Marcotte, Rancourt, Bachand

Appeal from a judgment of the Court of Québec allowing in part an appeal from two decisions of the disciplinary committee of the Chambre de la sécurité financière. De bene esse application for leave to file an incidental appeal after the expiry of the time limit. Allowed. The principal appeal is allowed and the incidental appeal is dismissed.

The respondent financial security advisor was convicted on the 39 counts of a disciplinary complaint faulting him for: (1) not preserving his clients’ financial needs analyses (FNA) in his files; (2) placing himself in a conflict of interest by lending money to his clients; and (3) having his clients sign blank documents. The Court of Québec judge upheld the respondent’s conviction and the sanctions imposed on the counts relating to the FNAs, but reversed the Committee’s decisions on guilt and sanctions on the other counts. The appellant syndic asks for the Committee’s decisions to be restored. The respondent seeks an acquittal on the counts relating to the FNAs by way of an incidental appeal.

Conflict of interest

The Committee committed no error of law justifying the intervention of the Court of Québec in finding that the respondent’s good faith and motivations were not relevant to a ruling on his guilt in connection with the offence set out in section 18 of the Code of Ethics of the Chambre de la sécurité financière (CQLR, c. D-9.2, r. 3), which does not require proof of intent to place oneself in a conflict of interest. Moreover, it is not necessary for the disciplinary offence to be precisely defined in the wording of the provision for the disciplinary complaint to be accepted. The Committee has broad latitude in determining what constitutes wrongful conduct in this respect. In this case, the judge, who did not have the benefit of the evidence adduced before the Committee, could not overturn the Committee’s decision that the respondent had placed himself in a conflict of interest by becoming the creditor of these clients.

Signature of blank documents

The generality of section 16 of the Act respecting the distribution of financial products and services (CQLR, c. D-9.2) and the fact that it does not explicitly prohibit the practice of having clients sign blank documents is not an impediment to the respondent’s conviction for violating it. The Committee, which determined that the respondent’s practice in this respect was [translation] “wrong and objectionable”, was right to conclude that he had lacked professionalism and had committed the offence set out in this provision.

Leave to appeal after the expiry of the time limit

Because section 115.22 of the Act respecting the regulation of the financial sector (CQLR, c. E-6.1) provides that leave is required to appeal the decision of the Court of Québec, leave was also required to file the incidental appeal. Because section 115.19 of the Act states that the appeal is governed by articles 351 to 390 of the Code of Civil Procedure (CQLR, c. C-25.01) and the time limits set out therein, an application for leave to file an incidental appeal must be filed within 10 days of the judgment authorizing the principal appeal. In this case, the de bene esse application filed shortly after expiry of the time limit meets the conditions for granting leave to file an incidental appeal after expiry of the time limit.  

Incidental appeal

The Committee and the trial judge correctly interpreted section 6 of the Regulation respecting the pursuit of activities as a representative (CQLR, c. D-9.2 r. 10) when they concluded that the provision created a duty not only to record the information gathered for the analysis of a client’s financial needs in writing, but also to preserve that information. This interpretation is consistent with the objective of protecting the public inherent in the Act respecting the distribution of financial products and services and with the large and liberal interpretation these provisions have been given in the case law.

Legislation interpreted: section 18 of the Code of Ethics of the Chambre de la sécurité financière, section 16 of the Act respecting the distribution of financial products and services, and section 6 of the Regulation respecting the pursuit of activities as a representative

Text of the decision: http://citoyens.soquij.qc.ca