The standard of review of a decision of the Insurance Councils Appeal Board of Alberta, finding misrepresentation, fraud, deceit, untrustworthiness or dishonesty, on the part of a person licensed to sell life insurance in Alberta, is reasonableness

Administrative law – Decisions of administrative tribunals – Insurance Councils Appeal Board – Jurisdiction – Insurance brokers – Permits and licences – Judicial review – Standard of review – Correctness – Reasonableness simpliciter – Procedural requirements and fairness – Compliance with legislation – Interpretation of legislation – Privative clauses

Roy v. Alberta (Insurance Councils Appeal Board), [2008] A.J. No. 1052, 2008 ABQB 572, Alberta Court of Queen’s Bench, September 23, 2008, R.P. Marceau J.

The applicant had a license to sell life insurance in the Province of Alberta. In January 2007, he routinely filled out an application for a renewal of his Certificate of Authority for life insurance for the year 2007. In the application, he was asked whether he had completed the continuing education work which he was required to do. The form gave him the option of saying that he had completed the necessary hours or that he would complete the necessary hours by the deadline. His response indicated that he had already completed the necessary work. This was incorrect. The Alberta Life Insurance Council found him guilty of misrepresentation, fraud, deceit, untrustworthiness or dishonesty, pursuant to the Alberta Insurance Act.

The applicant appealed this finding to the Insurance Councils Appeal Board of Alberta (“Appeal Board”). The Appeal Board set aside the finding of misrepresentation, fraud, deceit, and dishonesty but upheld the finding of untrustworthiness.

The issues before the Court were the following:

1. What is the applicable standard of review?
2. Did the Appeal Board err in its application of the principles of natural justice and procedural fairness?
3. Does the Appeal Board’s decision on guilt meet the applicable standard of review?

The applicant argued that the standard of review was a mix of correctness and reasonableness.

The Court noted that the allegations which the applicant argued were subject to the standard of review of correctness were that the Appeal Board breached its enabling statute by depriving the applicant of his right to be heard and by basing its decision on irrelevant considerations or grounds that were not argued. The Court held that these were matters which were relevant to the fairness of the process, and were to be reviewed on the correctness standard applying the analytical framework set out in Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817.

The applicant further argued that the Appeal Board’s decision, upholding the finding of untrustworthiness, but overturning the finding of misrepresentation, fraud, deceit and dishonesty, was based on attribution of different levels of mens rea to each allegation, which had not been argued by the applicant. The applicant contended that had he been given an opportunity to be heard on this issue, he would have made submissions, and the Appeal Board’s decision, in the absence of his argument, violated his right to procedural fairness.

The Court disagreed with the applicant’s contention noting that all counsel and the panel were aware of the fact that the words “misrepresentation, fraud, deceit, dishonesty or untrustworthiness” were used disjunctively and each should be interpreted in a similar context. The Court found that the applicant had every opportunity to argue that untrustworthy had no different meaning from the other four words and that one could not be found guilty of one and not the other. Therefore, natural justice was not violated.

With respect to the Appeal Board’s interpretation of its legislation and application of the facts in the case, the Court held that the reasonableness standard applied, based on a consideration of the following factors: the empowering legislation contained a limited privative clause, the Appeal Board was considering its own statute, the question was ultimately whether a member had breached the standards established for life insurance agents, which was central to the purpose of the administrative regime and the legislation, and the Court was not better suited than the Appeal Board to make the ultimate determination.

Because the false answer was one which the Alberta Life Insurance Council could not trust as a basis for renewing the applicant’s Life Insurance Certificate Authority, the decision of the Appeal Board to affirm the finding of untrustworthiness was held by the Court to be reasonable.

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