Citation: Spiegel v. Ontario (Superintendent Financial Services), 2018 ONFST 1 Decision No. IA728-2017-2 Date: 2018/01/17

IN THE MATTER OF the Insurance Act, R.S.O. 1990, c. I.8, as amended (the “Act”), in particular sections 392.4(4) and 407.1;

AND IN THE MATTER OF the Notice of Proposal to Issue a Licence with Conditions, dated March 10, 2017 against Roland Spiegel, issued by the Director, Licensing Branch by delegated authority from the Superintendent of Financial Services;

AND IN THE MATTER OF a Hearing in accordance with subsection 407.1(3) of the Act.

and

BEFORE:

Audrey Mak Chair of the Panel and Member of the Tribunal

Ian McSweeney Member of the Panel and Chair of the Tribunal

Paul Farley Member of the Panel and Member of the Tribunal

For the Applicant – Self-represented

For the Superintendent of Financial Services – Deborah McPhail

1Mr. Spiegel (the “Applicant”) is a paralegal regulated by the Law Society of Upper Canada (now the Law Society of Ontario, and hereinafter called the “Law Society”).

2On December 11, 2014, the Law Society issued an Amended Notice of Application alleging that the Applicant engaged in professional misconduct and conduct unbecoming of a licensed paralegal (“Law Society Notice of Application”).

3On July 20, 2016, the Applicant applied to the Superintendent of Financial Services (“Superintendent”) for an insurance agent licence.

4On March 10, 2017, the Superintendent issued a Notice of Proposal to Issue Licence with Conditions (“NOP”). Two conditions were proposed in the NOP. The first condition requires the Applicant to arrange for enhanced supervision of his life insurance activities for two years. The second condition requires the Applicant to provide a copy of the Law Society Tribunal’s decision in respect of the allegations against the Applicant (“Law Society Decision”) to the Superintendent within 24 hours of having notice of it.

5The Applicant filed a Request for Hearing pursuant to subsection 407.1(3) of the Act. A six day hearing before this Tribunal has been scheduled to take place on May 24, 25, 28, 29, 31 and June 1, 2018.

6At the pre-hearing teleconference held on October 26, 2017 (“October 26, 2017 PHC”), the Superintendent advised that the Law Society Decision was issued on September 15, 2017. The Law Society Tribunal concluded that the Applicant engaged in professional misconduct contrary to specific provisions of the Paralegal Rules of Conduct and the Law Society Act.

7The Applicant is appealing the Law Society Decision and the Superintendent has requested that the hearing in this proceeding be adjourned until the decision of the Law Society Tribunal Appeal Division is issued. The Applicant has opposed this request.

8The Superintendent has brought this motion for an order to adjourn the hearing dates in this proceeding sine die until the proceeding against the Applicant before the Law Society, and any subsequent appellate or review proceedings that flow from it (collectively referred to as the “Law Society Proceeding”), have been finalized. The Superintendent has provided submissions in support of this motion (including a copy of the Law Society Decision).

9The Applicant provided written submissions to the Tribunal, in response to the Superintendent’s motion.

II. DEcISION on the MOtion

10After carefully considering the written submissions of both the Superintendent and the Applicant, the Tribunal will not grant the order for adjournment requested by the Superintendent for the reasons set out below. The hearing in this matter will proceed on the dates set out in paragraph [5] above.

III. ANalysis

11It is the Superintendent’s position that if the hearing proceeds before the Law Society Proceeding is concluded, the hearing will be premature and the issues in the hearing may be moot.

12On the prematurity argument, the Superintendent submits, among other things, that “[c]urrently, the factual foundation for any adjudication as to whether the Applicant should be issued a licence under the Act is unresolved.” He also submits that if the Tribunal hearing goes ahead before the Law Society Proceeding is finalized, this would, in effect, be an attempt to second guess the adjudicator in the Law Society Proceeding because the only basis for the NOP is the fact of the allegations in the Law Society Proceeding.

13On the mootness argument, the Superintendent submits that because the Law Society Decision has already been issued, the proposed licence condition which required the Applicant to report the Law Society Decision to the Superintendent within 24 hours is already moot. As for the proposed licence condition that the Applicant be supervised, the Superintendent argues that this could also become moot (i.e., if the Applicant succeeds in his appeal before the Law Society Appeal Division, the Superintendent may reconsider his present position and grant the Applicant an unconditional licence.)

