LICENCE REVOCATION

On March 20, 2009, following an investigation spanning over two years resulting from allegations made to the Office of the Registrar, Private Security and Investigative Services Branch (PSISB) within the Ministry of Community Safety and Correctional Services of the Province of Ontario, Canada, a hearing to revoke the private investigation agency licence of Internal Affairs as well as the personal private investigation licence of the owner of this agency, was dismissed.

At the hearing, it was revealed that the lead Ontario Provincial Police (OPP) investigator in this case, Mark Johnston, made assertions that the owner of Internal Affairs 'lied' during the OPP investigation. Upon cross examination of Officer Johnston, it was revealed that in fact the owner of Internal Affairs had not lied, but that Officer Johnston misreported the contents of an interview with the owner of Internal Affairs in both his notes and his 'will-state' (anticipated evidence submission), as well as in his examination in chief. The reason for Officer Johnston's misreporting of material facts remains a mystery, but Internal Affairs has its suspicions.

A complaint has been filed with respect to Officer Johnston’s misreporting of material facts and his questionable testimony with the Professional Standards Branch of the OPP as well as with the Ontario Civilian Commission on Police Services (OCCOPS).
The initial allegations reported to the PSISB were made by a former Member of the Provincial Parliament of the Province of Ontario (MPP), one Eric Gordon Cunningham - an individual apparently close to many influential current and former Liberal politicians at both the federal and provincial level.

Mr. Cunningham alleged in his complaint that Internal Affairs had provided a report containing 'false and fraudulent' financial account information to a provincial court during a matrimonial litigation between Mr. Cunningham and his estranged spouse Joan Montgomery thereby violating Mr. Cunningham's 'privacy'. According to OPP documents, Mr. Cunningham "went to" the then Minister of the Ministry of Community Safety and Correctional Services of the current Liberal government of the Province of Ontario, Monte Kwinter, and reported his complaint.

Internal Affairs made it clear in an Affidavit submitted by the owner of that company that at all material times, it was not involved in any investigation of Mr. Cunningham. The bottom line with respect to Mr. Cunningham's complaint and the Registrar's subsequent investigation and hearing is that Internal Affairs was not involved in any wrong doing.

DISTURBINGLY, LATER IN 2009, A BLOG APPEARED ON THE INTERNET, NAMING ERIC GORDON CUNNINGHAM, JULIAN FANTINO (COMMISSIONER OF THE ONTARIO PROVINCIAL POLICE), MONTE KWINTER (AN ELECTED LIBERAL MEMBER OF THE ONTARIO PROVINCIAL LEGISLATURE AND FORMER MINISTER OF PUBLIC SAFETY AND PRIVATE SECURITY) AS WELL AS TWENTY-FOUR (24) ADDITIONAL WELL-KNOWN PAST AND CURRENT FEDERAL AND PROVINCIAL LIBERAL POLITICIANS, BANKING OFFICIALS, CORPORATE EXECUTIVES AND OTHERS AS ASSOCIATES AND DIRECTORS OF A HIDDEN INTERNATIONAL BUSINESS CORPORATION (IBC), SUPERSTAR LTD., LOCATED IN THE BAHAMAS.

THIS BLOG ALSO IDENTIFIED NUMEROUS BANK AND BROKERAGE  ACCOUNTS ASSOCIATED TO THESE INDIVIDUALS IN MANY FINANCIAL INSTITUTIONS IN THE BAHAMAS AND VARIOUS OTHER FOREIGN JURISDICTIONS CONTAINING MILLIONS OF DOLLARS AND THAT THESE UNEXPLAINED AMOUNTS SUGGESTED THAT THESE INDIVIDUALS MAY BE INVOLVED IN MONEY LAUNDERING, TAX EVASION AND OTHER FORMS OF ENTERPRISE CRIMINALITY. (SEE http://sites.google.com/site/sooperstarcorp/home)

The following article was written by Norman Groot and Alika Hendricks, Attorneys, Investigation Counsel Professional Corporation (ICPC), Toronto, Ontario, Canada (www.investigationcounsel.com) concerning the failed attempt by Cunningham, the OPP and the PSISB to revoke the licence of Internal Affairs and, thereby, terminate this business as well as the livelihood of the owner of the agency.

"Investigating the Investigators"
Lessons from a License Revocation Hearing

From October 2008 to March 2009, our firm handled a licence revocation proceeding instigated by the Registrar for Private Investigators against an established private investigation agency in Ontario. Some of the lessons learned and issues addressed are worth passing on to the industry.

The Allegations
In September 2008, an agency received a notice from the Registrar that the Registrar intended to revoke the agency's licence and that of its principal investigator as a result of a complaint received by a member of the public and the investigation carried out by the Registrar's office.

