2020 NBCA 76, 2020 NBCA 76

Investment Industry Regulatory Organization of Canada APPELLANT ORGANISME CANADIEN DE RÉGLEMENTATION DU COMMERCE DES VALEURS MOBILIÈRES APPELANT - and - - et - ROBERT CRANDALL RESPONDENT ROBERT CRANDALL INTIMÉ - and - - et - Financial and Consumer Services Commission (New Brunswick) INTERVENER COMMISSION DES SERVICES FINANCIERS ET DES SERVICES AUX CONSOMMATEURS (NOUVEAU-BRUNSWICK) INTERVENANTE - and - - et - Mutual Funds Dealers Association of Canada INTERVENER ASSOCIATION CANADIENNE DES COURTIERS DE FONDS MUTUELS INTERVENANTE Investment Industry Regulatory Organization of Canada v.

Crandall, 2020 NBCA 76 Organisme canadien de réglementation du commerce des valeurs mobilières c. Crandall, 2020 NBCA 76 CORAM: The Honourable Chief Justice Richard The Honourable Justice Quigg The Honourable Justice LaVigne CORAM : l’honorable juge en chef Richard l’honorable juge Quigg l’honorable juge LaVigne Appeal from a decision of the Financial and Consumer Services Tribunal: June 7, 2019 Appel d’une décision du Tribunal des services financiers et des services aux consommateurs : le 7 juin 2019 COURT OF APPEAL OF COUR D’APPEL DU NEW BRUNSWICK NOUVEAU-BRUNSWICK 73-19-CA

History of Case: 2016 IIROC 18 (Merits) 2016 IIROC 37 (Sanctions) Historique de la cause : 2016 OCRCVM 18 (décision sur le fond) 2016 OCRCVM 37 (décision sur les sanctions) Decision under appeal: 2019 NBFCST 7 Décision frappée d’appel : 2019 NBFCST 7 Preliminary or incidental proceedings: 2015 IIROC 30 2015 IIROC 35 2017 NBFCST 4 2018 NBFCST 1 2018 NBFCST 3 2018 NBFCST 4 [2019] N.B.J. No. 309 [2019] N.B.J. No. 363 [2019] N.B.J.

No. 364 Procédures préliminaires ou accessoires : 2015 OCRCVM 30 2015 OCRCVM 35 2017 NBFCST 4 2018 NBFCST 1 2018 NBFCST 3 2018 NBFCST 4 [2019] A.N.-B. n o 309 [2019] A.N.-B. n o 363 [2019] A.N.-B. n o 364 Appeal heard: March 10, 2020 Appel entendu : le 10 mars 2020 Judgment rendered: December 3, 2020 Jugement rendu : le 3 décembre 2020 Reasons for judgment by: The Honourable Chief Justice Richard Motifs de jugement : l’honorable juge en chef Richard Concurred in by: The Honourable Justice Quigg The Honourable Justice LaVigne Souscrivent aux motifs : l’honorable juge Quigg l’honorable juge LaVigne

Counsel at hearing: For the appellant: Melissa MacKewn and Alexandra Grishanova Robert Crandall, on his own behalf For the Financial and Consumer Services Commission (New Brunswick): Mark D. McElman and Rebecca Marie Atkinson For the Mutual Funds Dealers Association of Canada (MFDA): Alan Melamud Avocats à l’audience : Pour l’appelant : Melissa MacKewn et Alexandra Grishanova Robert Crandall, en son propre nom Pour la Commission des services financiers et des services aux consommateurs (Nouveau-Brunswick) : Mark D.

McElman et Rebecca Marie Atkinson Pour l’Association canadienne des courtiers de fonds mutuels (ACCFM) : Alan Melamud THE COURT The appeal is allowed, the decision of the Financial and Consumer Services Tribunal is set aside and the decision of the IIROC panel is restored. Costs were not sought, so none are awarded. LA COUR L’appel est accueilli, la décision du Tribunal des services financiers et des services aux consommateurs est annulée et la décision de la formation d’instruction de l’OCRCVM est rétablie . Aucuns dépens n’ont été sollicités; par conséquent, aucuns ne sont adjugés.

The judgment of the Court was delivered by RICHARD, C.J.N.B. I. Introduction [ 1 ] Self-regulating bodies work to protect the public from inappropriate actions by regulated professionals and to foster trust in their organizations. These objectives are not attained in a regulatory vacuum. Public protection and preserving trustworthiness must be achieved in a manner consistent with the rule of law.

Self-regulating bodies are not only governed by their enabling legislative and regulatory schemes; they also must abide by the fundamental principles of our legal system, one of which requires administrative decision-makers to comply with the requirements of procedural fairness when making “decisions affecting the rights, privileges or interests of an individual”: May v. Ferndale Institution , 2005 SCC 82 , [2005] 3 S.C.R. 809 , at para. 94 . [ 2 ] Procedural fairness is a contextually based broad concept that imposes certain obligations on administrative decision-makers.

Among these obligations is a requirement for an administrative body exercising disciplinary powers over one of its members to inform the individual concerned of the case to be met and of the evidence against him or her and to give all parties an opportunity to be heard (the audi alteram partem rule); another is captured by the “ nemo judex in causa sua rule, which recognizes the right of every party to be treated impartially and without bias”: Canadian Union of Public Employees, Local 821 v. Vitalité Health Network (Zone 1B) , 2015 NBCA 3 , [2015] N.B.J.

No. 14 (QL) , at para. 39 , per Drapeau C.J.N.B. (as he then was), applied in Landry v. Attorney General of New Brunswick , 2020 NBCA 38 , [2020] N.B.J. No. 113 (QL) , at para. 38 , per LaVigne J.A.

[ 3 ] This case concerns the extent of those procedural fairness obligations in the context of a self-regulatory organization recognized by the New Brunswick Financial and Consumer Services Commission pursuant to s. 35(1)(

b) of the Securities Act , S.N.B. 2004 c. S-5.5 . The regulator in question is the Investment Industry Regulatory Organization of Canada (“IIROC”). [ 4 ] IIROC is a private membership organization whose disciplinary jurisdiction over its members flows from the contractual commitment made by firms and individuals upon applying for membership or registration. IIROC’s mandate is to protect investors and the integrity of the capital markets through the regulation of investment dealers and their trading and advising activity throughout Canada.

To this end, IIROC has adopted standards and rules regarding the conduct of investment dealer firms and their registered employees. Among these rules is one recognizing that, when undertaking disciplinary proceedings, IIROC has the “obligation to disclose all materials as required by common-law.” [ 5 ] More precisely, this case is about the loss or destruction and consequential non-disclosure of documents in the possession of a third party despite IIROC’s numerous attempts to obtain these at the request, and for the benefit, of a member against whom disciplinary proceedings were commenced.

That member is Robert Crandall. II. Background [ 6 ] Mr. Crandall was active in the investment field since registering as an investment advisor in 1983. He was registered first with the Investment Dealers Association of Canada, and then with IIROC. From June 2006 to October 2011, he was employed as an investment advisor with Wellington West Capital Inc. When National Bank Financial Inc. (“NBF”) acquired Wellington West in 2011, Mr. Crandall remained as an investment advisor, a position he held until resigning in July 2012.

He then joined the firm of Jones Gable, with which he remained until 2015. [ 7 ] In 2013, IIROC received a complaint regarding transactions Mr. Crandall had made for a client for whom he had been the sole financial advisor from 1992 to 2012. The client was an elderly woman interchangeably referred to in the materials as either D.R. or the complainant. The complaint specified that, over a period exceeding five years, Mr.

Crandall had engaged in a pattern of excessive trading in her accounts, often without approval, thereby stripping out all the profits realized in these accounts. [ 8 ] The complaint caused IIROC’s staff to conduct an investigation. This eventually led to the institution of disciplinary proceedings against Mr. Crandall. A Notice of Hearing was issued, alleging the following three contraventions of IIROC’s Dealer Member Rules: 1) Between July 2006 and June 2012, [Mr.

Crandall] engaged in excessive trading in the accounts of D.R. which was not within the bounds of good business practices and was unsuitable for D.R., contrary to IIROC Dealer Member Rules 1300.1(

o) and (q) (IDA Regulations 1300.1 (

o) and (

q) prior to June 1, 2008); 2) Between July 2006 and June 2012, [Mr. Crandall] engaged in unauthorized discretionary trading in the accounts of D.R., without the accounts first having been approved as discretionary accounts, contrary to Dealer Member Rule 1300.4 (IDA by-law 1300.4 prior to June 1, 2008); and 3) Between July 2007 and October 2010, [Mr. Crandall] made unsuitable recommendations for the accounts of D.R., contrary to Dealer Member Rule 1300.1(q) (IDA by-law 1300.1(

q) prior to June 1, 2008). [ 9 ] Throughout the investigation and enforcement proceedings, Mr. Crandall steadfastly maintained that there existed various work records, such as notebooks, trade tickets, telephone notepads, emails, correspondence and mail records. These documents were not in his possession, given that IIROC Rules prevented him from taking any of the documents with him when he left NBF in 2012. IIROC staff made numerous requests of NBF to obtain such documents beginning shortly after their first interview with Mr. Crandall, in January 2014.

