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Real Property - Mortgage Brokerages, Lenders and Administrators Act, 2006. Harold the Mortgage Closer Inc. v. Ontario (Financial Services Regulatory Authority, Chief Executive Officer)
In Harold the Mortgage Closer Inc. v. Ontario (Financial Services Regulatory Authority, Chief Executive Officer) (Div Court, 2024) the Divisional Court considered the role of the Mortgage Brokerages, Lenders and Administrators Act, 2006 (MBLAA):[10] The applicants are licensed under the MBLAA. FSRA regulates the non-securities, financial services sectors in Ontario, including mortgage brokering. FSRA administers the MBLAA under the FSRA Act. In its regulatory activities, FSRA is guided by its statutory objects, which are set out in the FSRA Act and are reproduced at paragraph 58 below.
[11] In Ontario, mortgage brokering is governed by the MBLAA. The MBLAA provides a comprehensive licensing framework for mortgage brokerages, mortgage brokers, mortgage agents, and mortgage administrators. These licensees are required to comply with prescribed standards of practice, including disclosure, suitability and conflict of interest requirements.
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[13] FSRA may take regulatory action when individuals or entities contravene the MBLAA. Generally, before FSRA can impose licensing sanctions, general administrative penalties or compliance orders, FSRA must issue a notice of proposal (MBLAA, ss. 21, 35, 39). This triggers the right to a hearing before the FST, an independent tribunal. The FST holds a de novo hearing with no deference to FSRA’s NOP. The FST then issues an order which may direct FSRA to carry out the NOP with or without changes or substitute the FST’s opinion for that of FSRA. . Prince v Chief Executive Officer of the Financial Services Regulatory Authority of Ontario
In Prince v Chief Executive Officer of the Financial Services Regulatory Authority of Ontario (Div Court, 2023) the Divisional Court considered the appellant's argument that, in a professional discipline tribunal hearing [here before Financial Services Tribunal, acting under the Mortgage Brokerages, Lenders and Administrators Act, 2006 (the 'MBLAA')] that the standard of proof was higher than the normal civil standard of 'balance of probabilities' (it wasn't):[1] The Appellant appeals from a decision of the Financial Services Tribunal (the “Tribunal”) under the Mortgage Brokerages, Lenders and Administrators Act, 2006. (the “MBLAA”).
[2] The Appellant requested a hearing before the Tribunal after receiving a notice of proposal to revoke her mortgage licence based on a reasonable belief that she was not suitable to be licensed as a mortgage agent. The grounds for this belief were the Appellant’s past conduct, false statements by the Appellant in her application to be licensed on three subsequent renewals and for misleading Financial Services Regulatory Authority of Ontario (“FSRA”) investigators.
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[11] The Appellant submitted that a sliding scale or higher standard should be applied in circumstances such as this. Counsel referred the panel to Australian authorities to that effect and to a strongly worded minority opinion by the Chief Justice of the Supreme Court of New Zealand that a higher standard should be applied in circumstances where serious allegations and penalties are engaged: Z v. Dental Complaints Assessment Committee [2008] NZSC 55; [2009] 1 NZLR 1.
[12] I disagree.
[13] It is well settled law in Canada that there is one civil standard of proof at common law, which is proof on the balance of probabilities, notwithstanding the seriousness of the allegations or the consequences: F.H. v. McDougall, 2008 SCC 53 at para. 40 [2008] 3 SCR 41 (CanLII). This decision is binding on us as it was on the tribunal below.
[14] The Tribunal correctly applied the civil standard of proof to the hearing evidence and carefully set out its reasons for rejecting the Appellant’s evidence. It did not commit any legal error in its application of the standard of proof. Further, the prosecution’s case was established by clear and cogent evidence, most of which was not contested. The issue before the Tribunal was in respect of the appellant’s explanations for the impugned conduct, explanations which were rejected by the tribunal for reasons that are discussed below. I would not give effect to this ground of appeal.
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