The New Brunswick Court of Appeal has overturned a ruling by the province’s Financial and Consumer Services Tribunal, restoring an Investment Industry Regulatory Organization of Canada (IIROC) disciplinary decision against a former rep.
In 2016, an IIROC hearing panel found that a rep, Robert Adrian Crandall, violated IIROC rules. Crandall was banned by IIROC for five years and ordered to pay a $150,000 fine, among other sanctions.
Crandall appealed the decision to the Financial and Consumer Services Tribunal, arguing that the case against him was unfair, as the alleged violations had occurred at Crandall’s previous firm, National Bank Financial Inc. (NBF), and he didn’t have access to documents from that time to support his defence.
While IIROC requested documents from NBF, not all of the documents were found, and Crandall chose not to testify at the IIROC hearing, citing the absence of his notes from the relevant time.
At the tribunal, Crandall made several arguments, including that the IIROC proceedings against him were unfair due to the importance of the missing notes to his defence.
The tribunal found in favour of Crandall and vacated the IIROC hearing panel’s decision against him. The tribunal found that the failure to provide Crandall with documents relevant to his defence was a breach of IIROC’s duty of procedural fairness.
The court of appeal has now reversed the tribunal’s decision and reinstated the IIROC hearing panel’s original ruling.
In overturning the tribunal’s decision, the court found that the tribunal was incorrect to impose a duty on IIROC to disclose materials it never had in its possession, and that NBF’s inability to produce the notes didn’t amount to a breach of procedural fairness.
The court found that IIROC did not breach its duty, noting that IIROC repeatedly asked NBF to produce the documents Crandall sought and provided Crandall with the results of those inquiries.
“While Mr. Crandall might have been reliant on NBF to produce documents, he was not entitled to rely on IIROC staff to obtain what they were repeatedly told did not exist. IIROC staff’s ability to seek the production of documents from NBF does not equate to IIROC staff having control over the documents,” the court said.
The court added: “one simply cannot come to the conclusion IIROC staff had an obligation to produce documents it was told either never or no longer existed or could not be found. To conclude otherwise would be absurd.”
The court also ruled that the tribunal’s proceeding was not fair to IIROC: “In my respectful view, the process used by the tribunal was improper.”