Thursday, September 09, 2010
Click here for a PDF version of
this Order.
Docket: TLF09101
IN
THE MATTER of alleged
violations of the
Prince Edward Island Lands Protection Act by Melvin C. Griffin and Sylvia J. Griffin. BEFORE THE COMMISSION on Thursday, the
18th day of February, 2010.
Maurice Rodgerson, Chair Order Appearances & Witnesses Reasons for Order 1. Introduction 2. Discussion 3. Findings 4. Disposition Order 1. Special Counsel: Pamela J. Williams 2. For
the Respondents Melvin C. Griffin and Sylvia J. Griffin: Melvin C.
Griffin 3. Counsel for the
Review Panel: Paul D.
Michael, Q.C. Reasons for Order
[1] This is a decision of a
Review Panel of the Island Regulatory and Appeals Commission
("Commission") pertaining to Melvin C. Griffin and Sylvia J. Griffin
(the Respondents) pursuant to sections 15 and 15.1 of the
Prince Edward Island Lands Protection Act
(the "Act")
and pursuant to the procedures established under Commission Rule
R98-1.
[2] Under section 15 of the Act,
the Commission may request information and conduct an investigation for the
purpose of determining whether a person or corporation has contravened the
Act
or its regulations. Section 15.1 of the Act
provides that the Commission may impose a penalty where a person or
corporation has contravened the Act.
[3] On November 9, 2007, the
Commission issued a Notice of Investigation for the purpose of determining
whether the Respondents may have contravened the Act.
On November 14, 2007 the Commission appointed E. W. Scott Dickieson as the
Investigation Officer and Pamela J. Williams as Special Counsel in this
matter.
[4] On July 25, 2008 the
Investigation Officer filed his report with the Commission.
[5] On September 8, 2008 the
Respondents filed a response to the Investigation Officer's report.
[6] On January 20, 2009, the
Commission issued Order
LF09-001 ordering the Respondents to
provide the information and documents described in said Order to the
Commission on or before 5:00 p.m. January 30, 2009.
[7] On February 5, 2009, the
Commission issued Order
LF09-003 and found the Respondents,
pursuant to Section 15.1(f) of the Act,
to have contravened the Act
by failing to comply with the demands of Order
LF09-001. The Commission also imposed a
penalty the terms of which were set out in detail in Order
LF09-003.
[8] On June 3, 2009 the Commission
appointed a Review Panel pursuant to subsection 9(2) of Commission Rule
R98-1.
[9] On July 10, 2009, the Supreme
Court of Prince Edward Island granted the application of the Commission
enabling it to enter into judgment against the Respondents in the amount of
$28,800 being the penalty outstanding from Order
LF09-003 as of June 17, 2009. The Minute
of Judgment was registered on July 29, 2009.
[10] On September 8, 2009, the
Review Panel set the matter down for a public hearing on November 12, 2009.
[11] On the morning of November 12,
2009, Special Counsel and the Respondents filed an Agreed Statement of
Facts.
[11] On the afternoon of November
12, 2009, a public hearing was held before the Review Panel. Melvin C.
Griffin participated via telephone. Special Counsel formally presented the
Agreed Statement of Facts to the Review Panel. Mr. Griffin consented to
allowing the Agreed Statement of Facts to be entered into evidence. The
Review Panel established a deadline of December 11, 2009 for the filing of
written submissions on the issue of penalty.
[13] On December 11, 2009, Special
Counsel requested a one week extension for filing the written submissions on
the issue of penalty. The Review Panel granted that request.
[14] On December 18, 2009, Special
Counsel and the Respondents filed separate written submissions on the issue
of penalty.
Submissions of Special Counsel on the
Issue of Penalty
[15] Special Counsel noted that the
Respondents continue to be in breach of section 4 of the Act.
Special Counsel noted that the Respondents were not forthcoming with their
responses to requests for information, misrepresented information and
provided an inaccurate response. The Respondents' requests for extensions
and delayed responses were not made in good faith. Special Counsel
submitted that the Respondents' actions, which continued after the Notice of
Investigation was issued, results in a serious breach which ought to attract
the maximum fine under section 15.1 of the Act.
