2022 QCCQ 8776, 2022 QCCQ 8776

Iacono c. Ouimet 2022 QCCQ 8776 COUR DU QUÉBEC « Administrative and appeal Division » CANADA PROVINCE DE QUÉBEC DISTRICT DE MONTRÉAL « Civil chamber » N o : 500-80-043244-228 DATE : November 28, 2022 ______________________________________________________________________ PRESIDING : HONOURABLE STÉPHANE DAVIGNON, J.C.Q. ______________________________________________________________________ JOANNE IACONO Appellant v.

ME GILLES OUIMET , in his capacity of syndic of the Chambre de la sécurité financière Respondant and DISCIPLINARY COMMITTEE , chambre de la sécurité financière Third party ______________________________________________________________________ JUDGEMENT (ON A MOTION TO DISMISS THE APPEAL) ______________________________________________________________________ OVERVIEW [ 1 ] Me Gilles Ouimet, in his capacity as syndic of the Chambre de la sécurité financière (“ Chambre ”), requests the dismissal of Ms.

Joanne Iacono's appeal against a decision of the Disciplinary Committee of the Chambre (" Committee ") that found her guilty of placing herself in a conflict of interest and of having submitted to BMO Bank of Montreal (“ BMO ”) a lease knowing it to be false. [ 2 ] To better understand the demand, it is necessary to state the context in which it occurs. [ 3 ] At the relevant times, Ms. Iacono held a certicate from the Autorité des Marchés Financiers in insurance of persons and was a registered financial representative and financial planner with a Montreal office of Investors Group (“ IG ”).

She was also a registered real estate broker. As such, a professional relationship existed between her and Ms. Maria Brown, her client, as she was her registered financial representative and financial planner. [ 4 ] Ms. Brown was a senior who had recently lost her husband. Upon his passing, she decided to invest the proceed of his life insurance with Ms. Iacono. She also told her that she was interested in selling her house for which she asked Ms. Iacono for advice. [ 5 ] Ms. Iacono then offered Ms. Brown to buy her house for $650,000, alleging that it was in a state that required several works.

However, she completed a promise to purchase indicating that the sale price would be $900,000 and had Ms. Brown sign it. She then submitted this document to BMO for the purpose of obtaining a mortgage loan of the same amount. The bank then obtained an appraisal of Ms. Brown's house from an appraisal firm which, as it was in its condition, set the value at $ 902,000 on March 4, 2019. [ 6 ] In addition, in support of her loan application Ms. Iacono provided the bank with a residential lease for the rental of her own home for a monthly rent of $2,200, which was signed by a friend of her son.

She acknowledged, however, that it was not her intention to rent her home and that the sole purpose of this lease was to enable her to meet BMO's requirements for the loan she was seeking. [ 7 ] She then brought Ms. Brown to an addendum to the promise to purchase and reduced the price from $900,000 to $650,000 and mandated a notary to complete the drafting of a deed of sale in view of its execution at a closing date. [ 8 ] IG was eventually made aware of the situation and choose to investigate. In the aftermath, one of its representatives from the compliance department contacted Ms.

Brown and recommended that she does not show up for the closing session of the sale of her home, informing her that Ms. Iacono's actions were under investigation by the fraud department. [ 9 ] On the day set for closing, Ms. Iacono was required to report to her supervisor at IG, who informed her that the proposed transaction with Ms. Brown was contrary to the company's ethical rules and applicable laws, and then terminated her immediately. [ 10 ] Ms. Iacono saw things differently. She considered that she had in no way breached her professional obligations and that the price of $650,000 offered to Ms.

Brown met the market value of her home, given its condition. She therefore insisted on closing the sale. When Ms. Brown refused, she sued her for the transfer of title before the Superior Court. [ 11 ] The ensuing judgment of November 17, 2020 by the Honourable Justice Jeffrey Edwards is terse. After a 79-page analysis he

rejected Ms. Iacono's application, concluded that she had abused Ms. Brown's good faith and her vulnerable situation, that she had used a fraudulent scheme to appropriate her home at a price significantly lower than its value, and that she vitiated her client's consent. He thus declared that Ms. Iacono's legal claim was purely abusive and further ordered her to pay Ms. Brown $20,853 to compensate for part of her extrajudicial fees. [ 12 ] Around the same time, the syndic of the Chambre filed a first complaint against Ms.

Iacono accusing her of having placed herself in a situation of conflict of interest by negotiating and offering to buy Ms. Brown's house. He eventually filed a second complaint against her, this time alleging that she submitted a false lease to BMO and had not disclose the contents of the Addendum signed with Ms. Brown regarding the sale price of her home. [ 13 ] The complaints were heard before the Committee during a three-day hearing held on September 8, 9 and 10, 2021. The Committee rendered its decision on December 16, 2021, finding Ms. Iacono guilty on both counts.

A decision on sanction followed on August 19, 2022 by which Ms. Iacono was imposed a striking off her right to practice for a period of 5 years on each of the counts and ordered to pay a $ 5,000 fine. She filed a notice of appeal with the Court of Québec on September 26, 2022. It is not entirely clear whether she is attacking the decision on sanction, but on the other hand, she is clearly appealing the decision on guilt. ANALYSIS [ 14 ] Me Ouimet's motion to dismiss raises only one reason, that is that Ms. Iacono's appeal has no chance of success. According to

article 115.19 of the Act respecting the regulation of the financial sector [1] , the appeal of a decision from the Committee is governed by articles 351 to 390 of the Code of Civil Procedure (" C.C.P. ").