At least 19 requests were made to NBF for the production of documents, with at least four of these specifically seeking Mr. Crandall’s notebooks. When informed that such notebooks could not be located, IIROC staff requested of NBF summaries of the steps taken to locate them.

[ 10 ] A panel was assembled to consider the complaint. On December 10, 2015, Mr. Crandall asked the IIROC panel to order the production and disclosure of approximately 40 categories of documents. IIROC staff replied that many of the requested documents had already been disclosed to Mr. Crandall and the panel found that many of the documents were irrelevant to the proceedings. However, the panel did order IIROC staff to again ask NBF for the documents Mr. Crandall was seeking. That same day, IIROC staff emailed NBF, requesting Mr. Crandall’s notebooks, writing pads and hard copies of trade tickets.

Staff informed NBF that Mr. Crandall had stated he left all the documents with NBF when he resigned and that the notes had been packed and sent for storage at an off-site facility known as Iron Mountain. A week later, staff followed up by phone and NBF initiated another search. [ 11 ] On December 23, 2015, NBF advised IIROC staff it had located seven items related to D.R.’s accounts. These documents were received by IIROC on January 5, 2016. They were disclosed to Mr . Crandall two days later. [ 12 ] On December 30, 2015, NBF advised IIROC staff it had located five additional boxes of materials related to Mr.

Crandall. The materials were condensed into four boxes, which were received by IIROC staff on January 8, 2016. The relevant documents from these boxes were disclosed to Mr. Crandall a week later. While these documents contained hard copies of trade tickets, no notebooks or notepads had been found. NBF also stated the following: “There were no documents, lists, or any other indications pertaining to inventory, that indicate that any documents associated with Robert Crandall have been archived at Iron Mountain.” [ 13 ] In February 2016, a hearing was held on the merits of the allegations made against Mr. Crandall.

During the hearing, Mr. Crandall cross-examined IIROC’s witnesses, including D.R., and called a former co-worker to testify. However, he ultimately chose not to testify in his own defence, insisting he was unable to do so without his notes. In the end, much of D.R.’s testimonial evidence was uncontested. [ 14 ] The hearing culminated in a decision dated May 26, 2016, reported at 2016 IIROC 18 , holding that all three counts set out in the Notice of Hearing had been proven. In sum, the panel concluded Mr.

Crandall had: (1) engaged in excessive trading; (2) engaged in unauthorized discretionary trading; and (3) made unsuitable recommendations for D.R.’s personal investment account. In reaching these conclusions, the panel noted that “a great deal of material was obtained and produced to [Mr. Crandall],” but acknowledged that his personal notes could not be located . [ 15 ] This led to a hearing on sanctions and culminated in a decision dated October 3, 2016, reported at 2016 IIROC 37 , imposing upon Mr.

Crandall: (1) a $150,000 fine; (2) a prohibition from re-registering with IIROC for a period of five years; (3) a requirement to successfully re-write the Conduct and Practices Handbook exam and to be under strict supervision for 18 months in the event of a return to the industry; and (4) an obligation to pay costs of $35,000. [ 16 ] Subsection 44(1) of the Securities Act authorizes Mr. Crandall to seek a review of the panel’s decisions by the Financial and Consumer Services Tribunal (“Tribunal”) established under the Financial and Consumer Services Commission Act , S.N.B. 2013, c. 30 .

By letter to the Tribunal, Mr. Crandall initiated such review. [ 17 ] In his letter seeking review, Mr. Crandall complains he was denied the right to a panel composed entirely of individuals whose mother tongue is English. He claims this was denied to him despite repeated requests, because, ultimately, all panel members came from Quebec. He continued by listing what he perceived as seven “injustices,” only the first of which has any relevance to this appeal. It reads as follows: 1. Human rights – I should be assumed innocent until proven guilty.

Despite repeated requests to [NBF] by myself and my former lawyer […], I was denied the privilege of having access to my documents, statements, personal notes, telephone records despite the fact that my former administrative assistant has re-confirmed that she was specifically asked to have everything boxed up and sent to storage with bar codes for each box to identify contents for access as needed. This information was critical in my defense and I was not allowed access to any of this to properly defend myself.

I AM CONFIDENT that, IF I had been given access to this information, it would be easy for the panel to determine that I was NOT guilty of the accusations. [ 18 ] On September 21, 2017, the Tribunal held a pre-hearing conference. Two significant events occurred at that conference. First, Mr. Crandall retracted five grounds of review (described in his letter seeking review as “injustices”). Second, the Tribunal raised its own preliminary motion with respect to the disclosure provided to Mr. Crandall.

On the same day, the Tribunal issued an Order, which included the following directive: “If not already provided, IIROC shall produce the totality of its disclosure from the IIROC proceedings in paper format to Robert Crandall on or before October 6, 2017. […]” [ 19 ] The Tribunal issued and then amended a Notice of Hearing of its own motion. The relevant sections of the

Amended Notice of Hearing of Motion are as follows: TAKE NOTICE that the Financial and Consumer Services Tribunal will hold a hearing […] in relation to a motion raised by the Tribunal, namely whether [NBF] should produce the following documents to Robert Crandall:

a) personal and work notes and note pads of Robert Crandall from 2006 to July 1, 2012,

b) trade tickets pertaining to [D.R] or to [D.R] Holdings Inc. with notes inscribed thereon by Robert Crandall from 2006 to July 1, 2012,

c) telephone notepads showing all incoming and outgoing phone calls between Robert Crandall and to [D.R] […] from 2006 to July 1, 2012,

d) e-mails exchanged between Robert Crandall and to [D.R] […] from 2006 to July 1, 2012,

e) a copy of all recorded incoming and outgoing mail between Robert Crandall and to [D.R] […] from 2006 to July 1, 2012, and

f) all correspondence to [D.R] […] regarding quarterly reviews from 2006 to July 1, 2012. The Tribunal may also make such other or further Order as it may deem just or necessary. The hearing will be held pursuant to

section 44 of the Securities Act […] and paragraph 2(2) and

Part 6 of Local Rule 15-501 Proceedings before the Tribunal . [ 20 ] The Tribunal also issued a Summons to Witness to Charles Collins, a branch manager overseeing all NBF locations in New Brunswick. Mr. Collins was summoned to appear at the disclosure motion and to produce documents. Mr. Collins responded with an affidavit, stating that all the documents referred to by the Tribunal had “already been requested by IIROC” and NBF had “made all reasonable efforts to identify and produce relevant documentation.” Mr.

Collins did not believe that NBF was “in possession of documents requested pursuant to the Summons to Witness […] which have not already been provided to IIROC as part of their investigation of this matter.” [ 21 ] On December 15, 2017, the Tribunal held a hearing into its own motion on the question whether NBF should be ordered to produce additional documents to Mr. Crandall. Mr. Collins was the only witness called. He was questioned first by members of the Tribunal, then by Mr. Crandall and then, once again, by a member of the Tribunal. In keeping with his affidavit, Mr.

Collins did not produce any additional documents at the hearing of the disclosure motion. He testified that NBF had not found any additional documents. [ 22 ] On January 19, 2018, the Tribunal issued another order. On its own initiative, it severed Mr. Crandall’s ground of review dealing with disclosure and stated it would hear that issue before any “remaining grounds of review.” [ 23 ] In April 2018, NBF found an additional 49 boxes at the Iron Mountain storage facility, 11 of which related to Mr. Crandall and his clients. IIROC staff reviewed the contents of every box.

While they found notes taken on various pages, they did not find any notebooks. The relevant documents from these boxes were disclosed to Mr. Crandall in May 2018. All handwritten notes made by Mr. Crandall – in relation to all his clients and not just D.R. – were disclosed. [ 24 ] Off-site storage records revealed that four of NBF’s boxes had been destroyed.