In a nutshell, the complainant alleged that the agency and its principal investigator provided banking information from unauthorized sources, provided false banking information during an investigation, and referred bank information inquiries to an unlicensed investigator. With respect to the Registrar's investigation, the Registrar alleged that the agency and its principal investigator lied to the Registrar's investigators and referred investigation work to an unlicensed investigator.

Under section 16(3) of the Private Security and Investigative Services Act (the Act), the agency and/ or investigator had twenty-one days to request a hearing with the Registrar. Once the hearing was requested, the Registrar indicated the onus was on the agency ands its primary investigator to show why the Registrar should not revoke their licences. In other words, based on the complaint and the Registrar's investigation, the Registrar had concluded the licences would be revoked. The primary investigator had invested heavily into his agency, and it was his only source of income. He was appalled that the Registrar would take such draconian measures and impose a reverse onus position on him.

Licence Revocation Hearing Procedure
Under Ontario's new legislation regulating private investigators, section 16 provides that the Registrar shall serve written notice on a licensee if he proposes to revoke a licence. The notice is supposed to inform the applicant of the right to a hearing before the Registrar. Hearings themselves are conducted by a deputy registrar. In Ontario, the Registrar's office is now staffed by two deputy registrars - one on the investigation side, and another on the hearing side.

The Act is designed to be consumer protection legislation. As such, an applicant has a right to a licence if he or she can satisfy the licensing requirements. The Registrar, as a guardian of the public interest, has the right to suspend or revoke a licence if it deems there is sufficient evidence that the agency or the investigator is a danger to the public.

Interface of the PSISA with the SPPA
The remarkable aspect of sections 16(5) and (7) is that they put the onus on the agency or investigator to show why their licence should not be revoked. One would have thought that with the risk of losing ones livelihood at stake, and after being deemed fit to hold a licence for years before, procedural protections would be in place to ensure that a fair and impartial hearing would take place. What we learned was that this was not the case.

The Statutory Powers Procedure Act, 1990 (the "SPPA), is intended to apply to all provincial legislation that provides for a hearing. The SPPA sets out basic procedural safeguards to ensure natural justice is applied, such as the right to be represented by counsel (s.10) the right to disclosure (s. 5.4(1)) the right to call witnesses (s.10.1A) the right to be provided a written procedure for the hearing process itself (s.25.0.1), and the right to a pre-hearing conference with an adjudicator who is not the hearing adjudicator to deal with procedural issues (s.5.3(1)).

The PSISA provides for a hearing, and makes specific reference to the SPPA by stating that the SPPA does not apply to stays of proceedings in the event of an appeal (s.17(2)). It therefore came as quite a surprise to us that the hearing registrar held that the SPPA does not apply to the PSISA. In our view, this position is erroneous in law, but the agency was faced with accepting the deputy registrar's ruling or bringing an application for Judicial Review - an expensive proposition for an agency to undertake.

Basic Rules of Natural Justice: Disclosure and Summonsing Witnesses
Relying on his position that the SPPA does not apply, the deputy registrar further held that the Registrar's office was not obliged to summons witnesses, provide full disclosure, or have an independent adjudicator perform a pre-hearing conference to address procedural concerns. Accordingly, the licencee could not compel uncooperative witnesses to attend the hearing to explain what happened, could not compel the Registrar's office to provide all of the various letters the complaint had provided to the Registrar or obtain a copy of the investigating officer's notes, and could not obtain a pre-hearing conference to address his concerns. The hearing deputy registrar simply took the position that the licencee could call their own witnesses and would only be provided a ‘will-state' from the complainant and investigating officer. The hearing deputy registrar undertook to have the investigating officer and the complainant attend the hearing. Finally, the hearing officer did allow for an exchange of communication on procedural issues.

Disclosure of Rules that Applied to the Conduct of the Hearing
One of our major concerns was that the Registrar's office could not provide us a written procedure of how the rules to govern the hearing itself. The deputy hearing registrar advised that he was conducting 10 to 20 hearings a week (!), and that a written procedure had not been created in the past. Apparently many people attend these hearings unrepresented or with counsel who were not in the habit of seeking procedural safeguards were in place, and without any documentation of how the hearing would be conducted. We found this remarkable, and insisted on a written procedure setting out how the process would unfold. To do otherwise was to walk into a mine field and be blindsided. The Registrar's office produced a procedure in January 2009. A copy of the procedure is attached at the end of this article.

Requiring the Complaint and Investigating Officer to give Sworn Evidence
Another major concern was that the deputy registrar's position was that sworn evidence was not required of the complainant or the investigating officer. The agency owner had great concerns with the credibility of both the complainant and the investigating officer, and insisted on sworn evidence. The deputy hearing officer's concession to our request was that we could bring a court reporter at our own expense and we had to bring proof that the court reporter was a commissioner of oaths. As you will see at the end of this story, it was a good thing the agency made this investment.