Section 365 expressly provides that an appeal may be dismissed, particularly if it has no reasonable chance of success. [ 15 ] In his demand, Me Ouimet submits that Ms. Iacono's appeal relates only to the facts, whereas she criticizes the Committee for not having assessed them according to her own view, which was totally rejected. The syndic adds that no palpable and overriding error is even alleged by Ms. Iacono, who in essence is simply seeking a new hearing and inviting the Court to make a complete reassessment of the evidence. [ 16 ] Ms. Iacono's notice of appeal essentially amounts to a

summary of the facts based on her own

interpretation, which leads her to conclude that she did not breach her code of ethics by seeking to acquire the immovable property of her client, Ms. Brown, and that she did not take advantage of her. She submits that the immovable had a market value of well under $900,000, even though she did not present any independent evidence in this regard, neither before the Committee, nor before the Superior Court as part of her application for a transfer of title, limiting herself to submit her own opinion. [ 17 ] With respect to the issue of the lease she provided BMO in support of her application for financing, Ms.

Iacono submits that this is a common practice with mortgage lenders and that banks are well aware that a lease presented in this way is not real and that its sole purpose is to increase a borrower's ability to obtain a loan and thus justify its ability to repay it. However, apart from her own testimony, she does not present any evidence to support her thesis, which is quite singular to say the least. [ 18 ] The only grievance made against the Committee by Ms.

Iacono in her notice of appeal is that it based much of its reasons on the judgment of the Honourable Justice Edwards, who dismissed her application for transfer of title [2] . In this regard, Ms. Iacono is making quite a charge against Justice Edwards. At paragraph 21 of her notice of appeal, she states: 21. Conflict of Interest. The CSF/Syndic based their decision on the judgment made by Judge Jeffrey Edwards on November 17, 2020. The judge was biased and manipulated the evidence in the case to arrive at the verdict he wanted.

The guilty judgment of Judge Jeffrey Edwards was use by the CSF/Syndic and every other court case thereafter. This has caused a prejudiced assumption that The Appellant is assumed to be guilty instead of innocent. The CSF/Syndic waited until the judgment and the Appeal was finished before they would hear the case event though their investigation was finished in December 2019 by Emilie Tousignant. [ 19 ] Two comments should be made. [ 20 ] First, it should be noted that Ms. Iacono appealed Justice Edwards' judgment, but outside the 30-day timeframe provided by

article 360 CCP. The Court of Appeal concluded that she had not proved that she was unable to file her appeal within the time allowed and that it should therefore be dismissed for that sole reason. Moreover, even if that had been the case, it nevertheless concluded that her appeal in any event had no reasonable chance of success. It stated [3] : [4] Moreover, even if it had been established that the applicant could not have acted earlier, the appeal presents no reasonable chance of success.

Indeed, Justice Edwards found that the applicant committed a civil fraud with respect to the respondent while acting at the same time as her financial advisor. The judge found abundant evidence to justify this conclusion. The applicant fails to convince the Court that the judge committed a palpable and overriding error of fact or of mixed fact or law in so finding or that he would have otherwise erred in law. As a result, the Court is of the view that the proposed appeal has no reasonable chance of success and is purely dilatory. [ 21 ] Also, and contrary to Ms.

Iacono's allegations, the Committee is far from limiting its analysis to Justice Edwards' decision. In fact, it does not base its reasons in any way on the conclusions of his judgment, but rather on the proof adduced at the hearing. In this regard, it is eloquent to note that for all practical purposes, the proof is not disputed. As a result, the Committee states: [15] The Respondent does not seem to understand the conflict of interest and continues to deny that conducting a personal transaction with someone who is also her client creates a conflict.

She submits that she was not in a conflict of interest and relies on the internal policy of IG as quoted in their letter of termination sent to her and the limited examples there. She continues to blame others for the consequences of her actions. [16] The law is clear – a representative cannot place themselves in a situation where their personal interest would skew their judgment and undermine their independence. This rule exists to both protect the client and the public interest. An existing friendship between the

client and the representative can add to the risk of a conflict of interest arising and such a problematic situation can place the client in an even more vulnerable position. [17] It is clear from the evidence, and is not denied by either party, that a professional relationship existed between the Respondent and Ms. B.... During that professional relationship, Ms. B... told the Respondent that she was interested in selling her house and asked her for advice. [ 22 ] In light of the foregoing and in the face of such abundant and undisputed evidence of fact, the Tribunal finds that Ms.

Iacono's appeal has no reasonable chance of success and is doomed to fail. There is no need for it to continue further when the Committee's decision was fully reasoned and no error of law or of mixed fact or law is even alleged. FOR THESE REASONS, THE COURT : GRANTS the application of Me Gilles Ouimet, in his capacity as syndic of the Chambre de la sécurité financière; DISMISSES the appeal from Ms. Joanne Iaconno; THE WHOLE with legal costs. __________________________________ STÉPHANE DAVIGNON, J.C.Q. Ms. Joanne Iacono Self-represented Appellant Me Claude G. Leduc ML AVOCATS, s.e.n.c.r.l.

Attorneys for the Respondant Me Amélie Lemay Chambre de la sécurité financière Attorneys for the Third party Hearing date : November 18, 2022.