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Provincial offences Financial products and services Strict liability Defences Whether offence under s. 482 of Act respecting the distribution of financial products and services, R.S.Q., c. D 9.2 (“ADFPS”), is strict liability offence or requires proof of specific intent Whether actus reus of offence under s. 482 was proved Whether appellant could rely on due diligence as defence.

Section 71 of the ADFPS requires registration with the Autorité des marchés financiers in order to act as an insurance firm in Quebec. Moreover, s. 482 provides that “[e]very insurer that helps or, by encouragement, advice or consent or by an authorization or order, induces a firm . . . to contravene any provision” of the ADFPS is guilty of an offence. The appellant Sovereign was authorized to offer insurance in Quebec but instead issued policies through brokers, including Flanders Insurance Management and Administrative Services Ltd. of Winnipeg (“Flanders”). GE Commercial Distribution Finance (“GE”), which was based in Toronto, financed the inventory of recreational vehicles on merchants’ premises. In 2004, GE notified its clients that it had opted for a new master policy from Sovereign through Flanders. At GE’s invitation, 56 Quebec merchants subscribed to the policy. A rival of Flanders then filed complaints against Flanders and GE with, inter alia, the AMF, alleging that Flanders was acting as an insurance broker in Quebec without holding a licence. Following an inquiry, the AMF issued 56 statements of offence against Sovereign for consenting to or authorizing the issue of an insurance policy by Flanders, a firm not registered with the AMF, contrary to s. 71 of the ADFPS.