitted from the transactions. The Registrar argues that this is an irrelevant consideration. I disagree.
[41] The issue under section under section 14(1)(b)(ii) of the Act is what past conduct may have to say about whether a licensee will act with honesty and integrity in the future. The licensee’s motivations are clearly relevant to this issue.
[42] In Baxter v. Ontario (Registrar, Real Estate and Business Brokers Act), 2012 ONCA 543, at para. 63, the Court of Appeal held that a similar provision “required the Tribunal to consider, not only Mr. Baxter’s revocation-related past misconduct, but also his past conduct, in general”.
[43] In this case, the LAT made findings of fact that Ms. Thomas did not personally benefit from the transactions and that she was not motivated by personal gain. This was clearly relevant to the issue of whether there is reason to believe that she will not perform her functions in accordance with the law and with honesty and integrity in the future.
[44] The Registrar also argues that the LAT improperly considered that no one was harmed by Ms. Thomas’s actions. As conceded by Ms. Thomas’s lawyer during argument, I agree that this consideration should not be given much weight. If past misconduct is motivated by self-interest or malice, its ultimate impact should play little role in the analysis under section 14(1)(b)(ii) of the Act. However, this finding was not central to the LAT’s analysis.
[45] Again, the LAT made no errors of law or no palpable and overriding errors with respect to the factors it considered in deciding not to revoke Ms. Thomas’s licence.
Ignoring relevant evidence
[46] The Registrar argues that the LAT improperly ignored the evidence about two of the four sets of transactions referred to in the Agreed Statement of Facts. There is no merit to this argument.
[47] In its reasons, the LAT states that the Registrar did not pursue those two sets of transactions. In his affidavit, as reviewed above, Mr. Jordan confirms that counsel for the Registrar at the LAT stated at the beginning of the hearing that he would not be addressing those two sets of transactions.
[48] The LAT was entitled to rely on those representations. In fact, it would have been improper for the LAT to make any findings on those two sets of transactions when they were not pursued at the hearing.
[49] Counsel for the Registrar relies on R. v. Jacks, 2020 ONSC 983 (Sup. Ct.), at para. 16, where the Court held that “a trier of fact is not permitted to reject or ignore evidence that counsel have agreed should go in for the truth of the contents”.
[50] However, in this case, while the parties entered into an Agreed Statement of Facts, by the time of the hearing the Registrar represented that he was no longer relying on those facts. The LAT committed no error in disregarding the evidence at issue.
Conclusion
[51] For the reasons above, the appeal is dismissed.
[52] As the successful party, Ms. Thomas is entitled to costs which I fix at $6,000 all inclusive.
Favreau J.
I agree _______________________________
Penny J.
I agree _______________________________
Sutherland J.
Released: June 15, 2021
CITATION: Registrar, Funeral, Burial, and Cremation Services Act, 2002 v. Thomas, 2021 ONSC 4283
DIVISIONAL COURT FILE NO.: 600/20
DATE: 20210615
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Penny, Sutherland and Favreau JJ.
BETWEEN:
Registrar, Funeral, Burial, and Cremation Act, 2002
Appellant
– and –
Simone Thomas
Respondent
REASONS FOR JUDGMENT
FAVREAU J.
Released: June 15, 2021