While the records of the content of one of those boxes indicated it might have contained notebooks or phone message pads, the date range on that box covered only the period from January 1, 2006 to December 31, 2006. [ 25 ] When the Tribunal issued a Notice of Hearing, it recast the first of Mr. Crandall’s grounds of review in the following terms: Was there a breach of procedural fairness in the IIROC proceedings, including the investigation, which has impeded Mr. Crandall’s right

to reply to the allegations against him? [ 26 ] The hearing was held on September 10-11, 2018. At the outset, the Chair of the Tribunal explained as follows: “This hearing deals exclusively with the disclosure issue.” [ 27 ] The hearing began with Mr. Crandall calling two former co-workers as witnesses, after which he himself testified. IIROC called three witnesses, including Mr. Collins. [ 28 ] On June 7, 2019, the Tribunal released its decision, reported at 2019 NBFCST 7 , by which it “rescinded” IIROC’s decisions – on the merits and on the sanctions – and ordered a stay of proceedings.

The Tribunal held that the notebooks, trade tickets and telephone message books sought from NBF were relevant to the allegations against Mr. Crandall and to his defence. It found that the failure to provide these documents during the IIROC proceedings was a breach of IIROC’s duty of procedural fairness. [ 29 ] With leave, and in accordance with s. 48(1) of the Financial and Consumer Services Commission Act , IIROC appeals the Tribunal’s decision. The Financial and Consumer Services Commission of New Brunswick (“FCNB”) and the Mutual Fund Dealers Association of Canada (“MFDA”) were added as interveners.

In its Notice of Appeal, IIROC set out nine grounds of appeal, which it somewhat condensed in its written submission. In my view, at its core, this appeal raises the following three questions: 1) Was the process before the Tribunal procedurally fair to IIROC? 2) Was the Tribunal correct in holding that the duty of procedural fairness imposed upon IIROC an obligation to disclose materials not in its possession? 3) Does NBF’s failure to produce the requested documents constitute a breach of procedural fairness? [ 30 ] In my view, the answer to these questions is “no.” III. Analysis and Decision A.

Standard of review [ 31 ] The standard of review of administrative action depends on the nature of the matter being reviewed. “[W]hen it comes to procedural fairness, the reviewing court does not apply any deferential standard. It simply determines whether the rules of procedural fairness were respected”: Her Majesty the Queen in Right of the Province of New Brunswick, as represented by the Minister of Education v. Kennedy et al. , 2015 NBCA 58 , [2015] N.B.J. No. 251 (QL) , per Drapeau C.J.N.B. (as he then was), at para. 14, applied in Landry , at para. 36 .

Thus, the role of this Court, on the first of the three core questions raised on appeal, is to determine whether the process before the Tribunal was procedurally fair to IIROC. [ 32 ] When it comes to reviewing the substance of the decision, the standard of review is determined according to the process the Supreme Court of Canada elaborated in Canada ( Minister of Citizenship and Immigration) v. Vavilov , 2019 SCC 65 , [2019] S.C.J. No. 65 (QL) , at paras. 36-37 .

According to the Supreme Court, when an administrative decision-maker’s enabling statute contains a statutory appeal mechanism, a reviewing court is to apply the ordinary appellate standards of review, according to which questions of law are reviewed on the correctness standard and questions of fact, on the palpable and overriding error standard. Questions of mixed law and fact are also reviewed on the palpable and overriding standard unless an extricable question of law is identified: Housen v. Nikolaisen , 2002 SCC 33 , [2002] 2 S.C.R. 235 .

[ 33 ] IIROC filed its written submissions before the release of Vavilov , but it argued that the nature of the questions in issue required no deference to the Tribunal. Mr. Crandall suggested that reasonableness should apply. [ 34 ] Relying upon Vavilov , both FCNB and MFDA submitted that ordinary appellate standards of review apply. They argued that correctness is the appropriate standard of review because the grounds of appeal I have condensed into the second and third questions posed above all raise questions of law. I agree with their position. B.

Was the process before the Tribunal procedurally fair to IIROC? [ 35 ] In my respectful view, the process that led to the Tribunal’s decision was flawed in two significant respects, which, when combined, rendered it unfair to IIROC because they raise a reasonable apprehension of bias. These are as follows: 1) The Tribunal made a formal motion and then adjudicated it; 2) On its own initiative, without giving the parties any opportunity to be heard on the matter, with no stated authority and for no stated reasons, the Tribunal severed the grounds of review and first considered the issue it had itself reframed.

(1) Tribunal making and adjudicating its own motion [ 36 ] The Tribunal invoked s. 44 of the Securities Act and s. 2(2) and

Part 6 of the Local Rule 15-501 (the “Rule”) as authority for bringing its own motion on whether NBF should be ordered to produce documents. This Rule, which has since been repealed with the adoption of new Rules of Procedure , was in force when the Tribunal adjudicated its own motion. [ 37 ] With respect, nothing in the legislative provision invoked or in the Rule authorized the Tribunal to make a motion. [ 38 ]

Section 44 is the provision that enabled Mr. Crandall to seek a review, but it does not expressly or implicitly allow the Tribunal to make a motion and then adjudicate it. As for the Rule, it provided that motions, including preliminary motions, may be brought by a party during a proceeding.

Party is defined as “an Applicant, a Respondent, Staff or any person so designated by the Tribunal.” There is nothing that explicitly or implicitly allowed the Tribunal to bring its own motion. [ 39 ] Subsection 2(2) of the Rule allowed the Tribunal to vary or waive any provision of the Rule and to issue procedural directions if in the public interest or to otherwise secure a just and expeditious determination. The Tribunal relied on this provision to permit itself to raise and adjudicate its own motion.

In its final decision, however, the Tribunal did not offer any explanation as to how it might have been “varying” or “waiving” any provision of the Rule, let alone explain how doing so would have been in the public interest or might secure a just and expeditious determination of the issues. [ 40 ] Subsection 8(1) of the Rule provided as follows: “The Panel may, at the request of a Party or on its own motion, summon a witness to attend a hearing and give evidence and/or produce Documents.” [ 41 ] In the context of that section, the term “on its own motion” does not mean the panel may bring a motion and adjudicate it.

Rather, it merely allows the panel, in the absence of a request by a party, to summon a witness to produce documents. This is the only source of power the Tribunal could draw upon to compel a representative of NBF to appear at the hearing and to bring with him relevant documents in the possession of NBF. [ 42 ] In my respectful view, the process used by the Tribunal was improper. Neither the relevant legislation nor the Rule allowed the Tribunal to make its own motion and to adjudicate it. There is a good reason for this.

Allowing a decision-maker to make a motion and then adjudicate it, at the very least, raises a reasonable apprehension of bias. This is not to say that the Tribunal could

not raise a new issue in the interests of justice or that it could not, on its own motion, summon a representative of NBF and require theproduction of documents. [43] In the criminal law context, the Supreme Court has provided guidance on when and in what circumstances itwill be appropriate for an appellate court to raise new issues: R. v. Mian, 2014 SCC 54, [2014] 2 S.C.R. 689.

In my view, the principleselaborated in Mian are apposite to the proceedings before the Tribunal when sitting in review of a decision by an administrative tribunal.This, because the Tribunal, like a criminal law court, is required to adjudicate matters in the public interest through a procedurally fairprocess. Writing for the Court, Rothstein J. explained as follows: There are two potentially competing considerations at the heart of the issue in this case. First, the adversarial system, which is afundamental tenet of our legal system. Second, the role of the courts to ensure that justice is done.

Our adversarial system of determining legal disputes is a procedural system “involving active and unhindered parties contesting witheach other to put forth a case before an independent decision-maker” (Black’s Law Dictionary (9th ed. 2009), sub verbo “adversarysystem”). An important component of this system is the principle of party presentation, under which courts “rely on the parties to framethe issues for decision and assign to courts the role of neutral arbiter of matters the parties present” (Greenlaw v. United States, 554 U.S.237 (2008), at p. 243, per Ginsburg J.).

A fundamental reason for maintaining this system is to ensure that judicial decision-makers remain independent and impartial and areseen to remain independent and impartial. When a judge or appellate panel of judges intervenes in a case and departs from the principleof party presentation, the risk is that the intervention could create an apprehension of bias.

This kind of departure from the usual conductof an appeal could lead the court to be seen to be intervening on behalf of one of the parties, thus impugning the impartiality of the court.As this Court has said, “[it] is of fundamental importance that justice should not only be done, but should manifestly and undoubtedly beseen to be done” (Brouillard v. The Queen, (SCC), [1985] 1 S.C.R. 39, at p. 43, citing R. v. Sussex Justices, Ex parteMcCarthy, [1924] 1 K.B. 256, at p. 259).

It is for this reason that an important tenet of our appellate system is for the court to respect thestrategic choices made by parties in framing the issues (see W. (G.), at paras. 17-18). On the other hand, courts also have the role of ensuring that justice is done. As Lord Denning explained in the context of trial judges inthe United Kingdom: “... a judge is not a mere umpire to answer the question ‘How’s that?’ His object above all is to find out thetruth, and to do justice according to law ...” (Jones v.