Requiring Particulars of the Allegations
A final concern was the lack of specificity of the allegations. What exactly did being uncooperative with police investigators mean in the circumstances? What exactly did operating an agency without integrity and honesty mean in the circumstances? We insisted on the specific allegations we had to answer to persuade the deputy hearing officer that the licences should not be revoked.

The deputy hearing registrar agreed - and advised that the lack of cooperation and failure to operate an agency with honesty and integrity specifically meant that (1) the agency owner had lied to the Registrar's police investigators when asked if he knew a woman - who at the time the police did not know was his spouse, and (2) that the agency owner had referred investigative work to an unlicensed person - that being his spouse.

Duty on PI's to Assert Spousal Privilege
The threatened license revocation was directly related to the agency owner's perceived less-than-full-cooperation with the Registrar's OPP investigators. This claim was based largely on the fact that the investigator gave so-called "evasive" answers when asked to disclose his knowledge of the unlicensed investigator - who was in fact his wife. More particularly, the allegation was that when the OPP investigator asked the agency owner: "Do you know Ms. X?", the agency owner denied knowing her. The OPP investigator asserted the agency owner out and out lied to him during his investigation.

We argued that the agency owner was within his rights to respond evasively because of the doctrine of spousal privilege and because the agency owner was aware that his wife was under police investigation. Spousal (or marital) privilege is a doctrine with a long history, both in statute and the common law, which protects the confidences shared in marriage and seeks to preserve marital harmony by prohibiting spouses from testifying against one another.

Spousal privilege makes the testimony of one spouse inadmissible in court under the law of evidence. In this case, the agency owner, knowing that his spouse was under investigation by the PSISA (operating without a licence and disclosing bank information), refrained from saying anything to police investigators that could implicate his wife. We argued that spousal privilege gave him the right to do so. Moreover, there was no evidence before the Registrar to link the agency owner's activities with the unlicensed activities of his spouse. While no case law was found that specifically applied the doctrine of spousal privilege in regulatory proceedings and during regulatory investigations, the quasi-criminal nature of the penal sanctions that his wife would face suggested that the principle was applicable.

The deputy registrar, however, took a very different approach to interpreting spousal privilege. He held the view that if spousal privilege was going to be relied upon, it had to be claimed explicitly at the investigation stage. In other words, the agency owner would have had to inform the Registrar's OPP investigators that he was asserting spousal privilege, such that his answers could be seen in that light. In this case however, the questions posed by police were themselves flawed. They were unclear. The agency owner was never directly asked if the unlicensed investigator was his spouse. While the agency owner's answers were not dishonest, the Registrar found that they could have been less evasive, and since no spousal privilege was claimed at the time of questioning, the doctrine could not subsequently be relied upon.

The Registrar's Right to Inspect versus the Registrar's Right to Search
Under the PSISA, it is possible to obtain a search warrant if there are reasonable grounds for believing that a person or entity is operating in contravention of the PSISA (s.22). Warrants thus obtained enable authorized parties to enter premises as well as examine and seize documents as deemed necessary. The Act also provides for inspection of licensees' premises either with their permission (s.27) or by means of a warrant (s.28).

In the present case, there were clear problems with how the Registrar's investigation was conducted. While the agency owner voluntarily allowed authorities to enter his agency's premises, electronic documents were seized from the agency without a warrant. The information contained in these computer records was then inadequately monitored. This came to light because the complainant appeared to have knowledge not only of the existence of these documents, but alluded to their contents. His will-state, in fact, rested heavily on the contents of these files. Not surprisingly, the complainant was reticent to disclose his sources for obtaining said information. We were quite surprised, however, when the complainant refused to answer how he acquired information from the agency's computers, the hearing deputy registrar ruled the PISGA did not grant him authority to compel an answer, and the agency's owner request for a stay of the hearing was dismissed.

To the deputy registrar's credit, during the hearing he made it clear that he would not be relying on any information that was improperly obtained by police or the complainant.

Failing to Cooperate with a Registrar's Investigation - Lies and Damn Lies
In the end, this case turned on the question of the agency owner's supposed refusal to cooperate with a police investigation, and his alleged collaboration with an unlicensed investigator. The primary ground for revocation of the investigator's license was that he had lied to police. Interestingly though, it was the police themselves who were caught .... stretching the truth.

It was alleged that the principal investigator denied having any knowledge of a certain unlicensed investigator, who the police later learned was his spouse. These allegations were supported by an investigating officer's notes. The officer responsible for probing the allegations had written that the agency owner did not know Ms. X. The officer took the same position in his ‘will-state', which was disclosed. He later testified, under oath, to this fact at the hearing in this matter. The agency owner, however, had an ace up his sleeve.

