In recent decades there has been a shift in thinking about whether regulators should publish pending allegations of misconduct. Years ago, there was concern that such publication, before the allegations were proved, might be unfair to registrants. In recent years, concerns about transparency and permitting members of the public to make informed choices, have led to publication of such allegations by most regulators. Publication also facilitates the open hearing principle by enabling the public to choose whether to observe the hearings.
In Harold The Mortgage Closer Inc. v. Chief Executive Officer of the Financial Services Regulatory Authority of Ontario, 2024 ONSC 2236 (CanLII), two licensees are trying to turn back the clock. The licensees sought judicial review to quash a notice of proposal to revoke their licenses. They also sought:
- To have the regulator cease publishing the notice of proposal;
- To alter the regulator’s policies on publishing enforcement actions so as to prevent similar publications in future;
- To require the regulator to publish some aspects of the licensees’ dispute of the allegations; and
- To require the regulator to ensure that the licensees’ competitors did not use the regulator’s publications to harm the licensees’ business.
The regulator brought a motion to dismiss the application for judicial review as being plain and obvious to fail. The Court agreed that it was premature to interfere with the allegations in the notice of proposal. The tribunal hearing would address the issue. The Court was not in a good position to assess, as the licensees contended, whether the allegations contained deliberate falsehoods. That is for the tribunal to determine.
The Court expressed some doubts about the merits of the arguments about the regulator’s publishing policies and actions. However, the Court was unprepared to say that it was plain and obvious that the application would fail. Thus, those arguments will go to a full panel of the Divisional Court for determination. That decision, if made on the merits, will be of interest to regulators.
The Court did set aside the final ground relating to restricting competitors from using the publications. The Court said:
Finally, it is plain and obvious that the applicants have no claim for an order in the nature of mandamus against the regulator concerning competitors. There is no duty owing to the applicants for the regulator to take any steps against competitors. Moreover, prosecution and enforcement are always discretionary. Relief rooted in the availability of a writ of mandamus cannot be available for such decisions.
The Court also indicated that there was no need to pause the pending hearing before the tribunal while awaiting the Divisional Court decision about publication.