National Coal Board, [1957] 2 All E.R. 155 (C.A.), at p. 159 (emphasis added)).This proposition is no less true of appellate judges. Meaningful appellate review assesses the correctness of a lower court decision, bothon errors of law and palpable overriding errors of fact (see R. v. Sheppard, 2002 SCC 26, [2002] 1 S.C.R. 869, at paras. 25 and 28;and Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, at paras. 1 and 4).

I accept the submission of the intervener the AttorneyGeneral of Alberta that “for ‘justice in fact to be done,’ judges must sometimes ‘intervene in the adversarial debate’” (I.F., at para. 16,citing Brouillard, at p. 44). The question then is how to strike the appropriate balance between these competing principles. Appellate courts should have thediscretion to raise a new issue, but this discretion should be exercised only in rare circumstances. An appellate court should only raise anew issue when failing to do so would risk an injustice.

The court should also consider whether there is a sufficient record on which toraise the issue and whether raising the issue would result in procedural prejudice to any party. This test is sufficiently flexible while alsoproviding for an appropriate level of restraint to address the tensions inherent in the role of an appellate court. At all times this discretion is limited by the requirement that raising the new issue cannot suggest bias or partiality on the part of thecourt. Of essence here is that courts cannot be seen to go in search of a wrong to right.

This jurisdiction should be exercised with caution.Appellate courts have the discretion to raise a new issue where justice requires it, but this discretion is restrained in order to maintain theimpartiality of the decision-maker as required by our adversarial system. [paras. 37-42] [44] While Mian recognizes the right of an appellate court to raise a new issue in proper circumstances and withcaution, it does not stand for the proposition that an adjudicative body can bring a motion and adjudicate it.

In my view, the properprocedure in the present case would have been for the Tribunal, in the course of its pre-hearing conference with the parties, to addresswith them the need to compel the attendance of a representative of NBF together with the production of any relevant documents in theirpossession.

If, after having given the parties an opportunity to be heard on the question, the Tribunal saw it necessary to issue asummons, it could have done so and the representative from NBF would then have been required to attend at the hearing of the review.Since the Tribunal could well have achieved virtually the same result as it did by bringing a motion, I would not find that the processused, though improper, would, of itself, invalidate the Tribunal’s decision.

(2) Severing the grounds of review and hearing first the issue as reframed [45] On its own initiative, without prior notice to, or hearing from, the parties, the Tribunal, without apparentauthority and for no stated reasons, directed that a single ground of review, which the Tribunal, itself, reformulated, should bedetermined first. From my understanding of the record, when the Tribunal directed that the review would first proceed on the ground asreformulated, there were only two other grounds of review remaining as Mr.

Crandall had retracted five of the “injustices” he hadalleged in his letter seeking a review of the IIROC panel’s decision.

What was left is the following: (1) the linguistic ground alleging thehearing should have been heard by an IIROC panel composed of individuals whose mother tongue was English; and (2) the fifth“injustice” alleged in his letter, raising the question whether he should have been provided with “original documents for some of thecontents of information being used as evidence.” [46] As stated, no notice was given that the Tribunal was considering severance of the grounds of review, noopportunity was afforded to the parties to be heard on the question, no authority was cited in support of the severance of issues and noreasons were given for the Tribunal’s decision.

In proper circumstances, an administrative body might have the power to sever issues,but in doing so it must adhere to the principles of procedural fairness.

In the present case, the absence of any notice, opportunity to beheard and reasons for the severance was a clear violation of the rules of procedural fairness. [47] Had the Tribunal given notice to the parties it was considering severance of the issues and given them anopportunity to be heard, IIROC could have made a compelling argument, as it did before us, that severance was not appropriate because,in order to determine whether disclosure of the missing documents would have changed the result, the Tribunal should have to considerthe entire evidentiary record before the IIROC panel.

In sum, IIROC could have made a forceful argument against severance of theissues. They were not afforded that opportunity.

(3) Did the Tribunal’s procedural errors raise a reasonable apprehension of bias? [48] The test to determine whether a proceeding is vitiated on account of an apprehension of bias was articulated inCommittee for Justice and Liberty et al. v. National Energy Board et al., (SCC), [1978] 1 S.C.R. 369, [1976] S.C.J. No.118 (QL), at p. 394.

According to this test, the question is whether a reasonable and informed person, viewing the matter realisticallyand practically – and having thought the matter through – would conclude it is more likely than not that the decision-maker, whetherconsciously or unconsciously, would not decide fairly. [49] In my respectful view, when the two procedural flaws identified above are considered together, this test is met.A reasonable and informed person would be troubled by the fact that the Tribunal adjudicated upon its own motion.

That person wouldalso be troubled by the fact that, on its own initiative, with no apparent authority and for no stated reasons, and without hearing theparties on the matter, the Tribunal severed the grounds for review and opted to hear first only the one relating to the disclosure ofdocuments. There seemed to be no compelling time or cost-saving reasons to sever the grounds of review since the remaining twogrounds did not appear to raise complex questions.

The reasonable person would undoubtedly conclude it was likely the Tribunal heardthat ground of review first because it had already decided how it might dispose of it. The reasonable person would ask: why else severthis ground? The reasonable person would undoubtedly conclude the Tribunal had not considered the matter fairly and impartially. [50] In sum, it was improper for the Tribunal to make its own motion and then adjudicate it.

It was a breach ofprocedural fairness for the Tribunal to have, without notice to the parties and without hearing them on the matter, severed the grounds ofreview with no apparent authority and with no stated reasons for doing so. Together, these procedural errors raise a reasonableapprehension the Tribunal was partial to the position of Mr. Crandall and did not decide the matter fairly. For this reason alone, thedecision has to be set aside. In the normal course, the matter would be remitted to a differently constituted tribunal for determination ofthe review on its merits. However, at the hearing before us, Mr.

Crandall withdrew his submission the IIROC panel should have beencomposed entirely of members whose mother tongue was English and conceded his review effectively stood to be determined on thebasis of the question whether or not IIROC had breached its disclosure obligations. We understood by this that all other grounds ofreview were abandoned. Since, as will be demonstrated below, we are able to resolve that issue, there will be no need to return the matterto the Tribunal. C.

Did the Tribunal err in law in holding that the duty of procedural fairness imposed upon IIROC an obligation to disclosematerials not in its possession? [51] In the regulatory context under which IIROC operates, there are distinct investigative and adjudicative stages.The duty of procedural fairness owed at each stage of the process varies significantly.

(1) At the investigative stage of the process [52] The Tribunal began its analysis with the recognition that a high degree of procedural fairness was required inthe IIROC proceedings. The Tribunal then identified the ultimate question as being “whether Mr. Crandall knew the case he had to meetand had a full and fair chance to respond to the allegations” (para. 26). No one disputes either proposition. [53] The Tribunal next asked whether IIROC staff had an obligation “to provide Mr.

Crandall with the documentshe requested and, in the affirmative, whether the failure to do so was a breach of the duty of procedural fairness” (para. 27). In answeringthese questions, the Tribunal laboriously explained why it believed the documents Mr. Crandall was seeking once existed and how theymight be relevant. With respect, this effort was unnecessary because the answer to the question whether IIROC staff had an obligation toprovide Mr.

Crandall with the documents at the investigation stage is one of law and the correct answer is “no.” [54] After belabouring the existence and possible relevance of the documents Mr. Crandall had requested, theTribunal asked whether IIROC had “made sufficient efforts to obtain” these (para. 153). Under the heading “Investigation,” the Tribunalstated as follows: For the purposes of procedural fairness, an administrative body’s investigation is adequate where it satisfies two conditions: neutralityand thoroughness.

A thorough investigation does not require that the investigator interview every person proposed by the complainantbut that the investigator consider crucial evidence. [footnote omitted] In Tahmourpour v Canada (Solicitor General), 2005 FCA 113, the question before the court was whether the Human RightsCommission [italics in original] had been sufficiently thorough to be procedurally fair.

The Federal Court of Appeal [italics in original]concluded that the Commission’s investigator had breached the duty of procedural fairness by failing to consider and assess relevant dataand that he had failed to interview relevant witnesses. The Court of Appeal set aside the investigator’s decision to dismiss the humanrights complaint. [paras. 154-155] [55] The Tribunal held “the IIROC investigation failed to consider […] relevant data,” that is, the documents Mr.Crandall had requested (para. 156). With respect, how could IIROC staff have considered documents it was unable to obtain despiterepeated requests?

In my view, the Tribunal erred by imposing a duty on IIROC at the investigative stage that far exceeded anyprocedural fairness requirement for that stage of the proceeding. [56] The Tribunal relied on Slattery v. Canada (Human Rights Commission), (FC), [1994] 2 F.C.574, [1994] F.C.J. No. 181 (T.D.) (QL), to set out the standard of procedural fairness required at the investigative stage. The Tribunalsummarized the obligation as a requirement that the investigator “consider crucial evidence” (para. 154). It determined that crucialevidence was synonymous with “relevant data,” citing Tahmourpour v.

