Administrative law – Mortgage brokers – Disciplinary proceedings – Professional misconduct or conduct unbecoming – Criminal record – Penalties and suspensions – Public interest – Decisions of administrative tribunals – Registrar of Mortgage Brokers – Judicial review – Jurisdiction of registrar- Standard of review – Patent unreasonableness – Correctness
Pugliese v. British Columbia (Registrar of Mortgage Brokers, Financial Services Tribunal),  B.C.J. No. 594, British Columbia Supreme Court, March 21, 2007, Goepel J.
The Petitioner was previously convicted of conspiracy to traffic cocaine and possession of cocaine for the purpose of trafficking. He was sentenced to five years imprisonment and was incarcerated on September 22, 2004, when all his avenues of appeal were exhausted. His parole expires on July 11, 2009. The Petitioner applied to the Registrar of Mortgage Brokers for registration as a sub-mortgage broker. The Registrar refused registration on the basis that the Petitioner’s prior criminal record made him unsuitable. The Registrar also ordered that he would not consider another application from the applicant until five years after the expiry of the Petitioner’s sentence. At that time, the Registrar ordered he would only consider an application if the Petitioner could clearly demonstrate that he had rehabilitated himself and re-established his suitability. The Petitioner appealed to the Financial Services Tribunal, which confirmed the Registrar’s decision. The Petitioner then appealed to the B.C. Supreme Court, seeking a declaration that the Registrar does not have the jurisdiction to refuse to consider a further application until July 2014, and that the Registrar does not have the jurisdiction to refuse to consider a further application unless the Petitioner can “clearly demonstrate he has rehabilitated himself and re-established a suitability”.
In determining the appropriate standard of review, the Court found that the factors considered in the “pragmatic and functional approach” all militated in favour of maximum deference, and that the standard of review within the Registrar’s jurisdiction is that of patent unreasonableness and that the standard of review of decisions concerning his jurisdiction is correctness.
The Court held that under Section 14 of the Mortgage Brokers Act, the Registrar must consider both the suitability of the applicant and whether the registration is objectionable. In making that decision, the Registrar must consider, for reasons of public confidence and public accountability, whether a criminal conviction makes the registration objectionable. The Court found that if the Registrar concludes the registration is presently objectionable, it is within the Registrar’s jurisdiction to determine the period of time that the registration will remain objectionable. It held that given the Petitioner’s criminal past, the nature of those crimes, and the responsibility of the Registrar to ensure public confidence in the industry, it was open to the Registrar to require a period of time to pass before the Petitioner would be eligible to work as a sub-mortgage broker. The Court held that the Registrar’s conclusion that the Petitioner would be objectionable until at least five years had passed from the end of his sentence was not patently unreasonable. In the opinion of the Court, given the seriousness of the offence, this conclusion was correct.
However, the Court also found that the Registrar’s jurisdiction does not allow him, once the period of ineligibility has expired, to refuse to consider an application until the Petitioner had clearly demonstrated he had rehabilitated himself. While the Registrar may properly set a period of ineligibility, once that period expires, he cannot judge one applicant on a higher standard than other applicants. Although the Registrar must consider the new application, he is not required to accept it if he finds at that time that the Petitioner remains unsuitable or objectionable.
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