2021 QCCQ 4681, 2021 QCCQ 4681

OT Mining Corporation Inc. c. Autorité des marchés financiers 2021 QCCQ 4681 COURT OF QUÉBEC Administrative and Appellate Division CANADA PROVINCE OF QUÉBEC DISTRICT OF MONTREAL TOWN OF MONTREAL Civil Division No: 500-80-039754-198 DATE: May 17, 2021 ______________________________________________________________________ PRESIDED BY THE HONOURABLE DAVID L. CAMERON, J.C.Q. ______________________________________________________________________ O.T. MINING CORPORATION INC. and ROSEMARY CHRISTENSEN Appellants v.

AUTORITÉ DES MARCHÉS FINANCIERS Respondant ______________________________________________________________________ CORRECTED* JUDGMENT ______________________________________________________________________ Introduction [ 1 ] This is an appeal from a decision of the Tribunal administratif des marchés financiers (TAMF) given on September 12, 2019, (the "Decision") [1] .

The application [ 2 ] The matter was brought before the TAMF by way of an Application Instituting Proceedings introduced by l'Autorité des marchés financiers (AMF) on July 13, 2017 (The "Application") against O.T Mining Corporation inc. ("OTMN") and Rosemary Christenson. [ 3 ] The AMF alleged that OTMN and Ms Christensen contravened or aided in the contravention of provisions of the Securities Act,

chapter V-1.1 . The grounds for the application were particularised under five paragraphs, as follows:

a) À OTMN, d’avoir omis de déposer depuis le 1 er octobre 2013, ses états financiers vérifiés tant annuels que trimestriels ainsi que sa notice annuelle [2] , à compter de la période se terminant le 30 septembre 2012; et à Rosemary Christensen, d’avoir aidé OTMN à commettre ces manquements;

b) À OTMN et à Rosemary Christensen, d’avoir procédé vers le 18 février 2014, à des placements auprès d’investisseurs qualifiés, sans être inscrites et sans qu’OTMN ne dépose de déclaration de placement avec dispense de prospectus [3] ;

c) À OTMN et à Rosemary Christensen, d’avoir procédé à des placements auprès d’investisseurs non-qualifiés sans être inscrites et sans prospectus, et ce, entre octobre 2014 et septembre 2015 [4] ;

d) À OTMN d’avoir contrevenu à plusieurs reprises à la décision de l’Autorité qui lui interdisait d’effectuer des opérations sur valeurs [5] ; et à Rosemary Christensen d’avoir aidé OTMN à contrevenir à la décision de l’Autorité;

e) À OTMN d’avoir émis un communiqué de presse, le 28 octobre 2015, comportant des informations non vérifiées par une personne qualifiée, sur le potentiel d’exploitation des sites miniers et sur le type de minerai qui s’y trouve et à Rosemary Christensen d’avoir aidé à l’émission de cette communication aux actionnaires [6] . _________________________ [2] Art. 4.2 (b), 4.4 (

b) et 6.2 , Règlement 51-102 sur les obligations d’information continue , RLRQ, c. V-1.1, r. 24 (« Règlement 51- 102 »), art. 5 (

b) et 5 (c), Règlement 51-105 sur les émetteurs cotés sur les marchés de gré à gré américains , RLRQ, c. V-1.1, r. 24.1 (« Règlement 51-105 »), art. 73, LVM. [3] Art. 6.1 , Règlement 45-106 sur les dispenses de prospectus et d’inscription , RLRQ, c. V-1.1, r. 21 (« Règlement 45-106 »), art. 2.1 et 7.1 , Règlement 31-103 sur les obligations et dispenses d’inscription et les obligations continues des personnes inscrites , RLRQ, c. V-1.1, r. 10 (« Règlement 31-103 »).

[4] Art. 5, 11, 12, 148 et 149 LVM. [5] Art.195 (1) LVM. [6] Art. 2.1 et 2.3 , Règlement 43-101 sur l’information concernant les projets miniers, RLRQ, c. V-1.1, r. 15 (« Règlement 43-101 »). [ 4 ] The contraventions relate to:

a) disclosure obligations of a reporting issuer

b) trading in securities with qualified investors without following registration and prospectus requirements

c) Trading in securities with non-qualified investors without following registration and prospectus exemption requirements