Canada (Solicitor General), 2005 FCA 113, [2005] F.C.J. No.543 (QL). [57] Slattery and Tahmourpour both concerned complaints made to the Canadian Human Rights Commission thatwere dismissed. The procedural fairness obligations involved were owed to a complainant before issuing a report or deciding not topursue a complaint. These cases hold that, under that particular regime pursuant to which a complaint may be dismissed at theinvestigative stage, the decision whether or not to pursue a complaint must be based on a thorough investigation in which crucialevidence must be considered.

Neither of these cases stands for the proposition that investigators must pursue evidence they have beentold either does not exist or no longer exists. In the present case, the IIROC investigators requested all relevant documents, considered allavailable data and determined there was enough evidence to move forward with enforcement proceedings. [58] According to the Tribunal, the fact Mr. Crandall was required to leave all client documents with NBF when heceased employment there made him “completely reliant on NBF and IIROC for obtaining [them]” (para. 163).

The Tribunal found that,because of this, IIROC had a greater duty to obtain and preserve relevant documents for respondents and that it had failed in its duty.With respect, this misses the point. The point was whether, at the investigation stage, IIROC staff had a duty to do more than request thedocuments and act upon the answers it received. While Mr. Crandall might have been reliant on NBF to produce documents, he was notentitled to rely on IIROC staff to obtain what they were repeatedly told did not exist.

IIROC staff’s ability to seek the production ofdocuments from NBF does not equate to IIROC staff having control over the documents. [59] The extent of the duty of procedural fairness at the investigative stage must be contextually determined on a

case-by-case basis. The foundational principle dates back to Guay v. Lafleur, (SCC), [1965] S.C.R. 12, [1964] S.C.J.No. 49 (QL), in which Cartwright J., concurring, observed that, except in cases where the duty is applicable by operation of statute, anadministrative officer, “whose function is simply to collect information and make a report and who has no power either to impose aliability or to give a decision affecting the rights of the parties,” has no duty to comply with the audi alteram partem rule (p. 18).

Thisrule was a component of the rules of natural justice that later would become part of the duty of procedural fairness. [60] Much time has passed since Guay was decided and much in the area of administrative law has changed. Thishas caused at least one court to observe that the duty of procedural fairness at the investigative stage is “not well defined by authority”:Hills v. Nova Scotia (Provincial Dental Board), 2009 NSCA 13, [2009] N.S.J. No. 48 (QL), at para. 30. I agree. [61] In Province of New Brunswick v. Comeau, 2013 NBCA 41, [2013] N.B.J.

No. 199 (QL), this Court had theopportunity to consider the matter in the context of a case involving decisions by the Minister of Social Development that led to thetermination of two long-term employees of a provincially licensed adult residential facility. Writing for the Court, Bell J.A. (as he thenwas) explained that the extent of fairness varies from case to case and is to be determined on application of five factors set out in Baker v.Canada (Minister of Citizenship and Immigration), (SCC), [1999] 2 S.C.R. 817, [1999] S.C.J. No. 39 (QL).

Thesefactors include: (1) the nature of the decision being made and the process followed; (2) the nature of the statutory scheme; (3) theimportance of the decision to the individual or individuals affected; (4) the legitimate expectations of the person challenging thedecision; and (5) the choice of the procedure made by the agency itself when the statute leaves to the decision-maker the right todetermine the procedures it considers appropriate.

In Comeau, standards established by the Minister required the application of theprinciples of natural justice (read “procedural fairness”) to the investigation of complaints. In addition, Bell J.A. points out that “basedupon the Minister’s own policies, an investigative finding that one has violated the Act carries with it consequences equivalent to ajudicial finding” (para. 26). In the Comeau situation, it is not surprising a high degree of procedural fairness was required at theinvestigative stage, because that stage was effectively akin to the adjudicative stage.

That is not the case in the present matter. [62] To be clear, the Baker factors were elaborated in the context of the duty owed by a decision-maker and not oneowed by an investigator whose decision does not directly affect the rights of anyone. They may nevertheless be somewhat helpful indetermining the extent of any duty of procedural fairness owed by an investigator. In addition, the particular regulatory context in whichthe investigation takes place is also relevant.

Other relevant factors may include the regulator’s legislative mandate, the nature of theproceedings, that is, disciplinary, whether the investigator is the ultimate decision-maker and the need for administrative flexibility andefficiency. [63] The Tribunal considered this case as one where IIROC staff had failed to consider relevant data. I repeat theinquiry I made above: how could IIROC staff have considered documents it was unable to obtain despite repeated requests?

Howeverone might consider the Baker and other contextual factors in determining the extent of the duty of fairness IIROC staff owed Mr.Crandall at the investigative stage, one simply cannot come to the conclusion IIROC staff had an obligation to produce documents it wastold either never or no longer existed or could not be found. To conclude otherwise would be absurd. [64] In sum, this is not a situation where the investigators failed to consider relevant data, such as in the cases towhich the Tribunal referred.

In this case, IIROC staff made repeated requests of NBF for documents, disclosed the relevant ones NBFproduced, and otherwise informed Mr. Crandall of the replies received from NBF. Regardless of the extent of IIROC’s proceduralfairness obligations at the investigative stage, which are limited compared to those owed at the adjudicative stage, they certainly did notrequire IIROC to do any more than it did.

(2) At the adjudicative stage of the process [65] Once it was decided the matter would move to the adjudicative stage, as confirmed by the issuance of a Noticeof Hearing, there is no question IIROC had an obligation to disclose to Mr. Crandall the evidence upon which it would rely to make itscase.

The Tribunal observed that IIROC Rule 8417(1) requires “Enforcement Staff” to disclose to a respondent “all documents andthings in IIROC’s possession or control that are relevant to the proceeding, including documents and things that are relevant to therespondent’s ability to make full answer and defence.” The Tribunal erred in applying this Rule. After the proceedings against Mr.Crandall had begun, the IIROC rules were replaced by Consolidated Rules, which explicitly stated they were inapplicable to ongoingmatters.

However, this error is without consequence, because a somewhat similar disclosure obligation can be found in the rules thatshould have been applied. Rules 10.1 and 10.2 of those rules stated as follows: 10.1 Association Duty to Disclose Nothing in this Rule derogates from the Organization’s obligation to disclose all materials as required by common-law, as soon asreasonably practicable after the issuance of the Notice of Hearing.

10.2 Obligation to Provide Documents and Other Items - Organization The Organization shall, as soon as practicable after service of the Notice of Hearing, and in any case no later than 14 days in a StandardTrack proceeding and 60 days in a Complex Track proceeding, prior to the date of the hearing: 1. serve upon the Respondent: (

a) copies of all documents; and (

b) a list of items, other than documents intended to be relied upon at the hearing; and 2. make available for inspection to the Respondent all items referred to in subsection (a) (ii). [66] At common law, the most onerous disclosure obligations are those elaborated in the criminal law context in R.v. Stinchcombe, (SCC), [1991] 3 S.C.R. 326, [1991] S.C.J. No. 83 (QL). Disclosure obligations in the administrative lawcontext are not necessarily as onerous.

In May, referred to in the introductory paragraph to these reasons, LeBel and Fish JJ., for themajority, stated as follows: It is important to bear in mind that the Stinchcombe principles were enunciated in the particular context of criminal proceedings wherethe innocence of the accused was at stake. Given the severity of the potential consequences the appropriate level of disclosure was quitehigh. In these cases, the impugned decisions are purely administrative. These cases do not involve a criminal trial and innocence is not atstake.

The Stinchcombe principles do not apply in the administrative context. [para. 91] [67] IIROC did not dispute owing Mr. Crandall a duty of procedural fairness and acknowledged it was its practice,as part of fulfilling that duty, to comply with the Stinchcombe obligations: Re Hirani, 2018 IIROC 33, at para. 14. IIROC’s position isthat its staff and the IIROC panel complied with those obligations.

Because the parties agreed that criminal law principles should beapplied, I will consider IIROC’s disclosure obligations to be as defined in Stinchcombe and its progeny, without further comment on theirapplicability in administrative law matters generally. [68] In Stinchcombe, the Supreme Court adopted as the law the following statement made by McEachern C.J.B.C.,dissenting, in R. v. C. (M.H.) (B.C.C.A.), [1988] B.C.J. No. 2620 (C.A.) (QL), rev’d (SCC), [1991] 1 S.C.R. 763, [1991]S.C.J.