14The Applicant’s position is that the Tribunal is independent of the Law Society and has the authority and statutory jurisdiction to make its own determination as to matters under the jurisdiction of the Superintendent. He further submits that “there is nothing that stands in the way that prevents the Superintendent from introducing to the FST Panel any such probative material, documents, evidence, including any such LSUC’s documents and/or the LSUC Tribunal Hearing Panel’s decision, as it pleases, in order to advance the Superintendent’s position and assertions.”

15The Applicant also argues that “there is no good and/or sufficient reasons to delay the FST Hearing, already scheduled, which inevitably will be extremely prejudicial to the Applicant.”

16The Tribunal is of the view that the uncertainty of the outcome of the Law Society Proceeding is no different than it was at the time of the NOP, before the Law Society Decision was issued. As stated by the Superintendent, the NOP was issued on the basis of the allegations in the Law Society Notice of Application. Paragraph 13 of the Superintendent’s motion submission states that the Superintendent was of the view that it was necessary to impose certain conditions on any licence granted to the Applicant to protect the public during the period while the Law Society allegations against the Applicant were outstanding. Even though the Law Society has now released its decision, since the decision has been appealed, the allegations in the Law Society Notice of Application remain outstanding and the outcome of the Law Society Proceeding is still uncertain. In other words, the Tribunal does not accept the argument of the Superintendent that it is now premature to move forward on the Tribunal hearing when the Superintendent was prepared to move forward on the hearing prior to the release of the Law Society Decision.

17Furthermore, as stated by the Applicant, the Superintendent could, if desired, rely on the Law Society Decision and any documents relating thereto as some support for the Superintendent’s position at the hearing before the Tribunal. The probative value of such evidence and the weight to be given to it would, of course, be decided by the Tribunal Panel hearing the matter.

18In paragraph 19 of the motion submission, the Superintendent submits that the Tribunal will be faced with a dilemma if the hearing proceeds before the ultimate determination of the Law Society Proceeding:

(i) the refusal of a licence, or the granting of a conditional licence to the Applicant, would be an inconsistent result if the Applicant succeeds in his appeal in the Law Society Proceeding;

(ii) the granting of an unconditional licence would put the public at risk unless and until it is finally determined in the Law Society Proceeding that the allegations against the Applicant are unfounded.

19Again, the dilemma described by the Superintendent is no different than that facing the Tribunal if the hearing took place before the Law Society Decision was issued, as was contemplated originally. This is often the case in other proceedings where there are relevant outstanding criminal or other proceedings involving the applicant that have a bearing on the Superintendent’s case. Accordingly, the Tribunal does not find the Superintendent’s submission to be compelling.

20The Superintendent argues that the hearing should be adjourned “in the interests of judicial economy and consistency” and relies on a decision issued by the Ontario Grievance Settlement Board¹ (the “OGSB”) to support his position. The OGSB decision addressed a settlement grievance concerning the implementation of a Memorandum of Settlement between the complainant and her employer, in respect of a permanent vacancy which the complainant contends arose and to which she should have been assigned. The Panel hearing the OGSB case decided that if the complainant were to be successful in the settlement grievance, the result could not be implemented until after the resolution of a pending termination grievance (i.e., to determine if the complainant should be reinstated in employment). The Panel noted that nothing would be gained by completing the settlement grievance before the determination of the termination grievance. In the OGSB case, the issue that was to be addressed in the pending termination grievance (i.e., reinstatement of employment) was directly relevant to the settlement grievance.

21It is the Tribunal’s view that the OGSB decision can be distinguished from the instant case. In contrast to the OGSB case, the link between the Tribunal hearing and the Law Society Proceeding is still to be determined, as stated in the Tribunal’s decision dated August 31, 2017²:

“It appears that part of the Applicant’s argument is that the Superintendent may not rely on the LSUC disciplinary proceeding as a reason for imposing conditions on his licence but rather, the Superintendent must conduct his own independent investigation.

The Superintendent asserts in his submissions that in many cases the Superintendent looks to the proceedings of other courts or tribunals as ‘reasonable grounds for proposing an order.’ The merits and sufficiency of this assertion in the present case will be the subject matter of the hearing and cannot be determined at this point in the proceedings.”

22At this point in time it is unclear as to the extent to which the Superintendent can, or will, rely on the Law Society Proceeding as reasonable grounds for the NOP. Unlike the OGSB Decision referred to above, however, it is open to the Tribunal to come to a conclusion with respect to whether there are reasonable grounds to support the NOP in this case if the Tribunal conducts the hearing before the Law Society Proceeding is finally determined (e.g., licence with conditions, unconditional licence or no licence).

