Wang v. Ontario (Superintendent Financial Services), 2018 ONFST 5

FINANCIAL SERVICES TRIBUNAL

Citation: Wang v. Ontario (Superintendent Financial Services), 2018 ONFST 5 Decision No. I0776-2018-1 Date: 2018/03/19

IN THE MATTER OF the Insurance Act, R.S.O. 1990, c. I.8, as amended (the “Act”), in particular section 441.4;

AND IN THE MATTER OF an Order Imposing Summary Administrative Penalty, dated January 2, 2018, issued by the Director, Market Regulation Branch by delegated authority from the Superintendent of Financial Services;

AND IN THE MATTER OF a Notice of Appeal filed by Brian Wang pursuant to subsection 441.4(4) of the Act.

B E T W E E N:

BRIAN WANG

APPELLANT

and

SUPERINTENDENT OF FINANCIAL SERVICES

RESPONDENT

BEFORE:

Julie Maciura Chair of the Panel and Member of the Tribunal

WRITTEN SUBMISSIONS:

For the Appellant – Brian Wang

For the Superintendent of Financial Services – Ariel Schneider

REASONS FOR DECISION

I. INTRODUCTION

1The Appellant in this matter is an insurance agent licensed under the Act. By Order dated January 2, 2018 (and mailed January 3, 2018), Izabel Scovino, Director of Market Regulation Branch by Delegated Authority from the Superintendent of Financial Services (the “Superintendent”) imposed a Summary Administrative penalty of $3000.00 (the “Order”) on the Appellant on the basis that the Appellant failed to make written disclosure to his clients of the names of all the insurers that he represents.

2On January 30, 2018, the Appellant filed a Form 2 - Notice of Appeal with the Tribunal to appeal the Order. However, counsel for the Superintendent requested that the Tribunal issue a Notice of Intention to Dismiss without a hearing on the basis that the Notice of Appeal was filed after the deadline for doing so had passed.

3A Notice of Intention to Dismiss was issued by the Tribunal on February 8, 2018 and the parties were given 30 days to make written submissions with respect to the Notice of Intention.

4The Superintendent takes the position that the Tribunal does not have jurisdiction to hear this matter because the Appellant filed his appeal outside of the 15-day deadline in subsection 441.4(4) of the Act. The Superintendent further takes the position that subsection 441.4(4) is a substantive or jurisdictional requirement and that the statute does not confer any authority on either the Tribunal or the Superintendent to extend the 15-day time limit for filing a Notice of Appeal.

5The Superintendent provided material (filed February 16, 2018) in support of the motion including an affidavit of Khine Saw Hnin, a Legal Assistant in the Legal Services Branch of the Financial Services Commission of Ontario (“FSCO”), as well as the Record of Decision that led to the Order, submissions with respect to the Notice of Intention, and a Book of Authorities.

6The Appellant filed written submissions (which included sample disclosure forms as well as supporting letters from two clients) to the Tribunal, received March 7, 2018, with respect to the Notice of Intention to Dismiss.

II. DECISION

7For the reasons set out below, the Tribunal dismisses the appeal without a hearing.

III. FACTS

8In his written submissions, the Appellant concedes that he filed his Notice of Appeal outside of the 15 day deadline in the Act, but says that neither the Notice of Appeal form nor the cover letter attaching the Order explained when the deadline for appealing was and so he assumed that he had 30 days to appeal because that was how long he had to pay the penalty. He submitted that insurance agents do not actively go searching for information on when to appeal.

9Based on the material provided by the parties, I make the following findings of fact:

a. The Order was delivered on January 5, 2018 by Canada Post to the last known address for Mr. Wang.

b. The deadline for filing a Notice of Appeal is 15 days after the Order is “given” to the licensee.

c. Pursuant to subsection 33(3) of the Act, service by first class registered mail is effective on the seventh day after the document is mailed. The Order was mailed via registered mail on January 3, 2018 and so it was deemed to have been served on January 10, 2018. As such, the deadline to file the Notice of Appeal would have been January 25, 2018.

d. Mr. Wang filed his Notice of Appeal with the Tribunal on January 30, 2018, which is five days after the deadline.