d) trading in contravention of an order to cease trading

e) disclosure of scientific or technical information concerning a mineral project without the information having been based upon information prepared by or under the supervision of a qualified person or approved by a "qualified person”. [ 5 ] The AMF sought the imposition of orders and penalties, more particularly, 1. with respect to OTMN -an order prohibiting any activity in respect of a transaction in securities -administrative penalties 2. with respect to Rosemary Christensen -an order prohibiting any activity in respect of a transaction in securities -an order prohibiting her from acting as a director or officer of an issuer, dealer, adviser or investment fund manager for a period of 5 years. -administrative penalties, The Decision [ 6 ] In the conclusions of the Decision, the TAMF imposes the prohibition orders sought as well as administrative penalties for the various contraventions totalling $ 159,000 in the case of OTMN and $ 99,000 in the case of Rosemary Christenson. [ 7 ] In the case of Rosemary Christensen, the administrative penalty sought by the AMF concerning the disclosure of scientific or technical information (allegation

e) was not imposed by the TAMF in consideration of the insufficiency of the proof of the allegation that she had aided OTMN to make the disclosure. Standards of review [ 8 ] The procedural nature of the present case is an appeal. The standard of review is that of the Housen [2] judgment as confirmed in 2019 by the Supreme Court of Canada in the Vavilov [3] matter. [ 9 ] Some of the questions raised in the Appellants’ grounds of appeal are questions of law, to be reviewed under the standard of correctness. This is especially true with respect to the pretention that the AMF does not have jurisdiction.

Some are mixed questions of law and fact, reviewable under the standard of the palpable and overriding error, unless the legal component of the question presents, as explained in Housen , an extricable error in principle with respect to the characterization of the standard or its application, in which case the error may amount to an error or law, subject to a standard of correctness. The third ground, for example falls into the category of mixed questions of law and fact. [ 10 ] The issues going to the

interpretation of the regulations raised in the appeal present a challenge for the judge seeking to apply this standard of review method, in connection with the concept of “significant attachment”.

We will see this below, under the fourth and sixth grounds of appeal. [ 11 ] The review on sanctions is governed essentially by the same Housen appeal criteria to the extent that their imposition depends upon questions of fact, questions of law and mixed questions of law and fact. [ 12 ] It is however important to state that on matters of sanctions and penalties, the administrative tribunal is engaged in a discretionary exercise and the appellate court will intervene only in cases where the sanctions imposed are unreasonable.

The practice of the Court of Quebec is informed by the jurisprudence in deontological law, which follows principles derived in part from those pertaining to penal sanctions [4] . The status of the appellant OTMN

[ 13 ] The appeal brought by Rosemary Christenson expressed as "Petition to the Court of Quebec, Administrative and Appeal Division to Review and Rescind Decision no 2017-018-001 made by the Tribunal des Marchés financiers on September 12, 2019 as it condemn the O.T. Mining Corporation and Rosemary Christensen to fines and penalties." (“The Petition”). The Decision is voiced as being "at the request of the O.T. Mining Corporation and Rosemary Christensen, parties directly concerned by the Decision".

It is signed by her both personally and as President of OTMN, but the Court could not consider it as a valid proceeding in respect of OTMN, as it was not signed on behalf of the latter by a lawyer acting as attorney of record.

At a case management conference the problem was raised by my colleague Mme Justice Lavigne j.c.q. who noted the filing, on time, of the written submissions of the Appellants, gave time to OTMN to constitute an attorney and decided that, upon the attorney being of record, the appeal documents would be considered that of the corporation as well. [ 14 ] The time limit was extended and re-extended, an attorney appeared and then was allowed to cease representing and, when delays related to the Covid-19 crisis where suspended and then reactivated, a new attorney did appear in the file.

At the hearing the new attorney of record sought leave, on behalf of OTMN, de bene esse , to file its notice of appeal and written argument outside the deadlines, maintaining however its position that the appearance of an attorney for OTMN and the implicit adoption of the arguments on appeal were sufficient to meet the requirements of the case-management order given by my colleague.

The Court decided on that motion that the presence in the file of the attorney was sufficient and the hearing resumed with oral submissions from both Appellants on the understanding that the two Appellants have adopted the same grounds and arguments. [ 15 ] The Court will refer to the two Appellants severally by the abbreviations “Christensen” for Rosemary Christensen and “OTMN” for OT Mining Corporation inc. and, when referring to them collectively, as the “Appellants”. The Court’s analysis of the grounds of appeal [ 16 ] The "Petition" raises essentially six grounds.