23Finally, while the Tribunal agrees that the “interests of judicial economy and consistency” should be considered, this should be weighed against the potential impact on the Applicant if the requested adjournment is to be granted. The Applicant has submitted that the adjournment of the hearing could be prejudicial to the Applicant. In essence, should this matter be adjourned sine die, the Applicant will be refused a licence at least until the Law Society Proceeding is fully at an end.

24As submitted by the Superintendent, the appeal of the Law Society Decision cannot commence until after the penalty hearing has been concluded. The Applicant advises that the penalty hearing was scheduled to start on November 7, 2017. The Superintendent indicates in his submissions that the penalty hearing was to commence on December 7, 2017. In either case, given that the appeal hearing must still be conducted following a decision from the penalty hearing, after which a decision of the Law Society Appeal Division has to be issued (and there could be a subsequent appeal or review therefrom), it may be some time before the Law Society Proceeding is finalized.

25In summary, given the reasons stated above, the Tribunal does not accept the Superintendent’s prematurity argument.

26Regarding the Superintendent’s argument that the issues in the hearing could become moot if the hearing proceeds before the finalization of the Law Society Proceeding, it might be helpful to restate the issues which the parties agreed would be determined at the hearing by the Tribunal:

(a) Did the Applicant satisfy the requirements for qualification for a licence as enumerated in section 4(1) of Ontario Regulation 347/04? Specifically, is the Applicant of good character and reputation or otherwise a suitable person to receive a licence without conditions?

(b) If the answer to question (a) is no, is a licence with the conditions proposed in the NOP to Issue Licence with Conditions appropriate to be issued to the Applicant so as to ensure the protection of the public and to maintain public confidence in the regulated sectors?

(c) If the answer to question (b) is no, what conditions should be attached to any licence that might be issued to the Applicant?

27Given the manner in which the agreed upon issues have been framed and worded, the Tribunal’s view is that the issues are still live and relevant for purposes of the Applicant’s application for an insurance licence under the Act despite the Law Society Proceeding. Accordingly, the Borowski³ case cited by the Superintendent is distinguishable.

28It is also, in our view, irrelevant that the condition to provide the Superintendent with a copy of the Law Society Decision within 24 hours of its release is already moot and that the supervision condition could become moot depending on the outcome of the Law Society Proceeding. In regards to a hearing held pursuant to subsection 407.1(3) of the Act (as in this case), subsection 407.1(4) of the Act provides that the Tribunal may, by order, direct the Superintendent to carry out the NOP, with or without changes, or substitute its opinion for that of the Superintendent, and the Tribunal may impose such conditions as it considers appropriate in the circumstances. This provision of the Act gives the Tribunal the latitude to make an order that is appropriate in the circumstances at the time the hearing is heard (e.g., given the status of the Law Society Proceeding at that time and the evidence put forth by the parties).

29As a result, the Tribunal does not accept the Superintendent’s mootness argument.

30For all the above reasons, the Tribunal will not grant an order to adjourn the hearing until the Law Society Proceeding is finalized.

IV. ORDER

31The Tribunal orders that the motion brought by the Superintendent for an order to adjourn this proceeding until the Law Society Proceeding has been finalized, be dismissed. The hearing in this matter will proceed on the dates set out in paragraph [5] above.

32At the October 26, 2017 PHC, the Chair ordered that the deadlines for disclosing, producing, preparing, serving and filing documents as set out in the Pre-Hearing Conference Memorandum of the Chair dated September 20, 2017 be suspended, pending the decision of the Tribunal on this motion. Since the Tribunal has decided not to make the order requested by the Superintendent, another pre-hearing teleconference will be scheduled in this matter to review and revise the deadlines.

Dated at Toronto, this 17th day of January, 2018.

“Audrey Mak” Audrey Mak

“Ian McSweeney” Ian McSweeney

“Paul Farley” Paul Farley

Footnotes

Assn. of Management Administrative and Professional Crown Employees of Ontario v. Ontario (Treasury Board Secretariat) (Chapman Grievance), [2016] O.G.S.B.A. No. 69 (Ontario Grievance Settlement Board).
Spiegel v. Ontario (Superintendent Financial Services), 2017 ONFST 12, paras. 18 and 19.
Borowski v. Canada (Attorney General), [1989] 1 SCR 342.