No. 27: [T]here is a general duty on the part of the Crown to disclose all material it proposes to use at trial and especially all evidence which mayassist the accused even if the Crown does not propose to adduce it. […] [Stinchcombe, at p. 338] [69] The Supreme Court went on to note the disclosure obligation is not absolute and is subject to Crown discretionregarding the withholding of information and the timing of the disclosure in appropriate circumstances.

The exercise of this discretion isjudicially reviewable. [70] In the years since Stinchcombe was decided, much ink has been spilled on the matter of disclosure. The following paragraph taken from E. G. Ewaschuk, Criminal Pleadings & Practice in Canada, 2nd ed. (Aurora, Ont.: Canada Law Book,looseleaf), at s. 13:3020, is a general outline of the current state of the law in criminal law matters: The Crown has a “duty to disclose” all relevant, non-privileged information in its possession or control, whether inculpatory orexculpatory. This is referred to as “first party disclosure”.

If the Crown refuses first party disclosure, it bears the burden to show that theinformation is “clearly irrelevant”. The Crown’s duty to disclose corresponds to the accused’s constitutional right to the disclosure of allmaterial which meets the Stinchcombe standard. The purpose of disclosure is to protect the accused’s Charter right to full answer anddefence, which will be impaired where there is a “reasonable possibility that the undisclosed information could have been used in

meeting the case for the Crown, advancing a defence or otherwise making a decision which could have affected the conduct of thedefence”. The “Crown” for the purposes of Stinchcombe does not refer to all Crown entities, but only to the “prosecuting Crown”. All“other Crown entities”, including police, are “third parties” for the purposes of disclosure. They are not subject to the Stinchcomeregime.

In addition to information contained in the “investigative file”, termed “fruits of the investigation”, the police should alsodisclose to the prosecuting Crown any additional information that is “obviously relevant” to the accused’s case. The prosecuting Crownhas a reciprocal duty to make reasonable inquiries of the police as to the progress of the case. “Third party disclosure” is dealt with inO’Connor. To obtain disclosure of such records, an accused must make a court application.

First, the “burden is on the accused” to showthat the record is “likely relevant”. “Likely relevance” is a lower threshold than “true relevance”, and has a “wide and generousconnotation” that “includes information in respect of which there is a reasonable possibility that it may assist the accused in the exerciseof the right to make full answer and defence”. Second, where the accused discharges this burden, the judge will examine the record todetermine whether, and to what extent, it should be produced to the accused. To determine “which regime is applicable”, the courtconsiders:

(1) Is the information that is sought in the “possession or control of the prosecuting Crown”? and

(2) Is the nature of theinformation sought such that the police or another Crown entity in possession or control of the information “ought to have supplied it” tothe prosecuting Crown? This will be the case if the information can be qualified as being part of the “fruits of the investigation” or“obviously relevant”. An affirmative answer to either of these questions will call for the application of the first party disclosure regime.Otherwise, the third party disclosure regime applies. [71] Applying these principles to the present case, IIROC’s obligation at the adjudicative stage was to disclose toMr.

Crandall all relevant, non-privileged information in its possession or control, whether inculpatory or exculpatory. IIROC had anobligation to inquire of its investigators to ensure the disclosure was complete. IIROC also had to disclose relevant information obtainedfrom third parties in the course of the investigation, but it had no duty to disclose documents in the exclusive possession of any thirdparty. The information from NBF fell into this category.

Whatever relevant information IIROC received from NBF had to be disclosed,but IIROC did not have an obligation to do more than that. [72] It is true that IIROC’s regulatory regime applied to NBF, and although NBF employees seemingly compliedwith IIROC requests, the fact remains that NBF was a third party to the proceeding against Mr. Crandall. As a result, disclosure of anydocuments that had not been given to IIROC fell under the regime the Supreme Court of Canada established in R. v. O’Connor, (SCC), [1995] 4 S.C.R. 411, [1995] S.C.J. No. 98 (QL).

Again, I turn to Criminal Pleadings & Practice in Canada to explain: “Third-party documents” are governed by the O’Connor regime. An O’Connor application is a “two-step process”. Initially, an accusedmust demonstrate that the records sought are likely relevant to an issue at trial, such as the credibility or reliability of a witness. In viewof the privacy interests at stake, an “accused bears the burden” of demonstrating that the documents sought are “logically probative to anissue at trial or the competence of a witness to testify”.

If an accused meets the likely relevance threshold, the documents will beproduced to the trial judge, who must then weigh the “salutary and deleterious effects” of a production order and determine whether anon-production order would constitute a reasonable limit on the ability of the accused to make full answer and defence. [para. 13:3020A] [73] A process similar to this one was effectively used in the present case. By motion, Mr. Crandall turned to theIIROC panel to obtain disclosure of the documents he claimed NBF had in its possession.

The IIROC panel directed IIROC staff tofollow up, which it did, resulting in additional documents provided to Mr. Crandall. [74] According to the Tribunal, this was not enough. The Tribunal found “it should have been apparent to IIROC[s]taff that NBF’s record-keeping was sub-par.” (para. 177). Whether or not this characterization is well-founded, the Tribunalnevertheless erred when it concluded that the failure of full disclosure of the NBF documents could be attributed to IIROC.

While thedocuments, if they existed, might well have been relevant, they were not in the possession of IIROC staff and, as a result, were notrequired to be disclosed as part of IIROC’s disclosure obligations. The Tribunal also erred when it imposed an obligation on IIROC tomake requests on behalf of Mr. Crandall. The governing rules provided an avenue for Mr. Crandall to make motions before the IIROCpanel, which he did. They did not obligate IIROC staff to answer to his requests for third party documents. Although it was not obliged todo so, IIROC staff nevertheless repeatedly sought from NBF the documents Mr.

Crandall was seeking and provided him with whatrelevant information NBF produced. In these circumstances, one could not require more of IIROC. [75] For the reasons outlined above, I conclude the Tribunal erred in holding that the duty of procedural fairnessimposed upon IIROC an obligation to disclose materials NBF had not provided to it. IIROC repeatedly asked for the document Mr.Crandall sought, and it provided him with the results of its inquiries. Even on the more exacting obligations required in the criminal lawcontext, no more could be expected of IIROC.

It follows IIROC did not breach its duty of procedural fairness. D. Does NBF’s failure to produce the requested documents constitute a breach of procedural fairness? [76] For the reasons set out above, the Tribunal erred by approaching this as a disclosure case. Simply put, IIROCcould not disclose what it did not have or what was in the exclusive possession of a third party. Mr. Crandall was justified in asking theIIROC panel to order NBF to produce the documents and, while the IIROC panel replied by asking staff to again seek documents from

NBF, we now know that, even if a summons had been issued, the result would have been as it was when the Tribunal summoned Mr.Collins. He testified there were no further documents. As was later revealed, he was wrong, but that fact does not make this a disclosurecase. [77] Following Stinchcombe, the question arose whether the Crown had a duty to disclose materials in the hands ofother Crown departments or agencies. In my view, it cannot be said that NBF’s position as an entity regulated by IIROC is analogous toa government department or agency.

Nevertheless, even if NBF’s position in the regulatory scheme could be equated to a differentCrown department than the prosecuting agency, the obligation on IIROC would not have required disclosure of NBF documents IIROCdid not possess. The obligation would be as stated by Ryan J.A. in R. v. Arsenault (1994), (NB CA), 153 N.B.R. (2d)81, [1994] N.B.J. No. 417 (C.A.) (QL), in a paragraph that was endorsed by the Supreme Court of Canada in R. v.

McNeil, 2009 SCC 3,[2009] 1 S.C.R. 66: When disclosure is demanded or requested, Crown counsel have a duty to make reasonable inquiries of other Crown agencies ordepartments that could reasonably be considered to be in possession of evidence. Counsel cannot be excused for any failure to makereasonable inquiries when to the knowledge of the prosecutor or the police there has been another Crown agency involved in theinvestigation. Relevancy cannot be left to be determined by the uninitiated.

If Crown counsel is denied access to another agency’s file,then this should be disclosed to the defence so that the defence may pursue whatever course is deemed to be in the best interests of theaccused. […] [Arsenault, at para. 15; McNeil, para. 49] [78] Even if the relationship between IIROC and NBF were found to be analogous to what was considered inMcNeil, which I hold it is not, what would have been required were “reasonable inquiries”. On the evidence, it is clear that IIROC staffwould have amply met that obligation. [79] In my view, this was not a disclosure case but a missing documents case.

These types of cases may arise in oneof two ways: (1) the documents were lost or destroyed by a third party; and (2) the documents had been in the possession of the Crown(or the police) but have since been lost or destroyed. [80] The present case involves the first of these two scenarios. In the criminal law context, the law is clear that theCrown can disclose only what is in its possession, which includes that which is in the possession of the police relating to the particularfile and documents produced in response to reasonable inquiries of other Crown departments or agencies.