The Court will deal with them in the order raised in the initial notice of appeal, styled “Appellants’ Petition…” and using the headings set out in that document. The Court has indicated its own numbering, as the numbering in the Petition is not always consistent. First ground “I Jurisprudence” [ 17 ] In this

section the Appellants argue that much of the jurisprudence raised at the hearing in first instance by the AMF, some of which was referred to in the Decision consisted in cases unrelated to the specific factual issues of the case.

For example, they mention that "The jurisprudence offered relates to tales of obvious fraud, scams, and hoaxes perpetrated by unscrupulous people upon unsuspecting investors" [5] They point out, for this and much of the rest of the jurisprudence reviewed, factual and legal distinctions that distinguish the body of jurisprudence from the facts in issue here. [ 18 ] The Court considers this exposé, with respect, to be based on the fallacy that the Decision proceeds from jurisprudence and must be justified by it when, in fact, it is an application of norms of conduct provided by legislation, namely the Securities Act and certain regulations applying to an issuer such as OTMN.

The jurisprudence provided to the TAMF and that referred to in the Decision is part of a large body of jurisprudence from Quebec and elsewhere applying both basic and specific norms to factual circumstances. It is possible to see, in this jurisprudence, examples of applications of rules and statements concerning the general and specific purposes in the legislation. [ 19 ] The decision in Autorité des marchés financiers c. Demers [6] comes to mind. The Appelant refers as well to Autorité des marchés financiers c.

Valeurs mobilières Hampton . [7] This case is cited in the decision in regards to mitigating factors in the establishment of a sanction.

The point that the Appelants make, that OTMN is not a brokerage house based in Quebec is not particularly relevant. [ 20 ] As well, the case of Cartaway Resources Corp . [8] is cited in the decision at paragraph 189 because of general principles it sets out concerning sanctions, relating to general deterrence and specific deterrence. [ 21 ] But here, the TAMF had to decide whether, on the facts before it, failures to comply with applicable norms took place and, if so, to exercise its powers to impose orders and penalties with a view to the protection of the public and to the deterrence, both of the Appellants and of other members of the industry, from failing to observe the duties incumbent on them. [ 22 ] None of the points made by the Appellants in this

chapter of the petition and in in the other written and oral material submitted shows any error on the part of the TAMF. Second Ground “III INAPPROPRIAYE PROCEDURE from the TMF” 1. Financial information [ 23 ] In this

section the Appellants question the findings of the TAMF in respect of failure on the part of the reporting issuer to comply with its obligations of disclosure. The argument is that OTMN is in good standing in another jurisdiction in respect of the regulation of the O.T.C. Markets Pink sheets. The Appellants pose the question, rhetorically, "Is the financial information provided by the company accurate or a fair reflection of its activities". [ 24 ] With respect, the qualitative evaluation of OTMN’s disclosure in a different jurisdiction was not the issue joined in this case.

The question at hand was the failure of the issuer to comply with key features of the regulatory framework of the AMF. The failure to make the disclosures required by that framework in Quebec is not determined by evaluating the sufficiency of disclosures made elsewhere in a different regulatory environment. [ 25 ] It was, however, relevant to the determination of the appropriate sanction to impose for noncompliance with the Quebec rules to consider the degree of risk caused to investors and the relative sophistication or vulnerability of those who had dealings with OTMN in the relevant period.

The TMF does take into account as an attenuating factor that information was available on the web site OTC Markets in the USA. The Decision deals in depth with this under the heading “ Les facteurs atténuants ”: [195] Quant à OTMN, elle dépose périodiquement, sur le site OTC Markets, aux États-Unis, la documentation d’information continue.

Bien que beaucoup moins complète que les informations qui doivent être publiées par un émetteur assujetti au Québec, cette documentation comprend l’information financière et d’autres informations que les investisseurs peuvent consulter en tout temps avant d’investir. [196] Ainsi, malgré qu’OTMN a manqué à ses obligations d’information continue au Québec, il n’en demeure pas moins qu’il existe de l’information à jour pour les investisseurs sur le site OTC Markets aux États-Unis, eu égard à cet émetteur ce qui sera un facteur pris en considération dans l’évaluation de la sanction. [197] Lors de son témoignage Rosemary Christensen fait état de sa volonté qu’OTMN devienne un émetteur assujetti auprès de la Security and Exchange Commission (« SEC ») et a même mandaté des avocats américains de produire une inscription à cet effet. [198] Malheureusement, cette initiative qui aurait permis à OTMN d’être dispensée de déposer la documentation d’information continue la plus courante auprès de l’Autorité a été freinée par des membres du conseil d’administration d’OTMN qui, selon son témoignage non contredit, l’auraient empêché d’accéder aux locaux d’OTMN et à l’information pertinente pendant un certain temps. [199] La preuve démontre qu’il n’y a eu aucune fraude auprès des investisseurs, Rosemary Christensen était à la recherche de financement pour permettre à OTMN de continuer ses opérations, et n’a utilisé aucun stratagème ou subterfuge malhonnête pour les inciter à investir. [ 26 ] On the issue of non-compliance, as opposed to sanctions, it was not a question of considering the quality of the information, as that question was not in issue.

