Lessons in evidence, procedure and natural justice from the Financial Markets Administrative Tribunal

On June 4, 2021, the Financial Markets Administrative Tribunal (“FMAT”) rendered a judgment on the merits in Autorité des marchés financiers c. Hudson, 2021 QCTMF 33. The FMAT was asked to rule on a public offering to invest in an Iraqi dinar and railway bond operation without an approved prospectus and registration with the Autorité des marchés financiers (“AMF”).

The lengthy judgment provides a number of interesting lessons, particularly with respect to evidence and procedure before the FMAT.


In certain cases, the FMAT may find ex officio that a prospectus exemption applies.

First, the Tribunal noted that, in principle, a securities offering must be made with a prospectus, subject to certain exceptions to be established by the party wishing to rely thereon.1 However, it went on to state that in clear cases where the relevant evidence is available, the Tribunal may raise the issue ex officio and find that an exemption applies:

[186] It is usually up to the person claiming an exemption to invoke it; however, in clear cases where there is evidence before the Tribunal that an exemption applies—such as exemptions for the value of the investment, registrants or immediate family members—the Tribunal may ex officio find that an exemption is applicable.

[187] In the search for the truth and by virtue of the powers vested in the presiding administrative judge, he or she may also question the application or non-application of a statutory exemption when he or she believes that the context is one in which such an exemption applies.

[188] In this case, and having regard to the testimony of five witnesses presented by the Autorité, the Tribunal found that such exemptions applied.

[Translation; emphasis added]


The FMAT cannot correct ex officio an error in a conclusion of the AMF’s originating pleading if doing so would irreparably affect procedural fairness.

Furthermore, the Tribunal stressed that even though the allegations contained in the AMF’s originating pleading mentioned that certain defendants aided another defendant in acting as a dealer without being registered as such with the AMF, the conclusions of the document contained no corresponding order. The Tribunal thus considered that, in the absence of a timely motion to amend, it could not make findings based on these allegations without affecting the fundamental fairness of the proceedings:

[203] The Tribunal stresses that, in the absence of a timely request for amendment and despite the fact that this inconsistency is certainly the result of an error, it cannot, at this stage of the proceedings, amend ex officio the conclusions of the AMF’s application and address the notion of aid by Nicolas De Smet and Carol Hudson to Luc Roberge.

[204] In fact, in this case, in which the Tribunal has had to consider on several occasions the threshold beyond which procedural fairness is irreparably affected by delays, irregularities or an accumulation of irregularities, it is not inclined to correct ex officio the deficient conclusions in the originating pleading dated August 28, 2018.

[205] It considers that this would affect the fundamental fairness of the proceedings and the balance of rights of the parties.

[206] At this stage of the proceedings, the respondent Nicolas De Smet has responded to the requests for orders as drafted, and the Tribunal considers that adding to this conclusion the notion of aid to Luc Roberge would result in a new pleading.

[207] Although the Tribunal’s jurisdiction is exercised in the public interest, the Tribunal is of the view that the correction ex officio of an error in a conclusion of the originating pleading at this stage of the proceedings would irreparably affect procedural fairness in this case.

[208] Accordingly, with respect to the orders to be rendered by the Tribunal regarding Nicolas De Smet and Carol Hudson, the Tribunal will rely on the current conclusions of the originating pleading and will not rule on the aid to Luc Roberge by Nicolas De Smet and Carol Hudson.

[Translation; emphasis added; reference omitted]


The importance of the stakes for the defendants may require a high degree of procedural fairness from the FMAT in weighing the evidence.

The Tribunal also noted that the AMF had filed in evidence a table showing the result of the investigator’s analysis of the bank accounts of one of the defendants without, however, providing the supporting documents.2 The AMF explained this decision, in part, on the basis that hearsay evidence is admissible before the FMAT.

However, in the Tribunal’s view, such evidence did not offer reasonable guarantees of credibility in the context where the high stakes of the case required the application of a high degree of procedural fairness:

[243] The Tribunal reiterates that its rules of evidence and procedure permit hearsay, but that this permission is balanced by the requirement that such evidence offer reasonable guarantees of credibility and must be subject to the rules of natural justice.

[244] However, given the importance of the stakes for the respondent, which include a request for an administrative penalty of two million dollars, the Tribunal reiterates the need to apply a high degree of procedural fairness in its analysis of the evidence in this case.


[254] While hearsay evidence is admissible before the Tribunal, it does not open the door to assertions that are not supported by clear, convincing and unambiguous evidence. For example, the investigator’s assertion that he or she found, in the course of his or her investigation, that a distribution was made to a person must be supported or corroborated by evidence that is before the Tribunal or that is sufficiently specific for the Tribunal to reach the same conclusion.

[255] The entry recording a deposit made by a person with a common French name used in Quebec in the bank account of Carol Hudson or one of her companies could have been made for a variety of reasons other than an investment in the absence of any other evidence to support this assumption.

[Our translation]

Similarly, the Tribunal further stated that “the entry of an amount in a bank account, in the absence of reliable corroboration, does not constitute proof of an investment on a balance of probabilities.”3 Such corroboration could come from receipts, contracts, proofs of transfer or investor declarations.4



This judgment serves as a reminder that while the FMAT is not bound to follow the ordinary rules of evidence in civil matters5 and its rules of procedure are intended, among other things, to simplify the conduct of hearings,6 the significance of the penalties sought by the AMF in an originating pleading may require the Tribunal, whose process “resembles judicial decision-making,”7 to apply “a high degree of procedural fairness in its rigour in weighing the evidence.”8

In such a context, the FMAT could also raise ex officio certain evidence favourable to the defences that the respondents may put forward and refuse to allow an amendment to an originating pleading that was not made in a timely manner.

Finally, the FMAT justly highlighted that the fact that hearsay evidence is permitted before the Tribunal does not obviate the requirement for such evidence to offer reasonable guarantees of credibility in circumstances where the importance of the stakes raised by the hearing requires a high degree of procedural fairness.


1 Autorité des marchés financiers c. Hudson, 2021 QCTMF 33, paras. 183 and 186 [Judgment].
2 Judgment, paras. 237-238.
3 Judgment, para. 407 [translation].
4 Ibid, para. 404.
5 Rules of procedure of the Financial Markets Administrative Tribunal, CQLR c. E-6.1, r. 1, s. 75.
6 Ibid, s. 1.
7 Judgment, para. 59 [translation].
8 Ibid, para. 402. See also para. 59 and 244 [translation].