Otherwise, an accused personmust turn to the regime established in O’Connor. [81] R. v. Carosella, (SCC), [1997] 1 S.C.R. 80, [1997] S.C.J. No. 12 (QL), involved a situationwhere evidence had been destroyed by a third party. It was a situation where the complainant in a sexual assault case had gone to a crisiscentre for advice and had been interviewed by a social worker who had taken notes. Before trial, the defence brought an application forproduction of the centre’s file. Both the Crown and the complainant consented to the order. When the file was produced, the notes inquestion were not included.

It was later revealed these had been destroyed for the very purpose of not making them available for use in acriminal trial. [82] Sopinka J. wrote the reasons for a five to four majority. Having found an infringement of the accused’sconstitutional rights to full answer and defence, he held the trial judge had not erred in ordering a stay of proceedings as the appropriateremedy in the circumstances of that case. Shortly after Carosella, the Supreme Court released its reasons in R. v. La, (SCC), [1997] 2 S.C.R. 680, [1997] S.C.J. No. 30 (QL).

In that case, the same five to four majority concluded that a stay was not theproper remedy in a case where a statement had been inadvertently (not intentionally) lost or destroyed by the police. La will be reviewedin more detail below, but what comes out of it is a clarification of the operation of Carosella by confining it “to those exceedingly rarebut egregious cases where relevant evidence has been deliberately destroyed simply to frustrate the administration of criminal justice”:Graeme G. Mitchell, R. v. La: The Evolving Right to Crown Disclosure and the Supreme Court Divided (1997) 8 C.R. (5th) 179.

If therewere any doubt about the limits of Carosella, these were dispelled by the Court’s reasons in R. v. Buric, (SCC), [1997]1 S.C.R. 535, [1997] S.C.J. No. 38 (QL). [83] I borrow Graeme G.

Mitchell’s description of Buric: “the court had to consider whether Carosella applied incircumstances where the police had kept virtually no notes of extensive interviews that two officers conducted with the principal Crownwitness in a first degree murder case.” The appeal to the Supreme Court was summarily dismissed from the bench, Sopinka J. stating thatthe Carosella principles “have no application by reason, inter alia, that there is no finding by the trial judge nor any evidence whichwould justify the conclusion that the police failed to make a record deliberately to avoid production.” [84] In the present case, the Tribunal relied on Carosella in support of its decision to stay the proceedings againstMr.

Crandall, holding that the stay of proceedings in Carosella was warranted because “there was a reasonable possibility that the

information contained in the notes was logically probative to the issue of the credibility of the complainant” (para. 254). With respect,this ignores the behaviour in Carosella the Court was particularly denouncing and which La and Buric make clear was critical to theremedy ordered, that is, a stay of proceedings. Nothing similar can be said to have occurred in the present case.

There was no violation ofthe duty to disclose, no attempt to interfere with procedural fairness and, therefore, no basis to order a remedy, much less a stay ofproceedings. [85] In any event, it is not all destruction of evidence that will lead to a stay of proceedings. La was a case wheremissing documents were once in the possession of the police, but which had, at some point before trial, inadvertently been lost ordestroyed. The Court found this was not a “third party” loss of documents because the police, although separate for the Crown, have aparticular duty to preserve evidence.

As a result, this was treated as a disclosure case. The police had inadvertently misplaced the tape ofan interview with the complainant. For the same five judges as in Carosella, Sopinka J. observed that the duty to disclose included a dutyto preserve, but that, if the Crown could give a satisfactory explanation “that the evidence has not been destroyed or lost owing tounacceptable negligence, the duty to disclose has not been breached” (para. 20).

He went on to explain that, where evidence is lost notowing to unacceptable negligence, “in order to make out a breach of s. 7 [of the Charter] on the ground of lost evidence, the accusedmust establish actual prejudice to his or her right to make full answer and defence” (para. 25) (emphasis added). Only then would a stayof proceedings be justified. [86] As for what constitutes “actual prejudice,” Weiler J.A. in R. v. Bradford, (ON CA), [2001]O.J. No. 107 (C.A.) (QL), leave to appeal refused [2001] S.C.C.A.

No. 131, explained as follows: The fact that a piece of evidence is missing that might or might not affect the defence will not be sufficient to establish that irreparableharm has occurred to the right to make full answer and defence. Actual prejudice occurs when the accused is unable to put forward his orher defence due to the lost evidence and not simply that the loss of the evidence makes putting forward the position more difficult.

Todetermine whether actual prejudice has occurred, consideration of the other evidence that does exist and whether that evidence containsessentially the same information as the lost evidence is an essential consideration. […] [para. 8] [87] A good application of these principles can be found in Ontario (Ministry of Labour) v. Lee Valley Tools Ltd.,2009 ONCA 387, [2009] O.J. No. 1882 (QL), at paras. 21-30. See also R. v. Svekla, 2010 ABCA 390, [2010] A.J. No. 1443 (QL), atparas. 27-30.

In this latter case, following Bradford, the Alberta Court of Appeal pointed out that, in determining whether actualprejudice had been shown, “the existence of other evidence containing essentially the same information is ‘an essential consideration’”(para. 27). [88] These principles have been applied in an administrative law case, albeit an immigration case when s. 7 Charterrights have been held to be engaged. In Canada (Citizenship and Immigration) v. Harkat, 2014 SCC 37, [2014] 2 S.C.R. 33, certainmaterials had been destroyed and the question was whether summaries sought to be introduced should be excluded.

For the majority,McLachlin C.J.C. explained the situation as follows: As a result of policy OPS-217, the original operational notes and recordings are lost evidence. Where the Minister loses evidence thatshould have been disclosed, he has a duty to explain what happened to it: R. v. La, (SCC), [1997] 2 S.C.R. 680, atparas. 18-20. Where the Minister is unable to satisfy the judge that the evidence was not destroyed owing to unacceptable negligence, hehas failed to meet his disclosure obligations and there has been a breach of s. 7 of the Charter: ibid., at para. 20.

In the present case, thedestruction of operational notes pursuant to policy OPS-217 constitutes unacceptable negligence, within the meaning of La. Indeed, noreasonable steps were taken to preserve the evidence: ibid., at para. 21. Quite the contrary. CSIS destroyed the materials in violation ofthe CSIS Act, and, in so doing, compromised “the very function of judicial review”: Charkaoui II, at para. 62. Consequently, theministers failed to meet their disclosure obligations towards Mr.

Harkat and breached s. 7 of the Charter. [para. 93] [89] Having found a violation of the disclosure obligation, McLachlin C.J. then turned her analysis to theappropriate remedy. In arriving at the conclusion that trial fairness would not be significantly prejudiced by admission of the summaries,McLachlin C.J. approved the statement in Bradford to the effect that “the impact of the loss of evidence on trial fairness must beconsidered ‘in the context of the rest of the evidence and the position taken by the defence’” (para. 97). [90] In the present case, Mr. Crandall chose not to testify before the IIROC panel.

He stood mute because hewanted access to his notebooks and other documents. While it is possible the absence of these documents might have made puttingforward his position more difficult, there is no evidence establishing he was unable to put forward his defence. As a result, as this was atbest a lost evidence case, the remedy of a stay of proceedings would not have been available because Mr. Crandall failed to show hesuffered actual prejudice from the loss of any documents. In fact, before us, Mr. Crandall admitted he should have testified before theIIROC panel.

Perhaps he would have established actual prejudice, but at this stage that is mere speculation. The onus was on him toestablish it and he did not.

[ 91 ] In sum, this case involves the possible loss or destruction of documents by a third party, not done for the purpose of obstructing the proceedings before the IIROC panel. This is obvious since, if the documents contain what Mr. Crandall alleges, they would also have been of assistance to NBF in the event of any claim against it. The allegedly missing documents were never in the possession of IIROC, so this is not a failure to disclose case. Applying criminal law principles, which all parties submitted should be applied, Mr.

Crandall would have had to establish before the IIROC panel that the loss or destruction of documents caused him actual prejudice. This would have been assessed in light of the rest of the evidence before the panel. Mr. Crandall chose not to testify and failed to establish actual prejudice. In these circumstances, the Tribunal erred in finding this was a disclosure case and in ordering a stay of proceedings. IV. Disposition [ 92 ] In the normal course, this appeal should be allowed, and the matter remitted to the Tribunal for resumption of the hearing on the outstanding grounds of review.