IV. STATUTORY FRAMEWORK

10This matter relates to an Order issued under section 441.4 of the Act, a provision that authorizes the Superintendent to impose a summary administrative monetary penalty (“AMP”) on a person who has failed to comply with a requirement established under the Act.

11Subsection 15(1) of Ontario Regulation 347/04 under the Act provides that an individual who holds a life insurance licence shall disclose in writing the names of all the insurers that the individual represents to every prospective insured and to every insured who makes an application to renew or replace a policy of life insurance.

12Item 31 of Schedule 3 of Ontario Regulation 408/12 states that the prescribed penalty for contravention of subsection 15(1) of Ontario Regulation 347/04 is $3000.00.

13Subsection 441.4(4) of the Act provides that: “The person may appeal the Superintendent’s order to the Tribunal in writing within 15 days after the order in subsection (1) is given to the person.”

14Subsection 33(3) of the Act states that service by first class registered mail is effective on the seventh day after the document is mailed.

15The Tribunal’s Rules of Practice and Procedure include rules that govern the filing of documents with the Tribunal. Rule 8.01 states that “filing means the effective delivery of a document to the Registrar and its receipt by the Registrar”. Rule 8.04 states that the Registrar shall date stamp all documents when they are received and a document is deemed to be filed as of that date.

V. ISSUE

16Given that the Appellant does not dispute when he received the Order and does not dispute that he filed his Notice of Appeal more than 15 days after he received the Order, the issue in this case is whether the fifteen-day statutory deadline imposed by subsection 441.4(4) of the Act is a procedural requirement which can be waived, or a substantive requirement which cannot be waived and which must be met in order for the right of appeal to be created.

VI. ANALYSIS

17The Tribunal has considered the nature of the time limit established by subsection 40(4) of the Mortgage Brokerages, Lenders & Administrators Act, 2006 (“MBLA”) before in Viau v. Ontario (Superintendent Financial Services), 2010 ONFST 8, and Centum Premium Financial v Ontario (Superintendent Financial Services), 2017 ONFST 10. The wording of the time limit in subsection 40(4) of the MBLA is almost identical to the wording of the time limit in section 441.4(4) of the Act.

18In Viau, the Tribunal held that the 15-day deadline established by subsection 40(4) of the MBLA was not a procedural requirement but instead was a substantive requirement and as such, the time limit could not be waived pursuant to subsection 4(1) of the Statutory Powers Procedure Act (“SPPA”). Therefore, the Tribunal had no jurisdiction to deal with the Notice of Appeal filed by Mr. Viau after the deadline had expired.

19In reaching that conclusion, the Tribunal adopted a literal and contextual interpretation of subsection 40(4) of the MBLA, an interpretation that underscored the differences between the process established by section 40 of the MBLA for summary AMPs and the process established by section 39 of the MBLA for general AMPs.

20I agree with the analysis undertaken by the Tribunal previously. The Tribunal is established by subsection 6(1) of the Financial Services Commission of Ontario Act, 1997 (“FSCO Act”). Sections 6 and 7 of the FSCO Act provide for the composition of the Tribunal and establish a general framework for its governance. Section 20 of the FSCO Act grants exclusive jurisdiction to the Tribunal to “exercise the powers conferred on it under this Act and every other Act that confers powers on or assigns duties to it”. Sections 21 to 24 confer on the Tribunal a number of procedural powers for the conduct of “proceedings before the Tribunal”, including the power to make rules of practice and procedure with respect to those proceedings. However, there is nothing in FSCO Act that determines what matters may actually be brought before the Tribunal. Rather, the jurisdiction of the Tribunal to conduct proceedings – whether hearings or appeals – is conferred by a number of enabling statutes, including the Act.

21The Tribunal has exclusive jurisdiction to exercise the powers conferred upon it by the Ontario legislature; it has no inherent jurisdiction to conduct legal proceedings. Accordingly, a person must have an express statutory right to request a hearing or appeal a decision to the Tribunal in order for that particular dispute to be brought before the Tribunal.

