Mutual Fund Dealers Association of Canada v Lam, 2022 ONSC 2269

This case is about a mutual fund representative who was a branch manager that was reprimanded by the Mutual Fund Dealers Association of Canada (“MFDA”). The MFDA through section 151 of the Securities Act filed the hearing panel decision with the Superior Court of Justice and commenced enforcement against the individual.


Section 151 was amended not too long ago. It gave the MFDA the ability to enforce its awards through the tools available to a judgment creditor under the Rules of Civil Procedure. It effectively short-circuited the process. For in the past, the MFDA would have to commence an action.


The MFDA in this instance used that process. The individual argued the hearing panel order was converted into a Superior Court Order without jurisdiction. This was the main issue in this case.


Background.


The facts of this case are uncontested. The individual was subject to the MFDA and its rules. He resigned in January 2016 and the MFDA commenced an investigation in April 2016. The individual provided limited assistance and subsequently decided not to cooperate.


There was an MFDA hearing on the merits and the panel fined the individual and banned him.


The individual does not challenge the decision.


The MFDA then entered the hearing panel’s order as an Order of the Superior Court of Justice. The MFDA started enforcing the order by obtaining a writ, notice of garnishment and conducting an examination in aid of execution.


Court.


The individual’s position on the motion was that the conversion was made without jurisdiction. The basis of the position is section 151 is presumed not to have retrospective application to prior events. The individual’s malfeasance occurred before the amendment.


The MFDA took the position the section is triggered by the decision made by the hearing panel and not when the individual’s malfeasance occured.


The Court agreed with MFDA and held the section applied to the issuance of the decision by the hearing panel and not the conduct of the individual that attracted the decision.


The Court opined on the retrospectivability of the section and held a statute is not retrospective unless the description of the prior event is the fact-situation that brings about the operation of the statute.


But the Court concluded that section 151 was not applied retrospectively and was applied to the event (the hearing panel decision) that is covered in the section after the enactment of the section.


The motion was dismissed.


Conclusion.


As the Court found, Section 151 has had deterring effects. From this decision, we can take away the section 151 does not apply to the malfeasance but to when the hearing panel order was obtained. Therefore, so long as the hearing panel order was issued after the amendment, section 151 will permit the conversion to a Superior Court of Justice Order.

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