However, as a mitigating factor, Special Counsel noted that the Respondent
did ultimately co-operate with an agreed Statement of Facts on November 12,
2009 and therefore the following submissions are offered on the issue of an
appropriate penalty for this matter:
A fine of $9,000 as against the
Respondents with respect to the contravention under s. 4 of the Act,
payable within thirty days from the rendering of the penalty, at which
time if not paid a judgment shall be registered with the Supreme Court
of Prince Edward Island;
The Respondents are to make an
application for approval in their own names and/or in another
appropriate entity as non-residents acquiring an interest to occupy, use
or possess parcel number 141168 with said lands being in excess of
permitted acreage to be held by a non-resident, within thirty days from
the rendering of the penalty; and
The daily accrual of $200 in relation
to the non-production order penalty to be stayed effective the date of
judgment at $28,800.
Submissions of the Respondents on the
Issue of Penalty
[16] The Respondents acknowledge
that they are in contravention of section 4 of the Act.
However, they submit that they did not knowingly contravene the Act. They
submit that they relied on the advice of various professionals throughout
the course of the transaction. They submit that they complied with the
"Order to Produce Documents" as Marlin Property Development Inc. was
referred to as Marlin Properties Inc. in the Order. They also distinguish
the loan agreement from the development agreement and confirm there was no
written loan agreement. They submit that the "significant media coverage of
the original hearing caused humiliation and embarrassment which should be
considered in rendering the penalty". The Respondent offered the following
submissions on the issue of an appropriate penalty for this matter:
A fine of $5,000 against the
Respondents with respect to the contravention of section 4 of the Act;
The judgment of $28,800 with respect
to the "Order to Produce" be reduced to $3,000 "to recognize the
misunderstanding"; and
The Respondents are to make an
application for approval in their own names and/or in another
appropriate entity as non-residents acquiring an interest to occupy, use
or possess parcel number 141168 with said lands being in excess of
permitted acreage to be held by a non-resident, within ninety days from
the rendering of the penalty. [17]
The Review Panel has considered all the
documentation on file as well as the written submissions of Special Counsel
and the Respondents with respect to the issue of penalty. From a review of
the Agreed Statement of Facts, and the written submissions filed by the
Respondents on the issue of penalty, it would appear that the Respondents
have now conceded that they are in contravention of section 4 of the Act.
[18] Section 4 of the Act
reads as follows:
4. A person who is not a resident
person shall not have an aggregate land holding in excess of five acres
or having a shore frontage in excess of one hundred and sixty-five feet
unless he first receives permission to do so from the Lieutenant
Governor in Council.
1982,c.16,s.4; 1988,c.37,s.1; 1995,c.22,s.2,16 {eff.} Jan. 1/96.
[19] Land holding is defined in the
Act
as:
1(1)(g) "land holding" means,
subject to subsection (3), an interest conferring the right to use,
possession or occupation of land, but does not include land or an
interest in land acquired by a bank, trust company or other financial
institution in the ordinary course of its business by way of security
for a debt or other obligation;
[20] A resident person is defined
in the Act
as:
1(1)(k) "resident person" means a
person who resides in the province for one hundred and eighty-three days
or more a year;
[21] The Review Panel finds that
the Respondents were non-residents and remain non-residents. The
Respondents had applied to purchase the lands in question on November 7,
2003 but their application was denied by Order EC2003-689 dated December 2,
2003. The Review Panel finds that an arrangement was then contrived whereby
Blair Smith, a resident, would take legal title to the lands in question but
the Respondents would maintain the actual right to use or possession of the
property. The Respondents then, for all practical purposes, acted as the
developer of the property with the assistance of a power of attorney granted
to them by Mr. Smith on July 30, 2004. Using the power of attorney, the
Respondents then conveyed subdivided lots from the property to third party
purchasers. The Review Panel finds that the evidence is sufficient, on the
civil standard of a balance of probabilities, to find that the Respondents
possessed an interest in the subject property conferring the rights to the
use and possession of said property.