It was a case about the compliance or lack thereof with a continuous disclosure régime under Quebec law, within the institutional framework of the AMF. The passages cited show however that the TAMF did not fail to give due consideration to the foreign regulatory context and the impact of compliance with it in the appreciation of the attenuating factors concerning the quantification of the sanction. 2.

Technical Disclosure [ 27 ] Similarly, on the issue of the geological data, the point of the Decision was that the release of information to the public complained of in the allegations was a contravention of the rules because the information was not approved by a "Qualified Person" as defined in the regulation. The qualified person in fact had refused to endorse the news release and provided to management the reasons why he would not approve the information.

The Decision was not an assessment of the accuracy of the information per se , but rather an analysis of the requirement that the information be approved of by the qualified person as required by the regulations. [ 28 ] The points raised in the appeal under this

section concerning the financial and technical disclosure do not show any error on the part of the TAMF. [ 29 ] The exposé made by the Appellants concerning the contentious situation that was occurring at OTMN, including a legal battle, does not have a direct bearing on the very specific issue of noncompliance as proved in the evidence. At the hearing Christensen argued that The AMF was aware of the conduct her opponents who were using unlawful means, attempting to gain control of OTMN and usurp her authority as president.

She asserted that the AMF, refused to take steps to investigate their conduct and assist her and OTMN in dealing with the situation while focusing on the information coming from these opponents. [ 30 ] She complains that the AMF should not have jurisdiction against her in the present matter while at the same time it was declining jurisdiction to deal with the case of the wrongdoing of these individuals, under the pretense that it is a matter for a court having civil jurisdiction. [ 31 ] Related to this argument is the idea that the hearing before the TAMF was unfair because Christensen did not have a right to fully cross examine witnesses from among these persons, because they were allowed to evade questions and because one of them, the key wrongdoer in her estimation, was not even called as a witness.

There is no demonstration that she was not permitted to cross examine, and the tendency of a witness to evade answers would go to the credibility of the witness, not to the fairness of the hearing itself. Third ground « IV ERRORS ON FACTS” [ 32 ] In this

section the Appellants make the point that OTMN “chose to comply with” the C.T.O. (cease trading order) “in so far as no advertising, promotion solicitation or sale of stock took place in Quebec.

[ 33 ] They argue that it was a misapplication of the law on the part of the TAMF to consider that investments made from other jurisdictions such as Belgium, the United States and Ontario are a violation of the C.T.O. [ 34 ] The finding of the TAMF concerning 8 trades in the period after the cease trading order was issued is conclusive: [137] La preuve et les témoignages démontrent, qu’entre octobre 2014 et septembre 2015, OTMN a effectué à partir du Québec, par l’entremise de Rosemary Christensen, 8 placements de valeurs mobilières auprès de 7 investisseurs [73], malgré l’interdiction d’opérations sur valeurs en vigueur depuis le 20 juin 2014. [138] Ces placements sont les suivants : Date Investisseurs et lieu Investissements Placements Octobre 2014 P.H.H., France 8 000 $ US 100 000 actions 100 000 bons de souscription Octobre 2014 N.H., France 8 000 $ US 100 000 actions 100 000 bons de souscription Octobre 2014 P.H., Belgique 8 000 $ US 100 000 actions 100 000 bons de souscription Octobre 2014 J.B., États-Unis 5 000 $ US 62 500 actions 62 500 bons de souscription Décembre 2014 S.C., Ontario 4 000 $ US 50 000 actions 50 000 bons de souscription Janvier 2015 H.R., Québec 1 000 $ US 12 500 actions 12 500 bons de souscription Septembre 2015 3101 Québec, Québec 33 000 $ CAD Prêt Septembre 2015 3101 Québec, Québec Aucun investissement 100 000 actions 100 000 bons de souscription [139] Comme le précise la décision Valiquette [74], l’interdiction d’opérations sur valeurs imposée constitue un élément essentiel distinct des manquements d’effectuer un placement sans prospectus ou d’agir à

titre de courtier en valeurs sans être inscrit.