The agency owner had prudently tape-recorded his conversation with the officer during the investigation phase over a year before. The officer's notes of his conversation with the investigator were not an accurate reflection of the substance of the discussion. When the officer asked the agency owner who Ms. X was, the agency owner did not deny knowing her, but rather indicated that Ms. X was someone known to him and a ‘source'. When the tape was played, the OPP's investigating officer conceded the tape reflected his interview. When asked why there were discrepancies, long awkward pauses followed, before he explained that his notes reflected what he "interpreted."

Why had the Registrar's investigator not accurately recorded the conversation? It is suspected that at the time the question was asked, the issue was not important. Later, however, as a result of the complainant applying relentless pressure on the police, the Registrar's investigator's looked for anything upon which to bring the agency owner up on a hearing. This zealousness came at an awful price for the agency owner.

Appeals and Judicial Review
If the agency owner in this case had lost his license, he would arguably have several grounds for appeal. As earlier mentioned, hearings provided for under the PSISA are quite particular, and possibly problematic. There is no right for a licensee to call witnesses, no pre-hearing conference, no real disclosure and statements made in the hearing are not sworn. Nevertheless, an appeal may be made to the License Appeal Tribunal (the "Tribunal") established under Licence Appeal Tribunal Act, 1999. Procedural rights are greatly improved at this stage. Unlike the proceedings before the Registrar, appeals are adjudicated by an impartial, independent adjudicator and the Statutory Powers and Procedures Act does apply.

To initiate an appeal at the Tribunal, a notice of appeal must be submitted, along with a copy of the decision, a filing fee and the complete reasons for the appeal. According to the PSISA, these documents must be received by the Tribunal within twenty-one days of receiving the original decision (s.17(1)). It is worth noting that an appeal does not have the effect of staying the Registrar's decision pending the hearing of the appeal (s.17(2)). In addition, the Registrar is automatically a party to any appeal from a PSISA decision.

Under the Licence Appeal Tribunal Act disclosure of evidence must be made at least ten days before the hearing or pre-hearing. Once the Tribunal receives all relevant documentation, a pre-hearing is scheduled to give the parties an opportunity to settle. If no resolution is reached at this stage, the case proceeds to the one-member panel Tribunal hearing. At the hearing, witnesses may be called and cross-examined by both parties. Again, unlike the PSISA process, these hearings are open to the public and are audio recorded. At the conclusion of the hearing, the Tribunal panel member gives the parties a written decision.

Appeals from decisions rendered by the Registrar may also be heard at the Superior Court of Justice. Since revoking a license is deemed to be an exercise of ‘statutory power', the judicial review procedure laid out by the Judicial Review Procedure Act, 1990 also applies. The statute permits appeals to be made to the Superior Court, with leave. The Court can set aside decisions where there are errors of law (s.2(2)) or where there is insufficient evidence to ground the decision of the lower authority (s.2(3)).

Result and Going Forward
Despite the undermining of the credibility of the complainant and the investigating officer, the deputy hearing registrar required an affidavit from the agency owner setting out his response to the allegations. The affidavit set out in detail the police service history of the agency owner, his contribution to the PI industry in his 9 years of business, and enclosed letters of references from a half dozen other agency owners, clients and retired police executives. The affidavit also set out the agency owner's response to the specific allegations, refuting the evidence provided by the complainant and the investigating officer. Based on this evidence, the deputy registrar dismissed the proposed agency and investigator licence revocation, and only ordered that the agency owner review the Act's Code of Conduct with an emphasis on not providing the Registrar's investigating officers with evasive answers and not providing investigative work to unlicensed investigators, a curious admonition given the testimony of his own investigating officer.

The most significant take away from this proceeding was the ruling on spousal privilege. If investigated by the Registrar's police investigators, and if the investigators ask questions about your spouse, the Branch's view is that you must explicitly state you refuse to answer on the basis of spousal privilege. If spousal privilege is not explicitly asserted, you are required to answer the investigator's questions fully and completely as part of your duty to cooperate with the Registrar's investigations.

The most significant issue not resolved by this hearing was the application of the SPPA to the PSISA. We have only the deputy hearing registrar's view on the matter. What the industry needs is a Court to adjudicate this issue, and that is only possible by bringing an application for judicial review. We will have to wait for the right case to test this issue. Even without the Registrar's office agreement on procedural matters, anyone who faces one of these licence revocation hearings where they have a legitimate defence should insist on particulars, disclosure and the right to summons uncooperative witnesses.

A licencee should also bring his or her own court reporter and commissioner of oaths, and tape record all investigative interviews with the Registrar's investigators - especially if not represented by counsel. It is not often that we run into credibility issues with a complaint and an investigating officer like in this case, but in this case, the agency owner's tape saved the day.

For further information on responding to licence suspension and revocation hearings, we welcome you contacting our office."