[22] Given the evidence on file and
the Agreed Statement of Facts, the Review Panel finds that the Respondents
have been in contravention of section 4 of the Act
since December 2003.
[23] In considering what, if any
monetary penalty to impose, the Review Panel has carefully examined the
Act,
and in particular the following provisions:
10. (1) The Minister or the
Commission may request any person or corporation believed to have an
aggregate land holding
(a) in the case of a person, of
more than 750 acres; or
(b) in the case of a
corporation, of more than 2,250 acres,
to make a land holding disclosure
statement in the form prescribed in the regulations.
(2) Without prejudice to subsection
(1), any person or corporation having an aggregate land holding in
excess of the limit specified in subsection (1) shall, not later than
December 31 of each year, file a disclosure statement with the
Commission.
12. (1) Where he has reasonable and
probable grounds to believe that any person or corporation has
contravened section 2, 4, 5, 5.3, 6.1, or 6.2 of this Act,
the Minister may issue an order requiring that person or corporation
(a) to reduce his aggregate
land holding to the maximum permitted by section 2;
(b) to make application for and
obtain any permit required by section 4 or section 5; or
(c) repealed by 1998,c.79,s.12.
(2) Where any person or corporation
fails to comply with an order of the Minister under subsection (1)
within three months of the date on which the order is served, the
Minister may apply to a judge of the Supreme Court, who shall enforce
compliance with this Act
and may make one or more of the following orders:
(a) an order declaring null and
void any instrument or document by which a land holding is or may be
had in contravention of this Act;
(b) an order for the sale of
the land holding held in contravention of this Act and the
distribution of the proceeds from the sale to such persons as may be
entitled thereto;
(c) an order directing the
registrar to cancel the registration of a deed of conveyance or
other document registered under the Registry Act R.S.P.E.I. 1988,
Cap. R-10;
(d) an order to return any
consideration given under an instrument or a document made in
contravention of this Act;
(e) an order for possession of
the land holding to be given to such persons as may be entitled
thereto;
(e.1) an order declaring null and
void a permit issued pursuant to subsection 6.1(2);
(f) an order respecting costs;
(g) such other order as may be
necessary to give effect to the provisions of this Act
or as to him seems just.
1982,c.16,s.13; 1995,c.22,s.16; 1998,c.79,s.12.
...
15. (1) The Minister, the Commission
or any person authorized by the Minister may request information and
conduct an investigation for the purpose of determining whether a person
or corporation has contravened this Act
or the regulations.
15.1 (1) Notwithstanding any other
provision of the Act,
a person or corporation that
(a) has contravened section 2, 4,
5, 5.3, 6.1 or 6.2 ;
(b) fails to comply with a
divestiture schedule or any other condition of a permit issued
pursuant to section 6.1;
(c) fails to make a land holding
disclosure statement when requested to do so under subsection 10(1);
(d) fails to file a disclosure
statement pursuant to subsection 10(2);
(e) fails to comply with a demand
under subsection 15(2);
(f) fails, neglects, omits or
refuses to do any act or thing required of that person or
corporation by this Act, the regulations, any order of the
Commission or any order of the Minister; or
(g) violates this Act, the
regulations, any order of the Commission or any order of the
Minister
is liable to a penalty imposed by the
Commission of not more than $10,000.
(2) Each day during which a
prohibited activity subject to a penalty pursuant to subsection (1) is
continued gives rise to a separate liability to a penalty imposed by the
Commission not exceeding $500 for each day.
[24] The Review Panel believes the
Respondents' contravention of the Act
is very serious and requires a penalty that reflects this fact. Special
Counsel noted that the Respondents did co-operate by participating in an
Agreed Statement of Facts. While the Review Panel agrees that this
co-operation does serve to mitigate the penalty, the Review Panel finds that
this last minute co-operation on the courthouse steps' will only reduce the
penalty slightly. The Respondents claim they did not knowingly contravene
the Act.