En effet, une personne pourrait n’être condamnée que pour avoir contrevenu à cette interdiction alors qu’elle était inscrite auprès de l’Autorité et que l’émetteur détenait un visa de prospectus. [140] Après analyse, le Tribunal conclut qu’OTMN a contrevenu à plusieurs reprises à la décision d’interdiction d’opérations sur valeurs, rendue par l’Autorité le 20 juin 2014, lorsqu’elle a effectué, entre octobre 2014 et septembre 2015, 8 placements de valeurs mobilières auprès de 7 investisseurs, malgré cette décision et conclut que Rosemary Christensen a, par ses actes, aidé OTMN à contrevenir cette décision [75]. [73] P.P.H., N.H., P.H., J.P., S.C., H.R. et 3101 Québec [74] Autorité des marchés financiers c.

Valiquette , 2021 QCCQ 4885 , par. 167 à 169 [75] Art. 195 (1) LVM ____________________ [ 35 ] The Appellants admit that the operation of January 2015 for USD 1,000 took place from Christensen’s office in Westmount, but qualify this admission by contextual elements than can be interpreted as minimizing Christensen’s implication. [ 36 ] This and other trades were dealt with adequately in the evidence, written and testimonial, most notably the testimony of the Christensen [9] where she admits to a number of elements of activity in connection with the trades from her office in Westmount.

Much of what occurred was solicitation. Obviously, the conclusion of the contracts was a bilateral juridical act and the part of it that concerned the company took place through Christensen, at her office as did her communications in the nature of solicitation. [ 37 ] The Appellants have failed to show any error in the factual or legal analysis on the part of the TAMF on this issue. Fourth ground “V JURISDICTION OF THE AMF” [ 38 ] In this

section the Appellants take the position that the OTC markets are in no way subject to the AMF and that is not reasonable that investors under the rules and regulations of the OTC Markets be submitted to AMF rulings.

[ 39 ] They concede however the occurrence of one trade of USD 1,000 (referred to above in the chart) suggesting that it does not justify the fines imposed in the present case: There was confusion where the money had come from but perhaps this error does not justify $159,000 in fines for the company and $99,000 for Rosemary Christensen. These penalties are abusive and outrageous for someone trying to save the shareholders’ assets and at the same time accumulating more personnel debt for the company. [ 40 ] The argument is, with respect, vacuous.

The Decision deals with the question of jurisdiction implicitly mentioning the connecting factors that apply to bring OTMN within the purview of the legislation. The exposé set out in the analysis

section of the Decision beginning at paragraph [21] explains very systematically both the letter and the purpose of the regulation. The Quebec legislator sought through the enactment of regulation 51-105 to extend the benefits of an enhanced disclosure to the investing public interested by this type of OTC investment, otherwise subject to much less stringent requirements in the other jurisdiction(s), which apply to the issuer as an “OTC issuer”. The connecting factors are those which determine the applicability of the Quebec requirements making OTCM such an “OTC issuer”. They are, simply put, the criteria set out in the regulation at

article 3: Reporting issuer designation and determination 3. An OTC issuer is a reporting issuer under securities legislation if one or more of the following apply: (

a) on or after July 31, 2012, its business has been directed or administered in or from the local jurisdiction, (

b) on or after July 31, 2012, promotional activities have been carried on in or from the local jurisdiction, (

c) the ticker-symbol date is on or after July 31, 2012, and, on or before the ticker-symbol date, the issuer distributed a security to a person resident in the local jurisdiction and that security is of the class of securities that became the issuer’s OTC– quoted securities. _______________ M.O. 2012-11 , s. 3 [ 41 ] The TAMF, in applying these “facteurs de rattachement significatifs” analysed the proof presented before it and came to the conclusion that the regulation applies to it as all three criteria applied.

