FINANCIAL SERVICES TRIBUNAL
2006 ONFST 8
Decision No. 10281-2006-1
IN THE MATTER OF the Insurance Act, R.S.O. 1990, c. 1.8, as amended (the "Act");
IN THE MATTER OF a decision of the Executive Director, Licensing and Market Conduct Division of the Financial Services Commission of Ontario, to revoke the Level II life insurance agent's licence of Arun Shrivastava;
AND IN THE MATTER OF a hearing in accordance with sections 17 and 393(10.2) of the Act.
BETWEEN:
ARUN SHRIVASTAVA
Appellant
-and-
SUPERINTENDENT OF FINANCIAL SERVICES
Respondent
BEFORE:
Mr. Colin H.H. McNairn Chair of the Tribunal
APPEARANCES:
For the Appellant: Mr. Glenroy Bastien
For the Respondent: Ms. Larissa Easson
HEARING DATE: November 3, 2006
REASONS FOR DECISION ON APPLICATION FOR STAY
The Executive Director, Licensing and Market Conduct Division of the Financial Services Commission of Ontario (“FSCO”) made an order, under the Insurance Act, dated August 4, 2006 (the “Order”) revoking the Level II life insurance agent’s licence held by Arun Shrivastava. Mr. Shrivastava appealed that Order to this Tribunal. He then made application to the Tribunal, pursuant to s. 17(6) of the Insurance Act, for a stay of the Order pending the disposition of the appeal. The Tribunal directed that a hearing be held on that application, over which I presided as a single-member panel of the Tribunal.
I have decided to dismiss the stay application on the basis that the risk of harm to the public if the application were to be granted exceeds the risk of harm to Mr. Shrivastava if the application were to be denied.
The Prior Proceedings
The Executive Director made the Order, under delegated authority from the Superintendent of Financial Services, following a hearing by a three-member Advisory Board. Upon the conclusion of the hearing, the Board made a written recommendation to the Director, with supporting reasons, that Mr. Shrivastava’s licence be revoked. The Director adopted that recommendation in making his Order.
The Test for Granting a Stay
The Tribunal has set out a three-pronged test for deciding whether to grant a stay of an order under appeal in the case of Rendall v. Superintendent of Financial Services (FST Decision No. 10087-1999-1). According to that test, which I adopt for the purposes of this application, positive answers to all of the following questions are required before a stay will be granted:
- Is there a serious (as opposed to a frivolous or vexatious) question to be tried on the appeal?
- Would the appellant suffer irreparable harm if the request for a stay were to be denied?
- Is the risk of harm to the appellant if the request were to be denied greater than the risk of harm to the public if the request were to be granted?
The Admission of New Evidence on the Stay Application
On an appeal from an order made under the Insurance Act when there has been a hearing before an Advisory Board, the Tribunal would not normally entertain new evidence that had not been put to the Board (see Rule 43.03 of the Rules of Practice and Procedure before the Financial Services Tribunal). However, in applying the Rendall test, on an application for a stay of such an order, the questions to be addressed are not the same as those that must be addressed in assessing the merits of the appeal. Bearing this in mind, I ruled that I would hear the oral evidence of Fred Hollis, an investigator for FSCO, who was put forward by counsel for the Superintendent, provided that his evidence was confined to addressing certain allegations, evidence or findings as to the harm that would be suffered by Mr. Shrivastava for so long as his licence was lifted. The nature and extent of that harm is directly relevant to this application, although it is likely to be of limited or no relevance when the Tribunal comes to decide whether to allow the appeal.
The reasons of the Advisory Board, supporting its recommendation to the Executive Director, recite the fact that Mr. Shrivastava testified that he was under a good deal of financial pressure and that he had to support two adult children attending university. Those reasons also include a finding that Mr. Shrivastava “was driven by greed and the necessity of earning commissions to support himself and his children who were in university and whose education [he] was financing”. The grounds for the present application, which Mr. Shrivastava sets out in his written notice of application, include the claim that he is well qualified and his life agent business “has been the only means to earn his living and support his family”. Finally, the Advisory Board had documentary evidence before it, which is now before me on this application, of Mr. Shrivastava’s then current errors and omissions insurance coverage and of his brokerage agreement with Unity Life of Canada, which contained a provision to the effect that the agreement would be automatically cancelled should Mr. Shrivastava lose his life agent’s licence.
Mr. Hollis gave evidence at the hearing on this application that in the month or so before this hearing, he had;
- been in contact with Anurag Shrivastava, the youngest (23 years of age) of Mr. Shrivastava’s two children, who told Mr. Hollis that he had left university in June of 2006 and was employed as a life insurance agent by Primerica Financial Services, and that he was living at home with his parents but covering his own expenses such as the cost of cable and internet services;
- learned from Anurag Shrivastava that his older brother, who also lived with their parents, had graduated from Ryerson in 2005 and had been working for the Royal Bank of Canada since then;
- obtained an Equifax credit report, dated October 31, 2006, on Anurag Shrivastava, which was admitted in evidence on this application, showing that he had a number of credit cards and a generally good credit rating;
- contacted the broker through which the appellant, Arun Shrivastava, had obtained his errors and omissions insurance to advise of the licence revocation and been subsequently provided with a copy of a letter from the broker advising Mr. Shrivastava of the cancellation, effective August 4, 2006, of his insurance, which letter was admitted in evidence;
- contacted Unity Life of Canada to advise of the licence revocation and been subsequently advised that Unity Life had sent Mr. Shrivastava notice of cancellation of his brokerage agreement.
In cross-examination by counsel for Mr. Shrivastava, Mr. Hollis conceded that;
- the Equifax report did not indicate the extent to which Anurag Shrivastava might be supported by his father,
- while holding a Level II life agent’s licence, Arun Shrivastava could contract with various insurance companies and did not need to be sponsored by a single company, and
- although a life agent was required to have errors and omissions insurance, it was not clear that Mr. Shrivastava would be unable to obtain such insurance should the revocation of his licence be stayed.
Mr. Shrivastava did not put forward any evidence on this application. I accept the evidence-in-chief of Mr. Hollis as truthful and reliable, even though it is to some extent hearsay evidence. I also accept the limitations on the implications that can be drawn from Mr. Hollis' evidence that were conceded in cross-examination. To the extent that Mr. Hollis' evidence is inconsistent with any of Mr. Shrivastava's evidence on the record of the proceedings before the Advisory Board, I prefer Mr. Hollis' evidence as he had no apparent motivation to be less than truthful and his evidence was not challenged by any evidence put forward by Mr. Shrivastava on this application.