However, the Review Panel notes that the Commission made inquiries regarding
a possible contravention shortly after the property was sold in December
2003 and several times prior to issuing the Notice of Investigation. The
Respondents should have known, or certainly as a result of the inquiries
become aware, of the contravention at least five years prior to
acknowledging the fact in the Agreed Statement of Facts.
[25] The Respondents claim that
they complied with Order
LF09-001 because Marlin Property
Development Inc. was referred to as Marlin Properties Inc. in the Order.
However, such a response to Order LF09-001 suggests to the Review Panel an
attempt to avoid full disclosure rather than an effort to co-operate and
comply.
[26] In the Review Panel's view,
the Respondents' arguments do not serve to justify the significant reduction
in penalty suggested by the Respondents.
[27] The Review Panel finds that it
does not have the jurisdiction to reduce a judgment ordered by the Supreme
Court of Prince Edward Island.
[28] Accordingly, the Review Panel
imposes the following:
For the violation of section 4 of the
Act,
the Review Panel hereby imposes a penalty of $9,000, payable to The
Island Regulatory and Appeals Commission on or before March 31, 2010.
The Respondents are to make an
application for approval in their own names and/or in another
appropriate entity as non-residents acquiring an interest to occupy, use
or possess parcel number 141168 with said lands being in excess of
permitted acreage to be held by a non-resident, said application to be
filed not later than March 31, 2010.
With respect to the Supreme Court
judgment, the daily accrual of $200 in relation to the penalty set out
in Order LF09-003 shall be stayed, effective the date of judgment at
$28,800. [29]
An Order setting out the
penalties imposed by the Review Panel will therefore issue. Order WHEREAS
an investigation occurred into alleged violations of the Respondents, Melvin
C. Griffin and Sylvia J. Griffin, as authorized under section 15 of the
Prince Edward Island Lands Protection Act;
AND WHEREAS
a Review Panel of the Island Regulatory and Appeals Commission considered
the matter at a public hearing conducted in Charlottetown on November 12,
2009;
AND WHEREAS
the Review Panel has found that the Respondents have contravened the
Prince Edward Island Lands Protection Act
and has issued its findings in this matter in accordance with the Reasons
for Order issued with this Order;
NOW THEREFORE,
pursuant to the
Island Regulatory
and Appeals Commission Act
and the
Prince Edward Island Lands Protection Act
IT IS ORDERED THAT
1. For the violation of section
4 of the
Prince Edward Island Lands Protection Act, the Review Panel
hereby imposes a penalty of $9,000 payable to the Island Regulatory and
Appeals Commission on or before March 31, 2010.
2. The Respondents are to make
an application for approval in their own names and/or in another
appropriate entity as non-residents acquiring an interest to occupy, use
or possess parcel number 141168 with said lands being in excess of
permitted acreage to be held by a non-resident, said application to be
filed not later than March 31, 2010.
3. With respect to the Supreme
Court judgment, the daily accrual of $200 in relation to the penalty set
out in Order
LF09-003 shall be stayed, effective the
date of judgment at $28,800. DATED
at Charlottetown, Prince Edward Island, this 18th day of February, 2010. BY THE COMMISSION: Chester MacNeill, Commissioner
NOTICE
Section 12 of the Island
Regulatory and Appeals Commission Act reads as follows: Parties to this proceeding
seeking a review of the Commission's decision or order in this matter may do
so by filing with the Commission, at the earliest date, a written
Sections 13(1) and 13(2) of the
Act
provide as follows: 13.(1) An appeal lies
from a decision or order of the Commission to the Court of Appeal upon a
question of law or jurisdiction. (2) The appeal shall be
made by filing a notice of appeal in the Court of Appeal within twenty
days after the decision or order appealed from and the rules of court
respecting appeals apply with the necessary changes. In accordance with the
Commission's Records Retention and Disposition Schedule, the material
contained in the official file regarding this matter will be retained by the
Commission for a period of 2 years.
Order TLF10-001
Chester MacNeill, Commissioner
Contents
Appearances & Witnesses
Sylvia J. Griffin
1. Introduction
3. Findings
4. Disposition
|
|