There is nothing in the grounds of appeal and any of the written or oral grounds raised that would show that the TAMF made any error in the application of these legal criteria. [ 42 ] The statement made by the Appellants that the legal norms established by this regulatory scheme especially for OTC issuers should not apply to the latter, because of vague notions of unreasonableness is simply not a proper argument on appeal. Fifth ground “VI

INTERPRETATION OF 51-105” [ 43 ] This

section seeks to make the argument that, because the legislator was motivated by an intention to put an end to dishonesty or intent to defraud, and since the case is not based upon evidence of dishonesty or intent to defraud, the regulations, including 51-105, should be interpreted as not applying to OTMN.

With respect, these types of regulations seek to protect the public even in the absence of the intention to defraud, in cases of neglect or even of simple oversight. [10] [ 44 ] Similarly, the Appellants argue that the TAMF failed to take into account the amount and quality of the information otherwise available to investors through OTMN over the years which, according to the argument, was greater than what any prospectus complying with the laws and regulations administered by the AMF would have afforded the public. [ 45 ] At risk of being redundant, the Court wishes to point out that the issue in the case before the TAMF was compliance with requirements of the law and regulations, not the extent to which such compliance would be redundant with benefits otherwise available to the investing public.

The issue in the present case of non-compliance with the law is not a question of good faith or intention to harm, dishonesty or enrichment at the expense of shareholders. Issues related to intention were part of the consideration of the appropriate remedies, however, and the TAMF considered the aggravating and attenuating circumstances thoroughly. This part of the Appellants’ argument cannot be considered a proper ground of appeal.

Sixth Ground “DECISIVE LEGAL ISSUE” [ 46 ] In this section, the Appellants return to the issue of “significant attachment to Québec”, arguing that the TAMF has erred in deciding that OTMN’s “major decisions are made in Quebec and therefore justifies further the weight of a significant attachments to Quebec”. [ 47 ] The Appellants see the residence of Christensen in Quebec as a factor used by AMF to discriminate against the interests of the shareholders of an American company: if she had resided in the USA, a mere 50 miles away, American law would not discriminate against her nationality as a Canadian.

We petition the Court to consider that Rosemary Christensen’s living in Quebec be not considered significant in the application of this article. To do otherwise goes against the intent of the legislator which is to protect the interests of all investors whether from Quebec or the USA. To do otherwise would introduce issues of sovereignty which are restrictive and penalize the honest conduct of business. I urge the Tribunal to consider her living in Montreal as not ‘significant’ I the

interpretation of the

article contained in 51-105.

[ 48 ] The balance of the argument seeks to diminish the importance of the connection with Montreal, illustrating the company’s physical mining assets in the USA, its offices established in the USA, the fact that board meetings are the place where “command” decisions are made and that these “are held over the phone and could be officially held anywhere on the planet”.

The purely intellectual work carried out by Rosemary Christensen can be done anywhere in the world with a phone and computer, and a WiFi source, the Appellants argue, and this intellectual work is not “significant”. [ 49 ] The fallacy in this argument is that the application of the regulations to an OTC issuer such as OTMN is not a discretionary decision based upon weighing the relative connecting factors as between the various jurisdictions to which there is a greater or lesser connection. The regulation sets a minimum requirement for its applicability voiced in the three sub-paragraphs mentioned above.

It is not a question of the criteria being evaluated qualitatively or by comparison with the connections existing elsewhere: it is a more mechanical analysis of the facts to determine whether at least one of these criteria apply. The factual analysis of the TAMF and the application of the law to those facts is not flawed in any way, and, according to that analysis and application, the situation of the Appellants lands them in the Quebec territorial jurisdiction. [ 50 ] The Appellants seek in their last

section “VII CONCLUSION” to characterize the decision of the TAMF as arbitrary and abusive. More particularly on the issue of the penalties: The penalties are out of all proportion and addressing such penalties to Rosemary Christensen who has struggled body and soul to keep; this company going these last few years despite all adversity is unconscionable. [ 51 ] The principles applicable in the appeal context in relation to sanctions call for a great deal of deference on the part of the appellate court.

The Court understands the Appellants’ argument to be chiefly based on the severity of the sanctions both in the effect, on their future prospects, of the orders and in the amounts imposed as financial penalties in relation to the nature of the infractions. They point out that there was no fraud, no profit made at the expense of vulnerable investors. [ 52 ] They also make the argument that the magnitude of the monetary sanctions is grossly exaggerated, citing as a reference the Multi-Corp decision [11] , a matter before the Alberta Securities Commission.