22Subsection 4(1) of the SPPA does not alter this principle. While section 4(1) of the SPPA provides that a “procedural requirement” may be waived with the “consent of the parties and the tribunal”, that does not mean that an administrative tribunal can grant itself authority over a matter over which it does not otherwise have express jurisdiction, simply because the parties agree that the matter should be heard. Subsection 4(1) of the SPPA is not an independent source of jurisdiction; it is simply a power that is available with respect to a proceeding over which an administrative tribunal already has authority pursuant to an enabling statute.

23With respect to the Act in issue here, the Ontario legislature has created two distinct types of monetary penalties under this statutory scheme: general AMPs under section 441.3 and summary AMPs under section 441.4. These penalties are available to the Superintendent with respect to different types of contraventions by licensees. Each penalty involves a different process: a general AMP pursuant to section 441.3 may be imposed after the Superintendent issues a “notice of proposal” to the person affected. This notice must inform them of their right to “request a hearing by the Tribunal” and inform them of the “process for requesting a hearing”. In contrast, a summary AMP pursuant to section 441.4 may be imposed “by order” provided the Superintendent gives the affected person a “reasonable opportunity to make written submissions” beforehand, which was given in this case.

24In both cases the Act and enabling legislation read together confer jurisdiction on the Tribunal to conduct proceedings. However, there are differences in the way in which this authority is framed. Subsection 441.3(2) recognises the right of a person to request a “hearing” with respect to a notice of proposal and subsection 441.3(5) provides that “If the person requests a hearing within 15 days after the notice under subsection (2) is received, the Tribunal shall hold a hearing”. Therefore, with respect to general AMPs, a distinction has been made between the right to request a hearing (subsection 441.3(2)) and the process involved for requesting that hearing (subsection 441.3(5)). Arguably the fifteen-day deadline in subsection 441.3(5) refers to the process for requesting a hearing and, accordingly, is a “procedural requirement” within the meaning of subsection 4(1) of the SPPA – a requirement that can be waived with the consent of the parties and the Tribunal.

25Section 441.4, on the other hand, is worded quite differently. Subsection 441.4(4) of the Act provides that the person or entity “may appeal the Superintendent’s order to the Tribunal in writing within 15 days after the order … is given to the person.” (emphasis added). Here, no distinction is made between right and process.

26Based on a textual and contextual interpretation of subsection 441.4(4) of the Act, I agree with the previous Tribunal decisions (in Viau and Centum Premium Financial) that the fifteen-day deadline incorporated in this provision is not a “procedural requirement” within the meaning of subsection 4(1) of the SPPA, but a substantive condition to the appeal right created by section 441.4 of the Act. Thus, in the absence of express authority to waive or extend this deadline, the Tribunal has no jurisdiction to deal with this matter.

27While I agree with the Appellant that it is unlikely that many insurance agents “sit there and read the law of when to appeal and when not to appeal in their spare time or for knowledge”, when served with an Order requiring them to pay a monetary penalty, with which they disagree, that might be the one time they reasonably “go searching for” that information.

28However, I also agree with the Appellant that it would be preferable if either the Order itself or the cover letter accompanying it had specifically noted the deadline for appealing. This is particularly the case when the cover letter refers to the time period in which the Appellant was required to pay the Order, i.e., “no later than 30 days after the date of the invoice”. Given that the only reference to a time period in the correspondence was “30 days” it is reasonable to believe that this could be confusing to a licensee. The Tribunal has previously urged, and does again urge, the Superintendent to include a specific reference to the deadline for appealing in its correspondence with licensees, or attach a copy of the relevant section of the Act to the cover letter.

VII. ORDER

29Pursuant to its authority under Rule 32, the Tribunal orders that the Notice of Appeal filed by the Appellant is dismissed without a hearing.

Dated at Toronto, this 19th day of March, 2018.

“Julie Maciura” Julie Maciura