Recall this ground had been severed from the remaining grounds. However, at the hearing of the appeal, Mr. Crandall conceded his review stood to be determined solely on the ground of the missing documents. Considering this, it would serve no purpose to remit the matter to the Tribunal. As a result, I would allow the appeal, set aside the decision of the Tribunal and restore the decision of the IIROC panel. In its written submission, IIROC did not seek costs nor did it argue costs before us. In the circumstances, I would not make any order of costs.

Version française du jugement de la Cour rendu par LE JUGE EN CHEF RICHARD I. Introduction [1] Les organismes d’autoréglementation ont pour fonction de protéger le public contre les actions répréhensibles des professionnels réglementés et de promouvoir la confiance dans leur organisation. L’atteinte de ces objectifs ne se fait pas dans un vide réglementaire. La protection du public et la préservation de cette confiance doivent se faire d’une manière conforme à la primauté du droit.

Les organismes d’autoréglementation sont non seulement régis par leurs régimes législatif et réglementaire habilitants; ils doivent également respecter les principes fondamentaux de notre système juridique, notamment celui qui impose aux décideurs administratifs l’obligation de se conformer aux exigences de l’équité procédurale lorsqu’ils rendent des « décisions touchant les droits, privilèges ou biens d’une personne » : May c.

Établissement Ferndale , 2005 CSC 82 , [2005] 3 R.C.S. 809 , par. 94 . [2] L’équité procédurale est une large notion axée sur le contexte qui impose certaines obligations aux décideurs administratifs. Parmi celles-ci, notons qu’un organe administratif qui exerce des pouvoirs disciplinaires sur l’un de ses membres est tenu d’informer l’intéressé de la cause à réfuter et de la preuve qui pèse contre lui et de donner à toutes les parties la possibilité d’être entendues (la règle audi alteram partem ) ; une autre de ces obligations est englobée par la « règle nemo judex in causa sua , selon laquelle chaque

partie a le droit d’être traitée avec impartialité et sans préjugé » : Syndicat canadien de la fonction publique,

section locale 821 c. Réseau de santé Vitalité (Zone 1B) , 2015 NBCA 3 , [2015] A.N.-B. n o 14 (QL) , au par. 39 , le juge en chef Drapeau (tel était alors son titre), arrêt appliqué dans Landry c. Procureure générale du Nouveau-Brunswick , 2020 NBCA 38 , [2020] A.N.-B. n o 113 (QL) , au par. 38 , la juge d’appel LaVigne. [3] Il s’agit en l’espèce de déterminer l’étendue de ces obligations en matière d’équité procédurale dans le

contexte d’un organisme d’autoréglementation reconnu par la Commission des services financiers et des services aux consommateurs du Nouveau-Brunswick en vertu de l’al. 35(1)

b) de la

Loi sur les valeurs mobilières , L.N.-B. 2004 ch. S-5.5. L’organisme de réglementation en cause est l’Organisme canadien de réglementation du commerce des valeurs mobilières (l’OCRCVM). [4] L’OCRCVM est une organisation privée exerçant sur ses membres un pouvoir disciplinaire qui découle de l’engagement contractuel que prennent les sociétés de courtage et les particuliers lorsqu’ils présentent une demande d’adhésion ou d’inscription.

L’OCRCVM a pour mandat de protéger les investisseurs et l’intégrité des marchés financiers en réglementant les courtiers en valeurs mobilières ainsi que leurs activités d’opérations sur valeurs mobilières et de prestation de conseils partout au Canada. Dans ce but, l’OCRCVM a adopté des normes et des règles régissant la conduite des sociétés de courtage en valeurs mobilières et de leurs employés inscrits .

Parmi ces règles, il en est une qui reconnaît que, lorsqu’il engage une procédure disciplinaire, l’OCRCVM a « l’obligation […] de communiquer tous les renseignements requis en droit ». [5] Plus précisément, la présente instance vise la non-communication, en raison de leur perte ou de leur destruction, de documents qui étaient en la possession d’un tiers malgré les nombreuses tentatives que l’OCRCVM a faites pour les obtenir à la demande et au profit d’un membre contre qui une procédure disciplinaire avait été engagée. Ce membre est Robert Crandall. II. Contexte [6] M.

Crandall a été actif dans le domaine des valeurs mobilières depuis son inscription comme conseiller en placements en 1983. Il a été inscrit d’abord auprès de l’Association canadienne des courtiers en valeurs mobilières, puis auprès de l’OCRCVM. Du mois de juin 2006 au mois d’octobre 2011, il occupait un poste de conseiller en placements auprès de la Wellington West Capital Inc. Lorsque la Financière Banque Nationale (la Financière) a acquis Wellington West en 2011, M. Crandall est resté à son poste de conseiller en placements, poste qu’il a occupé jusqu’à sa démission en juillet 2012.

Il s’est alors joint à la société Jones Gable, dans laquelle il est resté jusqu’en 2015. [7] En 2013, l’OCRCVM a reçu une plainte au sujet d’opérations que M. Crandall avait faites pour une cliente dont il avait été l’unique conseiller financier de 1992 à 2012. Cette cliente était une femme âgée désignée indistinctement dans les documents sous les termes D.R. ou la plaignante. La plainte précisait que, au cours d’une période de plus de cinq ans, M.

Crandall avait effectué dans ses comptes toute une série d’opérations en nombre excessif, souvent sans approbation, ce qui avait eu pour effet d’effacer tous les bénéfices réalisés dans ces comptes. [8] La plainte a amené le personnel de l’OCRCVM à faire enquête. Cette enquête a finalement abouti à l’introduction d’une procédure disciplinaire contre M. Crandall. Un avis d’audience alléguant les trois infractions suivantes aux Règles des courtiers membres de l’OCRCVM a été délivré : [TRADUCTION] 1) Au cours de la période allant de juillet 2006 à juin 2012, [M.

Crandall] a effectué dans les comptes de D.R. des opérations en nombre excessif qui n’étaient pas dans les limites d’une saine pratique des affaires et qui ne convenaient pas à celle-ci, en contravention des alinéas 1(

o) et (

q) de la Règle 1300 des courtiers membres de l’OCRCVM (les alinéas 1(

o) et (

q) du Règlement 1300 de l’ACCOVAM, antérieurement au 1 er juin 2008); 2) Au cours de la période allant de juillet 2006 à juin 2012, [M. Crandall] a effectué des opérations discrétionnaires non autorisées dans les comptes de D.R., sans que les comptes aient d’abord été autorisés comme comptes carte blanche, en contravention de l’article 4 de la Règle 1300 des courtiers membres (l’article 4 du Règlement 1300 de l’ACCOVAM, antérieurement au 1 er juin 2008); 3) Au cours de la période allant de juillet 2007 à octobre 2010, [M. Crandall] a fait des recommandations à l’égard des comptes de D.R. qui ne convenaient pas à celle-ci, en contravention de l’alinéa 1(

q) de la Règle 1300 des courtiers membres (l’alinéa 1(

q) du Règlement 1300 de l’ACCOVAM, antérieurement au 1 er juin 2008). [9] Pendant toute la durée de l’enquête et des procédures de mise en application, M. Crandall a toujours soutenu qu’il existait différents dossiers de travail, dont des blocs-notes, des fiches de négociation, des carnets et feuillets de messages téléphoniques, des courriels, de la correspondance et des rapports du courrier reçu et envoyé. Or, il n’était pas en possession de ces pièces étant donné que les règles de l’OCRCVM l’empêchaient d’emporter l’un quelconque de ces documents lorsqu’il a quitté la

Financière en 2012. Le personnel de l’OCRCVM a présenté plusieurs demandes à la Financière pour obtenir ces documents, la première fois peu après sa première entrevue avec M. Crandall, en janvier 2014. Il y a eu au total au moins 19 demandes de production des documents adressées à la Financière, au moins quatre d’entre elles portant plus particulièrement sur les blocs-notes de M. Crandall.

Lorsqu’il a été informé que ces blocs-notes étaient introuvables, le personnel de l’OCRCVM a demandé à la Financière de produire un résumé des démarches entreprises pour les trouver. [10] Une formation d’instruction a été constituée pour examiner la plainte. Le 10 décembre 2015, M. Crandall a demandé à la formation de l’OCRCVM d’ordonner la production et la communication d’environ 40 catégories de documents. Le personnel de l’OCRCVM a répondu qu’un grand nombre des documents demandés avaient déjà été communiqués à M.

Crandall, et la formation d’instruction a conclu que de nombreux documents n’avaient aucune pertinence dans le cadre de l’instance. Toutefois, la formation a bel et bien ordonné au personnel de l’OCRCVM de demander de nouveau à la Financière les documents que M. Crandall voulait obtenir. Cette même journée, le personnel de l’OCRCVM a envoyé à la Financière un courriel dans lequel elle demandait les blocs-notes, les blocs-correspondance et les copies papier des fiche

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