That case was a decision on sanction pursuant to a joint recommendation of the parties which included an administrative penalty of $ 20,000 in connection with failure to comply with a cease- trade order and to file a report of exempt distribution” As in the present case, the regulator had issued the cease-trade order because of Multi-Corp’s failure to comply with continuous disclosure reporting requirements.

The transaction complained consisted of two asset purchase agreements by which Multi-Corp acquired certain natural gas working interests in New Mexico and drilling equipment in return for the issuance by it to the vendor of the assets of 12 million shares valued at $1.60.

Christensen suggests that, since the transaction that she admits to was a contravention amounted to USD 1,000, proportionately, the appropriate sanction for her would be $10. [ 53 ] OTMN makes the general statement that the quantum of the penalties is exaggerated in a more holistic way, as a sort of a self- evident fact. [ 54 ] The process of arriving at an appropriate sanction is the application by the TAMF of a method. In its perusal of the Decision, especially the parts concerning sanctions, the Court finds that the decision maker acted with a proper method in that: 1.

It correctly identified the two principal objectives of the law, that of protection of the public and the promotion of fair and efficient securities markets. [12] 2. It is based on a correct appreciation of the purpose of sanctions in this context: that of deterrence (dissuasion) both of the Appellants and others who might be tempted to follow their example, as opposed to punishment or compensation. [13] 3.

It weighs very carefully the applicable criteria that the Court would summarise as follows: a. the seriousness of the non-compliance; b. the past practice and experience of the contravener; c. the vulnerability or the sophistication of the investors solicited, as the case may be; d. losses suffered by the investors and profits made by the contravener, if any; e. the status and activities and the extent of the activities in the market of the contravener; f. the intentional nature of the conduct; g. risk to the investing public and to the financial markets of allowing the contravener to continue its activities; h. harm actually caused to the integrity of the market by the conduct; i.

The potential beneficial effect of the sanction, in view of the gravity of the acts, to deter the contravener and those who might be tempted to imitate the acts; j. the degree of remorse of the contravener; k. attenuating factors. 4.

The TAMF makes findings that are to the Appellants advantage on a number of issues, particularly in respect of the issues relating to the investors, the fact that information was, to a certain extent, available to them and in respect of numerous attenuating factors, such as the absence of any fraud, and the intention of the company, thwarted by internal disruption by certain insiders, to become a reporting issuer with the Security and Exchange Commission (SEC). These findings were effective in substantially reducing the monetary

sanctions as compared with those suggested by the AMF. On each of the elements of the analysis, under the appropriate subtitles, from paragraphs [150] to [199] the analysis is both clear and fair to the Appellants. 5.

The TAMF considers precedents, without putting too much reliance on them, but only as an indication of what might be appropriate and in illustrating the similarities and distinctions that apply. [ 55 ] From the point of view of methodology and structure, the analysis given for the Decision on sanctions is more than adequate to justify the result and, in terms of the attention to detail in application of the facts to the legal principles, it is impressive.

There is certainly no palpable error. [ 56 ] With respect, the Appellants have misconstrued the role and responsibility of the AMF as a regulatory body and the TAMF as an administrative tribunal. The Appellants cannot use as a shield the idea that the informants whose complaints triggered the AMF’s investigation were shareholders who were wrongdoers attempting a takeover of control using unscrupulous means.

Nor can they point to the AMF’s refusal to provide them with information about the wrongdoers as a denial of the AMF’s jurisdiction to seek sanctions against OTMN and its president for failure to respect the cease-trade order and the applicable registration, reporting and disclosure requirements. [ 57 ] There is nothing in the appeal that shows any error on the part of the TAMF. In the appeal process, the Court of Quebec cannot engage in a re-hearing with a view to giving a second opinion.

It cannot intervene to overturn or change a decision of the TAMF unless the appellant shows that there is an error of law or an error of fact or mixed error of law and fact that is patent and overriding. The appeal does not establish any such errors. Upon a careful reading of the Decision the Court finds nothing to show that the decision is not what would be expected from such a tribunal, a decision that is clear, thorough, jurisprudentially sound and meticulously accurate in its analysis of the law and the facts.

BY THESE REASONS, THE COURT: DISMISSES the appeal; WITH COSTS. __________________________________ David L. Cameron, J.C.Q. Me Daniel Brook Brook Legal Inc. Attorney for the Appellant O.T. MINING CORPORATION INC. ROSEMARY CHRISTENSEN Not represented Me Éric Blais Contentieux de l’Autorité des marchés financiers Attorney for the Respondant Date of hearing: November 5, 2020